Sitting of 27 April 1920

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

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:
Masham Urban District Council Bill [Lords]
Severn Navigation Bill [Lords].
Londonderry Port and Harbour Bill [Lords].
Bills to be read a Second time.
Private Bills (Petition for additional Provision) (Standing Orders not complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for additional Provision in the following Bill, the Standing Orders have not been complied with, namely:
Derwent Valley Water Board Bill.
Ordered, That the Report be referred to the Select Committee on Standing Orders.
Private Bills [Lords] (Petition for additional Provision) (Standing Orders not complied with),—Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for additional Provision in the following Bill, originating in the Lords, the Standing Orders have not been complied with, namely:
Manchester Ship Canal Bill [Lords].
Ordered, That the Report be referred to the Select Committee on Standing Orders.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 2) BILL,
to confirm certain Provisional Orders of the Ministry of Health relating to St. Helens, Spalding, Stockport, Tunbridge Wells, Westhoughton, Wimbledon, and the Middlesex Districts Joint Small-pox Hospital District," presented by Dr. ADDISON; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 85.]
Sheffield Corporation Bill,
Petition for additional Provision; referred to the Examiners of Petitions for Private Bills.

MIDLAND RAILWAY (NOTTINGHAM STATION).
Mr. ATKEY: I desire to present a petition from tradesmen, workmen, manufacturers, merchants, and other citizens of the city and environments of Nottingham. The petition showeth:
"That until the 2nd of February, 1917—"
Mr. SPEAKER: The hon. Member must not read the petition. He may summarise it and state briefly its object.
Mr. ATKEY: One sentence will summarise it—
"Until the 2nd of February, 1917, there existed an entrance to the Midland Station opposite Stratton Street which gave access to and from the centre of the station to various platforms, which entrance was of the greatest convenience.
Your petitioners, therefore, pray that this honourable House will give direction to the Minister of Transport to call upon the Midland Railway Company to re-open that entrance.
The petition is signed by the Mayor, Sheriff, and the Town Clerk on behalf of the civic authorities of Nottingham, the Chairman of the Chamber of Commerce, and the members of the Council, and 18,000 other users of the railway.

ORAL ANSWERS TO QUESTIONS.
  PERSIA.

    RAILWAY OR ROAD COMMUNICATIONS.
    Sir J. D. REESasked the Under-Secretary of State for Foreign Affairs

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    whether he can give the House any information regarding railway or trunk road communications in Persia completed during the War and such railways as are being surveyed at present, in view to early construction?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The amount of railway construction undertaken in Persia during the War was infinitesimal, and consisted chiefly of a light line laid from Bushire to Borasjun. The main road from the Turco-Persian frontier at Kasrishirin has been improved.
    As regards railway development, I would refer the hon. Member to the answer returned to the hon. Member for Stafford on the 18th February last.

  KOREA.

    LEAGUE OF NATIONS.
    Mr. HAYDAYasked whether the Government are prepared to aid properly accredited representatives of the Korean people in presenting to the League of Nations a statement of their case against the Japanese administration of their country?
    Mr. HARMSWORTH: His Majesty's Government have reason to believe that the reforms which the new Governor-General has introduced, and is about to introduce, in the administration of Korea will improve the position of the Korean people.
    Japan is herself a member of the League of Nations, and will no doubt consider the interests of her subject people in accordance with the principles of the League.
    Any such steps as suggested by the hon. Member would seem, therefore, to lie out-side of the province of His Majesty's Government.
    Sir J. D. REES: Is there any reason why the Government presume that the Korean people are misgoverned by the Japanese, as would appear from the answer to the question?
    Mr. HARMSWORTH: I have indicated the policy of His Majesty's Government in the last part of my answer.

    JAPANESE ADMINISTRATION.
    Mr. HAYDAYasked whether any representations have been made to the Imperial Government of Japan concerning the methods used during the past year in suppressing the pacific protest of the Korean people against the Japanese rule; and whether the Government are prepared to take any steps to help to secure justice and good government for this people?
    Mr. HARMSWORTH: The answer to the first part of the hon. Member's question is in the affirmative. As regards the second part, the subject matter would not appear to lie within the province of His Majesty's Government.

    CHEAMNI (ATTACKS UPON CHRISTIANS).
    Mr. GRUNDYasked the Under-Secretary of State for Foreign Affairs whether he is aware that in April, 1919, the Christian men in the Korean village of Cheamni were ordered by soldiers of the 78th Japanese Regiment to assemble in the church, that the doors were then shut and the men shot down, their bodies being bayoneted, and the church and most of the houses in the village set on fire; whether the British consul made any inquiries into this incident; whether any Report has been received; if so, will the Report be published; and whether he has received information that a merely nominal punishment was inflicted on the Japanese officer responsible, after urgent representations had been made to the Japanese Government General at Seoul
    Mr. HARMSWORTH: The answer to the first four parts of the question is in the affirmative. As regards part five of the hon. Member's question, full details were published in the local foreign newspapers in Japan at the time, and in view of the efforts which have since been made to improve matters, there seems to be no necessity now to republish these stories. In this connection, I may refer the hon. Member to a similar question asked by the Noble Lord, the Member for Hitchin, on 7th July, 1919.
    As regards part six, according to such official information as we have, the officers and men responsible were punished with 30 days' "close arrest" including reduction of pay and pension and deferment of promotion.

  GERMANY.

    MUNITIONS OF WAR.
    Commander Viscount CURZONasked the Secretary of State for War and Air, if any estimate can be given of the number of machine guns and small arms now in the possession of Germany; and whether Germany is now in the possession of any apparatus for the production and use of poison gas, either immediately or at short notice?
    The SECRETARY of STATE for WAR and AIR (Mr. Churchill): It is impossible to give any accurate estimate of the number of machine guns and rifles now in the possession of Germany until the Inter-Allied Military Commission of Control have completed their inspection of all German war material dumps and munition factories. The Commission are now actively engaged in checking and supervising the destruction of German war material, and will report fully in due course. A large amount of war material has already been destroyed.
    Similarly, it is impossible to give an answer to the second part of the question until the Commission of Control have completed their work of inspection of the factories.
    Viscount CURZON: Can the right hon. Gentleman say whether, when the Allied Mission of Control has finished its labours, the report, if any, will be available to Members of the House?
    Mr. CHURCHILL: I should think so, but I cannot give any definite undertaking and it must be left to the Allies. I should think the report will be available to the Parliaments of all the countries concerned.

    ALLIED TROOPS ON RHINE.
    Viscount CURZONasked the Secretary of State for War and Air if he can give the total number of the British, French, American and Belgian armies now on the Rhine and, if possible, the total number of effectives?
    Mr. CHURCHILL: The total number of British troops on the Rhine is approximately 14,000, of whom 13,000 are effectives. The French Army is approximately 95,000, with a fighting strength of 85,000. The total strength of the United States Army of Occupation is about 16,000, and the combatant strength 14,500. Exact
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    figures for the Belgian Army of the Rhine are not available, but the strength is estimated to be approximately 20,000.

