Sitting of 15 July 1914

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

PRIVATE BUSINESS.
Deal and Walmer Gas and Electricity Bill,
Lords Amendments considered, and agreed to.
Whitwell and District Gas Bill [Lords],
As amended, to be considered upon Friday.
Mersey Docks and Harbour Board Bill [Lords] (by Order),
Second Reading deferred till Friday.

TRADE REPORTS (ANNUAL SERIES).
Copy presented of Diplomatic and Consular Reports, Annual Series, No. 5343 [by Command]; to lie upon the Table.
EDUCATION (SCOTLAND).
Copy presented of Regulations for the Preliminary Education, Training, and Certification of Teachers for various grades of Schools, 1914 [by Command]; to lie upon the Table.
COLONIAL REPORTS (ANNUAL).
Copy presented of Report, No. 800 (Turks and Caicos Islands, Annual Report for 1913) [by Command]; to lie upon the Table.
SHOPS ACT, 1912.
Copy presented of Order made by the Council of the Urban District of Leek, and confirmed by the Secretary of State for the Home Department under the Act [by Act]; to lie upon the Table.
RAILWAY SERVANTS (HOURS OF LABOUR).
Copy presented of Return, in pursuance of Section 4 of The Regulation of Railways Act, 1889, of Railway Servants of certain classes who were on one or more occasions during the month of March, 1914 on duty on certain Railways of the United Kingdom for more than twelve hours at a time or who, after being on duty more than twelve hours, were allowed to resume work with less than nine hours' rest, with Appendices giving additional statements and explanations furnished by the Railway Companies [by Command]; to lie upon the Table.

ARMY.
Copy presented of Report of the Advisory Board, London School of Economics, on the Eighth Course at the London School of Economics, 6th October, 1913 to 25th March, 1914, for the Training of Officers for the higher appointments on the Administrative Staff of the Army and for the charge of Departmental Services [by Command]; to lie upon the Table.
Copy presented of List of Exceptions to the Army Regulations as to Pay, Non-effective Pay, and Allowances sanctioned during the year 1913–14 [by Command]; to lie upon the Table.
Copy presented of Return for the year ended 31st March, 1914 of Pensions specially granted under Articles 777 and 1201 of the Pay Warrant [by Command]; to lie upon the Table.

NATIONAL HEALTH INSURANCE (JOINT COMMITTEE).
Copy presented of Special Order, dated 15th July, 1914, made by the National Health Insurance Joint Committee and by the Insurance Commissioners, acting jointly, entitled the National Health Insurance (Special Employers' Custom) Consolidated Order, 1914 [by Act]; to lie upon the Table, and to be printed. [No. 356.]
Copy presented of Special Order, dated 15th July, 1914, made by the National Health Insurance Joint Committee and the Insurance Commissioners, acting jointly, entitled the National Health Insurance (Special Customs) Consolidated Order, 1914 [by Act]; to lie upon the Table, and to be printed. [No. 357.]

ORAL ANSWERS TO QUESTIONS
  ROYAL NAVY.

    FOURTH BATTLE SQUADRON.
    Mr. MIDDLEMOREasked the First Lord of the Admiralty at what date it was decided that it might be necessary to increase the Fourth Battle Squadron to a strength of eight battleships; when the personnel necessary for such increase was recruited; and, having in view the fact that the Fourth Battle Squadron consists now of only four battleships, upon what services is the surplus personnel employed?
    The FIRST LORD of the ADMIRALTY (Mr. Churchill): The eventual increase of the numerical strength of the Fourth Battle Squadron to eight ships was adumbrated when the new organisation of the Home Fleets was first announced in the spring of 1912. The personnel of the Navy is not allocated to specific ships or squadrons. Entries are calculated on estimated future requirements as a whole, and actual numbers borne at any given moment are appropriated as may be from time to time thought best.
    Mr. MIDDLEMORE: Why has the Fourth Battle Squadron been reduced from six to four, seeing that the right hon. Gentleman announced in 1912 that he proposed to increase it from six to eight?
    Mr. CHURCHILL: It will eventually reach a total of eight?
    Mr. MIDDLEMORE: When?
    Mr. CHURCHILL: Exactly at that point in the development of the Navy when such an increase is rendered necessary—neither before nor after. With regard to the question why was it reduced from six to four, it was because we were proceeding with the development of the Sixth Battle Squadron more rapidly than even we had intended.

    MEDITERRANEAN FLEET.
    Mr. MIDDLEMOREasked the First Lord of the Admiralty whether, in view of the admitted necessity that we should remain the independent guardians of our own important interests in the Mediterranean, he will state the material standard which is aimed at by the Board in determining our naval requirements in those waters?
    Mr. CHURCHILL: In introducing the Estimates for this year, I stated the actual naval strength to which we proposed to
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    work in the Mediterranean, and I indicated that this was based on a variety of considerations, some of which belong to the domain of State policy. I am not prepared, in answer to a question, to discuss those considerations.
    Mr. MIDDLEMORE: Does the right hon. Gentleman intend to maintain the one-Power standard in the Mediterranean?
    Mr. CHURCHILL: I am not prepared in answer to questions to enter into these difficult questions about standards.

    MARRIAGE OF PETTY OFFICERS AND MEN.
    Mr. MIDDLEMOREasked the First Lord of the Admiralty whether he is aware of the report recently mode by Mrs. Tennant on the subject of soldiers' marriages off the strength; whether no marriage allowance of any sort, either in money or in kind, is made to any petty officers or men of His Majesty's Navy; and, if so, whether he will take steps to remove the discrimination against the naval service?
    Mr. CHURCHILL: I must refer the hon. Member to the reply I gave to the hon. Member for East Leeds on the 12th February last year.

    GIBRALTAR (DISCHARGES or WORKMEN).
    Mr. BARNESasked the First Lord of the Admiralty whether he is aware that a number of workmen at Gibraltar are to be discharged through shortage of work; that a request has been received that some of the work usually taken in hand from October to February shall be anticipated in order to obviate these discharges and at the same time render unnecessary the overtime that has to be worked during that period; and whether he proposes to accede to the request and prevent the distress that will ensue as a result of discharges?
    THE PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): A number of workmen have recently been discharged from Gibraltar Dockyard on account of a temporary shortage of work. Certain representations have been received on the subject, and arrangements had already been made which will not only obviate further discharges, but will enable most of the local men who have been discharged to be re-entered. It will be understood that the work has to be arranged with regard to the Fleet requirements, and it is not practicable entirely

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    to avoid variations in the pressure and occasional overtime. I may mention that instructions have been issued that in the event of its becoming necessary at any future date to send home workmen who are serving under agreement at Gibraltar, notice has to be given to such workmen of at least one week for each year of service specified in the agreement, but that in all cases the notice has to be as long as possible, particularly in the case of men who are accompanied by their wives and families.
    Mr. BARNES: May I ask whether the right hon. Gentleman is aware that some of these men have been sent home within the period specified in the contract, and whether he will arrange that they will receive some money in lieu of what they lose?
    Dr. MACNAMARA: Ten of the men sent home have not completed their agreements. The usual course, unless a man is sent home for misconduct or at his own request, is to give half a week's pay for each month of the unexpired part of the agreement.

    OIL FUEL.
    Mr. EDGAR JONESasked the First Lord of the Admiralty (1) whether he will state the particulars of the prizes he proposes to offer to inventors of improved processes for the distillation of oil from coal; (2) whether he will arrange a system of research scholarships tenable at the mining school of the South Wales University College and other mining schools for purposes of research in the distillation and analytic classification of the various kinds of coal to be found in the United Kingdom; (3) whether he will arrange for a scientific inquiry as to the oil-yielding properties of the various classes of coal within the United Kingdom; and (4) whether he will build and maintain a suitable experimental plant for the distillation of oil from coal, or subscribe to the shares of a syndicate formed for that purpose, on similar lines to the investment in the Anglo-Persian Oil Company?
    Mr. CHURCHILL: As I have explained to my hon. Friend in reply to other questions, there are a number of considerations involved besides the question of research, and many other important interests are affected in addition to those of the Admiralty. The research side and the best methods of stimulating research will
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    receive the fullest consideration. An Admiralty Departmental Committee has already been appointed to take up the consideration of various questions relating to oil supply. Certain definite proposals for inquiry in relation to the possibility of oil extraction from coal will be referred to that Committee for early consideration, and in the meantime I am unable to state in detail what steps will ultimately be taken.
    Mr. E. JONES: Will the right hon. Gentleman let us have the terms of reference to the Committee later on?
    Mr. CHURCHILL: I will consider that.
    Mr. E. JONESasked the First Lord of the Admiralty whether he will publish Papers containing information in the possession of the Admiralty as to the use of oil fuel by foreign navies, and as to the processes being worked in foreign countries for the distillation of oil from coal.
    Mr. CHURCHILL: A good deal of information on the subject of the use of oil fuel by foreign navies has appeared in the Press, and I fear that I cannot usefully or properly supplement it. The Admiralty are not aware that any processes are being worked commercially in foreign countries for the distillation of oil from coal. No doubt some processes are being worked experimentally, and as far as I know they are the same or much the same as those in England which the Admiralty have under observation.
    Mr. E. JONES: Has the Admiralty made any inquiries at all?
    Mr. CHURCHILL: We have made every inquiry. We are accumulating all the information we possibly can.
    Mr. E. JONES: If so, why not publish some report so that Members may get the information.
    Mr. CHURCHILL: It is not always advisable or convenient to publish reports received as to what foreign countries are doing. Experience shows that very frequently these reports, when published, are animadverted upon in the countries to which they refer.
    Colonel YATE: Can the right hon. Gentleman say what proportion of British coal is taken by foreign navies?
    Mr. CHURCHILL: Not off-hand.
    Mr. PRINGLE: Is there any evidence to show that oil can be distilled from coal at

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    a price at which it can compete with oil otherwise produced?
    Mr. CHURCHILL: We have to consider that a new habit of industry must be created, and that there should be a market in this country for the by-products.

    COAL SUPPLY.
    Mr. E. JONESasked the First Lord of the Admiralty whether he will make inquiries and issue a Report as to the number of men now involved in supplying Admiralty coal who will be displaced should the whole of the Fleet be eventually equipped for burning oil instead of coal; and whether he will agree to the setting up of a Committee to inquire and report as to the economic effect upon coal prices, wages, and labour conditions of such a displacement?
    Mr. CHURCHILL: As pointed out in paragraph 9, page 5, of Parliamentary Paper Cd. 7419, coal must continue to be the principal combustible in His Majesty's Navy for some time to come. If therefore the contingency referred to in the first part of the question ever arises it can only be at some distant date. The average demand of the Admiralty upon the best classes of Welsh steam coal is less than one-tenth of the total output, and even supposing this small proportion were to suffer any diminution it is obviously impossible to estimate now what will be the circumstances of the coal supply, prices, wages, labour and other conditions at some unknown distant date. An enquiry held now on such an hypothetical basis could not be of any practical utility, and it is not proposed to adopt my hon. Friend's suggestion.
    Mr. E. JONES: Is the right hon. Gentleman aware that there are 16,000 men involved?
    Mr. CHURCHILL: I am not aware of any such number being involved. If the Admiralty demand for the small proportion of the coal were to undergo gradual diminution, there are no grounds for assuming that the excellent coal of South Wales would not find a market.

    FLEET MOBILISATION (LEAVE TO PORTSMOUTH MEN).
    Mr. FALLEasked the First Lord of the Admiralty if he can give any information as to the leave which will be granted to Portsmouth men of the Fleet which is assembling at Portsmouth; and what per-
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    centage of men will be allowed to visit their homes, and for what period?
    Mr. CHARLES DUNCANasked the First Lord of the Admiralty whether, in connection with the forthcoming inspection of the Fleet at Spithead, he will provide facilities for all the men whose homes are in Portsmouth having leave; and whether he will take steps to have sufficient craft provided for the purpose?
    Mr. CHURCHILL: I must refer the hon. Member to the answer I gave on the same subject on the 23rd June last year. These leave facilities are a matter of local arrangement, and I have no doubt that they will be given as freely as circumstances permit; but I would remark that on this occasion the Fleet will only be assembled for a day or two before it leaves for exercises.
    Mr. FALLE: Is a preference to be given to the Portsmouth men in their own homes?
    Mr. CHURCHILL: That is so—to the Portsmouth ships in the First and Second Fleets, but not to the ships in the Third Fleet, which are only called out for a short period in the manœuvres.

    AUSTRALIA AND NEW ZEALAND.
    Mr. HUNTasked the First Lord of the Admiralty whether, as under the 1909 agreement with New Zealand the British Government agreed that the New Zealand "Dreadnought" should be the flagship of a fleet unit in far Eastern waters, and that a small force of cruisers and auxiliary craft would be stationed in New Zealand waters, he can say why the Government have not carried out either of their undertakings; is he aware that both Australia and New Zealand refuse to depend on the Japanese Navy for their defence; and what he proposes to do to keep faith with these two great Dominions?
    Mr. HUNTasked the First Lord of the Admiralty whether, as under the naval agreement with Australia of 1909, Australia was to establish a fleet unit consisting of one "Dreadnought" cruiser, three protected cruisers, six destroyers, and three submarines, and that this fleet unit was to co-operate with a fleet unit of the Royal Navy to be stationed in Chinese and East Indian waters with the New Zealand "Dreadnought" as flagship, he can say why the British Admiralty has failed to carry out their part of the agreement, and consequently left the Australian

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    Navy completely isolated from any association with the British Fleet; and is he aware that the Australians are dissatisfied with the present condition of affairs?
    Mr. CHURCHILL: I made a very full statement on this subject in introducing the Estimates, and I have since stated in reply to questions that it is not possible to deal with issues of such importance at Question time.
    Mr. HUNT: Is it not a fact that unless the Government does fulfil all its agreements with Australia and New Zealand in matters of naval defence the inhabitants will be driven to seek protection from another white race?
    Mr. CHURCHILL: I cannot admit that we have failed to keep our agreements, nor can I admit that if there were any difference of opinion between us and the Australian Commonwealth on the subject of naval defence, that would in any way alter their view of their relations with this country.
    Mr. HUNT: Does the right hen. Gentleman dispute the fact that one of the Australian senators did complain that the British Government broke their agreement?

    ARMED MERCHANTMEN.
    Mr. KINGasked the First Lord of the Admiralty whether the policy of arming merchant vessels for possible use in warfare has been considered in its international legal aspects by the Law Officers of the Crown; whether a reasoned legal opinion on the various possibilities that might arise on the use of such armed merchantmen has been given; if so, when; and whether such opinion can now be made public?
    Mr. CHURCHILL: The reply to the first part of the question is "yes." As regards the second part of the question, I am advised that it would not be expedient to say more than I have already said on this subject.
    Mr. KINGasked how many merchantmen have now been equipped with guns for use in war; at what cost this has been achieved; what payments, if any, are annually made to the firms owning these armed merchantmen; and whether any additional merchantmen are to be similarly armed?
    Mr. CHURCHILL: Forty vessels engaged in carrying corn and meat have been armed for defensive purposes only. I am unable to give the information asked for in the second part of the question; the comparatively small cost of such structural alterations as have been necessary has been defrayed by the various shipowners. The reply to the third part of the question is that no payments are made by the Admiralty to the firms concerned; and to the fourth part of the question, yes.
    Mr. KING: Is it the policy of the Admiralty to arm only those ships that are carrying food supplies, and no other kind of merchant vessels?
    Mr. CHURCHILL: Yes. The only merchant ships we arm are ships engaged in carrying vital food supplies to this country, and they are only armed for self-protective purposes.
    Mr. KING: Is it intended to go beyond that policy?
    Mr. CHURCHILL: No. Any other merchantmen that may be taken up in time of war will be taken over definitely by the Admiralty.

    ROSYTH DOCKYARD.
    Mr. PONSONBYasked whether, in granting a site to the Dunfermline School Board for the erection of a school in the Rosyth area, the Admiralty have attached conditions to the Grant which are objected to by the board; whether those conditions include the fixing of a rent higher than the letting value of similar land in the neighbourhood, and a proposal for a revaluation in five years' time with a view to ascertaining the fair market value; and whether, in view of the fact that the school is to be erected for the exclusive accommodation and benefit of children brought to the district by the establishment of the Admiralty works now in process of construction, and ultimately for the children of permanent employés of the Admiralty, the Board of Admiralty will alter their decision, and either grant the site in question to the school board rent free or for a purely nominal sum?
    Dr. MACNAMARA: A suitable site within the area of the land owned by the Admiralty has been marked off for a school. The Dunfermline School Board are prepared to erect temporary premises upon this site, proceeding thereafter with the erection of a permanent school. Questions have arisen with regard to the

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    amount of feu to be charged, both during the occupation of the site by the temporary premises and hereafter in perpetuity. Although the matter is not solely in the hands of the Board of Admiralty, I do not contemplate any difficulty in arriving at terms in regard to the feu for the period of time during which the temporary buildings are in occupation. As regards the permanent feu, we have suggested to the Dunfermline School Board that the matter should be dealt with upon the commencement of the erection of the permanent school on the basis of a feu which should represent the fair market rental, the matter to be decided in the absence of mutual agreement by a joint valuation or by arbitration.
    Mr. PONSONBY: Is it not possible for the Admiralty to feu the land in perpetuity at once to the Dunfermline School Board for the erection of the school, which is a pressing necessity?
    Dr. MACNAMARA: I do not think that there is any difficulty about a temporary school. We are quite prepared to go into the question of the valuation as soon as possible, but I can give no assurance on the point.
    Mr. PONSONBY: Does the Admiralty desire by this valuation to get what it can out of the Dunfermline School Board, and does my right hon. Friend think it right for the Admiralty to haggle over a few pounds for the accommodation of the children when they are spending £1,000,000 there?
    Dr. MACNAMARA: The matter is not so simple as my hon. Friend thinks. If the local authority receive a contribution in lieu of rates in respect of this land, it seems to me that the land is on the same footing as the land of a private owner, whatever the purpose for which it is used.
    Mr. PONSONBYrose—
    Mr. SPEAKER: The hon. Member cannot turn his question into an argument. The question is intended to elicit information, and not for the purpose of having an argument.

    Albania.
    Mr. EDMUND HARVEYasked the Secretary of State for Foreign Affairs whether the attention of the Foreign Office has been called to a photograph taken in Koritza, in April of this year, showing a group of insurgent prisoners wearing Greek uniforms; whether the attention of
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    the Greek Government has been called to the use being made of Greek troops in Southern Albania; and whether, in view of the responsibility assumed by the Powers for the creation of an autonomous Albania, any collective protest is now being made on their behalf against this action of Greece?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Acland): I have heard of the existence of photographs which would appear to be sufficiently explained by the presence of Greek deserters among the Epirote forces. The Greek Government have withdrawn their troops, and have disclaimed any share in, or responsibility for, recent events in Epirus.

    Morocco.
    Mr. JOHN WARDasked whether the French Government are contemplating the appointment of a Minister of North Africa for grouping up and rearranging the administration of Tunis, Algiers, and Morocco; and, if so, whether this will or is intended to subvert and substitute the provisions of the Treaty of Algeciras so far as Morocco is concerned?
    Mr. ACLAND: I have no information respecting the appointment referred to, but the provisions of the Algeciras Act are, in any case, modified by the establishment of the French and Spanish Proctectorates in Morocco.
    Mr. J. WARD: Has the hon. Gentleman seen the report presented to the French Chamber on this subject?
    Mr. ACLAND: I have not seen it. I will look into that.
    Mr. J. WARDasked if there is any agreement between the French and Spanish Governments for handing over to the former any part of the territory within the Spanish sphere of influence as payment for any military assistance the French Government may render Spain in her attempt to conquer the tribes in the Riff?
    Mr. ACLAND: No such agreement has been brought to the notice of His Majesty's Government.
    Mr. J. WARDasked the Secretary of State for Foreign Affairs whether he has any information as to the recent operations of French troops within the Spanish sphere of influence in Morocco, particularly in the district north of Taza, in the Kabila of

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    Egzniai, in the direction of the Bay of Alheusemas; whether the French general has demanded tribute from the tribe within the Spanish sphere; and, if so, what action he proposes to take to maintain the Treaty of Algeciras?
    Mr. ACLAND: I have reecived no such information.
    Mr. J. WARD: Has the hon. Gentleman any reason to impute the statement that the French are now operating in the district referred to?
    Mr. ACLAND: We have good sources of information, and we have not got the information contained in the question, and therefore cannot confirm it.
    Mr. J. WARDasked whether there is any suggestion of the Spanish Government ceding either Ceuta or Alheucemas to a foreign Power; and, if so, what action His Majesty's Government propose to take to protect British interests in the Mediterranean?
    Mr. ACLAND: I have heard of no such suggestion.

    South Australia.
    Mr. HIGHAMasked the Secretary of State for the Colonies if he has any Returns from South Australia giving the capital assessment of unimproved land values and the capital assessment of land with improvements later than the 1885 details given on page 126 of Cd. 4750 of 1909; if so, will he state for the latest year of which he has the information the total capital land value including improvements, the total capital land value without improvements, the population for that year, and the average amount of unimproved land value per head of the population for that year; and will he state whether the values so given include the land which is the property of the Government or other public authorities?
    The SECRETARY of STATE for the COLONIES (Mr. Harcourt): No, Sir; I regret that I am not in possession of full information, but some information on the subject is contained in South Australian Parliamentary Papers, which will be placed in the Library of the House.
    Mr. HIGHAM: Is it possible for the right hon. Gentleman to write to Australia to get the exact details contained in the latest returns?
    Mr. HARCOURT: I will consider that.

    Deported Hindus (Vancouver).
    Mr. KINGasked the Secretary of State for the Colonies whether he is aware that the Canadian Government has refused to defray the expenses of deporting the Hindus who arrived at Vancouver, on the "Komagata Maru"; and whether, with a view of increasing good feeling between different races in the Empire, he will approach the Canadian Government in this matter?
    Mr. HARCOURT: I have no official information to this effect, and do not propose to take the action suggested.

  GOVERNMENT OF IRELAND BILL.

    SEARCH FOR ARMS (DUBLIN).
    Mr. BRADYasked the First Lord of the Admiralty if he is aware that, on Wednesday, 8th July last, Mr. Lawrence J. Kettle, an electrical engineer in the employ of the corporation of Dublin, when driving home in his motor car from the electric power station in the city of Dublin, was stopped by some Coastguards, and that the Coastguards proceeded to search Mr. Kettle's car for guns or ammunition; and will he say whether this was done under the authority of the Admiralty
    Mr. CHURCHILL: I understand that some vehicles—of which Mr. Kettle's motor car was one—coming from the end of Pigeon House Wall were searched by the Coastguard in consequence of a report that some arms had been landed at that place. In so doing the Coastguard were acting in accordance with the duty laid upon them by the Customs laws, and no authorisation from the Admiralty was needed.
    Mr. BRADY: Am I to understand that it is only in the Southern provinces of Ireland that the law in reference to the importation of arms is to be enforced, and that guns can be imported into Larne and other ports of Ulster without let or hindrance by coastguards or any other guards?
    Mr. CHURCHILL: I can only say that it will always be the duty of, and it ought to be a point of honour with, every person serving under the Crown in any official capacity, to do his utmost to maintain the law of the land impartially in all directions.
    Mr. SWIFT MacNEILL: Does that sentiment apply to Privy Councillors also?

    DOMINION OPINION.
    Dr. CHAPPLEasked the Secretary for the Colonies whether he has received from any of the Governments of the Over-sea. Dominions any resolutions or protests against the extension of self-government to Ireland on the ground that it would be disastrous to the Empire?
    Mr. HARCOURT: I have received no resolution or protest against the extension of self-government to Ireland from the Governments of any of the Overseas Dominions.

    Rhodesian Mines Department.
    Mr. MacCALLUM SCOTTasked the Secretary for the Colonies, if he will state on what principle it has been arranged that £21,403 18s. 3d. is charged for the Rhodesian Mines Department as administrative expenditure for Southern Rhodesia, whereas at the same time no part of the Southern Rhodesia mining revenue has been credited as administrative revenue for the year ending 31st March, 1913?
    Mr. HARCOURT: It is wrong to suppose that no part of Southern Rhodesia mining revenue is credited as administrative revenue. The gross administrative mining revenue was £33,069 4s. 3d., and the net was £29,533 8s. 10d. This is included under the heading "Stamps and Licences."

    British Malaya.
    Sir HERBERT ROBERTSasked the Secretary for the Colonies whether, in view of the allegations publicly made at meetings of the Planters' Associations in British Malaya, with regard to the spread of drinking habits among the immigrant population, especially Tamil estate labourers, further steps will be taken to remedy the admitted evils arising from the drink traffic in the States and Colony; whether it is the intention of the Government of the Federated Malay States to establish a system of licensing boards upon the lines recently adopted in Bengal; whether it is proposed to substitute a system of fixed licence fees for the auction system and to ensure a stricter supervision and inspection of places licensed for the sale of drink; and whether it is intended to include toddy and beer in the restrictions now applicable to the sale of spirituous liquors to Tamil coolies?
    Mr. HARCOURT: The High Commissioner for the Malay States informed me
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    on the 30th of April last that the reports which had been called for from the residents on the working of the 1912 Excise Enactment had been received; that they showed that the system established by the Enactment was certainly better than that previously followed; and that the question of introducing further improvements was under consideration. A further dispatch is promised after receipt of a report on the subject from the Acting Comtroller of Labour, who has visited India lately and studied the system adopted there.

    Nigeria.
    Mr. PARKERasked the Secretary for the Colonies whether the Provincial Courts in Nigeria presided over by executive officers would have jurisdiction over civil proceedings between the Government and natives?
    Mr. HARCOURT: No, Sir. Suits by or against the Government will remain within the jurisdiction of the Supreme Court.

  FINANCE BILL.

    IRELAND (GRANTS).
    Mr. MAURICE HEALYasked the Chancellor of the Exchequer if he will state the reasons why in the Amendments to the Budget he proposes to reduce the proposed new Grants to Ireland during the present financial year from £246,500 to £74,500, seeing that the additional taxation to be imposed for the same period is only to be reduced from £259,000 to £178,000, thus penalising Ireland to the extent of £91,000 for the year, merely because valuation proposals which never applied to Ireland are to be dropped from the Finance Bill; and whether, seeing that, apart from Insurance and Tuberculosis Grants, he still proposes to give £515,000 in local Grants to England and £71,000 to Scotland during the present year, he still proposes to give nothing to Ireland, while increasing Ireland's taxation by £178,000, or a net sum of £104,500, after giving credit for the Irish Insurance and Tuberculosis Grants?
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): I may point out to the hon. Member that under the amended proposals, for 1914–15 England and Wales will pay in additional taxation £5,330,000, and will receive in new Grants £1,553,000, while Scotland will pay £592,000 and receive £208,500. The excess of taxation over Grants is therefore in the case

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    of England £3,777,000, and of Scotland £383,500, as compared with the Irish figure of £103,500. I would, moreover, remind the hon. Member that in 1915–16 it is estimated that Ireland will contribute in additional taxation £415,000, and will receive £762,000.
    Mr. T. M. HEALY: During my speech on the Second Reading the right hon. Gentleman on three occasions asked me if I would drop Ireland out of the Bill. Does that offer still remain?
    Mr. LLOYD GEORGE: I am not aware that an option was ever proposed, but if the Irish Members make that proposal certainly it is a matter for consideration.
    Mr. T. M. HEALY: You ask me to make the offer; I make it now.
    Mr. DILLON: The Irish Members certainly will not.
    Mr. W. O'BRIEN: "Molly Maguires"—Irish Members!

    INCOME TAX.
    Mr. GODFREY LOCKER-LAMPSONasked the Chancellor of the Exchequer whether there will be any time limit within which persons must claim the repayment of the excess Income Tax; and whether the time limit laid down by Section 10 of the Income Tax Act, 1860, will apply as in all ordinary claims for repayment?
    Mr. LLOYD GEORGE: I am advised that the answers to both parts of the question are in the negative.
    Mr. G. LOCKER-LAMPSON: Will there be any time limit in the case of persons resident abroad and having income from foreign and Colonial Government securities, where the dividends are paid over here?
    Mr. LLOYD GEORGE: I should not like to say off-hand. It appears to me that the time is not provided in this particular Clause
    Mr. CASSELasked the Chancellor of the Exchequer what would be the total loss to the revenue if the incomes of husband and wife below £700 were treated as separate for the purpose of Income Tax?
    Mr. LLOYD GEORGE: The loss is estimated at about £500,000, not taking into account the loss which would arise from the transfer of income from husbands to wives for the purpose of avoiding taxation.
    Mr. BRIDGEMANasked the Chancellor of the Exchequer, if he can see his way to simplify the forms under which owners of land can claim relief from Income Tax, Schedule A, under Section 69 of the Finance (1909–10) Act, 1910, and under Clause 8 of the Finance Bill of this year?
    Mr. LLOYD GEORGE: I regret that it is not possible to simplify the forms in question, the information asked for being the minimum necessary for computing the amount of the repayment.
    Mr. BRIDGEMAN: If I can show any official that part of the form is superfluous, will the right hon. Gentleman reconsider it?
    Mr. LLOYD GEORGE: Certainly. I shall be very glad to go into the matter with the hon. Gentleman and the official. I am very anxious that this should work properly. It is a very admirable proposal as regards landowners who do spend money on this property.

    STAMP DUTY.
    Sir JOHN SPEARasked the Chancellor of the Exchequer if, in view of the cost of the transfer of land and the consequent hindrance to its easy exchange and transfer, he will consider the desirability of reducing the Stamp Duty payable on such conveyances?
    Mr. LLOYD GEORGE: The rate of Stamp Duty on conveyances for the transfer of land is a low one, and I do not see my way to propose any reduction in it.

  NATIONAL INSURANCE ACT.

    WIGTOWNSHIRE INSURANCE COMMITTEE.
    Viscount DALRYMPLEasked the Chancellor of the Exchequer if he can state whether any further allowance can be made to the Wigtownshire insurance committee, whose estimated income is £200 and whose estimated expenditure is £466; and, if so, out of what funds it will be paid and when the payment will be made?
    Mr. WEDGWOOD BENN (Lord of the Treasury): I would refer to the reply given to the hon. Member for Kincardineshire on the 9th instant.
    Mr. WORTHINGTON EVANS: Since that date, have any fresh funds been provided?
    Mr. W. BENN: This is a money Grant, and all the money is gone; it has already been disposed of.
    Mr. WORTHINGTON EVANS: If there is not money available, how is the committee of management to do its work?
    Mr. W. BENN: The Parliamentary Grant, to which I have referred, is in aid of administrative expenses for this year.

    ADMINISTRATION EXPENSE
    Major HOPEasked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether there is any limit to the percentage of the sanatorium benefit account for which insurance committees may take credit and expend on purposes of general administration expenses of the committees?
    Mr. W. BENN: No part of the sanatorium benefit funds of an insurance committee may be applied to defray the cost of any administration expenses other than those actually incurred, either directly or indirectly, in the administration of sanatorium benefit. The amount so applied necessarily varies in different areas, but is in all cases subject to review by the Treasury auditors.
    Major HOPE: Is it possible to keep the administration expenses of sanatorium and other benefits separate?
    Mr. W. BENN: I do not think it is practicable to do so.

    EMIGRANTS (TRANSFER).
    Major HOPEasked whether any arrangements have yet been made with the Government of any British Possession or of any foreign country, in accordance with Section 32 of the National Insurance Act, 1911, by which an insured person who emigrates may transfer to a society or institution similar to an approved society or the Post Office Fund, but which has no head office or branch in the United Kingdom?
    Mr. W. BENN: No arrangements of the kind referred to have been made, nor has any application with a view to such arrangements been received by the Commissioners. The Commissioners have, however, informed societies with branches of the conditions on which arrangements can be made under Section 32 (1) with regard to insured persons who, on emigration, join branches of approved societies in the Colonies or abroad.
    Major HOPE: Does that mean that although the Act has been two years in operation, unless the applicant happens to belong to a society which has a branch in the new country he loses all his contributions?
    Mr. W. BENN: The Commissioners are quite prepared to make arrangements with the Colonies or foreign countries. If they make overtures we are prepared to do it.
    Major HOPE: Nothing has been done in the meantime?
    Mr. W. BENN: Nothing can be done unless the Colony or the foreign country makes overtures to us. We are ready to do it immediately they are.
    Major HOPE: Was it not promised that it should be done?
    Mr. SPEAKER: This is not the time to argue the question.

    Housing Bill.
    Mr. LANE-FOXasked the President of the Board of Agriculture (1) whether, since local authorities who are carrying out building schemes in rural districts to replace condemned cottages are not to be assisted under the Government Housing Bill, the building proposed under the Bill will be limited to the area of those authorities who have not put forward any such schemes, how the Government propose to avoid thus subsidising the less active authorities and penalising the-more active; and (2) on what principle it is proposed to select the rural areas in which building is to be carried out under the proposed Housing Bill; and whether the Government will give a preference to areas in which the local authority has made genuine efforts to use its powers under the Housing and Town Planning Act?
    The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman): The number of local authorities carrying out building schemes in agricultural districts is extremely small. In selecting the agricultural districts in which cottages are to be built under the provisions of the Housing Bill, the Board will have regard to the urgency of the demand and to the practicability of obtaining land at a reasonable price. I am prepared to consider any representations which may be made to me on behalf of local authorities, but the Board cannot bind itself to refrain from exercising its powers in any particular

    1907
    district merely on the ground that the local authority has or has not taken action under the Housing and Town Planning Act.
    Mr. HARRY LAWSON: May I ask the right hon. Gentleman how "agricultural districts" are to be denned for this purpose?
    Mr. RUNCIMAN: I would refer the hon. Gentleman to the Bill.
    Mr. BATHURST: Will the Government be prepared to commence building in those districts where the landowners are prepared to give land to the Government?
    Mr. RUNCIMAN: Yes, Sir. One of the reasons for the Bill is that we had no legal powers—so we were advised—to take over land offered us on those conditions. I hope that we shall now be able to take advantage of them.
    Sir A. GRIFFITH-BOSCAWEN: Is the right hon. Gentleman aware that "agricultural districts" are not denned in the Bill?
    Mr. LANE-FOXasked the President of the Board of Agriculture if he will state on what principle the societies for building cottages will be selected under the Government Housing Bill; and when he will be able to announce to the House the names of such societies?
    Mr. RUNCIMAN: The Board will be prepared to consider an application made by or on behalf of any society which conforms with the definition in Clause 4 of the Bill. Several societies of the kind, which the Government have in view, have already been successfully promoted by the Rural Housing Organisation Society, and with the increased financial assistance which will be possible under the provisions of the Bill, I hope that many more will soon come into being. After the Bill has been passed into law I shall be prepared to announce to the House from time to time the names of any societies which have been approved.
    Mr. HOGGE: Will the local authorities have the same increased facilities as are proposed to be given to these building societies?
    Mr. RUNCIMAN: The experience in England is that the local authorities have done very little in the agricultural districts, but, having embarked on this scheme, proposals brought forward for
    1908
    agricultural or other districts will be considered on their merits.
    Mr. HOGGE: Will you give them the same facilities as is proposed to be given to these building societies?
    Mr. RUNCIMAN: Every case will be considered on its merits.
    Mr. C. BATHURSTasked the Prime Minister whether the Government propose to carry their Housing Bill into law this Session if it is treated as a non-contentious measure?
    The PRIME MINISTER (Mr. Asquith): Yes, Sir, the Government hope to do so.
    Mr. JAMES HOPE: May I ask the right hon. Gentleman if, as is likely to be the case, this Bill proves to be contentious, seeing that it gives arbitrary power of selection and discrimination involving the possibility of corruption, the Government will still proceed with it?
    Mr. C. BATHURST: Am I to understand that the Government will not be prepared to take time to carry this Bill if it proves to be contentious?
    The PRIME MINISTER: If it proves to be highly contentious, certainly.

    Sea Fisheries Committees.
    Sir JOHN SPEARasked the President of the Board of Agriculture if he is aware of the resentment felt by the members of the Sea Fisheries Committees at the recommendation of the Departmental Committee that these bodies as now constituted should be abolished; and if, inconsideration of the services rendered by these bodies in solving problems connected with inshore fisheries, he will oppose any alteration of the status of these Committees?
    Mr. RUNCIMAN: Before any action is taken upon the unanimous recommendation of the Departmental Committee the evidence on which it is based will be carefully considered by the Board in the light of the representations which have been received from Sea Fisheries Committees, but I am not prepared at present to express a definite opinion on the subject.

    Customs and Excise Surveyors.
    Mr. SNOWDENasked the First Lord of the Treasury if the practice of compelling surveyors of Customs and Excise to retire at sixty-one years of age, though

    1909
    they have not completed forty years' service, is still being followed, and if some surveyors, who have been compulsorily retired at sixty-one, have been re-engaged for temporary duty owing to pressure of work; and whether, in view of the hardship of compulsory retirement before the full pension can be earned, the Treasury will carry out the suggestion of the Hob-house Committee on Amalgamation and permit surveyors to complete forty years' service?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): The answer to the first part of the question is in the affirmative; and to the second part in the negative. As regards the third part, I cannot find that the Hobhouse Committee made any such suggestion, and the Treasury see no reason to modify the existing rule, which has been in force since 1908.

  BRITISH ARMY.

    CANTEENS.
    Mr. F. HALLasked the Prime Minister if it is proposed to frame Regulations for reorganising the system of supply to Army canteens, with the object of preventing a repetition of the scandals which have recently come to light in this matter?
    The PRIME MINISTER: A Committee has been appointed, and is now considering the whole subject. Its composition and terms of reference will be stated in answer to an unstarred question to-day.

    ROYAL FLYING CORPS.
    JOYNSON-HICKSasked the Secretary of State for War how many efficient aeroplanes commenced the recent month's encampment of the Royal Flying Corps at Netheravon; how many new ones were delivered during the month; and how many efficient aeroplanes ready for immediate war were left at the end of the month?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Harold Baker): The answers to the various parts of the questions are respectively 43, 6 and 44. This refers to machines actually at Netheravon in flying condition and ready for war within two hours.
    Mr. JOYNSON-HICKS: May I ask whether he proposes to publish any Report of those very important trials that take place?
    Mr. H. BAKER: I could not say.

    BULFORD CAMP.
    Mr. C. BATHURSTasked the Secretary of State for War if he is aware that the water supply in the villages in the neighbourhood of Bulford Camp is inadequate to the needs of the soldiers and other Government employés, and at times subject to fouling from sewage and other impurities; and what steps, if any, do the Government propose to take to improve it?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): My attention has not been called to the matter otherwise than by the hon. Member's question, and I should therefore be glad if he would furnish me with specific information.
    Mr. C. BATHURST: Will the right hon. Gentleman be prepared to make some inquiry into the unfortunate domestic conditions of Government employés in this district?
    Mr. TENNANT: Yes, I will make inquiry.
    Mr. JOHN WARD: Has the right hon. Gentleman received from the Shipton Rural District Council a communication where attention was called at the last meeting to the disgraceful condition of affairs there?
    Mr. TENNANT: A communication of the kind the hon. Member refers to was received at the War Office. I do not think there was any mention of a defective water supply.
    Mr. C. BATHURSTasked whether the Government intend to build cottages this year for the accommodation of their employés in the neighbourhood of Bulford Camp; and (2) whether, in view of the shortage of accommodation for Government employés in the neighbourhood of Bulford Camp, the overcrowding of most of the local cottages occupied by married soldiers and their families, and the insanitary condition of some of these cottages, the Government will apply part of the £2,000,000 available for such purpose under the Government Housing Bill towards the provision of new cottages in this district?
    Mr. TENNANT: Accommodation already exists at Bulford suitable for 246 married soldiers and subordinates. The Army Council propose building, in addition, eighty-six married quarters, of which the first twenty are already practically complete under the programme of last year.

    1911
    The second twenty are to be erected during this financial year, and the remainder as funds become available. If these measures do not prove sufficient, it would be a matter for consideration whether any further houses should be built, and, according to the particular circumstances of the demand, whether they should be built by the War Department or under the provisions of the Housing Bill.
    Mr. C. BATHURST: When this accommodation is provided, will the right hon. Gentleman see that no more than two families live in one house, and not six or even eight as at present?
    Mr. TENNANT: Of course, I think it would be very advisable that not more than two families should live in one house.
    Mr. WORTHINGTON EVANS: In estimating the requirements, has the right hon. Gentleman taken into account the married soldiers married off the strength?
    Mr. TENNANT: That is a part of the same inquiry. The whole condition of things is receiving constant attention.
    Mr. WORTHINGTON EVANS: Did not the right hon. Gentleman say he had made an estimate of the amount of accommodation required, and does his estimate include accommodation for soldiers married off the strength?
    Mr. TENNANT: What I said was that
    "Accommodation already exists at Bulford suitable for 246 married soldiers and subordinates. The Army Council propose building in addition 86 married quarters, of which the first twenty are already practically complete under the programme of last year. … The second twenty are to be erected during this financial year, and the remainder as funds become available."
    Mr. WORTHINGTON EVANS: Read on.
    Mr. TENNANT: My reply continued:—
    "If those measures do not prove sufficient it would be a matter for consideration."
    Of course that would be a matter for consideration.
    Mr. PETO: Does the right hon. Gentleman's reply mean that he can make no accurate estimate at all of what the requirements are in the matter of housing in the neighbourhood of Bulford Camp; and is not the state of affairs which exists to-day a proof that what he proposes is altogether inadequate?
    Mr. TENNANT: I have already stated that the Government have the matter under consideration. We realise that it is a serious matter and are inquiring into it.

