Sitting of 21 July 1914

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

PRIVATE BUSINESS.
Whitwell and District Gas Bill [Lords],
To be read the third time To-morrow.
Liverpool United Gaslight Company Bill [Lords],
As amended, to be considered To-morrow.
Wesleyan and General Assurance Society Bill [Lords] (by Order),
Third Reading deferred till Friday.
Oxford and District Tramways Bill (by Order),
Third Reading deferred till To-morrow, at a quarter-past Eight of the clock.
Skegness Urban District Council Bill [Lords] (by Order),
Consideration, as amended, deferred till To-morrow.
North Eastern Railway Bill [Lords] (by Order),
Consideration, as amended, deferred till To-morrow.
Great Central Railway (Pension Fund) Bill [Lords] (by Order),
Second Reading deferred till To-morrow.
Great Northern Railway Bill [Lords] (by Order),
Order read for resuming adjourned debate on Amendment to the Question (30th June), "That the Bill be now read a second time."
Which Amendment was to leave out the word "now," and at the end of the Question to add the words "upon this day three months."—[Mr. Wardle.]
Question again proposed, "That the word 'now' stand part of the Question."
Mr. WARDLE: I desire, in withdrawing my Amendment, to make a short statement. It is true that the company have received a deputation, but the men have not received all the satisfaction which we think they ought to have. There are still
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one or two points outstanding, namely, the question of the annual general meeting of the members of the fund, and the question of a secret ballot. There is also dissatisfaction with regard to the representation which has been given. But as the company have made some advance on their previous position, and as at some future time there will be an opportunity of raising these questions, I desire to withdraw the Amendment.
Amendment, by leave, withdrawn.
Main Question again proposed.
Mr. GINNELL: I object.
Mr. SPEAKER: The objection does not hold good. The Bill stands by Order for to-day.
Question put, and agreed to.
Bill read a second time, and committed.
Mersey Docks and Harbour Board Bill [Lords] (by Order),
Second Reading deferred till To-morrow.
Local Government Provisional Order (No. 23) Bill,
Third Reading deferred till To-morrow.
Clyde Navigation Order Confirmation Bill,
Second Reading deferred till To-morrow.

BELGIAN NATIONALITY (MISCELLANEOUS, No. 5, 1914).
Copy presented of Dispatch from His Majesty's Minister at Brussels enclosing a Copy of the Belgian Law of 26th May, 1914, respecting Belgian Nationality [by Command]; to lie upon the Table.
BOARD OF EDUCATION.
Copy presented of Regulations under which Grants to Schools for Mothers in England and Wales will be made by the Board of Education during the year ending on the 31st March, 1915 [by Command]; to lie upon the Table.
GREENWICH HOSPITAL AND TRAVERS' FOUNDATION.
Copy presented of Statement of the estimated Income and Expenditure of Greenwich Hospital and Travers' Foundation for the year 1914–15 [by Act]; to lie upon the Table, and to be printed. [No. 372.]
ORAL ANSWERS TO QUESTIONS.

  Asia Minor.
  Mr. NOEL BUXTONasked the Secretary of State for Foreign Affairs, what information he can give as to the pillaging of the farm of His Majesty's Vice-Consul at Aivali by Turks; whether the Vice-Consul had warned His Majesty's Consul at Smyrna that an attack might be expected; what cause for the attack has been alleged by the Turkish Government; and what demand for reparation His Majesty's Government has made?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir E. GREY): I am expecting a full report on the matter. His Majesty's Consul-General in Smyrna has received assurances from the Vali that. Mr. Eliopoulo will be compensated for any loss incurred by him.
  Mr. NOEL BUXTONasked the Secretary of State for Foreign Affairs whether his attention has been called to the fact that between 31st May and 13th June Turkish bands attacked the Greek population of Phocea; that many were massacred; that some escaped on board an English steamer, while others took refuge in the house of a French archæologist, M. Sartiaux, and that old men and women were tortured by amputation; and whether His Majesty's Consul at Smyrna is assisting in the work of relief?
  Sir E. GREY: I learn from His Majesty's Consul-General at Smyrna that such an attack was made on the 12th ultimo, in circumstances of barbarity. Many refugees were saved through the protection afforded them by Monsieur Sartiaux and his companions, and others were towed over to Mitylene by an English launch. I have no information as to any special measures of relief.
  Mr. NOEL BUXTONasked the Secretary of State for Foreign Affairs whether, he will publish the reports of His Majesty's Consuls and also of the dragoman of His Majesty's Embassy at Constantinople on the recent atrocities committed against Greeks in Asia Minor; and, if not, whether he will state the reasons which militate against publication?
  Sir E. GREY: I am unwilling to publish such reports for very similar reasons to those I gave the hon. Member in my
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  reply of the 18th June respecting civil and religious liberty in the annexed territories. Recent occurrences in Asia Minor do not, I am glad to think, represent a normal state of affairs, and if the reports which deal with them were made public, I should, in justice, feel obliged to take a like course in regard to reports dealing with maltreatment of Moslems in the territories recently annexed from Turkey. I am doubtful whether any useful purpose would be served by giving official publicity to a state of affairs which is, I trust, temporary, and in regard to which it is impossible to strike a balance of culpability.
  Mr. EDMUND HARVEY: Would not the knowledge that reports of this kind were to be published act as a deterrent in future in all these cases? Will the right hon. Gentleman consider that point?
  Sir E. GREY: My impression is that at the present moment the net result of publishing these reports would be to give great offence to four or five different foreign States, and not do much good.

  Armenia.
  Mr. NOEL BUXTONasked the Secretary of State for Foreign Affairs, if he will give the location of the Consulates and Vice-Consulates of Great Britain, France, Germany, and Russia in the vila-yets affected by the reform scheme for Armenia?
  Sir E. GREY: The hon. Member will find lists of the Consular posts in question in the Almanack de Gotha, pp. 1183, 1184, and 1186, and further particulars as to His Majesty's Consular Representatives in the Foreign Office list. There are copies of both publications in the Library.

  Portuguese West Africa (Rev. J. S. Bowskill's Arrest).
  Mr. EDMUND HARVEYasked the Secretary of State for Foreign Affairs whether he has received the Report of Mr. Hill, the British Consul sent to make investigations at San Salvador, into the events connected with the arrest of Mr. Bowskill; and whether he will issue the Report as a White Paper at the earliest possible date?
  Sir E. GREY: The Report has been printed for consideration, and as soon as I have read it I will say whether it can be laid.

  Persia.
  Sir GEORGE SCOTT ROBERTSONasked the Secretary of State for Foreign Affairs whether he is able to explain how the authority of the Government of Persia can be maintained, especially in the South, while the Persian Treasury remains empty; whether he will say if the British and Russian Governments are prepared now to advance money to meet the pressing needs of the Persian Government; and, if so, on what security?
  Sir E. GREY: I would refer the hon. and gallant Member to my remarks on the subject of Persia on the 29th ultimo—to be found in column 113 of the Parliamentary Debates of that day. I cannot usefully add anything to them at this juncture. They state the extent to which His Majesty's Government propose to advance money.
  Sir G. SCOTT ROBERTSON: Is the right hon. Gentleman aware of the position on the Bagdad-Kermanshah road, where £120,000 worth of British goods are held up owing to the unrest in the country, while Russian goods from the North flow in uninterruptedly?
  Sir E. GREY: That is not in connection with my hon. Friend's question; but as a matter of fact, that particular point has been brought to my notice, and some days ago I made the facts known to the Russian Government. I pointed out that in the interests of the "open door" for trade the Russian Consul at Kermanshah ought to be instructed to give support to the Persian Governor-General in measures to keep the road open, and the Russian Government have promised to send such instructions.
  Sir G. SCOTT ROBERTSONasked the Secretary of State for Foreign Affairs, whether, in view of the fact that the Persian Treasury has stopped payment to all Persian officials as well as to the Swedish gendarmerie, he has taken measures to ensure the maintenance of order in the territories where the Anglo-Persia Oil Company hold concessions; and whether he has satisfied himself that the Bakhtiari chiefs and the sheikh of Mohammera can protect the company's works and pipe-line without the help of the Persian Government in the districts dominated by those chiefs?
  Sir E. GREY: His Majesty's Government are ready to advance funds for the payment
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  of the gendarmerie, which I trust will enable that force to maintain order in Fars and Kerman. In reply to the second part of the question, I see no reason to apprehend danger to the company's works.
  Sir G. SCOTT ROBERTSON: Supposing these wild tribes are ineffectual in maintaining the works of the company, is the only other resource to have troops from India?
  Sir E. GREY: I think it is impossible to discuss various hypothetical contingencies. I can only contemplae the most probable contingencies, and I would reply to my hon. Friend by saying that I think the most probable contingency is that, supposing the tribes in question feel that it is to their interest to keep order and see that the pipe-line is not interfered with, no measures on our part will be necessary.
  Sir G. SCOTT ROBERTSON: is my right hon. Friend aware of the agitation which has now started in the Russian Press against the Anglo-Persian oil arrangement altogether?
  Sir E. GREY: I dealt with that point expressly in the speech which I made a short time ago in the House. I can only say that the agitation in the Russian Press is not likely to have any influence whatever on the conduct of the tribesmen.
  Sir J. D. REES: Is there not every reason to believe that the tribes highly appreciate this industry, which will put so much money into their pockets?
  Sir E. GREY: I have already stated what I consider to be the most likely hypothesis, and if that should be so no measures will be necessary.
  Mr. MacCALLUM SCOTT: Do the Russian Government regard this contract as being in conformity with the Anglo-Russian Agreement with regard to Persia?
  Sir E. GREY: I must ask for notice of that. I have already answered one question very fully without notice, and I must ask for notice of further questions.
  Sir G. SCOTT ROBERTSONasked the Secretary of State for Foreign Affairs, whether he is in a position to report the result of his recent communications with the Russian Foreign Office upon the existing state of affairs in Persia, and upon matters which have lately arisen in connection with the Anglo-Russian Convention of 1907; and whether he will state the

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  latest date when Russia's determination to preserve the independence of Persia was officially reaffirmed by Russia?
  Sir E. GREY: I will give the present state of the communications about the collection of taxes in Persia in reply to the next question on the Paper. I cannot make any more definite statement of a general character than I have made previously on the Foreign Office Vote. The independence and integrity of Persia as explained by me on the Foreign Office Vote the other day has been on both sides the basis of all conversations, whether this year or previously, and the Russian Government have repeatedly disclaimed any intention of annexing any part of Persian territory.
  Mr. MORRELL: Can the right hon. Gentleman say how long these communications are likely to last, and whether he will be able to make any statement in regard to this matter before the end of this Session?
  Sir E. GREY: The communications, I think, are likely to last as long as Persia is in an unsettled state.
  Sir G. SCOTT ROBERTSONasked the Secretary of State for Foreign Affairs whether he has official information to the effect that Russia insists upon the supervision of taxation in the Northern Provinces of Persia by the Russian Consular authorities; whether Russia has decided that the revenues of Azerbaijan are to be paid into the Russian bank; and, if so, has he protested, or does he intend to protest, against either or both of those measures as an infringement of the Anglo-Persian Convention of 1907?
  Sir E. GREY: The question of the collection of taxes in Persia by Russian officials was brought by us to the notice of the Russian Government last month, and a reply has been received to the effect that the collection of taxes by Russian Consuls has occurred in the case of Russian subjects and Russian protected persons, and that these revenues have been paid into the Russian bank, but that an account is kept of all sums collected by Russian Consuls and nothing is taken from the Persian Treasury.
  Sir G. SCOTT ROBERTSON: Has the right hon. Gentleman any information as to the sum of £42,000, said to have been
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  impounded by the Russian bank, which was to pay the police and the gendarmerie?
  Sir E. GREY: I must ask my hon. Friend to give me notice of that question.
  Mr. PONSONBYasked whether any representations have yet been made to the Russian Government with regard to the collection and appropriation of taxes in Azerbaijan by Russian officials; and whether the financial administration of that province is now entirely in the hands of Russia?
  Sir E. GREY: I have repeatedly stated that this is one of the questions in connection with Persia that I have brought to the notice of the Russian Government; the extent to which financial administration in that province is in the hands of Russian officials will appear from my answer already given to question No. 9.
  Mr. PONSONBYasked whether any reply has been sent by His Majesty's Government or the Russian Government to the Memorandum handed to the British and Russian representative at Teheran by the Persian Government in June last?
  Sir E. GREY: I can only answer for the British Government. So far as concerns them the answer is in the negative. There is no object in our making a reply to the Persian Government on a Memorandum which, although a copy was communicated to His Majesty's Government, was addressed by them to the Russian Government.

  China (Standard Oil Company).
  Sir J. D. REESasked the Secretary of State for Foreign Affairs whether the Standard Oil Company, under its agreement with the Chinese Government, has a monopoly extending over all China for a year, or whether it can operate only in the province of Shansi?
  Sir E. GREY: By the terms of the agreement the Standard Oil Company have acquired certain rights in the provinces of Shensi and Chihli. The agreement contains no reference to the province of Shansi. It confers no monopoly over the whole of China, but it does contain a provision by which the Chinese Government is precluded from giving before February next any concession to other foreigners for petroleum bearing properties in China. This, of course, does not affect any prior concessions which may have been granted by the Chinese Government.

  Anglo-Portuguese Treaty.
  Mr. PONSONBYasked whether any progress has been made in the negotiations for the conclusion of an Anglo-Portuguese treaty of commerce?
  Sir E. GREY: His Majesty's Government have good reason to believe that these protracted negotiations have reached a final stage, and that they may soon be brought to a conclusion.

  INDIA.

    ARCHITECTURE.
    Mr. KINGasked the Under-Secretary of State for India whether he is aware that formerly the instruction in architectural design given in Indian engineering colleges was limited to copying diagrams of the classic orders of Europe, while Indian architecture was ignored entirely, and that this qualification in architecture was held to enable assistant engineers of district boards to design buildings for municipalities; and whether these conditions as to training and qualifications of engineers doing architectural work still prevail in any part of India?
    The UNDER-SECRETARY Of STATE for INDIA (Mr. C. Roberts): In the two engineering colleges where instruction in architectural design is given, namely, the Thomason College at Roorkee and the Sibpur College, it is not limited in the manner suggested. The Secretary of State has received from the Government of India some details as to the instruction actually given, and I shall be glad to show them to the hon. Member. I should add that assistant engineers of district boards are not ordinarily entrusted with the designs of buildings of any importance.

    SECRETARY OF STATE'S COUNCIL.
    Mr. KINGasked whether it is the intention of the Government to introduce a Bill into this House with the object of reforming the Secretary of State's Council; and, if so, whether the Bill will include the placing of the salaries of the Secretary and Under-Secretary of State for India on the Estimates which have to be annually voted by this House?
    Mr. ROBERTS: The answer is in the negative.
    Mr. KING: Will the suggestion in the latter part of the question be adequately considered by the Government as to the
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    placing of the salaries of the Secretary and Under-Secretary upon the Estimates?
    Mr. ROBERTS: That is a matter that would require legislation, which is not being considered.
    Mr. MORRELL: Are we to understand that the Secretary of State does not contemplate taking any action to meet the situation which has been created by the rejection of the Indian Council's Bill?
    Mr. ROBERTS: I do not think I said that; what I did say was, that the answer to the question was in the negative.

    SERVICE BOUNTY.
    Sir J. D. REESasked what has been the result of the offer of a bounty of 250 rupees a man to prolong his Colour service for two years?
    Mr. ROBERTS: I would refer the hon. Member to the reply given to the hon. Member for South Birmingham on the 16th instant.
    Sir J. D. REES: Is the hon. Gentleman conscious of the fact that that reply did not give any information, and, in consequence, I have put this question?
    Mr. ROBERTS: I think there is no real inconsistency between the two replies.

    POLICE RESPONSIBILITIES.
    Sir J. D. REESasked whether the Secretary of State is aware that the work of police officers in India has increased during the last ten years owing to the spread of sedition, which has added to their responsibilities; if so, what action he proposes to take; whether the Secretary of State is aware that, if no present action is taken in regard to their grievances and the recommendations of the Public Services Commission are to be awaited and considered by the Government of India and by himself, at least five years and probably more will elapse before anything can be done to remove such grievances; and will he call for an immediate report in view of the urgency of the matter?
    Mr. ROBERTS: There has no doubt been some increase in recent years in the special responsibilities of the Indian police, as in those of the Indian Civil Service. The Secretary of State is not prepared to act in advance of the recommendations of the Royal Commission on the Indian Public

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    Services, and anticipates that these will be considered and dealt with well before the date mentioned by the hon. Member.

    ENLISTMENT OF COOLIES.
    Sir J. D. REESasked when the Government of India proposes to pass into law the Bill to penalise the enlistment of coolies?
    Mr. ROBERTS: I presume that the hon. Member refers to a Bill which may be introduced in the Assam Legislative Council. The administrative expediency of its provisions is at present under the Secretary of State's consideration.

    PROGRESS OF EDUCATION.
    EARL of RONALDSHAYasked the Under-Secretary of State for India if he can give the figures showing the proportion of passes to candidates in the various university examinations, in continuation of the figures given in paragraph 98 of the Fifth Quinquennial Review of the Progress of Education in India [Cd. 4635]?
    Sir G. SCOTT ROBERTSON: Before the hon. Gentleman replies, may I ask how or why the Noble Lord has received in advance a copy of this Quinquennial Report which other Members of the House have not been able to get?
    Mr. ROBERTS: I think I can reply to that. I do not think the Noble Lord has received the Report; he has received the Fifth, not the Sixth. The Noble Lord will find a statistical statement on the subject in the Sixh Quinquennial Review of the Progress of Education in India, which will shortly be in the hands of Members.
    EARL of RONALDSHAY: If the Quinquennial Report has not yet been published, cannot the hon. Gentleman give me an answer to my question before it is published?
    Mr. ROBERTS: I can give the Noble Lord the figures, and shall be glad to do so, but they are not strictly in continuation of the figures in the last Report.

    STUDENTS IN ARTS COLLEGES.
    EARL of RONALDSHAYasked for the figures of the number of students in arts colleges in India; and how many of these are living in collegiate buildings?
    Mr. ROBERTS: The Noble Lord will find these figures in the Sixth Quinquennial Review of the Progress of Education in India, Supplemental Tables, Nos. 44 and 45. The numbers are 28,196 and 8,518 respectively.

  POST OFFICE.

    IMPERIAL WIRELESS CHAIN.
    Sir J. D. REESasked what has been the cause of the delay in acquiring sites in India for Imperial wireless stations?
    Mr. ROBERTS: The delay is due to the site originally selected at Bangalore having proved to be unsuitable owing to the decision to establish direct communication between India and Egypt instead of East Africa, to which reference was made in the reply given by the Postmaster-General on the 16th inst to a question by the hon. and gallant Member for Central Finsbury. Another site has been provisionally selected, and is at present under examination by experts representing the Government of India and the Marconi Company.

    WAGES AND CONDITIONS OF EMPLOYMENT (COMMITTEE).
    Mr. TICKLERasked the Postmaster-General whether, as the Report of the Norton Committee is referred to in paragraph 268 of the Holt Report, the whole of which is to be considered by the Special Committee appointed for that purpose, he will suspend further transfers of work from sorting clerks to postmen until the issue of the Report of that Committee?
    The ASSISTANT POSTMASTER-GENERAL (Captain Norton): My right hon. Friend had already decided that while maintaining the small number of transfers which had been made no new cases should be authorised.

  East St. Pancras (Representation).
  Mr. GWYNNEasked the Chancellor of the Exchequer whether the hon. Member for East St. Pancras has made application for the office of the Chiltern Hundreds?
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George): The answer is in the negative.
  Mr. GWYNNE: Will the right hon. Gentleman inquire as to whether the application has been lodged with the local Radical association?

  Death Duties.
  Mr. WATTasked the Chancellor of the Exchequer whether his attention has been called to the fact that his Department in Scotland charge, on the death of a husband, Death Duties on gifts made to a wife many years before the death of her husband, whereas in England they charge duty on such gifts made only within three years; is he aware that dissatisfaction exists in Scotland with this inequality; and will he see it remedied in this Budget?
  Mr. LLOYD GEORGE: I would point out to my hon. Friend that the law of Scotland gives a husband power to revoke at any time a donation made by him to his wife. In view of this power, the donation forms part of the property of which the husband is at the time of his death competent to dispose within the meaning of the Finance Act, 1894, and is thus chargeable with Estate Duty on his death. In England, Wales and Ireland a revocable donation would also be chargeable with Estate Duty on the death of the donor, and accordingly I see no reason for initiating legislation in the matter.
  Sir G. YOUNGER: Does the right hon. Gentleman mean to say that there is no possibility of giving a gift to a wife in Scotland without paying Death Duties on it; if so, ought that not to be altered very promptly?

  Small Holdings (Scotland).
  Mr. JAMES HOGGEasked the Secretary for Scotland (1) what compensation is being paid to Lady Cathcart in South Uist for the creation of small holdings on her estate; whether compensation is being paid because the geese shooting is the rarest and most attractive sport in the island; whether this is the same island from which the crofters were driven to America to make room for sheep; whether geese have now supplanted sheep; and whether the Board of Agriculture in these circumstances propose to disturb the geese by placing small holders upon the land; and (2) whether his attention has been called to the proposal to award Lady Gordon Cathcart £500 for loss through prospective increase in school rates owing to the possibility of additional school accommodation being required for the children of the occupants of small holdings newly created in South Uist; and whether he proposes to introduce legislation to provide a fund to relieve rate-
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  payers elsewhere of the same necessity, particularly as the birth rate in Scotland is on the increase?
  The SECRETARY FOR SCOTLAND (Mr. McKinnon Wood): In the case referred to the Arbiter has not yet issued his final award, but has issued his proposed findings. The total amount of compensation which he proposes to award to Lady Gordon Cathcart is £13,049. The rental of the two farms taken, exclusive of sporting rental, was £580. The total includes £400 in respect of seaware and tangle; £2,600 for damage to the geese and duck and other shootings; £1,000 for damage to fishings; £500 is awarded for "Loss through prospective serious increase in school rates owing to necessity for building additional school accommodation." The Board of Agriculture have represented that this latter is not competent, and have asked the Arbiter to state a special case for reference to the Court of Session. They have also taken exception to the amount awarded for the shootings and fishings. It appears from the Award that there will be no loss of annual revenue, but, on the contrary, after allowing interest on the sums to be paid for buildings, there will be a substantial margin, for which the Arbiter allows £1,274; but a sum of £4,523 is awarded for depreciation of selling value due to the creation of small holdings on the estate. This is in addition to the award for damage to sporting rights.
  Mr. HOGGE: Will the right hon. Gentleman use all his influence to get the Scottish Smallholders (Amendment) Bill put through so as to avoid these unnecessary payments?
  Mr. McKINNON WOOD: I have done and will continue to do so.
  Sir G. YOUNGER: Is the right hon. Gentleman aware that the statements in the question that the crofters were driven from this island is untrue; whether he does not know—everybody else does!—that these crofters were voluntarily offered concessions in Canada by Lady Cathcart, were financed by her, and succeeded and prospered there, and were very grateful for what she did, and that is a gross broach of the privileges of this House to put such a statement on paper?
  Mr. McKINNON WOOD: Those facts are not stated in the question, and I must have notice.
  Sir G. YOUNGER: Does it not state in the question that the crofters were driven out?
  Mr. HOGGE: May I ask whether Lady Cathcart also invited the geese?
  MARQUESS Of TULLIBARDINE: May I ask whether the scenes of the disturbances of small holders, mentioned by the hon. Member for East Edinburgh, are due to the same cause as those mentioned in the last sentences of the question?
  Mr. FREDERICK WHYTEasked the Secretary for Scotland whether the Board of Agriculture for Scotland has adopted plans for three standard types of cottage which are to be built by them upon small holdings; and, if so, whether No. 1, the smallest of these, consists of a large kitchen with a bed recess, a front room with a bed recess, a small back bedroom, and a scullery with pantry; whether this plan was submitted to him for approval before it was adopted by the Board; and whether he is satisfied that it carries out the requirements of modern sanitation and public health?
  Mr. McKINNON WOOD: The answer to the first part of the question is in the affirmative. The answer to the second part is that provision is made for a recess in the kitchen and also in the front room, but that these recesses may or may not be used for beds, and in any event are open to the ceiling and have satisfied the local authorities concerned. The cottage is designed for people of small means in country districts who presently live in dwellings which are inferior both in sanitation and accommodation. As to the third part of the question, the answer is in the negative, but I have no reason to think that these dwellings, which have satisfied the public health authority, fail to carry out the requirements referred to.
  Mr. WHYTE: Is it not intended that these recesses should be used as bedrooms in these cottages, and, if so, will these plans be referred for examination by somebody who will take the medical side of the question into account?
  Mr. McKINNON WOOD: They satisfied the public health by-laws and the public health authorities. I dare say they are intended for that purpose. I am inclined to agree with my hon. Friend it is not a good purpose, but they are not the old recesses that used to be called box-beds.
  Mr. WHYTE: Does my right hon. Friend agree with the suggestion in the question, and, if so, cannot he use his influence to see that those plans are altered so as to meet the highest requirements of modern science and not the older practice which prevailed in Scotland for many years?
  MARQUESS of TULLIBARDINE: Does the right hon. Gentleman not consider recesses for beds absolutely out of date, and will he ask the Local Government Board to see that there are new methods for new buildings?
  Mr. PIRIE: Would it not be to the public advantage if there was at the Local Government Board for Scotland a man who had been through a sanitary engineering and architectural course?
  Mr. McKINNON WOOD: We have, of course, officials who have the necessary technical experience. I would point out that these recesses are not the same as the old recesses to which my hon. Friend referred.

  NATIONAL INSURANCE ACT.

    APPROVED SOCIETIES (VALUATION).
    Mr. CLYNESasked the Chancellor of the Exchequer, respecting approved societies with less than 5,000 members, what is their position with regard to valuation in cases where they have been unable to join with other small societies to reach the number named in the National Insurance Act?
    Mr. WEDGWOOD BENN (Lord of the Treasury): I would refer my hon. Friend to the reply given on the 7th July to the hon. Member for North-West Manchester.

    MEDICAL ATTENDANCE.
    Mr. NIELDasked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, whether he is aware that Miss Ruby Holt, of 191, Church Gardens, Ealing, made and forwarded an application on 1st June last to make her own arrangements for medical attendance, which application was refused; whether he is aware that the patient has been attended by Dr. Bennett, of Ealing, who has been the medical attendant of every member of her family for many years past, and in particular has attended the applicant since her childhood; for what reason and under and in pursuance of what Regulation has Miss Holt's request been refused?
    Mr. BENN: The circumstances of the application are in substance as stated. As I have already said in a previous reply to the hon. Member, the discretion to allow such applications for special arrangements rests in each case with the insurance committee.
    Mr. NIELD: Does the hon. Member not think that in a case of this sort the application ought to be granted without question or discussion?
    Mr. BENN: It is not for me to express my opinion about an Act of Parliament.
    Mr. NIELD: Does not the Act of Parliament give a discretion to the committee?
    Mr. BENN: Yes, Sir.
    Mr. NIELD: Very well. If the discretion is with the committee, ought it not to be exercised in a case such as is raised in the question?
    Mr. BENN: I have no doubt the committee will act in accordance with the instructions given to the committee by the decision of this House.
    Mr. NIELDasked the hon. Member for St. George's-in-the-East whether he will state the reason why the Middlesex insurance committee has neglected to pay Dr. J. Chambré, of South Ealing, the agreed sum payable for his attendance upon twenty-nine insured persons, being members of the District Railway staff resident in Ealing in respect to the year 1913; whether such attendance was given in pursuance of an arrangement made between the committee and Dr. Chambré; and whether full particulars of the claim have been before the insurance committee for some months past?
    Mr. BENN: The insured persons in question had been permitted by the insurance committee to make their own arrangements with the doctor referred to, and, as the hon. Member has already been informed, the dividends payable out of the Special Arrangements Fund to persons making their own arrangements could not be calculated until the accounts of all such persons had been received.
    Mr. NIELD: Have the accounts been received for 1913?
    Mr. BENN: Yes, I have answered that question.
    Mr. NIELD: Then why are they not paid?

    BOARD OF TRADE INSPECTOR (DISPUTED STATEMENTS).
    Mr. GIBBSasked the President of the Board of Trade if, owing to the uncorroborated and disputed statements made by a Board of Trade inspector, the Bristol magistrates on 9th July last dismissed a summons taken out against an employer by the Board of Trade under Part II. of the National Insurance Act; and, if so, what steps are being taken to ascertain if this inspector gave false evidence?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson): I assume the hon. Member refers to the case of the Llewellin Machine Company, who were recently convicted and fined for failure to pay contributions under Part II. of the Act. The summons which had been taken out at the same time against the company for making false representations with a view to avoiding such payment was dismissed by the magistrates, with the following comment (as reported):—
    "With regard to the summons under Section 101, we do not think that the evidence of. Mr. Bayliss is corroborated sufficiently to find defendant guilty, seeing that the Act provides imprisonment in the first instance for this offence. Consequently, the magistrates must have corroborative evidence of the statement on which they are called upon to act."
    I am not aware that there is any ground for the suggestion that the inspecting officer in question gave false evidence.

    INSURANCE COMMISSION (IRELAND).
    Mr. CHARLES DUNCANasked the Financial Secretary to the Treasury the number of assistant clerks, new class, employed in the National Health Insurance Commission (Ireland), the number who entered the class by competitive examination and by promotion from un-established classes, respectively, together with the number promoted to the rank of supervising assistant clerks from both these classes?
    Mr. BENN: Forty-seven of the fifty-one officers in the class referred to at present employed by the Irish Insurance Commissioners, and three of the five who have been promoted to supervising posts, entered the class by competitive examination.

  Crown Lands, North Wales.
  Mr. ORMSBY-GOREasked the President of the Board of Agriculture whether he has received any resolutions

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  from the Carnarvonshire County Council dealing with the action of the Government as landlord of certain Crown lands in North Wales; what action he proposes to take; and whether the same Carnarvonshire County Council last autumn passed a resolution distraining for rent against two county council tenants on small holdings who were unable to pay up some small arrears without delay?
  The PRESIDENT of the BOARD of AGRICULTURE (Mr. Runciman): With regard to the first part of the question, a copy of a resolution of the Carnarvonshire County Council has been received at the Office of Woods, but I do not propose to take any action on it. I have no knowledge of the resolution referred to in the latter part of the question.

  Madryn Estate, Carnarvonshire (Small Holdings).
  Mr. ORMSBY-GOREasked the President of the Board of Agriculture whether the Carnarvonshire County Council purchased the Madryn estate for the creation of small holdings; whether the number of holdings on the Madryn estate has only increased from forty-two to forty-eight since the county council be came the landlord; and whether the rents were reduced in no single case, but were raised considerably in some cases?
  Mr. RUNCIMAN: The answer to the first part of the question is in the affirmative, and according to my information the answer to the second and third parts is in the negative. I expect to receive shortly a detailed report upon the small holdings on the Madryn estate, and I will then communicate further with the hon. Gentleman.

  Housing Bill.
  Sir JOHN SPEARasked the President of the Board of Agriculture if, under the Government Housing Bill, police con stables will be regarded as Government employés, and houses be built for them?
  Mr. RUNCIMAN: Police constables are not Government employés for the purposes of Clause 2 of the Bill, but there is no reason why they should not occupy houses provided under Clause 1 in agricultural districts.

  Crown Forests (Wood for Post Office Purposes).
  Mr. CHARLES DUNCANasked the President of the Board of Agriculture
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  whether his attention has been drawn to the Post Office statement that private enterprise in this country has failed to supply sufficient wood for Post Office purposes; whether he is aware that the Post Office said that the wood chiefly required by that Department is easily grown in the United Kingdom; and whether, in face of these facts, he is prepared to provide land and grow wood for Post Office purposes on State land?
  Mr. RUNCIMAN: The answer to the first and second parts of the question is in the affirmative. In the management of the Crown forests the requirements of the Post Office will be kept in view, and the Board will also take steps to call the attention of other owners of forests to the statement recently published on behalf of that Department.
  Mr. PRETYMAN: Can the right hon. Gentleman give any idea of how many years he thinks it will take to grow this wood?
  Mr. RUNCIMAN: That does not arise out of the question, but there is no reason why timber at present growing and matured should not be sold to the Post Office.

  Ocean Island.
  Mr. GINNELLasked the Secretary of State for the Colonies if he will say what is the official explanation of the fact that in Sir E. im Thurn's report on the maladministration of Ocean Island there is no evidence or assertion that evidence had been obtained or sought from Natives or from Europeans friendly to them or from any person but representatives of the Pacific Phosphate Company and the accused. Mr. Campbell; and, if any independent inquiry has been held into the complaints made by the islanders and on their behalf, will he give a reference to the result?
  The SECRETARY of STATE for the COLONIES (Mr. Harcourt): Sir E. im Thurn's report of 1906 did not relate in any way to the affairs of Ocean Island, or the Pacific Phosphate Company, but to alleged maladministration on other islands of the Gilbert and Ellice Islands Protectorate.
  Mr. GINNELLasked the Secretary of State for the Colonies whether the charges of maladministration of Ocean Island, which Sir E. im Thurn was sent to investigate, included numerous charges against. Mr. Cogswell of having flogged

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  named natives to the point of death; why neither of those natives nor the Europeans who reported the facts were examined; and whether he is aware that. Mr. Cogswell had previously been in the service of the Pacific Island Company?
  Mr. HARCOURT: I cannot find that any specific charges against. Mr. Cogswell were included amongst the matters referred to Sir E. im Thurn for inquiry. I do not know whether. Mr. Cogswell was employed by the Pacific Islands Company before he entered the service of the Gilbert and Ellice Islands Government in 1901. He retired from that service in 1910.
  Mr. GINNELL: Can the right hon. Gentleman say for what purposes if not for flogging the Colonial Office officials in Ocean Island keep in their equipment a cat-o'-nine-tails?
  Mr. GINNELLasked the Secretary of State for the Colonies if he will give the House the terms of the indenture under which native labourers work for the Pacific Phosphate Company on Ocean Island?
  Mr. HARCOURT: A copy of the present form of indenture will be placed in the Library of the House.
  Mr. GINNELLasked the Secretary of State for the Colonies if the concession of the monopoly of Guano phosphate on Ocean Island to the Pacific Phosphate Company was not obtained by misrepresentation and was fair to the islanders, will he say on what grounds the concession was revised and on what evidence or in formation other than that of the company the royalty was doubled?
  Mr. HARCOURT: I have nothing to add to the reply to the hon. Member's question of 7th July, in which I stated that the terms were revised in consequence of a report from the Assistant to the High Commissioner for the Western Pacific.

  Wireless Installation, St. Kilda.
  Mr. HOGGEasked the Secretary for Scotland whether the wireless installation at St. Kilda is out of use; whether the Postmaster-General is prepared to seek the authority of the Treasury for taking it over subject to a guarantee to cover the whole net cost for ten years; and whether there is any likelihood of the Board of Agriculture, in carrying out the work of the late Congested Districts Board, guaranteeing
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  this amount or, alternatively, the Highlands and Islands Medical Committee?
  Mr. McKINNON WOOD: I am informed by the Postmaster-General that the facts are as stated in the first two portions of the question. The Highlands and Islands Medical Service Board are maintaining a nurse in the island, and they do not consider that any further part of their funds should be applied towards the cost of the wireless installation. The Board of Agriculture are not prepared to give, the guarantee in question.
  Mr. HOGGE: Is it not the case that the Board of Agriculture are now continuing the work of the Congested Districts Board, and is it not the case that the Congested Districts Board gave advances for similar purposes, though not for wireless?
  Mr. McKINNON WOOD: Yes, for similar purposes, but not precisely on the same lines.

  Edinburgh Distress Committee.
  Mr. HOGGEasked the Secretary for Scotland whether he is prepared to intro duce legislation on the lines of the memorial sent to him by the Edinburgh distress committee?
  Mr. McKINNON WOOD: The memorial to which my hon. Friend refers raises wide and controversial issues, and I am not prepared to introduce legislation on the subject at present.
  Mr. HOGGE: Docs my right hon. Friend propose to get a Report from the Local Government Board?
  Mr. McKINNON WOOD: I do not see how that would help very much.

  Scottish Education Department.
  Mr. PIRIEasked the Secretary for Scotland, with reference to the memorial presented to him signed by the large majority of Scottish Members asking for the transference of the Scottish Education Department to Edinburgh, if it was openly admitted at the time that certain signatures were carried over from a former memorial; and if no exception to the importance of those signatures was made by him at the time the memorial was presented?
  Mr. McKINNON WOOD: It is undoubtedly the case that certain signatures appended to the first memorial and subsequently transferred to the second, were

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  afterwards repudiated by the Members concerned, but, as I have already stated in a previous answer, I think it is not necessary now to revive the controversy as to the precise number of Members supporting the proposal.
  Mr. PIRIE: Did it not contain the signatures of two of the right hon. Gentleman's colleagues—the hon. Member for Berwick-shire and one of the Scottish Whips?
  Mr. McKINNON WOOD: Some hon. Members said their signatures were appended without their authority.
  Mr. PIRIE: Is not the last answer one of those half truths which is worse than no truth?

  Scottish Bills.
  Mr. CHARLES PRICEasked the Lord Advocate when he intends to take the Second Reading of the following Scottish Bills: The Entails (Scotland) Bill, the Feudal Casualties (Scotland) Bill, and the Burgh Registers (Scotland) Bill; and if it is intended to pass these Bills in this Session of Parliament?
  The LORD ADVOCATE (Mr. Munro): As regards the first two of the Bills mentioned by my hon. Friend, I would refer him to the statement made by the Prime Minister on Friday last. As regards the third of these Bills, namely, the Burgh Registers (Scotland) Bill, it is not my intention to proceed with that measure this Session.

  Lord Advocate's Office (Royal Arms).
  Mr. HOGGEasked the Lord Advocate, whether his attention has been called to the irregular use of the Royal Arms by his office; whether such use is in contravention of the Royal Proclamation of 1801; and whether he proposes to continue the use of the Scottish quarterings?
  Mr. MUNRO: The answer to the first part of my hon. Friend's question is in the negative. The quarterings used on the notepaper in my office, in point of fact, follow the quarterings used on what is generally referred to a" the Scottish Great Seal. It has not hitherto been suggested that the die is in contravention of the Royal Proclamation, and I see no reason for the alteration suggested. I shall be glad, however, to consider any representation on the subject by my hon. Friend.
  Mr. HOGGE: Is it not a fact that quarterings follow those of the Great Seal?
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  Can my right hon. Friend suggest why the flag which is used in Scotland should not also follow the quarterings of the Great Seal?
  Mr. MUNRO: That is a very different question, and raises quite distinct issues from those raised in the question on the Paper, namely, whether the quarterings upon my note paper are in contravention of the Proclamation of 1801.

  Income Tax.
  Mr. F. HALLasked the Prime Minister when the Committee to in quire into the arrangements with regard to Income Tax will be appointed; if steps will be taken to expedite the investigations of the Committee so as to give effect to their recommendations with the least possible delay; and if the terms of reference to the Committee will be submitted to the House for confirmation?
  The PRIME MINISTER (Mr. Asquith): As regards the first part of the question, the matter is still under consideration, but there will be no avoidable delay. As regards the second part. I have no doubt that the investigations will be conducted as expeditiously as possible. I see no necessity for the submission of the terms of reference to the House; I have already indicated what their scope will be.
  Mr. HALL: Will the terms of reference be sufficiently broad to enable the Members of the Committee to consider all questions relevant to the Income Tax?
  The PRIME MINISTER: Certainly.

  Elementary School Teachers (Superannuation) Act, 1898.
  Mr. SANDYSasked the Prime Minister whether his attention has been called to the position of teachers who re tired under the Elementary School Teachers (Superannuation) Act, 1898, before 1st April, 1912; and whether, as it is stated that legislation would be required to deal with their case, it is pro posed to introduce a measure for this purpose?
  The PRIME MINISTER: The answer to the first part of the question is in the affirmative. With regard to the second part, I am not in a position to make any statement.
  Mr. SANDYS: Are we to understand that nothing can be done to deal with

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  these cases of hardship in spite of the fact that representations have been made from all sides of the House?
  The PRIME MINISTER: I am afraid nothing can be done this Session.

  Gold Coinage.
  Mr. BENTHAMasked the First Lord of the Treasury whether, in future, on the issue of all gold coinage he will cause the value to be placed on every coin?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): The suggestion of the hon. Member is one which has been discussed on many previous occasions, but it would appear that both the sovereign and the half-sovereign are so well known throughout the world as to render it unnecessary that their value should be specifically indicated on their face. It would be difficult to provide for any such indication without detriment to the artistic character of the existing designs.

  San Francisco Exhibition.
  Mr. PRETYMANasked the Prime Minister whether any fund is available out of which men of science invited to read papers or to take part in the discussions at the conferences in connection with the World's Exhibition at San Francisco, and who are unable to defray the entire expense of the journey, may receive some assistance; and whether assistance of this character is being given by foreign Governments?
  The PRIME MINISTER: No special fund is available for the purpose suggested by the hon. Member. As regards the last part of the question, I am not aware of any such assistance being given by foreign Governments. If conferences, to the expenses of which His Majesty's Government usually contribute, are held at San Francisco during the Exhibition, the usual assistance will be given.
  Mr. HOGGE: Will the Prime Minister say from what fund the £10,000 is being given to the Sir Ernest Shackleton Expedition?
  The PRIME MINISTER: That does not arise at all out of the question.

  Members of Parliament (Attendance).
  Mr. GWYNNEasked the First Lord of the Treasury whether, having
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  regard to the Act of 6 Henry VIII., c. 16, enacting that no Member of Parliament shall absent himself from attendance therein except he have licence of the Speaker and the Commons, and the same licence be entered on record in the Book of the Clerk of the Parliament appointed for the Commons House kept for that purpose and deprived of their wages, he proposes to take any steps to cause the law to be observed or to repeal the Act?
  The PRIME MINISTER: I am not aware that there is any precedent in recent years for the enforcement of the law referred to as regards attendance in the House of Commons. The matter does not appear to be one in which the Government are called upon to take any action.
  Mr. GWYNNE: Does the right hon. Gentleman realise that the circumstances are altered owing to payment of Members?
  The PRIME MINISTER: Members were paid then as they are now.
  Mr. KING: Is the right hon. Gentleman aware that the hon. Member for East-bourne was absent from 424 Divisions—
  Mr. SPEAKER: We cannot go into these statistics.
  Mr. GWYNNE: I beg to give notice that I shall raise this question on the Adjournment to-night.

  Local Government Board Vote.
  Mr. WILLIAM THORNEasked the Prime Minister whether he will give another opportunity for discussion of the Local Government Board Vote?
  The PRIME MINISTER: I am afraid there will not be another opportunity to consider this Vote owing to the number of Votes not yet discussed.
  Mr. W. THORNE: Is the Prime Minister aware that the last time the Vote was under consideration the hon. Member for Chatham (Mr. Hohler) made a very violent attack upon the finance of the Borough of West Ham, to which I should like to have an opportunity of replying?
  The PRIME MINISTER: The hon. Member will have an opportunity on the Appropriation Bill.

  BRITISH ARMY.

    FUSILIER REGIMENTS (COLOURS).
    Captain FABERasked the Secretary of State for War whether, seeing that two regiments have now been allowed to add to their Colours the name of a battle which took place 150 years ago, he can give any approximate date at which the Fusilier regiments will be allowed to add the name of the Relief of Mafeking to their Colours?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): The question of the "Relief of Mafeking" amongst the honorary distinctions to be awarded for the South African war was thoroughly considered at the time and the Army Council do not now see their way to reopen the matter.

    RECRUITS.
    Captain FABERasked the Secretary of State for War why, seeing that establishments of the Regular Army, Home and Colonial, in 1908–9 were 169,114, and for 1914–15 are 168,500, making only 873 fewer to-day than in 1908–9, it was lately laid down that our annual requirements for recruits are now 34,700 for the whole Army against 37,700 in 1907; and why we need 3,000 fewer recruits to-day than six years ago for practically identical establishments?
    Mr. TENNANT: I agree with the hon. and gallant Member that the establishments of 1907 and of to-day may be taken for the purposes of this comparison, as practically identical, but I must not be taken as endorsing the aggregates he gives for the years 1908–9 and 1914–15, which are fallacious, inasmuch as they exclude the Indian establishments, and they include officers. The difference between the figures 34,700 and 37,700 is to be accounted for by the improvement in waste in recent years, and by the alteration in terms of service in the direction of lengthening the term and thus reducing the number of recruits required
    Captain FABER: Would the right hon. Gentleman say what he means by waste?
    Mr. TENNANT: Yes; invaliding principally, and desertions.
    Captain FABER: Have desertions not increased to a great extent lately?
    Mr. TENNANT: No, Sir; not lately.