    BRITISH ARMY OF OCCUPATION (GERMAN CIVILIANS).
    Mr. GILBERTasked the Secretary of State for War and Air whether he has now received any report from the British headquarters in Cologne as to the employment of German civilians with the British Army of Occupation; and can he state the number of Germans employed, the duties they perform, their rate of pay, and the reasons for employing them.
    Lieut.-Commander KENWORTHYasked whether German civilians are employed as batmen, motor drivers, telephone operators, and in similar posts with the British Army of the Rhine; and, if so, what is the approximate number so employed.
    Mr. CHURCHILL: The reply is in the affirmative. Owing to a shortage of technical personnel, mainly in the medical and administrative services, it is necessary to employ local personnel as a temporary measure. As a measure of economy a considerable number of local civilians are also employed on labour duties. The total number so employed is 2,949. Skilled tradesmen are being gradually withdrawn as qualified British soldiers become available to replace them. No German clerks are employed at British headquarters or in the staff offices. Pay is at local trade union rates which vary from that for boy messengers upwards.
    Mr. BILLING: Will the right hon. Gentleman consider the advisability of effecting further economy by enlisting Germans in the British Army of Occupation?
    Colonel ASHLEY: I understand the difficulties of the right hon. Gentleman, but is it really wise to use Germans to work the telephones?
    Mr. PALMER: Has the right hon. Gentleman considered the advisability of employing ex-service men, now out of work in London, many of whom would be willing to serve?
    Mr. CHURCHILL: I am not so sure about that. We are acting with a desire to use combatant men as far as possible. I do not think there is any cause for disquietude on this matter.
    Colonel CLAUDE LOWTHER: Has the right hon. Gentleman asked for volunteers for this specific purpose?
    Mr. CHURCHILL: I have not, nor do I think there is any necessity. Local labour is easily obtained for the services required.
    Mr. GILBERT: Is this the maximum number of men that will be employed or is it intended to still further increase it?
    Mr. CHURCHILL: I should think it will be somewhat decreased, but I am not giving any definite pledge.
    Sir W. JOYNSON-HICKS: Are these Germans included in the number of British troops authorised by Treaty, and if not is not the right hon. Gentleman' exceeding his authority?

    ALLIED WAR PRISONERS.
    Sir W. DAVISONasked the Secretary of State for War and Air whether his attention has been called to a statement that a private in the Coldstream Guards has recently returned to this country after having escaped from prison in Germany, where he had been kept in captivity for 5 ½ years, having originally been captured in the Mons retreat; whether he reported that he had seen prisoners of war of various nationalities mixed with German civilian prisoners; and whether any steps have been taken to visit the prisons in Germany to ascertain if anyone of Allied nationality is still being kept in confinement in that country?
    Mr. CHURCHILL: Attention had already been drawn to the statement referred to. Full investigations were made immediately, and it was found that there was no truth whatever in the statement. With regard to the last part of the question, as already explained, exhaustive search has been made throughout Germany, and all possible enquiries have been made by the British Military Mission in Berlin, and, in this connection, I would refer to the reply to a question put by the hon. Member for South Hackney (Mr. Bottomley).

    SURRENDERED AEROPLANES.
    Sir HARRY BRITTAINasked the Secretary of State for War and Air whether it is the intention of the Government to destroy or to make use of the German aeroplanes to be delivered as and when they are handed over?
    Mr. CHURCHILL: These aeroplanes will be surplus to all possible British requirements, and it has been decided that, except for some machines reserved for exhibition purposes, they shall be reduced to produce and the material sold.

  RUSSIA.

    MURDER OF BRITISH OFFICERS (ALLEGED).
    Mr. LEONARD LYLEasked what steps his Department is taking to verify the report of the murder and torture of two British officers by the Bolshevists; and whether this can be done by means of an official inquiry from members of the military mission and from refugees who have returned to this country?
    Mr. CHURCHILL: As regards the first part of the question inquiries have been made from General Holman (formerly Commander of the British Military Mission in South Russia), since his arrival in England, and it has been ascertained that all information that was in the possession of the mission has already been placed at the disposal of the War Office. Efforts are also being made to obtain further information from refugees now in camps under British control. His Majesty's Government, moreover, have made, and are making, every endeavour to obtain information from the Soviet Government as to the fate of these two officers, but up to the present no definite reply has been received.
    As regards the second part of the question, in view of what I have already stated, it is not considered that any further light can be thrown upon the reported murder and torture of the two British officers by the means suggested.

    BRITISH EXPEDITIONS (COST).
    Mr. CAPEasked the Secretary of State for War and Air whether he can now state the total cost of the expeditions to Russia and the assistance of all kinds given to the anti-Soviet forces up to the end of the last financial year; and whether any expenditure of this kind is still being incurred?
    Mr. CHURCHILL: This information is not yet available, but I propose to issue a statement shortly. No further War Office expenditure is being incurred except on certain Military Missions.

    SOVIET DELEGATION (CO-OPERATIVE MOVEMENT).
    Colonel NEWMANasked the Prime Minister whether he is aware that the President and Members of the Centro-sujus or governing body of the Russian co-operative movement are nominated by the Soviet Government and that only those who are approved by the local Soviet official are allowed to present themselves for election on the various local co-operative societies; and whether, in these circumstances, the Government will make it known that the Soviet delegation now on its way here does not consist of co-operators freely chosen to enter into commercial and other arrangements with Great Britain?
    Mr. BONAR LAW (Leader of the House): I am aware that the statements referred to in the first part of the question have been made. I do not think it is necessary to take action on the lines suggested by the hon. Member in the second part of the question.
    WATERSON: Can the right hon. Gentleman give the House the names of this deputation, and can he state whether they are the same who are reported to have come some time ago?
    Mr. BONAR LAW: They did not come, but I cannot give the names without notice.
    Mr. WATERSON: Does the right hon. Gentleman not consider it desirable that there should be someone from the Soviet Government with plenary powers to act? Seeing that one holds a position corresponding to that of the Minister of Transport in this country, and that it is a question of commerce, in which transport is an essential factor, is it not essential that he should come?
    Mr. BONAR LAW: That does not arise on the question. The Government have been perfectly ready to allow members of co-operative societies to come here, in order to encourage trade.
    Colonel NEWMAN: Could not the Government find out who these men are? Are they co-operators or simply emissaries of the Soviet Government?
    Mr. BONAR LAW: I have been asked that question very often. It is known that the co-operative societies are under
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    the control of the Soviet Government. It is in the interest of this country as well as of Russia to get trade established.
    Mr. WATERSON: Does the right hon. Gentleman deny that they are co-operators?
    Mr. BONAR LAW: No, I do not.