    TERRITORIAL FORCE REGULATIONS.
    Major BOWDENasked the Secretary of State for War with reference to paragraphs 109 and 515 of the Territorial Force Regulations, on which the official date of publication is the 12th June, 1912, will he state in what form and how those regulations were published on the 20th March, 1911?
    Mr. TENNANT: The rule about service on the unattached list not counting after 31st March, 1911, towards the period required for the Territorial Decoration was published in a Special Army Order on 20th March, 1911. I am sending the hon. and gallant Member a copy. The rule was subsequently embodied in the 1912 edition of the Territorial Force Regulations (paragraph 515) in the same way as other alterations and amendments that had appeared in Army Orders since the previous edition of the Territorial Force Regulations, which was issued in 1910.

    Crown Estate, Romford.
    Mr. WORTHINGTON EVANSasked the President of the Board of Agriculture (1) whether the Government instructed any official to attend a sale of land by auction at Romford on Wednesday, 8th July and to purchase a meadow there, if so, at what price and for what purposes was the land bought; and (2) whether the sanction of the Treasury was given to the purchase of land at Romford at an auction sale held there on the 8th instant; and for what Department and for what purpose the purchase was sanctioned?
    Mr. RUNCIMAN: The sanction of the Treasury was given to the purchase of the land referred to and the sale was attended by the Crown Surveyor on the instructions of my colleague Mr. Leveson Gower. The land was bought for the improvement of the adjoining Crown Estate (which is under Mr. Leveson Gower's charge) at the price of £750.
    Mr. WORTHINGTON EVANS: Would the right hon. Gentleman say for what purpose it was bought, and whether, under the lease, cottages may be built upon it?
    Mr. RUNCIMAN: I cannot answer the latter part of the question without notice.
    Mr. WORTHINGTON EVANS: Can the right hon. Gentleman say why it was bought at all?
    Mr. RUNCIMAN:I am informed by my colleague that it was bought for the improvement of the adjoining Crown Estates, but I do not know the details.
    Mr. WORTHINGTON EVANS: Does not the right hon. Gentleman know that this is—
    Mr. SPEAKER: The right hon. Gentleman has already said that he cannot answer as to details without notice.

    Revenue Bill.
    Mr. F. HALLasked the Prime Minister, if a memorial has been received from a number of Members of Parliament calling attention to the proposal to raise additional revenue for purposes which have not been previously sanctioned by this House; and if he is in a position to allay the apprehension caused by such a contemplated departure from the usual practice?
    The PRIME MINISTER: The whole matter has been thoroughly discussed in the House, and I can add nothing to what was then said.
    Mr. CHIOZZA MONEYasked the Prime Minister if, in view of the fact that many Clauses of the Revenue Bill as printed are designed to carry into effect definite promises made by the Government to remove injustices in existing taxation, he can see his way to give the House an opportunity to enact these Clauses quite apart from the separate question of a new valuation for rating purposes; and whether, in view of the fact that the suggested new valuation is obviously intended to form the machinery for a reform of our rating system, be will give the House an opportunity to pronounce upon its merits as a separate question?
    The PRIME MINISTER: As regards the first part of the question, if the House will agree to allow those adjustments, which were, I understand, discussed last year, to pass without opposition, we might proceed with them before the prorogation. It is intended that the proposals as to valuation shall be included in the same Bill as the new Grants which are to be conditional on the adoption of the valuation proposals.
    Mr. JAMES HOPE: Has the right hon. Gentleman any kind of guarantee that the
    1914
    doctrinaires of the Glasgow school will allow this?
    The PRIME MINISTER: No, Sir, none whatever.
    Mr. CHIOZZA MONEY: May I ask if the right hon. Gentleman will ascertain through the usual channels whether these Clauses can be regarded as non-contentious, which would enable him to proceed in the manner indicated?

    Compulsory Military Training.
    Mr. HUNTasked the Prime Minister whether his attention has been called to the fact that women are now undergoing military training in Ulster for the defence of themselves and their children; and whether he could therefore now agree with the Leader of the Opposition to make compulsory military training for men, for Home defence only, a non-party question, allowing Parliamentary candidates to advocate it or not, unhampered by party political orders?
    The PRIME MINISTER: I fear I do not see my way clear to adopt the hon. Member's suggestion.
    Mr. HUNT: May I ask the right hon. Gentleman whether he now thinks that those who advocate compulsory military training commit an infamous crime against mankind, as was stated by the Chief Government Whip; will he go as far as that?
    The PRIME MINISTER: That enters into the domain of opinion and not of fact.

    Chancellor of the Duchy of Lancaster.
    Mr. GRETTONasked the Prime Minister if Mr. Masterman is still a Member of the Cabinet; and, if so, does he retain any responsibility for the administration of the National Insurance Act?
    The PRIME MINISTER: The answer to the first part of the question is in the affirmative. As regards the latter part, my right hon. Friend is chairman of the National Health Insurance Joint Committee.
    Mr. WORTHINGTON EVANS: Will the right hon. Gentleman say who will be in charge of the Amending Bill when it comes before the House?
    The PRIME MINISTER: The hon. Gentleman will see.

    Lord Saye and Sele.
    Mr. NEVILLEasked the Prime Minister whether, when he decided to retain Lord Saye and Sele as a Member of his Government, he was aware that Lord Saye and Sele had admitted that he had frequently approached the commanding officers of regiments for the purpose of obtaining the custom of their canteens for the brewery whose salaried and commission agent he was, and that, when the Dublin Fusiliers changed their brewer, whose agent Lord Saye and Sele had been, he paid the expenses of Colonel Whitaker to visit the commanding officer of that regiment in Crete with a view to recovering the custom of their canteen, and with that object wrote a letter which the judge who sentenced Colonel Whitaker to imprisonment characterised as a most improper letter?
    The PRIME MINISTER: Lord Saye and Sele made a full statement in another place of what had occurred with regard to this matter, the version of which contained in the question is both incomplete and, I think, misleading.
    Mr. NEVILLE: May I ask whether the House is to understand that the conduct which was admitted by the Noble Lord, and which savours of tampering with the integrity of regimental officers, fully qualifies him for association with His Majesty's Ministers? [HON. MEMBERS: "Yes!"]
    The PRIME MINISTER: The Noble Lord remains a Member of the Government, and I have every confidence in him.

    Scientific Research (Government Grants).
    Mr. COWANasked the Prime Minister whether any existing fund is available out of which men of science may be compensated for losses incurred by them in doing unremunerative scientific work when such work has proved to be of advantage to His Majesty's Government and subjects; and whether, if no such fund is available, he will consider the advisability of providing funds for meeting such cases in the future?
    The PRIME MINISTER: I am not aware of any fund other than the Civil List. The conditions for the granting of Civil List pensions are laid down by Sections 5 and 6 of the Act I. and II. Vict. c. 2. I am not satisfied that further provision is necessary. I may add that
    1916
    nine pensions were awarded last year for scientific purposes—two to scientists themselves, seven to their widows or daughters.
    Mr. COWAN: May I ask whether it is not the case that Civil List pensions are in the nature of charity and not a reward for services?
    The PRIME MINISTER: No, Sir, I never regarded them as in the nature of charity. They are a reward for services rendered by deceased persons who have left their families in necessitous circumstances.
    Mr. J. HOGGE: Can the right hon. Gentleman state on what basis the Government give Grants for these scientific purposes; and will he explain, for example, why £10,000 is given to the Sir Edward Shackleton expedition before he makes any investigation, and will not give anything to Dr. Bruce?
    The PRIME MINISTER: That does not arise out of the question. I personally investigate every one of these cases.
    Mr. PRETYMAN: May I ask whether the right hon. Gentleman had a case before him of this kind in connection with the Exhibition at San Francisco, where requests have been made to scientists in this country to go and read Papers and take part in that exhibition, the expenses of which would be very heavy; and is there any possibility of a Grant being devoted to that purpose?
    The PRIME MINISTER: I would like notice of that. I was not aware of it.

    Elementary School Fees.
    Mr. KINGasked the President of the Board of Education whether he is aware that £26,331 was paid last year as school pence in 141 ordinary elementary schools in twenty cathedral cities of England; and whether he will institute an inquiry whether the education given in these schools is superior to that given in the council and non-provided schools in London, in all of which schools free education is provided?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Trevelyan): I do not wish to question the accuracy of the hon. Member's figures, but my right hon. Friend does not propose to

    1917
    institute an inquiry of the nature suggested, since the Statute under which the fees are charged does not necessarily require the education to be superior to that given in ordinary schools.
    Mr. KING: Does not the hon. Gentleman realise that when money is paid for an article which is generally supplied free, you expect to get something of a better quality?
    Mr. JOYNSON-HICKS: Does that apply to the £400 a year?

    Dowlais Roman Catholic School.
    Lord NINIAN CRICHTON-STUARTasked the President of the Board of Education (1) whether he can state whether section 49 of Mr. Barker's report on the Dowlais Roman Catholic school case has reference to the dismissal of eighteen teachers from that school; and whether he will state who is to blame for these dismissals; and (2) whether he is aware that eighteen teachers at the Dowlais Roman Catholic school were dismissed from 1st May to 8th June, 1914; whether this school was considered by the Board to be efficiently maintained during this period; and, if not, with whom the fault lies?
    Mr. TREVELYAN: Paragraph 49 of Mr. Barker's report obviously refers to the purported dismissal of the eighteen teachers, but the Board have no evidence that the school was not as efficient as possible in the circumstances during the period named and therefore, the other questions do not arise.
    Lord N. CRICHTON-STUART: Does the hon. Member consider that this school is properly maintained when the teachers are absent?
    Mr. TREVELYAN: There were other teachers supplied.
    Lord N. CRICHTON-STUART: Were they teachers with whom the managers agreed or not?
    Mr. TREVELYAN: The point is whether the school was efficient or not. As far as we have any information, the school was efficiently carried on during the whole period.
    Mr. KILBRIDE: Can the hon. Gentleman say whether the teachers supplied were supplied from Belfast?

    Illegal Trawling.
    Major ANSTRUTHER-GRAYasked the Secretary for Scotland whether he can state the number of prosecutions and convictions and total amount of fines for illegal trawling within the three-mile limit off the Scottish coast during the last twelve months?
    The SECRETARY for SCOTLAND (Mr. McKinnon Wood): The number of prosecutions was nineteen; the number of convictions seventeen; the amount of fines imposed was £1,045; and the amount of fines, paid £415.

    Mental Deficiency Act (Medical Appointments).
    Mr. SNOWDENasked the Home Secretary what appointments have been made to the posts of medical inspectors, under the Mental Deficiency Act; if all the persons appointed are men; at what, salaries they have been appointed; if the posts were advertised; if it is intended to appoint a woman or women medical inspectors; and, if so, at what salaries?
    The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): Three such appointments have been made, all of men, at the following salaries: Chief inspector, £200, in addition to his salary as inspector under the Inebriates Act; one inspector, £500, rising to £800; one inspector, £400, rising to £600. The last two posts were advertised. It is intended to appoint a woman medical inspector, and provision is made in the Estimates for a salary of £350, rising to £550; the Board of Control has not yet secured the services of a suitable person.
    Lord N. CRICHTON-STUART: Can the right hon. Gentleman give the names of those who are to be appointed?
    Mr. McKENNA: I could not without notice. I shall be glad to do so if a question is put on the Paper.

    Conviction for Loitering, Huddersfield (Harold Stansfield).
    Mr. CHARLES DUNCANasked the Home Secretary whether his attention has been drawn to the case of a young man named Harold Stansfield who, on the 16th of March last, was sentenced at the Huddersfield Police Court to twelve months' hard labour for loitering with intent to commit a felony; whether he is

    1919
    aware that Stansfield's previous history goes to show that he is not really criminally minded; and whether, in view of the effect a sentence of this duration will have upon Stansfield, he will inquire into the matter with a view to the remission or reduction of the remainder of the sentence?
    Mr. McKENNA: I have received two petitions from this prisoner. I could not agree that Stansfield's previous history gods to show that he is not really criminally minded; on the contrary, his history is very bad. I regret that the circumstances of his present conviction show no ground for interference with the sentence.

    Safety of Life at Sea (Regulations).
    Mr. PETOasked the President of the Board of Trade whether he will take steps to ascertain the opinions of shipmasters and others as to the advisability, in the interests of safety of life at sea, of altering Sub-section (e) of Article 2 of the Regulations for preventing collisions at sea so as to make it compulsory for steam vessels to carry two mast-head lights instead of optional; and, if the general opinion is favourable to the change, whether he will take the necessary steps to give effect to it?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Robertson): Steps have already been taken to ascertain the opinion of shipowners, shipmasters, and other interests concerned on the question of making the second masthead light for steamships compulsory; and in conformity with Article 14 of the International Convention on Safety of Life at Sea, steps will be taken towards obtaining the assent of the countries which are parties to the International Regulations for Preventing Collisions at Sea to the alteration of Article 2 of those Regulations.
    Mr. PETO: Do the Marine Department of the Board of Trade regard this change favourably?
    Mr. ROBERTSON: I did not catch the question.
    Mr. SPEAKER: The hon. Member had better put it on the Paper.

    Canada (Bradford Exports).
    Sir GEORGE SCOTT ROBERTSONasked the President of the Board of Trade
    1920
    whether he can give the value of the goods exported from the Bradford district to Canada for the month of June; whether he can say how that total compares with the same period of last year; and can he give the figures for the half-year ended in June as compared with those for 1913 and 1912, respectively?
    Mr. ROBERTSON: No information is available with regard to the value of the exports to Canada which originate from particular districts of the United Kingdom. The figures which were given to my hon. Friend respecting the trade between the Bradford district and the United States of America were obtained by the courtesy of the United States Consular officials, and were based on the invoices of the exporters, which have to be deposited at the United States Consulates. No corresponding source of information is available in regard to trade with Canada.

    Mercantile Marine (Seamen's Quarters).
    Mr. PETOasked the President of the Board of Trade whether his attention has been called to the opinions expressed by the medical officers of various port sanitary authorities, at the Sanitary Congress which concluded at Blackpool on the 10th instant; whether he is in agreement with the principle that the plans of inhabited quarters of all new vessels should be submitted to and approved by the port sanitary authorities; and, if not, what steps he proposes to take to render the regulation and inspection of them by his Department to be of such a nature as to insure that reasonably sanitary quarters shall be provided for all seamen in the British merchant service in future?
    Mr. ROBERTSON: My right hon. Friend has seen references in the public Press to statements made at the Sanitary Congress, but he has not yet received a report of the proceedings at that congress, or had an opportunity for properly considering them. As at present advised, he is inclined to doubt whether it would be practicable to compel plans of the inhabited quarters of new vessels to be submitted to local sanitary authorities. As regards the last part of the question my right hon. Friend does not think he can add anything at present to the full statement which he made in the House recently in the Debate on the Board of Trade Vote.

    Shipping Subsidies.
    Mr. HUNTasked whether the increased subsidies now given, or about to be given, by the German Government to German ships going to Australia amount to a larger sum than the subsidies given to British ships going to Australia; and, if so, how does the Government propose to neutralise the effect on British trade and shipping?
    Mr. ROBERTSON: My present information does not enable me to reply to the hon. Member's question, but I will make inquiries in the matter.

    Land Court (Scotland) Decision.
    Mr. COWANasked the Lord Advocate whether his attention has been called to a recent decision of the Land Court which dismissed the application of William Simpson to be declared a landholder or a statutory small tenant on the estate of Lord C. Crichton-Stuart, on the ground that the applicant was not holding under a lease of earlier date than 1st April, 1912; and if he can state whether Simpson was actually in occupation of the holding at that date?
    The LORD ADVOCATE (Mr. Munro): I have made inquiry into the circumstances of the case referred to by my hon. Friend. I am informed that William Simpson was in actual occupation of the holding at the date mentioned. His possession, however, was on behalf of his brother-in-law, Alexander Murdoch, who was tenant of the holding at 1st April, 1912, and continued his tenancy till Whitsunday, 1912.

    Public Trustee (Investments).
    Mr. F. HALLasked what is the total amount of the investments at present held by the Public Trustee; by whom such investments are selected; and whether the control and management of these trust funds are subject to any audit or supervision by his Department?
    THE SOLICITOR-GENERAL (Sir S. Buckmaster): The hon. Gentleman will find a series of detailed figures as to the property in the hands of the Public Trustee on page 12 of his Sixth General Report, Cd. paper 7343. Investments are selected on the advice of officers and professional advisers of the Public Trustee's Department, in consultation, as far as practicable, with those interested in the
    1922
    respective trusts. The accounts of all trusts are audited both by an internal auditor, and by the Comptroller and Auditor-General in a continuous day to day audit, acting under regulations issued by the Treasury. Periodical accounts of the transactions in every trust are also issued to the beneficiaries, not less than one a year.

    Heather Beetle (Scotland).
    Colonel BURNasked the Secretary for Scotland if his attention has been called to the damage done by the heather beetle on hundreds of thousands of acres of moorland in Scotland; and will he consider, as the best means of ridding the country of these pests, the advisability of passing legislation to authorise heather being burnt between the months of May and August?
    Mr. McKINNON WOOD: I am in communication with the Board of Agriculture for Scotland on the subject, but their has not been time to get their reply. Perhaps the hon. Gentleman would put the question again.
    Colonel BURN: If the information is satisfactory, will the right hon. Gentleman assist legislation to remedy the matter?
    Mr. McKINNON WOOD: I would rather not commit myself to any opinion as to whether or not that would be an effective remedy.

  POST OFFICE.

    TELEPHONE SERVICE.
    Mr. MacCALLUM SCOTTasked the Postmaster-General whether he is aware that the reorganisation of the traffic branch of the London telephone service, so far as the exchange managers are concerned, has been outstanding since before the appointment of the Holt Committee, and that the exchange managers were referred by the Department to that Committee for a settlement of their case, and a proposed scheme was laid before the Holt Committee by the Department's witness; and whether, in view of his recent statement to the effect that the matter was still under consideration, he can say what progress, if any, has been made and when the scheme is likely to be put into operation?
    The POSTMASTER-GENERAL (Mr. Hobhouse): It is not the case that a scheme for the reorganisation of the

    1923
    traffic section of the London telephone service was laid before the Holt Committee, though certain proposals with regard to the duties of the exchange managers were mentioned in evidence. The matter has, however, been engaging attention for some time past, and is now under consideration by a Departmental Committee. In the meantime, I regret that I am not in a position to make any further announcement on the subject, but my hon. Friend may rest assured that there will be no avoidable delay.

    SUPPLEMENTARY CLERKS.
    Mr. CHARLES DUNCANasked for the number of assistant clerks, the number of supplementary clerks employed in the Post Office, and the number of the former class who have been promoted to the rank of third-class supplementary clerk during the past five years?
    Mr. HOBHOUSE: 1,105 assistant clerks are employed in the Post Office, and 1,072 supplementary clerks. In the last five years 35 assistant clerks have been selected for promotion to third-class clerkships. A number of assistant clerks have also been promoted to second division clerkships.

    WOODEN POLES.
    Mr. C. DUNCANasked the Post master-General whether, in view of the Post Office statement that the Department requires many thousands of wooden poles per year, and that the wood best suited for the purpose is red fir and larch, and that private enterprise has failed to supply the material, he will consider the advisability of the Post Office purchasing land and growing its own wood?
    Mr. HOBHOUSE: I am obliged to the hon. Member for his suggestion, but the question of forestry comes under the control of the President of the Board of Agriculture.

    CLERKS (PROMOTION).
    Mr. C. DUNCANasked the Post master-General how often during the year the merits of assistant clerks in the Post Office are considered with a view to the promotion of those who are specially meritorious; and if he will take steps to ensure that the prospects of advancement of assistant clerks are not jeopardised whilst the revision of the Post Office
    1924
    clerical staff, consequent upon the recommendations of the Holt Report is under consideration?
    Mr. HOBHOUSE: It is usual to consider once a year the question of promoting specially meritorious assistant clerks. The matter will be taken up in due course in the current year; and the prospects of the assistants clerks will not be allowed to suffer while the recommendations of the Holt Committee respecting the clerical staff are under consideration.
    Mr. C. DUNCANasked the Postmaster-General the number of assistant clerks serving in the London telephone service who have been nominated for promotion but who have not yet been certificated as third-class clerks because they have not passed a qualifying examination in purely scholastic subjects; whether he is aware that both the Royal Commission, on the Civil Service and the Holt Committee have in their Reports condemned re-examination on promotion; and will he state the reason for the difference in treatment as between assistant clerks, recruited by examination through the ordinary channels, and ex-National Telephone Company's employés who have been graded as assistant clerks and who are not required to pass any qualifying test on promotion to third-class clerkships?
    Mr. HOBHOUSE: The number of assistant clerks serving in the London Telephone Service who have been nominated for promotion but have not yet passed the qualifying examination necessary before the issue of a Civil Service certificate is eight. The recommendations of the Holt Committee and the Royal Commission on the subject of promotion without examination relate to proposed new classes and not to the existing class of assistant clerks. The circumstances attending the transfer of the staff of the National Telephone Company were of an altogether exceptional character: and it was necessary in the case of the transferred officers to modify to some extent the regulations which normally govern promotion in the Civil Service.

    Mother's Maintenance (Manchester).
    Mr. TYSON WILSONasked the President of the Local Government Board if his attention has been called to the case of a man named John E. Hoare, who on the action of the South Manchester board

    1925
    of guardians was ordered by the magistrates at the Manchester City Police Court to pay 3s. 6d. per week towards the maintenance of his mother; whether he is aware that the woman's husband has an income of 43s. a week, and has no other dependants other than his wife towards whose maintenance he contributes 7s. per week, the son having a wife and three children to keep out of an income of 43s. per week; whether he is aware that, as the result of Hoare refusing to pay the 3s. 6d. per week, the magistrates have made an order to commit him to prison; and whether, with the object of preventing this, he will communicate with the guardians advising them not to enforce the order on the son, but to compel the husband to support his wife, which he is well able to do?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Herbert Samuel): The hon. Member has drawn my attention to this case. It rests with the guardians in the first instance, or with the justices if the case is taken before them, to decide whether a person who is legally liable for the support of a relative should be called upon to contribute to the cost of his maintenance when chargeable to the poor rate. I have no authority to review the action of the justices. I will, however, send a copy of the hon. Member's question to the guardians.

    Land Purchase (Ireland).
    Mr. FRANCIS MEEHANasked the Chief Secretary for Ireland whether he is aware that the tenants on the O'Beirne estate, Ballinaglera, county Leitrim, have been served with processes of ejectment owing to their inability to pay the present rents; and whether the Congested Districts Board will take immediate steps to bring about the sale of this estate?
    Mr. T. W. RUSSELL (Vice-President of the Department of Agriculture, Ireland): The Congested Districts Board cannot identify the estate from the particulars given. If further information is supplied inquiries will be made regarding the property.

    Royal Irish Constabulary.
    Mr. F. HALLasked if it is proposed to take steps to bring the conditions of labour and rates of pay of the lower ranks of the Royal Irish Constabulary into line with the considerable improvements granted recently as regards
    1926
    rate of pay, etc., in other important police services in England?
    Mr. RUSSELL: My right hon. Friend is taking steps with a view of having the recommendations generally of the Committee carried into effect with the least possible delay, but he is not prepared to make any further statement in the matter.
    Mr. F. HALLasked what are the respective salaries, including the value of any emoluments, which may be allowed, of the district constabulary inspectors for Youghal and Galway; what is the number of stations in each district; and have any steps yet been taken to redistribute and reorganise the constabulary, as recommended by the Vincent Commission in 1901, with a view to proportioning staff to correspond with the necessities of area and population?
    Mr. RUSSELL: The Inspector-General informs me that the pay and allowances, including lodgings, servants, and forage allowances, of the district inspectors at present at Youghal and Galway, are £360 and £410, respectively. There are four stations in Youghal District, and fourteen in Galway District. Reductions in the number of constabulary stations and of districts have been carried out from time to time since 1901 as circumstances permitted. At the beginning of the present year the number of ordinary stations had been reduced by about 120, while the districts were sixteen less than in 1901.
    Mr. F. HALL: Is it not the fact that in country Carlow where there are sixteen stations there is one county inspector and two sub-inspectors, while in Cork there are a greater number of stations and fewer inspectors?
    Mr. RUSSELL: If the hon. Member puts down a question my right hon. Friend will be glad to answer it.
    Mr. F. HALLasked what is the commencing rate of pay of men joining the Royal Irish Constabulary as constables, the rate after four years' service, and the maximum rate; and what increase these rates represent compared with those obtaining ten years ago?
    Mr. RUSSELL: The commencing rate of pay of a constable is at present £54 12s. per annum; after four years' service, £57 4s.; while the maximum rate of that rank is £72 16s. As compared with ten

    1927
    years ago, the maximum rate has been increased by 1s. per week (from £70 4s. to £72 16s.), but the other rates have remained unchanged.
    Mr. F. HALL: Is it not the fact that the commencing rate of pay of a member of the Royal Irish Constabulary is 15s. per week, and not as the right hon. Gentleman stated £54 per year?
    Mr. RUSSELL: I think the hon. Member will find that the figures in the answer are quite accurate.

    Police and Demonstrations (Ireland).
    Mr. F. HALLasked if any instructions, oral or written, of any kind have been issued to the Irish police, or any section of that force, as to the steps to be taken for dealing with demonstrations, meetings, or other manifestations of activity on the part of the Ulster Volunteers or the National Volunteer organisations?
    Mr. RUSSELL: All orders issued to the police are of a confidential nature—and I am not prepared to make any statement in the matter.

BUSINESS OF THE HOUSE.

  AUTUMN AND WINTER SITTINGS.
  Mr. JOYNSON-HICKSasked the Prime Minister (1) whether he proposes to proceed this Session with the Inebriates Bill; if so, when the next stage of this Bill will beign; and (2) whether he proposes to proceed this Session with the Criminal Justice Administration Bill; and, if so, when the next stage of this Bill will begin?
  The PRIME MINISTER: As regards this and the following questions, I must ask the hon. Member to await my statement on Friday.
  Mr. CHARLES BATHURSTasked the Prime Minister (1) if, for the domestic convenience of Members of this House and their families, he will now state whether the House is likely to be still sitting on 15th August or, alternatively, on 31st August; and (2) whether, seeing that this House is, according to present arrangements, to reassemble for next Session in the early winter, and that winter commences in this country on the 21st December, the Government contemplates the meeting of Parliament at or
  1928
  after Christmastide, or whether, alternatively, it is intended that the House shall reassemble in the autumn?
  The PRIME MINISTER: In reply to these questions, I will make a further statement on Friday.
  Mr. C. BATHURST: May I ask whether, in stating to the House that he proposes to call the House together in early winter, he really means an Autumn Session in November?
  The PRIME MINISTER: I have no regard to the strict dates in the calendar.
  Mr. BONAR LAW: May I ask the Prime Minister if he can say when the Government of Ireland (Amendment) Bill will be taken?
  The PRIME MINISTER: The Government are anxious that this Bill should be considered at the earliest practicable date, and in any case during next week. I will put it down provisionally for Monday. To-morrow, in my usual statement as to business, I will definitely state what will be done.
  Mr. BONAR LAW: I think, if I may say so, that it would be a real misfortune if there was any delay, and I sincerely trust that the right hon. Gentleman will take the Bill on Monday.
  Lord EDMUND TALBOT: Under these circumstances, may I ask the right hon. Gentleman what will be the order of business for Friday?
  The PRIME MINISTER: On Friday we will take the Motion for the Suspension of the Eleven o'clock Rule for the remainder of the Session; and after that Report of the Money Resolution of the Merchant Shipping (Convention) Bill, the Committee stage of the Government of the Soudan Loan Bill, and the Third Reading of the Elementary Education (Defective and Epileptic Children) Bill.

POLICE (WEEKLY REST-DAY) (SCOTLAND) BILL.
Reported, with Amendments, from the Standing Committee on Scottish Bills.
Report to lie upon the Table, and to be printed. [No. 358.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 358.]
Bill, as amended (in the Standing Committee), to be taken into consideration To-morrow, and to be printed. [Bill 327.]

GOVERNMENT OF IRELAND (AMENDMENT) BILL [Lords].
Read the first time; to be read a second lime To-morrow, and to be printed. [Bill 326.]
IRISH CONVICTIONS.
Return ordered, "showing (1) the names of all past or present Irish Members of Parliament who have been convicted of political offences since 1870; (2) the place and date of conviction; (3) the nature of the charge preferred; (4) the sentence."—[Mr. Hancock.]
NEW MEMBER SWORN.
The Right honble Joseph Austen Chamberlain, for the Borough of Birmingham (West Division).

SHORT WEIGHT.
Report from the Select Committee, with Minutes of Evidence and an Appendix, brought up, and read;
Report to lie upon the Table, and to be printed. [No. 359.]

LOCAL GOVERNMENT PROVISIONAL ORDER (No. 18) BILL.
Reported, with Amendments [Provisional Order confirmed]; Report to lie upon the Table.
Bill, as amended, to be considered To-morrow.

STANDING COMMITTEES (CHAIRMEN'S PANEL).
Mr. Eugene Wason reported from the Chairmen's Panel; That they had appointed
1940
Mr. John William Wilson to act as Chairman of Standing Committee B; Mr. T. P. O'Connor to act as Chairman of Standing Committee C; and Mr. Arthur Henderson to act as Chairman of the Standing Committee on Scottish Bills.
Report to lie upon the Table.

PRIVATE BILLS.
Message from The Lords,—That they have agreed to,—
University of Sheffield Bill, without Amendment.
Stourbridge Navigation Bill, with Amendments.
Amendments to—
Hull and Barnsley Railway Bill [Lords],
North Metropolitan Electric Power Supply Bill [Lords], without Amendment.
That they have passed a Bill, intituled "An Act to consolidate the Law relating to Deeds of Arrangement." [Deeds of Arrangement Bill [Lords.]
Also, a Bill, intituled, "An Act to consolidate the Law relating to Bankruptcy." [Bankruptcy Bill [Lords.]
And also, a Bill, intituled, "An Act to enable the urban district council of Weston-super-Mare to construct additional waterworks, to enlarge the cemetery, to acquire lands, to borrow additional moneys, and to confer upon that Council various powers for the health and good government of the district; and for other-purposes." [Weston-super-Mare Urban District Council Bill [Lords.]
Weston-super-Mare Urban District Council Bill [Lords,]
Read the first time; and referred to the Examiners of Petitions for Private Bills.

BILL PRESENTED.
  WINE PRIVILEGES (DISCONTINUANCE) BILL.
  "To provide for the discontinuance of certain Privileges of the University of Oxford and the city of St. Albans in connection with the sale of Wine and the granting of licences therefor, and for other purposes incidental thereto." Presented by Mr. MONTAGU; to be read a second time upon Friday, and to be printed. [Bill 324.]

LONDON STREET TRAFFIC.
Mr. DICKINSON: I beg to move, "That leave be given to introduce a Bill to provide for the regulation of Street Traffic in London."
In the few minutes at my disposal I hope that I may be able to show that this is a matter of more than local importance, one that has been continually before the consideration of this House, and is now pressing for solution. There have now been many Acts of Parliament dealing with the question of traffic in London. None of them have been satisfactory, and that has been largely due to the fact that the administration of local government in London and the surrounding districts has been of so chaotic a character that the ordinary solution as would have been applied in other parts of the country, namely, one based upon our well-organised municipal system, has never been applicable to London. Not long ago, about the year 1902 or 1903, a Royal Commission was appointed for the purpose of reporting upon the general question of the traffic in London, and this Commission was composed of very distinguished men. The Chairman was Sir David Barber. These gentlemen gave their attention to the question during a period of not less than three years. They visited Europe and America, and produced a Report of eight very bulky volumes; they made very important suggestions dealing with a great multiplicity of subjects; they suggested the establishment of a new body of experts, to be called a Traffic Board, which in due course was to make a new heaven and a new earth of our Metropolis in England. What has come of it? Of these distinguished gentlemen we may very well use the phrase, parturiunt montes, nascetur ridiculus mus. The only thing which has emanated from all that bustle and consideration has been the establishment of a traffic branch of the Board of Trade, which issues once a year a Report, which I doubt is read by twenty people, and it has done, so far as I have been able to discover, very little else.
The reason why these proposals have failed to be taken up is, in my opinion, that they were not based sufficiently upon the principle of municipal administration, and this explanation was evidently the one that was accepted by a Select Committee of this House, which was appointed
1942
in 1912 to consider once again this particular subject. In 1912 circumstances and facts had brought it about that it was absolutely essential some further investigation should take place. What appeared to be a question merely of public inconvenience had become one of public danger. The fatal accidents in the streets of London in 1904 numbered 155; in 1912 they had risen to 537; in 1913 the number had gone up to 612, and in all probability the number this year will be something approaching to 700—that is to say, there are thirteen people killed in London every week, almost two persons every day in the year, owing to the improper consideration of the question of the regulation of the traffic. This Committee was appointed by this House in 1912, and the hon. Member for Bury (Sir G. Toulmin) presided. It consisted of Members of all parties in this House, and it included those well acquainted with municipal affairs outside London, and several gentlemen whose knowledge of London was particularly complete, and this Committee reported upon the reference that was made to them. The spirit of that Report appears in a few words in paragraph 14, which I will venture to read to the House. They say:—
"The control of the streets is essentially a municipal function, and the same minds should have before them the question of the adequacy of the street, the facilities for traffic and its regulation, and the safety and convenience of pedestrians. These duties cannot, consistently with the principles upon which local self-government has developed in England, be assumed by Government, whether directly or by devolution to a body not responsible municipally and not endued with financial powers."
In that spirit they examined the suggestions made for a Traffic Board, and they reported against that proposal, and in doing so they stated:—
"Your Committee are of opinion that what is required is a new arrangement of the functions of Government Departments; and for all matters of a municipal nature the concentration of power and responsibility upon existing central authorities. The latter must eventually be the paymasters, they are in contact with the ratepayers, and are in daily touch with changing conditions. The duty of originating and accommodating traffic schemes and regulations is in the opinion of your Committee a municipal duty. It is the prime duty; and co-ordination, however necessary and important, is an adjunct. Co-ordination can be secured by consultation between adjoining municipal authorities under the direction and advice of a Government Department which is itself properly constituted to meet the special conditions."
And upon these lines they based their recommendations, and these recommendations have formed the basis entirely of the Bill which my colleagues and I have prepared and have now presented to the

1943
House. These lines can be stated in a very few words. All of them place the duty of initiation of by-laws and regulations and licences, and such like, upon the municipal authority. In order to discover what municipal authorities should be responsible, we have the Committee recommending and we propose that the municipal authority should be the County Council of London and the counties immediately surrounding London, and the councils of the county boroughs in the neighbourhood of London. Then the Bill proposes to transfer to these councils the duties of the Home Office, which in every other part of England are performed by the municipal authorities, such for instance as the licensing of public vehicles, and the making of general regulations affecting traffic. These powers can be, we believe, be transferred to the municipal authorities without interfering in the slightest degree with the proper functions of the police force, these functions being, as I understand, to execute the law and enforce police regulations when made by the public authorities. This Bill confers upon these councils powers to make by laws, to regulate the traffic, and especially to regulate the rates and speeds and time of stage carriages; but in order to prevent any conflict of administration between the different local authorities, and also to provide against any possible injustice, we propose that the action of these authorities should be subject in every case to the veto of the Government Department; and further, in dealing with all these matters with which, of course, the police are very closely concerned, the authorities should take into consultation the Commissioner of Police, and that he also should have a right to appear, if necessary, before the Government Department dealing with these proposals. In every respect, except one, the Bill follows the recommendations of the Select Committee, but there is one point where we have departed from it. The Committee recommends that the Government Department to be charged with these duties should be the Board of Trade, and that a traffic branch of the Board of Trade should be established for that purpose. After consideration we think it wiser to substitute the Local Government Board instead of the Board of Trade. These are the main lines of the Bill which I ask leave to introduce.
4.0 P.M.
Mr. JOYNSON-HICKS: With regard to this Bill I am convinced that it is absolutely necessary that there should be a rearrangement of the traffic of London. There is no doubt that a rearrangement is badly needed. The present system which is partly controlled by the Local Government Board, the Board of Trade, and the Road Board, is quite out of date, and a new Board is absolutely essential. The only objection I have to make is in regard to the Board which this Bill proposes. As far as I can understand it the proposal of this measure is that there should be a Traffic Board composed of representatives, of the County Councils of London, Middlesex, and Surrey. I think it is perfectly obvious that it would be unfair to put the whole traffic of London under the control of a body which has itself a competing system of traffic. The London County Council control and run the tramway system of London. On the other hand, there is a large traffic system which I frankly tell the House I am personally connected, though not financially, I mean that large motor omnibus traffic system which carries an enormous number of the people of London. I believe some 700,000,000 passengers are carried every year by the omnibuses of London, and I think that shows that they supply a public want. The only point I desire to make is that it would be absolutely unfair to put the whole organisation of the traffic of London, both tramways and omnibuses, under the control of one body which is personally interested in one branch of that traffic. I entirely agree with the proposal that there should be a Traffic Board. I do not know that I am giving away any secret when I say it is very largely imagined that the Government is considering proposals for dealing with the traffic question in London, and I am glad they are. The traffic of London has got into such a condition that it is most essential that it should be dealt with fairly by all parties for the good of the community and those who use the traffic.
Question put, and agreed to.
Bill ordered to be brought in by Mr. Dickinson, Mr. Shirley Benn, Mr. Carr-Gomm, Sir Stephen Collins, Mr. Goldsmith, Mr. Kellaway, Mr. Morison, Mr. Pearce, Sir Albert Spicer, and Mr. Wiles. Presented accordingly, and read the first time; to be read a second time upon Monday next, and to be printed. [Bill 325.]

ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee.
  THIRD ALLOTTED DAY.—[Progress, 14th July.]
  [Mr. WHITLEY in the Chair.]

  FINANCE BILL.