    QUEEN ALEXANDRA'S IMPERIAL MILITARY NURSING SERVICE.
    Dr. CHAPPLEasked whether there is an ample supply of applicants to fill staff nursing vacancies in Queen Alexandra's Imperial Military Nursing Service?
    Mr. TENNANT: Yes, Sir, the supply is ample.

    RIFLE AMMUNITION.
    Mr. F. HALLasked the Under-Secretary of State for War how many rounds of rifle ammunition per head are now available for use by the Regular Army, the Territorial Force, and the National Reserve?
    Mr. TENNANT: It is unusual and undesirable to publish information of this nature.
    Mr. HALL: Can the right hon. Gentleman give me any indication as to what ammunition is served out to members of the National Reserve?
    Mr. TENNANT: Yes, I can give those figures.
    Mr. HALL: Will the right hon. Gentleman give them to me?
    Mr. TENNANT: Certainly.

  ROYAL NAVY.

    ARMED MERCHANT VESSELS.
    Mr. KINGasked the First Lord of the Admiralty, if he will show that any other Power and, if so, what Power has adopted the policy of arming mercantile ships for use in the event of war?
    The CIVIL LORD of the ADMIRALTY (Mr. Lambert): I must refer my hon. Friend to the statement made by the First Lord on this subject when introducing the Navy Estimates on the 26th March, 1913.
    Mr. KINGasked the First Lord of the Admiralty whether his policy of arming merchant vessels for possible use in war time has been followed by any pre tests, official or otherwise, on the part of any other Powers?
    Mr. LAMBERT: Not so far as I am aware.
    Mr. KINGasked the President of the Board of Trade whether he has information to show that in the case of cargoes

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    carried in merchantmen armed by the British Admiralty higher or lower rates are required for insurance on cargoes carried in such armed merchantmen; and, if so, whether the higher or lower rates apply to ordinary or to war risks?
    Mr. J. M. ROBERTSON: I am informed that up to the present time there has been no difference between the insurance rates on cargoes carried in merchant vessels armed by the Admiralty and those on cargoes carried in unarmed vessels. It is impossible to say whether there would be any difference in war time in rates on armed and unarmed merchantmen, as the rates would be dependent on a number of conditions that cannot now be foreseen.

  Awards of British Courts.
  Mr. WATTasked when the Government propose to introduce the measure for rendering the awards of British Courts enforceable to all parts of the British Empire, based on the result of the inquiry made by the Colonial Office as to the views of the Colonial Governments on the subject?
  Mr. ROBERTSON: A draft Bill has been prepared, and it is proposed to send it to the Governments of the self-governing Dominions in order to elicit their views with regard to its provisions.
  Mr. WATTasked whether the resolutions passed at the recent Congress of International Chambers of Commerce, re commending action on the part of the French Government to convene an Inter national Diplomatic Congress to deal with the subject of the enforcement of awards of British Courts, has been considered by his Department; and, if so, with what result?
  Mr. ROBERTSON: I understand that the resolution to which my hon. Friend refers had in view the summoning by the executive of the International Congress of Chambers of Commerce of an assembly of business men and legal experts to prepare a draft Convention concerning arbitration in commercial cases which might afterwards form the subject of a Diplomatic Conference to be convened by the French Government. The next step, therefore, apparently rests with the committee of the Congress of Chambers of Commerce.

  Labour Exchanges.
  Mr. TYSON WILSONasked the President of the Board of Trade whether the rooms of Labour Exchanges are avail able for use by trades councils; and, if not, whether he will make arrangements for these bodies to hold their meetings at Labour Exchanges where there are suit able rooms?
  Mr. ROBERTSON: Under Regulation 8 (1) of the General Regulations for Labour Exchanges, accommodation within the premises of a Labour Exchange can be granted only for such purposes and on such terms and conditions as the Advisory Trade Committee of the district may approve. In some cases, but not in all, the Advisory Trade Committees concerned have approved of the Grant of accommodation to trades and labour councils. Under the Regulations the Board of Trade are bound by the decisions of the Advisory Committees in this matter.
  Mr. TYSON WILSON: May I ask if the Advisory Committees are aware that they have this power?
  Mr. ROBERTSON: Yes, they are aware of it.

  Motor Traction Traffic.
  Captain FABERasked the President of the Local Government Board if he will consider the advisability of compelling motor traction engines to carry reflecting glasses on the off-side, so that the men in charge may be able to see any traffic coming up behind which is desirous of passing; and whether his attention has been called to the nuisance caused by this obstruction of traffic, especially in country roads?
  The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Herbert Samuel): I have received a few representations on this subject, but I am advised that it is doubtful whether the advantage to be derived from the use of reflecting glasses on these vehicles would be such as to justify their compulsory requirement. The point, however, is one which will be referred for consideration to the Technical Committee on the law and the regulations relating to heavy motor cars and traction engines which is about to be appointed.
  Captain FABER: Does the right hon. Gentleman think that they are not much

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  use on account of the expense to the owner or because they would be of no practical value?
  Mr. HERBERT SAMUEL: The question is a very technical one, and I cannot very well answer that question.
  Mr. F. HALL: Will the right hon. Gentleman take into consideration the advisability of having some means of communication from the rear of these big trolleys to the man in front?
  Mr. SPEAKER: That does not arise out of the question.

  Land Purchase (Ireland).
  Mr. DORISasked the Financial Secretary to the Treasury if his attention has been called to the address of Lord Chief Baron Pallas to the grand jury at Mayo Assizes on the 16th instant, in which he said that while upwards of two-thirds of the county, in which land purchase was completed, was in a most satisfactory condition, a state of great unrest and agitation prevailed in the remainder of the county owing to delays in the purchase of congested estates, and that steps should be taken with the assistance of the Treasury to enable the Congested Districts Board to carry out their duties under the Land Acts, as otherwise they would never have peace in the county; has he received a copy of the resolution subsequently passed by the grand jury expressing concurrence with the Lord Chief Baron's remarks, stating that the delay in land purchase is due to the failure of the Treasury to provide the necessary funds, and earnestly requesting the Treasury to provide such funds; and whether the Treasury intend to comply with this request, so that the discontented people may no longer be deprived of the relief and benefits intended for them by the Land Act of 1909?
  Mr. DANIEL BOYLEasked the Chief Secretary for Ireland if his attention has been directed to the address of the Lord Chief Baron to the grand jury at the opening of the Mayo Assizes at Castlebar on the 15th instant, wherein his lordship, reviewing the condition of the county, stated that he was informed by the county inspector of police that, as regards two-thirds of its area, the county compared favourably with any other county in Ireland, but that, as regards less than one-third, there was considerable
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  unrest, due to the backward condition of land purchase in these parts; whether he is aware that his lordship said that these people see their neighbours in comparative plenty and pleasure, enjoying ownership, whilst they remained tenants in misery and poverty, and added that, so long as these contrasts continued, they would never have peace in the county; and whether, seeing that the grand jury subsequently by resolution unanimously endorsed the statement of his lordship and made representations to the Irish Government and to the Treasury on the subject, urging the completion of land purchase in the interests of peace and good relations between landowners and tenants, he will say what steps he proposes taking to have immediate effect given to these recommendations?
  Mr. DORISasked the Chief Secretary for Ireland if he has read a report of the address delivered by Lord Chief Baron Pallas to the grand jury at Mayo Assizes on the 15th instant, in which he said that unrest and agitation prevailed in about a third of the county owing to financial delays on the part of the Congested Districts Board in the purchase of congested estates and suggesting that, in the interest of the peace of the county, steps should be taken to enable the Congested Districts Board to carry out all their duties in reference to the tenants on such estates; has he received a copy of the resolution passed subsequently by the grand jury expressing concurrence with the Lord Chief Baron's remarks, stating that the delay in financing completed and pending sales is due to the failure of the Treasury to provide the funds required for land purchase, and earnestly requesting the Treasury to provide such funds so that sales may be completed; why the Treasury refuse to advance the funds necessary to complete sales under the Land Act of 1909; and what steps the Government propose to take in the matter?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell): My right hon. Friend has asked me to answer this question, and I will answer it with the similar questions, No. 79 and 88. I have seen the newspaper report referred to, and I have received a copy of the resolutions passed by the grand jury of county Mayo. The Congested Districts Board have definitely purchased and have concluded binding agreements for the purchase of 247 estates in Mayo. The area of these estates is 822,103 acres, and the purchase price

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  £3,218,280. It is obvious that in transactions of such magnitude and affecting such a large number of estates considerable time must be occupied in the necessary valuation surveys, negotiations, and the other proceedings inevitable in the transfer of ownership of land. The Board is making all possible exertions to carry out the purchase of estates in county Mayo, and the delay caused by legal difficulties and procedure, as well as by the necessary proceedings I have just referred to, is much greater than any delay occasioned by financial difficulties, which I hope may be surmounted. It is only fair to state that on no occasion whatever has the Treasury refused to issue stock necessary to complete sales under the Land Act of 1909.
  Mr. KILBRIDE: May I ask the right hon. Gentleman whether he has received any representations from the Mayo grand jury, as representing the landlords of the county of Mayo, that they are prepared to accept the principle of compulsion with regard to purchase and sale of estates in lieu of being paid in cash?
  Mr. BIRRELL: No, I have not received any such representations, but I have no doubt that they are quite willing to be paid in cash.
  Mr. MOORE: Will the right hon. Gentleman say whether something will be done for the loyal parts of the country in regard to land purchase?
  Mr. GINNELLasked the Chief Secretary for Ireland whether he still expects to get his Irish Land Bill passed this Session; if not, whether the obstacles he is unable to surmount are on the tenants' side or on that of the landlords; and what the intentions of the Government now are with regard to this problem, the urgency of which he has repeatedly acknowledged?
  Mr. BIRRELL: I regret that in the absence of any general agreement it has not been found possible to proceed with this Bill this Session. I am not prepared to say who is responsible for the fact that an agreement has not yet been arrived at, but I hope that an arrangement may be come to between the parties in time to enable the Bill to be reintroduced next Session.
  Mr. GINNELL: Cannot the right hon. Gentleman say with whom he was negotiating and whether the tenants or any one on their behalf interposed any obstacle whatever to the Bill?
  Mr. BIRRELL: No, Sir, I cannot. All I can say is that an agreement has not been arrived at.
  Mr. DORISasked whether the Congested Districts Board have made an offer for the purchase of the estate of Mr. Francis C. Garvey, Murrisk Abbey, county Mayo; and, if so, with what result?
  Mr. BIRRELL: The Congested Districts Board have made an offer for the purchase of the estate referred to which has not so far been accepted. Negotiations have been postponed pending settlement of questions raised by the Land Commission.
  Mr. DORISasked what steps the Congested Districts Board have taken to acquire the congested estate of Lord Vaux, in Mayo county?
  Mr. BIRRELL: The Congested Districts Board have had the estate referred to valued, and they have decided to make an offer for purchase which will be issued as soon as practicable.
  Mr. DORISasked what progress has been made by the Congested Districts Board in the proceedings or negotiations for purchase of the estate of. Mr. Patrick O'Dowd, J. P., in West Mayo?
  Mr. BIRRELL: The Congested Districts Board have had this estate valued, and they have decided to make an offer for purchase which will be issued as soon as practicable.
  Mr. DORISasked what progress had been made in the negotiations for purchase by the Congested Districts Board of the congested estates of Mrs. Pike and the trustees of the Achill Mission, in Achill, county Mayo?
  Mr. BIRRELL: The Congested Districts Board have decided to make offers for the purchase of the estates referred to, and they will be issued as soon as practicable.
  Mr. DORISasked whether Mrs. Agnes M'Donnell has accepted the offer of the Congested Districts Board for the purchase of her estate in Achill, county Mayo; and, if not, will the Board take immediate steps to acquire this congested estate compulsorily?
  Mr. BIRRELL: The Congested Districts Board have not yet issued an offer for the purchase of this property.

  Civil Service.
  Mr. F. HALLasked the Home Secretary whether Sir Charles Bruce addressed a petition to the Crown praying for relief from the cause of delay in submitting evidence on the security of tenure of Civil Servants to the Royal Commission; if so, when such petition was received and the terms thereof; by whom the matter was dealt with; and when a reply was sent thereto?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): Sir Charles Bruce, on the 8th of January last, forwarded to me a petition to His Majesty, but I do not find in it any reference to the submission of evidence to the Royal Commission on the Civil Service. The petition was received in the Home Office on the 10th of January, was submitted to the King, and was, on the 22nd of January, referred by His Majesty's command to the Board of Education to be dealt with. I understand from my right hon. Friend the President of the Board of Education that a reply was sent to Sir Charles Bruce on the 6th of March. In view of the answer given by my right hon. Friend yesterday to the hon. Member, I do not think it would be proper for me to state the contents of the petition.

  Suffragist Prisoner (Miss Grace Roe).
  Mr. GINNELLasked the Home Secretary whether Miss Grace Roe is the only suffrage prisoner who has been refused release on bail pending trial, forcibly fed prior to trial, and not released after the period of hunger strike after which other prisoners are released; and what the reasons are for this exceptional treatment of her?
  Mr. McKENNA: The answer is in the negative. There has been no exceptional treatment as suggested in the case of Miss Roe.
  Mr. GINNELL: May I ask if this young lady has been subjected to forcible feeding previous to trial?
  Mr. McKENNA: Yes, I stated as a fact that it is not exceptional treatment.

  Naturalisation Act.
  EARL of RONALDSHAYasked the Home Secretary if. Mr. Theodore Bayley, of 2b, Priory Pavement, Hornsey, has made an application for naturalisation;
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  whether Mr. Bayley has been refused the certificate of naturalisation; and, if so, for what reasons?
  Mr. McKENNA: I regret that I have felt it my duty to withhold a certificate of naturalisation from. Mr. Bayley, and I am afraid that I must decline in this, as in many other cases, to disclose the grounds of my decision. The Naturalisation Act expressly provides that the Secretary of State may, with or without assigning any reason, give or withhold a certificate as he thinks most conducive to the public good.

  Conveyance of Irish Live Stock.
  Mr. PATRICK WHITEasked the Vice-President o£ the Department of Agriculture (Ireland) the result of his communications with the Lancashire and Yorkshire Railway Company and the City of Dublin Steam Packet Company with regard to their refusal to issue through bookings of live stock from stations west of Drogheda; and whether he is aware that the London and North-Western Railway Company now issue through bookings?
  Mr. T. W. RUSSELL (Vice-President of the Department of Agriculture, Ireland): The Lancashire and Yorkshire Railway Company and the City of Dublin Steam Packet Company have not as yet been able to arrive at an arrangement regarding through bookings via Birkenhead, the question involved being one of adjustment of charges. The Department are glad to state that through bookings via Holyhead have been resumed by the London and North - Western Railway Company.

  GOVERNMENT OF IRELAND BILL.

    NATIONAL VOLUNTEERS.
    Mr. F. HALLasked the Chief Secretary for Ireland if his attention has been called to the proposal to be considered by the Kingstown Urban Council to submit a Bill to the Irish Parliament to be established under the Government of Ireland Bill to authorise, among other things, the erection of a public hall with power to lease the same to the National Volunters as a club, drill hall, and armoury; and if it woud be competent for the Irish Parliament to sanction such a scheme?
    Mr. BIRRELL: I have seen a newspaper report of a notice of motion by a member of the Kingstown Urban District Council

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    for the introduction of an omnibus Bill conferring some such powers as are referred to in the first part of the question As to the latter part of the question, would refer the hon. Member to paragraph 3 of Clause 2 of the Government of Ireland Bill.

  Manorhamilton District Council.
  Mr. FRANCIS MEEHANasked the Chief Secretary for Ireland whether the Manorhamilton District Council have had to appear by counsel in Court, at considerable expense, on two occasions in connection with an application in the exercise of their powers as a sanitary authority to abate a nuisance at Kiltyclogher which was dangerous to the public health; whether they were not only refused the costs of their appearance in the case, but actually threatened to be condemned in the costs of two appearances by counsel; and will he take steps to secure that they be paid the costs to which the council has been put?
  Mr. BIRRELL: It appears that the incident referred to in the question arose out of proceedings in the Land Judge's Court in connection with a question of contempt of Court on the part of the Manorhamilton Rural District Council. The matter is not one in which the Local Government Board can interfere.

  Royal Irish Constabulary.
  Mr. F. HALLasked the Chief Secretary for Ireland the numbers of chief and district constabulary inspectors respectively employed in county Car-low and Cork East, and the total number of stations in each of these areas; and can he explain why a county and two district inspectors are required in one case to look after sixteen stations, while in the other one county inspector controls over ninety stations?
  Mr. BIRRELL: In county Carlow there are one county inspector, two district inspectors, and there are sixteen stations. In Cork, East Riding, there are one county inspector, thirteen district inspectors, and there are ninety-one stations. The Constabulary Statutes provide for the appointment of one county inspector to each county in Ireland, with an extra county inspector for each of the counties Cork, Tipperary and Galway, where there are two ridings. As a county is a geographical unit, and also the unit for the purposes of local administration generally, it
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  has always been considered necessary that there should continue to be a county inspector in command of the police of each county, and that any change in this respect would require legislative authority.

  Housing (Dublin).
  Sir A. GRIFFITH-BOSCAWENasked the Chief Secretary for Ireland whether any of the reforms proposed by the Departmental Committee on Housing in Dublin have yet been carried out; if not, what steps he proposes to take to carry them out; and whether the three members of the Dublin City Council who received rebates in the rates in respect of property declared to be insanitary have refunded the amount of their rebates?
  Mr. BIRRELL: The matter is engaging the attention of the Government, but it will be impossible to introduce legislation on the subject during the present Session. The corporation have submitted several housing schemes under the existing Acts to the Local Government Board, which are now under investigation. The Board have no information as to the latter part of the question. Such refunds, if made by individual persons, would not come under the Board's notice until the auditor's report for the period covering them was submitted.
  Sir A. GRIFFITH-BOSCAWEN: Is the right hon. Gentleman aware that this report was published four months ago, and have no steps been taken yet in reference to it? Will the Board take steps to find out whether these refunds have been made, and whether rebates are still being made?
  Mr. BIRRELL: It is a matter for the auditors.
  Mr. MOORE: Will the right hon. Gentleman undertake that it will not be suppressed, as was done in the case of Sligo, where the Nationalists were not content with it?
  Mr. BRADY: Is it not a fact that the corporation of Dublin have done everything they can in the matter, having regard to their financial resources?

  St. Paul's Cray Labour Dispute (Fair-Wages Clause).
  Mr. ROWLANDS: In accordance with private notice, I wish to asked the Under-Secretary of State for India, in vie-w of the fact that a serious labour dispute is now

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  going on at the St. Paul's Cray Paper Mills, Kent, whether they have a Government contract from his Department; will the Fair-Wages Clause be included in the contract; and whether he is aware that complaints are being made that the Fair-Wages Clause is not being observed?
  Mr. C. ROBERTS: The answer to the first part of the hon. Member's question is in the affirmative; the Fair-Wages Clause is included in this as in other contracts made by this Office; a complaint has been received, and is now under investigation.

BUSINESS OF THE HOUSE.
Mr. BONAR LAW: I wish to ask the Prime Minister what business it is proposed to take after the Finance Bill tonight, and what will be the business for Friday?
The PRIME MINISTER: To-night we propose to take the Third Reading of the Criminal Justice Administration Bill, the Report and Third Reading of the Patents and Designs Bill, and the adjourned Debate on the Employment of Military in Cases of Disturbances. On Friday the business will be the Second Reading of the Housing Bill.
Mr. T. M. HEALY: As a great many changes have been made in the Criminal Justice Administration Bill, I think the House ought to be allowed to see them in print?
The PRIME MINISTER: I will ask my right hon. Friend as to that.

HEALTH RESORTS AND WATERING PLACES BILL.
Reported, with Amendments [Title amended], from Standing Committee A.
Report to lie upon the Table, and to be printed. [No. 373.]
Minutes of the Proceedings of the Standing Committee to be printed. [No. 373.]
Bill, as amended (in the Standing Committee), to be taken into consideration To-morrow, and to be printed. [Bill 335.]

SELECTION (STANDING COMMITTEES).
Sir Daniel Goddard reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Sir Walter Essex; and had appointed in substitution (in respect of the Places of Worship Enfranchisement Bill): Sir Joseph Compton-Rickett.
Sir Daniel Goddard further reported from the Committee; That they had discharged the following Members from Standing Committee A (in respect of the Hereditary Titles (Termination) Bill): Mr. Runciman and. Mr. Herbert Lewis; and had appointed in substitution (in respect of the said Bill): Mr. Secretary McKenna and Mr. Ellis Griffith.
Sir Daniel Goddard further reported from the Committee; That they had added to Standing Committee A the following Fifteen Members (in respect of the Hereditary Titles (Termination) Bill and in respect of the Trade Marks Bill): Mr. Butcher, Sir Hildred Garble, Mr. Carr-Gomm, Sir Thomas Esmonde, Mr. Gordon Harvey, Mr. Thomas Edmund Harvey, Sir Charles Henry, Mr. Jowett, Mr. Newman. Mr. Nuttall, Mr. Ponsonby, Sir John Randies, Mr. William Redmond, Major Stanley, and Mr. Stewart.
Sir Daniel Goddard further reported from the Committee; That they had discharged the following Members from Standing Committee A (in respect of the Trade Marks Bill): Mr. Runciman and Mr. Herbert Lewis; and had appointed in substitution (in respect of the said Bill): Mr. Burns and Mr. Robertson.
Sir Daniel Goddard further reported from the Committee; That they had discharged the following Members from Standing Committee A (in respect of the Hotels (Ireland) Bill): Mr. Attorney-
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General and Mr. Runciman; and had appointed in substitution (in respect of the said Bill): Mr. Birrell and Mr. Russell.
Sir Daniel Goddard further reported from the Committee; That they had added to Standing Committee A the following Fifteen Members (in respect of the Hotels (Ireland) Bill): Mr. Fetherstonhaugh, Mr. John Gordon, Mr. Horner, Mr. Leif Jones, Mr. Kerr-Smiley, Mr. Towyn Jones, Mr. Joyce, Major M'Calmont, Mr. Millar, Mr. Morison, Mr. O'Doherty, Mr. Parker, Mr. Thompson, Sir Thomas Whittaker, and Sir Harry Verney.
Sir Daniel Goddard further reported from the Committee; That they had discharged the following Member from Standing Committee B (in respect of the Places of Worship Enfranchisement Bill): Mr. Secretary McKenna; and had appointed in substitution (in respect of the said Bill): Mr. Attorney-General.
Reports to lie upon the Table.

ORDERS OF THE DAY.

  FINANCE BILL.
  REPORT.—[FIRST ALLOTTED DAY.]
  As amended, considered.
  [Mr. SPEAKER in the Chair.]

  FINANCE BILL.

    NEW CLAUSE.—(Reduction of Full Amount o Duty where the Margin Above the Limit of Value is Small.)
    (1) The amount of Estate Duty payable on an estate at the rate applicable thereto under the scale of rates of duty shall, where necessary, be reduced so as not to exceed the highest amount of duty which would be payable at the next lower rate with the addition of the amount by which the value of the estate, exceeds the value on which the highest amount of duty would be so payable at the lower rate.
    (2) Where the net value of the property real and personal in respect of which Estate Duty is payable on the death of the deceased, exclusive of property settled otherwise than by the will of the deceased, exceeds one thousand pounds, the amount of Legacy and Succession Duty payable in respect of the property shall not exceed the amount by which the net value of the property as estimated for the purpose of Estate Duty exceeds one thousand pounds.—[The Chancellor of the Exchequer.]
    Clause brought up, and read the first time.
    Motion made and Question, "That the Clause be read a second time" put, and agreed to.
    Clause added to the Bill.

    NEW CLAUSE.—(Charities.)
    The exemption from Income Tax granted by the Income Tax Acts to rents and profits of lands, tenements, hereditaments, or heritages belonging to any hospital, public school, or almshouse, or vested in trustees for charitable purposes, so far as the same are applied to charitable purposes, shall be extended to apply to any lands or property in the occupation of any charity.
    Clause brought up, and read the first time.
    Mr. G. LOCKER-LAMPSON: I beg to move the Second Reading of the first New Clause which stands in my name. I hope it will meet with sympathy, not only from the Government but from hon. Members in all parts of the House. The Clause is meant to cover charities that have been set up for the relief of poverty and have been established for other purposes of public good and public benefit. Under the Income Tax Act of 1842 certain exemptions of taxation are allowed in respect of rent and profits of land applied to charitable purposes. But the Section of the Act of 1842 dealing with this has been construed to mean that while property owned by a charity and let to a tenant, the rent being used for charitable purposes, is exempt from the tax, property in the occupation of the charity is not so exempt, unless those charities happen to be colleges, halls in universities, almshouses, literary institutions, and hospitals. Therefore in the case of a charity owning two properties, one in their occupation and the other let to a tenant, the one let to a tenant is exempt from the tax while the property in the actual occupation of the charity is not exempt. I do not see any sense in the distinction made between the two. If charities ought to be exempt in respect of property let, surely they ought equally to be exempt in respect of property which they actually own and occupy, and more so. I have got here, for instance, particulars of a hall in London carried on under a trust deed for the purposes of the very poor. It is admitted to be a charity under the Act. The hall
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    in which entertainments are held is, of course, in the occupation of the charity—that is to say, of the trustees, and no revenue is derived from it. Next door to it is a coffee tavern owned by the same charity and let to a firm of public caterers whose customers belong to a very poor class of people. The rent received is devoted to charitable purposes. The tax on the hall is £8 10s. The tax on the coffee tavern is a little over £19, but because the coffee tavern happens to be let by the charity the tax is recovered, whereas the hall, being in the occupation of the trustees, the tax cannot be recovered at all.
    I have one more case: it is a case of a denominational school and a denominational college, held by trustees under separate charitable trustees. Both are admitted by the Board of Inland Revenue to be charitable objects. The tax paid on the school is a little over £29; the tax paid on the college is a little over £19, together an amount exceeding £48 a year. But as the properties are in the occupation of trustees and do not happen to be let, the taxes cannot be recovered at all. On the other hand, both these trusts have incomes accruing from invested funds, from which the tax is deducted. Because it happens to be income from invested funds and not property in the occupation of the charity, the tax is repaid by the Board of Inland Revenue. It really seems to me—and I hope and believe hon. Members in all parts of the House will agree—that it is really a ridiculous position to make this distinction, and, in addition, there s no justification for making a distinction in the case of literary institutions, colleges, halls in universities, almshouses, and hospitals, and not applying the same principle to every charitable object which may do just as large an amount of public good. Take, for instance, the case of a charity the object of which is to befriend young men of the poorer class to look after them, to hold classes for their general advancement and to try and get them good situations. If a charity of this kind owns its own premises, it is taxed on the annual value of the property owned and occupied. But, on the other hand, take the case of a home founded for the relief of ladies in reduced circumstances, whose income is not more than a certain amount per year. If this charity owned the property as dwelling-houses, it would be exempted, on the ground that they happened to be

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    almshouses, under Section 61 of the Act of 1842. Again, take the case of a certain school founded with the object of benefiting certain poor classes, the fees being made up out of voluntary contributions. That, being a charitable school, would not be exempt under the 1842 Act, as would a charity which owned property which does happen to be a public school. In the case of a public school, under the Act of 1842, if it owns and occupies the property, it is exempt from the tax. I might go through other instances, but the same principle holds good all through. I may mention that among other institutions the Courts have held that the following are charitable purposes, namely, a society for the protection of children from cruelty, a fund to establish lectures against cruelty to animals, and an institution for saving the lives of shipwrecked mariners. In each of these cases, under the existing law, although the objects are charitable, they would not be exempt from the tax, and they would have to pay it supposing they occupied the property in the shape of offices or for any other purpose. Finally, it seems to me that the position of these charities is all the more anomalous when one looks at the way charities are treated under the Chancellor of the Exchequer's own Finance Act, 1909–10, in respect of Land Value Duties. Perhaps the House will allow me to quote four or five lines of that Act to show the way in which charities are treated in respect of the Land Value Duties. Section 37 provides that—
    "No Reversion Duty or Undeveloped Land Duty. … shall be charged in respect of land, or any interest in land, held by or on behalf of any governing body constituted for charitable purposes while the land is occupied and used by such a body for the purposes of that body."
    The Section goes on to define the term "governing body":—
    "The expression governing body constituted for charitable purposes' includes any person or body of persons who have the right of holding, or any power of government of, or management over, any property appropriated for charitable purposes."
    The Section goes on further to define "governing bodies." In view of that the House will see that this exemption applies to land in the case of the Land Duties
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    whether it is occupied or whether it is let by the charity, and the exemption not only applies to literary institutions, universities and almshouses, but to any person or body of persons who have any government of any property appropriated for charitable objects. As this was the Chancellor of the Exchequer's own provision in the Finance Act, 1909–10, it is quite clear that he agrees with the principle with regard to property occupied for charitable purposes. The new Clause merely asks that the treatment meted out to charities in respect of the Land Value Duties under the Finance Act, 1909–10, should also be meted out in equal measure to charities in respect of the Income Tax. I have given various instances to make the position clear as possible. The new Clause does not extend the term "charity" in any sort of way, but merely brings all objects of a charitable nature into the same line.
    Mr. MOUNT: I desire to second the new Clause, not only because I agree with the arguments of my hon. Friend on general grounds, but because I particularly wish to bring before the Chancellor of the Exchequer and the Law Officers of the Crown the case of residential halls and hostels belonging to our modern universities. My hon. Friend in moving the Clause has pointed out that there are special exemptions with regard to colleges and universities, but he has left me to point out that the exemption, so far as resident halls and hostels are concerned, is limited to the public buildings and offices belonging to the colleges and halls not occupied by any individual member thereof or by any person paying rent for the same. What is the result of that exemption? That while the universities and colleges are, so far as their endowments are concerned, exempt from Income Tax they are liable to the tax under Schedule A on the halls and hostels occupied by them. The Solicitor-General, no doubt, knows that in the case of Bangor University and Essex Hall that was the result of the judgment of the Court. They were held to come within the definition of charities under this exemption which my hon. Friend proposes to extend, but they are only exempt so far as concerns the rents and profits of their lands and hereditaments which are not occupied by them. That is an absolutely illogical position.
    4.0 P.M.
    I should like to put before the House a case which will make it quite clear, which

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    arises in the case of the University of Reading, of which I have an intimate knowledge. It is the case of Wantage Hall. That hall was built by the munificent generosity of Lady Wantage, and she also set aside a sum of money for its endowment. Out of the money it was proposed to spend upon building the hall there was a slight balance over, which she added to the purposes of the endowment. What is the result of the state of the law? The endowment fund of Wantage Hall is exempt from Income Tax, but Wantage Hall is assessed for its full value under Schedule A because it is occupied by the trustees of the charity, the Council of Reading University College. Supposing the Council of the College were to let the Hall and farm it out to any individual—a thing which to my mind would be disastrous to the discipline of the students there—no Income Tax would be paid upon it, because it would not be occupied by them themselves; yet because they are occupying it, and doing so in order that the best results may be obtained, Wantage Hall is at present liable to Income Tax. I only give the case of Wantage Hall as an example. It is symptomatic of others. In Reading University College we have three other halls. We are assessed for over £2,000 a year for all our halls. Anyone who knows anything about university management will understand that we have great difficulty in making two ends meet in regard to these halls. Taking them altogether, we run them at a loss, while we are liable to Income Tax upon all these halls. I only mention Reading, because it is a place I know personally, but there are other great universities which suffer in the same way—London, Leeds, Manchester, Sheffield, and the University of Wales at Aberystwyth. I wish the Chancellor of the Exchequer was in his place, so that I might appeal to him on the ground of the University of Wales. It is rather a curious position with regard to the University of Wales. They have two residential halls, one to hold 180 and the other to hold 30. They were assessed at £500 and £70 a year, and they have had to raise, in order to pay for these two halls, a loan of £20,000, and the interest on that is £800, and therefore that is set against the amount of £500 on which they are assessed. But supposing the time comes, as no doubt it may soon, when some generous donor in Wales gives a large sum towards paying off this debt on the University of Wales to enable this
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    hall to be free, the result will be that as soon as that debt is paid off that hall would at once become liable to Income Tax under Schedule A, and that again shows how illogical the present position is.
    It is not difficult to guess what is the reason how this position has grown up. It has grown up because in 1842 when the Income Tax Act was passed and when these exemptions were made there were only practically two Universities—Oxford and Cambridge, and it was then thought, possibly rightly, that it would be right to exempt only those public buildings which were not occupied by residents or by any of the members of the university. The others were, I suppose, to some extent a source of income. But that is all altered now these modern universities have grown up. You have them growing up in many of these towns, and during the last few years the residential system of these universities has been very largely developed, and though I should be out of order if I were to say anything to show how valuable that residential system is, I think I am entitled to recall to the mind of the House that that residential system has always met with approval from everyone who has considered at all the question of the true results which ought to be obtained from education at these universities. It is most essential that if students in these universities which are growing up all over the place now are to get good from the time they spend there, this residential system ought to be encouraged, and it is unfair that there should be any handicap whatever placed upon the setting up of these residential halls and hostels. I do not think the Chancellor of the Exchequer can make the excuse or give the reason which he is often able to give when appeals are made to him to accept new Clauses, that this new Clause at any rate is going to cost him a good deal of money. There are not a very large number of universities at present. They are growing in number, but there are not in them a large number of halls and hostels, though they are perhaps growing in number, too, but if they grow considerably more in number than they are at present I do not think there is any likelihood of their imposing a heavy charge upon the finances of this country or making a great claim upon the Chancellor of the Exchequer. It is because I think that this Clause, if it is added to the Bill, will relieve the difficulty under which universities are suffering that I beg to second it.
    The ATTORNEY-GENERAL (Sir John Simon): Everyone who has heard the speeches of the Mover and Seconder will agree that they have displayed great knowledge of this difficult subject, and have called attention to some undoubted anomalies in the present position of the law. I do not dispute that at all. The Income Tax law, as it exists at present, neither wholly exempts nor wholly taxes charities, and it is quite true that the line that is drawn is a line which is open to the criticism that it is not drawn in any very logical, or it may even be said in any very intelligible way. The matter stands, as it appears to me, very much as they have put it in the more general part of their speeches. There is no general exemption from the Income Tax law which attaches to properties belonging to charities, but there are certain cases where the exemption does operate. There may be said to be three classes of cases where the exemption occurs. There is the case where you are dealing with income from property that is held on trust for charitable purposes, so far as that income is used for charitable purposes, and that is the case which the hon. Member (Mr. G. Locker-Lampson) dealt with. There is, secondly, the case of certain specific kinds of charity—hospitals, public schools, almshouses, and so on—so far as the public buildings belonging to them are concerned, under certain conditions. There is a third case which is always, in practice, recognised, though I am not aware that you can find it very clearly laid down in the Income Tax law, and that is the case of property which is used wholly or mainly for religious purposes, of course religious purposes being a good deal narrower in what it covers than charitable purposes.
    Then, say these hon. Members, if you go as far as that why do you not go further, and the more so, if you have to admit, as I do admit, that the present position involves anomalies. I have to say that I am not at all certain that the exemptions which the present law gives, in the case of what are broadly called charities, may not be quite wide enough, and conceivably even too wide. I am not at all certain that if this general subject came under review it would be thought necessarily right to say, Here are certain exemptions existing under the present law. If we are going to be consistent and logical, we must carry these exemptions out the whole way, and exempt all charities of every sort and kind. It is a
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    very attractive thing to say so, and those who have these good causes particularly at heart are naturally anxious to urge it. But, after all, you have to face the fact that the more you create exceptions and exemptions for a particular class of case the more heavily has this tax got to fall upon the rest of the community, and the word "charity," though it is a word, I hope, which not only covers a multitude of sins, but easily inflames humane feeling in the heart of everyone, is an exceedingly wide word, and includes a number of things which certainly a considerable portion of the community does not necessarily approve of at all. It really is a large question whether, on the whole, it would be right to apply the doctrine of charity, as it is understood in the Chancery Court, and say that any undertaking or any fund which can bring itself within that conception is to find itself exempted from the Income Tax law. I am not prepared to say so, and therefore, while the two hon. Members who have spoken have undoubtedly made a very good case when they urge that there are anomalies, some of them rather remarkable, as between the case that is taken and the case that is left, I am not at all convinced that the proper way in which to deal with that would be, by one fell swoop, to include every single charity of every sort or kind within the four corners of the exemption.
    Mr. G. LOCKER-LAMPSON: Under the Act of 1910, dealing with the Land Duties, the Commissioners said what is a charity and what is not.
    Sir J. SIMON: I am sure the hon. Member does not really mean that he proposes to confer upon the Executive in this country the power at their free-will and pleasure to pick and choose as to what institution is to be favoured with exemption and which is not.
    Mr. G. LOCKER-LAMPSON: They have it under the Act of 1910.
    Sir J. SIMON: Does the hon. Member really suggest that that should be done here? I have often heard of attacks delivered from the other side of the House, and have always felt some sympathy with them so long as they had some foundation, against the danger of a Department or the Executive letting one man off and hitting another. But here the hon. Member now explains that after all this exemption will not be very serious because it will always be open to the Commissioners to say,

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    "We have had enough of this and this particular charity we do not propose to exempt." If that is the proposal I am more opposed to it than ever. I thought the proposal, at any rate, had this advantage, that it was logical, that it proceeded on principle, and that the principle was that wherever I find an institution which the law regards as a charity—it may be educational, or religious, or humane—the Income Tax ought not to touch that institution at all. If the hon. Member says that, he has the full advantage of a man who has put forward a consistent proposal and he has this further advantage, chat the present law is not very consistent and contains undoubted anomalies; but I have to answer him by saying that we are not convinced that if the thing came to be investigated, as it would have to be, in a great deal of detail and from many points of view, all good judges will agree that charities should be universally exempt, and in these circumstances I feel that I have the more reason to resist the Amendment. The hon. Member (Mr. Mount) hoped he was not going to be told that this was going to cost a lot of money. If this was not going to cost money to someone, would anyone agitate for a new Clause to be passed? It is just because it is going to relieve someone from payment, and consequently to throw that burden on someone else, that it is worth while moving such a Clause. I do not know how much it would involve in loss of revenue, and am quite willing to believe that the amount is not anything like as large as the sort of figure which has been mentioned in connection with some other proposals for exemption.
    It is perfectly obvious that no one would propose the Clause if it was not, because there were certain persons who wish to escape a tax which at present they have to pay, and just in proportion as they escape such a tax there is either a loss to the revenue or an increased burden thrown on other members of the community. I do not want, in dealing with a whole series of Clauses, to say every time that that would be a very proper matter to be discussed before the inquiry as to the Income Tax law which the Prime Minister has referred to. I quite understand that hon. Members who move new Clauses are not likely to be content with that answer, especially if it is repeated again and again. But if there ever was an example of a department of Income Tax law which would have to be examined in that sort of way in order that we may
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    really see what cases would be covered by the change and how the change ought to be framed, surely it is a proposal of this sort, which turns on the whole law of Income Tax in relation to charities. Therefore, I am sorry that we cannot accept this proposal. I desire, as far as I may, to keep my mind open to the merits of the proposal that there should be an extension. I do not say there should not be, but I am quite satisfied that any change which takes place cannot take place simply as the result of moving that what now applies to some charities shall apply to all without knowing what it means, but will have to be dealt with as the result of a far more detailed investigation than that, and I should have thought it was a very suitable subject for the investigation into the Income Tax law which we are promised. For these reasons, though we all very greatly admire the skill and knowledge which the hon. Member has shown, I do not find it possible to agree to accept the Clause.
    Mr. PRETYMAN: I congratulate the right hon. Gentleman upon the extraordinary skill he has shown in avoiding the point of the Amendment. He has the reputation of being a very clever advocate, and I suppose he finds it successful to glide over the real difficulty and to make a very admirable general statement upon a principle on which I think people on both sides of the House will agree, but which is not the proposal of the Amendment. All that this Amendment proposes is to do as to Income Tax exactly what the Government themselves carried out as to other taxes under the Act of 1910. My hon. Friend, in moving the Amendment, understated his case. All that the Amendment does is to say that property which belongs to a charity, and which is let, shall be exempt from Income Tax, and that the same exemption shall apply in the case of property which the charity itself occupies. The Attorney-General treats the proposal as though it were a wide general exemption of all charities in every case.
    Sir J. SIMON: Will the hon. and gallant Gentleman give an example of a charity which, under this Clause, will not be exempted?
    Mr. PRETYMAN: If that is so, and if this covers all the ground, then I think the Attorney-General is ever so much more wrong than I thought he was in dealing with the question as one of great magnitude. The Attorney-General treats it as

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    a question of great magnitude, but it is simply a question of extending to property occupied by a charity the same law which applies to property owned and let by a charity. That is the whole point, and I think the Attorney-General is not justified in dealing with it on general grounds. He never referred once to the point which was raised except by paying a eulogy to the general line of the argument of my hon. Friends and praising the style of their speeches. He dealt in general terms with large exemptions which would have to be given to other forms of charity. I should have thought more of his speech if the same point had not been dealt with in relation to the Land Duties which were imposed under the Budget of 1909. What was the course taken by the Government? It was the exact opposite to what is taken under the Income Tax Acts I do not know whether the Attorney-General has Clause 37 of the Act of 1910 in his mind, but if not, and if he looks at the Clause, he will see that it exempts from the Land Value Duties—Reversion Duty and Undeveloped Land Duty—all property owned by charities, and which is occupied by them, but it does not exempt property which is let. Evidently the principle in their minds is that property which is owned and occupied by a charity is more deserving of relief than property which is owned and let. All that my hon. Friend asks is that property which is occupied shall not be given differential treatment as compared with property which is let, but that it shall have exactly the same exemption. The Attorney-General has not dealt with that point at all. He has passed the whole thing over on general grounds and given a general answer. We can only come to one conclusion. We think we have grave cause of complaint that the Chancellor of the Exchequer is not present to-day. The Chancellor of the Exchequer has restricted the time available for discussion.
    Mr. BOOTH: The Members of your own Front Bench are not present.
    Mr. PRETYMAN: We are not responsible for the Finance Bill. If the Attorney-General cannot answer the arguments of one man, what is the use of more Members being here? The Chancellor of the Exchequer is not only responsible for the Finance Bill, but he is responsible for the Closure under which we are discussing it. He has restricted the time available for
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    debate to a very few hours, and in these few hours we should have some opportunity of making a case for changes in the law. He alone has the power to hear the arguments and to give a reply. The Attorney-General has no authority—
    Sir J. SIMON: With great respect, I have the Chancellor of the Exchequer's authority.
    Mr. PRETYMAN: To concede any of these Amendments? It is a large order for the Chancellor of the Exchequer to pass his authority over to another Member of the Government to concede Amendments on finance of the highest importance before he has even heard the arguments upon them. The way this House is treated, and the way one Minister shuffles responsibility from one to another has become very extraordinary. We do not know where we are. One thing we know is that we can never pin the Government to anything. We might as well be dealing with eels of a very slippery kind. I think it would be more proper and respectful to the House if the Chancellor of the Exchequer were present, and I see no reason why he should not be here. Even with all our respect for the Attorney-General, who is very competent to deal with public business, I say that the Chancellor of the Exchequer has no right to transfer such a grave responsibility in regard to Amendments on the Finance Bill, to absent himself from the House, and to leave the right hon. and learned Gentleman to exercise his discretion. If it were not that we are working under the gag Closure, which makes it ever so much worse, we should be entitled under the ordinary rules to move the adjournment of the Debate in order that the Chancellor of the. Exchequer might be present, and I should certainly take that course if it were possible to do so. We are prevented from doing that by this Closure, and therefore that imposes, to my mind, the duty upon the Chancellor of the Exchequer of being here. The House is unable to defend itself in the ordinary way owing to the manner in which the Government are tampering with the procedure of this House for their own benefit. They are taking advantage of that tampering with the rules of the House in order, for their own present convenience, to absent themselves from the Debate. It is a perfect scandal. It is perfectly useless to attempt to debate this question. First of all, time is taken from us, and then in the little