    EXPORT CARGOES.
    Mr. C. EDWARDSasked the Prime Minister whether his attention has been drawn to a statement made by a member of the Russian trade commission at Copenhagen to the effect that six ships are now ready loaded in the harbour at Petrograd with cargoes for export; and what stops are being taken by His Majesty's Government to carry out the decision of the Allied Council to resume trade with Russia?
    Mr. BONAR LAW: I have seen in the Press a statement to the effect indicated in the first part of the question. As regards the second part of the question, I would refer the hon. Member to the answer given on this subject to the hon. and gallant Members for Central Hull and Finchley on the 21st instant.

    NAVAL FORCES (BLACK SEA).
    Mr. C. EDWARDSasked the First Lord of the Admiralty whether four British warships have recently left Malta for the Black Sea; what is the present strength of the naval forces in the Black Sea; and for what purposes they are being kept there?
    The FIRST LORD of the ADMIRALTY(Mr. Long): The answer to the first part of the hon. Member's question is in the affirmative: but the movement is not in any way extraordinary and implies no augmentation of strength in the Black Sea. His Majesty's ships return to Malta from the Eastern Mediterranean regularly to refit and give leave.
    As to the second part of the question, the strength of the naval forces in the Black Sea varies from day to day; but an average is:—

    2 battleships,

    2 light cruisers,

    8 destroyers,

    1 aircraft carrier,

    2 sloops.

    These vessels are maintained there in order to ensure the safety of our troops at

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    Batum and the military mission in the Crimea; and generally to protect British subjects at the outlying Turkish ports.

  BRITISH ARMY.

    MACHINE GUN CORPS (APPLICATION FOR DISCHARGE).
    Mr. GRUNDYasked the Secretary of State for War whether he is now in a position to state the result of his inquiries into the case for discharge of Private T. Johnson, No.179,599, Machine Gun Corps, who is only 16 years of age, and is suffering from ulcers and tumour on the brain, and for whom instructions to proceed to a dispersal camp for discharge were issued last January?
    Mr. CHURCHILL: I am informed that this soldier is being discharged forthwith. Inquiries are being made as to the cause of delay.

    TERRITORIAL ARMY.
    Colonel NEWMANasked the Secretary of State for War and Air whether, under the reorganisation scheme of the Territorial Force, he can give the number of brigadier-generals and brigade-majors who will be appointed, together with their respective rates of pay and allowances, and whether any of these officers have been already appointed?
    Mr. CHURCHILL: There are no Brigadier-generals in the Territorial Army. Territorial infantry brigades, of which there are 42, will each be commanded by a colonel, who will draw consolidated pay of £1,000 per annum—his sum is inclusive of all allowances, except field and travelling allowance, and no free issues in kind are made.
    Forty-two brigade majors will be appointed.
    Brigade majors who are Regular officers will receive, if married, pay and allowances amounting to £832 per annum; if unmarried, £790 per annum.
    Territorial Force brigade majors will draw 33s. per day and allowances.
    Commanders have been appointed for 36 infantry brigades. A few of these who are still serving abroad have not yet assumed duty, but will do so shortly. Brigade majors have been appointed for
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    41 infantry brigades. The remaining appointments will be made in the course of the next few days.
    Colonel NEWMAN: What will these general officers have to do?
    Mr. CHURCHILL: They will be very fully occupied with the general work of training their men and seeing that the drills are carried out throughout the year according to the prescribed routine, and generally maintaining the efficiency of the Territorial Force.
    Major GLYN: When these officers were appointed were any qualifications with war service insisted upon?
    Mr. CHURCHILL: Yes, Sir; these officers were carefully selected by the Committee of Selection at the War Office and they comprise among them an extra-ordinary gathering of officers of the highest reputation in the field.
    Mr. PEMBERTON BILLING: Has the right hon. Gentleman yet arrived at any definite scheme dealing with the Territorial Force, seeing that the people of the country are anxious to take part in it, but lack information?
    Mr. CHURCHILL: Yes, Sir; I have lately made several announcements. I regret that none of them have yet reached the ears of my hon. and gallant Friend.
    Colonel WEDGWOOD: Were the political views of the officers inquired into?

    MUNITIONS (SUPPLIES).
    Major GLYNasked the Secretary of State for War and Air whether there is a fully sufficient supply of small arms ammunition, machine guns and other material available for the training branch of the General Staff to issue for the use of all arms; whether commanding officers are experiencing difficulty in obtaining such stores, material, and equipment to enable them to efficiently and rapidly train the troops under their command; and whether he can take steps to ensure that the Ministry of Munitions Disposals Board do not sell any such material that is required for training purposes until it is clearly proved to be surplus to requirements?
    Mr. CHURCHILL: At present there is a large surplus of all the stores mentioned and there is no difficulty in meeting the

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    demands of commanding officers for equipment necessary for training. With regard to the last part of the question, steps have already been taken to ensure that the Disposal Board do not part with any such material that could be utilised eventually to meet possible demands.
    Major GLYN: Will the right hon. Gentleman cause inquiries to be made and find out where the hitch is, seeing that many commanding officers cannot get the necessary equipment for training?
    Mr. CHURCHILL: If the hon. and gallant Gentleman will give me any such instances, I will make inquiry.

    TROOPS IN INDIA (PAY).
    Sir W. JOYNSON-HICKSasked the Secretary of State for War and Air whether certain British regiments enlisted and paid in England at one rate of pay have, on their arrival in India, been cut down to a lower rate owing to a dispute between the War Office and the India Office; and when will the mistake be rectified?
    The PARLIAMENTARY SECRETARY to the WAR OFFICE (Sir A. Williamson): I should be glad if the hon. Member would address his question to my right hon. Friend the Secretary of State for India, who, I understand, will be prepared to reply.

    TERRITORIAL ARMY (RECRUITS).
    Mr. SUGDENasked the Secretary of State for War and Air if he will state what numbers of Territorial recruits have been received to date from the Armistice day period; and does he propose to encourage recruiting for officers for the Territorial Force from amongst the ranks of demobilised temporary commissioned officers who have had war experience and service or to take for such recruits officers who have had no field service whatever?
    Mr. CHURCHILL: As regards the number of recruits for the Territorial Army, I would refer to the reply given on the 13th April to the hon. Member for Central Hull. As regards the latter part of the question, commanding officers are responsible for the selection of officers, and have been directed to take war service into consideration. Officers of the Special Reserve and New Armies may be considered for appointments.

    SOLDIERS' CLAIMS (INDIA).
    Mr. C. PALMERasked the Secretary of State for War and Air whether he could state the total cost of the cables despatched from the War Office to India, and the cabled replies from India to the War Office, in connection with the settlement of soldiers' claims?
    Sir A. WILLIAMSON: I regret that the records in the War Office are not kept in a form which would enable me to give this information.
    Mr. PALMER: Is the right hon. Gentleman aware there is a great deal of delay, which is causing much inconvenience and discontent?
    Sir A. WILLIAMSON: Yes, I am aware that there has been delay, but the cable has been used when necessary.