    CLAUSE 11.—(Relief in Respect of Quick Succession where Property consists of Land or a Business.)
    Where the Commissioners of Inland Revenue are satisfied that Estate Duty has become payable on any property consisting of land or a business (not being a business carried on by a company), or any interest in land or such a business, passing upon the death of any person, and that subsequently within five years Estate Duty has again become payable on the same property or any part thereof passing on the death of the person to whom the property passed on the first death, the amount of Estate Duty payable on the second death (if that death occurs after the passing of this Act) in respect of the property so passing shall be reduced as follows:—
    Where the second death occurs within one year of the first death, by fifty per cent.;
    Where the second death occurs within two years of the first death, by forty per cent.;
    Where the second death occurs within three years of the first death, by thirty per cent.;
    Where the second death occurs within four years of the first death, by twenty per cent.;
    Where the second death occurs within five years of the first death, by ten per cent.:
    Provided that where the value on which the duty is payable of the property on the second death exceeds the value on which the duty was payable of the property on the first death, the latter value shall be substituted for the former for the purpose of calculating the amount of duty on which the reduction under this Section is to be calculated.
    Mr. HOARE: I beg to move, to leave out the words "on any property consisting of land or a business (not being a business carried on by a company), or any interest in land or such a business passing."
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    I move this Amendment for two reasons. In the first place, I wish to ask the Chancellor of the Exchequer certain questions connected with the words which I propose to leave out; and secondly, I wish to ask the Committee to extend the relief in quick succession to personalty as well as to land or to a private business. It seems to me to be commentary worth noting that even the Chancellor of the Exchequer is rather compelled to ask this Committee to give some relief in the case of the Death Duties. They have reached such a point that even the right hon. Gentleman is convinced that some relief is required in the case of quick succession during the five years specified in this Clause. But even so, I think that the relief which he proposes is inadequate. In the first place, five years is a very short time. I believe there are other Amendments dealing with this point and therefore I would only allude to it in passing. The actual relief which the right hon. Gentleman offers on the Estate Duty is not as large as I think the circumstances justify. Hon. Members will see that if a second death takes place in the course of a year, a relief of 50 per cent. is given, and in subsequent years a relief of 40 per cent., 30 per cent., 20 per cent., and 10 per cent. is given. I should have thought that the relief would have been upon a much higher scale than that. There are other Amendments dealing with this point, and I have merely alluded to it to give point to what I said that the relief which the Chancellor of the Exchequer offers is very meagre.
    It seems to me that this relief is unnecessarily restricted to certain kinds of property. It is restricted to property in the form of land or a private business. I quite agree that both in the case of land and a private business some such relief is urgently required, but what I desire to put before the Committee is that personalty also has need for relief, and in actual practice it will be extremely difficult to draw a distinction between land and property in the form of private business and personalty. Take first of all the case of land. Most hon. Members will agree that some relief is urgently required. It is a very heavy charge now upon a property to have to pay one, two, three, or even more Death Duties in quick succession. The injury done is not restricted to the heir or life tenant, but extends over the whole neighbourhood from the fact that labour is displaced, and it may be

    1947
    difficult to keep the estate up in proper working order. Land is often not easily realisable. An estate consisting of land may find it very difficult to produce the large sum required for Death Duties, and all the more so when the Death Duties are required in quick succession. In this connection I want to ask the Chancellor of the Exchequer what he means by property consisting of land—will that extend to the farm buildings or to the cottage building? That is a point which seems to me not quite clear in the Clause, and I hope, before the Debate closes, the Chancellor of the Exchequer will be able to elucidate that point. Will the relief extend not only to farm buildings but to the farm machinery, without which the farm buildings would be practically useless? Does it also extend to mortgages? It is necessary for a farm to have such things as ploughs and wagons and machinery of that sort. Does it include mortgages on the land?
    I pass from the question of the relief given to land to the relief which is to be given to property consisting of a private business. There, again, I think it will be admitted, that some relief is urgently required. The death of a partner in a private business may involve the withdrawal of capital, and I think it will be admitted that the Chancellor of the Exchequer is right in offering some relief in that case. Here, again, I am not quite clear as to what is included in the Definition Clause. Would the relief extend also to professions? Would it extend, for instance, to a firm of solicitors? If it would not, I fail to see how the distinction can be drawn between the two, because it is equally hard for the capital to be withdrawn in either case. I cannot see how the Chancellor of the Exchequer can restrict the relief to a private business and deny it to the surviving partners in a professional firm. Does it extend to money lent upon the security of a private business? That seems to be a point which needs elucidation. If it does not, I fail to see how the distinction which the Chancellor draws is anything but arbitrary. These difficulties show how impossible in practice it is to draw distinctions between one kind of property and another for relief of this kind. In theory, besides practice, there is a demand for relief in the case of personalty as well. A series of heirs succeeding to property in the form of personalty, and having to pay a series of heavy Death Duties, are,
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    I think it will be admitted, all suffering a very heavy hardship.
    I have had sent to me two cases. In one case three brothers, all over the age of seventy, are heirs to a property in the form of personalty. It seems to me, if relief is to be given for quick succession, it should be given in that case. If it is not given, each of these three brothers, who may very well in the ordinary course of nature die in the next year or two, will have to pay a, duty of 8 per cent. That emphasises the demand for extending this relief to personalty. I have another case of the same kind, a case where there are three sisters and two brothers all over the age of fifty, who in the ordinary course of events will inherit property in the form of personalty. There, again, there may be a number of quick successions, with a consequent very heavy charge in Death Duties. It is only necessary to state these cases to show how urgent it is to have some relief in the case of quick successions of personalty. It is all the more urgent for two facts. In the first place, the ordinary Death Duties are being put up this year. That makes the demand for relief all the more urgent. Secondly, this Committee last night abolished the Settlement Estate Duty. That makes demand for relief even more urgent. Under any settlements, the people who eventually benefit will in many cases be brothers and sisters of the same generation. As long as the Settlement Estate Duty was in force each brother and sister did not have to pay the Death Duties, but now that this Committee has thought fit to abolish the Settlement Estate Duty each brother and each sister, very likely owing to the fact that they are members of the same generation, and therefore succeed at short intervals of time, will be compelled to pay a series of Death Duties which in the course of a very few years may eat up the whole corpus of the property. Therefore, with these two objects—first, of elucidating the points which I have ventured to put to the Chancellor of the Exchequer; and, secondly, with a view of having the relief extended to personalty—I beg to move the Amendment.
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): The Amendment moved by the hon. Gentleman illustrates the perils which a Minister has to encounter the moment he begins to make concessions. There are, after all, many points in the Income Tax Laws which a Chancellor of the Exchequer would like to be in a position to put right. This is not

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    the only one by any means. There is later on an Amendment with which I have the greatest sympathy, dealing with wasting assets. There is a good deal in the case of wasting assets that it is almost impossible to resist, and a Chancellor of the Exchequer has only one defence, which is that he cannot afford to do justice to everybody and to rectify all wrongs. I do not mean to say that the relief which in two instances I am giving in the case of quick succession is a perfectly logical proposal, but, at any rate, it is going some distance, and it is certainly as far as I can afford to go this year. The Committee has to decide whether it is worth while making this experiment as a beginning. If subsequent Chancellors of the Exchequer are in the position to do so, by all means let them extend it. There is a good deal to be said for extending it. I am not resisting on its merits the proposal of the hon. Gentleman, but I am now appealing to the Committee, when this concession is made for the first time after repeated appeals, not merely to myself, but also to previous Chancellors of the Exchequer, not to upset the whole thing by forcing the Treasury to go further than they can afford to go. That is really the danger when these appeals are made.
    I know perfectly well the consideration which weighs with the Chancellor of the Exchequer when they come to consider concessions. You have no sure foothold the moment you begin to depart in the direction of concessions. Somebody will say, "If you are going to do this, why not do that?" And "if you do that, why do you not do the next thing?" I agree logically that if you do this you ought to do that, and, if you do that, you ought to do the third thing. We recognise that there is a certain grievance in the matter of quick successions, and we have decided to make an experiment in the direction of a concession in the case of two classes of property where payment of Estate Duty within a very limited period does more harm than in the vast majority of other cases. This concession will cost about £156,000 a year. Let us look at all the concessions which have been asked from us on the basis of this one. I have just been working out what they would cost. First of all, there is the proposal that you should extend it to every class of property. That quadruples the cost at once; that brings you up to £624,000 a year. Then there is the proposal that you should extend it to nine years. That would bring it up to £1,800,000. If all the concessions
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    asked for were made, it would come to £3,500,000. No Chancellor of the Exchequer could possibly face that in the course of a single year, and surely not a Chancellor of the Exchequer who is putting a tax on other property in order to make this particular relief. I agree, if the hon. Gentleman likes to make out a case, that I am making an unfair preference, that he is entitled to do so. He is entitled to say, "You ought to have done it in respect of something else instead of these two." Why have these two particular classes of property been chosen? It is not because of any distinction between realty and personalty; it is not because we are favouring realty against personalty, for a business is personalty. It is because of the difference between what I may call fluidity and inconvertibility. That is really the distinction. The concession has been made with regard to businesses and land. It is not made because of any difficulty in realising land. No one would argue that there is any difficulty in realising agricultural land at the present time.
    Mr. PRETYMANindicated dissent.
    Mr. LLOYD GEORGE: I am putting the case against myself. Let us asume for the moment that there is no difficulty in realising agricultural land. Take the case of a ringed fence estate. There may be, and I think there is, a good deal to be said for breaking up the whole estate, but to break up a ringed fence estate is not an economic proposition. Coming to the second proposition, that of a business, the hon. Gentleman must admit that it is an exceptional case, because there you are damaging the business. It is not realisable. You can raise money by means of an overdraft or by means of a mortgage, but it is not very easy—there is the cost of the operation—and it cripples the business. We have therefore taken two cases where there is a special reason for making a start against other classes of property. There is no comparison, after all, between the man who leaves a fortune in stocks and shares, and the man the whole of whose assets are locked up in a business. He may on paper have a very considerable sum of money which, for Estate Duty purposes, will rank at £100,000 or £200,000, but he may be subject to a charge either at the bank or elsewhere which would have to be cleared off, and in addition to that you raise money for

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    Death Duty purposes. If that comes repeatedly, it hampers and cripples the business.
    There is, therefore, a special case with regard to a business which does not apply to a person who dies with a fortune. That is why we have chosen these two cases, and I would ask the hon. Gentleman seriously to consider if he can think of any extension beyond those two which would not force the Chancellor of the Exchequer to admit the whole case. I could not afford to do that without coming forward with a fresh proposal to raise taxation this year. Any Chancellor of the Exchequer would be faced with a serious deficit which he would have to impose on somebody else. It is a great mistake to suppose that the money for these concessions comes out of some inexhaustible revenue of the Treasury. There is only one means of getting the money, and that is by taxing something else in order to face the deficit. I put the matter very seriously to hon. Gentlemen who have been pressing me ever since I have been at the Treasury to recognise the case of quick successions. I have for the first time made an effort to meet those cases in two particular instances, and I ask them whether they think it is fair, and whether it is really wise, to press the Chancellor of the Exchequer to go beyond what he can afford when he is really making an effort to meet them in two cases where the subject is hardest hit. On the merits, if the hon. Gentleman were to press me, I should say that there was a good deal to be said for all the propositions before me to-day, but I do trust he will take into account the considerations I have urged in very good faith now that this effort has been made to redress this grievance.
    Mr. PRETYMAN: I think great sympathy must be felt on both sides of the House with the plea the Chancellor of the Exchequer has put forward, but before I deal with that I should like to say we all agree that the necessity for some exemption of this kind really arises from the very high rate of duty now imposed—a point which we discussed yesterday. Hardships which are only extremely severe under one rate of duty become intolerable under another rate. With regard to the right hon. Gentleman's plea as to the difficulty of finding money, perhaps he will allow me to remind him that in that regard we, on this side of the House, have already voted against the
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    decrease in the rate of Income Tax on the ground that the Death Duties proposed by the right hon. Gentleman press much more hardly upon the taxpayer than the. Income Tax.
    Mr. LLOYD GEORGE: The hon. Gentleman is hardly doing justice to himself. That was not the ground of opposition to decreasing the rate of Income Tax. The opposition to my taking a penny off was not in order that there should be a pool from which money could be drawn, instead of from the Death Duties, but because hon. Members opposite wanted temporary Grants to be given to the local authorities this year. The other suggestion was merely alternative. If the money were to be applied for temporary Grants. I can assure the hon. Gentleman that every penny of it would be wanted for that purpose, and it would also be needed next year.
    Mr. PRETYMAN: Our position was alternative. In the first place, we desired to retain the penny in order to give the money to the local authorities; but, if these Grants were not to be given to the local authorities, then we still preferred to retain the penny rather than raise the Death Duties, as proposed by the Chancellor of the Exchequer. I said that in the Debate, and I adhere to it now. Having said so, I have a right to repeat it now. I do not put it forward in a controversial spirit, but I felt bound to remind the right hon. Gentleman, in view of the argument, which he put to the Committee. I ask the Committee to note this, because I think it is a most important admission which makes the whole difference in the point of view from which the Committee should regard this proposal. If the right hon. Gentleman had put it forward as a full gift, if he had risen in his place and argued he was meeting the justice of the case by these proposals, then my hon. Friend would have felt bound to persist in his Amendment, and we should have been obliged to press it very strongly on the right hon. Gentleman. But when he tells us it is not a full gift, but that it is merely an experiment, and when he further admits that very much larger concessions than this are required by. the justice of the case—and that it what his statement really amounted to—I am glad to see he assents to it—and when he asks us, from that point of view, to accept this as an experiment, admitting that it is not a full gift, then I think it is an appeal

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    which we shall find it very difficult to resist, and on that distinct understanding, I, for one, am prepared to accept it.
    Mr. JAMES MASON: I gladly welcome the principle laid down in this Clause, which the Chancellor of the Exchequer has now developed, as to the sort of relief that ought to be given in the case of Death Duties. It seems to me that this form is certainly the fairest and most adequate way in which relief can be given.
    Mr. PRETYMAN: Before my hon. Friend proceeds, I wonder if I may be allowed to put a question to the Chancellor of the Exchequer. The right hon. Gentleman did not reply to my hon. Friend's very important question on the question of definition. We do not want litigation. We are most anxious to avoid it. But there is no Definition Clause in this Bill showing exactly what is meant by land or by business. I should like the right hon. Gentleman to give us some reference, if he can, to some other Act. The right hon. Gentleman will, I am sure, be the first to admit that what he states in Debate from that bench has no weight whatever in Courts of Law. We therefore want something put into the Bill which will make it absolutely clear what are the intentions of the right hon. Gentleman as regards "land" and "business."
    Mr. LLOYD GEORGE: I apologise to the hon. Gentleman for not having answered his question. I certainly had intended to do so. With regard to the first point, "land," of course, includes buildings.
    Mr. PRETYMAN: But will you state that in the Bill?
    Mr. LLOYD GEORGE: The hon. Gentleman knows that it always includes buildings. With regard to farm machinery, and fixtures, which sometimes go with the land, I should hardly like to give an answer off-hand. On the second point, as regards personalty, mortgages are included, and if they come in you must also include stocks, shares, and other kinds of property. Then I am asked to define what is a business. I am very loth to attempt any sort of definition. I have inquired, and I am told that it will be possible to work this administratively. I agree there may be some difficulty, but I am assured by the experts of the Department it will not be so very difficult to work. A good many conundrums have been put to me relating to cases just on the border-line. Of course
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    very much depends upon the class of business. A good deal of business is purely personal. But there is a class of business—long-standing firms—which are transmitted from one generation to another, and I should have thought, although I do not like to express an opinion, that they would have come within the definition. Still I should like to get the views of my legal advisers on that point. I could not have imagined there would have been any general difficulty in deciding what is or is not included.
    Mr. PRETYMAN: The words the right hon. Gentleman has just spoken show what a difficulty there is. As I have pointed out, what the right hon. Gentleman says here will not be noticed in the Courts of Law. I am asking him, not so much for an explanation, as for an undertaking that he will consider with his legal advisers whether he cannot insert a definition into the Bill; otherwise we may have perpetual litigation as to what a business is. What we want is a real definition.
    Mr. LLOYD GEORGE: The danger of definition is that it is exclusive and not in-elusive. I am assured by my legal advisers that there will be no difficulty in interpreting the word "business." There would be much greater difficulty in interpreting a definition, because the moment you begin to define, that moment you begin to create points for litigation. That is the real difference between the drafting of Bills a hundred years ago and the drafting to-day. There is much less litigation about an Act of Parliament, the purposes of which are put in a few brief Clauses, than about one which covers many pages. I think it would be a very dangerous thing to attempt to define a business. You may leave something which should be included, and you may put something in which should not be there. It would be far better to leave it to the common sense of the judges to decide what a business is. And, I repeat, I do not believe there will be any difficulty of interpretation in this matter.
    Mr. JAMES MASON: I was saying, when I was interrupted, that the principle embodied in this Clause is one of extreme value, and, although I admit it is impossible for the right hon. Gentleman to carry it very far this year, we may hope that on a future occasion it will be extended, and many obvious injustices dealt with. It seems to me that the carrying forward of this principle of relief in cases of rapid

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    succession is of even greater importance than the reduction in the general scale of the Death Duties, because one of the principal evils of the Death Duties seems to be that the duty is in the nature of a penalty on weak health and short life. It is quite obvious that in a family extremely healthy, in which lives are habitually long, the Death Duties fall with comparative lightness, because each succeeding generation lives longer without having to pay the duty, and, as the successors come to manhood, a great deal of property can be transferred during lifetime. But it is in the case where lives are short through accident, or though the fact that brother succeeds brother, where this duty falls with a severity out of all proportion to that with which it falls on any other class. That seems to be one of the great evils of the Death Duties which would obviously be overcome if this principle were carried somewhat further. It is one of the reasons why I have consistently favoured Income Tax as a preferable form of direct taxation to Death Duties. The other day, on the occasion of the Division to which the right hon. Gentleman has just referred, on the proposal to reduce the Income Tax by 1d., I deliberately voted against that reduction, on grounds which I thought were very ably put by the hon. Member for Ripon (Mr. Hills), in which he defended the case for devoting the money, providing it could not be used for Grants in relief of local taxation, towards relieving the Death Duties instead of reducing Income Tax by 1d.
    I rose principally for the purpose of asking for some information as to the effect of the Clause as it stands. The relief proposed to be given here is on land and business. I do not quarrel with the amount of it, because the right hon. Gentleman has said he cannot afford more. But I would like to know whether in the case of settled estates, which have been sold under the Settled Estates Act, and the proceeds of the sale of which remain vested in the hands of trustees under that Act, those proceeds will be treated as land or not. There are a great many instances of settled estates in which the trustees are able to dispose of any amount of land provided they retain the proceeds in their own hands, subject to the same conditions as obtained with regard to the settled estate, and I want to know whether land held under the Settled Estates Act will or will
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    not be included in the term "land." What took place yesterday with regard to the removal of Settlement Estate Duty proves that a very good case can be made out now for extending the relief, which is applicable to land and businesses only, to the case of settled estates, which have been so hardly hit by the removal of the conditions with regard to the Settlement Estate Duty.
    Mr. HOLT: I want to make my right hon. Friend quite comfortable—I do not ask him to make a single concession on this Clause. I have not asked him for any concessions which are in this Clause, but I would point out that the Clause as it stands is quite indefensible as a measure of justice, and that once you have adopted this Clause it will be absolutely impossible for the law to remain in the position in which it will be left. The distinction between a landed estate or a business and a company is one that cannot be maintained. I am a shareholder in a company in which the tranfer of shares is strictly limited by the articles, so as to make sure that only members of a certain family can ever possess them. A shareholder in the company is in precisely the same position as the owner of land. Precisely the same conditions exist in regard to land and businesses. We talk about companies as if they were large public companies in which the shares are held an very small fractions proportionately to the whole of the capital. As a matter of fact, the great mass of companies consist of those in which the shares are held in very large proportions compared with the total of the share capital. They are companies in which the transfer of shares is strictly restricted, and in which the shares can only be passed among a certain group of persons. These companies, to all intents and purposes, are private businesses, and cannot be distinguished from a partnership, except for the fact that a company has been formed as being more convenient and handy for certain financial transactions. One looks at the papers almost every day and sees notices that this or that old-established firm has converted itself into a limited liability company. But the position remains precisely the same as regards the ownership of the shares in that company, and it has become a sort of business. Suppose you have the majority of shares in the company, or, if not the majority, such a block of the shares as practically gives you the power of controlling the management.

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    It is just as much a hardship to be asked to break up that block as it is for a landlord who has an estate inside a ringed fence to be asked to break up his property. The hardship is precisely the same. The hardship consists in being asked to break up property which, as a whole, is more valuable than any one of its component parts. I quite agree that under the present financial circumstances it is not possible to give the same relief to all. My right hon. Friend talked of this as an experiment. It is an experiment which can only have this end, that finally everybody will have to be treated alike. I hope that as the proposal is put forward, it is put forward with a clear realisation of the fact that this relief, good or bad, will have to be extended. I am not at all sure that I am anxious to see the relief given at all, and if my right hon. Friend says that he would make a great concession and would withdraw the whole Clause, I should be perfectly satisfied. If the relief is going to be given at all, it will certainly at an early date have to be given to everybody. I hope that in framing future Budgets my right hon. Friend will bear that in mind, and realise that this relief will have to be extended to every form of taxpayer.
    Mr. F. HALL: I was surprised to hear the remarks made by the Chancellor of the Exchequer this afternoon as to what is going to be a business and what is going to be a profession. He seemed perfectly happy in his own mind to leave the question in abeyance and let it be worked out in the Law Courts, as such questions have hitherto been decided. The right hon. Gentleman has not appreciated the difference between a business and a profession. Take the case of a firm of surveyors or a partnership in accountancy. In each of those cases the gentlemen have to pass their examination in order to become fully qualified. The same question is likely to arise in those cases as would arise in a merchant's business. One partner dies and a large amount of capital is withdrawn. Perhaps, unfortunately, another partner dies and another part of the capital is withdrawn. Will a case of that kind be treated as a business or will it not receive the advantage which is proposed in this Clause? The hon. Member for Hexham (Mr. Holt) drew attention to a point of the greatest moment. My hon. Friend's Amendment leaps over the words with regard to a private business or a company. I would suggest to the Chancellor of the Exchequer, so that there
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    should be no hardship on those who have for family reasons turned their businesses into private limited companies, that he should agree to the addition of the word "public" before the word "company." That would meet us to some extent. If, on the other hand, the matter is left as it is, I suggest that many people in business who have for various reasons turned their businesses into private companies which to all intents and purposes are ordinary businesses, with two or three directors in place of partners holding practically the whole of the shares, will have no relief granted to them under the Clause. When this Clause was framed, was it the intention to give relief to those concerned in private companies as well as to those engaged in business, and, if so, does not the right hon. Gentleman think it is necessary to put in the word "public," in order that there should be no difficulty? I would like the Chancellor of the Exchequer to reply on that point.
    Mr. J. M. HENDERSON: I think my right hon. Friend has done something which he will afterwards regret. There is a good deal of misunderstanding as to what the Clause really means. An hon. Member opposite asked whether, if settled estates were sold and the money was invested by the trustee, it would be free. Certainly not; nor would an investment in anything else. If there is a partnership business and one partner dies, his estate pays full Estate Duty, and if the same interest is continued to his son and he dies also, then relief is given, but the other partners get no relief. The moment the share is turned into money it becomes the same as any other property, and is subject to the usual Estate Duty. So far as companies are concerned, there is a good deal to be said for including them, for the reason that a great many limited companies are created for the purpose of continuing the interest of the partners in the families. One has advised over and over again, in instances where partners were getting on in years, that they should turn out their businesses into companies, so that their share, instead of passing to the surviving partner, should continue and be distributed among the testator's relatives or the next of kin. It is for that reason that nine-tenths of the limited liability companies are formed, so that the capital invested in it may be limited and be continued in the shape of goodwill to the family, instead of, as it generally did, merging in the surviving

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    partners' interest. I hope my right hon. Friend will not attempt a definition of business. The more general the terms are, the less difficulty will the Somerset House people have in saying what a business is; whereas if we try to define it as lawyers try to define things we should shut out a great many businesses, because they do not come directly within the words put in the Act of Parliament. I agree with the hon. Member for Hexham that this is an experiment and in what he said as to what must come hereafter. The Chancellor of the Exchequer is doing what Sir William Harcourt did in regard to the Settlement Estate Duty. He is creating some relief which his successor will do away with. Sir William Harcourt gave relief to settled estates which they should not have had, and, subject to proper compensation, we did away with that yesterday. The same thing will occur here, for the drawing of the distinction cannot possibly survive. I am not wishing to oppose the relief such as it is.
    5.0 P.M.
    Mr. EDWARD WOOD: On the general principles of this Amendment I confess I have great sympathy with what was urged by the right hon. Gentleman as to the impossibility of finding a firm foothold once he begins to make concessions. To us on this side the attraction of seeing the right hon. Gentleman in the position of an advocate for economy is so great that I would not willingly vote against him when he makes that appeal. There is one point that has not been mentioned in the Debate, which to me outweighs even those considerations, and which would cause me, if my hon. Friend goes to a Division, to support him. It seems to me that you are at the present moment really doing a great injustice, because even taking the right hon. Gentleman's own case, that he wishes to limit this concession to two particular forms of property, I would ask him to consider another point. All the arguments this afternoon have turned upon the consideration of three distinct forms of property—land, business, and personalty. What happens when you have not got those properties all distinct, but have them mixed? I have in mind the case of land which forms part of a property of which the other half is personalty. I should not mind if you applied your principle of dividing the duty between the two. For the purposes of Estate Duty you lump the two together and charge the Estate
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    Duty on the land on the higher figure which you have arrived at by aggregating them. When you come to relieve, you divide them, because thereby you will only have to grant a smaller measure of relief. If you aggregate in the one case, you ought to aggregate in the other. If you do not, you will merely be asking us to do what we always have to do when playing with the Chancellor of the Exchequer—it is a case of heads he wins, tails we lose—namely, to aggregate when it suits him and to divide when it does not suit him. For that reason, if my hon. Friend goes to a Division, I shall support him. I would urge him not to assent to a definition of the term "business." The arguments which have been put forward against it seem to me conclusive, and there is one more conclusive to my mind than any—that is, that if the term were defined I believe even lawyers would find it very difficult to say whether membership of Parliament were a profession or a business. I hope therefore that the right hon. Gentleman will be firm upon that point, but that, in spite of the menacing tone adopted by the hon. Member (Mr. Holt) towards the end of his speech, he will not lose courage, and withdraw the Clause altogether. I think the Clause is of a certain value though it is illogical, and I think he could quite easily improve it.
    Mr. GOLDMAN: I regret that the Chancellor of the Exchequer does not see his way to accept the Amendment, because I think it would remove a great many hardships which will otherwise arise through the operation of the Clause. He bases his objection to it on two grounds. He says, in the first place, he has not got the money for the purpose, and secondly, he referred to what he called the fluidity of personal estate. With regard to finance, seeing that he contemplates an enormous burden on the taxable capacity of the country by increased death duties, I should have thought that the very first consideration which would have occurred to him was to give relief in such cases, where great injustices are daily occurring. In other words, contemplating as he does to raise £800,000 in the first year and next year £3,000,000 from increased Death Duties, he might have considered giving a wider application to the Clause, which would only cost him £600,000. I do not see how you can establish a distinction between the principle of personalty and realty, which are tangible

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    assets, such as land or business comprising machinery and stock-in-trade. The test that the right hon. Gentleman laid down in the Budget speeech was that as regards assets you should be sure that in an estate that is being transferred it is composed mainly of non-liquid assets. A banker or a financier is admittedly carrying on a business. It is largely composed of shares and stocks. Does he come within the interpretation of business? I disagree entirely with the hon. Member opposite, and also with my hon. Friend (Mr. Wood), who hoped that the Chancellor of the Exchequer would give no definition as regards the meaning of business. I believe that unless business is more closely and clearly defined, it will lead to endless confusion and litigation. Take the case of a solicitor. A solicitor's business does not merely consist of his professional business. It is also composed of personal estate. He has also stocks and shares. Is that going to be included in business, and is he to be exempt and get the relief or not? It is an important question which ought to be decided by some definition.
    Take the case of partnerships. Private persons carrying on business frequently convert their business into a limited liability concern. They want to apportion the different interests of those who have participations in the business, or between those who are partners with them. Why should a private person who converts his business into a limited liability company not come into the benefits of this relief, while another man who continues to carry on business gets all the advantages under the Clause? The only difficulty I see in the Amendment is that to which the Chancellor of the Exchequer referred, but it can be overcome. Stocks and shares are mobile, and it is extremely difficult to trace them when they are passing through different hands, and to identify the original interest. But the difficulty can be overcome because the Inland Revenue Department will be confronted with it in any case under the operation of this Clause. You can easily meet the difficulty by converting certain stocks into inscribed stocks, or you can keep separate accounts for an estate which has been transferred to a new heir. But what is going to happen under the present Clause? Supposing a business consists of realty and largely of personalty, and it is transferred to a man who only holds personalty. Supposing the business is shares and stocks which he inherits. It passes to an heir who has personalty—stocks and
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    shares. They are merged into one, and he carries on his business, and uses his own personal property indiscriminately in the operations of that business. How are you going to divide the two, that is, the assets which have been transferred and on which already Death Duty has been paid, and that which the heir already owns and has merged in the whole operation of his business? You will have to set up machinery for that purpose. That is the great difficulty, the fluidity of personal property, and as you are confronted with that difficulty under this Clause you might as well at the same time extend the operation of it and remove the great injustice and difficulty which will otherwise arise under it.
    Sir FREDERICK LOW: The longer this Debate progresses, the more convinced I am that the suggestion of the hon. Member (Mr. Holt) was really the best way of dealing with this matter, namely, to withdraw the Clause altogether. I thought so until I heard the last speaker, but he has convinced me, with the pathetic picture that he has drawn of the number of difficulties, and the seriousness of those difficulties which would arise in the application of this Clause, that this is another instance of the evil of attempting in any way to apply preferential methods in the application of taxation, and that really the difficulty and the trouble that are likely to arise in the application of this Clause are so serious that we should be well advised, if it were possible to do so, to abandon altogether this attempt at concession which the Chancellor of the Exchequer has put forward, and to refrain from placing ourselves in very much the same difficulty as we found ourselves in yesterday by reason of the legislation which took place years ago with regard to settled estates. Here is an attempt to do justice, no doubt, but, as the last speaker so forcibly pointed out, the attempt is so likely to lead to injustice that in the long run this Section will have to be repealed at some time or other, and then when that is proposed I suppose we shall be met with the charges of breach of contract and want of faith that were made yesterday, as it seemed to me, with very little foundation indeed. I, for one, should be very glad if the Chancellor of the Exchequer could announce that, although he intended this as in the nature of a concession, he now finds that the application of it so extremely difficult, and the difficulties have been so well

    1963
    pointed out on the other side of the House, that really the best course would be to abandon the attempt altogether.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I would suggest that my hon. Friend is drawing a gloomy picture which need not disturb us very much. It did not seem to me that there was a shadow of substance of any kind in the arguments about contracts yesterday. But even those who differed from me in that cannot believe that there is any case whatever for making out a contract between the subjects and the State if this concession is made this evening. The argument that the Death Duties should be graduated, not only according to the amount of the estate but to the number of years which have elapsed since it last passed, has not always found favour universally. There are those who argue still that, taking an average number of years, the misfortunes of life and death tend to equalise themselves, and that the hardship need not really be very great in that Death Duties can themselves be translated into terms of Income Tax by those who insure themselves against them. That has always been the argument when it has been attempted to resist a concession of this kind. It seems to me that the argument could easily be answered, because a victim of a particular misfortune is not likely to be comforted by being told that it will be all right if he is regarded as an integer, and secondly, that you have to consider in this matter the damage which has been done in particular instances by the misfortune of quick succession. That being so, and the argument for graduation according to the terms of years which have passed since the last death being admitted, the question is whether you shall wait until you can do the whole thing or whether you shall make an experiment and begin with the money which you have at your disposal. The hon. Gentleman (Mr. Pretyman) and the hon. Member (Mr. James Mason) made remarks about the penny which was taken off the Income Tax, and warned the Committee that the Chancellor of the Exchequer would use the argument of not having enough money if that penny was taken off when it came to the Death Duties. It is not really fair to say that the penny was taken off the Income Tax. It is better to say that a penny was not put on the Income Tax. The distinction is that the penny is
    1964
    only delayed because it will be wanted next year for these Grants which it is the intention to pay into local authorities as from 1st April, when the proceeds of the penny will have to be used for that purpose, and for that reason it would have been impossible, having regard to the future immediate needs of the State, to use the penny which would be put on for the reduction of existing taxation.
    That being so, and there being not sufficient money to make this full concession, it seems to me to be clearly wise to make a concession in the most urgent cases—the cases of those properties which are most likely to be damaged either by the withdrawal of working capital in the business or by the forced disintegration of a landed estate, with all the hardship which that involves upon a rapid succession of deaths. Hon. Members talk about the difference between a business and a private company, and they say it would have been better to draw the line between private companies and public companies rather than between businesses and companies. But in an experiment of this kind the necessity is to draw the line where it is easiest to work. We are assured by those who advise us in these matters that it will be possible to distinguish what a business is. What we have in view was described in the White Paper circulated to Members of the House. It would not be easy if you put in companies of any sort or kind to distinguish between them and other undertakings of the same kind. The Chancellor of the Exchequer referred to the difficulty of getting a foothold when you once get to the making of concessions. On the whole it seems to us that it is easiest to include those properties which are most likely to deserve relief, and for the present, and until we have more money at our disposal, we must resist all attempts to make the concession wider. We can only hope for the fortunate day when the Chancellor of the Exchequer will have more money to spare and no other competing demands upon him. In answer to the hon. Member for Ripon (Mr. E. Wood) I would say that I do not think he understood the situation when he talked of the difference of property which was half personalty and half realty. In the case of a property of £60,000, of which £30,000 is personalty, the rate on the whole would be 7 per cent., and the relief on £30,000 under this Section would be 3½ per cent.
    Mr. HQARE: I had intended to press this Amendment to a Division, but for two reasons I shall not do so. I understand, in the first place, that my right hon. Friend (Mr. Hayes Fisher) is going to move an Amendment on the subject; and secondly, after what has been said by hon. Members on the other side that this is a first instalment and that it cannot possibly stop where it is now, and in view of the fact that the Chancellor of the Exchequer has signified his approval of this statement, I have changed my decision, and I do not wish to press the Amendment to a Division.
    The CHAIRMAN: Amendment, by leave, withdrawn.
    Mr. KING: The hon. Member did not ask to withdraw the Amendment. He only said he would not wish to press it to a Division. Is he entitled, or are you entitled, to say that the Amendment is, by leave, withdrawn?
    Mr. BUTCHER: Is not the hon. Member too late in asking this question?
    The CHAIRMAN: When the hon. Member (Mr. Hoare) said that he would not press the Amendment to a Division, I think it was pretty clear what he meant.
    Amendment, by leave, withdrawn.
    Mr. HAYES FISHER: I beg to move, to leave out the word "five" ["and that subsequently within five years"], and to insert instead thereof the word "fifteen."
    The right hon. Gentleman has said today that there are always great difficulties in making concessions. The Chancellor of the Exchequer plainly indicated in his speech that the small concession which he makes in this Clause to-day cannot be thought to be final. There will have to be some day a resettlement of the whole scale of Death Duties. The whole of this matter will have to be reconsidered with the view, undoubtedly, to further concessions. Yesterday we had a very animated Debate on the subject of the Death Duties, and there was a general consensus of opinion that, whereas a graduated Income Tax probably more nearly approached perfection—if you can have an approach to perfection in any kind of taxation—than any other, the Death Duties are perhaps as full of imperfection as any tax that could possibly be devised. There was one very glaring defect in the application of the Death Duties which was pointed out quite as much by hon. Gentle-
    1966
    men opposite as by those who took part in the Debate on this side, and that was the inequality with which this tax falls upon different estates, the fact being that, whereas there are families which are famous for their longevity, there are also families which are famous—if I may coin a word—for their shortivity, and the consequence is that one estate may not have to pay these Death Duties more than once possibly in a hundred years, while other estates may have to pay them ten or twelve times in a hundred years. That is a matter of great concern, not only to those who have to pay the duties, but to the local community which suffers from the excessive payments which have to be made. The Chancellor of the Exchequer recognises that in the case of quick successions, where there are a series of deaths in a short number of years, there is real injustice and hardship which ought to be remedied; but, while he recognises the principle that the injustice and hardship ought to be remedied, undoubtedly his concession does not go anything like far enough. Under this concession an estate where there are two deaths in five years will have to pay the whole Estate Duty twice in that period. According to this concession, when the second death occurs in one year, the estate would have to pay the whole Estate Duty on the occasion of the first death and half the Estate Duty on the occasion of the second death, even although it occurred only one 5"ear after the first death.
    My proposal is that no estate should be called upon to pay the whole Estate Duty twice until an interval of fifteen years has elapsed. I believe that some day or other we will arrive at some logical conclusion on this matter, and that, whenever we do so, it will be generally agreed that no estate should be called upon to pay these heavy Death Duties—which have been made much heavier by the present Chancellor of the Exchequer—twice in less than a period of fifteen years. After all, fifteen years does enable a man to do what the Secretary to the Treasury said he ought to do, namely, to put by enough of his income to insure against the period when the estate will be called upon to pay. In less than fifteen years there is not a fair opportunity of putting by that money to insure against the time when the duties will have to be paid. There is another reason why this Amendment should be accepted: There is great inequality in

    1967
    these taxes. There are lives that cannot be insured, and, therefore, in those cases there is all the more necessity that the time should be extended so that some annual amount may be put by against the time when a second large amount of the estate may have to be taken out of the estate. I do not apply my remarks only to estates—I apply them almost equally to businesses. It was stated again and again yesterday by hon. Members on the other side that it was a serious matter when a great lump sum had to be taken out of a business and then, owing to the death of the son, another lump sum had to be taken out within two years of the occasion of the first lump sum being taken. My remarks would apply to cases of that kind. If my Amendment were carried, there would be a graduation of the duties payable in cases of quick successions and after fifteen years the whole amount would be payable. I cannot help thinking that when the whole of this case comes to be reviewed hereafter, and when we will have another Chancellor of the Exchequer who will regard this matter from a more favourable point of view, he will say that for fifteen years, at all events, an estate should escape from paying the full penalty which is now exacted from it. These duties may have to be exacted. I admit that we must get money from somewhere. I admit that these estates do provide a large amount of money for the various services of the country. But we ought to avoid harsh and unequal taxation wherever it is possible. Even although it may only fall on a few, yet these victims ought to be able to appeal to justice, and in all our taxes we should endeavour to avoid harshness and inequality of this kind.
    Mr. MONTAGU: I think it is really unreasonable to move this Amendment after the hon. Member who moved the previous Amendment did not even proceed to a Division upon it. When the last Amendment was before the Committee the argument which was addressed to the Committee by the Chancellor of the Exchequer was so appealing and moving that the hon. and gallant Member for Chelmsford (Mr. Pretyman) expressed
    sympathy with it, and it was withdrawn on the ground of the expense it would involve to the Exchequer. [HON. MEMBERS: "No!"] The right hon. Gentleman the Member for Fulham now comes forward with an Amendment which would cost the Exchequer £624,000. In regard to the previous Amendment, the Chancellor of the Exchequer said he could not afford the cost of £550,000. I cannot help thinking that the right hon. Gentleman (Mr. Hayes Fisher) was most ungenerous in asking us to accept this Amendment, seeing that the Chancellor of the Exchequer has taken a favourable view of the case in the concession he has already made. My right hon. Friend is the first Chancellor of the Exchequer who has inaugurated this principle at all. We are not able to make the concession larger.
    Captain CLIVE: The hon. Member has stated that the Chancellor of the Exchequer is the first to inaugurate this principle. So far from this Clause being a gratuitous concession on his part, it seems to me that it is the necessary corollary of the abolition of Settlement Estate Duty. People find themselves in a position of hardship when rapid successions become possible. Before Settlement Estate Duty was abolished it was possible for a man to provide against rapid succession either by transferring his property in his lifetime or by leaving it to one of the next generation and not to one of the same generation as himself. This Clause is obviously the minimum of concession that should have been made in order to prevent the abolition of Settlement Estate Duty being attended with partial effects. My right hon. Friend's Amendment does not give one life. It merely deals with the period up to fifteen years. Everyone knows that the average succession is thirty-three years. It appears to me that before the right hon. Gentleman enjoys the proceeds resulting from the abolition of Settlement Estate Duty, he ought to make provision for doing away with the injustice which will otherwise be created.
    Question put, "That the word 'five' stand part of the Clause."
    The Committee divided: Ayes, 297;. Noes, 175.

    Division No. 172.]

    AYES.

    [5.30 p.m.

    Abraham, William (Dublin, Harbour)

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

    Allen, Arthur A. (Dumbarton)

    Acland, Francis Dyke

    Agnew, Sir George William

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

    Addison, Dr. Christopher

    Ainsworth, John Stirling

    Armitage, R.

    Adkins, Sir W. Ryland D.

    Alden, Percy

    Arnold, Sydney

    Baker, Harold T. (Accrington)

    Griffith, Rt. Hon. Ellis Jones

    Morison, Hector

    Baker, Joseph Allen (Finsbury, E.)

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

    Morton, Alpheus Cleophas

    Balfour, Sir Robert (Lanark)

    Gulland, John William

    Muldoon, John

    Baring, Sir Godfrey (Barnstaple)

    Gwynn, Stephen Lucius (Galway)

    Munro, Rt. Hon. Robert

    Barlow, Sir John Emmott (Somerset)

    Hackett, John

    Murray, Captain Hon. Arthur C.

    Barnes, George N.

    Hall, Frederick (Yorks, Normanton)

    Needham, Christopher T.

    Barran, Sir John N. (Hawick Burghs)

    Hancock, John George

    Nolan, Joseph

    Beale, Sir William Phipson

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Norman, Sir Henry

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

    Harcourt, Robert V. (Montrose)

    Norton, Captain Cecil W.

    Bentham, George Jackson

    Harvey, A. G. C. (Rochdale)

    Nugent, Sir Walter Richard

    Bethell, Sir J. H.

    Harvey, T. E. (Leeds, West)

    Nuttall, Harry

    Black, Arthur W.

    Haslam, Lewis

    O'Brien, Patrick (Kilkenny)

    Boland, John Plus

    Hayden, John Patrick

    O'Connor, T. P. (Liverpool)

    Booth, Frederick Handel

    Hayward, Evan

    O'Doherty, Philip

    Bowerman, C. W.

    Helme, Sir Norval Watson

    O'Donnell, Thomas

    Boyle, Daniel (Mayo, North)

    Henderson, Arthur (Durham)

    O'Dowd, John

    Brace, William

    Henderson, John M. (Aberdeen, W.)

    O'Kelly, Edward P. (Wicklow, W.)

    Brady, Patrick Joseph

    Henry, Sir Charles

    O'Kelly, James (Roscommon, N.)

    Brocklehurst, William B.

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

    O'Malley, William

    Brunner John F. L.