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    time that is given to us the whole thing is treated with contempt, and the Government think that it is not worth while for them to answer arguments advanced on this side of the House on these financial matters. It is a perfect farce that we should be here wasting our time discussing these matters, and I hardly know what course to advise my hon. Friend to take.
    Mr. BOOTH: I think Members of the Government are not present on the Front Bench so often as they ought to be, and yesterday I gave expression to my views on that subject. To-day I am sure the hon. and gallant Gentleman (Mr. Prety-man) has no case whatever. His first complaint was that the Attorney-General is too clever, and that his arguments are so piercing and powerful as to convince the House. A few minutes later he complains that the arguments advanced on the other side are treated with contempt.
    Mr. PRETYMAN: The House is treated with contempt.
    Mr. BOOTH: Both statements cannot be correct. I, myself, would like to see a, better attendance on both Front Benches. I submit in all seriousness that the Attorney-General, who is a Cabinet Minister, is of sufficient rank to meet the hon. and gallant Gentleman himself on any question. Those complaints are very much resented on this side of the House. [Laughter.] Certainly, hon. Members opposite think they may indulge in gibes as to the absence of the Chancellor of the Exchequer, but the hon. and gallant Gentleman knows very well that at the present time there are matters of vital concern engaging the attention of the right hon. Gentleman. What is the complaint in regard to this Amendment? He complains that it is treated with contempt. Nothing of the kind! If there had not been a serious answer given by the Attorney-General, there would have been no need for a speaker on the Front Bench to reply. It is because the Attorney-General answered the arguments advanced by the Mover and Seconder of the Amendment that the hon. and gallant Gentleman rose. The Mover admitted in the course of his speech that there was a power vested in certain Commissioners to exempt certain charities from taxation. The point was a very proper one to take, but I think the hon. and learned Gentleman met that argument. If you are going to exempt these charities simply out of sympathy with the objects of the charities,
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    are you going to exempt a Mormon charity—a charity in favour of the Latter Day Saints? If you pick and choose, we shall be in confusion about all kinds of religious charities. Suppose the case of a charity which is left for illegitimate children of a certain type—
    Mr. MOUNT: May I point out—
    Mr. BOOTH: I do not want any corrections until a little later on. I am in the middle of my point and I wish to be allowed to state it.
    Mr. MOUNT: You are going to extend the exemption to any charity now exempted only in respect of the property it occupies.
    Mr. BOOTH: I am dealing, not with what is intended, but with what the Clause will do. Hon. Members opposite are appealing to the House for sympathy for charities. I want the House to see that there are many things called charities in the legal sense which may be something very different. There was a charity left for the benefit of illegitimate children; that is a very good object, but it did not occur to the founder of the charity that it might lead to many couples hesitating about getting married, so that the children born might get the advantage of the charity. As the result of their experience, the trustees of the charity had to come to Parliament to get an alteration made. I remember that Booth the elder and Booth the younger left property for charitable purposes, having in mind a small area in the borough of Salford. That property became very valuable, and the consequence was that large funds were available for the poor within the area. The poor of Salford drifted into that particular area, and instead of blessing the area in which they were born, those who were born there cursed it. The representatives of that charity had to come here in order to get power to divert the charity to another purpose. The hon. Gentleman opposite proposes to introduce a dangerous doctrine, namely, that State officials should be able to pick and choose the charities which are and the charities which are not to be exempt. I am not in favour of giving these increased powers to State officials. I am grieved to see a Conservative Member getting up and proposing that. What would be the result of a large increase of their powers to exempt people from taxation? I do not say that is the dominating point of the Amendment, but a

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    principle in the new Clause is that State officials should be able to pick and choose the charities they would exempt. Some officials may have leanings one way and others may have leanings in other directions, and I think a sufficient case has been made out for rejecting the Clause.
    Sir HENRY CRAIK: The hon. Member seems to think that it is a sufficient argument against the proposal in the new Clause to assert that there may be charities which are not worth considering, and that the ultimate effect of the proposal might not be altogether of advantage, and that for that reason the whole exemption of charities should be struck out. If that was not his argument, I do not know what it was. He cited a certain case in which the charity was given to nourish illegitimate children, in which it was found that the effect was to some extent not what was desired. But would he have allowed these children meanwhile to starve? Does he think that the charity was altogether "wrong in procuring for these poor creatures the advantages of education, and so on? The Attorney-General's speech had all the appearance of presenting a skilful argument, which he, as a lawyer, knows very well how to do, but he really brought forward not one single valid argument in the course of his speech. He first said, "We cannot do this, because if you exempt charities you must put this upon somebody else." If that be so, then we must not discuss any change in the incidence of taxation at all. Was there ever a more misleading and unsubstantial argument against an Amendment proposed with such solid reasons? Another argument which he used is, "Charity is not well defined. We, as lawyers, have attempted to do the best we can, but it is not properly defined, and therefore we cannot give this exemption." He forgets that the same argument applied to his own Chancellor of the Exchequer, whose full power of discretion he tells us he now wields. It applies to Section 37 of the Finance Act of 1910, which the Chancellor of the Exchequer adopted himself. If there was no possibility of defining what charity was, why did he put in Section 37? And why did he give expression to the definition of charity if it is so vague and so impossible of definition that, as we are told by his leading lawyer, it would be useless to try to define it? My hon. Friend suggested means by which charity might be defined, and pointed out that the local
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    Income Tax Commissioners had that power given to them. The right hon. and learned Gentleman says that it is a very dangerous thing to suggest. But they have it now. When that was pointed out he simply evaded the point, but he did not give an answer.
    The fact is that you cannot take these quibbles as to the difficulty of defining charity, or the still vaguer argument that if you take taxation off charity you must put it on the shoulders of somebody else. You must look on this on broad public grounds, and this is what the Amendment moved by my hon. Friend does. If you take away what a man gives for public purposes, you are simply discouraging the extension of these charities. Can there be anything more absurd than to say that when a man leaves his money for the public benefaction of a locality, then because he saves the State a certain amount by means of his charity, either in the form of poor rate or otherwise, therefore: you are to take vengeance on him and punish him by taking some of that which he has left for charitable purposes? Already the general principle is conceded that charities should be exempt. We are now making only this very clear, and I would have thought self-evident demand, that if you exempt that income which a charity draws from lands or tenements which it does not occupy itself, it should still more be exempt if it is under the necessity of using these tenements for the immediate purposes of the charity. I have known many cases in my own experience where this differentiation does exist, and where, if you are obliged to occupy certain premises instead of using the income for the purposes of the charity, you immediately find yourself under a heavy burden of taxation. I may take the case of Westminster School, of the governing body of which I am a member. We hold a number of houses round about the neighbourhood. So long as we have these houses we can draw the income, and they are exempt, though they are part of the endowment. But if we are obliged to use one of these houses for the immediate purposes of the school, we are then brought under heavy taxation, and obliged to diminish the value of the charity. That is a sound argument, and requires some answer more than the mere statement by the right hon. Gentleman that other people will suffer if you take this off, and that charity is very difficult to define, and that if we open the door too

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    widely we do not know where it will end. That is an argument which would make any rectification of injustice in the incidence of taxation absolutely hopeless. We put forward what we say as a sound argument in the public interest, and we ask the right hon. Gentleman, or some of his colleagues at least, to give us an answer to those arguments before setting aside our demand.
    Sir F. BANBURY: I should like to have heard some financial argument, which the House has not heard, upon this Amendment of my hon. Friend. Suppose that the arguments of my hon. Friends are right, and that the Clause is passed, what effect would that have upon the revenue? That is very important, because I believe that we are supposed to be discussing finance, and the representatives of finance on the Government Bench are two extremely able lawyers. When we want a legal question decided, they are always away in other places, and when we want a financial authority we cannot get him. I now see the Secretary to the Treasury, but he was absent when I began speaking.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu)indicated dissent.
    Sir F. BANBURY: I do think, at any rate, especially when we are debating under a Guillotine Resolution, that we should have the presence of the Chancellor of the Exchequer. It is all very well to say that he is engaged in other things. My hon. Friend is engaged in other things, but he is able to be present, and I do not see why the Chancellor of the Exchequer cannot be here too. There is no obligation to put this business down for this particular day. We cannot get more than two days, and it might easily be put down for a day on which the Chancellor of the Exchequer can attend. If we were not working under the guillotine I should certainly move the adjournment of the Debate. The hon. Member opposite for the last two or three days has taken a very sound view of these questions. I do not know whether the sound view which he took yesterday led him into collision with a certain officer in the Lobby. But it is merely sound common sense to say that when we have a financial question like this to deal with we should be able to hear the Chancellor of the Exchequer, and not be put into the hands of two lawyers.
    Mr. ROBERT PEARCE: There seems to have been a great deal of laborious trifling over this subject. The Amendment is a very reasonable one from the point of view which has been explained in the reference which was made to Westminster School. But the whole case is very clearly put that certain charities are not exempt because they are occupied for the purposes of the charity. Some Gentlemen who support that view have done so simply by abusing the absent Chancellor of the Exchequer for not being here. That is hardly relevant. I listened with a great deal of interest to what the Attorney-General had to say, but he did not seem to come to grips with it, and the reason seems to me to be because he is bound to continue the exemption of charities from Income Tax. That is part of the scheme of our finance, and he is obliged to find some other reason for this than the real reason. A very admirable summary of all the discussions which took place on this subject were contained in a letter written to the "Times" about twenty years ago, in which were pointed out the efforts which the late Mr. Gladstone made in this House to get this exemption of charities from Income Tax repealed. In Mr. Gladstone's time it was a very small matter. The income of the charities was not very large. But now they have grown so greatly that the question has come to be a very important one. The only effect of this particular Amendment would be to extend the mischief which already exists. In Mr. Gladstone's time the income of the charities amounted to £2,000,000 per year. Now the income amounts to £11,000,000 or £12,000,000 per year, which is exempt altogether from Income Tax.
    It is a most unreasonable distribution of the national burden that all that public property should not pay Income Tax in the ordinary course. There is no kind of argument in it, except that sentimentalism which says that the income of these charities should be allowed to do some good to the community at the expense of the national revenue. The largest charities would be the most benefited by the exemption. Take the case of the Westminster School. Why should it be exempt from Income Tax on its foundation income? It should not be exempt. The property itself should pay. And the same principle should apply to the whole £11,000,000 income of charity property. I could give a vast number of instances to show that these exemptions from Income Tax are pure

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    folly and have no financial reason in them whatever. In regard to the Income Tax, every parcel of income in the country ought to pay its regular share towards the general expenses of the State. If you want to benefit these charities in any way, it would be for Parliament to do something in their behalf, though I should say that it is an unwarrantable proposition for this House to make any Grants. Another reason why exemption should be done away with is that the State has to pay the expenses of the Charity Commissioners for keeping these properties in order. We spend £40,000 a year, or more, for looking after those charities, which are exempt from Income Tax.
    Mr. SPEAKER: I think the hon. Member is going beyond the Clause under discussion.
    Mr. R. PEARCE: I have already stated my reasons for opposing this Amendment, and I shall not pursue the subject further.
    Mr. CHAMBERLAIN: My hon. Friend and the hon. Gentleman who has just sat down have both addressed their remarks—or, at any rate, some of their remarks—rather pointedly to me. I wish to be absolved from the obligation of advising what course should be taken as regards this Bill; I am not in charge of the Bill; I am not responsible for the finance of the country, and it does not fall to me to take note of the observations and suggestions which hon. Members offer—nor, indeed, unless I should feel inclined to make observations on their points of view, is it part of my duty to give guidance to the Committee. I do venture to join in the protest which has already been made by hon. Friends of mine against the growing practice of the Chancellor of the Exchequer to absent himself from the House during discussions on the Budget. Putting myself out of the question, I venture to say that of all the predecessors of the Chancellor of the Exchequer whom I have known, none spent so small a proportion as he of the time occupied by the Budget on that Bench listening to the discussion. The House will recall the fact that in speaking of the growing impotence of this House, of its lessened power to exert authority, or to make its will effective, my right hon. Friend the senior Member for the City of London (Mr. Balfour) adduced, as one of the reasons, the practice of Ministers—I am
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    now speaking of Ministers specially responsible for Bills—not themselves to be present during the discussion. I do not wish to say anything discourteous of the right hon. and learned Gentleman opposite or of the Financial Secretary to the Treasury. I held the latter position myself under Sir Michael Hicks-Beach. I know what I did. I sat beside Sir Michael Hicks-Beach during the whole discussion except at such times as he had to withdraw to receive deputations, or confer with his officers, or during the short interval in which he was necessarily absent for his dinner. Except for those brief intervals, it was the uniform practice of previous Chancellors always to be present to listen to the Debate, and always to be ready to give the House the benefit of their counsel and knowledge. The question which is raised by this particular Amendment is one of great complexity and great difficulty. I do not think it can be laid down off-hand, as the last speaker attempted to do, that all charity funds should be brought within the ambit of the Income Tax. I, for my part, should not like to commit myself finally and definitely to the extension of the exemptions, or to financial results I do not foresee. I confess that this is one of the points on which the Income Tax law is in an unsatisfactory position—whatever the solution of the difficulty ought to be—because it is illogical in itself. I do not think it is possible to defend at one and the same time the exemptions which are now accorded or the refusal of exemptions which is now made. There is no common principle underlying these two things. I am not quite certain that the House knows, or that even the learned Attorney-General or anyone knows, exactly what the law is on this subject. Reference has been made by my hon. Friend to the case of Westminster School. I also am interested as governor in another great public school, and we have had the case of the Westminster School brought to our attention, and, unless I am under a misapprehension, the authorities of Westminster School are appealing against the assessment of particular properties with which they are concerned, and it may be that the Courts will decide that they are not liable to assessment on those properties.
    Sir J. SIMON: It is not on this point.
    Mr. CHAMBERLAIN: I thought it was the Income Tax. The learned Attorney-General has been good enough to correct

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    me, and to tell me that the case I have in mind does not deal with the point that has been raised.
    Sir J. SIMON: I think not.
    Mr. CHAMBERLAIN: I accept that at once; my memory or my information was at fault. I did not intend to take part in this discussion. I confess my inability to give the House any clear guidance as to what is the best course to pursue in this matter at the present time. I would submit again, however, that it is not to me that the House has a right to look for guidance on this matter, and it is a subject for legitimate complaint by Members in all quarters of the House that on a Bill of this importance they cannot address their arguments directly to the Chancellor of the Exchequer, and have his attention given personally to them.
    Mr. MONTAGU: I do not think the right hon. Gentleman was in the House when my right hon. Friend the Attorney-General addressed it.
    Mr. CHAMBERLAIN: I was not.
    Mr. MONTAGU: If he had been, he would have heard that, having been appealed to by hon. Friends behind him, my right hon. Friend the Attorney-General used almost exactly the same arguments as the right hon. Gentleman himself has put before the House. My right hon. and learned Friend acknowledged that there are certain anomalies under the existing law, and he pointed out that this was one of the points particularly appropriate for inquiry with a view to making the Income Tax more logical and more workable. He did not go so far as the hon. Member below the Gangway in condemning the practice of exempting charities, and he would certainly not go so far as to extend the number of exemptions, in view of the fact that we are promised an inquiry into the Income Tax which is going to be set up immediately. It was for that reason he suggested that it would not be wise, when he himself could not foresee exactly the extent of the expenditure, nor could the right hon. Gentleman, that would be caused by extending the exemptions.
    Mr. CHAMBERLAIN: I could not foresee, but the Chancellor of the Exchequer ought to be in a position to foresee.
    Mr. MONTAGU: The right hon. Gentleman knows it is very difficult to make exact estimates on these matters. My right hon.
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    Friend said that he agreed with those who moved this Clause that it would not be a very expensive matter. The law at the present moment exempts certain charities from taxation on the lands they occupy; but the Clause now before us seeks to exempt all charities from taxation on the lands they occupy. My right hon. and learned Friend suggested that that was a very proper matter to leave to the Committee of Inquiry, because it might turn out to be wise, rather than to extend the exemption, to withdraw them altogether. I do not think the right hon. Gentleman was justified in the attack he made on the Chancellor of the Exchequer, who, I think he will find, has been present throughout the discussions on the Budget in all its stages until this afternoon, when it is not difficult to understand the reason for his not being here.
    Mr. BIGLAND: I should like to refer to the case the Attorney-General made in reply to the hon. Member for Salisbury. To me he did not seem to reply to the point, and he drew the attention of the House away from the Amendment—to all charities. The Amendment, as I read it, is confined to those charities where there is property invested in the trustees, but the right hon. Gentleman attempted to make the House think that it was going to include all charitable institutions of whatever kind.
    The SOLICITOR - GENERAL (Sir Stanley Buckmaster): Why not?
    Mr. BIGLAND: Because the exemption is to extend to a great number of charities in the country with lands or property vested in trustees.
    Sir S. BUCKMASTER: Look at the words of the Amendment.
    Mr. BIGLAND: The words of the Amendment are quite clear, but I am afraid they are regarded from the financial point of view. We are representatives of the people in this House, and numbers of Members must know from their own personal experience as governors the great difficulty there is in obtaining the necessary finances to carry on these charitable institutions, and with this extra burden, as the hon. Member for Salisbury showed, charitable activity is decreased. That is a point which surely the Chancellor of the Exchequer ought to take into

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    account. We who represent the people of the country, we who are governors and trustees of charitable institutions, ought to see, if we are to represent the feeling of the country, that these exemptions are made. Surely it is for us to enforce our views on the Chancellor of the Exchequer, and to point out that this would not affect the revenues of the country so adversely that he could not afford to meet the wishes and feelings of an enormous number of people, whatever their political views, by remedying this anomaly in the Income Tax. I would point out to the Attorney-General that he should take into consideration the fact there is a feeling on his own side of the House that this anomaly should be put right. We have been told that there is to be an inquiry, but that answer might be given over and over again to later Amendments, and the House is not satisfied to be told simply that their Amendments shall be referred to some Committee.
    Mr. LEES SMITH: May I ask the Attorney-General whether the exemption proposed in this Clause would be referred to the Committee of Inquiry?
    Sir J. SIMON: I should say it would be a very proper question.
    Mr. LEES SMITH: I should like to ask, further, whether the Committee will take into consideration the primary question that there should be no exemption of charities?
    Sir J. SIMON: I am inclined to think that one of the principal reasons for an inquiry is to see that the Income Tax laws are made more consistent as a whole. I cannot imagine a more obvious example of the need for such an inquiry than the present state of the law which exempts some charities and docs not exempt others.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 168; Noes, 283.

    Division No. 190.]

    AYES.

    [5.1 p.m.

    Agg-Gardner, James Tynte

    Dickson, Rt. Hon. C. Scott

    Hunter, Sir C. R.

    Astor, Waldorf

    Duncannon, Viscount

    Ingleby, Holcombe

    Baird, J. L.

    Du Pre, W. Baring

    Jessel, Captain H. M.

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

    Eyres-Monsell, Bolton M.

    Kerry, Earl of

    Baldwin, Stanley

    Faber, George Denison (Clapham)

    Kinloch-Cooke, Sir Clement

    Banbury, Sir Frederick George

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

    Lane-Fox, G. R.

    Banner, Sir John S. Harmwood-

    Falle, B. G.

    Lloyd, George Butler (Shrewsbury)

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

    Fell, Arthur

    Locker-Lampson, G. (Salisbury)

    Barnston, Harry

    Fisher, Rt. Hon. W. Hayes

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

    Barrie, H. T.

    Fitzroy, Hon. Edward A.

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

    Bathurst, C. (Wilts, Wilton)

    Fletcher, John Samuel

    Lyttelton, Hon. J. C.

    Beach, Hon. Michael Hugh Hicks

    Ganzoni, Francis John C.

    MacCaw, Wm. J. MacGeagh

    Beckett, Hon. Gervase

    Gardner, Ernest

    Mackinder, Halford J.

    Benn, Arthur Shirley (Plymouth)

    Gastrell, Major W. Houghton

    Macmaster, Donald

    Beresford, Lord C.

    Gibbs, G. A.

    M'Calmont, Major Robert C. A.

    Bigland, Alfred

    Gilmour, Captain John

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

    Bird, A.

    Glazebreek, Captain Philip K.

    Magnus, Sir Philip

    Blair, Reginald

    Grant, J. A.

    Mildmay, Francis Bingham

    Boscawen, Sir Arthur S. T. Gritfith-

    Gretton, John

    Mills, Hon. Charles Thomas

    Bridgeman, W. Clive

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

    Moore, William

    Bull, Sir William James

    Guinness, Hon. W. E. (BurySI. Edmunds)

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

    Burdett-Coutts, W.

    Gwynne, R. S. (Sussex, Eastbourne)

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

    Burn, Colonel C. R.

    Haddock, George Bahr

    Newman, John R. P.

    Butcher, John George

    Hall, Frederick (Dulwich)

    Nicholson, William G. (Petersfield)

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

    Hall, Marshall (L'pool, E. Toxteth)

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

    Campion, W. R.

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

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

    Carlile, Sir Edward Hildred

    Hardy, Rt. Hon. Laurence

    Ormsby-Gore, Hon. William

    Cassel, Felix

    Helmsley, Viscount

    Paget, Almeric Hugh

    Castlereagh, Viscount

    Henderson, Major H. (Berks., Abingdon)

    Pease, Herbert Pike (Darlington)

    Cecil, Evelyn (Aston Manor)

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

    Peel, Lieut.-Colonel R. F.

    Cecil, Lord Hugh (Oxford University)

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

    Perkins, Walter F.

    Cecil, Lord R. (Herts, Hitchin)

    Hewins, William Albert Samuel

    Peto, Basil Edward

    Chamberlain, Rt. Hon. J. A.

    Hibbert, Sir Henry F.

    Pole-Carew, Sir R.

    Chaplin, Rt. Hon. Henry

    Hickman, Colonel Thomas E.

    Pollock, Ernest Murray

    Clive, Captain Percy Archer

    Hills, John Waller

    Pretyman, Ernest George

    Clyde, J. Avon

    Hill-Wood, Samuel

    Pryce-Jones, Colonel E.

    Cooper, Sir Richard Ashmole

    Hoare, S. J. G.

    Quilter, Sir William Eley C.

    Craig, Norman (Kent, Thanet)

    Hohler, G. F.

    Randles, Sir John S.

    Crichton-Stuart, Lord Ninian

    Hope, Harry (Bute)

    Rees, Sir J. D.

    Croft, H. P.

    Hope, James Fitzalan (Sheffield)

    Remnant, James Farquharson

    Currie, George W.

    Hope, Major J. A. (Midlothian)

    Ronaldshay, Earl of

    Dalrymple, Viscount

    Horne, E.

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

    Dalziel, Davison (Brixton)

    Horner, Andrew Long

    Samuel, Sir Harry (Norwood)

    Denison-Pender, J. C.

    Hume-Williams, William Ellis

    Sanders, Robert Arthur

    Denniss, E. R. B.

    Hunt, Rowland

    Sharman-Crawford, Colonel R. G.

    Spear, Sir John Ward

    Thomas-Stanford, Charles

    Willoughby, Major Hon. Claud

    Stanier, Beville

    Thompson, Robert (Belfast, North)

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

    Stanley, Hon. Arthur (Ormskirk)

    Thomson, W. Mitchell- (Down, North)

    Wilson, Captain Leslie O. (Reading)

    Stanley, Hon. G. F. (Preston)

    Tobin, Alfred Aspinall

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

    Starkey, John Ralph

    Tryon, Captain George Clement

    Wood, John (Stalybridge)

    Staveley-Hill, Henry

    Tullibardine, Marquess of

    Worthington Evans, L.

    Steel-Maitland, A. D.

    Valentia, Viscount

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

    Stewart, Gershom

    Walrond, Hon. Lionel

    Yate, Colonel C. E.

    Sykes, Alan John (Ches., Knutstord)

    Watson, Hon. W.

    Younger, Sir George

    Sykes, Sir Mark (Hull, Central)

    Weston, Colonel J. W.

    Talbot, Lord E.

    Wheler, Granville C. H.

    TELLERS FOR THE AYES.—Mr.

    Terrell, George (Wilts, N. W.)

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

    Mount and Sir H. Craik

    NOES.

    Abraham, William (Dublin, Harbour)

    Duncan, C. (Barrow-in-Furness)

    Lambert, Richard (Wilts, Cricklade)

    Addison, Dr. Christopher

    Duncan, Sir J. Hastings (Yorks, Otley)

    Lardner, James C. R.

    Adkins, Sir W. Ryland D.

    Edwards, John Hugh (Glamorgan, Mid)

    Law, Hugh A. (Donegal, West)

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

    Elverston, Sir Harold

    Levy, Sir Maurice

    Agnew, Sir George William

    Esmonde, Dr. John (Tipperary, N.)

    Lewis, Rt. Hon. John Herbert

    Ainsworth, John Stirling

    Esmonde, Sir Thomas (Wexford, N.)

    Lough, Rt. Hon. Thomas

    Alden, Percy

    Falconer, James

    Lundon, T.

    Allen, Arthur A. (Dumbartonshire)

    Farrell, James Patrick

    Lyell, Charles Henry

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

    Fenwick, Rt. Hon. Charles

    Lynch, A. A.

    Arnold, Sydney

    Ffrench, Peter

    Macdonald, J. Ramsay (Leicester)

    Baker, Harold T. (Accrington)

    Field, William

    Macdonald, J. M. (Falkirk Burghs)

    Baker, Joseph Allen (Finsbury, E.)

    Fiennes, Hon. Eustace Edward

    McGhee, Richard

    Balfour, Sir Robert (Lanark)

    Fitzgibbon, John

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

    Baring, Sir Godfrey (Barnstaple)

    Flavin, Michael Joseph

    MacVeagh, Jeremiah

    Barlow, Sir John Emmott (Somerset)

    Furness, Sir Stephen Wilson

    M'Callum, Sir John M.

    Barnes, George N.

    Gelder, Sir William Alfred

    McKenna, Rt. Hon. Reginald

    Barran, Sir John N. (Hawick Burghs)

    George, Rt. Hon. D. Lloyd

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

    Barran, Rowland Hurst (Leeds, N.)

    Ginnell, L.

    M'Micking, Major Gilbert

    Beale, Sir William Phipson

    Gladstone, W. G. C.

    Manfield, Harry

    Beauchamp, Sir Edward

    Glanville, H. J.

    Markham, Sir Arthur Basil

    Beck, Arthur Cecil

    Goddard, Sir Daniel Ford

    Marshall, Arthur Harold

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

    Goldstone, Frank

    Mason, David M. (Coventry)

    Bentham, George Jackson

    Greig, Colonel J. W.

    Meagher, Michael

    Birrell, Rt. Hon. Augustine

    Griffith, Rt. Hon. Ellis Jones

    Meehan, Francis E. (Leitrim, N.)

    Black, Arthur W.

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

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

    Boland, John Plus

    Gulland, John William

    Millar, James Duncan

    Booth, Frederick Handel

    Gwynn, Stephen Lucius (Galway)

    Molloy, Michael

    Bowden, G. R. Harland

    Hackett, J.

    Molteno, Percy Alport

    Bowerman, C. W.

    Hancock, John George

    Montagu, Hon. E. S.

    Boyle, Daniel (Mayo, North)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Mooney, John J.

    Brady, J. P.

    Harcourt, Robert V. (Montrose)

    Morgan, George Hay

    Brockiehurst, William B.

    Hardie, J. Keir

    Morrell, Philip

    Brunner, John F. L.

    Harmsworth, Cecil (Luton, Beds)

    Morison, Hector

    Bryce, J. Annan

    Harmsworth, R. L. (Caithness-shire)

    Morton, Alpheus Cleophas

    Buckmaster, Sir Stanley O.

    Harvey, A. G. C. (Rochdale)

    Munro, Rt. Hon. Robert

    Burns, Rt. Hon. John

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

    Murphy, Martin J.

    Burt, Rt. Hon. Thomas

    Haslam, Lewis (Monmouth)

    Murray, Captain Hon. Arthur C.

    Buxton, Noel (Norfolk, North)

    Havelock-Allan, Sir Henry

    Neilson, Francis

    Byles, Sir William Pollard

    Hayden, John Patrick

    Nicholson, Sir Charles N. (Doncaster)

    Carr-Gomm, H. W.

    Hayward, Evan

    Nolan, Joseph

    Cawley, Sir Frederick (Prestwich)

    Helme, Sir Norval Watson

    Norman, Sir Henry

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

    Hemmerde, Edward George

    Norton, Captain Cecil W.

    Chapple, Dr. William Allen

    Henderson, Arthur (Durham)

    Nugent, Sir Walter Richard

    Churchill, Rt. Hon. Winston S.

    Henry, Sir Charles

    Nuttall, Harry

    Clancy, John Joseph

    Higham, John Sharp

    O'Brien, Patrick (Kilkenny)

    Clough, William

    Hinds, John

    O'Connor, T. P. (Liverpool)

    Clynes, John R.

    Hodge, John

    O'Doherty, Philip

    Collins, Godfrey P. (Greenock)

    Hogge, James Myles

    O'Donnell, Thomas

    Collins, Sir Stephen (Lambeth)

    Holmes, Daniel Turner

    O'Dowd, John

    Compton-Rickett, Rt. Hon. Sir J.

    Holt, Richard Durning

    O'Malley, William

    Cornwall, Sir Edwin A.

    Hope, John Deans (Haddington)

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

    Craig, Herbert J. (Tynemouth)

    Howard, Hon. Geoffrey

    O'Shaughnessy, P. J.

    Crooks, William

    Hudson, Walter

    O'Sullivan, Timothy

    Crumley, Patrick

    Hughes, Spencer Leigh

    Outhwaite, R. L.

    Cullinan, John

    Illingworth, Percy H.

    Palmer, Godfrey Mark

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

    John, Edward Thomas

    Parker, James (Halifax)

    Davies, Ellis William (Eifion)

    Jones, Edgar (Merthyr Tydvil)

    Parry, Thomas H.

    Davies, Timothy (Lincs., Louth)

    Jones, H. Haydn (Merioneth)

    Pearce, Robert (Staffs, Leek)

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

    Jones, J. Towyn (Carmarthen, East)

    Pearce, William (Limehouse)

    Dawes, J. A.

    Jones, William S. Glyn- (Stepney)

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

    De Forest, Baron

    Jowett, Frederick William

    Philipps, Colonel Ivor (Southampton)

    Delany, William

    Joyce, Michael

    Phillips, John (Longford, S.)

    Denman, Hon. R. D.

    Kellaway, Frederick George

    Pirle, Duncan V.

    Devlin, Joseph

    Kelly, Edward

    Ponsonby, Arthur A. W. H.

    Dewar, Sir J. A.

    Kennedy, Vincent Paul

    Pratt, J. W.

    Dillon, John

    Kenyon, Barnet

    Price, C. E. (Edinburgh, Central)

    Donelan, Captain A.

    Kilbride, Denis

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

    Doris, William

    King, J.

    Priestley, Sir Arthur (Grantham)

    Duffy, William J.

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

    Priestley, Sir W. E. (Bradford)

    306

    307

    Primrose, Hon. Neil James

    Samuel, J. (Stockton-on-Tees)

    Waring, Walter

    Pringle, William M. R.

    Scanlan, Thomas

    Warner, Sir Thomas Courtenay T.

    Radford, G. H.

    Scott, A. MacCallum (Glas., Bridgeton)

    Wason, Rt. Hon. E. (Clackmannan)

    Raffan, Peter Wilson

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

    Wason, John Cathcart (Orkney)

    Rea, Rt. Hon. Russell (South Shields)

    Sheeny, David

    Watt, Henry Anderson

    Rea, Walter Russell (Scarborough)

    Sherwell, Arthur James

    Wedgwood, Josiah C.

    Reddy, M.

    Shortt, Edward

    White, J. Dundas (Glas., Tradeston)

    Redmond, John (Waterford)

    Simon, Rt. Hon. Sir John Allsebrook

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

    Redmond, William (Clare, E.)

    Smith, H. B. L. (Northampton)

    White, Patrick (Meath, North)

    Redmond, William Archer (Tyrone, E.)

    Smyth, Thomas F. (Leitrim, S.)

    Whitehouse, John Howard

    Rendall, Athelstan

    Soames, Arthur Wellesley

    Whittaker, Rt. Hon. Sir Thomas P.

    Richardson, Thomas (Whitehaven)

    Spicer, Rt. Hon. Sir Albert

    Whyte, A. F. (Perth)

    Roberts, Charles H. (Lincoln)

    Strauss, Edward A. (Southwark, West)

    Wiles, Thomas

    Roberts, G. H. (Norwich)

    Sutherland, J. E.

    Wilkie, Alexander

    Roberts, Sir J. H. (Denbighs)

    Sutton, John E.

    Williams, Aneurin (Durham, N. W.)

    Robertson, Sir G. Scott (Bradford)

    Taylor, John W. (Durham)

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

    Robertson, J. M. (Tyneside)

    Taylor, Theodore C. (Radcliffe)

    Wilson, W. T. (Westhoughton)

    Robinson, Sidney

    Taylor, Thomas (Bolton)

    Winfrey, Sir Richard

    Roch, Walter F. (Pembroke)

    Tennant, Rt. Hon. Harold John

    Wing, Thomas Edward

    Roche, Augustine (Louth)

    Thorne, G. R. (Wolverhampton)

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

    Roe, Sir Thomas

    Thorne, William (West Ham)

    Yeo, Alfred Wililam

    Rowlands, James

    Toulmin, Sir George

    Young, W. (Perth, E.)

    Rowntree, Arnold

    Trevelyan, Charles Philips

    Yoxall, Sir James Henry

    Runciman, Rt. Hon. Walter

    Verney, Sir Harry

    Russell, Rt. Hon. Thomas W.

    Walsh, Stephen (Lancs., Ince)

    TELLERS FOR THE NOES—Mr.

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

    Ward, W. Dudley (Southampton)

    William Jones and Mr. Webb.

    Question put, and agreed to.

    NEW CLAUSE.—(Residents Abroad owning Securities of Foreign State or British Possession.)
    The time limit imposed by Sub-section (2) of Section seventy-one of the Finance (1909–10) Act, 1910, which grants relief to persons not resident in the United Kingdom in respect of Income Tax on the interest or dividends of any securities of a foreign State or British Possession, shall be extended from six months to three years.
    Clause brought up, and read the first time.
    Mr. G. LOCKER-LAMPSON: I bog to move, "That the Clause be read a second time."
    At present only six months is allowed after the end of the year in which Income Tax is charged within which a claim may be made in respect of deduction of Income Tax on the income arising from securities in a foreign State or British Possession in the case of the person owning them being resident outside of the United Kingdom. The dividends are paid over here. The issue is probably through a British bank and paid through that bank for the sake of convenience. Under the Income Tax law the paying bank is compelled to deduct the tax before the money is paid, whether the person is actually liable or not and quite irrespective of where the person resides. My point is that the limit of six months is often very unreasonable as the limit within which a claim for abatement may be made. In practice a large number of people lose the tax which has been deducted, and which in
    308
    reality they are not liable to pay. For instance, take the case of a person resident in Australia or New Zealand with stocks of the description I have mentioned, the Income Tax being collected here by the bank. The dividend may be placed in the man's account towards the end of March and the bankers may advise him that the tax has been deducted. The man cannot possibly receive that information until well into May. I am very glad I have the privilege of putting my case before the Chancellor of the Exchequer. The man may be away from home at the time. He has to write to Somerset House for a form of claim, and that takes another six weeks. Probably there is a delay of a week at Somerset House, and another six weeks elapses before the man in Australia or New Zealand receives the form. He has to complete it and go before a justice of the peace or magistrate and swear as to the form which is returned to Somerset House. That makes altogether twenty-four weeks out of the twenty-six, even if everything is dealt with by return of post.
    Sir J. SIMON: Perhaps it may save the time of the House if I state I am going to accept this new Clause in the form in which it is moved.
    Mr. MOUNT: I beg to second the Motion.
    Sir J. SIMON: I am prepared to accept this new Clause. The matter is very simple. Suppose interest or dividend on securities of a foreign State or British Possession are paid in London, as I am

    309
    glad to think many of them are, and supposing that they are payable to persons who are not resident in the United Kingdom, though the Income Tax is deducted at the source the person entitled to the income or dividend, since he is not resident, is entitled to have it back. Under the existing law he has to claim it within six months, and I am quite prepared to agree that he ought to be given a longer term.
    Clause read a second time, and added to the Bill.

    NEW CLAUSE.—(Application of Section 24 (2) of Finance Act, 1907, to Income from Stocks, etc., arising Outside the United Kingdom.)
    All the provisions of Section twenty-four, Sub-section (2), of the Finance Act, 1907, which relates to a profession, trade, or vocation, which has been set up or commenced within the period of three years preceding the year of assessment, shall apply to income from stocks, shares, rents, or other sources arising in any place out of the United Kingdom, and assessed under case five in Section one hundred of the Income Tax Act, 1842, and the provisions of this Section.
    Clause brought up and read the first time.
    Mr. G. LOCKER-LAMPSON: I beg to move, "That the Clause be read a second time."
    The object of the Clause is to remove what I believe to be a very substantial grievance. Foreign income is assessed under two rules. Income received from Government securities in foreign States, or from loans of foreign States or municipal authorities is assessed on the amount received in the year of assessment; but income received from what are termed "possessions" abroad—that is to say, shares in trading concerns, rents of land, or rents of houses—is assessed like income accruing to a person from trade, business, or profits of employment received in this country. Income from securities in foreign countries is assessed only on the amount which has accrued in the year, while income from possessions in foreign countries is assessed on the average system. This procedure frequently leads to great injustice in the first three years of liability. Possessions in foreign countries are assessed like trading profits. Under the
    310
    Finance Act, 1907, Section 24 (2) in the case of income in this country accruing from a trade, profession or vocation which has been set up within the three years during which the average is taken under the Income Tax law, the taxpayer has the right to ask the Commissioners to adjust the liability to the actual amount received in the year of assessment. But this advantage does not apply to income from possessions in foreign countries. Say a man's income from possessions in other countries during the first three years was £5,000, £3,000 and £2,000—that is to say, £10,000 in all. He can be taxed on £5,000, £5,000, and £1,000, or £14,000 in all—that is, £4,000 above his actual income from his possessions. If he had actually the same income from trade or business over here, he would be taxed on £5,000, £3,000, and £2,000, or £10,000 in all—that is to say, he would be taxed on the actual income that he had received. It cannot be considered that there is any justice in this distinction between income from possessions abroad and income from ordinary trading profits arising in this country. Unless something is done a very real grievance will arise in the case of assessments under Clause 5 of the Finance Bill, which presumably will be based on the income of the three preceding years, in the case of income from foreign Government securities.
    In many cases where people have retired from India or the Colonies they send a considerable portion of their capital to this country, and the income arising from shares or rents abroad may, therefore, be considerably diminished by the time the actual year of assessment comes round—that is, the fourth year. Owing to remittances of capital here, the income from shares or rents accruing abroad may be, say, £1,000, whereas the actual income accruing abroad for the current year may be only £450. Supposing the capital which has been sent over here brings in in this country in the current year an income of £550. The tax of the current year will be paid not on the £450 accruing abroad and the £550 at home, but on the average of £1,000 of the three preceding years, and also the £550 accruing on the capital sent over to this country—that is to say, on £1,550 in all. The result is that although the capital has been invested here and produces an income subject to the deduction of tax over here in the current year, the tax is also based on the income which that capital produced

    311
    before it was sent over here at all. I do not know whether I have made myself quite clear. The income to the extent of the £550 which accrues from the capital sent over here has practically been taxed twice over—once here, and then again on taking the average of the three preceding years before it was sent over. If this provision of Section 24 (2) of the Finance Act, 1907, is extended, it will absolutely meet this particular grievance. I hope, therefore, the Government will accept my proposal.
    Mr. HILLS: I beg to second the Motion.
    Sir J. SIMON: The hon. Gentleman has moved his Clause with words at the end which I do not quite understand. I cannot help thinking that it has been transplanted bodily from something put down as an Amendment at an earlier stage. The words at the end, "and the provisions of this Section," do not convey any meaning to my mind at all. Perhaps the hon. Gentleman will explain that?
    Mr. G. LOCKER-LAMPSON: As a matter of fact, these words are unnecessary. The proposal was put down as an Amendment to a Clause in the Bill, and was then made into a new Clause.
    Sir J. SIMON: I understand that the new Clause is intended to stop after the words "Income Tax Act, 1842."
    Mr. G. LOCKER-LAMPSON: Yes.
    Sir J. SIMON: It follows, therefore, that the hon. Gentleman does not propose to apply the principles contained in the new Clause to Clause 5 of the present Finance Bill at all.
    Mr. G. LOCKER-LAMPSON: I do propose that.
    Sir J. SIMON: Where will that be? Perhaps the hon. Gentleman will explain that.
    Mr. G. LOCKER-LAMPSON: I should have to add the words "and the provisions of Section 5 of this Act."
    Sir J. SIMON: Then I understand that the. Clause is not to stop at the words "Income Tax Act, 1842," but is to run on with the words "and the provisions of Section 5 of this Act." That is what I expected the hon. Gentleman would say, but, of course. I wanted to know. Let me assure the hon. Gentleman that I under-stand
    312
    what he proposes, but I think there are good reasons against accepting the Clause. As things stand at present, you have the calculation on the average of three years applied in various cases under the Income Tax Acts. One of the best known to most of us is the case where you have the three years' average applied for the purpose of charging Income Tax in respect of profession, trade, or vocation. But that is by no means the only case where the average is applied. There is one case where a five years' average is taken, and another where a seven years' average is taken. There are many cases in which you do not take the actual year of charge, but some other year. As the law stands, in one case, and in one case only, out of all the cases where averages are taken, the taxpayer is allowed to say, "It is true that the law applies an average of, say three years to my case, but I have not been carrying on my profession, trade, or vocation for three years. This is only the second or perhaps the first year, and I wish to substitute the actual experience of the year of charge for the normal application of the average." That is permitted by Section 24 (2) of the Finance Act, 1907. I do not understand whether the hon. Gentleman proposes to limit this substitution of a given year for an average to cases in which the source of income has begun within the period over which the average is calculated. Does the hon. Gentleman propose to do that?
    Mr. G. LOCKER-LAMPSON: I think it is quite plain from the Section in the Act. I want that Section to apply in its completeness to this particular case.
    Sir J. SIMON: I hope the hon. Gentleman does not think that I am merely making points for the purpose of quarrelling with him. The subject is a complicated one, and I must know exactly what he means.
    Mr. G. LOCKER-LAMPSON: Whatever that Section covers, I want it to extend to this.
    Sir J. SIMON: The Section provides, in the case of an ordinary individual paying Income Tax on the three years' average, that he shall be entitled to say, so far as the figures for the particular profession, trade, or vocation are concerned, "Please, take a given year, and not the average of the three years." That has no application to the case of a man who has been carrying on his profession for four or five