  ROYAL AIR FORCE.

    CIVIL AVIATION.
    Major GLYNasked the Secretary of State for War and Air whether, in view of the present condition of a civil aviation industry in this country, he will issue as a Parliamentary Paper a complete statement in regard to the civil aviation branch of the Air Ministry, showing, separately, what results have actually been accomplished up to date; at what cost and how has the money voted been disbursed; what is the settled policy of that Department to be in carrying out the policy adopted by the Government for the future; and in what manner the Department suggests that efforts may be made to encourage the industries engaged in the manufacture of aeroplanes or parts of aeroplanes in this country?
    Mr. CHURCHILL: As I stated in debate on the 11th March last, I hope very shortly to lay before the House a Paper by the Controller-General of Civil Aviation. I think my hon. and gallant Friend will find there the detailed information to which he refers.

    HALTON CAMP, EAST.
    25.Mr. TREVELYAN THOMSONasked the Secretary of State for War and Air if he will state the number of youths at the Royal Air Force school of technical training at Halton Camp, East, whose term of service with the colours expires

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    next year; whether he considers that the cost of the training given will be recouped to the State in those cases where the boys then re-enter civil life; and whether, in the interests of national economy as well as in the interests of the youths themselves, he will consider the desirability of liberating them at once when they have civil employment waiting for them?
    Mr. CHURCHILL: I am informed that there are no boys at Halton serving under the conditions described in the first part of the question, and the second and third parts do not, therefore, arise.

    BRITISH FLYING OFFICERS (INDIA).
    Sir W. JOYNSON-HICKSasked the Secretary of State for War and Air whether British flying officers en route to Mesopotamia are often stranded for a fortnight in Bombay, with no extra allowance to cover their expenses while there; and whether he will remedy the hardship?
    Mr. CHURCHILL: The point has not previously been brought to notice. The officers in question should, on arrival in Mesopotamia, claim from the Command Paymaster there, the travelling allowances due for the period of detention in Bombay. In case there may have been any misunderstanding, special instructions have been sent to the paymaster as to the admissibility of such claims, if received.
    Sir W. JOYNSON-HICKSasked the Secretary of State for War and Air what are the existing arrangements as to the length of stay of officers and men in India; and what are the arrangements for married officers and men in that country?
    This question was only intended to apply to the Air Force, but someone has put in the words "for War."
    Mr. CHURCHILL: I think the answer has been framed by the War Office and is intended to apply to the military. If necessary the hon. Member perhaps will repeat his question. The answer I have to give is as follows:—
    The length of stay in India of other ranks depends partly on their colour service and partly on the foreign service roster of the unit in which they are serving. This period averages about 5½ years, but does not exceed six years unless the man volunteers to extend his service for a longer period.
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    The length of stay of an officer is governed by King's Regulations, which were framed to enable him to transfer to the Home Establishment on completion of six years' continuous service in India if he so desires.
    In the case of an officer who has been promoted from the ranks, commissioned and non-commissioned service is taken into account in estimating his period of service abroad.
    Married officers make their own arrangements for their families in India.
    Warrant officers, non-commissioned officers and men, if on the married establishment, are provided with quarters for themselves and their families. The percentage allowed is laid down in paragraph 109 Allowance Regulations.
    Sir W. JOYNSON-HICKS: The difficulty is that the right hon. Gentleman occupies two offices, but surely an hon. Member is entitled to put down, as I did, a question applying simply to the Air Force? Somebody else put in the words for War. Are we not entitled to ask separate questions, and to expect separate answers?
    Mr. SPEAKER: It would have made the question clearer if the hon. Member had, in the body of his question, indicated his intention that it should apply only to officers and men of the Air Force. Had he put in the words to that effect it would have made it clear.

    JERUSALEM RIOTS.
    Sir WILLIAM WHITLAasked the Secretary of State for War and Air (1) whether the recent outbreaks of disorder in Jerusalem were preceded by anti-Jewish political demonstrations in that city; whether he has any information to the effect that such demonstrations were worked up by agents from Egypt;
    (2) on how many days between the 1st and 10th April rioting took place at Jerusalem between Mohammedans and Jews; what was the total number of casualties in the two communities, respectively; whether any damage was done to religious edifices or private property; if so, has any estimate been made of the amount of the damage; will any compensation be paid; and, if so, by whom?
    Lieut.-Colonel MURRAYasked the Prime Minister the nature and composition of the inquiry that is being held into the recent disturbances in Jerusalem; and whether it is being conducted in public?
    Lieut.-Colonel POWNALLasked the Lord Privy Seal whether his attention has been called to the statement that Mr. Vladimir Jabotinsky had been condemned in Jerusalem to 15 years' penal servitude; and, if so, whether, in view of Mr. Jabotinsky's services during the War, he will have inquiries made as to the circumstances which have caused such a sentence?
    Lieut. - Commander KENWORTHYasked the Under-Secretary for State for Foreign Affairs whether Mr. Vladimir Jabotinsky has been sentenced to 15 years' penal servitude; whether this is the gentleman who was largely instrumental in raising the 38th Royal Fusiliers, which fought in Palestine by the side of British regiments; on what charge was he tried; what was the composition of the court; whether any appeal will be allowed; and whether any Arabs or Christians have been tried in connection with the recent disturbances in Palestine?
    Mr. KILEYasked the Under-Secretary of State for Foreign Affairs whether the Government sent instructions a few months ago to the British administration in Palestine that they were to regard the establishment of a Jewish national home in Palestine as an accomplished fact; whether M. Vladimir Jabotinski, who raised the first Jewish regiment to fight in the British Army in Palestine, was sentenced a few days ago by a British court-martial to 15 years' penal servitude according to the Ottoman penal code; and whether he will explain the reason for basing the sentence upon this code, in view of the Government's declared policy concerning Palestine?
    Mr. CHURCHILL: I have been asked to reply. I shall be much obliged if all these questions are put down again for next Thursday, as the information necessary to enable me to make a statement is still incomplete in several important particulars, and I am awaiting a further telegraphic report from Lord Allen by on various points, including especially the case of Lieutenant Jabotinsky.
    Colonel WEDGWOOD: Can the right hon. Gentleman say whether Mr. Jabotinsky is still in prison, and, if so, where?
    Mr. CHURCHILL: I understand that he is confined in Jerusalem.
    Colonel WEDGWOOD: Have instructions been sent that he shall be properly treated in prison?
    Mr. CHURCHILL: I have sent no instructions of that kind, but the British authorities are responsible for the proper treatment of prisoners.
    Colonel WEDGWOOD: Were the British officers responsible for the pogrom which took place?
    Sir W. WHITLA: Is it not a fact that Mr. Jabotinsky is treated as a political prisoner?
    Mr. CHURCHILL: I do not think that is so. I am in communication with Lord Allenby by telegram, and I wished the series of telegrams to be completed before I make a statement to the House.