    Hewart, Gordon

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

    Bryce, J. Annan

    Higham, John Sharp

    O'Shaughnessy, P. J.

    Buckmaster, Sir Stanley O.

    Hobhouse, Rt. Hon. Charles E. H.

    O'Sullivan, Timothy

    Burt, Rt. Hon. Thomas

    Hodge, John

    Outhwaite, R. L.

    Buxton, Noel

    Hogge, James Myles

    Parker, James (Halifax)

    Byles, Sir William Pollard

    Holmes, Daniel Turner

    Parry, Thomas H.

    Carr-Gomm, H. W.

    Holt, Richard Durning

    Pearce, Robert (Staffs, Leek)

    Cawley, Harold T. (Lanes., Heywood)

    Hope, John Deans (Haddington)

    Pearce, William (Limehouse)

    Chancellor, Henry George

    Howard, Hon. Geoffrey

    Phillips, Col. Ivor (Southampton)

    Chapple, Dr. William Allen

    Hudson, Walter

    Phillips, John (Longford, S.)

    Clancy, John Joseph

    Hughes, Spencer Leigh

    Pirie, Duncan V.

    Clough, William

    Illingworth, Percy H.

    Pollard, Sir George H.

    Clynes, John R.

    Jardine, Sir J. (Roxburgh)

    Ponsonby, Arthur A. W. H.

    Collins, Godfrey P. (Greenock)

    John, Edward Thomas

    Pratt, J. W.

    Collins, Sir Stephen (Lambeth)

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Price, C. E. (Edinburgh, Central)

    Compton-Rickett, Rt. Hon. Sir J.

    Jones, Edgar (Merthyr Tydvil)

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

    Cornwall, Sir Edwin A.

    Jones, Henry Haydn (Merioneth)

    Priestley, Sir Arthur (Grantham)

    Cotton, William Francis

    Jones, J. Towyn (Carmarthen, East)

    Primrose, Hon. Neil James

    Cowan, W. H.

    Jones, Leif (Notts, Rushcliffe)

    Pringle, William M. R.

    Craig, Herbert J. (Tynemouth)

    Joyce, Michael

    Radford, G. H.

    Crooks, William

    Kellaway, Frederick George

    Raffan, Peter Wilson

    Crumley, Patrick

    Kelly, Edward

    Rea, Rt. Hon. Russell (South Shields)

    Cullinan, John

    Kennedy, Vincent Paul

    Rea, Walter Russell (Scarborough)

    Davies, David (Montgomery Co.)

    Kenyon, Barnet

    Reddy, Michael

    Davies, Ellis William (Eifion)

    Kilbride, Denis

    Redmond, John E. (Waterford)

    Davies, Timothy (Lines., Louth)

    King, Joseph

    Redmond, William (Clare, E.)

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

    Lambert, Rt. Hon G. (Devon, S. Molton)

    Redmond, William Archer (Tyrone, E.)

    Davies, M. Vaughan-(Cardigan)

    Lambert, Richard (Wilts, Cricklade)

    Rendall, Athelstan

    Dawes, James Arthur

    Law, Hugh A. (Donegal, West)

    Richardson, Albion (Peckham)

    De Forest, Baron

    Leach, Charles

    Richardson, Thomas (Whitehaven)

    Delany, William

    Levy, Sir Maurice

    Roberts, Charles H. (Lincoln)

    Denman, Hon. Richard Douglas

    Lewis, Rt. Hon. John Herbert

    Roberts, Sir J. H. (Denbighs)

    Dewar, Sir J. A.

    Lough, Rt. Hon. Thomas

    Robertson, Sir G. Scott (Bradford)

    Dickinson, Rt. Hon. Willoughby H.

    Low, Sir Frederick (Norwich)

    Robertson, J. M. (Tyneside)

    Dillon, John

    Lundon, Thomas

    Robinson, Sidney

    Donelan, Captain A.

    Lyell, Charles Henry

    Roche, Walter F. (Pembroke)

    Doris, William

    Lynch, Arthur Alfred

    Roche, Augustine (Louth)

    Duffy, William J.

    Macdonald, J. Ramsay (Leicester)

    Roe, Sir Thomas

    Duncan, C. (Barrow-in-Furness)

    Macdonald, John M. (Falkirk Burghs)

    Rowlands, James

    Duncan, Sir J. Hastings (Yorks, Otley)

    McGhee, Richard

    Rowntree, Arnold

    Edwards, Clement (Glamorgan, E.)

    Maclean, Donald

    Runciman, Rt. Hon. Walter

    Edwards, Sir Francis (Radnor)

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

    Russell, Rt. Hon. Thomas W.

    Edwards, John Hugh (Glamorgan, Mid)

    MacNeill, J. G. Swift (Donegal, South)

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

    Esmonds, Dr. John (Tipperary, N.)

    MacVeagh, Jeremiah

    Samuel, J. (Stockton-on-Tees)

    Esmonde, Sir Thomas (Wexford, N.)

    M'Callum, Sir John M.

    Scanlan, Thomas

    Esslemont, George Birnie

    McKenna, Rt. Hon. Reginald

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

    Falconer, James

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

    Sheehy, David

    Farrell, James Patrick

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

    Sherwell, Arthur James

    Fenwick, Rt. Hon. Charles

    M'Micking, Major Gilbert

    Simon, Rt. Hon. Sir John Allsebrook

    Ffrench, Peter

    Manfield, Harry

    Smith, Albert (Lanes., Clitheroe)

    Field, William

    Markham, Sir Arthur Basil

    Smith, H. B. Lees (Northampton)

    Fiennes, Hon. Eustace Edward

    Marks, Sir George Croydon

    Smyth, Thomas F. (Leitrim, S.)

    Fitzgibbon, John

    Marshall, Arthur Harold

    Soames, Arthur Wellesley

    Flavin, Michael Joseph

    Meagher, Michael

    Spicer, Rt. Hon. Sir Albert

    France, G. A.

    Meehan, Francis E. (Leitrim, N.)

    Strauss, Edward A. (Southwark, West)

    Furness, Sir Stephen Wilson

    Meehan, Patrick J. (Queen's Co., Leix)

    Sutherland, John E.

    Golder, Sir W. A.

    Millar, James Duncan

    Sutton, John E.

    George, Rt. Hon. D. Lloyd

    Molloy, Michael

    Taylor, John W. (Durham)

    Gladstone, W. G. C.

    Molteno, Percy Alport

    Taylor, Theodore C. (Radcliffe)

    Glanville, Harold James

    Mond, Rt. Hon. Sir Alfred

    Taylor, Thomas (Bolton)

    Goddard, Sir Daniel Ford

    Money, L. G. Chlozza

    Tennant, Rt. Hon. Harold John

    Goldstone, Frank

    Montagu, Hon. E. S.

    Thomas, James Henry

    Greenwood, Hamar (Sunderland)

    Mooney, John J.

    Thorne, G. R. (Wolverhampton)

    Greig, Colonel James William

    Morgan, George Hay

    Thorne, William (West Ham)

    Grey, Rt. Hon. Sir Edward

    Morrell, Philip

    Toulmin, Sir George

    1970

    1971

    Trevelyan, Charles Philips

    Watt, Henry A.

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

    Verney, Sir Harry

    White, J. Dundas (Glasgow, Tradeston)

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

    Walsh, Stephen (Lanes., Ince)

    White, Sir Luke (Yorks, E.R.)

    Wilson, W. T. (Westhoughton)

    Walters, Sir John Tudor

    White, Patrick (Meath, North)

    Winfrey, Sir Richard

    Walton, Sir Joseph

    Whitehouse, John Howard

    Wing, Thomas Edward

    Ward, John (Stoke-upon-Trent)

    Whittaker, Rt. Hon. Sir Thomas P.

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

    Ward, W. Dudley (Southampton)

    Whyte, Alexander F. (Perth)

    Young, William (Perth, East)

    Wardle, George J.

    Wiles, Thomas

    Yoxall, Sir James Henry

    Waring, Walter

    Wilkie, Alexander

    TELLERS FOR THE AYES.—Mr.

    Warner, Sir Thomas Courtenay T.

    Williams, Aneurin (Durham, N.W.)

    W. Jones and Mr. Webb.

    Wason, John Cathcart (Orkney)

    Williams, Penry (Middlesbrough)

    Wason, Rt. Hon. E. (Clackmannan)

    Williamson, Sir Archibald

    NOES.

    Agg-Gardner, James Tynte

    Goldman, C. S.

    Peel, Lieut.-Colonel R. F.

    Amery, L. C. M. S.

    Goldsmith, Frank

    Peto, Basil Edward

    Anstruther-Gray, Major William

    Grant, J. A.

    Pollock, Ernest Murray

    Archer-Shee, Major Martin

    Gretton, John

    Pretyman, Ernest George

    Ashley, Wilfrid W.

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

    Prothero, Rowland Edmund

    Baird, John Lawrence

    Haddock, George Bahr

    Pryce, Jones, Colonel E.

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

    Hall, Frederick (Dulwich)

    Randles, Sir John S.

    Baldwin, Stanley

    Hamilton, C. G. C. (Ches., Altrincham)

    Rees, Sir J. D.

    Banbury, Sir Frederick George

    Hamilton, Lord C. J. (Kensington, S.)

    Remnant, James Farquharson

    Banner, Sir John S. Harmood-

    Harris, Henry Percy

    Ronaldshay, Earl of

    Barlow, Montague (Salford, South)

    Helmsley, Viscount

    Rothschild, Lionel de

    Bathurst, Charles (Wilts, Wilton)

    Henderson, Major H. (Berks, Abingdon)

    Rutherford, John (Lanes., Darwen)

    Beach, Hon. Michael Hugh Hicks

    Henderson, Sir A. (St. Geo., Han. Sq.)

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

    Beckett, Hon. Gervase

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

    Samuel, Sir Harry (Norwood)

    Benn, Arthur Shirley (Plymouth)

    Hewins, William Albert Samuel

    Samuel, Samuel (Wandsworth)

    Benn, Ion Hamilton (Greenwich)

    Hibbert, Sir Henry F.

    Sanders, Robert Arthur

    Bennett-Goldney, Francis

    Hills, John Waller

    Sanderson, Lancelot

    Bentinck, Lord H. Cavendish-

    Hill-Wood, Samuel

    Sandys, G. J.

    Bigland, Alfred

    Hoare, Samuel John Gurney

    Sassoon, Sir Philip

    Bird, Alfred

    Hohler, G. F.

    Scott, Sir S. (Marylebone, W.)

    Blair, Reginald

    Hope, James Fitzalan (Sheffield)

    Spear, Sir John Ward

    Bowden, G. R. Harland

    Hope, Major J. A. (Midlothian)

    Stanier, Beville

    Boyle, William (Norfolk, Mid)

    Home, Edgar

    Stanley, Hon. G. F. (Preston)

    Boyton, James

    Houston, Robert Paterson

    Starkey, John R.

    Bridgeman, William Clive

    Hunt, Rowland

    Staveley-Hill, Henry

    Bull, Sir Wiliam James

    Hunter, Sir Charles Rodk.

    Steel-Maitland, A. D.

    Burdett-Coutts, William

    Ingleby, Holcombe

    Stewart, Gershom

    Campion, W. R.

    Jardine, E. (Somerset, E.)

    Strauss, Arthur (Paddington, North)

    Carlile, Sir Edward Hildred

    Jessel, Captain H. M.

    Sykes, Alan John (Ches., Knutsford)

    Cassel, Felix

    Joynson-Hicks, William

    Sykes, Sir Mark (Hull, Central)

    Castlereagh, Viscount

    Kerry, Earl of

    Talbot, Lord Edmund

    Cecil, Evelyn (Aston Manor)

    Lane-Fox, G. R.

    Terrell, George (Wilts, N.W.)

    Cecil, Lord Hugh (Oxford University)

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

    Thomas-Stanford, Charles

    Clay, Captain H. H. Spender

    Lewisham, Viscount

    Thomson, W. Mitchell-(Down, North)

    Clive, Captain Percy Archer

    Lloyd, George Ambrose (Stafford, W.)

    Thynne, Lord Alexander

    Clyde, J. Avon

    Lleyd, George Butler (Shrewsbury)

    Tickler, T. G.

    Courthope, Georgo Loyd

    Locker-Lampson, G. (Salisbury)

    Tobin, Alfred Aspinall

    Craig, Norman (Kent, Thanet)

    Locker-Lampson, O. (Ramsey)

    Touche, George Alexander

    Craik, Sir Henry

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

    Tryon, Captain George Clement

    Crichton-Stuart, Lord Ninian

    Long, Rt. Hon. Walter

    Valentia, Viscount

    Currle, George W.

    Lyttelton, Hon. J. C.

    Walrond, Hon. Lionel

    Dairymple, Viscount

    MacCaw, Wm. J. MacGeagh

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

    Dalziel, Davison (Brixton)

    Mackinder, Halford J.

    Watson, Hon. W.

    Denniss, E. R. B.

    Malcolm, Ian

    Weigall, Captain A. G.

    Dickson, Rt. Hon. C. Scott

    Mason, James F. (Windsor)

    Weston, Colonel J. W.

    Duke, Henry Edward

    Middlemore, John Throgmorton

    Williams, Colonel R. (Dorset, W.)

    Duncannon, Viscount

    Mills, Hon. Charles Thomas

    Willoughby, Major Hon. Claud

    Du Pre, W. Baring

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

    Wills, Sir Gilbert

    Eryes-Monsell, Bolton M.

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

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

    Faber, George D. (Clapham)

    Neville, Reginald J. N.

    Wilson, Maj. Sir H. (Bethnal Green, S.W.)

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

    Newdegate, F. A.

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

    Falle, Bertram Godfray

    Newman, John R. P.

    Wood, John (Stalybridge)

    Fell, Arthur

    Newton, Harry Kottingham

    Wortnington Evans, L.

    Fitzroy, Hon. Edward A

    Nicholson, William G. (Petersfield)

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

    Foster, Philip Staveley

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

    Yate, Colonel C. E.

    Gardner, Ernest

    Ormsby-Gore, Hon. William

    Younger, Sir George

    Gastrell, Major W. H.

    Paget, Almeric Hugh

    TELLERS FOR THE NOES.—Mr.

    Gibbs, G. A.

    Parker, Sir Gilbert (Gravesend)

    Hayes Fisher and Mr. Butcher

    Gilmour, Captain John

    Pease, Herbert Pike (Darlington)

    Glazebrook, Captain Philip K.

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

    It being Half-past Five of the clock, the CHAIRMAN proceeded, pursuant to the Order of the House of the 8th July, successively, to put forthwith the Questions necessary to dispose of the Clauses to be
    1972
    concluded at Half-past Five of the clock at this day's sitting.

    CLAUSE 12.—(Protection of Purchasers and Mortgagees of Interests in Expectancy. 57 and 58 Vict., c. 30.)
    Where an interest in expectancy within the meaning of Part I. of the Finance Act, 1894, in any property has, before the eleventh day of May, nineteen hundred and fourteen, been bonâ fide sold or mortgaged for full consideration in money or money's worth, then no other duty on that property shall be payable by the purchaser or mortgagee when the interest falls into possession than would have been payable if this Part of this Act had not passed, and in the case of a mortgage any higher duty pay-Able by the mortgagor shall rank as a charge subsequent to that of the mortgagee.
    CLAUSE 13.—(Reorganisation of Grants to Local Authorities in England and Ireland.)

      CLAUSE 14.—(Reorganisation of Grants to Local Authorities in Scotland.)
      The CHAIRMAN: I put no Question on Clauses 13 and 14. There is no Resolution to authorise their consideration.
      Mr. FELL: Do they disappear entirely from the Bill?
      The CHAIRMAN: That is so.
      Mr. WORTHINGTON EVANS: Has you attention been drawn to an Amendment on the Paper in the name of the Chancellor of the Exchequer, in which he proposes to leave out these Clauses? Is that Amendment not necessary?
      The CHAIRMAN: My duty overrides the Amendments on the Paper.

PART V.
  NATIONAL DEBT.

    CLAUSE 15.—(Reduction of Permanent Annual Charge for Current Year. 38 and 39 Vict., c. 45, 10 Edw. VII, c. 35.)
    The amount of the permanent annual charge for the National Debt under Section one of the Sinking Fund Act, 1875, shall, during the current year, be the sum of twenty-three and a half million pounds instead of twenty-four and a half million pounds; and Section four of the Finance Act, 1910, shall have effect accordingly.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir F. BANBURY: I beg to move to leave out the Clause.
    If there is one question on which the Chancellor of the Exchequer has shown a greater want of consistency than on any other it is the question of the Sinking Fund. In the days when the right hon. Gentleman and the Liberal party were on this side of the House there was nothing on which they attacked the Conservative party to a greater extent than the idea that proper provision must be made by the Government for the redemption of debt. When, owing to the fortunes of war, the party opposite came into power, almost the first thing that the Prime Minister, who was then Chancellor of the Exchequer, did was to increase the Sinking Fund from £28,000,000, at which he found it, to £29,500,000. That increase was hailed with satisfaction by practically all the Liberal party, and it was stated that now that the Liberal party had come into power everyone would see the extravagance of the Tories reduced, and there were some people who were actually foolish enough to buy Consols with that idea. Fortunately they were Radicals, and when they told me what they had done and said that they thought that the depreciation of Consols was about to be checked I said, "I think you are wrong, and that you will lose your money." They did not agree with me, but they did lose their money, and I must say that I was not sorry. The Sinking Fund remained at £29,500.00 for, I think I am right in saying, one year, and ever since that year it has been reduced until now it has got down to £23,500,000. The Chancellor of the Exchequer has prided himself very much upon the fact that he has reduced the National Debt by £100,000,000.
    Mr. LLOYD GEORGE: The present Administration.
    Sir F. BANBURY: I mean the Liberal Government has reduced the National Debt by £100,000,000 since 1906. That being so, there is a saving annually of £2,500,000. As everyone knows, Consols are merely an annuity. It is undertaken by the Government to pay a certain sum annually. There is no provision for exemption; the Government have the power to pay them off at par, but there is no obligation to pay them off at par, or to pay them off at all; the only obligation is to pay an annuity to the people who are holders of the stock. The Chancellor of the Exchequer is actually reducing the annuity payable on Consols

    1975
    by £2,500,000. On the other hand, he has imposed, or, I had better say, the Government has imposed, an annuity of £20,000,000—£13,000,000 for old age pensions, and £7,000,000 for insurance. I myself voted against old age pensions, and I do not regret it. But I think nobody will deny that, having done it, we cannot go back upon it. Everyone on both sides of the House will admit that. Therefore, we are face to face with this fact, that there is a permanent charge of at least £13,000,000, probably more, which will never be reduced, and which has been imposed by the Government of the right hon. Gentleman. Against this, all that he has done is to decrease the annual charge by £2,500,000. Therefore, on that point alone we are £10,500,000 worse off than we were before the Government of the right hon. Gentleman came into power. Then there is the Insurance Act, which imposes a charge of £7,000,000 a year, but I will not go into that; it is quite sufficient for my purpose to show that instead of having made a reduction in the liabilities of the country as is asserted, the right hon. Gentleman, as a matter of fact, has increased them to the extent of £10,500,000.
    It has always been said, ever since I remember anything about the financial side of the Government in this country, that the Government had two resources in times of stress and trouble. One was the New Sinking Fund, and the other the Income Tax, which has been put up to such a height that it is almost impossible to increase it in times of emergency, at any rate, without imposing a very great burden upon a very small portion of the community. The Sinking Fund has also been reduced, and therefore the amount of money which in old days was available has disappeared. Supposing we were to go to war and it was necessary to borrow £100,000,000, if the Sinking Fund had not been depleted in this way, it would have been perfectly easy to reduce the Sinking Fund by £2,500,000 and to have found the interest on the £100,000,000 borrowed, without imposing an additional sixpence on the taxpayer. Owing to the depletion of the Sinking Fund that reserve disappears, and it would be very difficult to raise money and find the interest on the Sinking Fund, if the course of the Chancellor of the Exchequer is continued. There is another point which was discussed yesterday, and into which, of course, I will not go, namely, why English funds have fallen so much in value. Let me point out to the Chancellor
    1976
    of the Exchequer that toy depleting the Sinking Fund he has taken away from the market what is, practically, the only buyer of Consols. I do not want to go into the question why they are a favourite investment—the reasons do not matter—but the fact remains that there are not the purchasers of English stock that there used to be, and practically the only large purchaser is the Government broker, who is acting for the Sinking Fund. The Chancellor of the Exchequer is going to take away the money used for that purpose, and one of the effects of it must toe to decrease the price of Consols. It is perfectly evident, if you have not got as many buyers as you had formerly, and continue to have the same number of sellers, that the stock must decrease in value.
    Then, again, if the right hon. Gentleman wanted to raise money, the fact that the Sinking Fund has been diminished must cause a fall in Consols and make it harder for the right hon. Gentleman to go into the market and borrow. I do not think that anything I have said can be contradicted. I have endeavoured to put the matter entirely from the financial point of view, and not in any kind of way to introduce party politics. [HON. MEMBERS: "Hear, hear!"] I note that cheer. I have endeavoured, at any rate, to put before the Committee what, to my mind, is a very serious state of affairs. I am sorry that the hon. Member for the Hexham Division (Mr. Holt) is not here at the moment, and I am sorry that there is not a larger number of Members in attendance during this discussion. Although this is a dry subject it is an important one, and it is all the more important at a time when, rightly or wrongly, our annual expenditure is increasing at such a rapid rate. Surely the moment when we are spending over £200,000,000, and when we are considering the largest Budget ever introduced in this country, is not the right moment to reduce the New Sinking Fund. It is not as if the right hon. Gentleman should say, "Well, it is quite true that I am reducing the New Sinking Fund from the £28,000,000 at which it stood to £25,090,000 or £26,000,000, but I am doing it because I have paid off a large amount of the debt, and I think that is sufficient." The right hon. Gentleman, however, is continually doing it, and instead of turning round at some particular period and saying, "Although I have reduced the Sinking Fund now in face of the increasing expenditure, I am going to put it up again," he

    1977
    still persists in his evil courses and continues the reduction which he has commenced. I do not know whether I shall get any support from hon. Members on either side. I do not suppose I shall be able to influence the Chancellor of the Exchequer in the slightest degree.
    My hon. Friend said that when you play with the Chancellor of the Exchequer, it is tails he wins and heads you lose. I think that statement is absolutely true. But during the last four weeks there have been signs that the Chancellor of the Exchequer is a little more reasonable on financial matters. Whether his reasonableness has arisen from remarks made by myself or others on this side of the House, or whether it has arisen from remarks made by the hon. Gentleman who has concealed himself in a remote part of the building, I do not know. May I ask the hon. Member if he will kindly come forward because I hope to enlist him on my side. I should like to know from the right hon. Gentleman the Chancellor of the Exchequer whether this is the last reduction he proposes to make, and whether or not the proposes in the near future to increase the Sinking Fund to something approaching the amount at which it was when he first came into office. Of course the right hon. Gentleman may say, "If I was not to decrease the Sinking Fund, I should have to get more money. I have no money to pay my way unless I take this." My answer to that is, first of all, that we of the Opposition are not concerned nor is it our duty, to tell the right hon. Gentleman where to find the money. It is his duty to find the money in such a way that it does not depreciate the credit of the country. The methods which the right hon. Gentleman is pursuing are at the present moment depreciating the credit of the country. The fact remains that the credit of the country is very much lower than it was before the Liberals came into office. Something must be done to restore that credit in view of the fact that we are spending such enormous sums of money at the present moment. Of course there are many other ways by which the right hon. Gentleman could get the money, and there is no doubt a very simple one, and that is that he should not spend so much.
    Mr. JONATHAN SAMUEL: Why did you recommend the expenditure.
    Sir F. BANBURY: I have not recommended such an expenditure. I voted against old age pensions, which is one way of not spending the money.
    Mr. J. SAMUEL: You attended the meeting in the City.
    6.0 P.M.
    Sir F. BANBURY: Yes, it is quite true that I attended the meeting in the City, in conjunction with a good many gentlemen who hold the opinion of the hon. Member opposite. It was not a party meeting; it was a meeting of sensible men, who knew that if they were to protect the prosperity of the country, and to protect it from the depredations of people outside, they must have a certain amount of insurance, and they were prepared to support all those people who would take the proper course to protect the interests of this country. Other objects are advocated by hon. Members opposite for the purpose of catching votes, not because hon. Members think them right, but in order to enable them to secure £400 per year. I would ask why the right hon. Gentleman has not followed the principles laid down by the Prime Minister, and I think by himself when he was in Opposition and first came into power, namely, that the first thing was to see that the Sinking Fund for the reduction of the National Debt was not tampered with? The course he is following is bound to lead to further depreciation in English security and credit.
    Mr. GEORGE FABER: It is as long ago as 1909 since I last had the honour of addressing the Committee on the subject of the National Debt. In that year, if my memory does not fail me, in the original Budget Statement, and in October of the same year, two proposals were made taking three and a half millions from the Sinking Fund. I remember saying that although I thought there was a great deal to be said on both sides of the argument at that time, the dangerous factor in the case seemed to me that appetites in this matter grew with eating. After all, by reducing the New Sinking Fund you tread on nobody's toes, and if you touch taxation you are sure to tread on toes. The Sinking Fund is provided more or less for the benefit of posterity, and posterity is not here to look after its interests, and we are all too much inclined to say, if we have not got to pay, let posterity look after itself. My words on that occasion have turned out to be true, and appetite has grown. I am speaking from memory, and I think the Chancellor of the Exchequer made a further attack on the Sinking Fund after 1909. In 1909 it was reduced from £28,000,000 to £25,000,000,

    1979
    and then from £25,000,000 to £24,500,000, and now to £23,500,000. In that connection, may I compare the position to-day with the position in 1899, when the whole Radical party made such a tremendous attack on the present Lord St. Aldwyn, the then Chancellor of the Exchequer, for reducing the Sinking Fund to £23,500,000, and we shall appreciate the position of the Radical party then with that occupied by the Radical party now. In 1899 Consols were at 110 and to-day they are 75. In 1899 the National Debt was £635,000,000. To-day I forget exactly what it is, but it is considerably more than that.
    Mr. ARNOLD: It is £651,000,000.
    Mr. G. FABER: In 1899 there was a low Income Tax, and the hon. Baronet the Member for the City tells me it was 5d. or 6d. To-day you have it by graduation to 2s. 8d., and the Death Duties following on the Finance Act of Sir William Harcourt were nothing like as high as they are to-day. There was a tremendous increase in them in 1909, and in this Budget there is another increase. The Budget in 1899 amounted to £110,000,000, and today it is £207,000,000. The whole range of gilt-edged securities were hundreds of millions higher than they are to-day. The national credit then was from every point of view much better than it is now. Yet under all those favourable financial circumstances the party opposite made a tremendous onslaught on us for reducing the Sinking Fund to £23,500,000, when we had so much justification for doing so. Consols were then 110, redeemable in 1931 at par. What on earth would be the good of any far-seeing Chancellor of the Exchequer buying Consols at 110 when he had the chance in 1931 of redeeming them at par! It would not have been sound finance, and much better not to do it in that time of national affluence, good credit, and comparatively low taxation. To-day you can buy a hundred pounds of Consols for £75, and it is the best business, if I may venture to say so, that a Chancellor of the Exchequer could possibly do to buy a hundred pounds of national indebtedness for £75. Why does he not—because of the financial stringency? I would remind him of what eminent statesmen said in the past. When you are in opposition you always throw rotten eggs and stories—anyhow at the other side—and one of the most formidable opponents
    1980
    in 1899, doubtless, of our proposals to reduce the Sinking Fund to £23,500,000 was the present Chancellor of the Exchequer. In 1904 he said:—
    "After all, the great strength of the country was its great financial reserve. … "We were squandering her reserve, and the Chancellor of the Exchequer, who declined to face the situation courageously, was not taking a patriotic view of his duty to the country."
    Those high-sounding statements are sound. One of the very worst ways of supporting great financial strength is to put down the Sinking Fund at this moment when we have got the highest Budget on record. Let me point to what was said by a greater financier than the right hon. Gentleman. I refer to the late Sir William Harcourt, who said in reference to our Budget in 1899, to reduce the Sinking Fund to £23,500,000:—
    "Every day you are increasing the liabilities of this country to an extent you cannot measure, and which you are only commencing. You are issuing the scrip which they (posterity) will have to redeem. It is your posterity who will have to bear the enormous burdens of these great liabilities, and while you are creating these prospective liabilities you are cutting off the provision by which they might be made easier to bear."
    That was the old Radical doctrine or the old Liberal doctrine. I suppose there are no old Liberals left. Economy has gone. The higher the Budget, the more delighted the Radical party are. I know perfectly well that the Chancellor of the Exchequer, when he gets up, will say, "What should you do in my position?" That is always a difficult question to answer. I have always felt it to be a difficult question, because, if he kept the Sinking Fund at £23,500,000, his £1,000,000 would have to be found elsewhere. We all know, at least if we put our party politics into our pockets, that the Death Duties, at any rate, are reaching such a point at which productivity will become less, or, as the old Chancellors used to say, they are reaching the breaking point. We all know in our heart of hearts that with those Death Duties you cannot put the Income Tax much higher, as otherwise you are going to reach the breaking point there where productivity is going to become less. When you put those two together, the Death Duties and the Income Tax, the Chancellor of the Exchequer may well say, "Where am I to get the money if I do not reduce the Sinking Fund?" According to the tenets of Free Trade there is nowhere else. Everybody knows you are getting to the end of your Free Trade resources. If you put the direct taxation higher and higher in the way you are doing, the result will be less

    1981
    and less, and human nature will avoid more and more. Perhaps you may say that this criticism is poor conference, and the Chancellor may say, "What should you do?" He has put that point even to my humble self. I never thought that quite a fair way of putting it, because it is not the business of the Opposition to find the money but of the party in power. You have got to do one of two things. Either you have got to have a fresh Income Tax, starting low—
    The DEPUTY-CHAIRMAN (Mr. Maclean)rose—
    Mr. G. FABER: I was afraid I should tread on the toes of order. Therefore in discussing the question of the Sinking Fund it is very difficult to know where a Free Trade Government is going to get the money from if it does not keep nibbling as it is, or rather taking great chunks out of the Sinking Fund year by year. It is perfectly fair and reasonable of me to say that you are departing from all your old doctrines. If there was one great principle of Radical finance it was "Do not tamper with the Sinking Fund." Gladstone said, over and over again, if you tamper with the Sinking Fund that is borrowing in the strictest sense of the word. Of course it is. If you cut down the money for the reduction of the National Debt, you might just as well be borrowing in the open market. I leave the Radical party to find the escape for themselves. They are inconsistent with their past, and false to their past, if they go on, not only conniving at, but agreeing in this further cutting down of that fund which means the gradual reduction of our National Debt. We are not like some great Continental country with assets in hand. We have no assets in hand. Therefore it is our duty, year by year, to cut down our indebtedness. If a great war came, with a National Debt of £650,000,000, we should be in a very awkward position indeed. We should perhaps have to raise £500,000,000, and with our credit knocked about, with the Sinking Fund impaired, with taxes at a war level, we should be in such a tight place that no financier in the country would like to have to face it. But it is the difficulty of the Government; they have to meet it. It may be that from their point of view the only thing they can do is to be unfair to posterity and to their position as custodians of the National purse in order that they may reconcile themselves to the narrow and worn out tenets of a too strict Free Trade.
    Mr. GODFREY COLLINS: The hon. member opposite has referred to Lord St. Aldwyn and his 1899 Budget. May I remind him that when Lord St. Aldwyn reduced the Sinking Fund in that year to £5,800,000, he argued that it was in the permanent interest of the Sinking Fund. If the hon. Baronet, who shakes his head, will refer to the debates of that year, he will find that I am quoting absolutely correctly. The hon. Member (Mr. G. Faber) has also told us that Free Trade finance has broken down. I remember hearing that statement when I was adopted as a candidate five years ago. Since then we have raised £40,000,000 by taxation, and by the present Budget a further £12,000,000 will be raised. So that since Free Trade has broken down, we shall have raised, including this Budget £52,000,000 by strictly Free Trade finance. When the people in the country read the hon. Member's statement that Free Trade finance has broken down—
    Mr. G. FABER: I say that it has now.
    The DEPUTY-CHAIRMAN (Mr. Maclean: The hon. Member must confine his, remarks to the subject before the Committee.
    Mr. G. COLLINS: I was only endeavouring to deal with one or two points made by the hon. Member opposite. The matter before the Committee is the amount required for the Sinking Fund this year. I find that in the year 1890, when the debt per head of the population was £18, Lord Goschen, who is recogniesd by hon. Members opposite as a sound financier and a sound Chancellor of the Exchequer, reduced the amount of the Sinking Fund to £5,000,000. Lord St. Aldwyn, in the year 1899, when the debt per head of the population was £15 10s., reduced the Sinking Fund to £5,860,000. What is the proposal to-day? In the year 1914, when the debt per head of the population is only £14,,the amount set aside for the Sinking Fund is £6,750,000. In other words, if we compare this year with the year 1890, the Debt per head of the population has increased by 20 per cent., while the amount set aside for Sinking Fund has increased by 33 percent. I think that on reflection hon. Members opposite will see that my right hon. Friend has made, and is making, ample, provision for the Sinking Fund. Not only is he finding £6,750,000 for the Sinking Fund, but in the Navy Estimates of this year I find a sum of £1,300,000 to repay debts incurred by the party opposite

    1983
    during their years of office. I find in the Army Estimates also a sum of £880,000 to repay debts incurred by the party opposite during their ten years of office.
    Mr. PRETYMAN: I am sure the hon. Member wishes to be fair. He will remember that that system of borrowing was started by Sir William Harcourt, and has continued since his time.
    Mr. G. COLLINS: I have seen no repetition of that experience during the last seven years.
    Mr. PRETYMAN: I said that it had continued from Sir William Harcourt's time until this Government took office.
    Mr. G. COLLINS: Sir William Hardcourt may have adopted the practice in a small way, but to nothing like the same degree, and what might be defended in a small matter cannot be justified when we are dealing with large sums of public money. Further, during this year my right hon. Friend is finding £4,000,000 in the Army and Navy Estimates for works which might justifiably be paid, according to a Tory Chancellor of the Exchequer, by money raised by means of loans. If I add together the amounts required to wipe out the debt incurred by the party opposite for Army and Navy works during their term of office, and add the amount to the £6,750,000 set aside for the Sinking Fund, I have a total of £9,000,000 raised by taxation this year to wipe out debts bequeathed to us by the party opposite. Not only does the New Sinking Fund wipe out National Debt, but the Old Sinking Fund is also used for that purpose. If I make a further contrast between the policy of the present Administration and the policy of the Administration from 1895 to 1905, I do not think that any fair-minded man will say that we have not been absolutely sound in our financial dealings with the Sinking Fund.
    Sir G. YOUNGER: Does the hon. Member suggest that the present Government have done nothing of this kind? What about public offices, telephones, and all that sort of thing?
    Mr. G. COLLINS: Would the hon. Baronet compare money spent on unproductive works, such as harbours and works of that nature, with money spent for national telephone purposes?
    Sir G. YOUNGER: What about public offices? They are in the same position.
    Mr. G. COLLINS: Money raised by the present Government to any degree for public offices is put upon the Estimates of the year. If hon. Members opposite can point to any considerable sum raised this year by means of loan, I will give them my support in the Division Lobby. I find in the Estimates of this year a sum of £126,000 to wipe out debt incurred by the party opposite for public works. Before that interruption, I was referring to the Old Sinking Fund. In the years 1896, 1897, and 1898 the sum of £10,000,000 was realised from surpluses. One would have thought, from the attitude of hon. Members opposite, that that money would have gone automatically to the reduction of debt. But I find on examination that only £1,000,000 out of the £10,000,000 was devoted to the reduction of debt, the other £9,000,000 being diverted to other purposes. During the last seven years the present Government have repaid debt to the amount of £20,000,000 through the operation of the Old Sinking Fund.
    Sir F. BANBURY: That is due to bad budgeting
    Mr. G. COLLINS: The hon. Baronet says that it is due to bad budgeting. But I have just pointed out that in the year 1896 there was a surplus of £4,200,000; in the year 1897 there was another surplus of £2,473,000; and in the year 1898 there was a further surplus of £3,678,000. [An HON. "Bad budgeting!"] Those three sums together amount to £10,000,000, but only £1,000,000 was devoted to wiping out National Debt. Therefore, when we examine the record of the present Administration, whether in regard to the Old Sinking Fund or in regard to the New Sinking Fund, their policy is deserving of support of this House. We are always being taunted by hon. Members opposite in regard to our financial measures. During their ten years of office they had not the courage to tax the rich and they were afraid to tax the poor. This year when we bring forward our Budget they have not the courage to divide the House on the Finance Bill, but they take every possible step to frustrate the Chancellor of the Exchequer in what I believe to be his sound financial proposals.
    Colonel WILLIAMS: I wish to support the plea that the Chancellor of the Exchequer should make the sum £24,500,000 this year instead of £23,500,000. In the year 1913 there was a sum of £5,000,000

    1985
    for the Old Sinking Fund, but out of that sum £500,000 were taken for another purpose. The money was afterwards provided out of the Votes, and that £500,000 is still on the Exchequer Balances. To that extent the right hon. Gentleman really owes that £500,000 to the Sinking Fund, from which it was temporarily borrowed, and I submit that it ought to go back to the Old Sinking Fund if the Government hold any true canons of finance. I do not want to go into all the details of what past Chancellors of the Exchequer have done or of what the present Government has done. I am free to confess that they have striven manfully to pay off the War Debt, which was rightly incurred for a war in consequence of which the Empire has grown larger and stronger, and we have grown richer and able to bear a £200,000,000 Budget much better than we could have done before. The hon. Member opposite (Mr. G. Collins) spoke about debt having been left to that party by our party. I am not defending the practice of Army and Navy loans; but, after all, it is not the debt of a particular party. It was the way—I do not think it a very good way—in which the nation chose to meet large expenditure which was necessary at that particular time. It is a spirit which has not yet died out, because we have heard it suggested that the same sort of practice should be resorted to, that each year should not pay its way, and that money should be raised one year for the benefit of next year, which is against all canons of sound finance. I want to ask particularly concerning the remark made by the Solicitor-General. No doubt the Chancellor of the Exchequer will remember it. It was in reply to some observations on the Death Duties. He said that after all Death Duties, if they were capital, helped to swell the Sinking Fund, and helped to repay debt, because it was a capital charge. To my mind that is not a capital charge. That is an overspending of income, and ought to be repaid out of income. We cannot call it debt. If you diminish your capital by £500 you are so much the poorer, and if you run into debt £500, and have to repay it the next year out of your income, that is paying your bills.
    Therefore, the argument is that it is quite true—as the Solicitor-General said—or possibly true, that the Death Duties are really capital, but we must bear them because they go to replace capital. I think
    1986
    that argument is an entirely unsound one, and one which I do not think the Chancellor of the Exchequer will venture to uphold. I have already shown that the Chancellor of the Exchequer owes at least half of this, practically over a million, to the Old Sinking Fund. I go upon higher ground and say that if we can afford a £200,000,000 Budget Ave ought to afford much more than £23,000,000 towards paying off our National Debt. If the National Debt is a bad thing, it ought to be paid oft. If it is a burden upon the country—some think it is a burden upon the country—and when we have got years of riches—and there is no need to make a comparison with what anyone else has done or has not done, or what we ourselves had done in past years, when we are enjoying now the fruits of very huge years, I do say that I do think that this is not a proper amount, this £23,500,000, to apply to the Sinking Fund, with a £200,000,000 Budget. I would much rather the Fund were placed back even at the £28,000,000 at which it was before; and I do hope we shall be able to persuade the Chancellor of the Exchequer to increase the amount.
    Sir A. MARKHAM: It seems to me that if the Government proceeded to pay off the indebtedness of the country at a more economical rate, that the bankers on the other side of the House who have levied charges of wasteful expenditure against the Government, and have said or suggested that the finances of the country had broken down, would still not be satisfied. The hon. Baronet opposite and his colleagues do not seem to have the common honestly to recognise that every great Continental Power to-day, in order to meet the financial expenditure—which is incurred largely on armaments—have not only levied heavy taxation, but have had to increase very largely their indebtedness, while we under Free Trade system of Government have been able here at this time to pay our way, and at the same time, instead of raising loans for the purpose of the Army and Navy, reduced the debt at a very substantial rate. At all events we are reducing the National Debt by a sum of very nearly £7,000,000, while other great Continental countries with whom we are competing have, at the same time, very largely increased their debts. You cannot separate the two. You cannot regard this matter of expenditure except in the light of how the expenditure is incurred. The hon. Baronet seems entirely to have lost sight of the fact that the expenditure on