    313
    years. It applies only at the beginning, and the reason it applies at the beginning is that it may happen that a man in his first year does exceptionally well. His friends give him a considerable amount of support. A friendly solicitor, for instance, gives a young barrister some briefs. But the hon. Gentleman is really proposing a very much bigger thing than would appear from his speech. He is proposing that wherever an average is required by the present Income Tax law, and the taking of an individual year would be preferable to the taxpayer, that substitution shall be available—for instance, under Rule 5 of Section 100, or under Clause 5 of the present Bill—and thereby he would greatly extend what is at present a most exceptional provision. There is very good reason why it should not be so extended. It is comparatively safe to say, in the case of a man with a profession or vocation during the first three years, "I will take your actual figures for the present year, instead of taking an average." At any rate, his profession is definite; you know what you are dealing with. But the hon. Gentleman says, "I want to substitute the receipts of the current year of charge for the average in, for instance, case five of Section 100"—which is the foreign possessions case. Does not the hon. Member see that if you do that you put it in the power of the taxpayer to manipulate—I am not using the word in an offensive way—to vary from time to time the way in which he chooses to employ his capital, with the result that the revenue may lose taxes to which it is entitled, because he has so varied his investments, or varied the form in which he receives his money as to get the advantage of this new Clause? For example, supposing you say to the taxpayer you have got foreign possessions at present and pay income Tax on profits on those foreign possessions remitted to this country on an average of three years. That is the provision to which the hon. Member referred. If you say to the taxpayer, "You can substitute in any given year at your will and pleasure if you like, not what the revenue likes, the actual receipts for the given year"; if the taxpayer in that case wants to reduce his liability to pay to a minimum, there is a very obvious way in which he may do it. He may in that year refrain from having his income remitted to this country so that it is kept under old case five. Even supposing he is none the less hit under our new Clause 5—which
    314
    has nothing to do with remittance—he none the less may vary his form and may still invest instead in the securities in the home market, with the result that it is at his own will and pleasure to vary the amount which in a given year will come under that particular case. That is the reason why this was not extended at all. It was quite deliberate in 1907, even though it was not under this Government—
    Mr. CHAMBERLAIN: It was your Government.
    Sir J. SIMON: The right hon. Gentleman is quite right, but whoever was responsible, it was done in this way. It was not because the Government or the House of Commons—I hope—or the revenue imagine that the only case where you have an average was the case where you taxed a profession, trade, or vocation. There were a lot of other cases, but so long as you confined the concession to this it was all right, because a man cannot go on shifting his work about merely in order to save himself a little money in a given year. If you say you may substitute the amount received from foreign possessions in a given year for an average of three years, that will enable the person, by variations in the form of his investments, to present you a figure for a given year which is really not a fair figure.
    Mr. CHAMBERLAIN: Will the right hon. Gentleman point out how you can do that under the new Clause 5?
    Sir J. SIMON: Assume the taxpayer takes his interest by cashing coupons, in which case the income would be taxed at its source. In that case it would not come under our new Clause 5; it would be taxed at the source. It might, on the other hand, be remitted home, in which case it would come under our Clause 5. In the second case you can vary the way in which you are paid, so that at your will and pleasure you may tax the income at the source or later.
    Mr. PRETYMAN: Will the right hon. Gentleman make it quite clear? A man has the same source of income and investments, which may be foreign or may be home. The same kind of investment in foreign securities, which is a coupon investment, would be treated as a foreign investment. An investment of the same character payable in London would be a home investment. If it is a foreign investment is it assessed on an average of three years? Is that the position or not?
    Sir J. SIMON: No, it is not. If the hon. and gallant Gentleman will look at either the Income Tax Acts or the book of Mr. Dowell, he will see it is not so really, because the case that applies is that known as Case 4 under the Statute, not Case 5. The hon. Member who moved—quite accurately, if I may say so—confined himself to Case 5, which relates to foreign possessions, and not to the case of industrial securities. What I am pointing out is that if you take our new Clause, and if you say that a man is at liberty to substitute the amount he receives either for one year or an average of three years—in cases where the average applies—you are, as a matter of fact, presenting him with a choice of two alternatives, and, of course, he will always choose the one that suits him best. That does not apply in the one case under the Act of 1907, where concession is made, and for the practical reason that a man cannot say to himself, "I will be a barrister to-day, an architect tomorrow, and something else the next day." merely at his own will and pleasure, to avoid the average and to take a single year. That is the practical reason why the concession is made in that case. The hon. Member gave as an illustration the case of a man receiving £5,000 from foreign possessions in the first year, £3,000 the second year, and £2,000 the next year—the case of a dropping income—
    Mr. PRETYMAN: That is transferred here?
    Sir J. SIMON: Which is transferred here under the old law. The hon. Member said that it was hard to tax a man in the third year on the average of the three years. We took him, I may say, on the second year on the average of two years. Of course it is quite true there may be such cases, but the answer to that is that it is really a criticism of the whole principle of averages, wherever applied. If your income is a dropping income, your average tends to keep up the figure longer than you like. If your income is a rising income, the average tends to keep the figure down after the time when some people think it ought to be higher. That, really, is not a peculiar hardship of the Income Tax law: it is due to the law of averages, and the result is the same whether you apply it to this or to cricket or to any other averages. The hon. Member, if he follows me, will see that we cannot really apply this system of the substitution of a single year for the average of
    316
    three years in cases except the one case where it is substituted now. I know the subject is a very difficult and complicated one, but I think I understand what the hon. Member proposes, and I hope he sees that I understand it, and sees my reasons against the Amendment.
    Mr. G. LOCKER-LAMPSON: I do not think the right hon. Gentleman does quite understand. He tries to make out that my Amendment wants to give the benefit of being assessed on income received in the year of assessment. I am merely trying to give the benefit of the one case which relates to a profession, trade, or vocation to other persons to whom the Section in the Act of 1907 might be made applicable.
    Sir J. SIMON: If we were going to adopt the Clause at all it would need to be very carefully considered from that point of view. The hon. Member has explained what he has in his mind, and I am not going to squabble about words. Whatever you do, I do not believe you will find if you look into it closely—that it is possible to say to a man, even in the first three years, that you are going to give him an alternative of taking a year, the last year, and taxing him on that instead of applying the general principle of the three years' average. For one thing, I think you will find it more difficult than usual to discover that he has really began this form of income within the last three years—not an easy thing in regard to foreign investments—and in the second place, if you look at the thing broadly you will see that it does not work out unfairly. I agree that in every system of averages there is this, that some people will be required to pay more than they think they should pay, and some less. The matter is not one easy to explain, but I think the House will find that that really is the way this House arrived at it At any rate, when the revenue made that concession in 1907 it was not a concession that there was any difficulty with; they chose a case in which it could be safely done, and I suggest to hon. Members that it really is not a practicable or a wise thing to alter the machinery so that we should apply it to other cases.
    Mr. CHAMBERLAIN: There are three distinct questions which arise out of the discussion which my hon. Friend behind me has initiated. We have had a reply from the right hon. and learned Gentleman

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    upon it. I would like to deal with the questions in their order separately. As regards my hon. Friend's Amendment, the wording of it appears to me to carry out the option which is allowed to the investor at home in certain peculiar circumstances—not merely to some people if they are deriving their income from abroad—but to others. Therefore, if my hon. Friend's Amendment were carried in this form, people resident abroad would have an option in more cases than people resident at home. That is the first point. I agree with my hon. Friend that that would be the effect. When the words of Section 24 are confined to persons chargeable in respect of any profession, trade or vocation, my hon. Friend's Amendment applies it to income from stocks, shares, rents, or other sources arising in any place out of the United Kingdom. That does not confine it to home, but does confine it again in respect of any profession, trade or vocation. My first observation—if I am right in my interpretation—as to which Heaven forbid that I should speak dogmatically— I am not a lawyer and it is a very difficult matter—if I am right in my interpretation I think my hon. Friend's Amendment in that respect goes too far. The second question that is raised is: should not exemption, such as it is, which is now given to persons under these special circumstances—that is in the first three years of a profession, trade or vocation abroad, be extended having regard to the new Section spoken of, to people who derive similar incomes and under similar conditions from abroad? I think the learned Attorney-General made no answer to that point.
    Sir J. SIMON: Forgive me, our new Clause 5 does not tax anybody in respect of a profession, trade or vocation; it taxes stocks, shares, rent. It does not tax professional people qua professional people, or trading people qua trading people at all. There is nothing corresponding to that.
    Mr. CHAMBERLAIN: Suppose a man starts a manufacturing business in this country he will be entitled for the first three years to have an option given him under Section 24, Sub-section (2) of the Finance Act of 1907. Supposing the same person elected his factory, not in Lancashire, but in India, will he be entitled to the same concession? Will he be taxed on any profits that he brings home? Supposing he brings the whole of his profits of the manufactory home, or suppose he
    318
    accumulates them in India, under Section 5 you tax him on those profits if he is resident here. Is that so?
    Sir J. SIMON: The answer is, on stocks, shares, rents, yes, whether he brings them home or not; bat nothing on other income.
    Mr. CHAMBERLAIN: That is very important. I think that is certainly not understood by the people concerned, as I could illustrate from the correspondence I have. I think I am taking a perfectly clear case. I take the illustration of a man who is making cotton goods for the Indian market, and who has the option of establishing a new mill in Lancashire or in India. If he establishes his new mill in Lancashire he gets the benefit of the option under the Act of 1907. Does the hon. and learned Gentleman tell me that if he establishes the mill in India the profits of that mill in India will not be assessed and are not assessable to Income Tax in India under Section 5? He says "unless received." In your new Section 5 there is the phrase "whether they are received or not." Then, in the case of a business establishment, if he does not bring his profits home, they are assessable?
    Sir J. SIMON: Not under our new Clause.
    Mr. CHAMBERLAIN: I am very glad to get that assurance, because my correspondence has brought me many letters from people very much concerned about a particular case, and they were under the impression, as I was, that profits of a trade were included under the new Subsection. But I now understand from the Government Bench, and I am very much obliged for the explanation, that if a private resident in this country derives his trade profits from an enterprise abroad, and does not bring them home, he is not assessable to taxation under the new law.
    Sir J. SIMON: I agree this is very important, and it is extremely important that I should not mislead anyone—accidentally, of course—as to what the position is. The right hon. Gentleman is referring to an individual. He is not speaking about a limited company, or any of the complicated questions that arise as to where a limited company is resident. Our Section 5 does not in the least bring in the profits of business carried on abroad. It is strictly limited to what you may broadly call investments, namely, securities, stocks, shares, or rents, and

    319
    deliberately so. Of course, incorporated companies raise several difficulties of their own, which I do not understand the right hon. Gentleman to be referring to. His case is that of an individual.
    Mr. CHAMBERLAIN: That is satisfactory. I certainly did not mean to invite the Attorney-General into the technicalities of where a company is domiciled, or anything of that kind. I wanted to take a clear case of an individual who has, say, a mill in India or somewhere else abroad, and to see the effect of this legislation upon that. That disposes, and disposes satisfactorily, of the second point I wish to bring before the House. The third point arises rather from an answer of the right hon. and learned Gentleman, and I want to ask him for information upon the subject to see whether I have correctly under stood what he said in reply to my hon. and learned Friend. Supposing that some body resident in this country has his money invested, partly in this country and partly abroad, and suppose that for perfectly legitimate reasons he lessens the proportion of his capital invested abroad and in creases the proportion of his capital in vested at home, in the kind of securities of different sorts which are embraced in the purview of the Amendment and of the Sub-section to which it refers. Do I understand the right hon. and learned Gentleman to say, in the first place, that it is the law, and, in the second place, that it ought to be the law; that, although he has transferred capital, he is to be assessed upon the average of the profits which were actually received—that is to say, suppose that at the commencement of the three years he had £10,000 abroad, and that at the end of the year he sold £5,000 of the foreign investments and invested it at home, does the right hon. and learned Gentleman mean to say when you come to assess him for Income Tax in the second year in the securities dealt with here—
    Sir J. SIMON: Under Section 5?
    Mr. CHAMBERLAIN: I am following, I think, the case put by the Attorney-General himself. What we understood him to say was that in cases of such a transfer of investment where you were dealing, not with income fluctuating by the chances of the fortunes of the year, but with income diminishing owing to the transfer of part of the capital to another investment, you would still assess that holder upon the average of three years,
    320
    and that if his income from £10,000 was £500 in the first year, but owing to the transfer of the capital it was £250 in the second, you would call upon him to make an average of £750. That surely cannot be what the Attorney-General meant to say, because, of course, capital so transferred to this country is going to pay Income Tax here upon the profits it makes, and you would then be charging the same capital twice over. I think my hon. Friend said it was the law, and I thought the Attorney-General confirmed the view of my hon. Friend and said it was not only the law, but that it should be the law.
    Sir J. SIMON: I will put it as plainly as I can There are three things that must be distinguished. There is first the provision of the old law by which you tax an income from foreign securities, so far as they are remitted to this country. They are not taxed upon the average under the old law, but upon the amount you receive in the year. In the second place, also under the old law, there is the case of remitting to this country the proceeds of what are called foreign possessions—not the same thing as securities. For instance, the best known case in regard to foreign possessions, the one argued in the Courts a great deal, is the case of a wool business in Australia. There, of course, you may remit to this country in specie or in money. Under the old law you tax upon the average that is remitted to this country. Under the old law and under the present law you tax upon the average, the reason being that it might happen a person did not send here the whole of the product in any given twelve months, and therefore it was thought right to take the average The third thing is under our new Clause, and that, of course, has nothing to do with whether income is remitted to this country or not, though on the other hand I think it is quite clear it is limited to the case of securities, stocks, shares, and rents, and does not include profits on an ordinary business abroad. There again there is no question of average. You tax year by year on the interest of your investment abroad just as you are taxed year by year on the interest of your investments at home. At home you would be taxed at the source, whereas abroad you are not; but that is merely a matter of machinery. Out of the three cases—two under the old law, and one under the new—there is only one in which the average can apply. This new Clause cannot possibly have any reference to the first case

    321
    of the remittance to this country of foreign securities, nor to the last case I have mentioned, namely, that under Clause 5. The only case to which it can possibly have reference would be the case of the remittance to this country of the proceeds of foreign possessions, and there what I say is, that it is right to stick to the average, and that it would be wrong to give the taxpayer an option, because, of course, that would obviously mean that the taxpayer, either by choosing the time when he remitted or by limiting in some other form the amount, in any one year it might be a very small thing, whereas, as a matter of fact, the average would not correspond to the small figure which was produced in one year by manipulation. I do not know whether I make it clear, but two out of the three cases could not possibly be affected.
    Mr. CHAMBERLAIN: I think I understand the right hon. and learned Gentleman, and I am much obliged for his explanation. If I do not understand it, it is not for want of courtesy or want of knowledge on his part. But I take that case of foreign possessions, and I want to put a specific instance in that connection. I think the right hon. Gentleman said that the standard case was the case of a wool business in Australia. Take a man who is resident in London and making £5,000 a year by a wool business in Australia. He would be resident in London and he would have the whole of that £5,000 whether he brought it home or not. I understand in that case he will be assessed on the average of three years.
    Sir J. SIMON: The new Section will have nothing to do with that. It only deals with securities, stocks, shares, and rents. It has nothing to do with that.
    Mr. G. LOCKER-LAMPSON: The right hon. and learned Gentleman gave three cases. Is there not a fourth case in which this new Clause applies, namely, the case that, if a business is set up, at the end of three years, instead of being assessed on the average, it is assessed at the end of the year? That is what I want to apply to foreign possessions.
    Mr. CASSEL: May I ask the right hon. and learned Gentleman whether it is not the case that you have a distinction between separate cases—the case of an individual, the case of a partnership, and the case of a company? My right hon. Friend put the case of an individual who
    322
    has a business in Australian wool and who is resident in this country. I would ask the right hon. and learned Gentleman whether it is not the case that under the existing law that individual, however his business is managed, as an individual would be liable for the whole of the profits?
    Sir J. SIMON: That is not under the new Section 5.
    Mr. CASSEL: No, under the existing law. The case of an individual who owns the whole business is deemed to control the whole business, however much it passes into the hands of agents, for he can always dismiss his agents. Under the existing law a single individual—I am distinguishing the care of an individual—is liable on the whole profits of that business carried on abroad, whether remitted to this country or not. Whatever arrangement he makes in regard to agents he has the control of that business. Then you come to the case of a partnership and a company, where I think you are raising up most illogical provisions by your two new Sections. What you provide is this: Take the case of a partner in that wool business living in this country, and that partnership is controlled abroad; if I own half the shares in that partnership, you provide by Clause 10 that I am to be liable in respect to profits I do not bring back to this country.
    Sir J. SIMON: I treated the new Clause as meaning what it says. The hon. and learned Gentleman is talking of a partnership. What on earth has this Clause to do with any question of partnership?
    Mr. DEPUTY-SPEAKER: We are not dealing here with Clause 5 or Clause 10. We must keep to the subject raised by the proposed new Clause.
    6.0 P.M.
    Mr. CASSEL: The only reason I rose was in consequence of the case which my right hon. Friend put, and with reference to which it is essential to understand the position in order to realise the difference between the case of an individual and the partnership and a company. The individual under the existing law is liable. In the case of a partnership under the new Section 10 he is not liable in respect of that which he does not bring back. If that same partnership is transformed into a limited company in which he has a half share, he is liable on the dividends on that company although he does not bring them

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    back. The result of these two Sections is to leave the matter in a hopelessly illogical position, and the right hon. Gentleman had better refer this matter to a Royal Commission.
    Mr. POLLOCK: I think the Attorney-General is perfectly right in the statement of the law which he made, but it does not meet this Amendment. My hon. Friend's Amendment is very simple, but it is impossible to understand it without going back a little. My hon. Friend asks for an extension of the exemption granted under Section 24, Sub-section (2), of the Act of 1907. I am going behind that to remind the House what that Section was passed for. The Attorney-General, who is familiar with the Report of the Income Tax Act, 1905, will recollect that Clauses 81 to 111 deal specifically with this question of the three years' average. What was the position before the Act of 1907? There was Section 133 of the old Income Tax Act, which provided for an adjustment of the assessment at the end of the year by dispensing with all estimates which were based on the preceding year, or the average, and substituting the actual profits of the year by assessment as soon as ascertained. For good reasons, which are pointed out, it was held that the old form of adjustment was insufficient and ineffective, and was not fair to the Crown and the Income Tax Commissioners proposed that Section 133 should be repealed and a new mode of adjustment introduced. In consequence of their recommendation a new Clause was put in, and Section 24, Sub-section (2), and Section 133 of the old Act was repealed, and so now we have got the adjustments which can be made in respect of the three years' system brought up to a more modern system by means of Section 24, Sub-section (2), of the old system, and the old Section 133 of the Act of 1842 no longer stands good.
    What is the effect of that? It is that by means of this adjustment it is possible now for a man to say to the Commissioners that by reason of the three years' system he has paid more by taking this Act than he would have paid if he had taken the real sum he had received. That is the adjustment given in Section 2 and Sub-section (3). Now, my hon. Friend the Member for Salisbury comes forward with a very simple Amendment, and he gave a very good illustration of what it was sought to do. He said, "Let us take the three years'
    324
    average. A man has to return his whole income. Suppose he has returned it for a given year, say, 1914–15, and in that there is a certain amount comes to him from abroad. He has to return that because it is a part of the income from other sources which is to be found in the Income Tax returns we have to make. Having made his average based upon the sum of money he has received from foreign sources, he has returned his average. Having done that, he finds also that he is taxed particularly by another side wind or imposition in respect of this portion of the money which comes from abroad," and so my hon. Friend says that during a period of three years there ought to be an opportunity for exemption in respect of duty which has already been taken into account, and which is only being taxed by means of a direct imposition, and being foreign income there ought, therefore, to be an exemption from the three years' system. I think I have correctly explained the purpose of my hon. Friend's Amendment.
    The illustration which he gave to meet the point made it perfectly plain that this is all he desires to do. The Attorney-General several times over gave a clear exposition of the law, but I am sure he would not resist what I have said, because it is a pure act of justice. I agree that this Clause might have to be framed again or have introduced into it other words in order to make it accord with the Income Tax Act, but that is no reason why we should not read this Clause a second time. At the present moment no adjustment can be made in respect of this income coming from abroad. My hon. Friend suggests an adjustment, particularly in the last line or two. He says there are certain cases in which the hardship will be emphasised by reason of the passage of Clause 5 of this Bill. That Clause provides that whether the money comes over here or does not, it has equally got to be returned and there can be an assessment in respect of money which does not come over here. My hon. Friend proposes to give the exemption in respect both of money which is remitted from abroad and which is taxed, as I say, by a side wind, and which has already found its place in the three years' average and also in respect to the Income Tax which could be imposed by virtue of Clause 5 of the Finance Act of this year. This Amendment is to give that exemption during the same period, and no longer than Clause 24, Sub-section (2) gives it at the present time in respect of an average year's income. It is merely ingrafting

    325
    upon Section 24 a system which is required for the purpose of meeting an injustice by reason of income which is remitted and sent from abroad, and which, although not remitted, is taxed by means of Clause 5. All the other problems and conundrums which have been put have nothing whatever to do with that simple proposition.
    The Attorney-General says that foreign securities are taxed at the year of assessment, and that is the difficulty which makes my hon. Friend's Clause necessary. If they were not taxed on the year of assessment the difficulty might not arise, but inasmuch as they are so taxed, and you have to adopt a three years' average, and although they have been taxed in the year of assessment, they have to find a place in the average system. That system works unfairly, because you get an average of a certain amount of income which has been taxed, and will be taxed, although you are, by means of the average system, submitting them to taxation. I do not think that the Attorney-General was very clear in his answers as to why that
    exemption should not be given, and it seems to me that he wandered into a good many by-paths and a good many subjects instead of considering the very small alteration of the law which would be made by this Clause. If the Chancellor of the Exchequer thinks fit to make any answer, I hope he will say that it is not merely sought to put this Clause in a cupboard ready for the Income Tax Commissioners for their Report when it is made, but that he will see that Section 5 has brought into prominence an injustice which ought to have been remedied before, and will feel the weight of my hon. Friend's argument that Clause 24, Sub-section (2) ought to be extended in the way which is proposed by this very narrow exemption during that particular period of three years. On these grounds I support the Amendment of my hon. Friend.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 182; Noes, 283.

    Division No. 191.]

    AYES.

    [6.11 p.m.

    Agg-Gardner, James Tynte

    Cooper, Sir Richard Ashmole

    Hohler, Gerald Fitzroy

    Aitken, Sir William Max

    Craig, Captain James (Down, E.)

    Hope, Harry (Bute)

    Amery, L. C. M. S.

    Craig, Norman (Kent, Thanet)

    Hope, James Fitzalan (Sheffield)

    Astor, Waldorf

    Craik, Sir Henry

    Hope, Major J. A. (Midlothian)

    Baird, J. L.

    Crichton-Stuart, Lord Ninian

    Horne, Edgar

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

    Croft, H. P.

    Horner, Andrew Long

    Baldwin, Stanley

    Currie, George W.

    Hume-Williams, William Ellis

    Banbury, Sir Frederick George

    Dalrymple, Viscount

    Hunt, Rowland

    Banner, Sir John S. Harmood-

    Dalziel, Davison (Brixton)

    Ingleby, Holcombe

    Baring, Major Hon. Guy V. (Winchester)

    Denison-Ponder, J. C.

    Jessel, Captain H. M.

    Barnston, Harry

    Dennis, E. R. B.

    Joynson-Hicks, William

    Barrie, H. T.

    Dickson, Rt. Hon. C. Scott

    Kerry, Earl of

    Bathurst, Charles (Wilts, Wilton)

    Duke, Henry Edward

    Keswick, Henry

    Beach, Hon. Michael Hugh Hicks

    Duncannon, Viscount.

    Kinloch-Cooke, Sir Clement

    Beckett, Hon. Gervase

    Du Pre, W. Baring

    Lane-Fox, G. R.

    Bennett-Goldney, Francis

    Eyres-Monsell, Bolton M.

    Lloyd, George Butler (Shrewsbury)

    Bentinck, Lord H. Cavendish-

    Faber, George Denison (Clapham)

    Locker-Lampson, O. (Ramsey)

    Beresford, Lord Charles

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

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

    Bigland, Alfred

    Falle, Bertram Godfray

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

    Bird, Alfred

    Fell, Arthur

    Lyttelton, Hon. J. C.

    Blair, Reginald

    Fletcher, John Samuel

    MacCaw, Wm. J. MacGeagh

    Bowden, G. R. Harland

    Ganzoni, Francis John C.

    Mackinder, Halford J.

    Boyton, James

    Gardner, Ernest

    M'Calmont, Major

    Brassey, H. Leonard Campbell

    Gibbs, G. A.

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

    Bridgeman, William Clive

    Gilmour, Captain John

    Malcolm, Ian

    Bull, Sir William James

    Glazebreek, Captain Philip K.

    Mildmay, Francis Bingham

    Burdett-Coutts, W.

    Grant, J. A.

    Mills, Hon. Charles Thomas

    Burgoyne, A. H.

    Greene, W. R.

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

    Burn, Colonel C. R.

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

    Mount, William Arthur

    Butcher, John George

    Gwynne, R. S. (Sussex, Eastbourne)

    Newman, John R. P.

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

    Haddock, George Bahr

    Newton, Harry Kottingham

    Campion, W. R.

    Hall, D. B. (Isle of Wight)

    Nicholson, William G. (Petersfield)

    Carlile, Sir Edward Hildred

    Hall, Marshall (L'pool, East Toxteth)

    Nield, Herbert

    Cassel, Felix

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

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

    Castlereagh, Viscount

    Hardy, Rt. Hon. Laurence

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

    Cave, George

    Helmsley, Viscount

    Ormsby-Gore, Hon. William

    Cecil, Evelyn (Aston Manor)

    Henderson, Major H. (Berks, Abingdon)

    Paget, Almeric Hugh

    Cecil, Lord Hugh (Oxford University)

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

    Pease, Herbert Pike (Darlington)

    Cecil, Lord R. (Herts, Hitchin)

    Hibbert, Sir Henry F.

    Peel, Lieut.-Colonel R. F.

    Chamberlain, Rt. Hon. J. A.

    Hickman, Colonel Thomas E.

    Perkins, Walter F.

    Clay, Captain H. H. Spender

    Hills, John Waller

    Peto, Basil Edward

    Clive, Captain Percy Archer

    Hill-Wood, Samuel

    Pole-Carew, Sir R.

    Clyde, James Avon

    Hoare, S. J. G.

    Pollock, Ernest Murray

    Pretyman, Ernest George

    Stanier, Beville

    Ward, A. S. (Herts, Watford)

    Pryce-Jones, Colonel E.

    Stanley, Hon. G. F. (Preston)

    Watson, Hon. W.

    Quilter, Sir William E. C.

    Starkey, John Ralph

    Weston, Colonel J. W.

    Randles, Sir John S.

    Staveley-Hill, Henry

    Wheler, Granville C. H.

    Rees, Sir J. D.

    Steel-Maitland, A. D.

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

    Rolleston, Sir John

    Stewart, Gershom

    Williams, Colonel R. (Dorset, W.)

    Ronaldshay, Earl of

    Strauss, Arthur (Paddington, North)

    Willoughby, Major Hon. Claud

    Rothschild, Lionel de

    Sykes, Alan John (Ches., Knutsford)

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

    Rutherford, John (Lancs., Darwen)

    Sykes, Sir Mark (Hull, Central)

    Wilson, Captain Leslie O. (Reading)

    Samuel, Sir Harry (Norwood)

    Talbot, Lord Edmund

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

    Samuel, Samuel (Wandsworth)

    Terrell, George (Wilts, N. W.)

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

    Sanders, Robert Arthur

    Thomas-Stanford, Charles

    Wood, John (Stalybridge)

    Sanderson, Lancelot

    Thomson, W. Mitchell- (Down, North)

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

    Sandys, G. J.

    Thynne, Lord Alexander

    Yate, Colonel C. E.

    Scott, Sir S. (Marylebone, W.)

    Tobin, Alfred Aspinall

    Younger, Sir George

    Sharman-Crawford, Colonel R. G.

    Touche, George Alexander

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

    Tryon, Captain George Clement

    TELLERS FOR THE AYES.—Mr.

    Smith, Harold (Warrington)

    Tullibardine, Marquess of

    G. Locker Lampson and Mr. H. Terrell.

    Spear, Sir John Ward

    Valentia, Viscount

    NOES.

    Abraham, William (Dublin, Harbour)

    Denman, Hon. Richard Douglas

    Hughes, Spencer Leigh

    Addison, Dr. Christopher

    Devlin, Joseph

    Illingworth, Percy H.

    Adkins, Sir W. Ryland D.

    Dewar, Sir J. A.

    John, Edward Thomas

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

    Dickinson, Rt. Hon. Willoughby H.

    Jones, Edgar (Merthyr Tydvil)

    Agnew, Sir George William

    Donelan, Captain A.

    Jones, H. Haydn (Merioneth)

    Ainsworth, John Stirling

    Doris, William

    Jones, J. Towyn (Carmarthen, East)

    Alden, Percy

    Duffy, William J.

    Jones, Leif (Notts, Rushcliffe)

    Allen, Arthur A. (Dumbartonshire)

    Duncan, C. (Barrow-in-Furness)

    Jones, William S. Glyn-(Stepney)

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

    Duncan, Sir J. Hastings (Yorks, Otley)

    Jowett, Frederick William

    Arnold, Sydney

    Edwards, John Hugh (Glamorgan, Mid)

    Joyce, Michael

    Baker, Harold T. (Accrington)

    Elverston, Sir Harold

    Kellaway, Frederick George

    Baker, Joseph Allen (Finsbury, E.)

    Esmonde, Dr. John (Tipperary, N.)

    Kelly, Edward

    Balfour, Sir Robert (Lanark)

    Esmonde, Sir Thomas (Wexford, N.)

    Kennedy, Vincent Paul

    Baring, Sir Godfrey (Barnstaple)

    Falconer, James

    Kenyon, Barnet

    Barlow, Sir John Emmott (Somerset)

    Farrell, James Patrick

    Kilbride, Denis

    Barnes, George N.

    Fenwick, Rt. Hon. Charles

    King, Joseph

    Barran, Sir John N. (Hawick Burghs)

    Ffrench, Peter

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

    Barran, Rowland Hurst (Leeds, N.)

    Field, William

    Lambert, Richard (Wilts, Cricklade)

    Beale, Sir William Phipson

    Fiennes, Hon. Eustace Edward

    Lardner, James C. R.

    Beauchamp, Sir Edward

    Fitzgibbon, John

    Law, Hugh A. (Donegal, West)

    Beck, Arthur Cecil

    Flavin, Michael Joseph

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

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

    Furness, Sir Stephen Wilson

    Levy, Sir Maurice

    Bentham, George Jackson

    Gelder, Sir William Alfred

    Lewis, Rt. Hon. John Herbert

    Bethell, Sir John Henry

    George, Rt. Hon. D. Lloyd

    Lough, Rt. Hon. Thomas

    Birrell, Rt. Hon. Augustine

    Ginnell, L.

    Lyell, Charles Henry

    Black, Arthur W.

    Gladstone, W. G. C.

    Lynch, Arthur Alfred

    Boland, John Plus

    Glanville, Harold James

    Macdonald, J. Ramsay (Leicester)

    Booth, Frederick Handel

    Goddard, Sir Daniel Ford

    Macdonald, J. M. (Falkirk Burghs)

    Bowerman, Charles W.

    Goldstone, Frank

    McGhee, Richard

    Boyle, Daniel (Mayo, North)

    Greenwood, Hamar (Sunderland)

    Maclean, Donald

    Brady, Patrick Joseph

    Greig, Colonel J. W.

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

    Brockiehurst, William B.

    Griffith, Rt. Hon. Ellis Jones

    MacVeagh, Jeremiah

    Brunner, John F. L.

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

    M'Callum, Sir John M.

    Bryce, J. Annan

    Gulland, John William

    McKenna, Rt. Hon. Reginald

    Buckmaster, Sir Stanley O.

    Gwynn, Stephen Lucius (Galway)

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

    Burns, Rt. Hon. John

    Hackett, John

    M'Micking, Major Gilbert

    Burt, Rt. Hon. Thomas

    Hancock, John George

    Manfield, Harry

    Buxton, Noel (Norfolk, North)

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Markham, Sir Arthur Basil

    Byles, Sir William Pollard

    Harcourt, Robert V. (Montrose)

    Marks, Sir George Croydon

    Carr-Gomm, H. W.

    Harmsworth, Cecil B. (Luton, Beds)

    Marshall, Arthur Harold

    Cawley, Sir Frederick (Prestwich)

    Harvey, A. G. C. (Rochdale)

    Mason, David M. (Coventry)

    Cawley, Harold T. (Lancs., Heywood)

    Harvey, T. E. (Leeds, West)

    Meagher, Michael

    Chapple, Dr. William Allen

    Haslam, Lewis (Monmouth)

    Meehan, Francis E. (Leitrim, N.)

    Clancy, John Joseph

    Havelock-Allan, Sir Henry

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

    Clough, William

    Hayden, John Patrick

    Millar, James Duncan

    Clynes, John R.

    Hayward, Evan

    Molloy, Michael

    Collins, Godfrey P. (Greenock)

    Helme, Sir Norval Watson

    Molteno, Percy Alport

    Collins, Sir Stephen (Lambeth)

    Hemmerde, Edward George

    Mond, Rt. Hon. Sir Alfred

    Compton-Rickett, Rt. Hon. Sir J.

    Henderson, Arthur (Durham)

    Montagu, Hon. E. S.

    Cornwall, Sir Edwin A.

    Henry, Sir Charles

    Mooney, John J.

    Craig, Herbert J. (Tynemouth)

    Hewart, Gordon

    Morgan, George Hay

    Crooks, William

    Higham, John Sharp

    Morrell, Philip

    Crumley, Patrick

    Hinds, John

    Morison, Hector

    Cullinan, John

    Hobhouse, Rt. Hon. Charles E. H.

    Morton, Alpheus Cleophas

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

    Hedge, John

    Munro, Rt. Hon. Robert

    Davies, Ellis William (Eifion)

    Hogge, James Myles

    Murphy, Martin J.

    Davies, Timothy (Lincs., Louth)

    Holmes, Daniel Turner

    Murray, Captain Hon. Arthur C.

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

    Holt, Richard Durning

    Nicholson, Sir Charles N. (Doncaster)

    Dawes, James Arthur

    Hope, John Deans (Haddington)

    Noian, Joseph

    De Forest, Baron

    Howard, Hon. Geoffrey

    Norman, Sir Henry

    Delany, William

    Hudson, Walter

    Norton, Captain Cecil William

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    329

    Nugent, Sir Walter Richard

    Rendall, Athelstan

    Taylor, Thomas (Bolton)

    Nuttall, Harry

    Richardson, Thomas (Whitehaven)

    Tennant, Rt. Hon. Harold John

    O'Brien, Patrick (Kilkenny)

    Roberts, Charles H. (Lincoln)

    Thorne, G. R. (Wolverhampton)

    O'Connor, T. P. (Liverpool)

    Roberts, George H. (Norwich)

    Thorne, William (West Ham)

    O'Doherty, Philip

    Roberts, Sir J. H. (Denbighs)

    Toulmin, Sir George

    O'Donnell, Thomas

    Robertson, Sir G. Scott (Bradford)

    Walsh, Stephen (Lancs., Ince)

    O'Dowd, John

    Robertson, John M. (Tyneside)

    Walters, Sir John Tudor

    O'Malley, William

    Robinson, Sidney

    Wardle, George J

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

    Roch, Walter F. (Pembroke)

    Waring, Walter

    O'Shaughnessy, P. J.

    Roche, M. Augustine (Louth)

    Warner, Sir Thomas Courtenay T.

    O'Sullivan, Timothy

    Roe, Sir Thomas

    Wason, Rt. Hon. E. (Clackmannan)

    Outhwaite, R. L.

    Rowlands, James

    Wason, John Cathcart (Orkney)

    Palmer, Godfrey Mark

    Rowntree, Arnold

    Watt, Henry Anderson

    Parker, James (Halifax)

    Runciman, Rt. Hon. Walter

    Wedgwood, Josiah C.

    Pearce, Robert (Staffs, Leek)

    Russell, Rt. Hon. Thomas W.

    White, J. Dundas (Glasgow, Tradeston)

    Pearce, William (Limehouse)

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

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

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

    Samuel, J. (Stockton-on-Tees)

    White, Patrick (Meath, North)

    Phillips, John (Longford, S.)

    Scanlan, Thomas

    Whitehouse, John Howard

    Pirie, Duncan V.

    Scott, A. MacCallum (Glas., Gridgeton)

    Whittaker, Rt. Hon. Sir Thomas P.

    Ponsonby, Arthur A. W. H.

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

    Whyte, Alexander F. (Perth)

    Pratt, J. W.

    Sheehy, David

    Wiles, Thomas

    Price, C. E. (Edinburgh, Central)

    Sherwell, Arthur James

    Wilkie, Alexander

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

    Shortt, Edward

    Williams, Aneurin (Durham, N. W.)

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

    Simon, Rt. Hon. Sir John Allsebrook

    Williamson, Sir Archibald

    Primrose, Hon. Neil James

    Smith, Albert (Lancs., Clitheroe)

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

    Pringle, William M. R.

    Smith, H. B. Lees (Northampton)

    Wilson, W. T. (Westhoughton)

    Radford, George Heynes

    Smyth, Thomas F. (Leitrim, S.)

    Winfrey, Sir Richard

    Raffan, Peter Wilson

    Soames, Arthur Wellesley

    Wing, Thomas Edward

    Rea, Rt. Hon. Russell (South Shields)

    Spicer, Rt. Hon. Sir Albert

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

    Rea, Walter Russell (Scarborough)

    Strauss, Edward A. (Southwark, West)

    Yeo, Alfred William

    Reddy, Michael

    Sutherland, John E.

    Young, William (Perthshire, E.)

    Redmond, John E. (Waterford)

    Sutton, John E.

    Redmond, William (Clare, E.)

    Taylor, John W. (Durham)

    TELLERS FOR THE NOES.—Mr.

    Redmond, William Archer (Tyrone, E.)

    Taylor, Theodore C. (Radcliffe)

    W. Jones and Mr. Webb.

    NEW CLAUSE.—(Surrender of Interest by Tenant for Life or Person having Interest in Succession.)
    Where under any settlement by will or otherwise any tenant for life before the first day of April, nineteen hundred and fifteen, or where at any time any person possessing an interest in succession surrenders by deed lodged with the Estate Duty Commissioners his interest in possession in, or in succession to, any settled property, no Estate Duty shall be charged on any property passing, or which would have passed, under the provisions of the settlement at his death, and which would but for the provisions of this Section have been liable to Estate Duty under this Act.
    Clause brought up and read the first time.
    Mr. JAMES HOPE: I beg to move, "That the Clause be read a second time."
    I desire to say at the outset that which no doubt will soon become apparent, that I do not pretend to be an expert in the law of settled property, and, if the learned Solicitor-General contests with me the form of my Amendment, I must leave it to my learned Friends behind me to carry on the contest. I must, however, say that I think the object of this new Clause is pretty plain. It is to do something to mitigate the effect of the application of the Estate Duty to property passing in succession under a settlement. The effect, I think, was hardly brought out in the
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    course of the Debates on the new Clause which is now Clause 12. I will take two cases which I think are both covered by this Amendment, two cases which, of course, may apply in the course of the same settlement. There is, first of all, the case of a man who is now tenant for life, and who has thought that the property which will pass on his death to his heir would be entirely free from Estate Duty. His arrangements have been made on that assumption. If he had thought otherwise, he might perhaps have saved money and have left it to his heir, or he might have insured against his death; but, owing to the change of the law, he has made no provision against the duties which will now be payable, and which will be increased from the former rates if the estate is above a certain sum. In the case of this man, I suggest by this Clause that he should be free to say, "I am tenant for life only of this property; I cannot dispose of it; I cannot realise it, and probably only to a very limited degree can I charge it. I know I cannot enjoy it for any great length of time, and I wish now to relinquish my interest in it, and to let my successor have the benefit of the enjoyment of the estate, whether it be in land or personal property, as he could have had but for the change in the law this year 1014, which he was fully expecting to have, and on the assumption of which both he and I have based our calculations." I know that the tenant for

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    life can renounce, subject to the three years' provision of Section 59 of the Finance Act, 1910, but I do not think it fair in the case I am talking of that he should not have the right of renouncing his life interest under the changed circumstances of the law without being subject to that limitation.
    It is not only the interest of the present tenant for life that I am considering, and perhaps not so much as the interests of others in the succession. I have in mind a very hard case that sometimes occurs where you have property passing from brother to borther, and then to the son of the youngest brother. It is not such a very uncommon case to find three brothers of very much the same age, and only the youngest of the three with a son. I do not know whether hon. Members will have noticed the tragic fact in the case of my lamented Friend the Member for Oxford University (Sir W. Anson), that there were no less than three brothers and one nephew who died within twelve months. It is quite true that they did not die in order of succession, and I do not know whether there was any settlement, but that illustrates the kind of hardship that might be incurred if there were succession from brother to brother, and if the brothers were very much of the same age, and their lives were worth much the same. I propose to deal with such a case by this Clause. A is the present tenant for life, B is the next brother, C is the youngest brother, and D is C's son. I propose to give an option to C and D to cut themselves out of the succession, and that power is to hold good whether they die within three years or not. Surely it is perfectly fair that a man should have the right to say, "I am an elderly man. I am the heir of my brother. I am comfortably enough provided for. I do not wish to inherit. I do not wish to take upon myself the responsibilities of the estate or the responsibility which will inevitably attach to the business if I succeed to any settled share in it. If I succeed I cannot dispose of it or alter the succession. I am provided for, and I wish to stand out and let it go to my next brother." The third brother may say the same. The result of that would be that the heir who would ultimately succeed, the son of the youngest brother, would have the benefit of the succession, and the property would not be ruinously charged as it would be if the present proposal of the
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    Chancellor of the Exchequer with regard to settled property comes into effect.
    I ask only that this option shall be exercised if a man in succession entirely renounces his interest. Of course I quite realise that, subject to the three years' provision, C and D could surrender at the present time, and some mitigation is afforded by the Clause which is now Clause 13, but, even so, I submit that it would not be nearly enough. Supposing three deaths occurred within two years, I find, even with those mitigations in the case of quick succession, that a property which would ordinarily pay 10 per cent would pay something like 21 per cent. It surely is not the intention of this House to take advantage of the accidents of mortality to impose so ruinous a charge as that. I do not want to take any advantage; all I want is that settled property should not be at an unfair advantage, and that the tenant for life, or man having an interest in expectancy, should not be unfairly mulct because he is tied up by the settlement. Surely a man who can dispose of his interest is in a quite different position from the man who cannot dispose of it. Although it may be a matter of policy not to discourage settlements, it cannot be right to take advantage of a man being tied up by a settlement by the Exchequer levying heavy sums upon his property when he is quite willing and even eager to renounce all his interest in it for life. It is from that point of view, and not from the point of view of any advantage to settled property, but to save people who would be unwillingly caught in the net of the Inland Revenue, owing to the fact of their being under a settlement made under totally different conditions, and prior to this unexpected change in the law, that I ask the House to read the Clause a second time.
    Mr. MOUNT: I beg to second the Motion.
    Sir S. BUCKMASTER: At the invitation of the hon. Member (Mr. James Hope) I will forbear from criticising the language of this Clause, although I think it is quite obvious that, if the House were to adopt it, it would, in order to give effect to his intention, require to be couched in somewhat different terms. I quite agree with what he said that, in discussing a matter such as this, one has to look at the object of the Clause and to consider the real subject-matter of the Debate. In order to make plain why it is that this Clause cannot be accepted, I must ask the House

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    to bear with me for a few moments while I invite its consideration of the state of the law as it stands at the present time. By the Finance Act of 1894 Estate Duty was charged not only upon property that a man owned when he died, but upon the property that passed by reason of his death, and it followed, therefore, when a man who was tenant for life of settled property died, although he owned no interest in the capital of the estate, yet, none the less, the capital of the estate was taxed. That was one of the cardinal principles of the Act of 1894. Another was this. That a man should not be able to dispose by gift of his property within twelve months of his death, or if he did dispose of it none the less it should be aggregated with his other property. That provision was inserted as soon as attempts were made to get out of the Act of 1894.
    Mr. PRETYMAN: It was not done in the Act of 1894, but some years after.
    Sir S. BUCKMASTER: The particular moment when that provision was added does not matter. Probably it was in 1896. But the provision was made that if a man disposed of his property by gift within twelve months of death the property was none the less liable to be aggregated with his other property. That was how the law stood under the Act of 1894 as amended in 1896. It was then found that the tenant for life by surrendering his life interest caused what lawyers called a merger in the reversion, the result being that when he died the property did not, in fact, pass, because the union of the two estates made by virtue of the assignment effected during his life had caused the whole property to come under a totally different dominion, and it never passed at his death at all. The result was that people began to dispose of their property if tenants for life by surrender shortly before death, and the prudent cautious Government in power in 1900 took steps to remedy that by passing Section 11 of the Finance Act, 1900. That Section provides:—
    "In the case of every person dying after the 31st day of March, 1900, property, whether real or personal, in which the deceased person or any other person had an estate or interest limited to cease on the death of the deceased, shall.… be deemed to pass on the death of the deceased, notwithstanding that the estate or interest has been surrendered.… whether for value or not
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    to or for the benefit of any person entitled to an estate or interest in remainder … unless that surrender was bonâ fide resale or effected twelve months before the death of the deceased and bonâ fide possession and enjoyment of the property was assumed … and retained," etc.
    In that case the estate might escape duty. Thus under the Act of 1900 hon. Members opposite took care to prevent the mischief that was apprehended under the Act of 1894. But the hon. Member's new Clause seeks to restore it. It was provided that no such surrender of life estate should save the estate liability to duty when it passed, excepting when it was done more than twelve months before the date of death and bonâ-fide possession was taken. Now the twelve months is stretched to three years, and the position is we have extended the area of caution which hon. Members opposite established. What is this Amendment? Its object is to do away with the whole of that—
    Mr. PRETYMAN: No, no!
    Sir S. BUCKMASTER: The hon. and gallant Member says "No, no!" but I invite him to look at the Amendment. He will sue it is exactly what the hon. Member who moved it said it was its intention. It provides—
    "Where under any settlement by will or otherwise any tenant for life before the first day of April, nineteen hundred and fifteen, or where at any time any person possessing an interest in succession surrenders by deed lodged with the Estate Duty Commissioners his interest in possession in, or in succession to, any settled property, no Estate Duty shall be charged on any property passing, or which would have passed, under the provisions of the settlement at his death, and which would but for the provisions of this Section have been liable liable to Estate Duty under this Act."
    If I understand that Amendment, and I think I do understand it clearly, the effect is as I have stated. Let me assume that the person who surrenders his life estate dies. Where any tenant for life before the 1st day of April, 1915, surrenders by deed his interest in the estate the estate is to be free from duty. And the same thing would be true of any person who had surrendered his life interest previously to this date, provided he died within twelve months of the surrender. That is the position so far as the life tenant is concerned, and to that

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    extent this Clause completely repeals the whole effect of Section 11 of the Act of 1900, amended and extended as it was by our Statute in 1910. That is so far as the tenant for life himself is concerned. But the hon. Member goes on to suggest that it shall be open to a person entitled to any succession to effect release of that succession. It means, I assume, this, that a person who to-day is tenant for life in remainder and expectancy upon the death of his brother with remainder and expectancy on his death to some other relation, shall be at liberty to surrender his life estate expectancy to the third person in the reversion. This person is to surrender on the hypothesis that he must become tenant for life in settlement, because if he does not he will have to surrender nothing; nothing will have passed at his death, and there will never have been any duty payable on it. It can only operate on the hypothesis that the man who surrenders his estate in succession comes into the estate himself, and would, but for his dispossession have been entitled as tenant for life to the property. Therefore, in other words, it is an assignment in advance of the interest that he would enjoy as tenant for life.
    So, again, there would be no difference whatever between assigning the estate which you are coming into in expectancy, and assigning an estate when you have come into it, in the case where the assignment will only become effective and operative on the hypothesis that you do come into it. In other words, the subsequent words of this Amendment as to assigning the interest in succession are nothing but providing that the first part of the Section may be extended, so as to affect all tenants for life, who, before the estate falls into their possession, like to assign that estate away. What the reason for such an Amendment is, it is hard to understand. It affects exactly the same consideration as in the case of a tenant for life himself. And when the hon. Member says he does not desire to give any advantage to the tenants for life of settled property, he overlooks the fact that that is exactly what he is doing. If a person who owns property absolutely disposes of it within three years of his death, it would be aggregated. Yet if a man disposes of it before he comes into possession he is to be exempted notwithstanding the fact that he does come into possession as tenant for life.
    Mr. PRETYMAN: The hon. and learned Gentleman obviously does not understand the real object of this Amendment. He is perfectly correct in saying that on the Second Reading of a Clause what is important is to get at the real gist of its language, and then you can, if necessary, alter the wording later on. I thought my hon. Friend's explanation opposite perfectly clear, and I will repeat what he said in order to explain the object of this Clause. It is not desired by it to give any advantage whatever to the tenant for life, or anybody concerned in a settled estate which they do not possess now. And I will say at once that some words will have to be inserted in order to ensure that.
    Sir S. BUCKMASTER: The Clause as drafted does not provide that.
    Mr. PRETYMAN: The last part does, but not the first. I do not think—I speak with great diffidence—that the learned Solicitor-General is quite correct in saying that the object of the Act of 1894 was to make property passing at the death of the tenant for life, and where the tenant for life had no power over the capital, to pay Death Duty. That was not so. The whole scheme of the Act was that duty should only be paid on the death of the person competent to dispose of the capital. That was the main scheme of the Act upon which the whole duty was founded. A Clause was inserted, as the Solicitor-General will find, providing that, in order that the Act might come into bearing at an earlier date than it otherwise would do, where the tenant for life died, and where the duty had not already been paid on that setttlement, then, and then only, the duty was to be paid on his death. I think the Solicitor-General will find that is correct. The whole scheme of the Act is not to charge on the death of a tenant for life, but only on the death of persons competent to dispose. The words "competent to dispose" will be found in the original Clause. The object of that Act was to encourage settlements. When the Chancellor of the Exchequer himself, in his Budget of 1909–10, raised the insurance rate from 1 to 2 per cent., he endorsed the action of Sir William Harcourt, in 1894, in encouraging settlements. I do not myself think that such a great advantage was given to settled property as the Chancellor of the Exchequer supposes, but there was some advantage. To whatever extent that advantage goes, it follows that the action of Parliament was to encourage settlements. I am sure I have established that.