    PRE-WAR MILITARY PENSIONS (RE-ASSESSMENT).
    Colonel ASHLEYasked the Parliamentary Secretary to the War Office whether he will give a definition of the words, satisfactory paid military service, as used in Army Order 325, of 1919; whether he will state if, at the time that Order was published, the Army Council had ruled that at least 12 months' satisfactory paid military service must be given during the late War for a pre-War pensioner to qualify for re-assessment of his Service pension; if so, why this period was not laid down in the Order; and whether he will now consider an amendment to this ruling, which involves hardship to a number of men who in many cases made considerable sacrifice when, from patriotic motives, they came forward at a time of national emergency to join the Army, and were discharged, through no fault of their own, before completing 12 months' service in the War?
    Sir A. WILLIAMSON: I am not pre-pared to give a formal definition of the words in question; but the time limit tentatively adopted is no longer operative.
    Colonel ASHLEY: Do I understand that each case is decided on its merits?
    Sir A. WILLIAMSON: I would rather have notice of that question.

    TRIALS IN CAMERA.
    Mr. LYLEasked the Home Secretary if his attention has been called to the remarks of a Judge of the High Court at the Old Bailey against the trying of certain cases in camera; whether he declared that it was in the public interest that such secret trials should be abolished; and whether he will take the matter into consideration
    Lieut.-Colonel Sir J. NORTON-GRIFFITHSasked the Attorney-General if his attention has been drawn to Mr. Justice Darling's statement in the Central Criminal Court on Thursday, the 10th April, asserting that it would be to the public advantage that the system of trying cases in secret should cease; and if he will state what steps, if any, he intends to take in the matter?
    The ATTORNEY-GENERAL (Sir G. Hewart): Yes, I read the remarks of the learned Judge, and they are now under consideration. I cannot say more at present than that legislation will be necessary if it be decided to change the existing law and practice.
    Mr. BILLING: Is the right hon. Gentleman aware that, in the event of this rule being sanctioned, the public will lose the greater part of our judicial humour?

    WATERWORKS CLAUSES ACTS.
    Sir T. BRAMSDONasked the Prime Minister whether it is the intention of the Government to introduce a Bill for the revision and consolidation of the Waterworks Clauses Acts, 1874 and 1863; whether he is aware that the matter was considered by the Board of Trade, who are reported to have passed it over to the Ministry of Health, but that Department in turn returned it to the Board of Trade; and, under these conflicting statements, will he state which Department is charged with this revision and consolidation?
    The MINISTER of HEALTH (Dr. Addison): I have been asked to reply to this question. Neither the Board of Trade nor the Ministry of Health have undertaken the preparations of a Bill for the revision and consolidation of the Acts referred to.

  IRELAND.

    SECESSION POLICY.
    Colonel ASHLEYasked the Prime Minister whether his attention has been drawn to the recent official statement of the new British Ambassador to the United States of America, in which he declared that proposals for the secession of Ireland from the British Empire have been submitted to the British Cabinet and have been rejected; if he will inform the House who submitted these proposals to the Cabinet; and what precedent exists for a British Cabinet even to consider a suggestion to dismember the British Empire?
    Mr. BONAR LAW: The British Ambassador no doubt referred in his speech to the well-known secessionist policy of the Sinn Fein party, which is, of course, repudiated by His Majesty's Government.
    Colonel ASHLEY: Seeing that this is a definite statement, made from the capital of the United States, that a proposal was put before the Cabinet for giving complete independence to Ireland, may we not, here in the House of Commons, know who put that proposal before the Cabinet, and what reason there was for rejecting it?
    Mr. BONAR LAW: I have not myself noticed the exact terms of the Ambassador's speech, but I presume it refers to the obvious fact that the Sinn Feiners aim at a republic. It was, of course, never considered in the Cabinet.
    Colonel ASHLEY: Will the right hon. Gentleman issue an authorative denial of this statement, which was reported in all the public Press of this country as having been officially given by the new Ambassador, Sir Auckland Geddes?
    Mr. BONAR LAW: I have just made a statement which I think is a denial.

    MURDERS AND OUTRAGES.
    Colonel ASHLEY(by Private Notice) asked the Attorney-General for Ireland whether he is aware that in the Ballina-more district in the county Leitrim since the 1st of this month the following crimes have been committed—shop windows of local postmaster destroyed; evacuated police barracks burned together with the furniture of the caretaker, the wife of one of the constables; masonic hall burned down on the 16th by the mob; the railway line torn up and a train derailed and upset into the bog; a recruit of the Royal Irish Constabulary dragged out of bed and made to swear on his knees that he would not join up; another recruit of the Royal Irish Constabulary has had his leg shot off because he joined the force; a notice was posted stating that if anyone was seen talking to the rate collector he would be shot, and the same day a man working for the rate collector was shot; and further that notices have been posted up stating that the three loyalist shopkeepers in the town will be shot and anyone dealing with them; and what steps he proposes to take to preserve the lives and property of these three loyal men, and also the persecuted ex-service men in the town and district?
    The ATTORNEY-GENERAL for IRELAND (Mr. Henry): The facts are substantially as stated in the question of my hon. and gallant Friend. The Inspector-General, with whom I communicated both before and after I received the question, informs me that he has had every effort made to give adequate protection to the persons referred to in this question.
    Colonel ASHLEY: What I want to know is, are any troops or any extra police being sent down to the district to protect those men?
    Mr. HENRY: I only received notice of the question at noon. I communicated at once, and, of course, communication takes some time, but I will have special inquiries made on the subject and let the hon. and gallant Gentleman know the result.
    Lord ROBERT CECIL: Will the right hon. Gentleman give an undertaking to the House that protection shall be given to these men?
    Mr. HENRY: Certainly.
    Major O'NEILL: Does not the Government receive information about these things, without having every day to communicate specially and ask the constabulary whether they are sending protection to particular people or not?
    Mr. HENRY: Certainly; but the question asked by the hon. and gallant Gentleman to which I referred was in reference to the troops that were or were not being sent to the district.
    Major O' NEILL: Is it not the case that yesterday the right hon. Gentleman apparently knew nothing about events which had taken place at Waterford a few days ago?
    Mr. HENRY: Certainly, I knew about the matter, but not to the extent to which I was informed afterwards by an hon. Member who was on the spot.
    Sir C. KINLOCH-COOKE: Are troops being sent there or not?
    Mr. HENRY: It is quite impossible for me, when I am asked a question at 12 o'clock about a district in Leitrim, to say offhand whether or not troops have been sent there.