    1987
    armaments alone since this Government came into Office has increased by £25,000,000. Hon. Gentlemen opposite have been agitating that the present Government should spend larger sums on armaments! Then the hon. Baronet comes down to the House and complains of the Government, and speaks about "Lloyd-Georgian Finance" and about the Chancellor of the Exchequer being responsible for the bad state of the finance of the country. The hon. Member knows perfectly well that he is taking no regard to the main factors which are the causes of bringing on the financial position in which we are to-day. The hon. Baronet proceeded to say—and, of course, his own party do not agree with any of his speech—
    Sir F. BANBURY: What is that?
    Sir A. MARKHAM: No Member on the other side agrees to the speech that the hon. Baronet delivered. It was a speech delivered for the benefit of the electors of the City of London. None of his colleagues are going down to their constituencies to tell the electors there that the £14,000,000 spent on old age pensions is money wasted. The hon. Baronet speaks for those he represents, who are the plural voters.
    Sir F. BANBURY: I do not think the hon. Baronet or anybody can accuse me of vote catching. I have said exactly the same as in the City of London, and I said it before that. What I said a little while ago was that I did vote against the £13,000,000 which is now being spent on old age pensions, but I went on to say that that was done, and that it was quite impossible for anybody on either side of the House, whoever he was, ever to take it off. It is there, and we must accept it as a fact. I certainly did not say what the hon. Baronet is making me say.
    Sir A. MARKHAM: I understood the hon. Baronet to regard this £14,000,000 expenditure on old age pensions as wasted money. I think "wasted money" were the words he used.
    Sir F. BANBURY: No.
    Sir A. MARKHAM: The hon. Baronet deplored this expenditure as expenditure which the State ought not to have incurred. I do not think if he had to go to another constituency he would put forward those views.
    Sir F. BANBURY: I beg the hon. Baronet's pardon. I do not know that he wants to misrepresent me. I have made clear my views at each election. At Peckham I said I should vote against old age pensions. I said so in 1900, and I said so again in 1910.
    Sir A. MARKHAM: And doubtless that is the reason the hon. Baronet is not now Member for Peckham. I merely say this: The hon. Baronet does not come here to represent himself; he comes here to represent his constituency. No other constituency, I contend, would send the hon. Baronet to this House, except the plural voters of the City of London. Another distinguished banker on the opposite side who sits near the hon. Baronet regarded the debt of £140,000,000 incurred for the South African war as a "burden on prosperity."
    Mr. G. D. FABER: I did not say that.
    Sir A. MARKHAM: It was suggested that this debt made the country richer. That the country had been made richer by its indebtedness which the party opposite landed on our shoulders. We have got richer, it was suggested, by the fact of this increase of National Debt of £140,000,000. The hon. Gentleman opposite is an authority upon financial questions, and he referred to the indebtedness as an evidence of prosperity.
    Colonel WILLIAMS: I never said anything of the sort.
    Sir A. MARKHAM: What the hon. Member did say was that this expenditure had been good for the Empire.
    Colonel WILLIAMS: I never expect any "Little Englander" to understand what I mean.
    Sir A. MARKHAM: I have been all through the Colonies, and I do not know that a man can be termed a "Little Englander" because he has been looking after national resources instead of squandering them. We are told that if we got into a Continental war we should have to expend £500,000,000, and would therefore be put into a very tight place. I hope the party opposite will take to heart that observation of one of their Members. People go about the country shouting at meetings for more expenditure. That means that you cannot reduce the debt, and at the same time be spending money. Hon. Members opposite talk about future increases of the National Debt. Let the

    1989
    people who advocate this policy, and who always complain of our neighbours, pay some regard to the future and endeavour to bring about peace and good will between the nations of the world. By this alone we shall be able to reduce permanently the National Debt of this country. If we proceed in the policy that has been going on in this country for the last few years, you are likely, in my humble belief, to see an increase, and a large increase—one measured probably by no less a sum than the £500,000,000 mentioned—and the hon. Member knows how the money is going to be spent—he knows to what I am referring. The hon. Baronet the Member for the City of London was in the main, we know, speaking for the purpose of his plural voters. He was not representing in any way the party opposite, and as the plural voters are going at the end of this Parliament, we need pay very little attention to him.
    Mr. LLOYD GEORGE: We have had the usual speech on the Sinking Fund from the hon. Baronet—that is the usual speech since the present Administration came into power. All these wise doctrines of high finance, about reducing the amount by which you are diminishing your indebtedness, one never heard in the days when he supported Lord St. Aldwyn, when he reduced the amount applicable to this purpose considerably more than I propose to reduce it at the present time. We must not, however, complain of that. If a man does not grow wiser with years there must be something intrinsically wrong with him. Therefore I may say that the hon. Baronet can claim that experience has taught him something which he knew nothing of in those days. I look with interest to the time when he reaches an age at which he will be sitting on this side of the House, and I am here to see that he carries out those high doctrines that he has laid down. We have, I think, cause to complain of the way in which not only the hon. Baronet but those who supported him presented this case. Are they really under the impression that they have stated the facts, not fairly, but with anything approaching approximate fairness? The impression they created is that whereas in the great days of Lord St. Aldwyn—and, of course, Sir William Harcourt's days are great now!—and Mr. Goschen, the National Debt was reduced substantially year by year by those careful Chancellors! Since the present Administration came into power all that has gone. The National
    1990
    Debt, we are told, has not been reduced, appreciably, at any rate, in comparison with the amount by which the debt was reduced by the party opposite.
    Sir F. BANBURY: I did not say that.
    Mr. LLOYD GEORGE: What did the hon. Baronet mean to imply? Would anybody imagine from the speech he delivered that the debt has been reduced during the lifetime of the present Administration by more than twice the amount that it was during the days of the best of these Chancellors. Would anyone have known that or suspected it? Not at all. And that was the impression that the hon. Baronet tried to create. He is talking here to an audience that really knows something about the facts, and if he talks like that here, where we are able to correct him, what would he say in the City? What are the real facts? The real facts are these. Mr. Goschen is the Chancellor of the Exchquer who did most until the advent of the present Administration to reduce our national indebtedness. He did more than any other Chancellor of the Exchequer. Sir William Harcourt might have done as much, but he was only Chancellor of the Exchequer for three or four years. Mr. Goschen's reduction was one, I think, of £39,000,000 of debt.
    Mr. JAMES HOPE: For six years.
    Mr. LLOYD GEORGE: I will take six years if the hon. Gentleman likes. During these six years he reduced national indebtedness by £39,000,000. The present Administration have either actually reduced it, or have got money in the hands of the National Debt Commissioners for reducing it, by £103,000,000. Would anyone imagine from the speeches delivered by these great financial authorities, who try to inform the House of Commons and the public as to finance, and to warn them against the perils of the present Administration, that that was the state of things. It is not fair, it is not a creditable way of dealing with it.
    Sir F. BANBURY: I said you reduced it by £100,000,000.
    Mr. LLOYD GEORGE: You said I said so; you said I claimed that I did, but the hon. Baronet knows it is a fact. Is it fair, when the present Administration, having reduced the national indebtedness of this country by something that no other Administration has ever approximated to—

    1991
    is it fair not to state that fact to the country as well as to the House of Commons and the politicians of this country?
    Sir F. BANBURY: You increase the liabilities.
    Mr. LLOYD GEORGE: The hon. Baronet knows or he ought to know something about the rules of the House, and that it is not fair to carry on a running comment of that kind. He has had his fling and he ought to try and state the truth, but he concealed three-fourths of it. Now let us have the figures more carefully analysed. The hon. Baronet has suggested that the provision we are making this year for the reduction of debt is something which is incomparably less—that is his suggestion—than anything provided by the Administration to which he gave most unswerving support. He used to keep them in during the dinner-hour by spending hours of his time making speeches. He told us about that Administration, which he held up as a model of finance to me. They provided at the highest something like £6,000,000—I am not talking of the war time; I am leaving that out—I am talking of times of piping peace, times when the hon. Member for Clapham said were times of great credit and great finance, spirited markets, and great profits—and they provided these £6,000,000 a year for paying debt. This year, when we have reduced the Sinking Fund, we provide £9,000,000 to reduce national indebtedness—£3,000,000 better than those great creditable days of finance which is the standard on which a degenerate Chancellor of the Exchequer should fashion himself.
    Mr. G. FABER: I said it would have been very bad business to redeem Consols at 110 when they were redeemable in 1931 at 100.
    Mr. LLOYD GEORGE: It is bad finance for a Liberal Chancellor of the Exchequer to provide £9,000,000; he should have provided £10,000,000 or £11,000,000 or £12,000,000, but the highest financiers declared that a Tory Chancellor of the Exchequer should not provide more than £5,000,000 or £6,000,000. These Gentlemen pose as financiers, but they are simply rancorous partisans; they go about posing in the City as high-grade financial pundits, but they are pure common or garden Tories of the most common kind. I do not object to the hon. Gentle-
    1992
    man making his partisan speeches. Not at all, but I object to his doing it in the garb of a great financial authority and banker. That is what I object to.
    Mr. G. FABER: Getting back from Marconi.
    Mr. LLOYD GEORGE: The hon. Gentleman slings his personal insults.
    Mr. G. FABER: The right hon. Gentleman has been very offensive.
    Mr. LLOYD GEORGE: I have some weapons at my disposal too. At the same time I would rather keep within the rules of order and discuss this business across the floor, and if the hon. Gentleman cannot take his drubbing like a man I cannot help him. Let me just say exactly what has been provided in these degenerate days of Radical finance. My predecessor, the Prime Minister, in three years provided for the reduction of debt and reduced the debt of this country by a greater figure—approximately the same—than Mr. Goschen. The Unionist Chancellor of the Exchequer who did most in the way of reduction of debt did it in the whole of his six years of office. Mr. Goschen provided something like £39,300,000 for the redaction of debt, but my predecessor reduced it in three years by £39,857,000. This is the Radical Administration which is not paying oil debt. Let us come to the still worse case of my right hon. Friend's successor. I raided the Sinking Fund; I chipped it oft' here and there; I made no reduction of debt at all. That is a sort of suggestion made. Now what has happened in my degenerate and deteriorating days? In the course of the years I have been in office it is true I have had to find money for taxation, but I have imposed no taxation for anything or for any purpose that was not adopted by the whole House of Commons, and not merely by one party. I have not been forced to raise taxes for any purpose which was not supported by both parties. Old age pensions was so supported, and the only complaint about insurance was that I was not spending enough. Take the Navy. Attack was made upon our Administration, not because it was spending too much, but because it was not spending enough on the Navy. So that so far as taxation is concerned, I raised taxation for purposes pressed for by both parties.
    In spite of that fact, what has been done for the reduction of debt, including

    1993
    the money in the hands of the National Debt Commissioners? I have actually provided in those years of high taxation pressed upon the Exchequer, no less than £70,000,000 for the reduction, of debt. I am entitled to make this boast: No other Chancellor of the Exchequer, Radical or Unionist, has ever reduced the indebtedness of this country in the course of six years by £70,000,000. Let the hon. Gentleman opposite mention one, and if he is not able to do so he is not entitled to make these attacks upon me; he is bound to state the facts fairly. But in addition to the £70,000,000 gone in the net reduction of indebtedness, what has happened? We have found £1,500,000 for the building of sanatoriums out of the Old Sinking Fund. We have found £1,500,000 for a Development Fund, mainly for agriculture. We have found £250,000 for East Africa, and the hon. Gentleman (Colonel Williams) asks what happened to the £500,000 that was to come out of the Old Sinking Fund for East Africa? The whole of that sum has been voted to avoid the necessity of borrowing. Has the hon. Gentleman followed what has happened in regard to the Persian Oil transaction? We have been able to find £2,200,000 for that transaction without borrowing a single penny.
    Colonel WILLIAMS: I said that £500,000 is still upon the Exchequer Balances, and my contention was that it ought to go back to the Sinking Fund.
    Mr. LLOYD GEORGE: It is not for me now at this stage to defend that transaction. The only thing is, according to the hon. Gentleman, we should have put £2,200,000 to the Sinking Fund and go to the City and borrow £2,200,000. I should have thought that a very foolish transaction which no banker would press upon the consideration of the House. Then the hon. Gentleman says this is your Free Trade finance; you are bound to keep down your Sinking Fund. What Protectionist nation is paying debt, at all at the present moment? Has he followed what is happenning in other countries? My hon. Friend the Member for Mansfield has pointed out that while we are increasing expenditure, they are also increasing expenditure. They are increasing it on armaments, and we are increasing it partly and substantially for social reform. What is the difference between us and foreign countries? They are borrowing huge sums of money, while we this year
    1994
    are providing £9,000,000 for the reduction of debt without borrowing anything. With these facts, I think I am entitled to claim from men with some association with finance and some position in finance that they should state these facts fairly and with justice to their opponents
    7.0 P.M.
    Mr. PRETYMAN: I suppose the Chancellor of the Exchequer thinks that extravagance of language is the best cover for extravagant expenditure. I suppose he thought he was going to put himself on good terms with the Committee. [An. HON. MEMBER: "He has done it!"] It is not very difficult to do that with his own side. The right hon. Gentleman thinks he has put himself on good terms with the Committee by trying to persuade them that they understand finance better than a City audience. [An HON. MEMBER: "He did not say that!"] Yes, he did say that! The right hon. Gentleman talks about unfairness, but I wish he would try and be a little more fair himself in debate. He made that statement. He thinks he can throw gibes at us, and if we make the faintest reply he at once resents it, and stands on his high horse. The right hon. Gentleman first of all tries to please his own side by suggesting that they are much more capable of understanding high finance than a City audience, and then he proceeds to make a speech which proves that the exact contrary is his real opinion. I am sure the Chancellor of the Exchequer would never have attempted to make such a speech to any audience whom he really thought understood finance. I do not think he could have paid his own side a worse compliment, and his speech really was very amusing to us on this side of the House. [An HON. MEMBER: "You look amused!"] I do not think that I ever heard a speech which amused me more. I was never more amused than when I heard the rapturous cheers with which hon. Members opposite heard the right hon. Gentleman repeat for the seventh or eighth time the very identical phrases, and the very same extravagant gestures when he boasted of the number of millions by which he has reduced the National Debt. We have heard it all before—
    Mr. LLOYD GEORGE: They are the same figures, and I could not alter them.
    Mr. PRETYMAN: They always seem fresh to his audience. I congratulate the Chancellor of the Exchequer upon the admirable manner with which, by his

    1995
    oratorical ability, he can serve up stale goods as new. Of course, what he naturally did his best to conceal was that the point of view from which criticism has come on this side of the House was not confined to the mere figures by which this Chancellor of the Exchequer, or that, has paid off so much or so little of the National Debt, because that is a point to which the Chancellor of the Exchequer practically confined his whole speech. The point is not how much of the funded debt has been actually paid off by any individual Chancellor of the Exchequer, but it is, are we acting wisely to-day in reducing the amount allocated to the Sinking Fund, not regarded merely in comparison with the amounts which have been allocated to that service in previous years, and confined to that particular aspect of it, but are we allotting enough to-day in view of the general financial situation of which the Sinking Fund is only one particular unit? That is really the position.
    I am sure hon. Members will agree that to attempt to deal with the whole aspect of that question in a Committee debate would be out of order and impossible, and therefore I do not propose to attempt to cover the whole ground. I think, however, I am entitled to point that out in reply to what has been said. I do not think beyond what I have said that it is necessary to reply to the speech of the Chancellor of the Exchequer, because the whole point in his speech was, "I have paid off so many millions of the National Debt in so many years, and my predecessors paid off so much," and by saying that the right hon. Gentleman imagines that he has covered all the ground. Hon. Members who spoke before the right hon. Gentleman had a much wider knowledge of finance, and they dealt with the question on a somewhat wider ground. They did make some attempt to compare the situation which existed when previous Chancellors of the Exchequer paid off debt, and the situation which exists to-day when the Chancellor of the Exchequer is providing £9,000,000 for that purpose. Take, for instance, the time when the Unionist Government left office. An hon. Member opposite suggested that the present Government received a bad inheritance from the previous one, because certain sums had been borrowed for naval and military works, and the interest on that was left as a legacy to the present Administration.
    Mr. G. COLLINS: And Sinking Fund.
    Mr. PRETYMAN: I mean the repayment of Sinking Fund and interest was left as a legacy for the present Government, and the sum of £900,000 was the amount of that legacy.
    Mr. G. COLLINS: The £900,000 was the, amount for the Navy, but the total was £2,250,000.
    Mr. PRETYMAN: Well, the statement was that the Unionist Government left the present Government a legacy of £2,250,000. Did it ever occur to the hon. Member to compare that with the financial legacy which the next Administration is likely to inherit from the present Government? Which legacy would he prefer? Of course, every Chancellor of the Exchequer who has to deal with the finance of the country must look at it as a whole. You have in this matter to take the main factor, and that, is the rate of taxation which is being imposed upon the country You may express the Sinking Fund and all the other items in terms of taxation, but it is quite obvious that when we are incurring such commitments, looking at it from a purely financial point of view, the main point to consider in the raising of the money is not whether it has been ill-spent or well-spent, but what is the financial position of the country in regard to the finding of the money for the Budget of the current year. The Chancellor of the Exchequer claims that he has paid off a capital sum of £100,000,000, and because that is the sum taken by my hon. Friend behind me. The Chancellor of the Exchequer suggested that my hon. Friend had treated him very unfairly. I do not think he meant that, because the whole tone of my hon. Friend's speech was, extremely fair. He pointed out that £100,000,000 of debt had been paid off, but he went on to point out over the general area of finance how that in itself was not a sufficient provision for the general needs of the Exchequer. When the Chancellor of the Exchequer claims to have paid oil £100,000,000 of debt, he does not mention the fact that he has increased the annual expenditure by something like £40,000,000.
    Sir A. MARKHAM: And you approved of all of it.
    Mr. PRETYMAN: Not all of it.
    Sir A. MARKHAM: Which part do you not approve of?
    Mr. PRETYMAN: I do not approve of wasting £1,750,000 on the salaries of 12,000

    1997
    officials. I do not approve of wasting something like £1,000,000 a year upon an absurd and senseless and wasteful valuation. Those two items alone amount to a great deal more, and will produce a great deal less than the sum spent on naval and military works by the late Government, which has been referred to by the hon. Member opposite.
    Sir A. MARKHAM: That is only £2,500,000, and you said £40,000,000.
    Mr. PRETYMAN: Very large sums have been wasted on the Insurance Act, and I do not believe the country is getting anything like full value for that enormous expenditure. As I have already said, this is not the place to discuss whether we approve or disapprove of the different items of expenditure. This is not the opportunity, nor is the Committee now considering whether that particular form of expenditure is right or wrong. What we are considering is the way in which the money is being raised, the ability of the subjects to bear it, whether it is being raised in the best manner, and the general position of the Exchequer in regard to the same. This Clause raises the question of the credit of the State. I think the hon. Baronet opposite will admit that whether the1 expenditure be good or bad is a question beside the mark when you are considering the credit of the State. When the Chancellor of the Exchequer says he has paid off £100,000,000 of debt it is only fair to point out that he has increased the annual expenditure by at least £40,000,0000, and if that is translated into a capital sum it is equivalent to doubling the National Debt. At the time the legacy referred to was left to the present Government, the price of Consols considerably exceeded 100, and it was obviously bad finance to buy Consols at a price above par and then borrow fresh money for expenditure of that description. That was the reason why Sir William Harcourt originated that form of borrowing.
    Mr. LLOYD GEORGE: I think it is only fair to the memory of Sir William Harcourt to say that he did not initiate that system, because it was initiated by the Naval Defence Act of 1888, and the Barracks Act of 1895. It is true that in 1894 Sir William Harcourt followed the precedent which was set in 1888.
    Mr. PRETYMAN: I must challenge that statement. I know there had been isolated precedents, but the system of con-
    1998
    tinuous borrowing under a Naval and Military Loans Act was instituted by Sir William Harcourt, and the Chancellor of the Exchequer will not deny that. The first time there was any systematic continuous borrowing for naval and military works was under Sir William Harcourt's scheme of 1894. At any rate, it was Sir William Harcourt. This ought not to be the subject of recrimination on either side. The present Government are constantly claiming credit for having altered that system and for now paying for these works out of revenue. Do hon. Members suppose, if a Unionist Government were in office, with Consols at 75—I hope that they would be higher, and probably they would be—that they would not adopt the same system as the Chancellor of the Exchequer has adopted? It is purely a matter of the financial position at the time which each Chancellor of the Exchequer has to meet. Do hon. Members really suppose that because a certain system for providing money required by the State was necessary in 1896 it is necessary now? I would really ask hon. Members to allow me to proceed without so many interruptions. It is very difficult to make a speech when hon. Members are constantly interrupting.
    Mr. PRINGLEmade an observation which was inaudible in the Reporters' Gallery.
    Mr. PRETYMAN: Very well, then, make your point, but it is a very unfair interruption.
    Mr. J. M. HENDERSON: You could have increased the Sinking Fund in 1903, 1904, and 1905, when Consols stood at 86½, 85, and 87, or 14 per cent., 15 per cent., and 13 per cent., respectively, below par.
    Mr. PRETYMAN: That was immediately following the war. I did not mean in any way to impute unfairness to the hon. Member. It was the hon. Gentleman behind him who made an extremely rude interruption, and it is not the first time. Each Chancellor of the Exchequer, when he has to raise money, has to adapt the means to the particular financial situation at the moment. It is not, therefore, of very great value to a Committee of this kind—it is really a waste of our limited time—to throw stones across the floor of the House at each other as to the wisdom or folly of a particular action simply by comparison with the way

    1999
    in which money was raised eight or ten years ago. This thing is always cropping up. It is again and again contradicted, and it is again and again brought forward. Our contention is that, taking the whole area of which this particular proposal forms a part and having regard to the present position, to the rate of taxation, to the remaining amount of the National Debt and to the price of Consols, the financial position of this country is not so strong as we should like to see it, or so strong as it was left by the right hon. Gentlemen's predecessors. That is really the whole point. The question whether an extra million or two is added to or subtracted from the Sinking Fund is really a matter of minor importance. Supposing the credit of this country were so good, her resources so great, and her taxation so low that everybody knew that if she were to go into the market to borrow the whole financial world would be ready to supply her at sight, then these kinds of detail would be of minor importance. We know that is not the case to-day, and the real charge of my hon. Friend is that as the result of the financial operations of the present Administration, and particularly of the present holder of the office of Chancellor of the Exchequer, the credit of this country and the power of borrowing of this country have been considerably reduced. That is the position, and it is from that point of view we criticise this as an item in that decline of credit—not from the point of view of whether the exact amount of millions paid off to-day is greater or less than it was—and from that point of view every criticism offered from this side of the House is most amply and fully justified.
    Mr. J. M. HENDERSON: We have had in the City, as the hon. Baronet (Sir F. Banbury) knows very well, loans with which the present Chancellor of the Exchequer has had nothing to do, 90 per cent, of which have been left with the underwriters. Loan after loan has been a failure But what has that got to do with the Chancellor of the Exchequer? The whole market for Consols, as a matter of fact, was upset by a Unionist Chancellor of the Exchequer. He reduced them to 2¾ and then to 2½. For two and a half years, in 1894–5, the bank rate stood at 2. People began to think it was never going up again, and you could get no interest or only ½ per
    2000
    cent, on Bank deposits. People bought Consols and ran them up to an extraordinary figure. At that time Liverpool brought out a loan at 2½ per cent. and put it up by public tender and got 104. Birmingham got 102. Where are they to-day? What has the Chancellor of the Exchequer got to do with the fall of them?
    Sir F. BANBURY: Nobody said so.
    The CHAIRMAN: The hon. Baronet made the first speech in the Debate, and I must ask him not to interrupt.
    Sir F. BANBURY: I am sorry. I did not mean to interrupt, but the hon. Gentleman said that we had said that the Chancellor of the Exchequer was responsible because Birmingham stock had gone down. We never said anything of the sort.
    The CHAIRMAN: I must remind hon. Members that they are here to hear things with which they do not agree, and it is not necessary to make constant interruptions.
    Mr. J. M. HENDERSON: I am not a thick-and-thin supporter of the Chancellor of the Exchequer, or of any other man, but I do think that the attacks made upon him with regard to finance are shamefully wrong, and I really must protest against them. There is not a single or fair-minded man in the City who knows anything about finance who will ever say anything of the kind. I know there is a small coterie that charges him with everything. Anything that goes wrong is charged to the Chancellor of the Exchequer. It is not fair. We have, as a matter of fact, had years of prosperity when money has been fetching big interest—5 and 6 per cent.—and it has been impossible to float loans yielding a small return. That will come right when trade is not so flourishing. It is a simple operation of finance, as everybody knows. It is no use hon. Gentlemen turning round and saying that they would not be so foolish as to redeem Consols over par. They had an opportunity during four years of reducing the debt and buying at 14 per cent. or 15 per cent. discount and they did not do it—or, at all events, not to the extent that they might have done. You will find securities going up again when business is slacking off. Do not let any man make any mistake. I can remember when the Stock Exchange list was only a sheet, but to-day it is fourteen pages. What is the meaning of that? It

    2001
    means that to-day there are hundreds of things in which people can invest their money. Mr. Goschen kept up Consols by very clever means. He gave the banks and brokers ½ per cent. commission to induce their clients not to demand cash. The consequence was that when 3 per cent. was reduced to 2¾ per cent., and then to 2½. per cent., people began to want more interest, and they looked round to invest in something to give them more money. Recent years' have given them the opportunity. It is quite easy to get 4 per cent, and 4½ per cent. on good securities, particularly Colonial securities. Colonial stocks were also made trustee securities, and that opened a great field of investment. People to-day will not accept 2¾ per cent. and 2¾ per cent., and the investment field is ever so much wider. I protest against hon. Gentlemen blaming the Chancellor of the Exchequer or this Government for the decline in the securities or for a limited credit, because I know, and men who are in daily intercourse with the facts in the City know, that it is absolutely unfounded.
    Mr. JAMES HOPE: The Chancellor of the Exchequer in his very pretty outburst of simulated anger covered a great deal of ground, but he did not explain, and nobody has explained, why in the present year he should make provision for the Sinking Fund so very much less than his two predecessors. The hon. Member who has just spoken said that my right hon. Friend the Member for West Birmingham (Mr. Chamberlain) did not take advantage of the opportunity of relatively low Consols in 1905. That is exactly what he did. He did increase the Sinking Fund. I am not sure that he did not increase it in 1904, but he certainly did in 1905. It then stood at £28,000,000. The present Prime Minister the next year, when Chancellor of the Exchequer, increased it to £29,500,000, and the Chancellor of the Exchequer should explain why he now thinks £23,500,000 is sufficient, when the money, of course, would go much further. He talks of so many millions having been redeemed. It is a great deal easier for him than it was for my right hon. Friend the Member for West Birmingham. There never has been so good an opportunity for paying off National Debt at so low a figure, I suppose, for something like fifty or sixty years. The present proposition is a matter of a million. Would it not have been better to have spent a little less on various other things, which I cited the
    2002
    other day? £200,000 might be saved on ourselves. I quoted the Road Board. The right hon. Gentleman said, "Oh, but now we have such splendid roads." It is all very well for him going about in his motor car, scattering the sons and daughters of the people before his path, but he should really think more of the taxpayers at large than of the interests and amusements of special classes who can afford these luxuries. My hon. Friend suggested that it might be done in the matter of valuation as well. But the whole point of this Debate is, should £1,000,000 be taken from the Sinking Fund or be raised by fresh taxation, or saved by economy. I have mentioned one or two ways in which a great deal, more than a million might be saved without interfering with armaments, which are a necessary insurance, and the point I wish to emphasise is, that the Chancellor of the Exchequer, neglecting the example of his immediate predecessors, is doing nothing which he might do although he has a splendid opportunity of reducing debt and enhancing the credit of the country.
    Mr. MILLS: The hon. Member for West Aberdeen (Mr. Henderson) has delivered a very able speech, and I think he ought to follow it up by voting with us in the Division Lobby, because all the arguments he adduced conclusively proved our case. In view of the fall in Consols and Stocks,, surely that is all the more reason why this raid should not be made on the New Sinking Fund. I agree that in matters of this sort you cannot lay down any general rule, and though, perhaps, I have less experience than the hon. Gentleman, I should say he is just as much in the wrong in his defence of the Chancellor of the Exchequer as are those who attribute the whole fall in Consols to the right hon. Gentleman's finance. It is a fact that Consols have fallen considerably—and, in my opinion, much more than they ought to have done. At the same time we have also had very cheap money. Consols are standing somewhere between 71 and 75 and, although we have not got money quite as cheap as in 1892, it is under 2 per cent., and if you cannot get more than 1½ to 2 per cent. for your money in the ordinary Money Market, whereas you can get £3 6s. 8d. from Consols, unless there is something wrong, Consols ought to stand higher than they do to-day. That is a reason why we should not take away the only customer for Consols that we have

    2003
    got. The hon. Baronet the Member for the City of London (Sir F. Banbury) very truly observed that the one force which keeps up the Consols market, even to the limited height it stands at to-day, are the buyings of the Government brokers, and what you are doing to-day is to reduce that buying power.
    May I submit with great respect to hon. Members opposite that it is no use their attempting to prove that we were much worse than themselves. I imagine they support the Chancellor of the Exchequer because they think he is much better than we were, but if they can only support his financial policy by proving that our policy was worse, it would not seem that they have a very good argument. I notice that hon. and right hon. Gentlemen opposite do not attempt to say that the proposed provision is sufficient. If you are raising the largest sum in taxation that has ever been raised, and your expenditure is higher than ever before, it seems to be elementary common sense that this is not the time to reduce the amount you are putting aside for payment of debt. What, after all, is the point of this Amendment? It is not a question whether we were piling on debt or borrowing money, or at what price Consols stood in our time. I very much doubt if any hon. Gentleman opposite considers that this is an opportune moment for reducing the charge for the New Sinking Fund, and that is shown by the fact that they have not attempted to defend it. They have tried to get us to say we are not in favour of old age pensions or national insurance, in order that they may make a party point in the constituencies, but that does not wring my withers at all. It is the business of the Government to so limit national expenditure, and so raise taxation as to do the greatest possible good to the community at large, without breaking down our credit system. They quote in support of their action Sir G. Paish, who, because he is a Radical statistician, they think is some inspired authority. It reminds me of the King of Israel who was told by every prophet, save one, that he was going to win, and when I hear hon. Gentlemen reviling our action I always recall Zedekiah, the son of Chenaanah.
    Mr. W. REDMOND: Tell us something about it.
    Mr. MILLS: Perhaps a story of the deceased prophet would not be quite in
    2004
    order at this moment. I only rose in order to answer the speech of the hon. Member for West Aberdeen, and I hope, as he takes such a gloomy view of the fall, both in Government securities and municipal stock, he will support the hon. Baronet in the Division Lobby.
    Mr. LEIF JONES: I rise to reply to the challenge thrown out by the last speaker. He said that no Member on this side had suggested that sufficient money was being provided for the Sinking Fund. I venture to express the opinion that, considering the amount of money the Government have to raise for services agreed to by the House, it would be very injurious if they had not put the Sinking Fund at its present level but had kept it at its old level and imposed fresh taxation to take the place of money they were getting out of the Old Sinking Fund. I am bound to say that in most of the debates on the Budget the Opposition appear to me to have shown very poor political instinct in picking out for attack this particular Clause. In my opinion many parts of the right hon. Gentleman's Budget are much more vulnerable.
    Mr. MILLS: Yes; but you have so arranged the guillotine that we have no opportunity of discussing them.
    Mr. LEIF JONES: I wish we had more time for discussing the Finance Bill, and I deeply regret the conditions under which we are debating it. I have always felt that the Sinking Fund has been hallowed into something almost sacred by successive Chancellors of the Exchequer, but that, after all, it is only a childish expedient for the House of Commons or anybody else to indulge in—this setting aside a fixed sum of money by the Government in power to pay an amount of interest on debt unknown, and also to be devoted to the repayment of capital, also to an unknown amount. It is but a childish expedient for dealing with the debt, and it has always seemed to me it would be a simpler and better plan that we should know how much we are devoting to the payment of interest on the old debt, and how much is to be devoted to paying off debt in the Estimates. A great deal of the discussion which has gone on has been solely due to this sort of sacred halo which as grown around the head of the New Sinking Fund, and I do urge that it would be much better if we devoted our attention to the actual fact how much of the £200,000,000 Budget is actually being

    2005
    devoted by the right hon. Gentleman to the repayment of debt. He has admitted by figures given during the Debate that he is paying £9,000,000 off the old debt in his present Budget, and I say, in answer to the hon. Member's challenge, that, considering the weight of taxation thrown upon the country by the increased expenditure on the Army, and for old age pensions and insurance, which nobody in this House except, perhaps, the hon. Baronet the Member for the City of London attacks, £9,000,000 devoted to paying off debt is a very creditable sum for the Government, and quite sufficient in all the circumstances of the case. The hon. and gallant Member for Chelmsford (Mr. Pretyman) said that in considering the general position, a million more or less devoted to the Sinking Fund was a comparatively small matter, and what we had to look at was the credit of the country as a whole. Compare our position with that of foreign countries who are borrowing money in order to meet the expenditure of the year, while we are paying for everything out of income as we go along, and paying off debt as well. Surely no one in this House will deny that, whatever discredit may attach to the Government in the eyes of hon. Members opposite, the fact remains that our Government can borrow in the markets of the world at a much cheaper rate than any other Government.
    Mr. JOHN WARD: I also wish to draw attention to an observation made by the hon. and gallant Member for Chelmsford, who pointed out to those who were supporting the Chancellor of the Exchequer on this side, that it did not matter how we increased the expenditure for services like pensions of war, so long as we found the money out of revenue. The hon. and gallant Gentleman seemed to suggest that were the Conservative party to come into power it would adopt a similar policy. Have they then changed their tactics with reference to the question of borrowing for these purposes, and have they adopted the principles of the present Chancellor of the Exchequer of meeting expenditure out of revenue from year to year? I should like to know whether there is any authority whatever for the suggestion that there has been a change of policy in that respect by the party opposite. It is only about a year or two ago, when the question of adding considerably to the expenditure on the Navy was under discussion that we had a speech, which, I believe, will
    2006
    be found on record, by the right hon. Gentleman the Member for West Birmingham, whose return to the House I was pleased to see to-day, a speech containing a weighty statement in justification of the policy of borrowing for expenditure of this kind. I believe we had a series of speeches of that character delivered at that time in which it was urged that this expenditure ought to be met in that way, because it was expenditure not merely for insurance, not merely for the purpose of defending the Empire, but that it was also in the interests of future generations in this country and Empire, and we were, therefore, entitled to ask those who were coming after us to share the burden that we found ourselves immediately face to face with.
    That was the burden of the song during the whole discussion on the Navy Estimates. The Noble Lord the Member for Portsmouth (Lord Charles Beresford) suggested, amid the cheers of hon. and right hon. Gentlemen opposite, that they ought at once to insist upon a Naval loan of something like £100,000,000. That was clearly the policy of the Conservative party up to a few months or years ago, at any rate, since I have been in the House. To-night we hear that if there were a Conservative administration in power, with Consols at the present price, they would not have attempted to meet exceptional expenditure for naval or military purposes by raising loans, but would have done exactly as the Chancellor of the Exchequer has done, and have met the whole of that expenditure out of the annual revenue. I do not know whether that is a change of policy, or merely a kite sent up by the hon. Member for Chelmsford, or an argument to counter the support given to the Chancellor of the Exchequer from this side. It is very creditable that the Chancellor of the Exchequer should have insisted upon the policy of paying his way as he went along. Hon. and right hon. Gentlemen opposite have described that policy as not being fair or just to ourselves or to the generations to come. I wish to refer to the statement of the hon. and gallant Member (Mr. Pretyman), because I want it on record for some future occasion when we are debating the Naval Estimates and there is a large upward tendency in the expenditure, that there has been a definite statement made from the Front Bench opposite that if they were in power in similar circumstances, they would do

    2007
    exactly as the Chancellor of the Exchequer has done. The hon. Member for Central Sheffield (Mr. James Hope) suggested ways by which we could save money, and he drew attention to the money we spent upon ourselves. I suppose he meant the payment of Members. I quite understand that hon. Members opposite do not want any poor men in this House.
    Mr. JAMES HOPE: If the hon. Member had heard the speech I made the other day he would have heard me distinctly say that the case of really poor men must be met.
    Mr. J. WARD: If there are exceptions to be made, I suppose the hon. Gentleman would come down to my Constituency and offer to do the job for nothing, while I should insist upon being paid, and therefore he would get the best chance, even though the electors did not believe in his politics. Whenever it is suggested that any special item of expenditure should be reduced the ideas of hon. Members opposite immediately fly to the payment of Members. The fact that there are forty odd Members in this House who are poor men, and could not possibly keep themselves without it, is a serious disadvantage to hon. Gentlemen opposite. With reference to the financial situation, the hon. Member for Chelmsford said you have not only to consider what is paid off, but the liabilities you have incurred. He said we have added an extra liability for annual expenditure of something like £40,000,000, and that that should be put against the £100,000,000 liabilities of the State which have been paid off. It is not fair to refer to that £40,000,000 unless hon. Members are opposed to the items of expenditure which compose it. The time to discuss whether we ought to incur all these responsibilities should be on the Navy and Army Estimates, for we are all agreed upon social reform. I do not imagine that if hon. Gentlemen opposite were in power tomorrow they would interfere with old age pensions, which represent some £13,000,000. The probability is that within a year or two they might propose rather an increase than a reduction of that expenditure. I do not think they will attempt to reduce expenditure on the Army and Navy, or even upon insurance. In these circumstances, as the £40,000,000 increase is an expenditure accepted in the main by both parties, it is a moral certainty that the Chancellor of the Exchequer, of whichever party was
    2008
    in power, would have to provide for this expenditure. It is extremely creditable to-the present Liberal Administration that, in spite of these extra expenses, they have managed to relieve the liabilities of the State in eight and a half years by something like £100,000,000.
    Mr. MITCHELL-THOMSON: The real criticism we have been applying to the right hon. Gentleman's financial measures is in relation to the management of the New Sinking Fund. I have only one word to say in regard to the speech to which we have just listened. You must compare the proportions of the revenue of the country and the provision for the payment of debt in relative periods to get the real test of how much of your annual income you should apply year by year to the extinction of your liabilities. I have made that test, and the figures are rather interesting, and I propose to give a short summary of them. In the financial year 1886–7 the proportion of our revenue set aside for the payment of national liabilities to the whole tax revenue was 7.2 per cent.; in 1892–3 it was 8.3 per cent.; in 1895–6, 7.9 per cent.; in 1898–9, just before the outbreak of the war, it was 6.4 per cent.; in 1905, immediately after the war, and when the liabilities were still-being liquidated, it was 5.7 per cent. Today the right hon. Gentleman is actually coining down here and having the assurance to congratulate himself in the House of Commons on the fact that the amount, which he has set aside for the extinction of national liabilities is not 8.3 per cent., as it was in 1892–3; not 5.7 per cent., as it was in 1905, but 3.9 per cent. That is the answer to the figures quoted by the hon. Member for West Aberdeenshire (Mr. J. M. Henderson).
    Mr. LEIF JONES: What is the total sum?
    Mr. MITCHELL-THOMSON: I have not got it here; it is 3.9 per cent. of the total tax revenue.
    Mr. LEIF JONES: I make it 4½ per cent.
    Mr. MITCHELL-THOMSON: I make it 3.9 per cent. There is this to observe, that in the previous periods to which I have alluded those who were responsible for the finances of the country had always behind them in the case of emergency the great reservoir of the Income Tax, the great reservoir of the Death Duties, and the yet untapped reservoir of the Super-

    2009
    tax. Those are now being drained dry by the Government. If war were to break out, or any sudden crisis or emergency were to arise to make you call on your reserves, you would have none of those resources to which in those days you could have gone, while you are extinguishing your liabilities at a rate only half as fast as was done in the clays when
    you had those resources still behind you. That is the real answer to the Iron. Member for West Aberdeenshire.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 281; Noes, 176.

    Division No. 173.]

    AYES.

    [7.58 p.m.

    Abraham, William (Dublin, Harbour)

    Duffy, William J.

    Kelly, Edward

    Acland, Francis Dyke

    Duncan, C. (Barrow-in-Furness)

    Kennedy, Vincent Paul

    Addison, Dr. Christopher

    Duncan, Sir J. Hastings (Yorks, Otley)

    Kenyon, Barnet

    Adkins, Sir W. Ryland D.

    Edwards, Clement (Glamorgan, E.)

    Kilbride, Denis

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

    Edwards, Sir Francis (Radnor)

    King, Joseph

    Agnew, Sir George William

    Edwards, John Hugh (Glamorgan, Mid)

    Lambert, Rt. Hon. G. (Devon, S. Molten)

    Alden, Percy

    Esmonde, Dr. John (Tipperary, N.)

    Lambert, Richard (Wilts, Cricklade)

    Allen, Arthur A. (Dumbartonshire)

    Esmonde, Sir Thomas (Wexford, N.)