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    Now Parliament turns round and completely alters its system, and we now say that, instead of encouraging settlements, we are going to charge the same duties upon the death of a tenant for life as those which are otherwise dealt with. I think the Solicitor-General finds I am correct.
    Sir S. BUCKMASTER: Not only do I not find that, but I should like to withdraw my recantation with regard to the twelve months, which came in under the Act of 1894, and not the Act of 1896.
    Mr. PRETYMAN: The matter was tried in the Beech case. I debated that across the floor over and over again, and it will be within the recollection of every Member present who was here at that time. The question was whether, whenever an interest was transferred by a person in articulo mortis, the twelve months applied to it or not. The Beech case was the case of a clergyman in Suffolk who had the same name, although spelt differently, as the then Chancellor of the Exchequer. It was selected as a test case, and the then Chancellor of the Exchequer agreed to pay the costs of both sides, so that it should be decided whether the twelve months applied or not. That was settled property.
    Sir S. BUCKMASTER: The hon. and gallant Member will forgive me for interrupting him, but we are at cross purposes. My statement was that the Act of 1894 left it open to the tenant for life to surrender his life estate up to the time he was dying, but that the Act of 1894 provided that if the gift was made within twelve months from that it should not take away the liability to aggregation. It was that statement, which was not advertently but inadvertently corrected by hon. Members opposite, that I was correct in making. I pointed out that it being found that the tenant for life could exercise a right up to the moment of death which the absolute owner could not enjoy, it was that which led to the Act of 1900 being passed, placing him on the same footing in regard to it with the absolute owner. It is quite right to say that the Beech case did decide that with regard to settled property, but not with regard to unsettled property. That was the part of my argument which was misunderstood.
    Mr. PRETYMAN: We are discussing settled property now. We do not desire in any way that settled property should be put in a different position. We are
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    dealing with existing settlements which have been created largely and mainly because this House has given settled property an opportunity of insurance. It has insured itself, and the settlements have been created. The Chancellor of the Exchequer will agree that these settlements, having been created for the purpose of obtaining this insurance, cannot now be determined. That is impossible, because they are tied by the leg. The argument by which Clause 10, to which this Clause applies, was supported from the Government Bench was that the intention was to put settled property in the same position as free property. All that we desire is to put settled property in the same position as free property. It is now in a much worse position. Take the case of three brothers mentioned by my hon. Friend. You have three brothers, A, B, and C. A is the owner of free property. He has a brother B a year or two younger, and another brother C a year or two younger than himself. C is a son. D is a son of C. A as the owner of the free property can leave that property by will direct to his nephew D, and no Estate Duty will be payable. It will then pass direct to the next generation, and Estate Duty will only be payable once in a generation. With the enormous Death Duties which are now levied, it is the care of every careful owner of property to see that these crushing burdens do not fall more than once in a generation, because, if they do, even if it is landed property to which the settlement applies, the property is absolutely crushed out of existence. That is a normal case. If the Chancellor of the Exchequer does not agree to some Amendment of this character he will be doing by this Bill what he said he would do, taxing people out of existence. They are tied up and cannot escape.
    Take the case of the three brothers, A, B and C, which is not an uncommon case, but a very ordinary case in the ownership of an estate. A cannot dispose of the capital of the property at all. He has no discretion over the capital. He can only deal with his own estate. He has no power to say how much B, C or D is to have, and without any discretion of his own it must pass to B. B may, it is true, divest himself of it by passing it on to C, and C may again divest himself of it bypassing it on to D. In each case the three years have to elapse before that transfer has any effect in avoiding the duty, whereas were the property free, and had

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    the Chancellor of the Exchequer desired to put it in the same position as free property, A might leave the property direct to I), and only one duty would be payable in the generation. This Clause divides itself into the two cases of the existing tenant for life and of those who are expectant tenants for life. In regard to the existing tenant for life, it is perfectly clear that we must give him a limited opportunity to act, and it is suggested that the 30th April next would be a reasonable date. As to the wording of the Amendment, the Solicitor-General is right in saying—I admit it was an oversight—that any tenant for life would be able to transfer, even if he were liable to duty now, on his death. To meet that it would be perfectly easy to insert words which will make the Clause read: "Where under any settlement by will or otherwise any tenant for life at whose death Estate Duty would not be payable but for Section 10 of this Act." I think that would make it clear. That is what we intended, namely, that where a tenant for life is now exempt and has made a bargain with the State—he holds a contract which the State has made with him—Estate Duty shall not be payable at his death. Now the State, although he holds the State's paper and a contract the State has made with him that he is not to pay duty at his death, not only rescinds that contract and says that he shall pay that duty, but it deprives him of a power all free men should have of being able to transfer his property.
    We say that where a tenant for life has this contract broken he should have a few months, and only in that case, not in the case where he would pay duty normally at his death because he is tenant for life under the Act of 1894, but where the bargain is broken and where the State has repudiated its contract with him that he should have a few months in which, if he likes, to transfer his property to the next generation; that where other lives intervene in the same generation—that is, taking the difficult case of the brothers B and C—they should both have the option before they succeed, of renouncing their tenure of the property and by agreement although it does not put them in the same position as they would be if the owner were a free owner because he has got to get the consent of B and C—if they desire that the property should pass from A to D, which is the next generation, that they should have the power of transferring
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    within the period of a few months and of renouncing their right of succession; and that they should be put in the same position as the owner of a free property is in. I hope I have made the position absolutely clear. If there is anything in this proposal which gives an advantage to a settled property which is not held by a free property, we are perfectly willing to find words to put that right, but we maintain most strongly that this House has no right, not only to break its contract but to put the individual with whom the contract is broken in an infinitely worse position than a man who has never made a contract with the State at all. There must surely be a point beyond which dishonesty and unfairness in taxation cannot be carried. We have long passed the point when the same code of honour is expected from the State as is expected between one individual and another. My own view is that that is a most dangerous point to pass, because I do not conceive that it is to the advantage of the State or of public policy that there should be one code of honour between individuals and another and a, lower code of honour between the State, and the subjects of the Crown. That is bad, and this shows it.
    7.0 P.M.
    You are, in this Bill, passing the point where a private individual who dealt with another man as you are dealing with people with whom you have made contracts would be liable to be hauled before a Court of Law to make good his tort. You are above the law. One lapse leads to another. Finding yourselves above the law, there seems to be no limit to which you would not carry the hardship you inflict upon the taxpayers. We ask the Chancellor of the Exchequer to accept this Amendment as a measure of ordinary justice to owners of settled property who are put in a most unfortunate position by this legislation, because they are tied up. Does he understand that Clause 10, with which this new Clause is concerned, even if amended as we propose, may place enormous and unequal burdens on a particular class of property? There are many properties which will not be affected to the extent of one farthing by Clause 10 in any shape or form. There are other properties which by the mere accident of the position of the lives which happen to hold them, and to be likely to succeed to them, would be absolutely crushed, and where anything from £100,000, £200,000, or £300,000 may be demanded

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    over and above the contract which has been definitely made with the State. When the Chancellor of the Exchequer is by the mere force of his majority, against all right and justice, carrying such a Clause as Clause 10, and when his argument on Clause 10 is that he proposes to put settled property in the same position as free property, he is surely bound to see that, at any rate, he does not put settled property in a worse position.
    Sir A. MARKHAM: I have always had some hesitation on this Budget in supporting the Settlement Clause. I have supported the Government all through on the Budget, but I did not take part in the Division on the Settlement Clause. I have no interest, directly or indirectly, in settled property, but I think, when the State has entered into a bargain with individuals, the honour of the State should be just the same as the honour of an individual. Whether it has been in this case or not I am not going to say, further than this. If the State finds it is necessary to raise money for the purpose of increased expenditure, I think the State ought to have regard to the interest of those who have entered into a direct bargain with them. In this case where a man has entered into a bargain with the State, and where a settlement would not have been made unless Parliament had given them this right, you ought not to put him in a worse position than where property has not been settled at all. For this reason, though not accepting the Amendment on the Paper, which is of a totally different character, I hope the Government will give consideration to the Amendment to the Clause which my hon. Friend has proposed.
    Mr. CAVE: I quite appreciate the fact that we are not discussing the form of this Clause, because the hon. Member (Mr. James Hope) very fairly admitted that it would require consideration. I am in sympathy with his object, and with the reason given by my hon. Friend (Mr. Pretyman). I quite agree with the Solicitor-General that the whole thing began with what he calls one cardinal principle of the Act of 1894, that property shall be deemed to pass on death when it does not, in fact, pass on death. It may be that it is a bad principle, but it is far too late, at any rate this is not the occasion on which, to attempt to alter it, and we must accept it at present. The Act of 1894 did provide that when the life tenant died, the property which passed to others
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    on his death, not under his will or by his disposition, should bear duty as if the whole interest were then created in the successor. Then came this difficulty, that it was thought—I do not know whether it was true or not—that people began to make what might be called death-bed surrenders. A man who was not likely to live surrendered his life estate just before his death. To meet that difficulty the Act of 1900 was passed, and one year was allowed so that surrenders within that year were not really effective. So far, so good. The real difficulty and hardship came in first, under the three years' rule, which the Chancellor of the Exchequer proposed in 1909–10, and, secondly it will be greatly increased by the provision in Clause 10. Under the three years' rule, if a man surrenders or gives property within three years before his death, you treat that as if it passes on his death, which is an absolutely unfair thing. Three years is much too long a time, and very often that provision imposes duty on people who make their gift without the least intention of evading Death Duty. We probably all know cases in which that provision has worked great hardship. We all think on this side of the House that a great mistake is being made in going behind the provisions of the Act of 1894 with regard to Settlement Estate Duty. Naturally the hon. Baronet (Sir A. Markham) agrees with us that bargains of that kind ought to be kept. When you have got two great hardships of that kind it is only right for hon. Members to try and see whether they cannot relieve settled property in some way or other by some fair means. The effect of what my hon. Friend proposes is that the three years' rule shall not apply to surrenders of life estates made within the next year—a very modest proposal. I can hardly understand why it is limited to surrenders of life estates before April next. But, at all events, the Chancellor of the Exchequer cannot complain of that, and the proposal is simply that as between now and April next surrenders should be made without being subject to this very harsh rule, which is created by the two Sections. Really, I do not see why that should not be accepted! At all events, you might go back to the one year imposed by the Act of 1900, and make it one year instead of three. I will go further. I should have thought it a hardship that, notwithstanding the surrender of a life estate, the reversion should bear Succession Duty as if no surrender had been made. I myself

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    would like to alter that rule and to relieve settled property of that burden, but that is not done by this Amendment. So the first part of the new Clause, in principle, is surely right. The second part seems to me merely an extension of it. It only operates if the person who surrenders the life interest survives the actual tenant for life. The only intention is to put the reversionary life tenant upon the same footing as the actual life tenant. While my hon. Friend limits the relief in the case of actual life tenants to surrenders within the year, he makes the relief to the reversionary life tenant general. For myself, I would make the relief general all round. I think, subject to Amendments in detail, something of this kind might fairly be done.
    Mr. JOYNSON-HICKS: I associate myself with the arguments which have been used by my hon. and learned Friend (Mr. Cave) and my hon. Friend (Mr. Pretyman), but I should like to put a case stronger than my hon. Friend put with regard to his A, B, C, and D. He suggested that at present, in dealing with unsettled property, the donor, instead of leaving the property to A, B, and C in succession, and then to D, should leave it straight away to D. Surely it is stronger than that. I want to draw a comparison between unsettled and settled property. The object of the Government should be to make it equally fair whether the property is settled or unsettled. If the Chancellor of the Exchequer makes his will and leaves me a legacy of £10,000, and in default of my taking that legacy leaves it to his son, it is perfectly open to me to say, "I will not touch the money." I renounce it later. I need not do It before his death. Or, say, he leaves £10,000 to me; if I do not take it, he leaves it to the Solicitor-General, and, if he does not take it, he leaves it to anyone you like, and, in the fourth place, he leaves it to his son D. If that is not settled property, I can say I will not touch the money, and there is no duty payable. The Solicitor-General in turn says, "I will not take the £10,000. I have plenty of my own." Again, no duty is payable. Then the next man will not take it, and finally it goes to the Chancellor's own son D., and there is only one duty payable. Suppose, instead of that, he says, "I will leave my estate to Mr. Joynson-Hicks for life, and after his death to the Solicitor-General for life, and after his death to someone else for life, and after his death to my son D."
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    What is the case there? I cannot renounce without duty being payable, the Solicitor-General cannot renounce without duty being payable, the next person cannot renounce without duty being payable, and if we all three say we do not want to take the life interest which the Chancellor has left, three duties have to be paid before the property gets down.
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)indicated dissent.
    Mr. JOYNSON-HICKS: I appeal to the Solicitor-General if that is not the effect of the law as it stands to-day? In other words, it is penalising settled property as against property which is not settled. A person to whom it is left absolutely may renounce the legacy, but the tenant for life cannot do it. Surely that is not right. My hon. Friend raised this point when the Budget was going through Committee. I think the Law Officers of the Crown will admit that there is no power for a life tenant, either in reversion or in possession, to renounce his life interest without duty-accruing. It seems a monstrous thing.
    Sir S. BUCKMASTER: I do not understand the appeal that is made to me in the least. If the tenant for life assigns or surrenders his life interest at a period within three years before death there is no hardship whatever.
    Mr. JOYNSON-HICKS: We all know that. I was dealing on the same lines between settled property and unsettled property. Is it necessary for me to renounce a legacy of £10,000 three years before I die or not? That is the whole point of the Amendment. Is it necessary for me to live three years or not? If the right hon. Gentleman will not answer that he is not dealing fairly with me and with my argument.
    Sir S. BUCKMASTER: It is obvious that if you take the legacy, it is.
    Mr. JOYNSON-HICKS: But if I do not take it, just exactly as the tenant for life says I will not take this life interest. The Solicitor-General knows perfectly well that the cases are on all-fours, and if I renounce the legacy I am not bound to live three years, but if I renounce a life interest I am bound to live three years. That is the whole question. My hon. Friend asks that the life tenant of settled property may be put in exactly the same line as a

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    person who is left a legacy of unsettled property. That seems to be so absolutely fair that the Amendment is one which ought to be accepted.
    Mr. CROFT: What I think is always forgotten is this fact, that in justifying the Death Duties originally Sir William Harcourt pointed out that it would be possible to insure. Everybody thought it would be possible to insure against the Death Duties, and what seems to be so very immoral in the present suggestion is the fact that no tenants for life have had the opportunity of undertaking insurance, because they thought the State could be trusted to keep its contracts. I think it is a little doubtful whether many of such settlements would ever have been made if those making them could have had any idea that in three, five or six years they would have to pay a large amount in Death Duties. These Death Duties are very much larger under the new Budget. I think there are many Members of this House who agree that from to-day there are certain arguments which make it advisable that settled estate should bear the same burdens as unsettled estate. But to go back ten, fifteen, or twenty-five years when there was no opportunity for insurance seems to me to be absolutely contrary to all principles of justice and equity. Whatever a man may decide to do in relation to his private life that is his own affair. If he wishes to be regarded as a person who breaks his contracts, that is his own affair, but the right hon. Gentleman has no right to allow the reputation of the State to be dragged in the mud. I have heard, not one, but dozens of hon. Members, deplore this departure from rectitude on the part of the State. I hope the Chancellor of the Exchequer will accept this Amendment, which appears to be only just and equitable. I think it does not meet the point, but it gives some opportunity to those who desire to do so to make over their property at the present time.
    Mr. BUTCHER: I hope that some answer will be given by the Chancellor of the Exchequer to the case which has been presented in support of this Clause. The Solicitor-General, who was misled possibly, and not unnaturally, by the precise form of the Clause, delivered an argument which had absolutely no bearing on the real object of the Clause. The hon. and learned Gentleman directed his attention to an entirely different point, but now
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    that the real nature of the Clause has been explained, I hope the Chancellor of the Exchequer will address his mind to it. The Solicitor-General said that if you pass this Clause then you reverse the policy of the Act of 1894. The exact opposite result would follow. This Clause is not intended to reverse the policy of the Act of 1891. It is intended to carry it out, and it is entirely due to Clause 12 of this Bill that it becomes necessary to introduce the Clause. If Clause 12 had not been in the Bill we should not have been asking this Clause. It is because it runs counter to what Parliament declared in 1894 was fair that this Clause becomes necessary. Sir William Harcourt declared that it would not be fair to exact Succession Duty on every life. The Chancellor of the Exchequer says by this Clause that it is fair. Here is a way in which he can give relief from some of the hardships imposed by Clause 12. The case was put by my hon. Friends, and to that we have had no answer. What we would like to hear from the Chancellor of the Exchequer is an answer, if he can give one, to the case which has been put forward. Clause 12 is really a breach of a Parliamentary bargain, and we wish to know whether he can state reasons why he cannot remove some of the hardships which fall upon tenants for life. By accepting this new Clause he will give some relief, if not the whole relief, they are entitled to.
    Mr. LLOYD GEORGE: I rise in response to the appeal made by the hon. Gentleman opposite. I wish to say a word in regard to certain observations which were made before I was present. I understand that there was some complaint made in regard to my absence during the first hour of the Debate. I very much regret that owing to circumstances over which I have no control, because of a duty which has been thrust upon me, certainly not of my own seeking, but which I had no option but to accept, and which entails the giving of a good deal of attention to matters not strictly relevant to my office, it was not possible during the first hour, consistently with the proper discharge of that duty, to be present here. I should like to make another observation in reply to the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain), I think he rather complained that I was not present at the Debates on other days. I do not think that that would be the observation of those who were here during the Debates.

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    As a matter of fact, I was here every day until nine o'clock. I remained in attendance until that hour before I took my dinner.
    Mr. CHAMBERLAIN: I did not mean to say anything offensive with respect to the right hon. Gentleman.
    Mr. LLOYD GEORGE: I have been here consistently much longer than is usual, having regard to the arrangements which are made in circumstances of the kind. I hope I may make that statement to the House to put the matter in its proper light. Now, I come to the matter under discussion. The speech of the hon. Gentleman opposite is one which makes it as difficult as possible for the Government even to approach him with a desire to meet the difficulties which he has stated to the House. It is very difficult to get up and make a concession which is based on the assumption that one has been exceedingly dishonest, and has done something equivalent to a fraud. That is a bad beginning to an appeal for some sort of reasonable compromise. I must say that up to that moment I was applying my mind to the case presented by the hon. Member for the Central Division of Sheffield (Mr. J. Hope) which appeared to be one deserving of some consideration. But I felt at once after the speech of the hon. Gentleman that, oven if I met the hon. Member on that point, the speech was tantamount to an appeal for something which the Government could not accede. Let me address myself to the question raised by this Amendment. If we accept the assumption that we are breaking contracts, then the whole case of the other Clause goes. That is not relevant to this Amendment. I agree that if he is right in that argument, then the other Clause ought to go. That is the decision of the Committee of the House of Commons, and I should have thought that the hon. Gentleman made his appeal in respect of this Amendment on the assumption, for the purpose of this Clause, that the decision of the Committee was embodied in the Kill and accepted. I have no doubt he will challenge that decision later on. But when he puts it there will be no need for this Clause. If he moves this Clause, it must be for the purpose of argument when that Clause is accepted by the Committee. There are two classes dealt with in this particular Clause. The first is the
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    case of the tenant for life—the person who is in the enjoyment of settled property. It is suggested that, so far as he is concerned, he should have an opportunity of surrendering. The first case put by the hon. Gentleman (Mr. Pretyman) is that the tenant for life ought to have an opportunity of surrendering, because you can put him in a position under this Clause which he did not and could not anticipate. I see the force of that. He says, "Supposing a tenant for life knew that he was going to be put under conditions of that kind, he might have surrendered in time to make the three years' limit operative." That case is fairly open to that observation.
    The second case is this: I am not sure whether remainder man is the proper phrase—I would say the intermediate interest, or the next interest. I think that is in a totally different category. I do not think that that is a case which has the same claim for consideration as the claim of a person who is now tenant for life—a case where a man actually surrenders something he is in the enjoyment of at the present moment. I say so for this reason: I do not think it is the business of the Legislature to encourage transfers of property with the view of defeating the revenue. I am prepared to meet the hon. Member in so far as the first case is concerned—the case of a man who is now actually in the enjoyment of property, and who might conceivably say, "If I knew I was to be put in that position, I would have surrendered my life interest long-ago." As my hon. Friend pointed out, he had not the option of insuring. I should be prepared, as far as that particular case is concerned, to do something to meet it. I would prefer to have a little more time to consider the words which I would propose if the hon. Gentleman would withdraw his Clause at the present moment. I do not know whether it would be possible to move a new Clause if it was not on the Paper, but, if so, I think that would be preferable.
    Mr. JAMES HOPE: On the point of Order. May I suggest that something to this effect would be possible as a proviso to Clause 12?
    Mr. LLOYD GEORGE: I am not suggesting that this could not be put as a new Clause, but on the point of Order am I right in the opinion that this would come in better as a proviso than as a Clause itself? I submit that it can be moved as

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    a proviso to Clause 12 because it deals with the subject-matter of that Clause, and that Clause renders it necessary that this should be moved. If this can be moved as a proviso to Clause 12, as I submit, I would invite the hon. Gentleman to withdraw his Clause and I will put on the Paper an Amendment in the form of a proviso to Clause 12, which can be moved to-morrow.
    Mr. SPEAKER: There is nothing on the face of this Clause to show that it is connected with Clause 12. That came out in the course of the argument on Clause 12. That was taken in the Committee. Therefore it seemed to me to be an independent matter, and that is why I allowed it to be moved as a separate Clause. Now that I have heard all the arguments about it, it is obvious that this is, pro tanto, a remedy, or at all events an alleviation, of the conditions of Clause 12, and as such it might come in as a proviso. The right hon. Gentleman is entitled to move a proviso, but if I may say so, I think that he should put down the proviso to-night in case of what may happen by the time we reach the Clause to-morrow.
    Sir STANLEY BUCKMASTER: I would suggest that the proviso to be added to Clause 12 should be as follows:—
    "and (c) Section eleven of the Finance Act, 1900, as amended by Section fifty-nine of the Finance (1909–10) Act, 1910, shall not operate on any such surrender, assurance, divesting, or disposition, as is mentioned in the said Section eleven made by any person between the fifteenth day of August, nineteen hundred and fourteen, and the first day of April, nineteen hundred and fifteen, so as to make any Estate Duty payable on the death of that person which would not have been payable but for this Section."
    Mr. CHAMBERLAIN: I do not wish to seem otherwise than grateful to the Chancellor of the Exchequer for the spirit in which he has dealt with this somewhat difficult matter, but I would beg him to take a little more time for consideration, and to devote that consideration not only to the exact wording of what he has undertaken to do, but to further reflection upon the distinction which he has drawn between the two classes of cases. I submit that the distinction really will not hold good. What is the basis of the criticism which the right hon. Gentleman is making? I am not going to use contentious
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    language if I can avoid it, though the right hon. Gentleman knows my opinion of Clause 12. But previous to Clause 12 the State offered to individuals certain advantages under a settlement subject to certain conditions. By Clause 12 you alter that state of things and deprive them of the special advantages which in many cases were the only inducement to settle the property. In such cases these people should not continue to be saddled with the disadvantage which the settlement entails.
    Mr. LLOYD GEORGE: There is another point of distinction. [HON. MEMBERS: "Speak up!"] In one case the opportunity must be exercised before 1915. In the other case it can be exercised at any time, and it is in a different category altogether for that reason.
    Mr. CHAMBERLAIN: Perhaps the Chancellor of the Exchequer will be good enough to consider my plea without regard to the exact words of the Amendment, which is going to be withdrawn, but rather as a subject-matter for a possible Amendment to Clause 12. The plea which I put forward is strictly limited. I do not want it to apply to settlements in future. It is only a plea for interests under existing settlements, which settlements I contend would not have been made, or at any rate would very probably not have been made, if at the time they were made Clause 12 had already been the law of the land. If the Chancellor of the Exchequer likes to attach a time limit to the concession to the intermediate interest within which he should exercise the option, I should think that that would be perfectly reasonable, and there would be no cause of difference between us. I believe that the Chancellor will find that you cannot make any distinction in justice between the two classes, and that the amount of money involved, if it be safeguarded as we on this side of the House are willing that it should be, by in the first place confining it to existing settlements, and in the second place, by making a time limit within which that option must be exercised, would not be very great, and by conceding it you would really remove a great hardship which, quite apart from the original controversy between us as to the merits or demerits of Clause 12, is only accidental to the scheme and is not essential to its main objects or principle. I only beg him to consider this matter. I do not ask him to give an answer now, but to consider it with an open mind, subject to the restrictions

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    and reservations which I have suggested, and confining it purely to the point which I have indicated.
    Sir A. MARKHAM: Can the right hon. Gentleman say how much this concession is going to cost?
    Mr. LLOYD GEORGE: That is a very difficult question, and it would be impossible for me to say. I would promise the right hon. Gentleman to consider the matter, and the fact that he has indicated his willingness to agree to a time limit makes it easier for me to do so. Without a time limit it would be quite impossible for me to consider it.
    Sir FREDERICK CAWLEY: The Chancellor of the Exchequer would meet the views of a great many Members on this side of the House if he would give consideration to the remarks of the right hon. Gentleman the Member for West Birmingham. All those cases should be placed in exactly the same position as if the people had not settled at all. No doubt the inducements held out did induce the settlement of estates, and the option ought now to be given as if those estates had not been settled at all. I am sure that a very great number of hon. Members on this side of the House would join in asking the Chancellor of the Exchequer to give this matter favourable consideration.
    Mr. JAMES HOPE: I admit that the Chancellor of the Exchequer has met me on the first point, and I hope that he will bear in mind what my right hon. Friend has said. Personally, I attach quite as much importance to the second point as to the first, but in all the circumstances, as he has met us fairly on the one point and promises to give consideration to the other, I would ask leave to withdraw the Clause.
    Clause, by leave, withdrawn.

    NEW CLAUSE.—(Insurances for Estate Duty.)
    (1) Any person desiring to provide against the duties which may become payable under the Finance Act, 1804, or any Amending Acts, in respect of property passing on his death, may effect for that purpose a policy of assurance (to be called an Estate Duty policy) upon his life.
    (2) Any moneys payable upon the death of a person under an Estate Duty policy effected by him shall be applied by the company with whom such policy is effected
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    in payment in the first instance of the duties payable under the said Acts in respect of so much of the property passing on the death of such person as he shall by writing under his hand direct, and the balance, if any, of such moneys shall be paid to the executor of such person and Estate Duty shall be levied thereon at the proper graduated rate.
    (3) Save as herebefore provided, Estate Duty shall not be paid in respect of any moneys payable under an Estate Duty policy.
    Clause brought up, and read the first time.
    Mr. BUTCHER: I beg to move, "That the Clause be read a second time."
    The object of this Clause is to make some reasonable provision for cases where n man insures against Death Duties. In substance the proposal is this. If a man insures against Death Duties, which shall become payable upon his death, and earmarks the fund which he so provides for the payment of those duties, then when he dies that fund shall not be brought into his estate so as to pay duty, except in so far as it is obliged to pay duty. In existing circumstances a man who insures against the payment of Death Duties is subject to two hardships. In the first place, his thrift is penalised and he is discouraged from making that provision, because he knows that he will have to pay duty, and there is the further hardship, that by the very act of making provision for the Death Duties, he builds up a fund which, in existing circumstances, is added to the estate, so that the estate may be made to pay a higher rate of duty than if he had never provided this fund at all. That is a very serious harship, and it is a hardship even in existing conditions. But when we come to this year and find that the Estate Duties are to be increased largely, this existing hardship is also very largely increased. And what I suggest to the Chancellor of the Exchequer is that the proposal involved in this Clause will be of advantage not only to the subject, which perhaps will appeal to him more or less, but will be to the advantage of the Exchequer itself. It will be to the advantage of the subject because he will be induced to make this provision in his lifetime and save money for his successor, and when his successor comes in, instead of having to pay away a considerable portion of the estate, whether it be realty or personalty,

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    in the shape of Death Duties, he will find a fund ready to hand out of which Death Duties can be paid. The advantage to the subject is therefore quite obvious. An additional advantage is that the Death Duty rate would not be increased owing to the existence of this fund. But it will be to the advantage of the Exchequer itself, because the Exchequer will find a fund ready to hand out of which this duty can be paid, and will not have to wait for a year to run on, as the fund will be ready to pay them at once. A further advantage is that the property itself which pays duty is not going to be diminished by the duty.
    In other words, when a man dies with an estate worth, say, £100,000, the Death Duties will be paid out of the fund, and the £100,000 estate will be handed on to his successor, and upon the next death duty will be paid upon the £100,000 intact. In other words, you leave the taxable asset in the form of the estate undiminished for the Chancellor of the Exchequer to get full duty upon the next death. The Chancellor of the Exchequer will therefore see from his own point of view as a tax gatherer that it is very desirable to have this undepleted fund. One of the gravest dangers of the existing system of taxation, which has been pointed out over and over again, is that you are continually depleting the capital by these heavy duties. You are reducing the fund which pays the duty, and in that way reducing the duties themselves and the proceeds of the duties when death takes place. But if you give a man an opportunity of providing in this way a fund out of which Death Duties can be paid, then the capital of the country and the individual remains undiminished for the purpose of future taxation. I offer that to the Chancellor of the Exchequer as a strong inducement for accepting this Clause. May I recall the fact that in 1894 the proposition was made in substantially the same form as the present Clause? It was made by Mr. Byrne, subsequently Mr. Justice Byrne, in this House, and was supported by the present Member for the City of London, by Lord St. Aldwyn, and, I think, by all the financiers of the day. Sir William Harcourt very nearly conceded it; he promised it favourable consideration. Unfortunately the moments expired, and he did not carry that promise into effect.
    If the right hon. Gentleman cares to look at the Debate he will find that Sir William Harcourt thought that
    354
    there was a very great advantage in having a fund earmarked for the payment of duty. Unfavourable comment has been made between the finance of Sir William Harcourt and that of the present Chancellor of the Exchequer, and not to the credit of the latter. I am not going to say anything in any way disagreeable that would induce the right hon. Gentleman to look unfavourably upon this proposition, but he has now an opportunity of doing something better than his predecessor Sir William Harcourt did. The right hon. Gentleman ought to be obliged to us for giving him this opportunity of being able to say that he made a concession which Sir William Harcourt would have liked to make, but which unfortunately for some reason or other—perhaps time—he did not make. Therefore, now that the right hon. Gentleman has increased the Death Duties so largely, I hope he will take the opportunity of encouraging the tenant for life to build up a fund for the payment of the Death Duties—not for his own advantage, but to the advantage of his successors and the advantage of the State itself.
    Mr. CASSEL: I beg to second the Amendment.
    Mr. LLOYD GEORGE: This Clause, if I accepted it, would make a very serious inroad upon the revenue. I do not say that is a reason for excluding it, but that fact in itself is, at any rate, sufficient to compel very careful scrutiny of demands of this character. The Amendment is practically that the owner who insures his life with a view to paying the Death Duties should have the cost of the premium deducted from the Death Duty. If his proposal were accepted it would involve a loss of £2,000,000 a year to the revenue.
    Mr. BUTCHER: I am much obliged to the right hon. Gentleman for stating the figure, but does he take into account the fact that the capital of the estate would be left intact for taxation? That is really a very strong point in favour of my proposal.
    Mr. LLOYD GEORGE: I am not so sure that the estate would be kept intact, though that might be the case in the second generation. The capital is not left intact, and the hon. and learned Gentleman knows very well that it does not remain from generation to generation—I will not say in the majority of cases—and the estate is shifted from one to another.

    355
    Let me point out what the Amendment would mean. It would involve this consequence, that the owner of property would have to earmark the proceeds of his life policy to the payment of Death Duties, and the extent to which the Death Duties would be payable would mean that the amount received under the insurance policy would be exempt altogether from Death Duties. That is a proposition which no Chancellor of the Exchequer could possibly accept. There are many estates where no provision of this kind is made at all—no provision by means of insurance. Other provisions may be made. For instance, the owner might set aside stocks for the purpose of paying the Death Duties, or he might sell certain outlying farms for their payment. In that case the particular owner would have to pay a heavier Death Duty than the owner who had made an arrangement by means of a life policy. This would not be fair as between the one owner and the other, and I therefore cannot see my way to accept the Clause.
    Mr. EDWARD WOOD: I do not think the right hon. Gentleman's answers are really conclusive. He has given two answers. In the first place, he says that the Amendment would make a very serious inroad on the revenue if it were accepted. That is an easy position for the Government to take, and it is not one that I can deny, but I am prepared absolutely to take the right hon. Gentleman's word for it. I think, however, that there are one or two other matters which must be considered, as well as the inroad on the revenue. Last week I looked up some figures as to the yield of the Death Duties during the last twenty years. I have not those figures with me, but the right hon. Gentleman can check them by reference to the Report of the Inland Revenue Commissioners for this year. The conclusion that those figures showed beyond any dispute was that the whole yield of the Death Duties indicated a far less substantial growth than might reasonably have been expected in the last few years, especially the last six or seven years. What was especially noticeable was that the payments which have been made were mainly on the smaller estates. The larger estates had been stationary, and I am almost certain that they showed a diminution. As I am reminded by my Noble Friend near me, one reason of that is that the rates have
    356
    been altered. I should have thought that the object of the Chancellor, if he was disturbed, and he must be disturbed, by the rather stationary yield of these duties, would have been to use whatever machinery he could to case the collision between the demands of the Treasury and the resources of the taxpayer. The hon. and learned Member for York suggests one way of doing it, and I have often thought that the only profession or calling in the country that has benefited from the increase of the Death Duties is that of the insurance companies. I know, and almost everybody in the House knows very well, that since the Chancellor introduced his Budget, almost every person has had rained upon him policies and advice from the insurance companies in London as to the best way in which the Chancellor of the Exchequer could be defeated. The insurance companies are not doing it for their health, and we all know that these companies have been able to make very substantial profits for their shareholders.
    I have often wondered if it would not be worth while for the Chancellor of the Exchequer to consider whether the State—I go rather further than my hon. and learned Friend suggests—could enter into some kind of insurance business with the taxpayers, and allow them to insure with the State in order to make provision for the payment of these duties. I merely throw that suggestion out for consideration. The other point on which the right hon. Gentleman relied in his resistance to my hon. and learned Friend's Amendment, was that it would tend to produce in some cases unequal treatment as between different estates. I really do not think that this House need concern itself with that consideration. It is really desirable, so far as we possibly can, to encourage the taxpayer by every means in our power to provide for occasions of financial strain, which are bound to be occasions to him of great financial dislocation. Therefore, I think we need not be deterred from giving, by every means in our power, encouragement to men who endeavour, not in their own interests, but in the interests of those who come after them, to provide for the strain which the Chancellor of the Exchequer is putting upon them. If you want to encourage them, one simple way, and only a small way, is to do what my hon. and learned Friend suggests; and I do not think that is an unfair proposal to make, if you view the Death Duties as being really what they are, namely, deferred

    357
    Income Tax. It is surely unreasonable to aggregate for duty any sum of money that has either been set aside on the taxpayer's death, or has been produced by an insurance policy, because if it had been paid as Income Tax it would have been spent year by year, and it would not have been there to be aggregated when the gentleman died. I would only point out, in conclusion, that by trying to encourage insurance in this way you can avoid what is the inherent vice of the Death Duties, namely, that they always tend to spend your capital unless the taxpayer can be induced, by some sort of favourable treatment, to make provision to pay them out of income. For these reasons I support the Amendment.
    8.0 P.M.
    Viscount HELMSLEY: I support the Amendment, which, if carried, would operate as a very great relief to the taxpayer, and would stop a great deal of the harm arising from the burden of the Death Duties. While it is difficult for the Chancellor of the Exchequer to accept this Amendment because of the inroad upon revenue, I would point out that that is a reason given in respect of a good many other Amendments. It is a reason which ought not to be pressed too far on each Amendment as it comes up for discussion, because the greater the inroad such a proposal makes on the revenue the greater, in all probability, is the injustice which is being done to the taxpayer. In so far as this would mean two millions a year, that shows that considerable injustice is being inflicted on the taxpayer. He is encouraged to insure by the Government, and by the late Sir William Harcourt and his successors, and then the money is aggregated with the rest for the purposes of taxation. I think this Amendment is all the more necessary because of the graduation which has been made steeper, and makes the provision already made inadequate. The discussion we have had on Clause 12 makes the matter still worse. In the case of real property there is to my mind a greater hardship than in the case of personal property. Real property gives a very low rate of interest and is more difficult to replace, while personal property, such as stocks and shares, gives a higher rate of interest, and in forty years, by a sinking fund, will largely replace itself. Therefore, in the case of real property, a provision of this kind would be of the greatest value in preventing the breaking up of estates, which is a debatable
    358
    point. Some people think it is good and some bad, but, I suppose, the owners would think it a bad thing. If it ought to be done, and I am not discussing it now, it ought to be done directly by legislation, and not by means of a fiscal instrument.
    It is all very well for the Chancellor to say that the owner can make provision to sell outlying farms. After the first generation that cannot go on very long. I think I am within the mark in saying that no agricultural property can nowadays possibly survive for more than three generations—probably not more than two—under these burdensome Death Duties.
    Is it not desirable from the point of view of the Exchequer that there should be those large blocks of real estate passing intact from generation to generation, and therefore subject to Death Duties? The Chancellor said this proposal would not be fair as between one owner and another. I do not think that argument appeals to me very much, since the present Prime Minister, when Chancellor of the Exchequer, drew a distinction between earned and unearned income for the purposes of Income Tax, although the distinction is really a very flimsy one. A man who has earned his money and invested some, is really as much entitled to favourable treatment in Income Tax as the man who continues to earn his income. If the Chancellor says this would cost too much to the revenue, no doubt we shall not be able to persuade him to give way on this point, but, if he cannot give the whole thing, can he not make the money represented by the insurance policy a separate estate, and not aggregate it with the rest? That would be some mitigation of the present difficulty.
    Mr. F. HALL: It has been suggested that it might be advisable for the Government to enter into some scheme for insurance in this matter. Anybody who knows anything about the insurance of the Government knows that it would be rather a bad thing for the insured people, because there is no system of insurance the Government have undertaken but is entirely to the detriment of—
    Mr. SPEAKER: We are not concerned with that just now. This is an obiter dictum of the hon. Member.
    Mr. F. HALL: The question had been raised, and that was the reason I referred to it. I think my hon. and learned Friend has made his case perfectly plain. We had

    359
    the argument last week about the sale of land, and if there is a large amount of duty payable the Chancellor may realise how harshly it presses on landowners. Surely, if men under such circumstances insure against those heavy duties, they should not have those amounts included for taxation. It seems rather hard that such sums should be charged on the same basis according to the sliding scale. It might be dealt with separately, as the Noble Lord has suggested. The Chancellor has mentioned the amount this would cost him, but I think that in many cases he is entirely out of his reckoning in his calculations. In 1909 motor taxes were estimated to yield £250,000 or £300,000, and that amount has already been doubled or
    trebled. I think it might be advisable for the right hon. Gentleman to look into the amounts he is likely to obtain.
    Viscount HELMSLEY: The Chancellor said something, I think in his Budget Speech, to the effect that the Government are considering some method as to whether they would themselves insure against Death Duties.
    Mr. LLOYD GEORGE: I rather referred to advancing money at Government rates of interest.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 103; Noes, 225.

    Division No. 192.]

    AYES.

    [8.12 p.m.

    Agg-Gardner. James Tynte

    Duke, Henry Edward

    Pollock, Ernest Murray

    Ashley, W. W.

    Eyres-Monsell, Bolton M.

    Pryce-Jones, Colonel E.

    Astor, Waldorf

    Fell, Arthur

    Randles, Sir John S.

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

    Flannery, Sir Fortescue

    Rawlinson, John Frederick Peel

    Baldwin, Stanley

    Fletcher, John Samuel

    Rees, Sir J. D.