    PALESTINE (RESTORATION TO JEWS).
    Mr. C. EDWARDSasked the Prime Minister whether the pledge given to the Jewish people by Great Britain, France, Italy, America, and the other Allied Powers to restore Palestine to the Jewish nation has been agreed upon by the Supreme Council; and whether Great Britain is to become the mandatory power under the League of Nations?
    Mr. BONAR LAW: The pledges made by the Powers referred to have been adopted by the Supreme Council. The answer to the last part of the question is in the affirmative
    Colonel WEDGWOOD: Can the right hon. Gentleman say whether this decision will involve a change in the military governorship of Palestine, and when it is likely that civil administration will be instituted?
    Mr. BONAR LAW: That does not arise out of the question.
    Mr. JAMESON: In view of the fact that in much more recent times the national home of the Anglo-Saxon was Schleswig-Holstein, will the right hon. Gentleman consider the necessity of clearing the English out of England?
    Mr. SPEAKER: The House has not sufficient time to make a historical research of that kind.

    EGYPT (LORD MILNER'S MISSION).
    Mr. ALLEN PARKINSONasked the Prime Minister whether Lord Milner has visited or proposes to visit Zaghloul Pasha, the accredited representative of the Egyptian people, before submitting his report?
    Mr. HARMSWORTH: The reply is in the negative. It is for Zaghloul Pasha to take the initiative if he wishes Lord Milner to consider his views.

    LITHUANIA AND POLAND (BOUNDARY).
    Lord R. CECILasked the Prime Minister what is the present actual boundary between Lithuania and Poland; and how far it corresponds with the line laid down by the Supreme Council in Paris.
    Mr. BONAR LAW: There has been no modification on the part of the Supreme Council of the frontier provisionally set up in Paris. I have not the information which would enable me to define the exact line which is occupied at the present moment by the forces of the two States.
    Lord R. CECIL: May I ask whether, in point of fact, these States are complying with the line laid down by the Supreme Council?
    Mr. BONAR LAW: I believe that at present they do not comply, but there has been no change in the decision in their case.

    LICENSING REGULATIONS (TRAVELLERS).
    55. Sir J. NORTON - GRIFFITHSasked the Lord Privy Seal whether, in view of the great inconvenience caused to travellers by the existing
    1028
    licensing Regulations, steps may be taken to revive the pre-war practice of allowing travellers to obtain refreshments on licensed premises at any hour?
    Mr. BONAR LAW: I cannot add anything to previous answers on this subject.
    Mr. BILLING: Does not the right hon. Gentleman think we ought to extend to people outside this House the same privileges that we enjoy in this House, which enable us to get a drink any time we like?

  BUDGET PROPOSALS.

    INCOME TAX.
    Sir J. NORTON-GRIFFITHSasked the Chancellor of the Exchequer whether, having regard to the fact that many life assurance policies were taken out years ago for the purpose of thrift, and that to encourage this thrift legislation was passed whereby the premiums thereon were allowed as a deduction for Income Tax purposes, he will amend his proposals so as to leave such conditions undisturbed?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): My hon. and gallant Friend will find in the White Paper the proposals respecting the allowance in respect of life assurance premiums for Income Tax purposes, and he will see that, although the new methods proposed to be adopted on the recommendation of the Royal Commission for the graduation of the Income Tax involve some corresponding alterations in the practical method of granting the allowance of Income Tax on account of those premiums, the substance of the existing relief's remains unchanged. There are one or two modifications in favour of the taxpayer which have been recommended by the Royal Commission, and which I propose to embody in the Finance Bill.

    WAYS AND MEANS ADVANCES.
    Mr. MARRIOTTasked the Chancellor of the Exchequer what were the sources of Ways and Means advances at the latest date for which particulars can conveniently be given?
    Mr. CHAMBERLAIN: The particulars given each week in the return published in the "London Gazette" each Tuesday show that, on the 17th April, Bank Ways and Means amounted to £39,500,000 and

    1029
    Ways and Means advances from other sources to £206,337,000. The other sources are the National Debt Commissioners, the Currency Note Investment Account, and various balances held by the Paymaster-General.
    Sir P. MAGNUSasked the Chancellor of the Exchequer whether he can give the House an approximate estimate of the loss to the Revenue on Income Tax Account that would result from the separation of the incomes of husband and wife in their returns for payment of Income Tax and Super-tax?
    Mr. CHAMBERLAIN: If the marriage allowance which, in pursuance of the recommendations of the Royal Commission, it is now proposed to grant were maintained, and at the same time separate assessment were allowed, it is estimated that the immediate loss to the revenue would be £18,000,000 and that the ultimate loss would exceed £40,000,000. But, as the Royal Commission point out, if separate assessment were granted the marriage allowance should be abolished. In this case there would be an immediate gain of £2,000,000 to the revenue; but again, to quote the Royal Commission, "the result would be a shifting of burdens from the rich to the poor, because in the vast majority of cases the wife has either no separate income at all, or a separate income less than the amount of the present marriage allowance and far less than the allowance we suggest should be made." I should add that the immediate gain would soon be converted into a considerable loss by redistribution of income. In connection with the whole subject I invite the particular attention of the House to paragraphs 256–260 of the Report of the Royal Commission

    CORPORATION TAX.
    Sir A. FELLasked the Chancellor of the Exchequer if an individual deriving his entire income of £100 a year from dividends on ordinary shares in a company, liable to Corporation Tax, will in fact be taxed to the extent of £5 or £10 as the case may be on such £100; and, as this will be a tax on income, will he be able to recover such tax from the income tax authorities in the same way as he now recovers the 6s. in the £ deducted from his dividends?
    Mr. CHAMBERLAIN: The Corporation Tax is not devised as a tax upon the
    1030
    individual, but as an impersonal tax upon the profits of a company chargeable thereto prior to distribution. No question of recovery by an individual shareholder can arise.
    Sir A. FELL: Then the ordinary man who has a small income from shares will have this deduction from his income and will not be able to recover it?
    Mr. CHAMBERLAIN: He will not be able to recover, but I cannot be taken as assenting to all my hon. Friend's premises.
    Mr. MARRIOTT: Will it not be as a fact a tax on the income of such persons?
    Mr. CHAMBERLAIN: I suggest that it is more convenient to argue these questions in Committee on the Finance Bill than at question time.
    Sir A. FELLasked the Chancellor of the Exchequer if land, mortgage, investment, and trust companies which are not engaged in any trade or manufacture either in Great Britain or abroad will be liable to Corporation Profits Tax?
    Mr. CHAMBERLAIN: Limited liability companies of the character referred to by the hon. Member will be liable to the Corporation Profits Tax.