    Law, Hugh A. (Donegal, West)

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

    Esslemont, George Birnie

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

    Armitage, Robert

    Falconer, James

    Leach, Charles Henry

    Arnold, Sydney

    Farrell, James Patrick

    Levy, Sir Maurice

    Baker, Harold T. (Accrington)

    Fenwick, Rt. Hon. Charles

    Lewis, Rt. Hon. John Herbert

    Baker, Joseph Allen (Finsbury, E.)

    Ffrench, Peter

    Low, Sir Frederick (Norwich)

    Balfour, Sir Robert (Lanark)

    Field, William

    Lundon, Thomas

    Baring, Sir Godfrey (Barnstaple)

    Fiennes, Hon. Eustace Edward

    Lynch, A. A.

    Barlow, Sir John Emmott (Somerset)

    Fitzgibbon, John

    Macdonald, J. Ramsay (Leicester)

    Barnes, George N.

    Flavin, Michael Joseph

    Macdonald, J. M. (Falkirk Burghs)

    Barran, Sir John N. (Hawick Burghs)

    France, Gerald Ashburner

    McGhee, Richard

    Barran, Rowland Hurst (Leeds, N.)

    Furness, Sir Stephen Wilson

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

    Beale, Sir William Phipson

    Gelder, Sir William Alfred

    MacNeill, J. G. Swift (Donegal, South)

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

    George, Rt. Hon. D. Lloyd

    MacVeagh, Jeremiah

    Bentham, George Jackson

    Gladstone, W. G. C.

    M'Callum, Sir John M.

    Bethell, Sir John Henry

    Glanville, H. J.

    McKenna, Rt. Hon. Reginald

    Black, Arthur W.

    Goddard, Sir Daniel Ford

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

    Boland, John Plus

    Goldstone, Frank

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

    Booth, Frederick Handel

    Greenwood, Hamar (Sunderland)

    Manfield, Harry

    Bowerman, Charles W.

    Greig, Colonel James William

    Markham, Sir Arthur Basil

    Boyle, Daniel (Mayo, North)

    Griffith, Rt. Hon. Ellis Jones

    Marks, Sir George Croydon

    Brace, William

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

    Marshall, Arthur Harold

    Brady, Patrick Joseph

    Gulland, John W.

    Meagher, Michael

    Brocklehurst, William B.

    Gwynn, Stephen Lucius (Galway)

    Meehan, Francis E. (Leitrim, N.)

    Brunner, John F. L.

    Hackett, John

    Meehan, Patrick J. (Queen's Co., Leix.)

    Bryce, John Annan

    Hall, Frederick (Yorks, Normanton)

    Millar, James Duncan

    Buckmaster, Sir Stanley O.

    Hancock, John George

    Molloy, Michael

    Burns, Rt. Hon. John

    Harcourt, Rt. Hon. L. (Rossendale)

    Molteno, Percy Alport

    Burt, Rt. Hon. Thomas

    Harcourt, Robert V. (Montrose)

    Montagu, Hon. E. S.

    Buxton, Noel

    Harmsworth, Cecil (Luton, Beds)

    Morgan, George Hay

    Byles, Sir William Pollard

    Harvey, A. G. C. (Rochdale)

    Morison, Hector

    Carr-Gomm, H. W.

    Harvey, T. E. (Leeds, West)

    Morton, Alpheus Cleophas

    Cawley, Sir Frederick (Prestwich)

    Haslam, Lewis

    Muldoon, John

    Cawley, Harold T. (Lanes., Heywood)

    Hayden, John Patrick

    Munro, Rt. Hon. Robert

    Chancellor, Henry George

    Hayward, Evan

    Murray, Captain Hon. Arthur C

    Chapple, Dr. William Allen

    Helme, Sir Norval Watson

    Needham, Christopher T.

    Churchill, Rt. Hon. Winston S.

    Henderson, Arthur (Durham)

    Nolan, Joseph

    Clancy, John Joseph

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

    Norton, Captain Cecil W.

    Clough, William

    Henry, Sir Charles

    Nugent, Sir Walter Richard

    Clynes, J. R.

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

    Nuttall, Harry

    Collins, Godfrey P. (Greenock)

    Hewart, Gordon

    O'Brien, Patrick (Kilkenny)

    Collins, Sir Stephen (Lambeth)

    Higham, John Sharp

    O'Connor, John (Kildare, N.)

    Compton-Rickett, Rt. Hon. Sir J.

    Hobhouse, Rt. Hon. Charles E. H.

    O'Connor, T. P. (Liverpool)

    Cornwall, Sir Edwin A.

    Hodge, John

    O'Doherty, Philip

    Cotton, William Francis

    Hogge, James Myles

    O'Donnell, Thomas

    Craig, Herbert J. (Tynemouth)

    Holmes, Daniel Turner

    O'Dowd, John

    Crumley, Patrick

    Holt, Richard Durning

    O'Kelly, Edward P. (Wicklow, W.)

    Cuilinan, John

    Hope, John Deans (Haddington)

    O'Kelly, James (Roscommon, N.)

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

    Howard, Hon. Geoffrey

    O'Malley, William

    Davies, David (Montgomery Co.)

    Hudson, Walter

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

    Davies, Ellis William (Eifion)

    Hughes, Spencer Leigh

    O'Shaughnessy, P. J.

    Davies, Timothy (Lines., Louth)

    Illingworth, Percy H.

    O'Sullivan, Timothy

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

    Jardine, Sir John (Roxburghshire)

    Outhwaite, R. L.

    Davies, M. Vaughan-(Cardigan)

    John, Edward Thomas

    Parker, James (Halifax)

    Delany, William

    Johnson, W.

    Parry, Thomas H.

    Denman, Hon. Richard Douglas

    Jones, Rt. Hon. Sir D. Brynmor (Swansea)

    Pearce, Robert (Staffs, Leek)

    Dewar, Sir J. A.

    Jones, Henry Hayden (Merioneth)

    Pearce, William (Limehouse)

    Dickinson, Rt. Hon. Willoughby H.

    Jones, J. Towyn (Carmarthen, East)

    Phillips, John (Longford, S.)

    Dillon, John

    Jones, Leif (Notts, Rushcliffe)

    Pirie, Duncan V.

    Donelan, Captain A.

    Joyce, Michael

    Pollard, Sir George H.

    Doris, William

    Kellaway, Frederick George

    Pratt, J. W.

    Price, C. E. (Edinburgh, Central)

    Scanlan, Thomas

    Ward, W. Dudley (Southampton)

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

    Scott, A. MacCallum (Glas., Bridgeton)

    Wardie, George J.

    Priestley, Sir A. (Grantham)

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

    Waring, Walter

    Pringle, William M. R.

    Sheehy, David

    Warner, Sir Thomas Courtenay T.

    Radford, George Heynes

    Sherwell, Arthur James

    Watt, Henry A.

    Rattan, Peter Wilson

    Simon, Rt. Hon. Sir John Allsebrook

    White, J. Dundas (Glasgow, Tradeston)

    Rea, Walter Russell (Scarborough)

    Smith, Albert (Lanes., Clitheroe)

    White, Sir Luke (Yorks, E.R.)

    Reddy, Michael

    Smith, H. B. Lees (Northampton)

    White, Patrick (Meath, North)

    Redmond, John E. (Waterford)

    Smyth, Thomas F. (Leitrim, S.)

    Whitehouse, John Howard

    Redmond, William (Clare, E.)

    Spicer, Rt. Hon. Sir Albert

    Whyte, Alexander F. (Perth)

    Redmond, William Archer (Tyrone, E.)

    Strauss, Edward A. (Southwark, West)

    Wiles, Thomas

    Rendall, Athelstan

    Sutherland, John E.

    Wilkie, Alexander

    Richardson, Albion (Peckham)

    Sutton, John E.

    Williams, Aneurin (Durham, N.W.)

    Richardson, Thomas (Whitehaven)

    Taylor, John W. (Durham)

    Williams, Penry (Middlesbrough)

    Roberts, Charles H. (Lincoln)

    Taylor, Theodore C. (Radcliffe)

    Williamson, Sir Archibald

    Roberts, Sir J. H. (Denbighs)

    Taylor, Thomas (Bolton)

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

    Robertson, Sir G. Scott (Bradford)

    Tennant, Rt. Hon. Harold John

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

    Robertson, John M. (Tyneside)

    Thomas, James Henry

    Wilson, W. T. (Westhoughton)

    Robinson, Sidney

    Thorne, G. R. (Wolverhampton)

    Winfrey, Sir Richard

    Roch, Walter F. (Pembroke)

    Thome, William (West Ham)

    Wing, Thomas Edward

    Roche, Augustine (Louth)

    Toulmin, Sir George

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

    Roe, Sir Thomas

    Trevelyan, Charles Philips

    Yeo, Alfred William

    Rowlands, James

    Verney, Sir Harry

    Young, William (Perth, East)

    Rowntree, Arnold

    Walsh, Stephen (Lanes., Ince)

    TELLERS FOR THE AYES.—Mr.

    Russell, Rt. Hon. Thomas W.

    Waiter, Sir John Tudor

    W. Jones and Mr. Webb.

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

    Walton, Sir Joseph

    Samuel. J. (Stockton-on-Tees)

    Ward, John (Stoke-upon-Trent)

    NOES.

    Agg-Gardner, James Tynte

    Faber, George D. (Clapham)

    Lyttelton, Hon. J. C.

    Aitken, Sir William Max

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

    MacCaw, Wm. J. MacGeagh

    Anstruther-Gray, Major William

    Falle, Bertram Godfray

    Mackinder, Halford J.

    Archer-Shee, Major Martin

    Feil, Arthur

    Magnus, Sir Philip

    Ashley, Wilfrid W.

    Finlay, Rt. Hon. Sir Robert

    Malcolm, Ian

    Baird, John Lawrence

    Fisher, Rt. Hon. W. Hayes

    Mason, James F. (Windsor)

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

    Fitzroy, Hon. Edward A.

    Mills, Hon. Charles Thomas

    Baldwin, Stanley

    Fletcher, John Samuel

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

    Banbury, Sir Frederick George

    Forster, Henry William

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

    Banner, Sir John S. Harmood-

    Foster, Philip Staveley

    Mount, William Arthur

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

    Gardner, Ernest

    Newdegate, F. A.

    Barlow, Montague (Salford, South)

    Gastrell, Major W. Houghton

    Newton, Harry Kottingham

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

    Gibbs, George Abraham

    Nicholson, Wm. G. (Petersfield)

    Beach, Hon. Michael Hugh Hicks

    Gilmour, Captain John

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

    Beale, Sir William Phipson

    Glazebrook, Captain Philip K.

    Paget, Almeric Hugh

    Beckett, Hon. Gervasse

    Goldman, Charles Sydney

    Parker, Sir Gilbert (Gravesend)

    Benn, Ion Hamilton (Greenwich)

    Grant, J. A.

    Pease, Herbert Pike (Darlington)

    Bennett-Goldney, Francis

    Greene, Walter Raymond

    Peel, Lieut.-Colonel R. F.

    Bentinck, Lord H. Cavendish-

    Gretton, John

    Peto, Basil Edward

    Bigland, Alfred

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

    Pollock, Ernest Murray

    Bird, Alfred

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

    Pretyman, Ernest George

    Boscawen, Sir Arthur S. T. Griffith-

    Haddock, George Bahr

    Pryce-Jones, Colonel E.

    Bowden, G. R. Harland

    Hall, O. B. (Isle of Wight)

    Rawlinson, John Frederick peel

    Boyle, William (Norfolk, Mid)

    Hall, Frederick (Dulwich)

    Remnant, James Farquharson

    Boyton, James

    Hamilton, C. G. C. (ches., Altrincham)

    Rolleston, Sir John

    Bridgeman, William Clive

    Hardy, Rt. Hon. Laurence

    Ronaldshay, Earl of

    Bull, Sir William James

    Harris, Henry Percy

    Rothschild, Lionel de

    Burn, Colonel C. R.

    Harrison-Broadley, H. B.

    Royds, Edmund

    Butcher, John George

    Helmsley, Viscount

    Rutherford, John (Lanes., Darwen)

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

    Henderson, Major H. (Berks, Abingdon)

    Salter, Arthur Clavell

    Campion, W. R.

    Henderson, Sir A. (St. Geo., Han. Sq.)

    Samuel, Samuel (Wandsworth)

    Carlile, Sir Edward Hildred

    Hewins, William Albert Samuel

    Sanders, Robert Arthur

    Cassel, Felix

    Hibbert, Sir Henry F.

    Sanderson, Lancelot

    Castlereagh, Viscount

    Hills, John Wal'er

    Sandys, G. J.

    Cautley, Henry Strother

    Hill-Wood, Samuel

    Sassoon, Sir Philip

    Cecil, Evelyn (Aston Manor)

    Hoare, Samuel John Gurney

    Scott, Sir S. (Marylebone, W.)

    Cecil, Lord Hugh (Oxford University)

    Hope, James Fitzalan (Sheffield)

    Spear, Sir John Ward

    Chaloner, Colonel R. G. W.

    Hope, Major J. A. (Midlothian)

    Stanier, Beville,

    Clyde, James Avon

    Home, Edgar

    Stanley, Hon. G. F. (Preston)

    Coates, Major Sir Edward Feetham

    Houston, Robert Paterson

    Starkey, John Ralph

    Cooper, Sir Richard Ashmole

    Hume-Williams, William Ellis

    Staveley-Hill, Henry

    Courthope, George Loyd

    Hunt, Rowland

    Stewart, Gershom

    Craig, Norman (Kent, Thanet)

    Hunter, Sir Charles Rodk.

    Strauss, Arthur (Paddington, North)

    Crichton-Stuart, Lord Ninian

    Jardine, Ernest (Somerset, East)

    Swift, Rigby

    Currie, George W.

    Jessel, Captain Herbert M.

    Sykes, Alan John (Ches., Knutsford)

    Dalrymple, Viscount

    Lane-Fox, G. R.

    Talbot, Lord Edmund

    Dalziel, Davison (Brixton)

    Larmor, Sir J.

    Thomas-Stanford, Charles

    Denniss, E. R. B.

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

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

    Dickson, Rt. Hon. C. Scott

    Lee, Arthur Hamilton

    Thynne, Lord Alexander

    Du Cros, Arthur Philip

    Lewisham, Viscount

    Tickler, T. G.

    Duke, Henry Edward

    Lloyd, George Butler (Shrewsbury)

    Tobin, Alfred Aspinall

    Duncannon, Viscount

    Locker-Lampson, G. (Salisbury)

    Tryon, Captain George Clement

    Du Pre, W. Baring

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

    Walrond, Hon. Lionel

    Eyres-Monsell, Bolton M.

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

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

    2012

    2013

    Watson, Hen. W.

    Wills, Sir Gilbert

    Yate, Colonel C. E.

    Weigall, Captain A. G.

    Wilson, Captain Leslie O. (Reading)

    Younger, Sir George

    Weston, Colonel J. W.

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

    Wheler, Granville C. H.

    Wood, John (Stalybridge)

    TELLERS FOR THE NOES.—Sir

    Williams, Colonel R. (Dorset, W.)

    Worthington Evans, L.

    J. Randles and Mr. Hohler.

    Willoughby, Major Hon. Claud

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

    Question, "That the Clause be read a second time," put, and agreed to.

    It being Eight of the clock, the CHAIRMAN proceeded, pursuant to the Order of the House of the 8th July, successively to put forthwith the Question on any Amendments moved by the Government, of which notice had been given, and the Question necessary to dispose of the Clause to be concluded at Eight of the clock at this day's sitting.

    CLAUSE 16.—(Repeal, Construction, and Short Title.)
    (1) The enactments specified in the Fifth Schedule to this Act are hereby repealed to the extent mentioned in the third column of that Schedule; provided that, where any such enactment relates to any of the Grants or payments set out in the Third Schedule to this Act, the repeal of that enactment shall not take effect till the Grant or payment ceases in pursuance of this Act.
    (2) Part I. of this Act, so far as it relates to duties of Customs, shall be construed together with the Customs (Consolidation) Act, 1876, and any enactments amending that Act.
    Part II. of this Act shall be construed together with the Income Tax Acts, 1842 to 1853, and any other enactments relating to Income Tax, and those enactments and Part II. of the Act are in this Act referred to as the Income Tax Acts.
    Part III. of this Act shall be construed together with the Finance Act, 1894.
    (3) This Act may be cited as the Finance Act, 1914.
    Government Amendment made: In Sub-section (1), leave out the words "provided that, where any such enactment relates to any of the Grants or payments set out in the Third Schedule to this Act, the repeal of that enactment shall not take effect till the Grant or payment ceases in pursuance of this Act."—[The Chancellor of the Exchequer.]

    NEW CLAUSE.—(Provisions with Respect to Income Tax of Married Persons.)
    (1) If an application to the Commissioners of Inland Revenue is made for the purpose in such manner and form
    2014
    as may be prescribed by those Commissioners, either by a husband or wife, within six months before the commencement of any Income Tax year—

    (a) Income Tax (including Super-tax) for that year shall be assessed, charged, and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of the Income Tax Acts with respect to the assessment, charge and recovery of Income Tax (including Super-tax), and the penalties for failure to make a return, shall apply as if they were not married; and

    (b) All the provisions of the Income Tax Acts which relate to claims for exemption, relief, or abatement, and the proof to be given with respect to those claims, shall also apply as if they were not married; and

    (c) The income of the husband and wife shall be treated as one in estimating the amount to be repaid or allowed in respect of any exemption, relief, or abatement which depends wholly or partially on total income, and the total amount of any exemption, relief, or abatement given in respect of the incomes of the husband and wife shall not exceed that which would have been given if an application had not been made under this Section; and

    (d) The benefit of any such exemption, relief, or abatement may be given either by way of reduction of assessment, or by repayment of any excess of tax which has been paid, or by both of those means, as the case requires, and shall, in the case of relief given in respect of earned income, be given in proportion to the income earned respectively by the husband and the wife, in the case of relief given in respect of insurance premiums, be given to the husband or wife, as the case may be, by whom the premium is paid, and in any other case be given in proportion to the respective incomes of the husband and wife; and

    2015

    (e) For the purpose of any exemption, relief, or abatement, a return may be made by the husband or the wife of the total income of the husband and wife, but if the Commissioners of Inland Revenue are not satisfied with such return they may obtain a return from the wife or husband, as the case may be; and

    (f) The income of the husband and wife shall be treated as one in estimating total income for the purpose of Super-tax, and the amount of Super-tax payable in respect of the total income shall be divided between the husband and wife in proportion to their respective incomes, and the total amount payable shall not be less than it would have been if an application had not been made under this Section.

    (2) The Commissioners of Inland Revenue may require returns for the purposes of this Section to be made at any time, and Section fifty-five of the Income Tax Act, 1842, shall, with the necessary modifications, apply in the case of the refusal or neglect to make or wilful delay in making any such return.
    (3) Where Income Tax (including Super-tax) is charged on the profits or income of a married woman, whether in the name of her husband or separately in pursuance of this Section, the power to distrain in the case of non-payment of any Income Tax payable either by the husband or the wife shall extend both to the goods and chattels of the wife and to the goods and chattels of the husband.
    (4) Section eleven of the Revenue Act, 1911 (which relates to the assessment and recovery of part of the Super-tax from the wife in certain cases) shall cease to have effect; and Section five of the Finance Act, 1897 (which relates to the exemption of the income of a married woman in certain cases), shall not have effect in a case where an application has been made under this Section.
    Clause brought up, and read the first time.
    Motion made, and Question proposed. "That the Clause be read a second time."
    Mr. CASSEL: It would hardly be fair or courteous on my part if I did not say a word of acknowledgment of the fact that the Chancellor of the Exchequer has given us the opportunity of discussing this
    2016
    matter. It is quite true that the right hon. Gentleman gave a promise that he would do so last Session, but I recognise that, notwithstanding the difficulties of time in which the Government have been placed, he has carried out that pledge in the fullest and fairest way. I am emboldened by that to think that the right hon. Gentleman himself considers that this is a very important subject, and one well worthy of the consideration of Parliament. The anomalous position of the law at the present moment arises from the fact that the Income Tax Act of 1842 was passed long before the Married Women's Property Act. It was passed in the time while married women were still incapable of owning property, and that property was, in fact and in law considered the property of the husband. The husband had the management and control of it, and in those days it was not unreasonable to treat the two incomes as the joint income of one person. But since then the position has completely changed. Married women carry on businesses and earn considerable incomes, and they are recognised by law as having independent control of their property, and as being able to do with it what they please, dispose of it by will, and spend it as they please, without any control on the part of their husband. I do not think the Income Tax law has ever been brought into conformity with these changes in the law relating to the powers of married women in connection with the ownership of property. The grievances which arise from this are really of a threefold character. The wife is treated as a mere nonentity by the law, as far as Income Tax is concerned. It is true that she pays, but for the purpose of assessment, collection, and fixing the amount of abatement or exemption or the rate of tax, it is treated as if the wife did not exist and it was all the husband's property, notwithstanding the fact that it is not the case under the Married Women's Property Act.
    That system is unjust to the husband and to the wife and, most important of all, it places a special penal tax upon marriage. It is unjust to the husband because the husband can be actually put in prison because his wife does not disclose to him what her income is. He is supposed to return her income, but has no power of compelling her to tell him what it is, and he is bound to pay the tax upon her income but has no right of recovering the amount of the tax from her. The

    2017
    absurdities flowing from this were prominently brought to the attention of the public by the Wilks case, when Mr. Wilks was clapped in Brixton gaol because his wife would not tell him what her income was, and because the Commissioners then proceeded to assess the wife's income without knowing it, and he refused to pay the Income Tax upon his wife's income so assessed. That is on the face of it an absurdity which cannot be allowed to continue. But it is also unjust to the wife, because, though she may be earning an income in a business or profession, she is given no opportunity whatever in the making of the return. The return is made through the husband, and she has no voice in the matter at all. And so far as claims to exemption or abatement are concerned, she cannot do it for herself, but it is left to the husband to claim it or not as he pleases, and if he does claim it she has no right of recovering from him the amount which he recovered by way of abatement or exemption. I think this Clause does something to meet the first two injustices which I have dealt with, but it does nothing to meet the third. The third is what I call a special penalty tax on marriage under our existing law. Under our law, we still treat the income of husband and wife added together, although it is the income of two persons with the requirements of two persons, as if it were the income of one person. The result of that is that husband and wife are called upon to pay more Income Tax in proportion to their ability to bear taxation than either bachelors or spinsters, or persons who live together, or whose relationship is of any other description than that of husband and wife legally married.
    I propose to illustrate that by four cases which I shall give to the Committee. The first case I will take is one where neither the husband nor wife before their marriage paid any Income Tax at all. I will take the case of a clerk earning £160 a year. Before marriage he pays no Income Tax at all. He marries a woman who, under her father's will, has got £100 a year. Before marriage neither of them pay any Income Tax at all. Their income remains precisely the same after marriage, and their Income Tax is £5. Assume that instead of being a married couple, it was a case of father and son, or father and daughter, or brother and sister, living together, and having a joint household. In the case of the brother and sister, or father and daughter, although they live together, no Income Tax will be payable at all. It is only in the
    2018
    case of husband and wife that the £5 tax is payable. I will assume that they had three children. The right hon. Gentleman has done something to meet the case where there are children, and I think we are indebted to him for what he has done in that direction. If they have three children, there will be an allowance from the £5 in respect of each child. But even so, the husband and wife living together with their three children, would pay Income Tax, while the father and son, or the father and daughter, would pay nothing. I say that is not only an anomaly, but a gross injustice.
    Let me give my second case where there is a slightly higher Income Tax in each case. Take a case where a man is earning £180 a year, and his wife has an income of £150 from savings or investments. As a rule the wife's income is treated as unearned income and is taxed at the unearned rate. Before marriage the woman has been paying no Income Tax, and the husband has been paying a tax of 15s., that is to say, 9d. per £1 on £20. What would be the tax after marriage? It would be £9 10s., or twelve times as much. If, instead of being legally married, they were cohabiting, the tax would be 15s., because they were not legally married. But after marriage, if there was no judicial separation, and no divorce, the tax would be more than twelve times greater. That is really a very important matter. Even if they had five children, after getting credit for the allowance for children they would be paying nearly £3 as Income Tax, while two people illegally cohabiting, or a father and child, would not pay any Income Tax I do submit that these are cases well worthy of the consideration of the Chancellor of the Exchequer, with a view of seeing if anything can be done to meet so practical an anomaly.
    I will not trouble the Committee with the third case, because it is much on the same lines. I will take the fourth case, which is an actual case I have known only quite recently. It is a case of a rather larger income—that of a retired Indian Civil servant. The ordinary pension is £1,000 a year. That Civil servant has no other means but his pension. Pension pays at the earned rate of 9d. The fact that his wife is left £50 tinder her father's will has this result: Not only does she pay 1s. 3d. on her income, but the husband pays on his whole £1,000, and instead of paying at the rate of 9d., he pays at the rate of 10½d., because of the fact that his wife has been

    2019
    left £50. She may use her income for her own purpose. The result of that is that the whole of the tax falls on the husband's income, and he pays not 9d., but 10½d. in the £. If the relationishp were anything else than that of husband and wife, and if they were living in a joint menage, that consequence would not ensue. In this case if the wife sold out some of her securities, or spent some of the capital so as to reduce her income to £4 a year, a strange result follows. Because she has £4 a year the husband pays £6 5s. more Income Tax, so that the husband's Income Tax is actually increased by more than the total of the wife's income. I am sure that kind of case is not capable of defence on its merits in any sense whatever. I have been comparing, so far, the position of persons before they were married with the position arisng after marriage, and also comparing the case of a joint household where the persons are married with the case of a joint household where the persons are not married.
    Take another case—that of husband and wife living together as compared with bachelors and spinsters. Here the present law is grossly unjust to the married persons, because the bachelor who has £600 a year is surely in a better position to pay than married people who have the the same amount of income and who have three children. Now you treat husband and wife as if they were one person, when for all practical purposes and requirements they are two persons. They eat twice as much. [An HON. MEMBER: "What about the children?"] I am leaving out the children. This is not a case in which there will be the special exemption for children, because the income is over £500. They want twice as much in clothes. [An HON. MEMBER: "Three times as much!"] The wife requires as much clothing as the man. They require more house accommodation, and for that reason they contribute more to the local authority in the shape of rates, and more to the State in the shape of duties on food, because they consume more tea and sugar. I say it is indefensible that for the purposes of Income Tax, and from the point of view of ability to pay, a bachelor or spinster should pay on the same level as two persons who are married, even if they have no children. When in addition to that you take the fact that they may have children, and consider all the expense of their education and upbringing, the injustice is very much
    2020
    accentuated. I submit that if you were to select any particular relationship for special taxation, marriage is the very last which you should select. It is the interest of the State that marriage should be encouraged, and with a declining birth-rate it becomes a more and more important factor. I do not believe very much in taxation as a great encouragement either to marriage or an increase of the birthrate. But it is impolitic and unjust for the State to select marriage as the one relationship for special and penal taxation when it is the married people to whom the State has to look to bring up its future-citizens. In the Clause of the right hon. Gentleman I detect the subtle hand of the Treasury. I do not wish to be offensive in my criticism of it, because I am grateful to the right hon. Gentleman for having given me the opportunity of discussing it, but I am obliged to put forward my criticism. The only grievance which the Clause meets in any sense is in connection with the collection and recovery.
    Mr. LLOYD GEORGE: Rebates.
    Mr. CASSEL: The only way in which it improves the position so far as rebates are concerned is in the collection and recovery of rebates. As a result of this Clause not a single married couple will be relieved from a single farthing of what I call the marriage tax. It is quite true that under the conditions in which the Clause applies they may be entitled to be assessed separately for the purpose of the return, and the actual collection and enforcement of the duty. But the amount of the duty on the two will be precisely the same as it was before, and even so far as recovery and collection are concerned, every possible obstacle has been placed in the way of their being able to get the benefit. Under the Clause it is necessary that notice should be given of a desire to be separately assessed six months before the yearly assessment. Why is that notice required? It is as long that the notice is given to terminate a yearly tenancy, and it has this extraordinary resemblance that you cannot get the relief in a great many cases for more than a year after you make the application. Take the case of the people who are married after the 5th of October. Those people cannot get the relief in the next Income Tax year, but can only get it in the Income Tax year after that. I do not know whether the right hon. Gentle-

    2021
    man wishes particularly to encourage marriages early in the year. Why people married early in the year should be in a better position than those married after the 5th of October I cannot see. Why should so long a notice as six months be required to bring this Clause into operation? The right hon. Gentleman, speaking to a deputation of ladies that waited upon him, described the present position as a humiliation to women. Why should a woman who is married after the 5th of October be humiliated for one year and a half?
    There is no reason why the Treasury when an application is made should not comply with it at once. There is not the slightest difficulty about that, unless it is that the Treasury want this Clause to apply to as few cases as possible. I can see the hand of the Treasury official in this Clause. He looks at everything from the point of view of revenue, and naturally so. I ask the right hon. Gentleman's assistance in removing that obstacle from the working of the Clause. The right hon. Gentleman has not carried to its logical conclusion the principle which is embodied in the Clause. The logical conclusion is to treat married people as they are treated under the Married Women's Property Act, and give them their exemptions and abatements on that basis. The present Clause leads to extraordinary difficulties in administration in making apportionments between husband and wife. It also involves this result that you must in every case where this Clause applies tell the wife what the husband's income is, and tell the husband what the wife's income is. Are we all prepared to accept the position that that is desirable? There are many cases where the husband may not wish to disclose his total income, and, although he is entitled to exemption, sooner than reveal the fact that his income is smaller, he will pay more tax. If a wife asks to be separately assessed this Clause cannot be carried out unless you also assess the husband. If she is told "You have got to pay so much," she must be entitled to know at what the husband is assessed. So you are driven to the logical conclusion of carrying out to its full extent the Married Women's Property Act. This raises a number of difficulties. As an example, the effect of this Clause would be that the married man, although he is not a Super-tax payer, would be compelled to make a return of his full income. It is very difficult
    2022
    to carry out the Clause without this. But was it intended that he should make a return of his full income and be under a penalty if he does not make that return?
    The unmarried man if he is not a Super-tax payer is not bound to make a return of his total. He is only bound to make a return of that income which is not taxed at the source. But under this Clause, my interpretation at first sight at all events, seems to be that you compel a married man who is not a Super-tax payer, or within reach of being a Super-tax payer, to make a return of his total income, although you could not compel an unmarried man. I do not know whether the right hon. Gentleman intended that, but it shows the difficulties which arise from not giving full logical effect to the Married Women's Property Act. There are two other points connected with this Clause which probably the right hon. Gentleman will be prepared to meet. I do not think that it is intended that the actual effect of the Clause should be to take away any benefit which is now given under Section 5 of the Act of 1907. Under that Section in cases where the joint income is under £500 and it is earned income on both sides, earned in entirely separate businesses, there is power to claim exemption and abatement as if there were two separate incomes. Under this Clause the right hon. Gentleman has taken away that right. I do not think that he intended to do so, and I am sure that if that is the effect of the Clause he would be prepared to meet it by an Amendment on this point. There is one other thing which I am sure the right hon. Gentleman did not intend, and which provides that in future the Treasury can turn the screw much more tightly than before on married people. That is Sub-section (3), which ought to be amended. I think I see the subtle Treasury hand in this elaborate Sub-section which has been worked in, from their point of view, quite rightly, for they want as much revenue as they can get. But ought this change to be made, that you should have the right to distrain on the husband's goods or the wife's goods for Income Tax, even where the tax is levied on the wife's income?
    The DEPUTY-CHAIRMAN: The hon. and learned Gentleman is now, and has been for some time, dealing with the Amendments. I may take it that when he moves the Amendments he will deal with them shortly.
    Mr. CASSEL: I said at the commencement that I should make a statement as to the Amendments, in order that the right hon. Gentleman might have the full facts before him.
    Mr. LLOYD GEORGE: If I may say so, Sir, the hon. Gentleman at the outset stated that he was going to put the whole of his case on those Amendments, and that he did not intend to repeat his arguments. If I may respectfully say so, I think that is an advantage, not only for the Committee, but for the Government as well.
    The DEPUTY-CHAIRMAN: I quite see that. I was desirous of saving the time of the Committee later on, not only in reference to the speech of the hon. and learned Member, but the speeches of other Members of the Committee.
    Mr. CASSEL: I will undertake not to repeat myself at a later stage. I think it is rather an advantage that the right hon. Gentleman should have a little more time to consider the matter before the particular Amendments arise. The other point was that this new Clause for the first time gives the right to distrain on the wife's goods for the tax for which the husband is liable, and vice versâ, to distrain the husband's goods in respect of the tax for for which the wife is liable. If that were carried out it would be a great hardship, and I think the Sub-section ought to be omitted. In conclusion, I will only state that I have considered the difficulties and the anomalies. I quite recognise that there are difficulties in solving the problems which I raise. The right hon. Gentleman said that he would lose so much revenue if logical effect throughout were given to the Married Women's Property Act. I think he said he would lose as much as £2,000,000 of revenue, apart from the possibility of evasions of the tax. I think that is based on a very uncertain estimate, though I will not pursue that point further. I think the right hon. Gentleman would get more revenue from it in other directions. I know the amount is serious, and what the Treasury argument always is. The right hon. Gentleman says that £2,000,000 is too great a loss of revenue. I submit two alternatives. In the first instance, I suggest that the proposal should apply only to incomes below £700, which are the incomes in respect of which abatement will be allowed under the Income Tax Act, and in respect of which this Marriage Tax is most severely felt. In connection with those incomes
    2024
    evasions would be less likely to occur, and the loss of revenue, according to the right hon. Gentleman's estimate, would only be £500,000.
    I suppose that could be met by saving expenditure, but, even if the right hon. Gentleman had to raise the money, it would be less than a farthing in the £, and if he retained a farthing in the £ off the penny which he has deducted it would fall only upon certain incomes. I am not suggesting that the farthing should be taken as the actual figure, because it cannot be done this year, and must be done in future years, but it would fall only on incomes of over £2,500, or on unearned incomes of over £500. I think the more useful suggestion would be to take one which has been recently introduced in regard to the American Income Tax. If you treat married persons who are really two persons as one for the purpose of the Income Tax, you ought to give them some special consideration, in view of the fact that they are married. The suggestion I make is that, in the case of married persons, 20 per cent., 10 per cent., or, at all events, some percentage should be deducted from the tax which they pay. I have embodied that in an Amendment which is on the Paper. The various alternatives which I submit are contained in the Amendments standing in my name. There is a good deal to be said from the point of view of simplicity for the suggestion that there should be a special exemption for married persons in the sense of allowing them a certain percentage off the tax, which, otherwise, they would have to pay. That is following out the recently introduced system in the American Income Tax. The right hon. Gentleman may say that this is a complicated problem and that he would rather refer to the Royal Commission about to be appointed. If he says that, I should like to anticipate that argument, because I ventured to use it myself the other day in connection with Clause 5 as to foreign investments, and the right hon. Gentleman then said that a little experience would be helpful to the Royal Commission.
    Mr. LLOYD GEORGEdissented.
    Mr. CASSEL: I venture to think that the problem that is raised is one which is deserving of the attention of the House, and which sooner or later will have to be met. Whether it is met this year or next year, we cannot allow it to continue, that this special and penal taxation should be imposed upon the one relationship in our

    2025
    community on which, least of all, we should impose special burdens.
    Mr. LLOYD GEORGE: The hon. and learned Gentleman has raised one of the most important questions that could engage the attention of the Committee of Ways and Means. If I may say so, I think he has stated with great lucidity and ability the difficulties that present themselves in attempting to arrive at a fair solution of this extremely complicated problem. I regret that under the conditions of the time-table he has had to make his very important statement in a House which is necessarily rather a thin one. There are at least four main issues or problems which the Committee will have to consider in this Clause, and the Amendments of which notice has been given, and which appear upon the Paper. The first is the method of assessing married people; the second, the question of rebate; the third, the question of a special method of procedure as to distraint; and the fourth, which is a much larger problem, of not merely separate assessment, but the treatment of the income of the husband and the income of the wife as if they were two separate persons. As regards the first three I am in entire accord with the hon. and learned Gentleman, and I think the case he has made out is unanswerable. The Clause we think meets those points, and, in so far as it does not, we are certainly prepared to consider favourably every Amendment that has been moved. With regard to the last, I am not going to say merely that the Government are not in a position to meet it because of the special financial difficulties. I am prepared to go further and to say that the case which was made out is not a good case on the merits. I am not going to say that there is not a special case for special consideration for the joint income of married people. That is a different matter, but I am entirely opposed to the suggestion that you ought to treat the incomes as if they were separate, and I shall give my reasons.
    The hon. and learned Gentleman has referred, speaking of the first three points, to a deputation which appeared before me. There was the case mentioned of a very famous actress whose husband was a medical man. He followed his profession and she ran her theatre. The Income Tax demand in respect of the theatre went to the husband, Dr. Simpson, who had absolutely nothing to do with the theatre, and there was inserted
    2026
    in brackets "for wife." She was treated as if she were a person of no account at all in running a business which was entirely her own. She stated with very great force that if she was to be treated as a nonentity for the purpose of assessment, she ought to be treated so for the purpose of taxation. That is a case which I agree is quite unanswerable. Therefore we propose whenever there is a claim put forward for that purpose, and whenever a married woman insists that she should be assessed separately, in those cases we should allow her to be so assessed. Coming to the question of rebates there was a case where the whole of the income was the wife's, the husband having no income at all, and the husband claimed the rebate and got it. She had an income, I think, of £300, on which 1s. 2d. was charged, and the whole of the rebate amounting to twelve or thirteen pounds was paid to him, and he never saw it. That of course is perfectly indefensible, and they claimed that in a case of that kind the portion of the rebate which is attributable to the income of the wife ought to be paid to the wife if she makes the claim. That is a case which can only be answered by a Clause of this kind. There is then the case of distraint which arose out of the Wilks case. In that case the man was assessed upon their joint income, the wife's income being the larger of the two. She refused to pay, and she supported him in that respect. When the distraint took place she claimed the goods, and under the present law you cannot distrain in that case on her goods. Thus the husband would have to be sent to gaol to recover a debt due by the wife. We put in a protection for the married woman, and I think the husband ought also to be protected.
    We must not altogether forget the male partner in the matrimonial alliance. The woman stated, very fairly, that since she incurred the penalty by refusing to pay, she expected to pay the penalty; and it is not only a grievance to the man, but the woman feels it is a grievance that the man should have to pay the penalty for what his wife has done. That is the justification for the Clause. We have attempted to redress the grievances before me as to separate assessment, separate claims for rebate and separate distraint by this Clause, and I think we have done so. In so far as we have failed we are quite willing to accept any Amendments which have been put down. I come to the

    2027
    fourth claim put forward by the hon. and learned Gentleman, and that is that you should make a separate assessment and treat married people as if they were seperate persons. There I am entirely against him. He has contrasted the position of married persons with their joint income with the position of a brother and sister living together whose incomes are taxed separately, and with the case of persons cohabiting together without marriage. He says this is a penalty on marriage. Let me reassure him on that point. He has given the case of the Indian Civil servant with an income of a £1,000 and whose wife had an income of £50, which caused him to be taxed on the higher scale, and that if they had not been married that would not have happened. Let me tell him that is a case where the Death Duties come to the rescue. Take the case of persons cohabiting together, and that the man has the money left to him. In that case he would pay Death Duties as if they were strangers.
    Mr. CASSEL: Estate Duty would be payable although they are treated as one for the purpose of Income Tax, being married people, on succeeding to each other's property, and they would pay the same Succession and Legacy Duty as lineal descendants.
    Mr. LLOYD GEORGE: That is not the point in this case. In the case of persons cohabiting together the man would have to pay 10 per cent., whereas if they had gone through the form of marriage he would not have had to do so. The rates would be totally different. Therefore, the Death Duties come in there to redress the balance. I do not think the hon. and learned Gentleman will seriously put it forward that this has the slightest effect on the question whether persons go through the form of marriage or not. This practice has existed ever since the Income Tax Law of 1842, and I do not think the hon. and learned Gentleman will suggest that it has had the slightest effect on the question of whether people will marry or cohabit without going through the form of marriage. The hon. and learned Gentleman has contrasted the position of a brother and sister with a joint income with that of a husband and wife. Has he taken the trouble to contrast the case of a husband and wife with a joint income with a case where the whole of the income is earned by the husband. Let me give a case of that kind. Take, first, a case
    2028
    where there is an income of £400, all belonging to the husband—£200 earned and £200 unearned. In that case the tax paid is £10 16s. 8d. There are of course allowances for children. But supposing it is a joint income, of which £200 earned belongs to the husband, and £200 unearned to the wife. In that case, if this Amendment were carried, they would pay only £3 10s. Is that fair? Is it fair that a man whose income is his own should pay £10 16s. 8d., while in the other case, simply because the income is divided between husband and wife, only £3 10s. should be paid as the contribution of that household to the State? Where is the justice of that?
    Further, who would make up the deficiency? I suggest that there would be a deficiency of at least £2,000,000, without making any allowance for the kind of arrangement that would undoubtedly spring up. The deficiency would mount up by millions. Husband and wife in a case of that kind would undoubtedly make arrangements to reduce their taxation. Stocks, shares, and other property would be put in the name of the wife or of the husband, as the case might be, in order to save Income Tax. I would not suggest that it would be fraudulent. It would be worth their while to make a bonâ-fide arrangement of that sort, in order to save in the higher incomes hundreds of pounds a year. I will give two or three more cases. Take an income of £5,600 a year. If it all belonged to the husband, and was unearned, that household would contribute £27 10s. to the Income Tax. If it were divided between husband and wife, the household would contribute only £12, although the income and the expenses were the same as in the other case. In fact, in the first case there might be five children, and in the other none at all, and yet the first household, with more expenses and the same income, would contribute £27 10s., while the second household, with less expenses, would contribute only £12. If this Amendment were carried, the first household would have to bear a considerably heavier burden, in order to make up the deficiency caused by giving relief to the second household.
    9.0 P.M.
    I come now to the Super-tax region. Take an income of £6,200, the husband having £4,700 and the wife £1,500. The tax at present would be £133. If the incomes were treated separately the tax would be £65. Then take a joint income of £8,900,