    Banbury, Sir Frederick George

    Gardner, Ernest

    Ronaldshay, Earl of

    Baring, Major Hon. Guy V. (Winchester)

    Gibbs, G. A.

    Rothschild, Lionel de

    Barrie, H. T.

    Gilmour, Captain John

    Salter, Arthur Clavell

    Beach, Hon. Michael Hugh Hicks

    Glazebreek, Captain Philip K.

    Sanders, Robert Arthur

    Benn, Arthur Shirley (Plymouth)

    Goldman, C. S.

    Sanderson, Lancelot

    Bennett-Goldney, Francis

    Greene, Walter Raymond

    Sharman-Crawford, Colonel R. G.

    Bigland, Alfred

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

    Spear, Sir John Ward

    Bird, A.

    Haddock, George Bahr

    Stanier, Beville

    Blair, Reginald

    Hall, Frederick (Dulwich)

    Stanley, Hon. G. F. (Preston)

    Boscawen, Sir Arthur S. T. Griffith-

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

    Staveley-Hill, Henry

    Boyton, James

    Henderson, Major H. (Berks, Abingdon)

    Stewart, Gershom

    Bridgeman, W. Clive

    Hewins, William Albert Samuel

    Strauss, Arthur (Paddington, North)

    Bull, Sir William James

    Hibbert, Sir Henry F.

    Swift, Rigby

    Burn, Colonel C. R.

    Hohler, G. F.

    Sykes, Sir Mark (Hull, Central)

    Cassel, Felix

    Hope, Harry (Bute)

    Talbot, Lord E.

    Castlereagh, Viscount

    Hope, James Fitzalan (Sheffield)

    Thomas-Stanford, Charles

    Cave, George

    Horner, Andrew Long

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

    Cecil, Evelyn (Aston Manor)

    Jardine, Ernest (Somerset, East)

    Thynne, Lord Alexander

    Cecil, Lord Hugh (Oxford University)

    Joynson-Hicks, William

    Tuilibardine, Marquess of

    Cecil, Lord R. (Herts, Hitchin)

    Locker-Lampson, G. (Salisbury)

    Ward, A. S. (Herts, Watford)

    Chaloner, Colonel R. G. W.

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

    Watson, Hon. W.

    Clyde, J. Avon

    Lyttelton, Hon. J. C.

    Weston, Colonel J. W.

    Craig, Captain James (Down, E.)

    M'Calmont, Major

    Wheler, Granville C. H.

    Craig, Norman (Kent, Thanet)

    Malcolm, Ian

    White, Major G. D. (Lancs., South port)

    Crichton-Stuart, Lord Ninian

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

    Williams, Colonel R. (Dorset, W.)

    Currie, George W.

    Newman, John R. P.

    Willoughby, Major Hon. Claud

    Dalrymple, Viscount

    Nield, Herbert

    Wills, Sir Gilbert

    Denniss, E. R. B.

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

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

    Dickson, Rt. Hon. C. Scott

    Ormsby-Gore, Hon. William

    TELLERS FOR THE AYES.—Mr.

    Du Cros, Arthur Philip

    Perkins, Walter Frank

    Butcher and Viscount Helmsley

    NOES.

    Abraham, William (Dublin, Harbour)

    Bowerman, Charles W.

    Compton-Rickett, Rt. Hon. Sir J.

    Acland, Francis Dyke

    Boyle, Daniel (Mayo, North)

    Cornwall, Sir Edwin A.

    Addison, Dr. Christopher

    Brady, Patrick Joseph

    Cory, Sir Clifford John

    Adkins, Sir W. Ryland D.

    Brockiehurst, William B.

    Crooks, William

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

    Brunner, John F. L.

    Crumley, Patrick

    Armitage, R.

    Bryce, J. Annan

    Cullinan, John

    Arnold, Sydney

    Buckmaster, Sir Stanley O.

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

    Baker, Joheph Allen (Finsbury, E.)

    Burt, Rt. Hon. Thomas

    Davies, Ellis William (Eifion)

    Balfour, Sir Robert (Lanark)

    Byles, Sir William Pollard

    Davies, Timothy (Lincs., Louth)

    Barnes, George N.

    Carr-Gomm, H. W.

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

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

    Chancellor, Henry George

    Dawes, James Arthur

    Bentham, George Jackson

    Clancy, John Joseph

    Delany, William

    Bethell, Sir John Henry

    Clough, William

    Denman, Hon. Richard Douglas

    Black, Arthur W.

    Clynes, John R.

    Devlin, Joseph

    Boland, John Plus

    Collins, Godfrey P. (Greenock)

    Dickinson, Rt. Hon. Willoughby H.

    Booth, Frederick Handel

    Collins, Sir Stephen (Lambeth)

    Dillon, John

    Donelan, Captain A.

    Kilbride, Denis

    Rea, Walter Russell (Scarborough)

    Doris, William

    King, Joseph

    Reddy, Michael

    Duffy, William J.

    Lambert, Richard (Wilts, Cricklade)

    Redmond, John E. (Waterford)

    Duncan, C. (Barrow-in-Furness)

    Lardner, James C. R.

    Redmond, William (Clare, E.)

    Duncan, Sir J. Hastings (Yorks, Otley)

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

    Redmond, William Archer (Tyrone, E.)

    Edwards, John Hugh (Glamorgan, Mid)

    Levy, Sir Maurice

    Richardson, Thomas (Whitehaven)

    Elverston, Sir Harold

    Lewis, Rt. Hon. John Herbert

    Roberts, Charles (Lincoln)

    Esmonde, Dr. John (Tipperary, N.)

    Lundon, Thomas

    Roberts, George H. (Norwich)

    Esmonde, Sir Thomas (Wexford, N.)

    Lynch, Arthur Alfred

    Robertson, John M. (Tyneside)

    Falconer, James

    Macdonald, J. Ramsay (Leicester)

    Robinson, Sidney

    Farrell, James Patrick

    Macdonald, J. M. (Falkirk Burghs)

    Roch, Walter F. (Pembroke)

    Fenwick, Rt. Hon. Charles

    McGhee, Richard

    Roche, Augustine (Louth)

    Ffrench, Peter

    Maclean, Donald

    Roe, Sir Thomas

    Field, William

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

    Rowntree, Arnold

    Fitzgibbon, John

    MacVeagh, Jeremiah

    Runciman, Rt. Hon. Walter

    Flavin, Michael Joseph

    M'Callum, Sir John M.

    Russell, Rt. Hon. Thomas W.

    George, Rt. Hon. D. Lloyd

    M'Curdy, C. A.

    Samuel, J. (Stockton-on-Tees)

    Gladstone, W. G. C.

    McKenna, Rt. Hon. Reginald

    Scanlan, Thomas

    Glanville, Harold James

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

    Scott, A. MacCallum (Glas., Bridgeton)

    Goddard, Sir Daniel Ford

    Markham, Sir Arthur Basil

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

    Goldstone, Frank

    Marshall, Arthur Harold

    Sheehy, David

    Greenwood, Hamar (Sunderland)

    Meagher, Michael

    Shortt, Edward

    Greig, Colonel James William

    Meehan, Francis E. (Leitrim, N.)

    Simon, Rt. Hon. Sir John Allsebrook

    Griffith, Rt. Hon. Ellis Jones

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

    Smith, Albert (Lancs., Clitheroe)

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

    Molloy, Michael

    Smith, H. B. L. (Northampton)

    Gwynn, Stephen Lucius (Galway)

    Molteno, Percy Alport

    Smyth, Thomas F. (Leitrim, S.)

    Hackett, John

    Mond, Rt. Hon. Sir Alfred

    Spicer, Rt. Hon. Sir Albert

    Hancock, John George

    Montagu, Hon. E. S.

    Sutherland, J. E.

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Mooney, John J.

    Sutton, John E.

    Harcourt, Robert V. (Montrose)

    Morgan, George Hay

    Taylor, John W. (Durham)

    Harmsworth, Cecil (Luton, Beds)

    Morison, Hector

    Taylor, Theodore C. (Radcliffe)

    Harvey, A. G. C. (Rochdale)

    Morton, Alpheus Cleophas

    Taylor, Thomas (Bolton)

    Harvey, T. E. (Leeds, West)

    Munro, Rt. Hon. Robert

    Tennant, Rt. Hon. Harold John

    Haslam, Lewis (Monmouth)

    Murphy, Martin J.

    Thorne, G. R. (Wolverhampton)

    Hayden, John Patrick

    Needham, Christopher Thomas

    Thorne, William (West Ham)

    Helme, Sir Norval Watson

    Neilson, Francis

    Toulmin, Sir George

    Henderson, Arthur (Durham)

    Nicholson, Sir Charles N. (Doncaster)

    Verney, Sir Harry

    Hewart, Gordon

    Nolan, Joseph

    Walsh, Stephen (Lancs., Ince)

    Higham, John Sharp

    Nuttall, Harry

    Wardle, George J.

    Hinds, John

    O'Brien, Patrick (Kilkenny)

    Waring, Waiter

    Hobhouse, Rt. Hon. Charles E. H.

    O'Connor, T. P. (Liverpool)

    Watt, Henry A.

    Hodge, John

    O'Doherty, Philip

    Webb, H.

    Hogge, James Myles

    O'Donnell, Thomas

    White, J. Dundas (Glasgow, Tradeston)

    Holt, Richard Durning

    O'Dowd, John

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

    Howard, Hon. Geoffrey

    O'Malley, William

    White, Patrick (Meath, North)

    Hudson, Walter

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

    Whitehouse, John Howard

    Hughes, Spencer Leigh

    O'Shaughnessy, P. J.

    Whittaker, Rt. Hon. Sir Thomas P.

    John, Edward Thomas

    O'Sullivan, Timothy

    Whyte, Alexander F. (Perth)

    Jones, Edgar (Merthyr Tydvil)

    Palmer, Godfrey mark

    Wilkie, Alexander

    Jones, H. Haydn (Merioneth)

    Parker, James (Halifax)

    Williams, Aneurin (Durham, N. W.)

    Jones, J. Towyn (Carmarthen, East)

    Parry, Thomas H.

    Williams, Penry (Middlesbrough)

    Jones, Leif (Notts, Rushcliffe)

    Pearce, William (Limehouse)

    Williamson, Sir Archibald

    Jones, William (Carnarvonshire)

    Phillips, John (Longford, S.)

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

    Jones, William S. Glyn- (Stepney)

    Pratt, J. W.

    Wilson, W. T. (Westhoughton)

    Jowett, Frederick William

    Price, C. E. (Edinburgh, Central)

    Winfrey, Sir Richard

    Joyce, Michael

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

    Wing, Thomas Edward

    Kellaway, Frederick George

    Pringle, William M. R.

    Yeo, Alfred William

    Kelly, Edward

    Radford, George Heynes

    Kennedy, Vincent Paul

    Raffan, Peter Wilson

    TELLERS FOR THE NOES.—Mr.

    Kenyon, Barnet

    Rea, Rt. Hon. Russell (South Shields)

    Illingworth and Mr. Gulland.

    NEW CLAUSE.—(Appeal.)
    (a) If any person, charged by an assessment or surcharge of the duties contained in Schedule D of the Acts relating to Income Tax in England or Scotland, shall think himself aggrieved by the determination of the Commissioners for general purposes or the Commissioners for special purposes directed to hear appeals in any appeal against such assessment or surcharge, it shall be lawful for him, on giving notice in writing to the inspector or surveyor within twenty-one days after such determination, to require that such appeal shall be reheard by His Majesty's
    362
    High Court of Justice, and thereupon such appeal shall be reheard by a judge of His Majesty's High Court of Justice (King's Bench Division) in such manner and in accordance with such conditions as shall be prescribed by rules of the Supreme Court, and the determination of such judge on such appeal shall be final and conclusive on all questions of fact; but if any party to such appeal shall be dissatisfied with the determination of the judge in point of law, or upon the admission or rejection of any evidence, the party aggrieved may appeal from the same to His Majesty's Court of Appeal and from thence to the House of Lords.
    (b) The fact that an appeal is pending before the High Court of Justice shall not in any way interfere with the payment of the Income Tax according to the assessment appealed against, but the Income Tax shall be paid according to such assessment as if there were no appeal; and in the event of the amount of assessment being altered by the order or judgment of the Court the difference in amount, if too much has been paid, shall be repaid with such interest (if any) as the Court may allow, and if too little shall be deemed to be arrears, and shall be paid and recovered accordingly.
    (c) In the application of this Section to Scotland a lord ordinary or judge of the Court of Session shall be substituted for a judge of the High Court of Justice, and the Court of Session for the Court of Appeal.
    Clause brought up, and read the first time.
    Sir A. WILLIAMSON: I beg to move, "That the Clause be read a second time."
    When the Income Tax law was first passed in 1842 there was considerable fear in the mind of the public as to the publicity which might ensue with regard to the finances and means of individuals, and it is probable that, owing to that fear of publicity, the law provided that appeals from assessment should be heard by the Commissioners, of whom there were two, and by them alone. No option was given to anyone who was dissatisfied with the assessment levied upon him to go to the Courts with his appeal; he was forced to go to the Commissioners. As I understand it, when the Commissioners hear a case they are in the habit, after hearing the aggrieved taxpayer, of letting the appellant leave the room while they consult privately with the surveyor, who is, in effect, the defendant in the case. If that is a correct statement of what takes place, it seems to me a very unfair and unreasonable procedure as against a private individual. The Income Tax law is undoubtedly full of intricacies, and it is very difficult for even the most subtle intellects of the country to decide certain cases which come up for decision. There have been to my knowledge cases of a very intricate and involved nature brought before the Commissioners. When a case is heard by the Commissioners, if the decision is adverse to the taxpayer, the latter may desire to appeal to the Courts. In that case the Commissioners are asked to state a case. As I understand, the case is generally
    364
    drawn up by the clerk to the Commissioners, who is very likely a local solicitor, and who, not unnaturally, does not wish to see a decision which has been arrived at reversed. What is stated is very often that "the Commissioners, having investigated the facts, found as follows." The consequence is that the aggrieved taxpayer has no chance of succeeding in the Courts, because the Courts at once say, "The Commissioners have inquired into this matter, and found on the facts. As we can only decide on questions of law, you have no case to bring before us at all." The position of the taxpayer and the whole view of Income Tax have very much changed since 1842, and if there are people who desire to have their cases heard by the Courts, both as to facts and as to law, I cannot understand why that right should be refused to them. Such a proposal can no doubt be justified, not only because of the procedure of the Commissioners themselves, but also on the ground that some of the cases are of a most intricate and difficult nature. I believe I speak the mind of many who are interested in this matter when I say that it would be very desirable that such a Clause as I now propose should be accepted, so that questions arising upon the assessment of any individual could be investigated, as regards both the facts and the law, in the Courts.
    Mr. BIGLAND: I have much pleasure in seconding this Amendment. Like my hon. Friend, I feel that matters have changed very much One reason why I am glad to second the Amendment is that even those who have drawn up our Acts of Parliament have stated—it was even stated in the House this afternoon—that it was not for a Minister to give an opinion upon an Act of Parliament. If it is so difficult for one of our Ministers to give an opinion upon an Act of Parliament, it is very difficult for a Commissioner to give a positive opinion upon an Act. These amounts now have come to be such enormous sums that I think it is right for the Government to accept this new Clause. If a case has been taken to one of the higher Courts it will form the basis upon which the Commissioners in future will be able to decide cases. Applicants then will realise that there is a fair decision given. There are many business men in my experience who feel a great deal of dissatisfaction. They wonder whether they have always been able to get justice in the manner in which these claims are now heard and decided.

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    I have a great deal of confidence in saying to the Government that it would have the good wishes of the mercantile world in this country if this Clause were added. I see one difficulty to which the Chancellor of the Exchequer may refer—that is, that it may involve the Government in an enormous number of lawsuits. Whether that objection is a valid one or otherwise, I do not know; whether there will throughout the country be many who will defend these cases and carry them up to the High Court, I do not know. But it is right that we as Englishmen should always have the consciousness that we have got full justice, especially in regard to the payment of taxes.
    Mr. LLOYD GEORGE: This suggested new Clause involves a very serious departure in law and practice in regard to the assessment of Income Tax. At the present moment the Court of Appeal deals with questions of law. Whether the procedure by which you get to the Courts is good or bad is a matter for argument. I know something about the statement of special cases, and I have always felt that there has been a grievance in the matter of stating special cases from magistrates. It is even true in respect to County Court judges, because you are appealing against the statement of facts which the judge has entered in his notebook. That, however, is an objection that applies not merely to this particular kind of appeal, but to most cases of appeal from the inferior Courts. The facts are stated by the very judge against whose decision you are appealing. That seems to call for reconsideration as to the basis of appeal. But that is a matter I should be very sorry to see considered merely in connection with the Income Tax Commissioners—and that is the point which my hon. Friend is seeking to cover by this Amendment. The Amendment goes far beyond that. He proposes that you are to have an appeal not merely on questions of law, but on questions of fact. I cannot conceive anything more disastrous from the point of view of the Income Tax machinery, and I cannot conceive anything more disastrous from the point of view of the Courts. The Courts hitherto have not merely decided questions of law, but upon the facts which are presented to them, and they, it is suggested, are to retry complicated questions of fact!
    Sir A. WILLIAMSON: Hear, hear!
    Mr. LLOYD GEORGE: My hon. Friend says "Hear, hear!" If you want to double the number of judges that is the way to do it. What does the proposition mean? It naturally means, of course, that this method of procedure would not really be open to the ordinary Income Tax payer. It would be available for the men who had large sums of money involved. It might be worth their while to pursue the matter. It certainly would not be worth the while of the ordinary trader or professional man to have a retrial in the higher Courts, with counsel, witnesses, and all the ordinary machinery of litigation, for the purpose of trying a question of fact. It would be a ruinous temptation to such men, and I hope it will not be put in their way. I do not say that the present system is the best one, but, on the whole, it has worked fairly. There is a good deal to be said about the method of appointing Commissioners. My hon. Friend has criticised the method of appeal. He said you are practically appealing to the defendant in the case. You are not doing that.
    Sir A. WILLIAMSON: "Consulting him," I said.
    Mr. LLOYD GEORGE: I do not think you are consulting him quite. I think it is perfectly impartial. I have entered into this matter before; you go before another Commissioner altogether. [HON. MEMBERS: "Where do we come in?"] I do not think my hon. Friends below the Gangway would be very anxious to keep up the opportunities for litigation. As a matter of fact, the only persons who would really be grateful to my hon. Friend are the lawyers. I am told that business in the High Courts is not good. There is depression in trade there. My hon. Friend has come to the rescue just at the right moment. I have no doubt that the lawyers in the High Courts will be so grateful that they will be proposing to erect a statue—I do not say to his memory, I hope that is a long way off!—but they will be exceedingly obliged to him for this proposal. It is a proposal to provide them with what will be an increased income, subject to Income Tax, that comes from the direction of the Inns of Court. They do very well out of it. But the Income Tax payer, with the exception of the men who have very large incomes—and companies perhaps—would not think it worth their while to have a rehearing of these cases. It would only be the means of embarrassing the Commissioners in the collection of the

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    taxes. It would enormously increase litigation. It would bring about very considerable delay. When you proceed to appeals of this kind it takes a very long time before they are settled.
    Sir A. WILLIAMSON: The Commissioners take three years to settle some cases.
    Mr. LLOYD GEORGE: Then it would take the Court of Chancery about thirty years, judging by the comparative rate, or speed, at which these cases are settled as between the Income Tax Commissioners and the High Court judges. I am not sure that I would be in order in speaking on the question of fact, but on questions of this kind I would often rather have the judgment of these Commissioners than that of many judges of the High Court. I cannot enter upon that without perhaps getting within some rule of order. My own experience of many of these cases does not encourage me to extend the area of operations of the Judges of the High Court. I think, therefore, my hon. Friend had better be satisfied with the opportunities of litigation which are afforded him by the Act of 1842, and other Acts. I should have thought they were ample for most of the subjects of His Majesty in this Kingdom. I hope he will not extend the area of temptation in this respect which might lead many poor tradesmen and professional men to ruin. I am sure he would not like to have that on his conscience! I therefore appeal to him in the interests of the general repose of mind that he limits the temptation that would be there if this Clause were added to this particular Finance Bill. I appeal to him in the interests of his composure that he will withdraw his Amendment.
    Question, "That those words be there inserted," put, and negatived.

    NEW CLAUSE.—(Income from Capital Earned by Recipient.)
    For the purpose of computing income for the assessment of Income Tax and of Super-tax, income arising from capital earned by the recipient shall be regarded as earned income.
    Clause brought up, and read the first time.
    Sir J. D. REES: I beg to move, "That the Clause be read a second time."
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    No one has dealt with the matter so far with which I am endeavouring to deal in this new Clause, or which the new Clause is meant to cover. I cannot understand if an income which is earned, say, by a doctor, barrister, or any other class of profession that may occur to hon. Members, is earned income while he is earning it, why that money which has just been earned and saved, and accumulated as capital, instead of being spent, should not be regarded as much as earned income as the several classes of income enumerated in the Finance Act of 1907. The cases I have in mind, and which I have been asked from many quarters to raise, are not in the least differentiated from other cases, but I may mention, with the indulgence of the House, the particular class of cases which have been brought under my notice from many quarters. Take the case of an official who serves a great part of his life, say, twenty-five years, abroad, and then comes back to this country to live and educate his children and spend his declining years. He saves, during his service abroad, a certain sum of money, and when he comes home with the interest on that money to supplement his pension, he hopes to be able to bring up his family in tolerable comfort. Why is the money, which he has earned and put aside for this estimable and admirable purpose, as every hon. Member will allow it to be, not just as much earned income when banked and invested, as when he actually earned it? I confess I do not know what the answer to this question will be, and I hope that the right hon. Gentleman the Secretary to the Treasury, if he does not accept this Clause, will explain what is the difference. Is the definition in the Finance Act of 1907 to be rigidly construed?
    What is the difference in kind and principle between the income arising from earned income when invested in this manner, and from earned income when it is being received? The effect of the inclusion of income of this character would seem to me to be to induce people—Government officials and others—who otherwise might be prudently inclined to lay by money for the benefit of their children, to dissipate that money, I will not say in riotous expenditure, but in very liberal expenditure, of what they should properly lay by for that time when they have returned, and when, in the absence of special circumstances, they are always rather hard pushed for money in order to maintain themselves upon a similar plane

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    to that which they occupied when enjoying the full income of their salary. It is a case of extremely common occurrence, and there are hon. Members of the House, I am sure, who are acquainted with towns or districts in this country which are populated to a great extent by people of that class. They are very seldom heard in this House. Very rarely representations are made in their behalf. They are a feeble part of the electorate, and they do not count for very much. They have no claim upon the Chancellor of the Exchequer, and, therefore, I am appealing to the House for a fair consideration of their case. But, as I said, I do not see that their case in any way differs from that of any professional man. Take a man engaged in a profession in this country. Why should his earned income be rigidly restricted in the manner in which it is by the Finance Act of 1907? I must accept it that it does not cover a case of this sort. I will not venture to take up the time of the House by reading the Section of the Act, but it is quite evident that that interpretation is accepted by the Government, and, for my part, I do not dispute that that is the interpretation, and for that reason I venture to move this Clause.
    There is one answer that I hope will not be given. The Attorney-General, in reply upon another new Clause, pleaded that it would cost too much to accept it. I submit that is not a satisfactory reply, and that any such plea comes with very ill-grace from a colleague of the Chancellor of the Exchequer in a Government which has added some £50,000,00 or £60,000,000 to the expenditure of the country. None of those affected in this case can accept any such plea as satisfactory. I confess it does not seem to me to be satisfactory. I think it is absurd to plead that lack of funds is a sufficient reason for not doing justice when once a case of injustice is established. I have endeavoured to establish that case of injustice, and I will leave it to my hon. Friend who is to second this new Clause to develop the case which. I have endeavoured, however inadequately, to put before the House.
    Mr. EVELYN CECIL: I desire to second this new Clause, which appears to be of real substance and importance. I have never been able myself to understand why a legislative distinction has been drawn between earned and unearned income. I should think it was obvious that the King's
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    English meant something quite different from what the Statute of 1907 laid down. After all, earned income is income that has been earned; to my mind, it does not change its character because it is put into the funds where it is invested. If a man is a success in business and a success in the world and makes a fortune, large or small, he has earned the whole of that fortune, and that fortune, be it large or small, remains earned income as long as it is in his possession. That seems to me to be the natural sense of the word "earned," and I have never been able to understand thoroughly, or to understand at all, why the Chancellor of the Exchequer and the Government have chosen to set up this artificial distinction, which is entirely contrary to the ordinary meaning and sense of the word. I know the Chancellor of the Exchequer always pleads on these occasions that the Government want the money, and therefore that they must spread their net as far as possible. I think he must admit that these taxes are not justifiable. The reason for all this is that the Government, and in particular the Chancellor of the Exchequer, has launched out upon a spendthrift policy, and having done so entirely contrary to the advice of wise financiers, whether permanent officials of the Treasury or outside, he is obliged to resort to this sort of tactics in order to accumulate the money which he requires. I urge that this is a hard case in respect of many people. It is hard in the case of those who have succeeded in making large fortunes, but it is much harder in the case of those who have made small fortunes. In many cases small tradesmen whom I represent have said to me, "It is very hard upon us to pay this tax after having worked for fifteen or twenty years at our business, and, after we have put enough money away to make a material difference in the bringing up of our families, to be told that all this is not earned income, and that we are to pay this tax upon it." I think this does involve a great injustice, and I urge upon the Chancellor of the Exchequer that some mitigation ought to be devised by which such people would not suffer. After all, an action of this kind is really a penalty on thrift. These people have been thrifty, and why are they to be penalised by an artificial interpretation of this word by Statute, such as this artificial definition of the word "earned" is? It is time this House should recognise that such business men as I have referred to and others are harshly treated, and I urge upon the

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    Government to alter this definition so as to make the tax more equitable in the cases to which I have referred.
    Mr. MONTAGU: This is the first time I have had to deal with a proposal of the hon. Member for East Nottingham since I left the India Office, and once again I have to differ from his view. On this occasion I think the arguments advanced are not such as ought to commend this Clause to the House. The first argument was that the hon. Member hoped the Chancellor of the Exchequer or the Minister who represented him would not urge as an answer to this new Clause that it would cost too much, because, it is said, this would be a ridiculous argument in the face of an injustice from any Chancellor of the Exchequer, and much more so from the present Chancellor of the Exchequer. I have been unable to see any difference between this Chancellor of the Exchequer and his predecessors except that when there has been an irresistible demand for money the present Chancellor of the Exchequer has been more fertile and successful in finding the money than his predecessors.
    Sir J. D. REES: And spending it himself.
    Mr. MONTAGU: Hon. Members opposite are moving this Clause on the Report stage, cost what it may, when both of them know that any alteration in the balance-sheet cannot be repaired by imposing new taxation. Consequently the cost of their proposal becomes all the more important. Even if we had plenty of money and a large surplus to meet this demand, I would suggest to the House that it should be resisted, because I do not think it is founded upon equity. The hon. Member for East Nottingham talked of the hardship upon a tradesman who finds that his invested savings are treated as unearned income. After all it is a concession to that tradesman only dating from 1907 that any attempt has been made to differentiate between earned and unearned income.
    Sir J. D. REES: The hon. Member forgets that at that time the Income Tax was totally different, because it was not an inordinately high and penal impost like it is now.
    Mr. MONTAGU: If it had not been for the new departure then made, the tradesman to whom the hon. Member referred who is sensible of such hardship, would
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    have been taxed at 1s. 3d. instead of 9d. When this new differentiation was made in 1907 the arguments now put forward were urged upon the House then, and it is quite clear from the speeches of both hon. Members opposite that they have not read the relevant Debate on the Finance Act of 1907, because they have not attempted to deal with any of the arguments dealt with at that time by the Prime Minister, which are as good to-day as they were then. The Prime Minister then dealt with the difference between savings which are not treated as earned income, and those which are treated as earned income. Earned income which has not been saved and invested is a precarious income, dependent upon the earning capacity and the health of the man who earns it, where as the savings are not dependent upon the man's health or upon whether he is capable of earning them or not. That is one substantial difference between the two. Further than that, earned income was not intended to include pensions or deferred pay at all, and it was only after a considerable amount of Debate that the present Prime Minister, who was then Chancellor of the Exchequer, said that after a great deal of heart searching and doubt he had agreed to include as earned income pensions and superannuation allowances.
    A distinction was then made, despite the very cogent arguments of the hon. Member for Yarmouth, between pensions and superannuation allowances on the one hand, and the savings of those officials whom the hon. Member refers to on the other hand. For this reason: the pension might be regarded as deferred pay and as part of the consideration upon which the official enters a public service; he was to get so much a year, and when he retired from that service he was to get either a superannuation allowance or a pension. That was part of the terms of his contract, and there was this further distinction: If a man saved during the time he was employed and invested his savings he could sell either the annuity he had bought or the investments, as he thought fit, whereas the pension was an unsaleable thing, and died with him. So that on all these grounds, on the ground of the fact that one is a voluntary saving from pay and the other might be regarded as a compulsory deduction from pay; on the ground that one was saleable and the other was not; on the ground that both pensions and savings do not depend upon

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    the health and well-being of the individual who is earning the income, there is every reason to differentiate between capital invested as a result of earnings and the earnings themselves. I do not think, after this feeble recapitulation of the unanswered arguments of the Prime Minister in 1907, that I need add anything; but, if anything more has to be added, I would say that if you were to try and differentiate between investments made out of savings and investments made out of truly and strictly unearned income, it would put upon those who administer the Income Tax Acts a task which would be almost impossible. You would have to accept the guess arrived at by the taxpayer himself when he said: "I think this part of my investment is savings, and this part ought legally to be taxed as unearned income." Not only would it increase the difficulty of the administration of the Acts, but it would increase the expense of administration. I think it will be agreed in all parts of the House that the more easy it is to administer the Acts and the less friction there is in the collection of the tax, the better on the whole for the tax; and when you have in this particular case to set the Inland Revenue a task which must admittedly be difficult to meet a grievance which does not really exist, I venture to suggest to the House that it would do well to reject the proposed Clause.
    Sir J. D. REES: Is the hon. Gentleman aware that in the cases to which I refer, and to which my hon. Friends refer, the taxpayer would have no difficulty in differentiating, because he has nothing except what he earns?
    9.0 P.M.
    Mr. BIGLAND: The Financial Secretary to the Treasury has made a statement which needs a reply. He says that this is not a Clause which could be upheld in equity. If there is a Clause which has been suggested which could be upheld in equity, it is this one. Once it has been decided that there shall be a differentiation between earned and unearned income, surely it must be a matter of equity that the savings of a man who denies himself over many years should be treated as his earnings. I was made executor of one gentleman whose life is an example of the point in question. He started with a salary of £150 a year, and he told me that whatever his salary was he determined to save a certain percentage. His whole system was continued as he advanced in business
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    until, at the age of ninety-four, after an enormously long life, he had saved £90,000. Surely during that man's lifetime, while he was still working, the money which he had little by little invested in one security and another was earned income, and I claim, in equity, if there is any differentiation, that he was entitled, and all those who deny themselves in order to save money which they may leave to their children, and their children's children, are entitled to have it regarded as earned income. The Financial Secretary to the Treasury suggests that it would be almost impossible for the Commissioners to decide these matters. I know there would be a difficulty, but the Chancellor of the Exchequer has told us that there is practically no appeal from the Commissioners, and we know, when we enter the Commissioners' room, that it is a matter of secret questions and cross questions, and there is no reporter there. It would be a simple matter for these Commissioners to ask a gentleman whether this item was his own earnings or whether it was an inheritance from somebody else. It would be very easy for the Commissioners to discriminate between investments and securities held by any man who could prove whether they were his own savings or whether they were an inheritance. I claim that this Clause is perfectly sound in equity. Now that the Government have raised this taxation so high they have roused the feelings of individuals against them to such a point that this sort of difference exasperates the individual to an enormous extent. I have heard men on the business exchanges resent this kind of difference in their taxing enormously, and surely it is the province of the Government, while levelling the tax at an enormously high rate, to prevent this irritation of the individual against the tax collector and against the Government. Surely we do not want them to be at enmity where it is necessary that the individual shall pay. There is a very strong feeling by the average man that he should be treated differently in his Income Tax return between the money he saves and the money for which he works.
    Mr. JAMES PARKER: There has been certain loose talk with regard to what is earned and what is unearned income. I suppose all income is earned by someone, though the person who earns it does not always receive it, and, so far as the Income

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    Tax applies to unearned income, it applies to that portion of a person's income for which he has put forth no effort except to receive the cheque. That is about what it amounts to. You have some money invested in the bank or in the funds, and before the interest is paid over to you obviously someone, somewhere and somehow, has had to put in some work to earn that income. If you are to receive income, as I suppose some of the Members of this House, including the Labour Members, in some small degree do, which is the product of other men's labour, surely, altogether apart from Socialism or any of these things, it is only just and right that upon that income you should pay a larger tax than upon the income which you may earn by manual or brain labour. I am opposed to the Clause, and though I agree there are certain hard cases, I have no sympathy with the poor Indian Civil Servant who retires with £1,000 a year. Perhaps it is rather hard in the case of the widow who is left with an income of not more than £150 or £160 year, or even less sum, so far as unearned income is concerned. The Amendment, however, has not been moved to deal with that case, but with the question of unearned income generally. I claim that there is a wide difference between the income which a man earns as a Member of Parliament or as a navvy and the income which comes to him from money deposited at the bank or invested in Consols, and I think that the law which differentiates between the two is perfectly just and equitable.
    Mr. NIELD: I hope it will not go forth to the world, as a result of what the last speaker has said, that the income which many of us here unwillingly receive as Members of this House is easily earned. I may say that every penny that I receive in this regard is devoted to the destruction of Radicalism—
    Mr. DEPUTY - SPEAKER: That is hardly a question relevant to the matter before the House.
    Mr. NIELD: It was rather provoked by what has fallen from the hon. Member for Halifax (Mr. Parker). I wanted it to be known that the treadmill of daily life in this House is as hard as any work performed outside. The view expressed by the hon. Member was rather in the direction of suggesting that money earned by a daily avocation stands in a different
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    category to money accruing from dividends. But it must be remembered that in the case of small persons their capital fund is the creation of their own work, and therefore it never loses its character as earned increment.
    Mr. PARKER: No one suggests that that capital was not earned. What I do say is that the money received in respect of it is not earned by the recipient.
    Mr. NIELD: If a man in a humble walk of life is able to put by year by year a sum of £10 or £20, and in due course invest it, ought he by reason of his self-denial to be penalised by having to pay Income Tax upon it at a different rate from the Income Tax on his ordinary income? It seems to me an almost suicidal policy from the Government point of view, because it destroys the opportunity of creating a capital upon which Death Duties are charged. It destroys the encouragement to be thrifty, it encourages people to live up to the last penny of their incomes, and it is bad for the State, because it brings about a condition of disturbance. Anyone who was a Member of this House fifteen or twenty years ago, if he had heard such a speech as we have just had from the Secretary to the Treasury, would have been very much surprised. We are not, because we have been accustomed to that kind of speech since 1906. But anybody would think from the lecture the hon. Gentleman delivered to us, that we are all conspiring to defraud the State, when we are merely protesting against the heavy imposition put upon us. I do not suppose the Secretary to the Treasury, bearing the name he does, has ever experienced what any ordinary person feels who is dependent upon a small-earned income. We have been told it is not right to seek to have this differentiation made in respect of income which has really been put aside simply as an act of self-denial. Although it may make a considerable difference in the final balance-sheet, which would have to be redressed by still further impositions on unearned income, I do say this is an act of injustice which ought not to be withheld. It seems unintelligible to me that, because a person chooses to say "I will not live like my neighbours, I will provide against any accident happening to me which may deprive me of my earning capacity," therefore the income he receives from the money thus saved is to be specially taxed. I say such a course prohibits a person adopting that thrifty

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    policy; it penalises him for his self-denial, and it destroys the very fund from which considerable Death Duties can be collected. If a man comes into a windfall, for which he has done nothing himself, then, of course, he should pay the additional rate of tax, but if he chooses to be frugal in his method of living, then he
    ought not to be made to pay Income Tax as for unearned income.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 103; Noes, 230.

    Division No. 193.]

    AYES.

    [9.11 p.m.

    Agg-Gardner, James Tynte

    Dickson, Rt. Hon. C. Scott

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

    Ashley, W. W.

    Du Cros, Arthur Philip

    Ormsby-Gore, Hon. William

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

    Duke, Henry Edward

    Parker, Sir Gilbert (Gravesend)

    Baldwin, Stanley

    Eyres-Monsell, Bolton M.

    Pease, Herbert Pike (Darlington)

    Banbury, Sir Frederick George

    Fell, Arthur

    Perkins, Walter Frank

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

    Fletcher, John Samuel

    Pryce-Jones, Colonel E.

    Barlow, Montagu (Salford, South)

    Forster, Henry William

    Randles, Sir John S.

    Barrie, H. T.

    Gardner, Ernest

    Rawlinson, John Frederick Peel

    Benn, Arthur Shirley (Plymouth)

    Gibbs, G. A.

    Salter, Arthur Clavell

    Bennett-Goldney, Francis

    Glazebreek, Captain Philip K.

    Sanders, Robert A.

    Bigland, Alfred

    Goldman, Charles Sydney

    Sanderson, Lancelot

    Bird, A.

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

    Sassoon, Sir Philip

    Blair, Reginald

    Haddock, George Bahr

    Sharman-Crawford, Colonel R. G.

    Boscawen, Sir Arthur S. T. Griffith-

    Hall, Frederick (Dulwich)

    Spear, Sir John Ward

    Boyton, James

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

    Stanier, Beville

    Bridgeman, W. Clive

    Harris, Leverton (Worcester, East)

    Stanley, Hon. G. F. (Preston)

    Bull, Sir William James

    Helmsley, Viscount

    Staveley-Hill, Henry

    Butcher, John George

    Henderson, Major H. (Berks, Abingdon)

    Stewart, Gershom

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

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

    Strauss, Arthur (Paddington, North)

    Carlile, Sir Edward Hildred

    Hewins, William Albert Samuel

    Swift, Rigby

    Cassel, Felix

    Hibbert, Sir Henry F.

    Sykes, Sir Mark (Hull, Central)

    Castlereagh, Viscount

    Hohler, G. F.

    Talbot, Lord E.

    Cave, George

    Hope, Harry (Bute)

    Terrell, H. (Gloucester)

    Cecil, Lord Hugh (Oxford University)

    Hope, James Fitzalan (Sheffield)

    Thomas-Stanford, Charles

    Cecil, Lord R. (Herts, Hitchin)

    Horner, Andrew Long

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

    Chamberlain, Rt. Hon. J. A.

    Jardine, Ernest (Somerset, East)

    Tullibardine, Marquess of

    Clay, Captain H. H. Spender

    Joynson-Hicks, William

    Watson, Hon. W.

    Clyde, J. Avon

    Locker-Lampson, G. (Salisbury)

    Weston, Colonel J. W.

    Cooper, Sir Richard Ashmole

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

    Wheler, Granville C. H.

    Craig, Captain James (Down, E.)

    Magnus, Sir Philip

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

    Craig, Norman (Kent, Thanet)

    Malcolm, Ian

    Wills, Sir Gilbert

    Crichton-Stuart, Lord Ninian

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

    Worthington Evans, L.

    Currie, George W.

    Newman, John R. P.

    Dalrymple, Viscount

    Newton, Harry Kottingham

    TELLERS FOR THE AYES.—Sir

    Denison-Pender, J. C.

    Nield, Herbert

    J. D. Rees and Mr. Evelyn Cecil

    Denniss, E. R. B.

    NOES.

    Abraham, William (Dublin, Harbour)

    Clough, William

    Farrell, James Patrick

    Acland, Francis Dyke

    Clynes, John R.

    Fenwick, Rt. Hon. Charles

    Addison, Dr. Christopher

    Collins, Godfrey P. (Greenock)

    Ffrench, Peter

    Adkins, Sir W. Ryland D.

    Collins, Sir Stephen (Lambeth)

    Field, William

    Agnew, Sir George William

    Compton-Rickett, Rt. Hon. Sir J.

    Fitzgibbon, John

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

    Cornwall, Sir Edwin A.

    Flavin, Michael Joseph

    Armitage, R.

    Cory, Sir Clifford John

    Gelder, Sir William Alfred

    Arnold, Sydney

    Crooks, William

    George, Rt. Hon. D. Lloyd

    Baker, H. T. (Accrington)

    Crumley, Patrick

    Gladstone, W. G. C.

    Baker, Joseph Allen (Finsbury, E.)

    Cullinan, J.

    Glanville, H. J.

    Balfour, Sir Robert (Lanark)

    Davies, David (Montgomery Co.)

    Goddard, Sir Daniel Ford

    Barnes, George N.

    Davies, Ellis William (Eifion)

    Goldstone, Frank

    Beale, Sir William Phipson

    Davies, Timothy (Lincs., Louth)

    Greig, Colonel James William

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

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

    Griffith, Rt. Hon. Ellis Jones

    Bentham, G. J.

    Dawes, James Arthur

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

    Black, Arthur W.

    Delany, William

    Gwynn, Stephen Lucius (Galway)

    Boland, John Plus

    Denman, Hon. R. D.

    Hackett, J.

    Booth, Frederick Handel

    Devlin, Joseph

    Hancock, J. G.

    Bowerman, C. W.

    Dickinson, Rt. Hon. Willoughby H.

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Brady, P. J.

    Dillon, John

    Harcourt, Robert V. (Montrose)

    Brockiehurst, William B.

    Donelan, Captain A.

    Harmsworth, Cecil (Luton, Beds)

    Brunner, John F. L.

    Doris, W.

    Harvey, A. G. C. (Rochdale)

    Bryce, J. Annan

    Duffy, William J.

    Harvey, T. E. (Leeds, West)

    Buckmaster, Sir Stanley O.

    Duncan, C. (Barrow-in-Furness)

    Haslam, Lewis (Monmouth)

    Burns, Rt. Hon. John

    Duncan, Sir J. Hastings (Yorks, Otley)

    Havelock-Allan, Sir Henry

    Burt, Rt. Hon. Thomas

    Edwards, John Hugh (Glamorgan, Mid.)

    Hayden, John Patrick

    Byles, Sir William Pollard

    Elverston, Sir Harold

    Helme, Sir Norval Watson

    Chancellor, H. G.

    Esmonde, Dr. John (Tipperary, N.)

    Henderson, Arthur (Durham)

    Chapple, Dr. William Allen

    Esmonde, Sir Thomas (Wexford, N.)

    Hewart, Gordon

    Clancy, John Joseph

    Falconer, James

    Higham, John Sharp

    Hinds, John

    Montagu, Hon. E. S.

    Runciman, Rt. Hon. Walter

    Hodge, John

    Mooney, John J.

    Russell, Rt. Hon. Thomas W.

    Hogge, James Myles

    Morgan, George Hay

    Samuel, J. (Stockton-on-Tees)

    Holt, Richard Durning

    Morison, Hector

    Scanlan, Thomas

    Howard, Hon. Geoffrey

    Morton, Alpheus Cleophas

    Scott, A. MacCallum (Bridgeton)

    Hudson, Walter

    Munro, Rt. Hon. Robert

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

    Hughes, Spencer Leigh

    Murphy, Martin J.

    Sheeny, David

    John, Edward Thomas

    Needham, Christopher

    Shortt, Edward

    Jones, Edgar R. (Merthyr Tydvil)

    Neilson, Francis

    Simon, Rt. Hon. Sir John Allsebrook

    Jones, Henry Haydn (Merioneth)

    Nicholson, Sir Charles N. (Doncaster)

    Smith, Albert (Lancs., Clitheroe)

    Jones J. Towyn (Carmarthen, East)

    Nolan, Joseph

    Smith, H. B. L. (Northampton)

    Jones, Leif (Notts, Rushcliffe)

    Nuttall, Harry

    Smyth, Thomas F. (Leitrim, S.)

    Jones, William (Carnarvonshire)

    O'Brien, Patrick (Kilkenny)

    Spicer, Rt. Hon. Sir Albert

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

    O'Connor, T. P. (Liverpool)

    Sutherland, J. E.

    Jowett, Frederick William

    O'Doherty, Philip

    Sutton, John E.