    LAND VALUATION DEPARTMENT.
    Mr. G. LOCKER-LAMPSONasked the Chancellor of the Exchequer what was the total cost of the Land Valuation Department from its inception to the 5th April, 1919; and what is the estimated cost of it for the year ending the 5th April, 1921?
    Mr. CHAMBERLAIN: I would refer my hon. Friend to the answer given yesterday to the hon. Member for Penryn and Falmouth.
    Mr. LOCKER-LAMPSONasked the Chancellor of the Exchequer, what was the total number of valuations made by the Land Valuation Department; and how many were accepted without negotiation and after negotiation and amendment respectively?
    Mr. CHAMBERLAIN: The number of valuations made by the Land Valuation Office in connection with the original valuation under Part I. of the Finance (1909–10) Act, 1910, is about 7,750,000. In addition the Valuation Office has made

    1031
    valuations in connection with Death Duties, Land Values Duties, and for a variety of other purposes; the number of these is very considerable; but no detailed record of them has been kept. No separate record has been kept of the number of valuations accepted without negotiation or otherwise.
    Mr. LOCKER-LAMPSON: Are the establishment charges now going to be reduced?
    Mr. CHAMBERLAIN: Very consider able reductions have been made. I have not the particulars present in my mind. As I told the House yesterday, I am inquiring whether further reductions of the staff are not possible.

    AUSTRIA (RELIEF PAYMENTS).
    Major GLYNasked the Chancellor of the Exchequer how much money has been paid by the British Treasury for the relief of the inhabitants of Austria since 1st January; and how much more money is it anticipated will be spent in this way?
    Mr. CHAMBERLAIN: The actual cash advances for Austrian relief (including grants to the Vienna Relief Committee) since 1st January last amount to £394,000. £10,000,000 is provided in the Estimates for 1920–21 for relief loans to Austria and Poland, and it seems probable that some £7,000,000 of this will very shortly be spent for this purpose.

    SIBERIAN BANK.
    Mr. MacCALLUM SCOTTasked the Chancellor of the Ex-chequer (1) how many shares the Government has acquired in the Siberian Bank, what is their normal value, what price did it pay for them;
    (2) with whom he is negotiating for the sale of the shares which the Government holds in the Siberian Bank; whether he has granted any option for the purchase of these shares; if so, for what consideration;
    (3) whether he is advised, and by whom, that the present is a suitable time for selling the shares which it has acquired in the Siberian Bank?
    Mr. CHAMBERLAIN: Negotiations in this matter are in progress, and I do not think it would be in the public interest to make any statement on the matter at present.
    Mr. SCOTT: Is it undesirable in the public interest to state what price the Government have paid for these shares, and how many shares they hold?
    Mr. CHAMBERLAIN: I think it is undesirable, while negotiations are going on, that I should make any statement.
    Mr. SCOTT: How is it possible to sell these shares to the best advantage if it is not known generally how many shares are for sale? Have the negotiations been conducted by the Treasury direct or have they been conducted by the Department of Overseas Trade?
    Mr. CHAMBERLAIN: I must have notice of that question.
    Mr. SCOTT: Arising out of that—
    Mr. SPEAKER: Will the hon. Member put down any further questions?

    PRIZE COURT FUND.
    Viscount CURZONasked the Chancellor of the Exchequer if he will consider the advisability of publishing a complete balance sheet of the Prize Court Fund, showing the receipts and expenditure in detail under all heads?
    Mr. CHAMBERLAIN: Details of the Supreme Court Prize Deposit Account are published annually (see Return 48 of 1920). When the proceeds have been finally allocated between the Exchequer and the Naval Prize Fund I will consider, in conjunction with my right hon. Friend the First Lord of the Admiralty, the publication of complete balance sheets under each head.
    Mr. MILLS: Is it not a fact that, whilst men who have earned prize money are still waiting for it, the lawyers have already drawn over £6,000,000?

    SILVER (EXPORT).
    Lieut.-Colonel SPENDER CLAYasked the Chancellor of the Exchequer whether silver coinage has been exported

    1033
    from this country for melting purposes owing to the enhanced price of the metal, and what steps are taken to prevent a serious loss to the country from this practice?
    Mr. CHAMBERLAIN: The export of British silver coin, except under licence from the Board of Trade, has been forbidden by Order in Council since April, 1918, and so far as I am aware the prohibition has been effective. At the present price of silver there is little or no profit in melting.

    MUNICIPAL LOANS.
    Mr. SUGDENasked the Chancellor of the Exchequer when and what means he purposes to adopt to prevent competition between municipal authorities in obtaining municipal loans which at present results in high prices for such loans?
    Dr. ADDISON: In the case of housing loans I have power, with the concurrence of the Treasury, to limit the rate of interest and thus to some extent to prevent competition. In other cases I have no such power.

    HAMBURG STATE LOTTERY.
    Mr. LYLEasked the Secretary of State for the Home Department if he is aware that under date March, 1920, appeals for the Hamburg State Lottery, offering prizes to the extent of 13,731,000 marks, are now being issued through the British Post Office by one Samuel Heckscher, the draw to take place next month; and whether steps can be taken to protect the public from, on the one hand, their exploitation by our late enemies and, on the other, from the moral degradation which may ensnare the British public so carefully guarded by official prohibition of all lotteries, including those organised for charities and hospitals?
    The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): Steps have been taken to prevent, as far as possible, the distribution of advertisements of this and all similar lotteries through the post.

    WOMEN POLICE.
    Mr. GILBERTasked the Home Secretary whether the women police who
    1034
    are patrolling London streets are members of the Metropolitan Police Force; if so, will he state how many women constables there are and what is the rate of pay and hours of duty; and whether, if they are not members of this force, he will state what control the Chief Commissioner has over them and in what way it is given effect to?
    Mr. SHORTT: There is a body of women police attached to the Metropolitan Police Forces and controlled by the Commissioner. This body consists of 1 superintendent, I assistant superintendent, 10 sergeants, and 100 women police. These women are paid 48s. a week; sergeants, 60s. a week; and their hours of duty are 7 hours a day for 6 days a week. There are also other unofficial bodies of so-called women police, who are not connected with the Metropolitan Police Force and not controlled by the Commissioner.
    Sir J. D.REES: Who controls these bodies?
    Mr. SHORTT: They are associations of ladies. The whole question of their employment is before a Committee.
    Sir J. D. REES: Are we to infer that this kind of voluntary police will now be brought to an end?
    Mr. SHORTT: I have said it is before a Committee.
    Mr. A. SHORT: Have these people the same power as ordinary policemen of arrest?
    Mr. SHORTT:They have no power of arrest at all.
    Viscount CURZON: Have any cases occurred in which these policewomen have been subjected to rough treatment or indignities while performing their duties?
    Mr. SHORTT: One woman policeman suffered ill-treatment in Epping Forest. That is the only case brought to my notice.
    Mr. WATERSON: Are they allowed to join a trade union of their own?
    Mr. SHORTT: Certainly not.