    2029
    £6,700 belonging to the husband and £2,200 to the wife. The Super-tax at present would be £299, which, if the incomes were treated separately, would immediately drop to £160. Does anyone imagine that with such substantial inducements arrangements of that kind would not be promoted? The household which treated the revenue quite honestly would suffer. The household where the whole income was attributable to the earnings of the husband, and consequently precarious, would suffer in comparison with the household where the income depended on investments which were not in the slightest degree affected by the husband's health or employment. Is that fair? I submit that it is not. I repeat here an observation which I made earlier in the afternoon—that all these cases, when you come to relief which runs to millions a year, are treated as if there were some inexhaustible pool at the Treasury for the purpose of dispensing relief to various classes. You cannot do it without imposing burdens on other classes.
    Lord ROBERT CECIL: Hear, hear!
    Mr. LLOYD GEORGE: I am glad the Noble Lord cheers that. He was not here when I made the observation first of all, and it is worth repeating to get his approval. It means that the households where the income depends on the husband's health and fitness, sometimes on his life, would have to bear heavier burdens in order to relieve the privileged households who were able to divide their investments with a view to getting up to £5,000,000 dispensed among them. There is absolutely no reason why they should not contribute this money to the State if the others have to do so. When the hon. and learned Gentleman says that "you can save this," and "you can save the other thing," I reply that if you can save money it ought to be saved for the benefit of the whole of the taxpayers of the country. If there is a saving, I can see no reason why you should give the benefit of that saving to people who have got joint incomes of this kind, rather than to people whose income depends entirely upon the exertions of the husband. When the hon. and learned Gentleman says that you ought to favour certain people, and there is a case for the special exemption of married people, I agree with him. But that is a very different proposition. His case, and the case of the
    2030
    Amendment, is that you ought to assess the incomes separately and not jointly, even if there were a special exemption for married people.
    He says you ought to have an exemption of 10, or, if you can afford it, of 20 per cent., as they have in the United States of America. I agree on one point, I do not think the bachelor contributes fairly. I have made several very small adjustments of the Income Tax which, at any rate, establishes that principle. There is a distinction established now between married persons with children and married persons without children and the bachelor. It is not a very substantial one, I agree. It costs £100,000 a year. I agree it ought to be much more considerable. If I might suggest to the hon. and learned Gentleman that is the direction in which relief ought to be given, not this: that is to give exemption to people who have in justice the right to claim it. He says I am penalising marriage. He refuses to recognise the essential principle of marriage—that is, identity of interest. You cannot have it both ways. He desires that married people's incomes should be treated separately. You cannot have it. That goes to the very root idea of the marriage law. When he talks about the married husband who does not want his wife to know what his income is, I think that is a very extraordinary conception of the relations between the two.
    Mr. LEIF JONES: Hear, hear!
    Mr. LLOYD GEORGE: Here is a bachelor who agrees with me!
    Mr. LEIF JONES: I am simply stating the idea to which I have been brought up.
    Mr. LLOYD GEORGE: I do not think the view of the hon. and learned Gentleman is one to be encouraged. As a matter of fact, I believe that even if the grievance were attempted to be redressed the vast majority of people would not claim this special treatment. I think there would be very few persons indeed who would claim this special treatment, so complete is the identity of interest amongst married people. There are people who say that the law should be altered. That is a very different thing to saying to me now that I am to find anything between, perhaps, £2,000,000 and £5,000,000 of money in order to give a special privilege to certain households. The hon. and learned Gentleman said, "Why did you not keep the penny on the

    2031
    Income Tax? We could have done something with that." That penny has been useful for very many purposes this afternoon; it is to go in order to pay rates; it is to go in order to relieve the Death Duties; it has been suggested in order to relieve these specially privileged people. It is like the widow's cruse, the more you take out of it the bigger it becomes. You cannot really use it for all these purposes. The hon. and learned Gentleman must remember that that penny is for his constituents. He pledged himself to get it. He cannot go lavishly squandering it in the way he suggests. We must jealously guard that penny so that no one shall touch it. The hon. and gallant Gentleman the Member for Chelmsford tried to get it from me this afternoon, and I defended the interests of the hon. and learned Gentleman so that it should not be taken away. Now I have to protect it against himself. He has been dipping into that till, and he must not do it. He has promised it to his constituents, and it is my business to see that his pledge is redeemed.
    Mr. MITCHELL-THOMSON: Quis custodiet ipsos custodes?
    Mr. LLOYD GEORGE: It has been recognised by some on the other side that the only way to do what is asked is to raise an extra farthing, or a penny, or whatever the sum may be. I do not think we should be justified in increasing taxation on particular households in order to spare households that have got the good fortune to have part of their income invested in something that returns interest, and for that reason, though I am prepared to consider the grievances that were presented to me by the deputation the other day, I cannot see my way to accept the Amendment.
    Mr. RAWLINSON: I have had the privilege of moving an Amendment of this kind every year except last, since I have been a Member of Parliament. I believe that not until this afternoon has any Chancellor of the Exchequer ever stood up and defended this idea of taxing married people's incomes as if they were a joint income. Even the right hon. Gentleman himself has never defended it before to-day. I have much admiration for the advocacy of the right hon. Gentleman, but I think even he was driven pretty hard when he really had to tell the
    2032
    House that there was something inherently just in not treating the joint income of married people as separate incomes—as in fact they are. Of course the right hon. Gentleman towards the finish got on to sure ground. I am sure those of us who know can always tell by the tone of his speech when he is and when he is not on sure ground. Like other Chancellors he got on to sure ground when he said: "We cannot afford it. There is a lot of money required, and we cannot find this £2,000,000 therefore we cannot do it." When I first began to move this. Amendment, the sum that would have been necessary was a comparatively small one. Is it any real answer to the case to say what the Chancellor has said? As time goes on the injustice becomes very much greater and, therefore, the only real argument in the matter is that we cannot levy this in any shape or form because if we were to do it the loss would be too-gigantic.
    Let us look for a moment at the justice of the case. There are two different ways in which I have moved this Amendment on various occasions. There is the one which I believe really would properly meet the justice of the case more than any other—though I admit there is much that can be said against it—and that is to allow married people to aggregate their income. I am very strongly in favour of the taxation of married people, and of the bachelor. I thoroughly agree with it, though I am a bachelor myself. I am in favour of the taxation of luxuries, and I am perfectly prepared to pay my share of a luxury which I have enjoyed so happily and for so long. I think that to divide up the sum would be a perfectly fair thing to do. I proposed to this House before that where the joint income is £600 it should be divided by two and looked upon as two separate incomes of £300 each. My hon. Friend restricts his claim to £700. Surely no great injustice would be done by that because, undoubtedly, married people are far less able to pay taxes than unmarried people. If the Chancellor of the Exchequer is not inclined to go so far as that—and I admit it is much further than it is necessary to go this afternoon—is there any sort of objection to his seeing that people who have two separate incomes when they are married should not have them aggregated as a joint income? The right hon. Gentleman says we must treat

    2033
    people in the married state as one. That is one of those pieces of eloquence which adorns his speeches. It was merely a burst of eloquence, because he and his party are treating them differently every day in the matter of Estate Duties, because when people die they are treated as separate for the purpose of taxation. People who are single are entitled to exemption, but when they are married they are not, which is essentially unjust. The Chancellor of the Exchequer cannot really seriously contend, despite what he said, that it is otherwise than a gross injustice.
    Many of us remember the long discussions, continued into the early hours of the morning, that took place upon the Deceased Wife's Sister Bill. The argument was frequently put forward that where a man married his deceased wife's sister before that Bill they were exempt from Income Tax, but at the moment the marriage was recognised by law they had to pay Income Tax. I am bound to admit that that was a five-o'clock-in-the-morning argument, but, at the same time, it was a fair illustration of the present method of dealing with Income Tax. That being so, I submit that the justice of the case here made out ought to be met. This Amendment is a step in the right direction. My hon. Friend only suggests that it should apply to incomes under £700. I admit that is illogical, but it would be a step forward, and it would be a step in the right direction. The concession the Chancellor of the Exchequer has made is hardly worth talking about. His new Clause will not reduce the amount people have to pay by one penny. It may possibly avoid anomaly in the recovery of taxes, but it is likely to raise more anomalies, more especially Sub-section (3), which allows distress upon the husband's property for the Income Tax of the wife, and on the wife's property for the tax of the husband, because it must be remembered, as far as I understand it, that applies not only in the case of persons living together, but it applies also to people living separate. And on these occasions we, who see the unfortunate side of the law as well as the fortunate side, know there is considerable friction between such people. The Chancellor of the Exchequer laughs at the idea that the husband and the wife do not know each other's incomes.
    Some years ago, when I brought forward this question before the House, I had considerable correspondence on
    2034
    the subject, and I remember stating to the House that I was surprised to find the number of cases of husband and wife who did not know each other's incomes, and cases where they would make any sacrifice sooner than ask. It may sound strange, as it sounded strange to me then, but many cases came under my notice, and I could give the names, if necessary, of people living in one's own station of life where the husband never liked to ask the amount of his wife's income, and equally where the wife did not know the exact amount of the husband's income. I hope it is not common, but it does exist, and I have not the slightest doubt of it. And if it is true of people living together under the same roof surely it applies in the case where the husband and wife are living separately, and if they are living separately this Clause will lead to further anomaly and further trouble, because all a spiteful husband will have to do is to decline to pay his Income Tax and suggest that his wife's goods should be distrained for the amount. There is only one way of dealing with this question of elementary justice, and that is not the way put forward by the Chancellor of the Exchequer for treating the incomes of the husband and wife. When they are married and have separate incomes they are entitled to separate assessment, and they should be treated as separate individuals. If that is done no injustice will follow. If it is not done anomalies and difficulties will occur. I differ from my hon. Friend and from the Chancellor of the Exchequer in what they say as to this being a very complicated question. I venture to suggest that it is not, and if you want to do what is right you should, at all events, make a beginning now.
    Mr. LEES SMITH: This is a proposal which I have heard made a good many times by the hon. and learned Member. I am bound to say that during the first, two or three times I heard him he convinced me, but I have since learned that I was misled. His proposal breaks down upon this ground, that it goes in the teeth of the main principle upon which Income Tax is based, the principle of payment according to ability. The proposal supposes that you ought to charge at a. lesser rate of taxation a family and household, where part of the income is dependent upon the wife's investment, than a similar household dependent upon the earnings of the husband.

    2035
    That appears to me to be a proposal which gives the relief where it is least needed. After all, if you take these households where the wife has an income of her own, in the majority of cases that means that the wife has private means for other investments, but just to the extent that she has these investments, is it stronger and more secure than a family with a similar income entirely dependent upon the earning capacity of the husband. The hon. Member who has just spoken appeared to me to avoid dealing with what is, after all, the main practical difficulty which the Chancellor of the Exchequer presented to the House. We have adopted the principle that we charge the tax higher on unearned income than on earned income, but this proposal must inevitably mean that a large section of the unearned income of the country would not only evade taxation, on the higher scale, but evade it altogether. Take people with small investments. If they invest their money in the name of their wives, provided the wife's income did not amount to more than £160, they would evade taxation altogether. The sum of £160 represents a capital of between £3,000 and £4,000, and therefore this proposal means that they would be able to have capital up to £2,000 or £3,000 and pay no tax at all. That is a difficulty which ought not to be lost sight of. The hon. and learned Member for St. Pancras (Mr. Cassel) mentioned the case of the United States. I believe that the system in the United States is that they have abatements which we have here, but the abatements for married households is on a higher scale than the abatement for single persons. That is, I think, a wise provision, but it does not appear to me to have anything to do with the proposal before the Committee.
    Mr. CASSEL: I have another alternative proposal on the Paper.
    Mr. LEES SMITH: I am dealing with the particular alternative that you should differentiate between households where the wife has an unearned income and households dependent upon the earnings of the husband. The system in the United States was not differentiated at all, and it allows this abatement to households of both kinds, and therefore it does not seem to me that the hon. and learned Member is justified in quoting it in favour of this proposal.
    Mr. CASSEL: I quoted it in favour of my second alternative which is on the Amendment paper—to insert the words,
    "Provided that from the duty thus ascertained to be payable by husband and wife, respectively, there shall be deducted by way of special allowance to married persons a sum equal to twenty-five per cent. of the duty."
    Mr. LEES SMITH: I will pass from that point. The hon. and learned Gentleman stated that the present system penalises marriage. I am bound to say that that seems to be a rather fanciful argument. I do not think that throughout the expanse of the United Kingdom any hon. Members could quote a single case which has ever occurred in which a couple who were desirous of getting married refrained from doing so because of the few shillings payable as Income Tax. If such a case had occurred I should say that the Chancellor of the Exchequer was acting the part of a wise father in forbidding the marriage, because neither of them are likely to bring happiness to the other or to anybody else. It appears to me that the hon. and learned Member's proposal does penalise, and this is its injustice, that it penalises the households with children. The Amendment proposes that in those households where the wife earns an independent income there should be a lower rate of taxation than in the households where the wife stays at home. It must be true that in the majority of cases where the wife is able to earn an income outside the home she is only able to do so because she is not occupied with the cares of the family. I see no justice whatever in the claim that married households where the wife earns an income outside should be treated favourably as against the married household where the wife earns an income for the State by staying at home. There is one suggestion which the hon. and learned Member made to which I think the Chancellor of the Exchequer has not referred, and it is contained in his Amendment. He proposes that the whole of the provision for six months' notice should be abandoned, and that this system should be made universal throughout all married households.
    The DEPUTY-CHAIRMAN: I foresaw that this would happen. There is now going on a general discussion ranging over the Amendments which have been subsequently put down, and if it goes on I

    2037
    really do not know where we shall find ourselves. With much respect, I suggest to the Committee that it would be better to read the Clause a second time, and then proceed to deal with the Amendments on the Paper.
    Mr. POLLOCK: There are certain points which I wish to discuss in the Clause itself. I desire to call attention to one or two matters which I feel quite sure the Attorney-General will give me an answer upon, and I want to do this before we read the Clause a second time.
    The DEPUTY-CHAIRMAN: I intimate now that I shall listen very carefully to the remarks of subsequent speakers, and I shall keep them very strictly to the Clause.
    Lord ROBERT CECIL: Is it not a fact that every part of the Clause is now before us, and is open for criticism? I submit that it is impossible to carry out criticism without pointing to specific injustices in the Clause.
    The DEPUTY-CHAIRMAN: I do not mean to rule in the way the Noble Lord appears to suggest, but I shall certainly rule out the discussion of any particular Amendment.
    Mr. LEES SMITH: Then I will reserve my remarks until the Amendment is moved.
    Mr. POLLOCK: Perhaps I may say, in reference to the speech made by the Chancellor of the Exchequer, that he has not really answered the broad question which was put by my hon. and learned Friend as to the purpose of the Clause, and as to the tax which it really puts upon married persons. The right, hon. Gentleman gave us some very interesting examples of what would be the effect if he did differentiate in favour of married persons, and he gave us the illustration that a certain number of married persons might feel disposed to put the property of either the one or the other in the name of the other, so as to avoid paying the Income Tax. But the right hon. Gentleman in his own speech answered that difficulty himself, because he pointed out that in may cases, and particularly in this case, the Death Duties would come to his assistance, and would prevent that wholesale alteration in the tenure of property, because there is also the risk of the one dying before the other and being liable to very severe Death Duties, which would not exist if the scheme or strategy
    2038
    had been resorted to. Then we have the old figure of £2,000,000, that old stalking horse of the Chancellor of the Exchequer. I know it so well. It is the same old £2,000,000 we always hear whenever we move a new Clause. I once asked him how he got this figure of £2,000,000. He told me that there was not sufficient material on which to found a precise estimate, and he was informed that it would be unwise to assume that the Amendment would entail a less loss. It is a sort of nightmare which is based on nothing, on no detail, and on no figures worth quoting. The Clause itself is a very remarkable one. I am going to assume that its purpose is wholly beneficient, and that the Chancellor of the Exchequer is going to try and relieve the husband and the wife from anomalies to which they are at present subject. In Sub-section (1) (a) it is provided that
    "Income Tax (including Super-tax) for that year shall be assessed, charged, and recovered on the income of the husband and on the income of the wife as if they were not married, and all the provisions of the Income Tax Acts with respect to the assessment, charge, and recovery of Income Tax (including Super-tax), and penalties for failure to enter a return, shall apply as if they were not married."
    The meaning of the Clause, as I understand, is that a return will have to be made both by the husband and by the wife. They will have to make a return not only in relation to Income Tax, but also in relation to Super-tax; otherwise, they will not fulfil this Sub-section (1) (a), because, if all the provisions relating to Super-tax and Income Tax are in force, and they have got to make a return, it is quite clear that in the return they make they will have to keep in mind the possibility of liability to Super-tax as well as Income Tax. Let us look at paragraph (f):—
    "The income of the husband and wife shall be treated as one in estimating total income for the purpose of Super-tax."
    I think I, therefore, make my proposition quite good by saying that if in this return required under paragraph (a), which deals not only with the Income Tax, but also with the Super-tax, and if under paragraph (f) the income of the husband and wife are to be treated as one in estimating the total income for the purpose of the Super-tax, it is quite plain that the return which will have to be made in relation to

    2039
    Super-tax under Sub-section (1) (a) will be a return including, in the case of the husband, the wife's income, and, in the case of the wife, the husband's income. I cannot imagine that is really intended, but that is how the matter stands.
    "And the amount of Super-tax payable in respect of the total income shall be divided between the husband and wife in proportion to their respective incomes."
    The effect, therefore, is that whereas at the present time the husband has to make a return and to include in his return for Super-tax his wife's income, we shall now have the anomalous position that both the husband and the wife, with their eyes on the Super-tax Clauses, will have to make a return, and the one will have to include the income of the other, because, in estimating whether they are liable to Super-tax they both have got to have regard to the income of the other. That is an anomaly and a new burden, which I do not for a moment think was intended, and which must be due to some error by the draftsman. It is almost impossible to read paragraphs (a) and (f) together and to find that any relief such as is intended is effected. Let me also call attention to the fact that under Section 2,
    "The Commissioners of Inland Revenue may require returns for the purpose of this Section to be made at any time, and Section 55 of the Income Tax Act, 1842, shall, with the necessary modifications, apply in the case of the refusal or neglect to make, or wilful delay in making, any such return."
    Section 55 of the Income Tax Act of 1842 is the Section by which the penalties for not making a return are imposed. When you take the two Sub-sections to which I have referred and this Sub-section (2) together, you have put upon the wife the burden of making a return of her husband's income, and you have subjected her to all the penalties which at the present time exist under the Act if that return is not properly made. The net result is that you have imposed a more curious burden than existed before. In the case given by the Chancellor of the Exchequer, of the actress and the dentist who were married, the dentist will have to return his wife's income for the purposes of the Super-tax, and the actress will also have to return the dentist's income, and, if there is any default on either side, they
    2040
    will both be liable to the penalties imposed by Section 55. I have no doubt that the Attorney-General will be good enough to give the matter his consideration. I have endeavoured, in company with some of my learned Friends, to try and make sense of paragraphs (a) and (f) and I cannot find that I have overstated the effect of them as drawn. Why is it necessary to repeal the relief which is given under Section 5 of the Act of 1897? Sub-section (4) says:—
    "Section 5 of the Finance Act of 1897 (which relates to the exemption of the income of a married woman in certain cases) shall not have effect in a case where an application has been made under this Section."
    I assume there may be an answer, and I only want to know what it is, but I really cannot see why that relief should now be withdrawn. Section 5 of the Finance Act of 1897 is one under which relief is given where the husband and wife are engaged in earning income. Sometimes the wife is engaged, we will say, in keeping a shop, and the husband may be engaged as a schoolmaster. Those sort of cases are by no means infrequent. The cases which came before the Courts were very ordinary cases, such as that of the schoolmaster and his wife, the schoolmistress. Why is it necessary to withdraw a privilege and an exemption which has existed since 1897, because, under this Clause, there is to be a separate return made of the income of the husband and the income of the wife. I cannot follow it at all. If the exemption was good in 1897 I do not see why it is not still good, and I know no reason for withdrawing it because of the separate mode of assessment which is laid down by this Clause. There is really no actual relief from taxation given under this Clause. The effect is only to give relief from the oppressive machinery which has hitherto existed in the case of the husband's and wife's incomes. The return to the revenue will be just as much as before, but the machinery will not be quite so burdensome as it has been in the past. If that is all the effect of the Clause, as I think it is, we should watch carefully what we are doing. It is not the time, as the Chancellor of the Exchequer said, to put a further screw upon the incomes of husband and wife. Indeed, the tendency of the right hon. Gentleman is in the direction of some relief, although he will not concede the relief which my hon. and learned

    2041
    Friend asks for. I, at any rate, can see no possible reason for withdrawing this exemption, and I hope on this point we shall get some answer from the Treasury Bench to the criticisms which I have offered—criticisms which, I venture to assert, have indicated points where the Clause really fails to accomplish the object with which, I believe, it was originally introduced into this House.
    Mr. DICKINSON: I am one of those who regret that this Clause has been brought forward. It has been suggested, in order to meet what, in my opinion, are very minor difficulties. Three points have arisen in connection with this particular branch of the law. Defects in the law as it stands have been pointed out; it has been shown that under the existing law the husband is able to get the whole of the rebates in respect of the wife's property, and it is also the fact that the money due from the wife has to be recovered from the husband, and if he has not the cash he is compelled to go to prison. These are very plausible points, and the question is whether it is necessary to adopt principles very far reaching in their effect and of very great importance in order to meet them. This Clause lays down for the first time a principle which bas never before existed in Statute law. The words are:—
    "The income of the husband and wife shall be treated as one in estimating the amount to be repaid or allowed in respect of any exemption, relief, or abatement which depends wholly or partially on total income."
    And then there are similar words used in regard to Super-tax. This particular law is even now the subject of judicial consideration, and I understand that the decision arrived at by Mr. Justice Rowlatt may come before the Court for review. I do not think, therefore, it is quite fair for us to legislate at the present moment, before the point is finally settled, especially in view of the fact that these proposals have been brought in almost at the last moment, and were not in the Finance Bill as originally presented. The Finance Bill as brought in had no reference to this particular subject, and I submit, with great respect, it is not fair either to the public or to those particularly concerned that this attempt should be made to deal with it. Of course the case is one of great difficulty. Those of us who listened to the case put
    2042
    forward by the hon. and learned Member for West St. Pancras (Mr. Cassel) must have come to the conclusion, at the end of his speech, that it was quite unanswerable. And, again, those who listened to the speech of the Chancellor of the Exchequer must have come to the conclusion also that his case was quite unanswerable. They both of them quoted cases which looked at from one side or the other seem to settle the thing altogether. The hon. and learned Member for St. Pancras cited a case in which he showed that two-persons who before marriage had been liable to a tax of 15s. only, became liable after marriage to a tax of £9, and he urged that that was extremely unjust. Then the Chancellor of the Exchequer cited a case in which the husband and wife now pay £27, whereas, if they were allowed to divide their Income Tax as suggested, they would only pay £12, and he asked, "How can I possibly justify bringing in a change in the law which will enable these people to escape their obligations?"
    The whole question depends upon what is the justice of the case. If it is unjust that these incomes should be lumped together, then we ought, to remedy that injustice. I have always believed that it is an injustice which cannot stand. But I had hoped that when we were called upon to deal with it it would not be in relation to a Clause brought in at the last moment, but it would have first been made a subject of careful inquiry and consideration. This matter must be looked at with very considerable care. It might be dealt with in various ways. For instance, you might give a rebate to married persons in the same way as you give a rebate for children, or you might adjust the Super-tax and the higher taxes so that the joint income might pay what was considered to be a fair share. I am not prepared to say that they ought not to pay rather more than if they had been living under single conditions. But it certainly is not fair that they should pay on the basis that now holds good. I do not know what the Government are going to do with regard to this Clause. I think it ought not to have been proceeded with, inasmuch as it only deals with a very small section of the community, and does not attempt to meet the real question of the particular system of taxation which should apply to married couples. I say it is not reasonable it should have been brought forward at this particular period.
    Mr. SANDERSON: I quite agree with some of the remarks made by the hon. Member who has just sat down. What we have to look at in this case is what is the justice of the matter, and whether it is really right that the incomes of married people should be lumped together and taxed as one entity. I listened with much interest to the speech of the hon. Member for Northampton (Mr. Lees Smith), and I understood him to say that he had been entirely converted by the earlier speeches of my hon. and learned Friend the Member for West St. Pancras (Mr. Cassel), but had recently changed his mind. Then he gave us the reason for it. With great respect to him, I am bound to say I do not think his reason was a good one, and I have some hope, if he listens to me, that I may turn him round again. He said he thought the proposal of my hon. and learned Friend is running in the teeth of the principle upon which all taxation ought to be based, namely, that of ability to pay. He instanced two cases: first, the case of a man who had an income of his own of £600 a year; and, secondly, the case of a family where the income of the husband was £300 a year and the income of the wife was £300 a year. He said that in the second case the family were better off than in the first case, and that they ought not to be let off more easily than the first case. May I point out to him the fallacy of that? In the case where the husband's income is £600 a year it is his income, and he has complete control over it. He can spend it as he likes, or he can keep his expenditure within his income and reckon the amount of the tax he has to pay. But in the second case, where the husband has only £300 and his wife has the other £300, since the Married Women's Property Act he has only £300 over which he has control. His wife can do whatever she likes with her £300 a year. She can say, "I am going to spend so much of this a year," or, if she is extravagant, she may say, "I am going to spend the whole of the £300 on my clothes," or she may say, "I am going to save it and keep it for one of my daughters when she gets married." The husband has only control over £300. In the first case, where the income is entirely his own, he has full control, and you tax him according to his ability to pay; but in the second case you do not tax him according to his ability to pay. I do not know whether that argument appeals to the hon. Member for Northampton, but I hope he will consider it before he gives his vote.
    2044
    10.0 P.M.
    There is one matter we ought to notice, which is that we have got one very valuable admission from the Chancellor of the Exchequer to-night, namely, that the incomes of married people ought to be treated more favourably than the income of a bachelor. He admits that the concessions which are now made are not anything like large enough. I submit that he has a very good opportunity of making a beginning to-night. He is not going so far as some of us would like him to go, and, perhaps, he will go a little distance to-night when we come to the propositions, as I hope we shall before long, of my hon. and learned Friend the Member for St. Pancras. The Chancellor of the Exchequer pointed out that in the course of a deputation which waited upon him on this matter, one of the ladies said that if the woman was in default in making a return or paying Income Tax she only ought to be made to suffer, and that the husband ought not to be punished in any shape or form. If the right hon. Gentleman will look at the Clause he has introduced, especially at Sub-section (3), he will see that he is not attempting to remedy that matter at all. As I read that Sub-section it means that if the incomes are separately assessed, as he proposes in his previous Sub-section, and the Income Tax in respect of the lady's income is not paid, execution can be levied upon the husband's goods. The words are perfectly clear. The Sub-section says:—
    "The power to distrain in the case of non-payment of any Income Tax payable either by the husband or the wife shall extend both to the goods and chattels of the wife and to the goods and chattels of the husband."
    That is quite contrary to the principle laid down by the Chancellor of the Exchequer this evening. The concessions made by the Chancellor of the Exchequer in this Clause are really of little value. They only apply to the questions of assessment and recovery, and do not make the slightest alteration as regards the amount the husband and wife have to pay. They do not apply to the general complaint which is made, but only to a few specific cases which have been brought to the attention of the Chancellor of the Exchequer. We are greatly indebted to my hon. and learned Friend the Member for West St. Pancras for the way in which he has put this before us. We all felt, and in a vague way we knew about

    2045
    the injustice which is perpetrated by the Chancellor of the Exchequer in many cases, but I do not think we ever knew the extent to which that injustice goes. I am certain that we have never had it so clearly stated in this House as it was stated by my hon. and learned Friend to-night. I hope that the Committee will have listened to the arguments he put forward and will vote for the Amendments he will propose later.
    Lord ROBERT CECIL: There are in the case of this Clause a certain number of detailed criticisms which might be made. I do not propose to do more than mention them, because, no doubt, they will be dealt with on Amendments later. The point raised by my hon. and learned Friend (Mr. Pollock), that apparently under this Clause for the first time, both husband and wife will be compelled to make a return in respect of Super-tax seems a serious injustice, although it may not be an important matter in point of numbers. There is also the point mentioned by my hon. and learned Friend the Member for the Appleby Division (Mr. Sanderson), that apparently this Clause greatly increases the power to distrain on the goods of the husband or wife in respect of the tax due from the other person. That certainly seems to be a very strange way of remedying the injustice which resulted in Mr. Wilks being sent to prison. Lastly, there is the point that, for some reason not explained, Section 5 of the Act of 1897 has been repealed. These are details, and I do not propose to trouble the Committee with any further observations upon them, nor do I wish to say very much about the points which the Chancellor of the Exchequer said in the beginning of his speech that he had dealt with—the right of separate assessment, and the question of rebate. These points are, of course, of importance, but they are not the substantial questions which have been raised in connection with this matter, and I do a little regret that the Chancellor of the Exchequer should have been led, in connection with that matter, to have said that in the deputation he received no claim was made in respect of the substantial question, namely, that husband and wife are treated as one person for the purpose of Income Tax. He is entirely mistaken. That point was certainly raised. I find that Miss Amy Hicks said this:—
    "May I ask a question. You lay stress on the fact that it is the households which should be taxed, and not the separate parties making up that household. I should like to know if there is any reason why a hus-
    2046
    band and wife should be singled out for taxation, and why the household should not be taxed in the same way as, for instance, a mother, brother and sister, or father and daughter. Why is the household regarded as the unit?
    That is the whole argument, and the Chancellor of the Exchequer dealt with it afterwards, and if you read the whole of his speech it is quite plain that that was by far the largest part of the matter which, was brought before him on that occasion. It is a matter to be regretted, because what is said in this House is very closely watched in matters of this kind, and there are many people only too ready to say-that the claims and suggestions made by women are not properly considered by this House, and are not properly dealt with, because they have not got power to enforce them. I think that extract which I have read really puts the exact point. The hon. Member (Mr. Chiozza Money), who loves to go back to the theory of the thing, stated as the theory of the Income Tax that it depended upon ability to pay. Of course, in that sense that is true of every tax, but the theory of the Income Tax is a much simpler matter. It is a tax upon the income of the individuals who make up the population. There is no doubt about that at all. There is no trace of any other form of taxation in the whole of the Income Tax, and it is perfectly plain that that is so, because, in fact, households are not taxed. The incomes of households are not taxed in any other case whatever. The Chancellor of the Exchequer, in dealing with the deputation, referred to the fact that wherever there is more than one wage-earner in a family the income of all the wage-earners is quite commonly dealt with as the income of the house. But it is not taxed. Each individual is taxed.
    Take a manufacturing town where you may have a father and, it may be, one or two sons and, maybe one or two daughters, all earning income, and the joint income will come a great deal above the minimum under the Income Tax. In those cases there has never been a suggestion that on that ground you should tax the household, or tax any individual in the household, because the joint income comes to more than £160 a year. So it is where you have two or more brothers or unmarried sisters living together—people of the richer class who club their incomes in order to live together. I know of my own knowledge several households where unmarried sisters, who have been left tolerably well off, have lived together for the

    2047
    purpose of joining their incomes and living more comfortably, treating their joint incomes as one for the purposes of the household. Sometimes they make contributions to the joint household expenses, and sometimes they pool the whole of their incomes in order to live more comfortably. In none of those cases are the individuals taxed on their household income. This doctrine of a tax on a household is absolutely unknown in nearly all these cases. In the other case, which was much less common and much less important, the case of a man and woman living together who are not married, the point does not so often arise, as in those cases there is no attempt to tax the household. The individuals are taxed according to their taxable capacity, whatever it may be. In this case alone, where you have married persons living together and joining their income, they are treated by a pure survival as a single person. It dates back from the very origin of the Income Tax in 1842, because at that time married women had no property, apart from certain exceptions. It was treated as her husband's property, and it was quite fair, since that was the general rule of the law, that he should also obey the rule in respect of taxation. But that has been entirely swept away.
    In point of fact, in spite of the hon. Member (Mr. Chiozza Money), this really is a tax on marriage. For all purposes a man and his wife are treated as economically independent, except for income. If they were taxed fairly and justly according to their economical position they would be treated as individuals. They are taxed in addition a certain sum, which the Chancellor of the Exchequer put at £2,000,000 a year, by reason of the fact that they are married. Supposing that had been put quite plainly. Supposing they had been told "you shall each pay your tax as economic individuals, and in addition to that, because you are married, you shall be taxed £2,000,000 a year"—that is the plain English of what has been done—there would not be a single man who would defend such a tax for a moment. I am amazed that anyone can be found to defend it on principle, and I listened with great interest when the Chancellor of the Exchequer said that not only did he resist this proposal because it was inconvenient to the Exchequer, but he resisted it on prin-
    2048
    ciple, and I listened with great interest to hear what his argument on principle really was. I do not know of any argument he put forward on principle, except that the whole foundation of marriage was indentity of interest. The right hon. Gentleman really ought to have lived forty-four years ago and opposed the Married Women's Property Act in 1870. That was the argument which was used no doubt by those who were the political ancestors of hon. Members sitting near me now, that their interests were identical, and that it would lead to splitting up the family and all the other terrible results which we are always told will follow if you do anything to emancipate women from the control of men. That really is the whole difference on principle, as far as I understand the Chancellor of the Exchequer, because he very soon felt that he was not on very sound ground on principle. It is not perhaps the ground which the Chancellor of the Exchequer takes with the greatest pleasure or the greatest success, and he passed to what is undoubtedly a much stronger ground, namely, the practical difficulties. I am not going to say for a moment that he did not make a strong case as regards the practical difficulties. I think he did. It is a strong argument to put before the House that to make this alteration means a loss of £2,000,000. That is a conventional figure, but the alteration means a considerable loss to the Exchequer immediately, and a larger loss when the adjustments have been made between the incomes of husband and wife.
    If the proposal of my hon. and learned Friend (Mr. Cassel) were simply to sweep away the whole of this injustice at one swoop, I should find great difficulty in supporting him, because of the financial difficulties which would occur. That is a different proposition, and I admit that it is indefensible. When addressing the women the Chancellor of the Exchequer went so far as to say that if this were a new tax which was being imposed, it would be imposed in an entirely different way from the form in which it appears. That is a reasonable position to take up. Admitting that you have no right to impose this special tax on marriage, it is reasonable to say, "We cannot abolish it at a stroke, but we will make a start to-night. We will lay down the principle, so far enshrined in the new Clause, that husband and wife ought to be taxed on their separate incomes.