    Joyce, Michael

    O'Donnell, Thomas

    Taylor, John W. (Durham)

    Kellaway, Frederick George

    O'Dowd, John

    Taylor, Theodore C. (Radcliffe)

    Kelly, Edward

    O'Malley, William

    Taylor, Thomas (Bolton)

    Kennedy, Vincent Paul

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

    Thorne, G. R. (Wolverhampton)

    Kilbride, Denis

    O'Shaughnessy, P. J.

    Thorne, William (West Ham)

    King, J.

    O'Sullivan, Timothy

    Toulmin, Sir George

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

    Palmer, Godfrey Mark

    Verney, Sir Harry

    Lambert, Richard (Wilts, Cricklade)

    Parker, James (Halifax)

    Walsh, Stephen (Lancs., Ince)

    Lardner, James C. R.

    Parry, Thomas H.

    Wardle, George J.

    Law, Hugh A. (Donegal, West)

    Pearce, William (Limehouse)

    Waring, Walter

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

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

    Watt, Henry Anderson

    Levy, Sir Maurice

    Phillips, John (Longford, S.)

    Webb, H.

    Lewis, Rt. Hon. John Herbert

    Pratt, J. W.

    Wedgwood, Josiah C.

    Lundon, T.

    Price, C. E. (Edinburgh, Central)

    White, J. Dundas (Glasgow, Tradeston)

    Lynch, A. A.

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

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

    Macdonald, J. Ramsay (Leicester)

    Pringle, William M. R.

    White, Patrick (Meath, North)

    Macdonald, J. M. (Falkirk Burghs)

    Radford, George Heynes

    Whitehouse, John Howard

    McGhee, Richard

    Raffan, Peter Wilson

    Whittaker, Rt. Hon. Sir Thomas P.

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

    Rea, Rt. Hon. Russell (South Shields)

    Whyte, Alexander F. (Pertn)

    MacVeagh, Jeremiah

    Rea, Walter Russell (Scarborough)

    Wilkie, Alexander

    M'Callum, Sir John M.

    Reddy, Michael

    Williams, Aneurin (Durham, N. W.)

    M'Curdy, C. A.

    Redmond, John (Waterford)

    Williams, Penry (Middlesbrough)

    McKenna, Rt. Hon. Reginald

    Redmond, William (Clare, E.)

    Williamson, Sir Archibald

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

    Redmond, William Archer (Tyrone, E.)

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

    Markham, Sir Arthur Basil

    Richardson, Thomas (Whitehaven)

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

    Marshall, Arthur Harold

    Roberts, Charles H. (Lincoln)

    Wilson, W. T. (Westhoughton)

    Meagher, Michael

    Roberts, G. H. (Norwich)

    Winfrey, Sir Richard

    Meehan, Francis E. (Leitrim, N.)

    Robertson, John M. (Tyneside)

    Wing, Thomas Edward

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

    Robinson, Sidney

    Yeo, Alfred William

    Millar, John Duncan

    Roch, Walter F. (Pembroke)

    Molloy, M.

    Roche, Augustine (Louth)

    TELLERS FOR THE NOES.—Mr.

    Molteno, Percy Alport

    Roe, Sir Thomas

    Illingworth and Mr. Gulland.

    Mond, Rt. Hon. Sir Alfred M.

    Rowntree, Arnold

    NEW CLAUSE.—(Investment in British Colonies and Possessions.)
    Income received in the United Kingdom from investments in British Possessions and Colonies shall be assessable to Income and Super-tax under this Act after the deduction of such Income Tax as has been paid in any British Possession or Colony upon such income.
    Clause brought up, and read the first time.
    Sir J. D. REES: I beg to move, "That the Clause be read a second time."
    It is an unjust thing that income which has already paid Income Tax in one part of the British Empire should be assessed for further Income Tax at home. In case it should appear that this principle is a difficult one to urge upon the Chancellor of the Exchequer—whose attention I am not so fortunate as to enjoy, and which, perhaps, I do not deserve—I would point out that the principle of the deduction
    380
    in such cases has already been allowed by the Government in respect of Death Duties. The Death Duty payable to the Government of India in respect of Indian assets is deducted or allowed in assessing the Death Duties payable on the entire estate of the deceased person leaving assets located in India. This Clause extends that principle to Income tax and to other British Possessions. My submission is, that a principle which is allowed in regard to Death Duties should be equally allowed in regard to Income Tax. It is a hardship, when an income has paid Income Tax amounting to 2½ per cent. to the Government which affords the protection under which it is earned, that the same income should be subject to a tax of four times as much by the Home Government, to which it owes no protection commensurate to that of a Government, financially independent, under which the income is earned. I believe I should be careful here not to reiterate any of the arguments used in regard to the merits of Clause 5 of the

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    Bill. I would urge that not only should the Income Tax paid in a British Possession be deducted, but that the commissions paid to bankers and agents to recoup themselves for any services they offer, should also be deducted, with other necessary expenses. If the Chancellor of the Exchequer will not consider a proposition to make all those deductions, at any rate one might be allowed. I do not think I should be in order in urging that taxation like this, which deprives of capital a British possession greatly in need of capital, is in itself thoroughly bad, and should be resisted upon that score. On the present occasion it would be more immediately to the point to urge that such a deduction as I propose is called for by equity and justice. I do not know whether the claims of those who are affected by the provisions of the Finance Act in this respect appeal to the Chancellor of the Exchequer. I imagine I should not be justified in taking up the time of the House in pleading the way in which this affects the general financial position of a British possession. Perhaps I should be more in order in sticking closely to this immediate Clause.
    Sir A. MARKHAM: Has the hon. Gentleman a pension on the Indian fund?
    Sir J. D. REES: That has nothing whatever to do with this. I think the hon. Baronet has misunderstood, but I do not know that the fact of one Member having misunderstood the point I was making would justify me in putting the whole House to the pains of hearing it all over again.
    Mr. JAMES HOPE: I beg to second the new Clause.
    Sir J. SIMON: The hon. Gentleman has certainly explained his Amendment, but I am not quite certain whether his explanation is what I should have expected from the terms of the Amendment itself. If I understood him rightly, he was assuming this case: Supposing in some British Possession there is an Income Tax of 1s. 2d., and here the Income Tax is 1s. 3d., he suggests that it would be right to tax that income, so far as we were concerned, only by the amount of the difference, namely, 1d.
    Sir J. D. REES: It would be fairer if the right hon. Gentleman were to say, suppose the Income Tax somewhere else were 2d., and here it is 2s. Then my point would be far clearer.
    Sir J. SIMON: I am prepared to take either. I thought I had reproduced the illustration of the hon. Gentleman. Let me take his illustration. He is proposing, apparently, that the whole income should be taxed on the difference. Unfortunately that is not his Clause. The Clause has nothing in the world to do with that. It is a provision that we should first subtract out of the income that portion of the income which is used to pay the Income Tax elsewhere, and then that you should impose the British Tax at the full rate upon the difference, which is a different proposition. Either proposition is intelligible, but neither is the same as the other. Then there is this further consideration which I do not think the hon. Gentleman has had quite sufficiently in mind. He really is proposing to reverse what is the principle of Income Tax law. It is not the case, even about British Income Tax that you pay the tax on your income less the amount of the tax. That may be true of some other charges, but not about Income Tax. If a man has an income of £1,000 he has to pay Income Tax on the £1,000 and not on the £1,000 less some sum which will be sufficient to pay the tax on the smaller amount. Whether it be Income Tax or Super-tax the principle on which these things apply, he will see on consideration, is that you tax the amount of the income and not the amount that is left of the income after you have paid the tax. If that is true about the British tax, I cannot conceive why it should not be true about other taxes. The principle which is supposed to be at the bottom of the Clause is one which we could not accept in any case. If such a proposal was going to be made I doubt whether it could be fairly limited to British Possessions and Colonies. It is enough to say in general terms that the principle which we suggest should apply is a principle which is completely contradicted by the proposal which the hon. Gentleman makes, whether it is the proposal of the new Clause or the different proposal which I understood him to explain in his speech.
    Mr. CHAMBERLAIN: I really do not think the answer which we have had from the right hon. Gentleman is adequate to the question which is raised by this Amendment. It is a question of serious concern to every portion of the Empire. I do not allege for a moment that the change which the right hon. Gentleman is making in the law at present raises this question

    383
    for the first time. It has been raised at more than one Colonial Conference, and it has been raised in communications from Colonial Governments to the Home Government on other occasions than those of the Colonial Conference. I do not, therefore, wish to be thought for a moment to allege that the change in the law proposed by the Chancellor of the Exchequer raises this very difficult and complicated question for the first time. But I think it still further complicates it, and I think it introduces new matter which it would be well for the House to consider at the outset. I am struck, with such experience as I have had of financial changes in this House, with the great difficulty which there is, once you have imposed a tax in a particular form, in subsequently alleviating its hardships or its burdens. We have had illustrations of it to-night. Take, for instance, the question as to the exclusion of an insurance to provide for the payment of Death Duties. My hon. and learned Friend (Mr. Butcher) was correct when he said that at the time when the tax was imposed and the Amendment was first moved in the Budget of Sir William Harcourt it was touch-and-go whether Sir William Harcourt would not accept it.
    Mr. LLOYD GEORGEmade an observation which was inaudible in the Reporters' Gallery.
    Mr. CHAMBERLAIN: I think at that time the difference would not have been very serious compared with the new-revenue which Sir William Harcourt was then raising. Perhaps I put it a little too strongly when I said it was touch-and-go, but at any rate Sir William Harcourt seriously hesitated before refusing to accept the Amendment. Now the Chancellor of the Exchequer says, "After all the years in which this has been in force you are asking me to make so great a sacrifice—in fact, to transfer so heavy a burden from shoulders which have become accustomed to bear it to other shoulders. That I cannot do." Therefore, I rather press that it is important to consider the bearing of these new taxes at the moment when they are imposed, and to try and make concessions at that moment, if we are going to make them at all, because it is at that moment when we make them most easily, and with the least sacrifice of revenue and the least disturbance of the financial arrangements of the Chancellor of the Exchequer. In return
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    for what do we pay taxes? In return for the security which we receive from the Government to which we pay them, and for all the benefits which we draw in any shape or form, and as an obligation which we owe as citizens of the country to the common weal and the common defence. The Chancellor of the Exchequer, rightly, under these circumstances, taxes all income which is brought home here and enjoyed here, and therefore is subject to his protection and the privileges which our law and our society and our nationality afford. The Chancellor of the Exchequer under this Budget goes one step further and attaches this taxation to income which is not brought home nor owned by someone who resides here. In the case of that income the possessor owes nothing specifically to the Government of this country in respect of that income which he does not bring home, which is not earned here, and which is not protected by the Government of this country. I am not arguing that the Chancellor of the Exchequer is wrong in doing so. That is quite a distinct question which I do not wish to raise. But I think the House will go with me so far as to say that the income which is earned in another country and remains in another country, under the protection of another country, is not in the same position as income which is earned in this country, or which is brought home to be enjoyed under the protection of this country.
    It is not therefore quite sufficient to say, as the Attorney-General did, that we tax the whole income in the one case and that therefore we ought to tax the whole income in the other case. The circumstances of the two kinds of income and the services which the State accords to the citizens are quite different in the two cases. But that is not the whole of the argument. We are dealing in this Amendment with income earned in the Colonies. We are going to tax it in this country. The Colony also has an Income Tax. The double Income Tax is the subject of a difficulty which I, in my official career as Chancellor of the Exchequer had to consider with the Colonial authorities, and I think the right hon. Gentleman has had to consider it as well. I have felt that under the present fiscal relations of the Empire, we had no choice, and that we could not meet the Colonial demand. But the right hon. Gentleman is now proceeding farther in the matter on which the Colonies have already remonstrated. In the case of an

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    income earned in this country you charge on the full income, but is that parallel to what you are doing now on income earned in a Colony? If it is earned in a Colony, that Colony has its Income Tax, and the citizen only gets the income subject to that. You are going to tax this particular class of investment—not only the income which the investor possibly enjoys in this country, but also on the tax he has paid in another country. I do not complain of the system by which a man who earns £1,000 in this country is taxed on that income. But what you are saying here is that if he has an income in another country, where it is subject to the Income Tax of the Colony, even though he does not bring home the money, he is to be taxed here on that income. If you do that, ought you not to tax him on the income less the tax which he pays in the Colony? If he has lived in this country and brought the income home, you have taxed him on the income brought home. What you set out to do was to tax in the same way the man who does not bring the income home, but reinvests it in the colony. But you are going to tax him in a different way from the man who brought the money home. You are going to tax him on the money earned in the colony where it is subject to Income Tax.
    It is rather a delicate question. I hope I have made my meaning clear. I think the House will see that the answer given was not a proper answer. There is a real distinction between Colonial income and Home income. There is a case for redress. I do not want to pledge myself to particular words, the effect of which only a lawyer or a draughtsman can exactly measure. What I wish to impress upon the Chancellor of the Exchequer is, that there is a case which he ought to meet, and that now is the time to meet it. When raising new revenue you can afford to give away a little part, but when the whole balance of the Budget depends upon the yield you are accustomed to expect, it is almost impossible for a Chancellor of the Exchequer, even when he realises what is being done, to right the wrong which is being committed. I urge this particular case with the more seriousness because I do feel that there is a danger in our Imperial relations in connection with this delicate question of taxation. I am anxious to say nothing which would make a case against the Imperial Government, or embarrass them in the presentation of the case which has to be met on behalf of
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    this country at any conference, or in any negotiations which may take place. But I do feel that we are on delicate ground, and I beg the Government to walk warily and to make such concessions as are reasonable to meet and to mitigate any sense of injury or any sense of irritation which may arise through our form of taxation.
    Mr. LLOYD GEORGE: The right hon. Gentleman has referred to the difficulties with which every Chancellor of the Exchequer has been confronted for a good many years; I have no doubt that he received many deputations on the subject. I attended a Colonial Conference where there was a resolution proposed by one of the Colonial premiers upon this very topic. But I must say this, that when he looked into the matter of the difficulty from the point of view of the Imperial revenue and the loss which the proposal must necessarily inflict on the revenue, the resolution was withdrawn. I think they all felt that it was a position which we could not possibly redress without too great a loss to the revenue, in view of the amount which has to be expended on Imperial purposes. I recollect also receiving a deputation on the subject, and I must say that the case presented by the deputation was a very real one. This was the case put to me in regard to one particular Colony: A company promoted here for the development of the resources of that Colony. All the money was raised here, and spent there in developing that country. They pointed out that they had done a vast amount of admirable work in developing the resources of that country, and that still they were taxed, not only in respect of the ordinary income Tax, but taxed as absentees, which meant that they paid a sort of penal tax, while at home they paid the Income Tax of this country. I pointed out that that was more a grievance against the Colonial Government than against the Government at home. They said, "We have no redress against the Colony. But here we have got our votes and can bring pressure to bear upon the Chancellor of the Exchequer." I agreed, but on the whole I felt that justice was on our side and not on the side of the Colony. I felt that there was an injustice inflicted when all the money and all the directing brains were British, and it was of vast importance to the Colony to get the cash, that yet these people were penalised because they raised the money here.

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    Those are some of the difficulties with which every Chancellor is confronted when he comes to deal with the matter. It is not merely a matter of the amount of the revenue, but I think that there are equities on the side of the Imperial revenue. As the right hon. Gentleman knows, the same thing applies when you come to Death Duties. We have arrived at some sort of arrangement with the Colonies. I am not at all sure that that arrangement was not extended during the last few years. If a reciprocal arrangement were entered into with regard to the Income Tax, we would get nothing out of it. "Suppose," we said, "we excepted all our residents who have got investments there, and you do the same thing, we would got very little out of it." They saw that, and that it was not worth our while. The right hon. Gentleman has said that what makes it especially incumbent to give still more favourable consideration under this particular Budget is the fact that Clause 5 for the first time taxes incomes which are not brought over here. I think that on reflection the right hon. Gentleman will see that there is very little in that. The incomes enjoyed by men of moderate means are almost always brought over here and you are taxing those now.
    Mr. CHAMBERLAIN: I think that that is not always so. I think that you will find a certain number of people who themselves have been settled in various Colonies who have up to this stage probably been in business, and who do not bring over their whole incomes, but reinvest a great part of it in developing the business, and they are wise to do it. They themselves have taken up an estate. They may come over here when the time comes to educate their children or something of that kind. I am not putting the case of a person resident in the Colonies, but that of a person who has been resident in the Colonies, and ceases to be resident there, and has come over here. Take the case of a man who has started an estate in British East Africa or Nigeria, where he is engaged in developing a considerable estate. He cannot develop it all at once. He takes from his income what he requires to live on, and the rest is invested in the development of that estate. That is at least one class of case which I think is entitled to the attention of the Chancellor of the Exchequer.
    Mr. LLOYD GEORGE: I agree, but I may point out that Clause 5 does not apply to businesses. It applies only to stocks, shares, securities, and rents. That is not the case of rents, but of the development of a business, and therefore it does not apply there. I agree to that in cases where money is left to develop businesses, but I should say that there are comparatively few men of small means who can afford to roll up their investments and employ brokers in Canada, Australia, or elsewhere to reinvest their money. So practically, therefore, the only difference made now is that men who can afford to leave their money there have to pay. There is no difference in principle. It is only an extension of the class who are subject. Therefore I do not think that there is a case for making any alteration in this respect. Foreign countries are practically doing the same thing now. Take the present Income Tax in France. British residents have to pay their 1s. 2d., Is. 3d., or 1s. 4d. as the case may be there, and under the new Income Tax proposals they will have to pay the 1s., or whatever the Income Tax may be in France as well.
    Sir P. MAGNUS: It has not begun yet.
    Mr. LLOYD GEORGE: No, but next year will arrive, and they will have to pay then. They will have to pay 2s. 3d. This has become not merely an international business, but an international business.
    Mr. FELL: The United States will not.
    Mr. LLOYD GEORGE: I do not know. But I think that it is one of those questions which might very well be considered by the Committee which it is proposed to set up. It is one of those hardy annuals. There is a great deal to be said for the proposals in themselves on the merits, but, on the other hand, there is very serious objection to them, not merely on the score of revenue, but on the ground of justice. It is true that it is very hard to tax any man twice over for the same income. Then comes the question who is to give in. Are we to give in or are the Colonies to give in?
    Mr. CHAMBERLAIN: The right hon. Gentleman sees that that is not the simple point raised by this Amendment. It is not the question whether you will tax a man twice over. It is a question whether you should tax him on his taxes.
    Mr. LLOYD GEORGE: That was a question which was raised with regard to the Super-tax here. For instance, you Super-tax a man here on Income Tax which he pays. That is the contention. You raise almost the same questions. I should like the whole of these questions to be considered together. I think that it is a very proper subject for inquiry by the Committee. I do not know whether the hon. Gentleman will press it, but I undertake that the terms of reference will be so drawn that this will be considered by the Committee.
    Mr. WILLIAM REDMOND: This is a matter on which I confess that I have some sympathy with the hon. Member who moved the Amendment, and it is a question which I myself brought before the House more than once. The Attorney-General, in his answer, did not seem quite to realise that this is considered to be a very serious question in nearly every one of the Over Seas Dominions. For instance, by a strange coincidence, in this very day's "Times," there is a cablegram which sets forth the protest of more than one of the Australian Governments on this point, and that surely is a matter to which the right hon. Gentleman should pay considerable attention. With regard to the new taxation, to which the right hon. Gentleman has referred, I do not propose to say anything—that is, the question of taxing incomes abroad which are not brought to this country. But I consider that the new Clause moved by the hon. Gentleman would, if adopted, meet a longstanding grievance of many of the self-governing Dominions. Take, for instance, a well-to-do Canadian, Australian, New Zealander, or South African, who desires to come home and is in a position to do so. He brings his income home to Europe, and spends it here, and it circulates for the benefit of this country to a great extent. He pays in the country from which he derives this money the Income Tax of that State, whatever it may be, and it varies in different Dominions. He pays also the absentee tax, because he is spending income elsewhere than in the country where he earned it. I do not say anything about the absentee tax; I think it is more or less equitable that where a man uses a country and enjoys its advantages, and spends the income he makes there for the benefit of other countries, he should pay the absentee tax. He pays the Income Tax and he pays the absentee tax, yet, because he spends his money here, he has to pay
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    the Chancellor of the Exchequer 1s. 4d. in the £ as well. I think myself that this really calls for serious consideration. It does not by any means encourage people to come to this country and circulate their money.
    10.0 P.M.
    The right hon. Gentleman said that this was an international question, and that an Englishman going to Paris would be taxed on his income there, and would also have to pay the new French Income Tax. That remains to be seen. Personally, I doubt very much that the French Government will in future be so short-sighted as to compel any foreigner who brings money to Paris to pay the French Income Tax, while also taxing him on the money which he brings to spend in their country. I do not think that they will persist in that, though it is the case now. The French are very worldly-wise, and I do not think that they will continue to put a tax upon people who bring money to circulate in their country. There is a difference between the case of a foreign country and the case of one of the Dominions. [HON. MEMBERS: "Hear, hear!"] I know that hon. Gentlemen cheer that observation in a sense different from that in which I make it. My point is that there is a vast difference between a citizen of Canada, or Australia, or New Zealand, or South Africa who comes to Scotland, England, or Ireland, and the position of a man belonging to a different nationality, speaking a different tongue, and who is absolutely foreign in every way. If you are going to deny an abatement, or whatever you may be pleased to call it, to the Canadian, Australian, or New Zealander, who circulates his money here—if you are going to treat them in no way different from the way in which under present law an Englishman or foreigner would be treated in Paris with regard to Income Tax, you could not be surprised if, on opening your "Times" this morning, you found that the self-governing States and many Dominions are protesting. They say that they are willing to pay the Income Tax in the country to which they belong, but, if in addition to that they are willing and ready to pay the absentee tax, because they desire to travel abroad and come and live here for some years, if they are willing to come here and put their money into one of your banks, and spend it in Regent Street or Bond Street, or wherever it may be, and you charge them 1s. 4d. in the £, in addition to the taxes that they pay in their

    391
    own country, you cannot wonder if they complain and say that this is hardly the way to encourage them to come here. The right hon. Member for West Birmingham (Mr. Chamberlain) cannot say very much in the matter, because, unless I am very much mistaken, this question has been brought every year, certainly for the thirty years I have been in this House, before each Chancellor of the Exchequer, and not one of them, not even the ex-Chancellor of the Exchequer who is here, ever did anything to meet this particular grievance; and in all the talk we have heard, especially on this side of the House, about Imperialism and the necessity for binding the Dominions to the Mother Country, and all the rest of it, besides all we have heard is to be done by Preference and in various ways, it has never been suggested that it ought to be done in the reasonable way of encouraging people to come to this country by saying, "Well, you pay the absentee tax and come here, and we will make an abatement, and consider that in the tax imposed here." I suggest to the Chancellor of the Exchequer that, if he thinks what I am saying is not worth considering—and lots of people hold that view—then let him go to the Agents-General of any of our Dominions who are here and ask them if what I have said is not true, and they will say, "It is perfectly true, and what he states absolutely represents for the moment the view which is held in most of the Oversea Dominions on this matter."
    Mr. LLOYD GEORGE: What they were concerned about was the Canadian or Australian who has come over here to spend a few years for the education of his children, or simply to visit this country, but who intended to return to the Colony, would be taxed not merely on the income received here—that they did not object to—but that they had been taxed upon the income which was left in Australia. I think the statement in the "Times" probably related to something which happened about a fortnight ago. The "Times," as a rule, is more up-to-date than that, but on this occasion they have got hold of something which happened a fortnight or three weeks ago, and which has been submitted to the Agents-General.
    Mr. WILLIAM REDMOND: What the right hon. Gentleman says is perfectly true, but I think I am correct in saying that the
    392
    protest has reference to the new tax which is proposed by this Budget, and that is the taxing of money which is not earned in this country at all. I am sure the right hon. Gentleman would be the last to deny that protests have been made with regard to this new proposal. I am not pressing the point in any unfriendly spirit, but I know a strong opinion is held abroad on the matter. This year I happened to go through all those Dominions, and wherever I went I met a number of politicians, and one of the things they mentioned and of which they complained was this system. I hope the right hon. Gentleman will look into it, and if he will remedy it he will earn appreciation for himself in many distant parts of the world.
    Sir P. MAGNUS: I am in general agreement with the remarks of the hon. Gentleman, but I desire to draw attention to the terms of the New Clause which I think the right hon. and learned Gentleman opposite treated with scant fairness, and on which he somewhat unwisely threw ridicule. The Clause has given rise to a very interesting Debate on a question which demands the careful consideration of the Government. The Chancellor of the Exchequer seemed to deal with the subject of the Clause only in the last few words of his speech, and the Debate generally has covered a much wider ground than was intended, it seems to me, to be covered by the Clause, which deals with a very small matter, and very much less than was supposed by the Chancellor, or by the hon. Gentleman who has just spoken. I do not think the Clause has anything to do with the objection to the payment of Income Tax in this country as well as in one of the Dominions. That is a much larger question which formed the subject of many of the speeches. The Clause merely asks that in assessing one's income in this country, which may be derived from dividends or income from Dominions or Colonies, one may, in filling in the form, deduct the amount of Income Tax charged in the Dominion or Colony. Surely that is a very reasonable proposition, and would make little difference to the revenue. Let us suppose the total income is £100, and that there is an Income Tax of 1s. in the £ in the country from which the money comes, the man receives £95 here, and surely he ought not to be required to pay 1s. 4d. in the £ on £100. That is the whole question, and I hope the Chancellor will accept the Amendment.
    Mr. FELL: This is a matter which requires consideration by the Chancellor, because if he does not agree to this Clause he will be effecting a change in the law as it is at present. This Clause, as far as I can understand it, carries out exactly the present method of taxation on Colonial incomes received here. If a man receives a net amount of £95 from abroad, £5 being deducted, in London he would pay 1s. 3d. not on £100 but on the net sum of £95. It would be a most grievous thing if by any misunderstanding it should be thought that the taxation is not on the net income received in this country.
    Mr. LLOYD GEORGE: We are making no change in it.
    Mr. FELL: That is all this Clause asks and if there is any doubt thrown on it we must have the present law made clear. If it is accumulated abroad there is a special Clause, but this Clause only deals with charging the tax on the net sum, and has nothing to do with double duties or Colonial duties and English duties.
    Mr. LLOYD GEORGE: There is absolutely no change in that respect. Clause 5 covers the possibility mentioned by the hon. Gentleman.
    Mr. CHAMBERLAIN: Take the case put by my hon. Friend of an income of £100 received in a British Colony, and £5 is paid in taxes to that Colony and £95 remitted here. You have to pay Income Tax on £95. But if the money is accumulated in the country in which it is received, will not the taxpayer resident in this country have to pay British Income Tax on £100 under the new provision, instead of £95?
    Mr. LLOYD GEORGE: No. If the right hon. Gentleman will look at Clause 5, we propose that the same deduction will be made in respect of income arising out there as is made now in respect of income remitted to this country. We do not propose any alteration in the present practice. The hon. Gentleman has rightly stated the practice and we extend that practice in the other cases.
    Mr. BOOTH: There is one difficulty to my mind, and that is the definition of the term "Income Tax." I do not at all agree that this is such a very simple matter. We are face to face in this country with the proposal for a larger Income Tax in order to remit local taxation—that is to say, in order to relieve local rates. It is
    394
    quite possible that the Colonies may put on a large Income Tax in order to relieve their local rates. It does not at all follow that what is called Income Tax in the future will mean exactly what it has meant in the past. The Colonies might put on a tax of even 10s. in the £ in order to clear all their local rates. We do not know what they will do; they are not under our control. Hon. Members opposite have spoken of a 5 per cent. deduction. That argument has no weight with me, because they cannot guarantee anything of the kind. If we go into the Income Tax of the Colonies we shall get on foreign ground, and find ourselves in great difficulty. If we ignore their taxes, as we do at present, we know where we are, and we shall not become involved in inter-Colonial controversies. I object to the introduction of any such Clause as that now proposed. Our first duty is to the British Exchequer, and not to make arrangements which the Colonies may think more favourable to them. If the positions were reversed, we should not make the slightest impression upon any Colonial Legislature by putting forward such arguments as have been brought here to-night. Let us defend our own cash-box, and levy whatever Income Tax we feel we have a right to do in this country, and not go into the complicated questions of Income Tax in Australia and elsewhere.
    Sir P. MAGNUS: I think the hon. Member entirely fails to understand—
    Mr. SPEAKER: The hon. Member has already spoken.
    Sir F. BANBURY: I think the hon. Gentleman opposite does not really understand the Amendment. It does not in the least matter what is the amount of Income Tax imposed by the Colony. All the Amendment says is that if an Income Tax is charged upon the revenue arising in a Colony, an additional Income Tax shall not be charged upon that sum in England. It does not matter whether it is 1s. or 10s.; the amount that has to be paid in the Colony is deducted before the sum is assessed here. The matter is absolutely simple, and I think that for once the hon. Member for Pontefract has made a mistake.
    Sir A. MARKHAM: If the hon. Baronet who has just sat down had carefully read the Amendment, and had followed the speech in which the Amendment was carefully explained by the hon. Member for

    395
    London University, he would not have made the statement he has made. I want to ask the Attorney-General a question. If £100 is derived by a man living in Australia, there is an Income Tax of 1s. in the £, and the recipient receives an income of £95, but if that £95 is remitted here, what does that man pay in Income Tax? He is only charged on the £95. If that is so, what is the use of this Amendment, which I submit is out of order?
    Mr. MACMASTER: The amount of income taxable in this country, less the Income Tax paid in the Dominion or in Colonies, is a comparatively small affair—
    Sir A. MARKHAM: May I, Mr. Speaker, ask your ruling on a point of Order on the Amendment now before the House? The Amendment provides, "That income received in the United Kingdom from investments in British Possessions and Colonies shall be assessable to Income and Super-tax under this Act after the deduction of such income," and so on. Seeing that that is the existing law, how can this Amendment be in order?
    Mr. SPEAKER: The hon. Member assumes that that is the law.
    Sir A. MARKHAM: The Attorney-General said it was the law.
    Mr. MACMASTER: I am only endeavouring to point out what I understand to be the meaning of this Clause. I understand it to mean that there will be no Income Tax paid upon money which has paid any form of Income Tax in the Colonies. That is not the impression of people abroad in British Dominions. A small amount may be deducted under the provisions of this Clause, which is comparatively unimportant one way or another. That is not what affects me. But it is the fact that money sent here, and which may have accumulated becomes subject to tax again in this country. It ought to be perfectly possible for there to be some sort of reciprocal arrangement. In many of our Dominions there are reciprocal arrangements founded upon Statute by which in certain specified cases Income Tax paid in the Colonies is deducted from the amount of tax that is assessable in this country. That works very well; but that is a very different thing to what is proposed here. I am not
    396
    very much surprised, even if this Amendment is accepted, to find that there will be a very slight relief.
    Mr. WORTHINGTON EVANS: I thought—and I will be very much obliged to the Chancellor if he will say what is the actual fact—that the Income Tax in future, owing to Clause 5, was to be payable on the gross and not on the net. This Amendment is designed to make English Income Tax payable on the net and not on the gross income. Under the law as it stands to-day, Income Tax is only payable on the net amount received from abroad—after Income Tax, and after deducting any amounts which are not remitted at home. Under Clause 5, he is no longer to be charged on the net amount remitted. He is to be charged, subject to something which is reserved in the Clause, on the amount of income earned whether remitted or not. There are some provisions in Clause 5, and it may be that concealed in these provisions is the difference between gross and net. I ask the Chancellor of the Exchequer this. Under the new Clause 5, the Income Tax is payable upon income whether remitted or not. Take the case of £100 of income in Australia. It is quite true that Australia takes away £5 for Income Tax, but if anyone is making his declaration for Income Tax here, he is bound to say that his income in Australia is £100, and not £95. What I ask the Chancellor of the Exchequer is, whether, under Clause 5, British Income Tax is payable upon £100 or upon £95? I cannot find any words that show it is payable upon £95, and if it is payable on £100, and not £95, then this Amendment is surely needed.
    Mr. LLOYD GEORGE: If the hon. Gentleman will look at Clause 5 he will find that in the case of income not received in the United Kingdom the same deductions and allowances are allowed as if it had been so received. That means that if you pay upon £95 in the one case you pay upon £95 in the other.
    Mr. WORTHINGTON EVANS: May I point out to the right hon. Gentleman that in the colony the Income Tax would be paid upon £100, and not upon £95. If it means you pay on the same amount in both places then in England you also pay on the £100.
    Mr. HENRY TERRELL: A great deal of confusion is caused in not distinguishing between income received in this country from business carried on abroad

    397
    and income received by persons resident in this country in respect of securities, stocks, and shares abroad. In the first case, in respect of profits derived from business carried on abroad, the amount received in England is only taxed for Income Tax on so much of this profit as the man chooses to bring into the country. Neither under the present law, nor the law as amended by this Bill, will a man carrying on business abroad be taxed upon anything beyond so much of his income as he brings into this country. If a man having a business abroad chooses to turn that business into a limited liability company, if he no longer, in fact, carries on the business as a private business but as a company, and he receives an income arising from securities, stocks or shares in this company established abroad, then he is taxed, not only upon so much of that income as he chooses to bring into this country, but, under Section 5, upon the whole of the income which he derived from the whole of those securities, stocks, and shares. The income he receives from his shares in the company is the amount of dividend that is paid upon those shares. If the company pays a dividend of £100 upon a share, the income upon that share is £100, and he will be taxed upon that £100 in the country or the colony, and he will also be taxed here, not only upon the amount he brings in from the colony, but upon the whole £100, because the whole £100 is income arising from those stocks, shares, or securities. I suggest to the Attorney-General that the Chancellor of the Exchequer is quite mistaken in thinking that the case will in any way be covered by the words introduced in this connection. Income not received in the United Kingdom is to be subject to the same deductions and allowances as if it had been so received. In the United Kingdom there is no deduction allowed under the Act in respect of Income Tax paid in a foreign country, because the only amount received here is the amount after that deduction has been made. That refers to the deductions and allowances made under Schedule D of the Act of 1873 in respect of income paid in this country. When he receives income in this country he is not taxed on the whole amount, but he is allowed certain allowances and deductions under the existing law, and it is to those allowances and deductions that that Clause in this Section refers, and not to the Income Tax in a foreign country. The present Acts have nothing to do with that.
    398
    The net result is that in the case of stocks, shares, and securities a man receiving the dividends from shares which he holds in Australia will have to pay out of those dividends the Income Tax charged in Australia, and then he will have to pay Income Tax under this Clause in this country on the whole amount of the dividends, including that which has been deducted in Australia. I do not think the Attorney-General will deny that for a moment. Is it not manifestly clear on the construction of Section 5 that a man in that case having shares in a company in Australia so entitled to a dividend in Australia of £100 will pay tax in Australia and when he comes to England to make his declaration he will be taxed again in England upon the whole £100? I challenge the Attorney-General to say that this is not so under this Clause. The deductions to which the Chancellor of the Exchequer referred had nothing whatever to do with this case. Those deductions entitled a man receiving his income from abroad to certain deductions in respect of the money which he receives in this country, and they could not have anything to do with a deduction made in the Colonies in respect of the Income Tax he has paid there. I think the true construction of Section 5 ought to be made perfectly clear, and if it cannot be made clear, this Amendment should be introduced to make it perfectly clear. It is no use passing a Section of this kind until we know what is its real construction, and we should have it made clear that what is proposed will do what is intended.
    Mr. PRETYMAN: Can the learned Attorney-General tell us what is meant by the same deductions and allowances?
    Mr. BUTCHER: I think right hon. Gentlemen sitting on the Treasury Bench might, at least, arrange to say the same things on the same subject at different times. I have listened to all this Debate, and in the earlier stages of it the Attorney-General told us that a man would be called upon to pay Income Tax in this country on the gross amount which he gets from a Colony, and not the net amount; or, in other words, upon the amount, plus the tax, which he has paid in the Colony. I want to know whether it is a fact that the English Income Tax would be charged upon the gross amount received from the Colony? Am I wrong in that? I understand that I am right. The Debate has gone on for

    399
    over an hour upon that hypothesis, and the object of the Amendment is to say that which the Attorney-General says is the existing practice is wrong, and ought to be amended. The general subject we have been discussing is whether we ought to amend the existing law by making the Income Tax in England payable upon the net amount and not upon the gross. That has been resisted by the Treasury Bench, and only two minutes ago the Chancellor of the Exchequer told us, to the surprise of most of us, that we have been all wrong all this time, and that the true position is that at the present moment the English Income Tax is payable upon the net amount, and not upon the gross. If that is the real fact, what on earth have we been wasting over an hour's time for? That is exactly what my hon. Friend's Amendment tries to establish, that the Income Tax is payable upon the net amount. Before the Debate closes and we divide upon a subject, which the Chancellor of the Exchequer admits is of considerable importance, I really think that it would be only fair to the House that the Attorney-General should tell us whether he is right, or whether the Chancellor of the Exchequer is right, or whether they are are both wrong, and somebody else is right. It is quite clear we cannot intelligently vote upon this Amendment, which the Chancellor of the Exchequer says is entirely unnecessary, and which the Attorney-General says is not unnecessary but ought to be resisted without an answer, and I would ask the Attorney-General if he would kindly say whether I am right in the interpretation I have put upon it.
    Mr. G. D. FABER: There seems to be a considerable difference of opinion, and perhaps I may be allowed to put the concrete case once again. There is £100 income received in Australia. A shilling Income Tax is paid upon it and £95 is remitted to this country. Is the Income Tax here of 1s. 3d. in the £ payable upon the £95 received here, or upon the £100 earned in Australia? I think one is entitled to in answer to that question. A good deal "will depend upon the answer. Will the Income Tax be chargeable upon the £100 or upon the £100 minus the £5? It is a very simple question, but there seems a great deal of difference as to the fact. I am sure the right hon. Gentleman, with his well-known courtesy, will give me an answer.
    Sir J. SIMON: I have nothing at all to add to the explanation very fully given by my right hon. Friend the Chancellor of the Exchequer.
    Mr. HOHLER: I should have thought the Attorney-General, in response to the appeal, would have told us what is the position. May I say what I understand is the position. At the present time it is the nett income that is received in this country that is liable to be taxed, and, of course, that income is entitled to the deduction. Under this Clause you are now taxing the whole of the income earned in the Colony wholly without regard to any Income Tax paid there. You will tax the whole £100 here because it is earned abroad. I can find nothing in this Section which provides for any allowance or reduction whatsoever, and the £100 which pays Income Tax in the Colony will also pay Income Tax here. I should be glad if the Attorney-General will say if the law is otherwise, because that is the whole point of the Debate.
    Major ARCHER-SHEE: I understand the Chancellor of the Exchequer to say the sum on which Income Tax is payable is, according to Clause 5, the whole income received in the United Kingdom, subject
    "to the same deductions and allowances as if it had been so received and to a deduction on account of any annual interest or any annuity or other annual payment payable out of the income to a person not resident in the United Kingdom."
    Does the right hon. Gentleman mean to say Income Tax paid in Australia and charged by the Australian Government is an annual payment or is it a deduction in the form of annuity or annual interest? I fail to see that it comes under either head. It is an exceedingly important point and we ought to have a clear explanation before we divide.
    Mr. PETO: In view of the words in the Clause itself—Income Tax in respect of income "arising"—I wish to point out that "arising" is a very complicated word and I do not think we should make business for lawyers in the future. We ought therefore now to get a clear definition from the Law Officers on this point.
    Mr. HAYES FISHER: This is really important. It is the last opportunity we have for clearing up this matter. It is especially important to those who come over here in increasing numbers; they

    401
    have a right to know clearly the effect of this law which will so seriously affect their incomes. The Clause has been on the Paper many days. The right hon. Gentleman has had the great advantage of consulting experts under the Gallery: they can tell him whether or not this is the law, and there is no excuse for giving us entirely different opinions as to the effect of that. We have no reason on this side to complain of want of attention or courtesy, either on the part of the Chancellor of the Exchequer or of the Attorney-General all through this Debate, but to-night I think the House is not being treated with fairness and patience. One would have thought the Chancellor of the Exchequer and the Attorney-General could have agreed upon the interpretation they would put upon this Clause, and if either of them, either through modesty or by reason of the rules
    of the House, is prevented addressing it for the second time, surely the Secretary to the Treasury has had ample opportunity to confer with the experts from the Treasury and Somerset House and could have learnt the law from them. I cannot help thinking that as the Front Bench is protected by the guillotine that is the reason why, now the Debate is becoming intricate and uncertain in its results, we cannot get a clear answer. Perhaps it is because at eleven o'clock we can raise our voices no more, can ask no further questions, and can obtain no further explanations, that they are deserting us to-night and are not giving us that information which on previous occasions they have accorded to us.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 182; Noes, 262.

    Division No. 194.]

    AYES.

    [10.45 p.m.

    Agg-Gardner, James Tynte

    Dickson, Rt. Hon. C. Scott

    Keswick, Henry

    Aitken, Sir William Max

    Duke, Henry Edward

    Kinloch-Cooke, Sir Clement

    Archer-Shee, Major M.

    Eyres-Monsell, Bolton M.

    Lane-Fox, G. R.

    Ashley, Wilfrid W.

    Faber, George Denison (Clapham)

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

    Astor, Waldorf

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

    Lloyd, George Butler (Shrewsbury)

    Baird, J. L.

    Fell, Arthur

    Locker-Lampson, G. (Salisbury)

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

    Fisher, Rt. Hon. W. Hayes

    Locker-Lampson, O. (Ramsey)

    Baldwin, Stanley

    Flannery, Sir J. Fortescue

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

    Banbury, Sir Frederick George

    Fletcher, John Samuel

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

    Banner, Sir John S. Harmood-

    Forster, Henry William

    Lyttelton, Hon. J. C.

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

    Garzoni, Francis John C.

    Macmaster, Donald

    Barlow, Montague (Salford, South)

    Gardner, Ernest

    Malcolm, Ian

    Barnston, H.

    Gastrell, Major W. Houghton

    Mason, James F. (Windsor)

    Bathurst, C. (Wilts, Wilton)

    Gibbs, G. A.

    Mildmay, Francis Bingham

    Beach, Hon. Michael Hugh Hicks

    Gilmour, Captain John

    Mills, Hon. Charles Thomas

    Beckett, Hon. Gervase

    Glazebreek, Captain Philip K.

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

    Benn, Arthur Shirley (Plymouth)

    Goldman, C. S.

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

    Benn, Ion Hamilton (Greenwich)

    Goldsmith, Frank

    Mount, William Arthur

    Bennett-Goldney, Francis

    Grant, J. A.

    Newdegate, F. A.

    Bentinck, Lord H. Cavendish-

    Gretton, John

    Newton, Harry Kottingham

    Bigland, Alfred

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

    Nicholson, William G. (Petersfield)

    Bird, A.

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

    Nield, Herbert

    Blair, Reginald

    Gwynne, R. S. (Sussex, Eastbourne)

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

    Boscawen, Sir Arthur S. T. Griffith-

    Haddock, George Bahr

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

    Bowden, G. R. Harland

    Hall, D. B. (Isle of Wight)

    Ormsby-Gore, Hon. William

    Boyton, James

    Hall, Frederick (Dulwich)

    Parker, Sir Gilbert (Gravesend)

    Brassey, H. Leonard Campbell

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

    Pease, Herbert Pike (Darlington)

    Bridgeman, W. Clive

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

    Peel, Lieut-Colonel R. F.

    Burn, Colonel C. R.

    Hardy, Rt. Hon. Laurence

    Perkins, Walter Frank

    Butcher, John George

    Harrison-Broadley, H. B.

    Peto, Basil Edward

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

    Harris, Leverton (Worcester, East)

    Pollock, Ernest Murray

    Campion, W. R.

    Helmsley, Viscount

    Pretyman, Ernest George

    Carlile, Sir Edward Hildred

    Henderson, Major H. (Berks, Abingdon)

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

    Cassel, Felix

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

    Quilter, Sir William Eley C.

    Castlereagh, Viscount

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

    Randles, Sir John S.

    Cave, George

    Hewins, William Albert Samuel

    Rawlinson, John Frederick Peel

    Cecil, Evelyn (Aston Manor)

    Hibbert, Sir Henry F.

    Ronaldshay, Earl of

    Cecil, Lord Hugh (Oxford University)

    Hills, John Waller

    Rothschild, Lionel de

    Cecil, Lord R. (Herts, Hitchin)

    Hill-Wood, Samuel

    Royds, Edmund

    Chamberlain, Rt. Hon. J. A.

    Hoare, S. J. G.

    Salter, Arthur Clavell

    Clay, Captain H. H. Spender

    Hohler, G. F.