    2049
    Having separated the incomes of husband and wife for every other purpose, and having laid down that for practical reasons we cannot carry out this proposal to the full at the present moment, we will, therefore, begin with incomes under £700 a year, or provide for a special abatement in the case of married persons. We will begin by giving some partial relief from the injustice, and in future years we will hope to sweep away the whole of the injustice. We ought to remedy what is at present a blot on the taxes of this country." I do feel that as long as women have not the franchise, there is in this matter a special case for the consideration of the injustice with regard to women, which ought to be dealt with with the utmost generosity. We, as a body, have refused to enfranchise them, and we are bound, therefore, to treat their claims with special consideration. I think that this claim, having been made out absolutely to the full, the Government will behave very wrongly and regrettably if they do not make a serious effort to remove the injustice which has been so fully established.
    The ATTORNEY-GENERAL (Sir John Simon): The Noble Lord has said some strong things as to the general sufficiency of this Clause, and about that I should like to say a word before I sit down. But in the first place I ought to deal with two or three special points of criticism of the Clause which were made by earlier speakers. The hon. and learned Gentleman (Mr. Cassel)—and he has been followed by one, or it may be more than one, of the other speakers—questioned the following words at the beginning of the Clause:—
    "If an application to the Commissioners of Inland Revenue is made for the purpose in such manner and form as may be prescribed by those Commissioners, either by a husband or wife, within six months before the commencement of any Income Tax year—"
    The hon. and learned Gentlman seemed to think that these words meant that no husband or wife could get this relief in respect of the tax beginning on 5th April unless he or she shall give notice of his or her intention six months before that date. That is not the meaning of the words "within six months" at all. The meaning of these words is this: We cannot have notice given an unreasonable time beforehand. That would obviously be a great inconvenience, and in the case of married
    2050
    people they might change their minds. The meaning of the Clause is that as soon as you get within six months of the beginning of the Income Tax year, from that time, right up to the day before the Income Tax begins, you may give notice on any day you like. That is the meaning and intention of the words, so that that particular criticism is based on a misapprehension. The hon. and learned Member for Leamington said that under the existing law, whether a married woman lived with her husband or did not, for all purposes except the special case of the Act of 1897 the law regarded the income as being the income of the man. I do not think that that is so. The provision that a wife's income is to be deemed to be part of the husband's income is a proviso of the Income Tax law, in the case of a married woman living with her husband, and it is limited to that case.
    The same hon. and learned Member complained that Sub-section (f) of this Clause was either inconsistent with Sub-section (a) or nullifies it and makes it entirely absurd. The particular instance put is this: The hon. and learned Member contends that the Clause, as drafted, will have this effect, that a wife claiming the right to make a return separately from her husband would have, in the case of Super-tax, to return a figure which was the total of her own and her husband's income, and the husband in the same way would have to return the wife's income as well as his own. Again, that is not the intention of the Clause, and I do not think it is the effect of it. It is quite true when you come to determine the total income on which Super-tax is payable you have to link the two together. If the man has just under £3,000 a year, and the married woman has just under £3,000, they are expected to make a contribution to the Super-tax, inasmuch as every single person who has got £3,000 or more has got to pay Super-tax. But it is not the fact that the effect of this Clause is that either has got in his or her return to include the income of the other.
    Mr. POLLOCK: The Attorney-General has not appreciated the case I stated. In (f) it is quite clear that the income of the husband and wife should be treated as one in estimating the total income for the purposes of Income Tax. Therefore under (a) they have got to make a return, not only on the Income Tax, but on the Super-tax, and a return which puts on them a burden which does not exist at present.
    Sir J. SIMON: That is what I have been trying to explain. It is quite true that you discover the amount of tax by estimating the total income of the two, but there is nothing whatever in the Clause to say that either has got to return the income of both. One other criticism made on Sub-section (4) is that it is proposed, as some critics have suggested, to repeal Section 5 of the Finance Act of 1897. That is not so. What is proposed is that where advantage is taken of this new provision you cannot have Section 5 of the Act of 1897 operating at the same time. Anyone who studies that Section will see why. That Section does not provide quite what we say in the Bill. It provides that, where the total income of the two is not more than £500, and where some portion of that income is earned by one party and some portion of it is earned by the other party, in that event the wife's returns may be assessed quite separately and dealt with exactly as though she was not married. But what is to happen in the case where the wife has got a certain portion of her income earned and some unearned? The Section provides that the wife's unearned income is to be lumped with the husband's. Supposing her husband earns £200 a year, and his wife £150, and that she has also got £100 a year of her own unearned, making the total income £450, the Section of the Act of 1897 will apply. But how does it apply? It applies by saying that the wife has to pay on the £150 which belongs to her, and she is to be assessed separately on the £150, and the £100 is to be counted as part of the husband's income. You cannot do more than say to the husband and wife, who are able to take advantage of the Act of 1897, "Take advantage of it if you think it is really better for you than coming under this Clause, but if you come under this Clause we cannot at the same time, as a practical matter, indeed, as a logical matter, apply the Act of 1897 as well."
    To come to the more general matters, it is quite true that this Clause which we propose does not do all which some who are most concerned to see our Income Tax altered in relation to married women, would desire. May I refer, for instance, to a right hon. Friend of mine (Mr. Dickinson) a very good friend, as we all know, of the cause with which he has been so much identified. He seems to complain that such a proposal should be made at all. He says, "Here you are at the last moment flinging at my head a Clause
    2052
    which I cannot understand." I should have thought that my right hon. Friend would have known that this Clause is almost exactly the same as appeared on the Paper last year, and he has had a year in which to study it. The Noble Lord opposite will regard the Income Tax laws as a tax on marriage, and he criticises this proposal. Is he really quite fair? This Clause, whatever else it does not do, does two things, and I should have thought that, as far as they went, those two things were things which Members holding the opinions of the Noble Lord and my right hon. Friend would most certainly have welcomed. It says that a married woman shall be entitled to claim that she, in her own right and in her own name, may make a return in respect of her own income, as being the person who knew most about it, and is accountable for it, who ought to be recognised by the State, and she can insist that the fact that she is married to her husband does not mean that her husband has, in relation to Income Tax, to be regarded as the only person that the tax gatherer has ever made acquaintance with.
    It says in the second place—and this is an entirely practical thing—whereas, under the present law, the husband returns the income of both, and if there is any question of exemption or abatement (although, as a matter of fact, the exemption or abatement, may be in respect of income which is entirely the wife's), he is able himself to claim and to receive the whole of the exemption or abatement, from this time forward, if exemption or abatement is due to the fact that it is the wife's income which entitles exemption or abatement to be granted, it is to belong to the wife, it is she who is to get it. I really think from those who take, as I take, a very sincere interest in changing the law, so far as it affects unfairly the position of women, we might expect from them some recognition that these changes are changes of some value. The Noble Lord says, oh yes, but you have not done this, you have not said so far as Income Tax law is concerned that it does not know whether men or women are married or not, and since you do not do that you are really putting a penalty on marriage. I confess I do think there may be very good grounds for arguing that the mere fact that a man and woman are married is not in good logic a reason why the extent to which exemption or abatement is given, should be exactly the same as that which would

    2053
    be the case if their joint income was the single possession of an unmarried person. I quite see it does not at all follow. You cannot properly, or logically, or entirely justly say that you do not make any distinction between the two cases. That is a very different thing from saying that if a man and woman are married they ought to be regarded under Income Tax law as being in precisely the same position from the point of view of contribution which they are asked to pay as though they were not married. Let me give one single illustration to show how very strangely such a contention would work. It is common ground under our law to-day that it is desirable that you should not put a heavier burden upon earned income than you should put upon unearned income. That distinction, which was made by the Prime Minister, is one which has entered into our recognised and accepted Income Tax law. Take this case. Suppose you have got a man who by his own exertions earns £800 per year. He marries a woman who has no income, earned or unearned. They may have children. What is the position under the law of such a man. He has got to pay Income Tax on an earned income of £800 per year, and that would be found to be £30. There is no allowance for children because the man has £800 of an income. Suppose instead of that that the man has got an unearned income of £400 and marries a lady who has also got an unearned income of another £400 per year. You have now got a household with £800 per year unearned. Suppose they have children as before, and if you treat those two people in the same way in which you would treat them as though not married, the result would be that the husband who has got £400 per year unearned would have to pay £14, and the wife £14, so that the unearned income of £800 will pay less taxes than the sum of £800 which is earned by the exertions of the husband in the first case.
    I do not say at all that the changes which we are contemplating now, and which we are entering upon, do not make it very proper to survey this subject with a view to seeing whether or not Income Tax law does do justice by treating men and women, when they are married, as completely one for the purpose of exemption or abatement. On the other hand, I submit it is really quite absurd to say that £800 of unearned income should pay a tax of £28, which the
    2054
    Committee will observe will be reduced substantially for every child that is born, while exactly the same sum of money earned by the exertions of one of the parties has got to make a larger contribution, and that is not reduced even though children are born. I give that illustration because it appears to me to be quite sufficient to show that you cannot be quite so cocksure about this matter as some hon. Members seem to think. What is necessary is that we should realise that we have reached a point, as the Noble Lord said, where we by common consent want to change the Income Tax law so as to recognise the position which a married woman really occupies. It is not accurate to say that when the Income Tax Act of 1842 was passed, a married woman was treated as if for all purposes she was absorbed in the property of her husband. If she had any separate property of her own then, as now, it was treated quite separately. If she was a sole trader by custom she paid in 1842, quite separately, as she does now. But, no doubt, the principle in 1842 was that, supposing you had a woman and a man married and living in a home, it was right to regard the husband as responsible for the expenses of the home, and answerable, so far as Income Tax was concerned, for the whole of the revenue of the home.
    I agree that the time has come to revise that arrangement. And we do revise it very substantially by saying, on the one hand, that the idea that a married woman has no position, and nothing to recognise in this matter, must be put an end to, that she must have her rights here. We recognise it still further by saying that every exemption or abatement due to her income, as distinguished from her husband's income, should belong to her, be paid to her, and remain hers. But I submit that when these rearrangements are made—I do not call them concessions, because they seem to me to be thoroughly warranted by the facts of the case—unless this matter has been much more thoroughly thought out by some who criticise this Clause than I think is really the case, it is a little unreasonable to say, "It is quite simple; there is no difficulty but an obscurantist Government and a Chancellor of the Exchequer who talks about £2,000,000 being lost. Any honest, reasonable person would in a moment say that even if two persons are married they ought to

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    have each, separately, all the exemptions and abatements." The exemptions and abatements in the Income Tax code were fixed by Parliament on the basis that a husband and wife living together were for some purposes in a special position. It may be that that is a bad basis. If so, let us change the basis. But if you change the basis, you must also revise your system of abatements and exemptions.
    It is a complete confusion to suppose that there is anything in the Income Tax law of America to justify this criticism of our Clause. The Income Tax law of America, it is true, allows certain abatements in respect of the income of the home, but it allows it without the slightest reference to whether the income of the home is built up by a contribution from the wife and another from the husband, or whether the whole income of the home is due to the exertions or the investments of one party. It has absolutely nothing to do with the question who owns the money. Therefore I suggest that it is time that we read the Clause a second time. I am glad to think that some of the detailed points will come up for discussion on subsequent Amendments. With all sincerity I submit to the House that if this matter is going to be dealt with fairly, it ought not to be treated as a proposal which is intended to put off those who are asking for this reform and will concede nothing. It ought to be recognised as making a concession in two Departments which are of great importance; at the same time that the further concession which is urged should be recognised as one which prudent and careful legislators would need to have considered in connection with the whole scheme of Income Tax. I agree that it is desirable to carry this thing now, and not to wait until any Committee or Conference has reported. The hon. and learned Gentleman the Member for St. Pancras made a point with which I agree; by all means let ns carry it now, and let us remember if you are going to pull up the basis of a great deal of our Income Tax law, that there may be a great deal more that needs to be adjusted and varied than even this particular provision. For these reasons I invite the Committee to read this Clause a second time, and I trust that we shall now move to the discussion of some of the more detailed Amendments.
    Mr. WORTHINGTON EVANS: The right hon. and learned Gentleman gave
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    the House a case in which he said even if our arguments were accepted that the husband and wife ought to be treated as separate individuals for the purposes of the Income Tax, a grave injustice would be done to single people, who are now separately taxed. He took as his case a man with an earned income of £800 a year, who at present pays a tax of £30. The right hon. and learned Gentleman said, if you divide that £800 and make it £400 unearned income of the husband and £400 unearned income in the case of the wife, the total tax payable by them would only be £28; and he continued that that would be a grave injustice, because in respect of that unearned total income those concerned would be paying £2 less than the man who is paying upon the £800 earned income. But the right hon. and learned Gentleman forgot to remind the Committee that there is compensation in those cases in connection with the Death Duties. Let us continue his narrative where he left off, and see where the injustice really does exist. If there is an unearned income of £400 a year it presupposes a capital of something like £10,000, which belongs to the wife and £10,000 that belongs to the husband. Death Duties at the rate of 4 per cent. would be £400 by the wife and £400 also by the husband. If they were prudent people they would be insured for the purpose of paying these death Duties. To insure at, say, thirty or thirty-five, they would have to pay a premium of about 3 per cent., and 3 per cent. on £400 is £12, so that the actual tax that the husband and the wife would be paying would not be £28, but £28 plus £24 premium.
    We find that they will be paying in respect of their unearned income, to maintain the capital from which the unearned income is derived, the sum of £52 a year, compared with the £30 which is paid by the single individual in respect of earned income. That, after all, is a perfectly fair test, and a test which the Chancellor himself has been using in order to prove that there is no tax on marriage. My hon. and learned Friend who opened this Debate pointed out—and so many hon. Members were not present that I do not apologise for repeating it—that in. the case of a clerk with £180 per year before marriage he paid 15s. as Income Tax. On marriage he had his Income Tax not doubled, but multiplied by 12, and turned into £9 10s. That difference between 15s. and £9 10s. is a difference due solely from marriage.

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    If, instead of marrying, he had lived unmarried, that tax would not be payable at all. It is surely perfectly true to say that that is a tax due solely to marriage. The Attorney-General in his answer does not deal at all with that case, but he picks out a case of somebody else with £800, and I think very unsuccessfully, and tries to show that some imaginary grievance would arise if this were altered. The Chancellor of the Exchequer dealt with it in a different way. He said, we have compensated, because where people live together without marriage they are strangers in blood, and will have to pay heavy in Death Duties or 10 per cent. Legacy Duty. The Attorney-General refuses to consider Death Duties at all as compensation, although it is a good enough argument in the mouth of the Chancellor of the Exchequer in his endeavour to meet the case my hon. and learned Friend advanced. All the way there is this question of compensation by Death Duties. You do already assess the husband and wife for Death Duties. You make them each pay Death Duties in respect of their property, and if the husband passes on his property to the wife Estate Duty is payable, and if the wife passes on her property to the husband Estate Duty is payable both in respect to the original property and the property derived from the husband. So I think it can be shown that almost in every case—the case the Chancellor of the Exchequer gave and the case the Attorney-General gave—Death Duties when taken into account will be found to compensate for any apparent difference, and if that is so it is quite true to say this extra tax is a tax upon marriage which the proposals of the Government not only do not remove, but actually accentuate. It is accentuated by Sub-clause (4), which the Attorney-General dealt with. He seemed to think that my hon. Friends who have spoken were mistaken in their reading of this Clause, but he admitted what was given by Sub-clause (4) to the married woman was an option. They could either come within the provision of the new Clause, or else remain under the exemption under Section 5 of the Finance Act of 1897. And the Attorney-General admitted it would be better for them in a good many cases to come within Section 5 of the Act of 1897, and that they would be actually losing something by accepting the proposals the Government now offer as a solution of the grievances put before them.
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    It would be easy, I think, to make Section 5 of the Act of 1897 also apply to those who exercise the option to be separately assessed under that Act. The Attorney-General took one case only under the Act of 1897, namely, that the surplus of unearned income belonging to the wife would be treated as the husband's income, but while that is so there would be no difficulty in amending Section 5 of the Act of 1897, so as to allow the unearned income of the wife to be treated as her income, and to allow her to have the privileges now given under Section 5, to have separate assessment and separate abatement in respect of her earned income. She is entitled to that under Section 5, and why should she give up that if she comes under the new Clause the Government propose and which they say is a concession? I only intend to deal with one point of detail, and that is Sub-clause (3). The Attorney-General did not answer the case made out. I do not think he referred to it at all. Does he say the law is not being altered by Sub-clause (3)? The proposal amounts to this, that you can destrain upon the wife's goods for the Income Tax for which the husband has been separately assessed, and which he fails to pay. What possible justification can there be in seizing the wife's goods for Income Tax for a debt due to the Crown by the husband? The Attorney-General did not answer that. It is an alteration in the law at the present moment, because at present the law does not allow the wife's goods to be seized for a debt due to the Crown by her husband. If that is the law, why does the Government now wish to take the power to seize a woman's goods for her husband's debts? Do the Government really mean that? The Attorney-General did not deal with that point. If there is no opportunity on account of the Closure to move such an Amendment, will the Government move it and so save the married woman from a still further injustice which is going to be put upon her in the form of a concession?
    Mr. EVELYN CECIL: It appears to me that this Clause is very little more than an attempt to improve the Treasury machinery in respect of this Tax. It does not relieve married couples from any taxation, and we ought really to take a step forward. I suggest that we ought to have began to-night either by making some advance towards giving a special allowance or exemption to married persons of some 25 per cent. of the duty, or that we should

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    have made an exemption according to the number in the family. That would be better than the present Clause. The point which has not been sufficiently worked upon in the Debate is the fact that the Chancellor of the Exchequer in his speech has emphasised so emphatically that in this matter the whole idea of marriage is that the two persons are one and legally identical, and therefore you cannot separate their incomes for the purpose of relief, and therefore the right hon. Gentleman is obliged to continue the present system. I wish to call attention to a proposal I have on the Paper which it is not likely that I shall have an opportunity of moving. It provides that—
    "Notwithstanding the provisions of any Act to the contrary, no Estate or Succession Duty shall be chargeable on the transfer by death of property passing from husband to wife, or wife to husband."
    I submit that every single argument of which the Chancellor of the Exchequer has used to-night is an argument in favour of that Amendment. What I should like to know directly from him is whether in view of the arguments he has used he would be prepared to support an Amendment of that kind My Amendment assumes that for the purposes of Estate or Succession Duty husband and wife are one. The argument of the right hon. Gentleman has been that in this matter husband and wife are to be treated as one. Therefore, if it is right that in the matter of the Income Tax and Super-tax husband and wife should be treated as one, we ought to insist that in the Estate Duty and the Succession Duty also husband and wife should be treated as one. If the excuse of the Treasury is that there would be too great a loss, I do not think that is an adequate reason. We want to go upon a general principle, and we must choose which we are going upon. If they are to be counted as one, as the Chancellor of the Exchequer has argued to-night, my Amendment ought to be accepted, but if, on the other hand, we are going on the principle that they are not to be counted as one, then my Amendment ought not to be accepted, and the Chancellor of the Exchequer ought to make a real difference in distinguishing their separate incomes.
    Mr. LEIF JONES: The Attorney-General complained, not without some reason, that there had been no sufficient
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    expression of gratitude on the part of those supporting the women's movement for the Clause which the Government has introduced, and I do not want the Debate to close without expressing my gratitude, as one who has supported the claims of women, to the Government for having dealt with this question, and for having introduced this Clause. The Attorney-General misconceived the attitude of those supporting this movement It is not that we are not grateful to them for trying to deal with the question. We are grateful, but the Clause does not go far enough to satisfy the women or those representing the women in this House. If this were the final word of the Government on the question, I do not think that we could express satisfaction with it, but I regard it as the beginning of a great movement to treat women fairly under the Income Tax Acts, and for that reason I shall certainly give my vote for the Second Reading of the Clause. What is the object of the reforms for which we have asked? It is in order that justice may be done and justice will not be done to the incomes of women until they are treated exactly like the incomes of men and taxed in the same way. The Attorney-General took some hard cases. He took the case of a man with an earned income of £800 who pays £30 and compared it with two unearned incomes of £400 each, one belonging to a woman and the other to a man, and said that they would pay less than the man with the £800. He is there falling into the fallacy, from my point of view, of treating the second £800 a year as if it were £800 a year belonging to the man. He is reverting to the old position in order to compare them. We say that £400 belonging to the husband and £400 belonging to the wife is a different sort of income to £800 a year belonging to a man, and it ought to be taxed differently. They ought to be taxed as incomes, and not aggregated for the purposes of the Income Tax Acts. That is what is ultimately meant by every supporter of the hon. and learned Member for St. Pancras in this matter. I quite recognise that to enact at once that you should treat the incomes of the husband and the wife as if they were independent would create immense confusion in the coming year, and that it is quite impossible for him to deal with it this year. I also recognise that existing abatements are made on the basis of the theory that there would be this aggregation of income, and therefore I think the Government are perfectly right not to attempt at once to right the

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    whole grievance. I only want to-night to enter a sort of caveat that I cannot accept what is done to-night as a final settlement of the women's claim, but I regard it as an instalment which is most welcome, and I thank the Government for it.
    Mr. PRETYMAN: As the Second Reading has been very fully discussed, we do not propose to divide against it, especially in view of the statement of the Chancellor of the Exchequer that he is prepard to consider any Amendment which may be made to strengthen it in the direction of the three points which have been raised.
    Committee report Progress; to sit again to-morrow (Thursday).

PRIVATE BUSINESS.

  LOCAL GOVERNMENT PROVISIONAL ORDER (No. 3) BILL.—(WAKEFIELD.)
  Order for consideration, as amended, read.
  Motion made, and Question proposed, "That the Bill, as amended, be now considered."
  Mr. LANE-FOX: I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day three months."
  In making this Motion I wish it to be understood that it is not done out of my desire to prevent the ancient City of Wakefield realising its wishes, but because this is an absolute matter of life and death to the West Riding of Yorkshire and other industrial communities, which may be seriously affected by this if carried. If I do not argue the case on its merits, or go fully into the details, it is not because I have not full faith in these merits, but because I know that they have been already put before the House and considered in Committee, and because also I recognise that on the Third Reading one should deal rather with great principles. There are matters which a Committee is not so competent to deal with, and which the House may more effectually decide at this stage, and it is a matter of principle of this sort that I am asking this House to decide to-night.
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  The House will remember that on a previous occasion a Bill was brought before us containing three Orders, one for Cambridge, one for Luton, and one for Wakefield, all more or less of the same character. That Bill, after it had been passed by the Committee, was thrown out on Third Reading. The Government, by a method which has never been attempted before, have introduced this Bill, basing it on an old Provisional Order of over a year ago. It is not fair, and it is not true to say that this has been done because the case against Wakefield was not as strong as that against Cambridge or Luton. In the last Debate the Chairman of the Committee which sat upon the previous Bill spoke very strongly of the strength of the case against Wakefield. He said:—
  "The County Council of the West Riding have more serious grounds for complaint than the County Council either of Cambridgeshire or Bedfordshire. They are faced with a continuous increase in the number of county boroughs which will try to be created within their area. Therefore the position of the County Council of the West Riding would be more serious than that of the other two county councils which have been referred to."
  It is not fair in view of a statement of that sort, made by an hon. Gentleman most qualified to make it, to say that there is a less strong case against Wakefield than against the other two boroughs. If this Bill passes it will form a precedent which will be absolutely disastrous to county council government, not only in the West Riding, but in similar industrial areas which are also great communities and are faced with the problems of county government, although they are in actual rural areas. It will be a precedent for the formation of a string of other county boroughs which will absolutely dislocate county government in the West Riding and make it impossible for us to carry on the great schemes which have hitherto been successfully carried out. We shall be left a county of mere patches between a series of county boroughs, placed in various districts in the West Riding. Already Doncaster is waiting, and there are communities such as Harrogate, Keighley, and others who will all have this precedent in mind. The hon. Baronet, the Member for the Mansfield Division (Sir A. B. Markham), in the previous Debate, alluded to the county councils as being Tory in character. At any rate he will absolve the West Riding County Council of being that.
  Sir A. MARKHAM: It is rather worse than the others
  Mr. LANE-FOX: That shows that the hon. Baronet does not know them, because for many years I have been a solitary Tory struggling in an atmosphere of a different kind. We shall be left a series of patches with no possibility of a regular system of government. You may say the West Hiding is an unwieldy body. If you hold that view you could justify halving it or dividing it up, but the very worst thing you can do is to divide it up into a series of patches on no system, without any cohesion, and to ask us to govern an area in that way must lead to disaster. I quite understand that the Committee felt that they could not take the responsibility of breaking the long series of precedents which exists in these matters. Until the Cambridge case there was practically no precedent for throwing out a Bill based on a Provisional Order granted by the Local Government Board. Now, in the case of a rural area of that sort, a precedent has been established which has saved, I hope for all time, rural areas from not having their case properly considered, but as regards industrial or semi-industrial areas, such as this, a precedent has yet to be created, and that is the precedent I ask the House to create to-night, to secure that there shall be full consideration, and that any government shall not be dislocated and entirely destroyed until a proper inquiry has been held—I would suggest that the best inquiry possible would be one before a Joint Committee of the two Houses—or until the whole matter has been gone into to see what is to happen to our county government in future if this system of taking away large rateable areas and dislocating the government is to be persisted in. I realise that a Committee would not feel equal to breaking a precedent in this way, but that is a function which the House can carry out, and it is a function I ask it to carry out to-night. I have not gone into all the merits of the question as I think the House is familiar with them, but I hope the House will decide on the greater matter of principle because this is a matter of the most vital importance deeply affecting our local government from one end of the country to the other, and it is a matter which will have to be decided sooner or later, and I hope before it leads to more serious trouble than it has done hitherto, and that the House will come to a final decision upon it.
  Sir HASTINGS DUNCAN: I beg to second the Amendment.
  Sir STEPHEN COLLINS: I am not very much acquainted with the West Riding, but I was one of the Members who sat on this Committee for about a week, and we came to the unanimous conclusion that the powers should be granted to the City of Wakefield. It is a very simple matter, whether Wakefield shall govern itself or not. This has the unopposed support of the members of the town council, the chamber of commerce, and sixty-two of the principal members of the tradesmen's association of Wakefield. The city has a population of 60,000. The present state of things makes much overlapping in the work in connection with the city. Every detail of every kind of work that has to be carried on must be submitted to the county council—every improvement and piece of work however trivial. This applies alike to roads, bridges, street widenings and repairs of every kind. This state of things duplicates offices and officers. The city council has a fully qualified staff fully equipped to carry out every improvement efficiently and expeditiously if left to itself. I will give one or two illustrations of the absurdity of the present state of things. The city surveyor has to prepare all plans, estimates and quantities of work required. Everything must be submitted to the county council, even to road metalling and tar spraying, yet the city does the work. This applies even to opening a road for a sewer, for water, or for electrical works. Even in a case of flooding it took three weeks to get repairs executed, and the cost was only £40, because it had to be submitted to the county council. There was another similar case of three months' delay for a trifling repair at a cost of a few shillings. The council is impotent because it has to apply to the county council. I know nothing about the county council, no doubt it does quite good work, but is it to stand in the way of a city carrying out its own work, especially in little trifling matters of this kind?
  The surveyor's sanction must be obtained for everything, and all this, of course, causes inconvenience, irritation, delay, and extra cost to the ratepayers, and duplication of authorities, officials and administration. Why is all this opposition? Chiefly because the county council is afraid of losing power and prestige. That is the real cause. Where does the opposition come from? Only three came forward to oppose. There were two representatives of the county council. One was the respected chairman, another was the

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  clerk of the council, and the third opponent was a distinguished Member of this House, who, I believe, is chairman of the County Councils Association, and, of course, he is very jealous of the powers of all county councils. They said it was an attack upon county council government. I say it is nothing of the kind. It is a case of Wakefield standing up to have power to manage its affairs in its own way. The opponents endeavoured to show that education would suffer. I questioned them about that.—[Laughter]—I hope the House will pardon me if I refer to myself personally. We questioned them, and not a tittle of evidence was forthcoming to show that education would suffer. The opponents were asked to name other towns in the neighbourhood which had suffered after receiving powers similar to those which are asked in this case, and they could not bring any evidence whatever to show that any town had suffered. The county council will perhaps sustain a money loss, but the West Riding is a rich district. It has a growing population. It has new industries continually springing up, and the county council will soon be able to recoup itself for any little loss caused by giving these powers to Wakefield. The question is—shall this city govern itself? The time has come when it should be allowed to do so. Not one inhabitant of Wakefield could be found to come forward to oppose this proposal. I think that is one of the strongest arguments that could be urged in favour of giving Wakefield power to govern its own affairs.
  Sir RANDOLF BAKER: The hon. Member (Sir S. Collins) submitted an argument in support of the Bill purely in respect of the particular town concerned in this case. So far as the argument goes I have no doubt he is perfectly right, but the supporters of this proposal are asking the House to set up a precedent on the larger question until the question has been considered, as I think it must be some day, by a Royal Commission or some such body. It is absolutely necessary for the future of county government in this country that county councils should know what is likely to happen to them in future. A great many years ago a population limit of 50,000 was fixed as the number required by a borough which applied to be created a county borough. Since then the boroughs have grown, and they have tried to take the best of the rateable areas from the counties, and to
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  set up as county boroughs. The people of Wakefield hope to get their rates down The hon. Member said that the county area in this case had plenty of other places. That might matter much to a poor county. Wakefield tried to get this power last Session, and the House rejected the Bill on the ground that it would rob the county council. We then asked, and we ask now, that the Government shall inquire into the whole question, and that the House of Commons shall not merely on the recommendation of four hon. Members agree to the proposal in the Bill. I hope the House will not consider that that is a sufficient tribunal to decide questions of such great principle. The majority of county Members have no objection to Wakefield being made a county borough. All they ask is that it should be postponed until we have had a Commission to inquire into the whole subject and settle what should be the areas and the principles, adopted.
  Mr. MARSHALL: As representing the borough of Wakefield, I wish to say a few words in support of the Provisional Order. This matter has been considered by the House on a previous occasion and it was committed twice to a Select Committee, of the House. The result of prolonged inquiry by two Committees, one last year and one this year, is that in each case the Committee found unanimously in favour of the claims of Wakefield. That is a very important factor, especially as the Wakefield case presented in this House when it was linked with Cambridge and Luton has since been reconsidered, and in spite of all the opposition skilfully and carefully worked out with all the ability of the West Riding County Council the Select Committee decided unanimously in favour of the claims of Wakefield being met by this Order being passed. I submit that in these circumstances there is very strong reason why this House should not interfere with the findings of its own Committee, after a six days' hearing on this occasion, and a three days' hearing on the previous, occasion.
  The case put forward by the opponents of this Order is reduced to this, that there should be no more creations of county boroughs in any circumstances, because they lay down the principle once for all that there must be an inquiry into the whole system of county government before any other county borough can be created. That means at any rate in the case of the West Riding County

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  Council that a progressive self-contained able local authority shall be denied the right which ever since the passing of the Act of 1888 they have had granted to them, a right, when they have become sufficient in population and on the merits to make a claim to the House of Commons, to obtain the status of a county borough. That right has existed now for nearly thirty years, and we are asked to go back on the general principle that has existed so long and has been laid down in a special Act of Parliament. And if there is a case of any sort in regard to loss of rating the Devonshire Committee that was set up by general agreement provided for an equitable assessment of the loss to the county, and that loss is now made good by the Wakefield Corporation. They satisfied the West Riding County Council most clearly that they would honourably fulfil their undertaking to provide compensation for the financial loss to the West Riding. The county council had not opposed previously in anything like a serious way the creation of county boroughs, and certainly had not opposed it on the grounds alleged by the hon. Member for Barkston Ash. It did not oppose Dewsbury, Barnsley, and Rotherham when taken out of the county council area. It did not come to say that it would be impossible to carry on county government because the county would be a thing of shreds and patches. It acquiesced and agreed happily and amicably that those authorities should apply for these powers.
  Mr. LANE-FOX: The hon. Member must know quite well that at that time there was absolutely no precedent for any such Order being refused, and that opposition was hopeless.
  Mr. MARSHALL: I do not understand what that has to do with the case. If the case was one of hardship, I am perfectly certain that the hard-headed members of the county council of the West Riding, of whom the hon. Member was one at that time, would very quickly have raised a grievance and challenged the proposal quickly enough. But they knew perfectly well that they were not injured for the very reasons that they are not injured in this case, but adequate compensation was to be given to them. They were perfectly acquiescent in the case of those other boroughs. Why? For this reason that the West Riding County Council has over and over again complained of the
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  burdens that have been put upon it as being almost too great for them to bear. In a very recent speech the chairman of the county council admitted that the burdens had been piled upon the county council, and that it would not at all injure them to get rid of some of them. The fact of the matter is that the county council would be strengthened in its administration by the exclusion of some other boroughs as well as the borough of Wakefield on the same terms, and for the same reasons as Wakefield has asked it. It is not known, of course, universally in this House that the West Riding County Council is concerned with the government of a borough sixty miles away on the north-west border, and as far as the borders of Sheffield, thirty miles away, and another town thirty miles to the east—an area large enough for a Parliament.
  I am not quite sure whether the First Lord of the Admiralty did not put it forward a little while ago as being a fit subject for an experiment in the policy of Home Rule. The reason why the West Riding County Council ought not to oppose this application of Wakefield is this: My hon. Friend the Member for Kennington pointed out that they are duplicating services, are adding to the expense of administration, and creating difficulties in the way of delay. I do not for a moment urge that there is any great friction between those two bodies, but when we come to discuss this case, it is not the West Riding that is fighting Wakefield, it is the County Councils Association that is fighting the whole question of autonomy in the boroughs. I hope, however that the House will not depart from the practice so long established. I am not going into the merits of the case, but the county council upstairs abandoned point after point on their own initiative. This matter is of importance to Wakefield, which should have the right to govern her own affairs. I may state that when the Borough of Wakefield gave notice of this application there was no opposition raised in the county council, and no opposition at the inquiry, and it was with the full approval of the West Riding County Council that we came to this House. I hope that the House will not go back upon the precedents, and that they will support this Bill.
  Mr. TICKLER: I desire to give one or two reasons for supporting the grant of these powers to Wakefield. In the first place, I have the honour of representing

  2069
  a county borough, and know of some of the advantages which are obtained from the fact of it being a county borough. I also wish to associate myself with the hon. Member for Kennington (Sir S. Collins), when he told the House we sat for about a week and gave very careful attention to the matter, and were unanimous in our opinion that Wakefield had made out a good case. We also felt that the County Council of the West Riding were not likely to suffer by losing the rateable value of Wakefield. It has been stated that the case of Luton and Cambridge was rejected, and was similar. We did not think so, but that they were altogether different. In Luton and Cambridge you were taking away a big rateable value from a rural district while this is an industrial district. It was shown that in the course of two years or a little more the County Council of the West Riding would be in quite as good a position in rateable value to-day. The Committee therefore thought that the county council were not going to suffer in that way. We also felt that the Borough would not gain much in the way of rates, but would gain something in prestige. We had it shown that it was not likely that the rates would be reduced, and in fact I have not the least doubt, from the improvements contemplated, that the rates may possibly increase. One of the great things that weighed with us was that there was not a single councillor in Wakefield who had not brought this question before electors and they were in favour of it becoming a county borough. At the same time the county council could not find a single elector or county councillor to come from there to support their case. We thought therefore that Wakefield had made out a very good case, and recommended the House to support it.
  Sir RYLAND ADKINS: Mr. Speaker—[Interruption]—there is one custom of this House which I hope will be continued, and that is that when a Member has been attacked he should be allowed to reply, whatever the feeling of the House may be. It has been said by two hon. Members that the opposition to this Bill is entirely due to the County Councils Association. [Interruption.] I hope the courtesy of listening to Members who are attacked may be extended to me for two or three minutes. I desire to show why the Bill is now opposed. [Several HON. MEMBERS: "Divide, divide!"] There are real argu-
  2070
  ments, as I should be the first to allow, for the creation of county boroughs in various parts of England. But the creation of county boroughs if continued—[Several HON. MEMBERS: "Divide, divide!" and "What about Wakefield?"]—If you create Wakefield a county borough it would be very difficult, if you followed precedent, not to create in the West Riding alone, a considerable number of other county boroughs. If you go on making an indefinite number of county boroughs out of the administrative county you have the result that you have entirely altered the whole character of county government in that area. That may be a good or it may be a bad thing. What we say is, that where that result is certain to follow in one county, and in a similar way in other counties, the time has come for the House or for the Government to inquire into the general principle of local government in the counties. If this House or the Government come to the conclusion that county areas ought to be cut into indefinitely, then we know where we are. If they come to the conclusion that that is not intended that is another matter. All we ask is that the general principle should not be decided by constant individual precedents without regard to the general effect upon the country as a whole. Therefore whatever the pointed criticism that is addressed to us we shall go on pressing for a general inquiry into the matter. I can assure the House that until that inquiry is given there is bound to be constant controversy over particular cases, and the giving of that inquiry is the only way to the final solution of this problem in a way that is fair to every type of local government in every part of England and Wales.
  Lord A. THYNNE: I desire to ask one question and one question only of the President of the Local Government Board. At the time when the three Provisional Orders were considered by the House the President informed the House that there was a very strong case for Wakefield, although he did not consider that there was quite so strong a case for Luton and Cambridge. Hon. Members who think with me will certainly consider that the President of the Local Government Board is in honour bound to give a lead to the House—[HON. MEMBERS: "NO, no"]—in regard to the case of Wakefield which has been reintroduced to the House as the direct consequence of what the right hon. Gentleman said on that occasion.
  The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Herbert Samuel): Seeing the House is anxious to come to a decision I shall say no more except that for my part I shall certainly support the Motion.
  Question put, "That the word 'now' stand part of the Question."
  The House divided: Ayes, 142; Noes, 82.

  Division No. 174.]

  AYES.

  [11.45 p.m.

  Abraham, William (Dublin, Harbour)

  Hall, Frederick (Normanton)

  Pease, Herbert Pike (Darlington)

  Agg-Gardner, James Tynte

  Hancock, John George

  Pollard, Sir George H.

  Allen, Arthur A. (Dumbartonshire)

  Harvey, A. G. C. (Rochdale)

  Pratt, J. W.

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

  Harvey, T. E. (Leeds, West)

  Pringle, William M. R.

  Armitage, Robert

  Hayden, John Patrick

  Pryce-Jones, Colonel E.

  Banner, Sir John S. Harmood-

  Healy, Timothy Michael (Cork, N.E.)

  Radford, George Heynes

  Baring, Major Hon. Guy V. (Winchester)

  Higham, John Sharp

  Rea, Walter Russell (Scarborough)

  Barlow, Montague (Salford, South)

  Hogge, James Myles

  Reddy, Michael

  Barran, Rowland Hurst (Leeds, N.)

  Hope, John Deans (Haddington)

  Redmond, John E. (Waterford)

  Bigland, Alfred

  Hope, James Fitzalan (Sheffield)

  Redmond, William Archer (Tyrone, E.)

  Boland John Pius

  Hudson, Walter

  Robertson, John M. (Tyneside)

  Bowerman, Charles W.

  Hughes, Spencer Leigh

  Robinson, Sidney

  Boyle, Daniel (Mayo, North)

  Hunter, Sir Charles Rodk.

  Rowlands, James

  Brady, Patrick Joseph

  Jones, H. Haydn (Merioneth)

  Rowntree, Arnold

  Brunner, John F. L.

  Jones, J. (Carmarthen, East)

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

  Bull, Sir William James

  Jones, Leif (Notts, Rushcliffe)

  Samuel, J. (Stockton-on-Tees)

  Burns, Rt. Hon. John

  Jones, William (Carnarvonshire)

  Scott, A. MacCallum (Glas., Bridgeton)

  Butcher, John George

  Joyce, Michael

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

  Cecil, Evelyn (Aston Manor)

  Kelly, Edward

  Sheehy, Davia

  Chaloner, Colonel R. G. W.

  Kenyon, Barnet

  Smith, Albert (Lancs., Clitheroe)

  Chapple, Dr. William Allen

  Kilbride, Denis

  Smyth, Thomas F. (Leitrim, S.)

  Clancy, John Joseph

  Lambert, Richard (Wilts, Cricklade)

  Stanley, Hon. G. F. (Preston)

  Collins, Sir Stephen (Lambeth)

  Levy, Sir Maurice

  Sutherland, John E.

  Cooper, Sir Richard Ashmole

  Lewis, Rt. Hon. John Herbert

  Sutton, John E.

  Craig, Norman (Kent, Thanet)

  Lloyd, George Butler (Shrewsbury)

  Taylor, Thomas (Bolton)

  Crean, Eugene

  Low, Sir Frederick (Norwich)

  Thomas-Stanford, Charles

  Crichton-Stuart, Lord Ninian

  Lundon, Thomas

  Thorne, G. R. (Wolverhampton)

  Crumley, Patrick

  McGhee, Richard

  Thynne, Lord Alexander

  Cullinan, John

  Maclean, Donald

  Tickler, T. G.

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

  MacVeagh, Jeremiah

  Toulmin, Sir George

  Davies, M. Vaughan-(Cardiganshire)

  Markham, Sir Arthur Basil

  Tryon, Captain George Clement

  Dillon, John

  Meehan, Francis E. (Leitrim, N.)

  Walsh, Stephen (Lancs., Ince)

  Doris, William

  Meehan, Patrick J. (Queen's Co., Leix.)

  Watt, Henry A.

  Duffy, William J.

  Millar, James Duncan

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

  Duncan, C. (Barrow-in-Furness)

  Molloy, Michael

  White, J. Dundas (Glasgow, Tradeston)

  Esslemont, George Birnie

  Muldoon, John

  White, Patrick (Meath, North)

  Falconer, J.

  Neville, Reginald J. N.

  Whyte, Alexander F. (Perth)

  Ffrench, Peter

  Nolan, Joseph

  Wilkie, Alexander

  Fitzgibbon, John

  Nuttall, Harry

  Williams, Penry (Middlesbrough)

  Flannery, Sir J. Fortescue

  O'Brien, Patrick (Kilkenny)

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

  Gibbs, G. A.

  O'Donnell, Thomas

  Wilson, W. T. (Westhoughton)

  Gladstone, W. G. C.

  O'Dowd, John

  Winfrey, Sir Richard

  Granville, Harold James

  O'Kelly, Edward P. (Wicklow, W.)

  Wing, Thomas Edward

  Glazebrook, Captain Philip K.

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

  Wood, John (Stalybridge)

  Goldstone, Frank

  Outhwaite, R. L.

  Yeo, Alfred William

  Greenwood, Hamar (Sunderland)

  Paget, Almeric Hugh

  Griffith, Rt. Hon. Ellis Jones

  Parker, James (Halifax)

  TELLERS FOR THE AYES.—

  Gulland, John William

  Parry, Thomas H.

  Mr. Sherwell and Mr. Marshall.

  Hackett, John

  NOES.

  Adkins, Sir W. Ryland D.

  Clive, Captain Percy Archer

  Henderson, Major H. (Berks, Abingdon)

  Baird, John Lawrence

  Clough, William

  Hills, John Waller

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

  Coates, Major Sir Edward Feetham

  Hill-Wood, Samuel

  Baldwin, Stanley

  Cory, Sir Clifford John

  Hope, Major J. A. (Midlothian)

  Banbury, Sir Frederick George

  Craig, Herbert J. (Tynemouth)

  Horne, Edgar (Surrey, Guildford)

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

  Dalrymple, Viscount

  Hunt, Rowland

  Bathurst, Charles (Wilts, Wilton)

  Davies, David (Montgomery Co.)

  Jardine, Ernest (Somerset, East)

  Beach, Hon, Michael Hugh Hicks

  Davies, Timothy (Lincs., Louth)

  King, Joseph

  Bennett-Goldney, Francis

  Edwards, John Hugh (Glamorgan, Mid)

  Lyttelton, Hon. J. C.

  Black, Arthur W.

  Eyres-Monsell, Bolton M.

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

  Booth, Frederick Handel

  Fitzroy, Hon. Edward A

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

  Brace, William

  Gilmour, Captain John

  Mount, William Arthur

  Bridgeman, William Clive

  Goldsmith, Frank

  Murray, Captain Hon. Arthur C.

  Brocklehurst, William B.

  Grant. James Augustus

  Newton, Harry Kottingham

  Bryce, John Annan

  Gretton, John

  Nicholson, William G. (Petersfield)

  Campion, W. R.

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

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

  Cautley, Henry Strother

  Hamilton, C. G. C. (Ches., Altrincham)

  Pollock, Ernest Murray

  Cave, George

  Hardy, Rt. Hon. Laurence

  Pretyman, Ernest George

  Cecil, Lord R. (Herts, Hitchln)

  Helme, Sir Norval Watson

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

  Chaplin, Rt. Hon. Henry

  Helmsley, Viscount

  Ronaldshay, Earl of

  Royds, Edmund

  Warner, Sir Thomas Courtenay T.

  Willoughby, Major Hon. Claud

  Salter, Arthur Clavell

  Webb, H.

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

  Sanders, Robert Arthur

  Weigall, Captain A. G.

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

  Scott, Sir S. (Marylebone, West)

  Weston, Colonel J. W.

  Yate, Colonel Charles Edward

  Stanier, Beville

  Wheler, Granville C. H.

  Younger, Sir George

  Starkey, John Ralph

  White, Sir Luke (Yorks, E.R.)

  Talbot, Lord Edmund

  Whittaker, Rt. Hon. Sir Thomas P.

  TELLERS FOR THE NOES,—

  Walker, Colonel William Hall

  Williams, Aneurin (Durham, N.W.)

  Mr. Lone-Fox and Sir J. Hastings Duncan.

  Waring, Walter

  Main Question put, and agreed to.

  Bill, as amended, considered, read the third time, and passed.
  The remaining Orders were read and postponed.
  It being after half-past Eleven of the clock on Wednesday evening, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Twelve o'clock midnight.

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