    Samuel, Sir Harry (Norwood)

    Clive, Captain Percy Archer

    Hope, Harry (Bute)

    Samuel, Samuel (Wandsworth)

    Clyde, J. Avon

    Hope, James Fitzalan (Sheffield)

    Sanders, Robert A.

    Craig, Captain James (Down, E.)

    Hope, Major J. A.

    Sanderson, Lancelot

    Craig, Norman (Kent, Thanet)

    Horne, E.

    Sassoon, Sir Philip

    Craik, Sir Henry

    Horner, Andrew Long

    Scott, Sir S. (Marylebone, W.)

    Crichton-Stuart, Lord Ninian

    Hunt, Rowland

    Smith, Harold (Warrington)

    Currie, George W.

    Hunter, Sir C. R.

    Spear, Sir John Ward

    Dalrymple, Viscount

    Jardine, Ernest (Somerset, E.)

    Stanier, Beville

    Denison-Pender, J. C.

    Joynson-Hicks, William

    Stanley, Hon. G. F. (Preston)

    Denniss, E. R. B.

    Kerry, Earl of

    Starkey, John R.

    Staveley-Hill, Henry (Staffordshire)

    Touche, George Alexander

    Willoughby, Major Hon. Claud

    Steel-Maitland, A. D.

    Tryon, Captain George Clement

    Wills, Sir Gilbert

    Stewart, Gershom

    Tullibardine, Marquess of

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

    Strauss, Arthur (Paddington, North)

    Walrond, Hon. Lionel

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

    Swift, Rigby

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

    Wood, John (Stalybridge)

    Sykes, Sir Mark (Hull, Central)

    Watson, Hon. W.

    Worthington Evans, L.

    Talbot, Lord E.

    Weigall, Captain A. G.

    Younger, Sir George

    Terrell, Henry (Gloucester)

    Weston, Colonel J. W.

    Thomas-Stanford, Charles

    Wheler, Granville C. H.

    TELLERS FOR THE AYES.—Sir

    Thomson, W. Mitchell (Down, N.)

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

    J. D. Rees and Sir Philip

    Thynne, Lord Alexander

    Williams, Colonel R. (Dorset, W.)

    NOES.

    Abraham, William (Dublin, Harbour)

    Ftrench, Peter

    Macdonald, J. M. (Falkirk Burghs)

    Acland, Francis Dyke

    Field, William

    McGhee, Richard

    Addison, Dr. Christopher

    Fiennes, Hon. Eustace Edward

    Maclean, Doneld

    Adkins, Sir W. Ryland D.

    Fitzgibbon, John

    MacVeagh, Jeremiah

    Agnew, Sir George William

    Flavin, Michael Joseph

    M'Callum, Sir John M.

    Allen, Arthur A. (Dumbartonshire)

    Furness, Sir Stephen Wilson

    M'Curdy, C. A.

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

    Gelder, Sir William Alfred

    McKenna, Rt. Hon. Reginald

    Armitage, R.

    George, Rt. Hon. D. Lloyd

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

    Arnold, Sydney

    Gladstone, W. G. C.

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

    Baker, Harold T. (Accrington)

    Glanville, H. J.

    Manfield, Harry

    Baker, Joseph Allen (Finsbury, E.)

    Goddard, Sir Daniel Ford

    Markham, Sir Arthur Basil

    Balfour, Sir Robert (Lanark)

    Goldstone, Frank

    Marshall, Arthur Harold

    Baring, Sir Godfrey (Barnstaple)

    Greig, Colonel J. W.

    Meagher, Michael

    Barlow, Sir John Emmott (Somerset)

    Grey, Rt. Hon. Sir Edward

    Meehan, Francis E. (Leitrim, N.)

    Barnes, George N.

    Griffith, Rt. Hon. Ellis Jones

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

    Beale, Sir William Phipson

    Guest, Hon. Frederick (Dorset, E.)

    Millar, James Duncan

    Beck, Arthur Cecil

    Gulland, John William

    Molloy, Michael

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

    Gwynn, Stephen Lucius (Galway)

    Molteno, Percy Alport

    Bentham, George Jackson

    Hackett, J.

    Mond, Rt. Hon. Sir Alfred

    Bethell, Sir John Henry

    Hancock, John George

    Montagu, Hon. E. S.

    Black, Arthur W.

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Mooney, John J.

    Boland, John Plus

    Harcourt, Robert V. (Montrose)

    Morgan, George Hay

    Booth, Frederick Handel

    Hardie, J. Keir

    Morison, Hector

    Bowerman, C. W.

    Harmsworth, Cecil (Luton, Beds.)

    Munro, Rt. Hon. Robert

    Brady, P. J.

    Harvey, A. G. C. (Rochdale)

    Murphy, Martin J.

    Brockiehurst, William B.

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

    Needham, Christopher Thomas

    Brunner, J. F. L.

    Haslam, Lewis (Monmouth)

    Neilson, Francis

    Bryce, J. Annan

    Havelock-Allan, Sir Henry

    Nicholson, Sir Charles N. (Doncaster)

    Buckmaster, Sir Stanley O.

    Hayden, John Patrick

    Nolan, Joseph

    Burns, Rt. Hon. John

    Hayward, Evan

    Norton, Captain Cecil W.

    Burt, Rt. Hon. Thomas

    Helme, Sir Norval Watson

    Nugent, Sir Walter Richard

    Byles, Sir William Pollard

    Hemmerde, Edward George

    Nuttall, Harry

    Carr-Gomm, H. W.

    Henderson, Arthur (Durham)

    O'Brien, Patrick (Kilkenny)

    Cawley, H. T. (Heywood)

    Henry, Sir Charles

    O'Connor, T. P. (Liverpool)

    Chancellor, Henry George

    Hewart, Gordon

    O'Doherty, Philip

    Churchill, Rt. Hon. Winston S.

    Higham, John Sharp

    O'Donnell, Thomas

    Clancy, John Joseph

    Hinds, John

    O'Dowd, John

    Clough, William

    Hodge, John

    O'Malley, William

    Clynes, John R.

    Hogge, James Myles

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

    Collins, Godfrey P. (Greenock)

    Holt, Richard Durning

    O'Shaughnessy, P. J.

    Collins, Sir Stephen (Lambeth)

    Hope, John Deans (Haddington)

    O'Sullivan, Timothy

    Compton-Rickett, Rt. Hon. Sir J.

    Howard, Hon. Geoffrey

    Palmer, Godfrey Mark

    Cornwall, Sir Edwin A.

    Hudson, Walter

    Parker, James (Halifax)

    Craig, Herbert J. (Tynemouth)

    Hughes, Spencer Leigh

    Parry, Thomas H.

    Crooks, William

    Illingworth, Percy H.

    Pearce, William (Limehouse)

    Crumley, Patrick

    John, Edward Thomas

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

    Cullinan, John

    Jones, Edgar (Merthyr Tydvil)

    Phillips, John (Longford, S.)

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

    Jones, H. Haydn (Merioneth)

    Pratt, J. W.

    Davies, David (Montgomery Co.)

    Jones, J. Towyn (Carmarthen. East)

    Price, C. E. (Edinburgh, Central)

    Davies, Ellis William (Eifion)

    Jones, Leif (Notts. Rushcliffe)

    Priestley, Sir Arthur (Grantham)

    Davies, Timothy (Lincs., Louth)

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

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

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

    Jowett, Frederick William

    Pringle, William M. R.

    Dawes, J. A.

    Joyce, Michael

    Radford, G. H.

    De Forest, Baron

    Kellaway, Frederick George

    Raffan, Peter Wilson

    Delany, William

    Kelly, Edward

    Rea, Rt. Hon. Russell (South Shields)

    Denman, Hon. R. D.

    Kennedy, Vincent Paul

    Rea, Walter Russell (Scarborough)

    Devlin, Joseph

    Kenyon, Barnet

    Reddy, M.

    Dickinson, Rt. Hon. Willoughby H.

    Kilbride, Denis

    Redmond, John E. (Waterford)

    Dillon, John

    King, J.

    Redmond, William (Clare, E.)

    Donelan, Captain A.

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

    Redmond, William Archer (Tyrone, E.)

    Doris, William

    Lambert, Richard (Wilts, Cricklade)

    Rendall, Athelstan

    Duffy, William J.

    Lardner, James C. R.

    Richardson, Albion (Peckham)

    Duncan, C. (Barrow-in-Furness)

    Law, Hugh A. (Donegal, West)

    Richardson, Thomas (Whitehaven)

    Duncan, Sir J. Hastings (Yorks, Otley)

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

    Roberts, Charles H. (Lincoln)

    Edwards, John Hugh (Glamorgan, Mid)

    Levy, Sir Maurice

    Roberts, G. H. (Norwich)

    Elverston, Sir Harold

    Lewis, Rt. Hon. John Herbert

    Roberts, Sir J. H. (Denbighs)

    Esmonde, Dr. John (Tipperary, N.)

    Lundon, T.

    Robertson, John M. (Tyneside)

    Esmonde, Sir Thomas (Wexford, N.)

    Lyell, Charles Henry

    Robinson, Sidney

    Falconer, James

    Lynch, A. A.

    Roch, Walter F. (Pembroke)

    Fenwick, Rt. Hon. Charles

    Macdonald, J. Ramsay (Leicester)

    Roche, Augustine (Louth)

    404

    405

    Roe, Sir Thomas

    Taylor, John W. (Durham)

    Whittaker, Rt. Hon Sir Thomas P.

    Rowlands, James

    Taylor, Theodore C. (Radcliffe)

    Whyte, A. F. (Perth)

    Rowntree, Arnold

    Taylor, Thomas (Bolton)

    Wiles, Thomas

    Runciman, Rt. Hon. Walter

    Tennant, Rt. Hon. Harold John

    Wilkie, Alexander

    Russell, Rt. Hon. Thomas W.

    Thorne, G. R. (Wolverhampton)

    Williams, Aneurin (Durham, N. W.)

    Samuel, J. (Stockton-on-Tees)

    Thorne, William (West Ham)

    Williams, Penry (Middlesbrough)

    Scanlan, Thomas

    Toulmin, Sir George

    Williamson, Sir Archibald

    Scott, A. MacCallum (Glas., Bridgeton)

    Verney, Sir Harry

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

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

    Walsh, Stephen (Lancs., Ince)

    Wilson, W. T. (Westhoughton)

    Sheehy, David

    Walters, Sir John Tudor

    Winfrey, Sir Richard

    Sherwell, Arthur James

    Wardle, George J.

    Wing, Thomas Edward

    Shortt, Edward

    Waring, Walter

    Yeo, Alfred William

    Simon, Rt. Hon. Sir John Allsebrook

    Warner, Sir Thomas Courtenay T.

    Young, William (Perth, East)

    Smith, Albert (Lancs., Clitheroe)

    Watt, Henry A.

    Yoxall, Sir James Henry

    Smith, H. B. L. (Northampton)

    Wedgwood, Josiah C.

    Smyth, Thomas F. (Leitrim, S.)

    White, J. Dundas (Glasgow, Tradeston)

    Spicer, Rt. Hon. Sir Albert

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

    TELLERS FOR THE NOES.—Mr.

    Sutherland, J. E.

    White, Patrick (Meath, North)

    William Jones and Mr. Webb.

    Sutton, John E.

    Whitehouse, John Howard

    NEW CLAUSE.—(Deduction of Payments for Education of Child.)
    In any assessment made upon any parent for the purposes of Income Tax, such parent shall be entitled to claim that a deduction shall be made from such assessment equal to the amount of any payment made by him for the education of any child during the previous twelve months.
    Clause brought up, and read the first time.
    Mr. STEWART: I beg to move, "That the Clause be read a second time."
    I do not expect that the new Clause will get from the Government anything but an unkind reception. We have been reproached by the Secretary to the Treasury for bringing forward these new Clauses on the Report stage of the Finance Bill. We are forced to do that, under the guillotine, because this Clause was put down for the' Committee stage. This is the only opportunity we shall have of discussing it. With the Income Tax at the present height, and with the taxation against married people in this country amounting to £2,000,000 more than it would be if they were living together without being married—[Laughter.] That was admitted by the Chancellor of the Exchequer in the last few days. The request in this Clause is that he should give some reparation to married people. When we know that the country has to pay £38,000,000 in education charges, the concession asked in this proposal will help
    people to pay for the education of their children and save them from becoming a charge on the public rates. If the Chancellor of the Exchequer cannot give any consideration to the proposal this year, I hope he will bear it in mind and give it some of his sympathy in the next Budget.
    Sir HENRY CRAIK: I beg to second the Motion. I do so with a very different expectation from that expressed by my hon. Friend. I do so with full confidence that the admiration professed by the Government for education is something more than lip service, and that the party opposite, by supporting us in the Lobby, will do something on behalf of education.
    Sir J. SIMON: This is a proposal that if you send your son to Eton and pay £300 for his education, you are to get a deduction of Income Tax in respect of that amount, and in like manner if a boy's education at a cheaper school costs £200 or £100, you will be entitled to a deduction on the amount. I think it is not reasonable to ask that you should pay Income Tax in proportion to the expense of the education of your children.
    It being Eleven of the clock, Mr. SPEAKER proceeded, pursuant to the Order of the House of the 8th July, to put forthwith the Question necessary to dispose of the Clause under consideration.
    Question put, "That the Clause be read a second time."
    The House divided: Ayes, 166; Noes. 266.

    Division No. 195.]

    AYES.

    [11.0 p.m.

    Agg-Gardner, James Tynte

    Banner, Sir John S. Harmood-

    Bentinck, Lord H. Cavendish

    Aitken, Sir William Max

    Baring, Major Hon. Guy V. (Winchester)

    Bigland, Alfred

    Amery, L. C M. S.

    Barlow, Montague (Salford, South)

    Bird, Alfred

    Archer-Shee, Major Martin

    Barnston, Harry

    Blair, Reginald

    Ashley, Wilfrid W.

    Beckett, Hon. Gervase

    Boscawen, Sir Arthur S. T. Gnffith-

    Astor, Waldorf

    Benn, Arthur Shirley (Plymouth)

    Bowden, G. R. Harland

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

    Benn, Ion Hamilton (Greenwich)

    Boyton, James

    Baldwin, Stanley

    Bennett-Goldney, Francis

    Brassey, H. Leonard Campbell

    Bridgeman, William Clive

    Hardy, Rt. Hon. Lawrence

    Perkins, Walter Frank

    Burn, Colonel C. R.

    Harris, Leverton (Worcester, East)

    Peto, Basil Edward

    Butcher, John George

    Harrison-Broadley, H. B.

    Pollock, Ernest Murray

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

    Helmsley, viscount

    Pryce-Jones, Colonel E.

    Campion, W. R.

    Henderson, Major H. (Berks, Abingdon)

    Quilter, Sir William Eley C.

    Carlile, Sir Edward Hildred

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

    Randles, Sir John S.

    Cassel, Felix

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

    Rawlinson, John Frederick Peel

    Castlereagh, Viscount

    Hewins, Wiliam Albert Samuel

    Rees, Sir J. D.

    Cave, George

    Hibbert, Sir Henry F.

    Ronaldshay, Earl of

    Cecil, Evelyn (Aston Manor)

    Hills, John Waller

    Rothschild, Lionel de

    Cecil, Lord Hugh (Oxford University)

    Hill-Wood, Samuel

    Royds, Edmund

    Cecil, Lord R. (Herts, Hitchin)

    Hoare, S. J. G.

    Samuel, Sir Harry (Norwood)

    Clay, Captain H. H. Spender

    Hohler, G. F.

    Samuel, Samuel (Wandsworth)

    Clive, Captain Percy Archer

    Hope, Harry (Bute)

    Sanders, Robert Arthur

    Clyde, J. Avon

    Hope, James Fitzalan (Sheffield)

    Sanderson, Lancelot

    Coates, Major Sir Edward Feetham

    Hope, Major J. A. (Midlothian)

    Sassoon, Sir Philip

    Craig, Captain James (Down, E.)

    Horner, Andrew Long

    Scott, Sir S. (Marylebone, W.)

    Craig, Norman (Kent, Thanet)

    Hunt, Rowland

    Smith, Harold (Warrington)

    Crichton-Stuart, Lord Ninian

    Hunter, Sir Charles Rodk.

    Spear, Sir John Ward

    Currie, George W.

    Jardine, Ernest (Somerset, East)

    Stanler, Beville

    Dalrymple, Viscount

    Joynson-Hicks, William

    Stanley, Hon. G. F. (Preston)

    Denisen-Pender, J. c.

    Kerry, Earl of

    Starkey, John R.

    Denniss, E. R. B.

    Keswick, Henry

    Staveley-Hill, Henry

    Dickson, Rt. Hon. C. Scott

    Kinloch-Cooke, Sir Clement

    Swift, Rigby

    Eyres-Monsell, Bolton M.

    Lane-Fox, G. R.

    Sykes, Sir Mark (Hull, Central)

    Faber, George Denison (Clapham)

    Lloyd, George Butler (Shrewsbury)

    Talbot, Lord Edmund

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

    Locker-Lampson, G. (Salisbury)

    Terrell, Henry (Gloucester)

    Fell, Arthur

    Locker-Lampson, O. (Ramsey)

    Thomas-Stanford, Charles

    Fisher, Rt. Hon. W. Hayes

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

    Thomson, W. Mitchell- (Down, North)

    Flannery, Sir J. Fortescue

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

    Thynne, Lord Alexander

    Fletcher, John Samuel

    Lyttelton, Hon. J. C.

    Touche, George Alexander

    Ganzoni, Francis John C.

    Macmaster, Donald

    Tryon, Captain George Clement

    Gardner, Ernest

    M'Calmont, Major Robert C. A.

    Walrond, Hen. Lionel

    Gastrell, Major W. Houghton

    Magnus, Sir Philip

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

    Gibbs, G. A.

    Mason, James F. (Windsor)

    Watson, Hon. W.

    Gilmour, Captain John

    Mildmay, Francis Bingham

    Weigall, Captain A. G.

    Glazebreek, Captain Philip K.

    Mills, Hon. Charles Thomas

    Wheier, Granville C. H.

    Goldman, C. S.

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

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

    Goldsmith, Frank

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

    Williams, Colonel R. (Dorset, W.)

    Grant, J. A.

    Mount, William Arthur

    Willoughby, Major Hon. Claud

    Greene, W. R.

    Newdegate, F. A.

    Wills, Sir Gilbert

    Gretton, lohn

    Nicholson, William G. (Petersfield)

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

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

    Nield, Herbert

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

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

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

    Wood, John (Stalybridge)

    Gwynne, R. S. (Sussex, Eastbourne)

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

    Younger, Sir George

    Haddock, George Bahr

    Ormsby-Gore, Hon. William

    Hall, D. B. (Isle of Wight)

    Parker, Sir Gilbert (Gravesend)

    TELLERS FOR THE AYES.—Mr.

    Hall, Frederick (Dulwich)

    Peel, Lieut.-Colonel R. F.

    Gershom Stewart and Sir Henry Craik.

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

    NOES.

    Abraham, William (Dublin, Harbour)

    Byles, Sir William Pollard

    Edward, John Hugh (Glamorgan, Mid)

    Acland, Francis Dyke

    Carr-Gomm, H. W.

    Elverston, Sir Harold

    Addison, Dr. Christopher

    Cawley, Harold T. (Lancs., Heywood)

    Esmonde, Dr. John (Tipperary, N.)

    Adkins, Sir W. Ryland D.

    Chancellor, Henry George

    Esmonde, Sir Thomas (Wexford, N.)

    Agnew, Sir George William

    Churchill, Rt. Hon. Winston S.

    Falconer, James

    Allen, Arthur A. (Dumbartonshire)

    Clancy, John Joseph

    Fenwick, Rt. Hon. Charles

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

    Clough, William

    Ffrench, Peter

    Armitage, R.

    Clynes, John R.

    Field, William

    Arnold, Sydney

    Collins, Godfrey P. (Greenock)

    Flennes, Hon. Eustace Edward

    Baker, Harold T. (Accrington)

    Cempton-Rickett, Rt. Hon. Sir J.

    Fitzgibbon, John

    Baker, Joseph Allen (Finsbury, E.)

    Cornwall, Sir Edwin A.

    Flavin, Michael Joseph

    Balfour, Sir Robert (Lanark)

    Cory, Sir Clifford John

    Furness, Sir Stephen Wilson

    Banbury, Sir Frederick George

    Craig, Herbert J. (Tynemouth)

    Gelder, Sir William Alfred

    Baring, Sir Godfrey (Barnstaple)

    Crooks, William

    George, Rt. Hon. D. Lloyd

    Barlow, Sir John Emmott (Somerset)

    Crumley, Patrick

    Gladstone, W. G. C.

    Barnes, George N.

    Cullinan, John

    Glanville, H. J.

    Beale, Sir William Phipson

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

    Goddard, Sir Daniel Ford

    Beck, Arthur Cecil

    Davies, David (Montgomery Co.)

    Goldstone, Frank

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

    Davies, Timothy (Lincs., Louth)

    Greig, Colonel J. W.

    Bentham, George Jackson

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

    Grey, Rt. Hon. Sir Edward

    Bethell, Sir John Henry

    Dawes, James Arthur

    Griffith, Rt. Hon. Ellis Jones

    Black, Arthur W.

    De Forest, Baron

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

    Boland, John Plus

    Delany, William

    Gulland, John William

    Booth, Frederick Handel

    Denman, Hon. Richard Douglas

    Gwynn, Stephen Lucius (Galway)

    Bowerman, Charles W.

    Devlin, Joseph

    Hackett, John

    Brady, Patrick Joseph

    Dickinson, Rt. Hon. Willoughby H.

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

    Brockiehurst, William B.

    Dillon, John

    Hancock, John George

    Brunner, John F. L.

    Donelan, Captain A.

    Harcourt, Rt. Hon. Lewis (Rossendale)

    Bryce, J. Annan

    Doris, William

    Harcourt, Robert V. (Montrose)

    Buckmaster, Sir Stanley O.

    Duffy, William J.

    Hardie, J. Keir

    Burns, Rt. Hon. John

    Duncan, C. (Barrow-in-Furness)

    Harmsworth, Cecil (Luton, Beds)

    Burt, Rt. Hon. Thomas

    Duncan, Sir J. Hastings (Yorks, Otley)

    Harvey, A. G. C. (Rochdale)

    408

    409

    Harvey, T. E. (Leeds, West)

    Markham, Sir Arthur Basil

    Robertson, John M. (Tyneside)

    Haslam, Lewis (Monmouth)

    Marks, Sir George Croydon

    Robinson, Sidney

    Havelock-Allan, Sir Henry

    Marshall, Arthur Harold

    Roch, Walter F. (Pembroke)

    Hayden, John Patrick

    Meagher, Michael

    Roche, Augustine (Louth)

    Hayward, Evan

    Meehan, Francis E. (Leitrim, N.)

    Roe, Sir Thomas

    Helme, Sir Norval Watson

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

    Rowlands, James

    Hemmerde, Edward George

    Millar, James Duncan

    Rowntree, Arnold

    Henderson, Arthur (Durham)

    Molloy, Michael

    Runciman, Rt. Hon. Walter

    Henry, Sir Charles

    Molteno, Percy Alport

    Russell, Rt. Hon. Thomas W.

    Hewart, Gordon

    Mond, Rt. Hon. Sir Alfred

    Samuel, J. (Stockton-on-Tees)

    Higham, John Sharp

    Montagu, Hon. E. S.

    Scanlan, Thomas

    Hinds, John

    Mooney, John J.

    Scott, A. MacCallum (Glas., Bridgeton)

    Hodge, John

    Morgan, George Hay

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

    Hogge, James Myles

    Morrell, Philip

    Sheeny, David

    Holt, Richard Durning

    Morison, Hector

    Sherwell, Arthur James

    Hope, John Deans (Haddington)

    Munro, Rt. Hon. Robert

    Shortt, Edward

    Howard, Hon. Geoffrey

    Murphy, Martin J.

    Simon, Rt. Hon. Sir John Allsebrook

    Hudson, Walter

    Needham, Christopher T.

    Smith, Albert (Lancs., Clitheroe)

    Hughes, Spencer Leigh

    Neilson, Francis

    Smith, H. B. Lees (Northampton)

    Illingworth, Percy H.

    Nicholson, Sir Charles N. (Doncaster)

    Smyth, Thomas F. (Leitrim, S.)

    John, Edward Thomas

    Nolan, Joseph

    Spicer, Rt. Hon. Sir Albert

    Jones, Edgar (Merthyr Tydvil)

    Norton, Captain Cecil W.

    Sutherland, John E.

    Jones, Henry Haydn (Merioneth)

    Nugent, Sir Walter Richard

    Sutton, John E.

    Jones, J. Towyn (Carmarthen, East)

    Nuttall, Harry

    Taylor, John W. (Durham)

    Jones, Laif (Notts, Rushcliffe)

    O'Brien, Patrick (Kilkenny)

    Taylor, Theodore C. (Radcliffe)

    Jones, William S. Glyn- (Stepney)

    O'Connor, T. P. (Liverpool)

    Taylor, Thomas (Bolton)

    Jowett, Frederick William

    O'Doherty, Philip

    Tennant, Rt. Hon. Harold John

    Joyce, Michael

    O'Donnell, Thomas

    Thorne, G. R. (Wolverhampton)

    Kellaway, Frederick George

    O'Dowd, John

    Toulmin, Sir George

    Kelly, Edward

    O'Malley, William

    Verney, Sir Harry

    Kennedy, Vincent Paul

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

    Walsh, Stephen (Lancs., Ince)

    Kenyon, Barnet

    O'Shaughnessy, P. J.

    Walters, Sir John Tudor

    Kilbride, Denis

    O'Sullivan, Timothy

    Waring, Walter

    King, Joseph

    Palmer, Godfrey Mark

    Warner, Sir Thomas Courtenay T.

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

    Parker, James (Halifax)

    Watt, Henry A.

    Lambert, Richard (Wilts, Cricklade)

    Parry, Thomas H.

    Wedgwood, Josiah C.

    Lardner, James C. R.

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

    White, J. Dundas (Glasgow, Tradeston)

    Law, Hugh A. (Donegal, W.)

    Phillips, John (Longford, S.)

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

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

    Ponsonby, Arthur A. W. H.

    White, Patrick (Meath, North)

    Levy, Sir Maurice

    Pratt, J. W.

    Whitehouse, John Howard

    Lewis, Rt. Hon. John Herbert

    Price, C. E. (Edinburgh, Central)

    Whittaker, Rt. Hon. Sir Thomas P.

    Lundon, Thomas

    Priestley, Sir Arthur (Grantham)

    Whyte, Alexander F. (Perth)

    Lyell, Charles Henry

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

    Wiles, Thomas

    Lynch, Arthur Alfred

    Pringle, William M. R.

    Wilkie, Alexander

    Macdonald, J. Ramsay (Leicester)

    Radford, G. H.

    Williams, Aneurin (Durham, N. W.)

    Macdonald, J. M. (Falkirk Burghs)

    Raffan, Peter Wilson

    Williams, Penry (Middlesbrough)

    McGhee, Richard

    Rea, Rt. Hon. Russell (South Shields)

    Williamson, Sir Archibald

    Maclean, Donald

    Roa, Walter Russell (Scarborough)

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

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

    Reddy, Michael

    Wilson, W. T. (Westhoughton)

    MacVeagh, Jeremiah

    Redmond, John E. (Waterford)

    Winfrey, Sir Richard

    M'Callum, Sir John M.

    Redmond, William (Clare, E.)

    Wing, Thomas Edward

    M'Curdy, C. A.

    Redmond, William Archer (Tyrone, E.)

    Yeo, Alfred William

    McKenna, Rt. Hon. Reginald

    Rendall, Athelstan

    Young, William (Perth, East)

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

    Richardson, Albion (Peckham)

    Yoxall, Sir James Henry

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

    Richardson, Thomas (Whitehaven)

    M'Micking, Major Gilbert

    Roberts, Charles H. (Lincoln)

    TELLERS FOR THE NOES.—Mr.

    Malcolm, Ian

    Roberts, George H. (Norwich)

    Wm. Jones and Mr. Webb.

    Manfield, Harry

    Roberts, Sir J. H. (Denbighs)

    Question put, and agreed to.
    Adjourned accordingly at a Quarter before Twelve of the clock.

    Further consideration of the Bill to be resumed to-morrow (Wednesday).

PRIVATE BUSINESS.
  LOCAL GOVERNMENT PROVISIONAL ORDER (No. 18) BILL.—(By Order.)
  Considered; read the third time, and passed.
CRIMINAL JUSTICE ADMINISTRA TION BILL.
Read the third time, and passed.

PATENTS AND DESIGNS BILL.
Not amended (in the Standing Committee).
Considered; read the third time, and passed.

EMPLOYMENT OF MILITARY IN CASES OF DISTURBANCES.
Order read for resuming Adjourned Debate on Question [20th July], "That a Select Committee be appointed to report in what circumstances and on what conditions His Majesty's Military Forces should be employed to deal with disturbances or threatened disturbances of the peace among the civil population: "—[Mr. Gulland.]
Question again proposed. Debate resumed.
"That a Select Committee be appointed to report in what circumstances and on what conditions His Majesty's Military Forces should be employed to deal with disturbances or threatened disturbances of the peace among the civil population."
Committee accordingly nominated of Mr. Butcher, Mr. Cave, Lord Hugh Cecil, Mr. Hamar Greenwood, Mr. Ellis Griffith, Sir Ivor Herbert, Mr. Hicks Beach, Mr. M'Ghee, Mr. Pollock, Mr. Pringle, Mr. William Redmond, Mr. Albion Richard-son, Mr. George Roberts, Major Stanley, and Mr. John Ward.
Ordered, "That the Committee have power to send for persons, papers, and records."
Ordered, "That Five be the quorum."—[Mr. Gulland.]
Whereupon Mr. DEPUTY-SPEAKER, pursuant to the Order of the House of 17th July, proposed the Question, "That this House do now adjourn."

EAST ST. PANCRAS (REPRESENTATION).
Mr. RUPERT GWYNNE: During question time to-day I raised the question of the hon. Member for East St. Pancras (Mr. Martin), and as to the right of the House to demand that Members should attend or get leave of absence if they do not attend. I gave notice to the Prime Minister, who incidentally is First Lord of the Treasury, that I would raise the question to-night, and I see he is not here. I certainly think that when the Prime Minister moves with a light heart the Suspension of the Eleven o'clock Rule, he might at least endeavour sometimes to be present. The point I wish to raise is one in which a serious principle is involved. For the first time we have had it to-day from a Minister of the Crown that hon. Members can absent themselves for as long as they like, indeed for an indefinite period, without any effort on the part of the Leader of the House to enforce their attendance or to ask on what grounds they are absent. It is an important principle, because for the first time since we have had payment of Members it has been said that there is no need for Members to ask leave of absence. Of course, cases arise
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when Members are unable to attend the House. That must frequently happen through ill-health or otherwise. But now that we have payment of Members unconditionally—owing to the way in which it has been introduced—either some provision should be made to see that Members do not leave the House for an undue time or else the old Statute of Henry VIII. should be enforced. The hon. Member for East St. Pancras (Mr. Martin) has openly given it out that he has left the country and does not intend to return to take part in these Debates or to do anything to justify his continuing the office of Member for East St. Pancras. He stated recently that he had no intention of returning, and he added,
"The Government are going straight to destruction. They are too weak and too divided in opinion to deal firmly with any question."
Apparently they are so weak and divided that they are afraid to deal with the hon. Member's own question, because, according to the paper, he stated that he had offered to send in his application for the Chiltern Hundreds, but had left the matter in the hands of the local Radical Association to deal with. I think the Treasury Bench ought to take some steps to see that this important constituency is not disfranchised. At any rate some explanation is due to the House for their having done nothing in the matter. If the Report is not accurate it ought to be denied. If the hon. Member for East St. Pancras has left the country, does not intend to return, and has not placed his resignation in the hands of the Whips of his party, I think some steps should be taken to enforce his attendance here or see that he does not receive his salary. Hon. Members opposite have in years past been very horrified if any hon. Member on this side was not regular in his attendance. Cases have been frequently raised as to the absence of Members abroad or otherwise. I notice that in 1898 the question was raised, and the then First Lord of the Treasury (Mr. Balfour) said:—
"In answer to my hon. Friend I have to say I understand he has omitted one important phrase in the Act of Henry VIII., which is as follows:
'That those Members who absent themselves from Parliament without licence of the Speaker of the House shall be entered in the book of the Clerk of the Parliament kept for that purpose, and deprived of their wages.'
The Statute is evidently directed against those Gentlemen who took the pay of their constituents and did not do the work their constituents thought they ought to do."
[HON. MEMBERS: "Hear hear."]

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If hon. Members will wait for the end of my quotation they can then cheer!
"It is evident that, as our constituents no longer pay hon. Gentlemen, therefore that particular obstacle has lost its cogency."
If that is so and the First Lord of the Treasury had been here to-night he could not have made the same statement as the right hon. Gentleman (Mr. Balfour) did then, because now we receive a salary. I do not think it is an unreasonable thing to say that so long as we do receive salaries there should be some effort on the part of the Leader of the House to see that hon. Members do attend or give some reason for non-attendance. I hope someone on the Government Front Bench will be able to give us some satisfactory explanation.
Mr. PETO: I desire to say a few words in support of the contention of the hon. Member for Eastbourne. I want to recall the broad fact that in the older and more honest days of Henry VIII., when Members received their salaries direct from their constituents, the House thought it necessary to see that the constituencies got their money's worth. Under the present dispensation of a Radical Government we have had a Resolution of this House passed giving payment to Members without imposing any conditions whatever as to their attendance. While the constituencies themselves were the paymasters the House thought it necessary to see that they got something for their money; now, without consulting the constituencies, we have taken their money without any obligation of services rendered. At the present moment we have an occasion on which an hon. Member of this House is leaving, not this House nor his constituents, but the country, and stating publicly that he has no intention of returning during the currency of the present Parliament. He also made some candid statements as to the Government which he had been returned to support. Let that pass. Unless this House reverts to the sound and honest doctrine of services rendered for money received, we are placing ourselves in a position of inferiority altogether, and we are practically doing the confidence trick—taking the money of the taxpayers of this country, without even seeing that the House looks after the attendance of Members in the way they used to do when the electorate themselves were directly responsible.
The SECRETARY of STATE for the HOME DEPARTMENT (Mr. McKenna): Owing to the appreciation of the circumstances
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of the case, such as we might expect from him, the hon. Member for Eastbourne has raised a case which, were we to take examples from the whole House, and explain them, is far more applicable to his side.
Viscount HELMSLEY: Explain then.
Sir FORTESCUE FLANNERY: Give us one case.
Mr. McKENNA: I will give the case of the hon. Member for Eastbourne. During the last two and a-half years, in which the Member for Eastbourne has drawn from the State £1,000, he has voted in 263 Divisions out of 687. On his own principle, the payment ought to be proportionate to the attendance, and upon that principle he would be entitled to a sum of £400.
Mr. GWYNNE: How many thousands have you drawn?
Mr. McKENNA: And being, as we all know him to be, a thoroughly conscientious Gentleman, and convinced that on principle he ought not to retain or draw his salary for work he has not done, I have no doubt he will pay to the Chancellor of the Exchequer the £600 difference. It so happens that the hon. Gentleman who makes this objection has voted 263 times in the last two and a-half years, whereas the hon. Gentleman against whom he brings the charge, in the same period, has voted no fewer than 415 times, so that if there is anything due, there is a much larger sum due by the hon. Gentleman than by my hon. Friend. I think hon. Gentlemen opposite have been peculiarly unfortunate in raising this subject at all. I have here an analysis of the average attendance of hon. Gentlemen sitting on the opposite side of the House and an analysis of the attendance of my hon. Friends sitting on this side of the House. The only means we have of judging is by the Division lists, and I find from an analysis of the Division lists that the average number of Divisions in which hon. Members opposite took part in the last year was 36 per cent., while the average number of Divisions in which my hon. Friends on this side took part was 58 per cent. We are discussing now, not the reason for voting, but the propriety of taking salaries when we do not vote. I am speaking now of Divisions which are trials of Parliamentary strength when questions of principle arise. I find that on this very day on which the hon. Gentleman

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opposite raises this question when such an important matter as the Finance Bill of the year is discussed, that in the four Divisions that took place from five o'clock until eleven minutes past nine o'clock, in the first, 170 hon. Members opposite voted out of 287, in the second, 184 out of 287 voted, in the third, 105 out of 287 voted, and in the fourth, 105 out of 287 voted. [An HON. MEMBER: "How many abstained?"] The hon. Member himself and the whole of the party opposite on the record of the day have been convicted of the offence of drawing a salary for work which they did not do. There is an old maxim that he who comes into Court should come with clean hands—I do not mean his physical hands; but if they are as dirty as his he should not raise a question of this kind.
Viscount HELMSLEY: The Home Secretary has indulged us with a speech which is of the kind one would expect from him. I do not believe that there is a single Member on the bench where he sits or behind or below him who does not think that his speech was not marked by the utmost insincerity. He knows very well that if there is one fallacious test of attendance it is the Divisions. [An HON. MEMBER: "Why?"] It amuses me that any hon. Member, even though he be a Private Secretary to one of the Members on the Front Bench, should pretend that that is the case. [An HON. MEMBER: "Tell that to your constituency."] If the hon. Member suggests that I would not say that to my own Constituents, all I have to say is that I am quite ready to do so. I can prove to hon. Members that on some occasions there have been as many as twenty-five or thirty Divisions in a single day in which hon. Members opposite have voted, and there are an equal number of hon. Members on this side of the House who have attended day after day for a fortnight or three weeks when there have been only some three or four Divisions. Nobody can deny that. If that is the case, how ridiculous it is to say that the number of Divisions is any test of attendance, when Members may be here day after day listening to the Debate and making speeches, as my hon. Friend the Member for Eastbourne has very often done, of a very unpleasant character, unpleasant to right hon. Gentlemen opposite, who, in the term of their Ministerial office, have done so much of
416
which they ought to be ashamed if they are not. The whole defence set up by the Home Secretary can be shown to be utterly fallacious and insincere. The real truth is that they are preventing a by-election taking place in East St. Pancras at the present moment. Perhaps one of the Whips of the Liberal party will be able to say whether any application for the Chiltern Hundreds has been made by the hon. Member for East St. Pancras (Mr. Martin).
The PARLIAMENTARY SECRETARY to the TREASURY (Mr. Illingworth): Certainly not.
Viscount HELMSLEY: Or to the Whips or the Liberal Association?
Mr. ILLINGWORTH: No.
Mr. WEDGWOOD BENN: The Noble Lord seems to imagine that you apply to the Liberal Association for the Chiltern Hundreds.
Viscount HELMSLEY: I imagine nothing of the kind, but hon. Members have to apply to an association, otherwise they have no chance. I am glad to get that distinct statement from the Chief Whip to the Liberal party that no such application has been made. If such an application had been made and had not been granted, it would have distinctly aggravated the case. As it is, the case is quite bad enough. The fact that a Member announced to the papers his intention, without any excuse of ill-health, or of a desire to travel, or of anything of that kind, of leaving the country for good, and did not intend to return to Parliament, should have afforded an opportunity to the Chief Liberal Whip to have suggested to him that it would be more suitable and more seemly if he applied for the Chiltern Hundreds and vacated his seat in Parliament. I should like to ask the Chief Whip whether he has taken any action, because, if he has not, then I think he has been guilty of a distinct dereliction of his duty to this House. These are the plain facts of the case, and they are not going to be swept away by any specious accusations of the Home Secretary against this side of the House, since no one knows better than he does himself how fallacious his arguments are, and how they are only calculated to please right hon. Gentlemen sitting beside him and hon. Members behind him, who are quite indifferent to the fact that an hon. Member may leave this House without any other excuse than

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merely his own good will and pleasure, and draw a salary and not attend, and who think that they have to deal with an ignorant electorate who do not realise the real facts of the situation, and are going to be taken in by the absurd and specious defence of the Home Secretary.
Mr. KING: I always experience a peculiar pleasure in being lectured by people of superior character. When these people come forward and boast of their great achievements, I feel humiliated, but when on reflection, and after looking into their record, I find that they are proved frauds, then my own estimation of myself rises. I have had that happy experience this evening, especially during the speech of the Noble Lord. He has with wonderful elevation of attitude poured scorn on the idea that records of Divisions here could be taken into consideration at all. I do not wonder at that, because, on looking into his record, which, fortunately, I am able to give the House, I find that in the first two Sessions of this Parliament there were 1,056 Divisions, and the Noble Lord was present at 454 and absent from 602.
Viscount HELMSLEY: What was the Prime Minister's record?
Mr. KING: The Noble Lord was absent for something like 200 more Divisions than the hon. Member for Eastbourne. When you get hon. Members and Noble Lords with records of this kind raising their solemn and undignified protests against men like the hon. Member for East St. Pancras, who has only been away from this House something like a fortnight, and has previously attended regularly to his duties, I feel that the chosen spokesmen of the other side are of a very hypocritical character.
Mr. BOOTH: I should like, in the first place, to challenge a statement of the Noble Lord opposite. I had a conversation with the hon. Member (Mr. Martin) recently and he told me that owing to some difference in the value of land in Canada he had decided to go back. He has some undeveloped land in the Dominion. He pays taxes upon it. He says it is right that he should do so, and one of his principal objects in coming into this House was to be found in the hope that legislation of that kind might be introduced here. He told me further that
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the obstruction, particularly on the Front Bench below the Gangway opposite, had had such an effect upon him that one of two things were bound to happen. Either he must remove from his seat below the Gangway to behind the Speaker's Chair, or he must go back to Canada. He could not stand the sight of those Noble Lords continually obstructing. He said he was sitting there day after day looking at the Noble Lords wasting his time in defending their own vested interests, and he longed for those happy days when he was Premier of a small Dominion across the water. He said that there they talked business, and did things in a businesslike way; that they paid no respect to titles, and followed business methods. But he assured me that he should, if possible, come back for next Session and attend this House again. The reports the hon. Members have read are very unfair to my hon. Friend. In my view, when he gets back to Canada among the breezy Colonials, where there is no Established Church and no hereditary landed interest, he will find that he wants to stay there and not come back into an arena like this. He assured me that on several all-night sittings the sight of the three Noble Lords sitting opposite was very upsetting; he used, in fact, a term about them which I should not like to repeat. But he told me they had more than exhausted his patience, and that would account for some of the erratic votes which he had given in this House. He had listened to their arguments, and had become so confused he did not know the difference between the Aye Lobby and the No Lobby.
Mr. PETO: Is that recorded in the Division Lists?
Mr. BOOTH: I think that in the circumstances it comes with very ill grace from the Noble Lords opposite to make this attack. They mesmerised him night after night and induced him to give these erratic votes, and now they round upon him in this fashion. I shall feel it my duty to communicate to him the ingratitude of the Noble Lord the Member for Thirsk, and I shall assure him that the Noble Lord does not represent the House in the sentiments which he has expressed to-night.

NATIONAL INSURANCE ACT.
  APPROVED SOCIETIES (INVESTED FUNDS).
  APPROVED SOCIETIES (INVESTED FUNDS).
  Soldiers, Sailors, and Absent Voters Bill.
  Soldiers, Sailors, and Absent Voters Bill.
  Training Colleges (Ireland).
  Training Colleges (Ireland).
  Burtonport Harbour.
  Burtonport Harbour.
  Loans to Farmers.
  Loans to Farmers.
  Welsh Steam Coal.
  Welsh Steam Coal.
  Education, England and Wales (Cost).
  Education, England and Wales (Cost).
  School Inquiry (Glamorganshire).
  School Inquiry (Glamorganshire).
  Distilling in India.
  Distilling in India.
  Assaults on Warders and Attendants.
  Assaults on Warders and Attendants.
  Swinton Poor Law Schools (Ophthalmia).
  Swinton Poor Law Schools (Ophthalmia).
POST OFFICE.
  TELEPHONE SERVICE.
  TELEPHONE SERVICE.
  Cost of Living (Dudley).
  Cost of Living (Dudley).
  Swine Fever.
  Swine Fever.
  Steam Trawlers (Damage).
  Steam Trawlers (Damage).
  Scottish Licensing Case.
  Scottish Licensing Case.
  Housing (Scotland).
  Housing (Scotland).
  Small Holdings (Scotland).
  Small Holdings (Scotland).
  Broadmoor Criminal Lunatic Asylum (Charles Pritchard)
  Broadmoor Criminal Lunatic Asylum (Charles Pritchard)