    MASSAGE ESTABLISHMENTS.
    Mr. PALMERasked the Home Secretary whether he is aware that many

    1035
    so-called massage establishments in London are really houses for
    the propagation of vice of a particularly decadent character; and whether he will cause inquiry to be made with a view to action being taken for their suppression?
    Mr. SHORTT: Massage establishments are subject to registration and regulations by the London County Council, and if the hon. Member has evidence that any establishment is not properly conducted, he should supply information to the Council.
    Mr. PALMER: Is the right hon. Gentleman aware that I have considerable information in my possession, with which I will furnish the London County Council?

    DISORDERLY HOUSE.
    Mr. PALMERasked the Home Secretary whether a woman who was convicted in 1913, under the name of Queenie Gerald, of keeping a disorderly flat in Piccadilly Circus has since, under the assumed name of the Honourable Geraldine Q. G. Gayner, been carrying on her former methods in a flat at No. 9, Maddox Street, W.; whether it has come to his knowledge that complaints have been made to the police, both by the military authorities and by civilians, in regard to this flat extending over a long period: and can he state why no action has been taken by the police?
    Mr. SHORTT: The woman in question occupies a flat at the address mentioned, and certain complaints with regard to her have reached the police; but, so far as can be ascertained, she is the only occupant and there is no evidence to show that the flat is used as a brothel. If the hon. Member has any information to show that there are any contraventions of the law, he should communicate it to the police.
    Mr. PALMER: Has the right hon. Gentleman sought information from those who have complained to the police, and is he aware that the police have promised to raid the premises, but have never done so?
    Mr. SHORTT: There have been no grounds for doing so.
    Colonel LOWTHER: Is there any truth in the report circulated in the Press that a lady of this name is seeking Parliamentary honours?

    POLICE, PAY AND PENSIONS (DESBOROUGH REPORT).
    Lieut.-Colonel GUINNESSasked the Home Secretary whether the Government have decided to adopt the recommendations contained in the second part of the Report of the Desborough Committee; and how soon this Report will be published?
    Mr. SHORTT: The second part of the Report was published in February. The recommendations of the Committee are now under my consideration. I am advising Police Authorities to adopt some of the recommendations, but others cannot be adopted without legislation.

    DISABLED EX-SERVICE MEN (TRAVELLING FACILITIES).
    Colonel ASHLEYasked the Minister of Pensions whether a decision has now been arrived at regarding the provision of additional travelling facilities by means of half-fare vouchers to men undergoing treatment away from home; and whether, in view of the fact that it is a hardship of disabled men in such circumstances that they can only visit their homes free of cost at infrequent intervals, he will further consider the issue of a free railway ticket every three months instead of once in every six months, or some concession?
    The MINISTER of PENSIONS (Mr. Macpherson): If my hon. and gallant Friend will put down his question again in a fortnight's time, I hope that it will then be possible for me to announce a definite decision.

  SCOTLAND.

    SMALLHOLDINGS, GRETNA.
    Major W. MURRAYasked the Secretary for Scotland whether a transfer to the Scottish Board of Agriculture of the land at Gretna designed for smallholdings will be carried out prior to the

    1037
    conditional sale of such land to an agricultural company; and whether in the event of such sale taking place the Scottish Board of Agriculture will reserve powers to approve the terms upon which smallholders may be established, and to resume possession of the land should smallholdings not be formed upon it within a fixed period and Scottish smallholders be settled thereon?
    The SECRETARY for SCOTLAND (Mr. Munro): No transfer to the Board is proposed; but negotiations are proceeding with a view to the adjustment of an agreement on the lines contemplated in my reply to my hon. and gallant Friend of 30th March.
    Major MURRAY: Will my right hon. Friend give the guarantees mentioned in the latter part of the question?
    Mr. SPEAKER: The hon. Gentleman should put that question down.

    LAND SETTLEMENT (APPOINTMENT OF DIRECTOR).
    Major MACKENZIE WOODasked the Secretary for Scotland whether a new office has been created for the purpose of supervising land settlement in Scotland; and, if so, who has been appointed, and what are his qualifications for the post?
    Mr. MUNRO: Lieut.-Colonel Sir H. Arthur Rose, D.S.O., has been appointed to undertake the duties of Director of Land Settlement under the Board of Agriculture for Scotland. The appointment, which is a temporary one, is made with a view to developing and accelerating land settlement operations, more particularly in the interests of ex-service men. Sir Arthur Rose has, in the position of Food Commissioner for Scotland and in other public positions, shown very exceptional qualities as an organiser and administrator, and I consider myself fortunate in having been able to secure his services.
    Major WOOD: Has he any agricultural qualifications?
    Mr. MUNRO: He certainly has a most intimate knowledge of agriculture.
    Major WOOD: Will he devote his whole time to the work, and is the right hon. Gentleman aware that this gentleman has been recently chairman of the education authority for Edinburgh?
    Mr. MUNRO: My information is—I do not want to put it as a certain fact—that Sir Arthur Rose proposes to resign that particular appointment. In regard to the other part of the question, it would not be reasonable to ask a gentleman who has undertaken an appointment terminable at a month's notice to give his exclusive time to the performance of his duties, but these duties will have first call upon his time, and one can trust him to act accordingly.
    Major WOOD: What is the salary?
    Mr. MUNRO: Speaking from recollection, £1,200 a year, with the usual war bonus.

    GRAZING AREAS.
    Lieut.-Colonel MURRAYasked the Secretary for Scotland whether he is aware that, in response to appeals by the Board of Agriculture for Scotland in 1917, landowners generally showed themselves anxious to assist the Board in its efforts to make hill areas available for the grazing of cattle and sheep, and that only in a comparatively few cases was it found necessary for the Board to have recourse to its powers under the Defence of the Realm Regulation 2 M; whether he has any information to the effect that it is intended in certain instances to reserve for sporting purposes areas which, since 1917, have been available for grazing; whether he is aware that since the outbreak of war much permanent pasture has been compulsorily broken up and is not in the meantime available for grazing, with the result that the head of livestock in some counties has been reduced; and whether, in view of the national necessity for reasonable facilities being afforded for summer grazing and of the uncertainty that exists as to the present position, he will define the existing powers of proprietors in the matter?
    Mr. MUNRO: The answer to the first part of the question is in the affirmative. I have no information in regard to particular areas which it is now proposed to reserve for sporting purposes, but the Deer Forests Committee is at present investigating this matter. The answer to the third part of the question is in the affirmative. The total cattle stock in Scotland in June, 1919, was, however, larger than in June, 1914, and while ten counties showed a decrease, this was not considerable. The sheep stock in June,

    1039
    1919, was the lowest on record, but this was due largely to causes other than the amount of grazing land available. The rights of proprietors in this matter are limited by the powers exercisable by the Board of Agriculture for Scotland under Regulation 2 M of the Defence of the Realm Regulations, and will be limited by Part IV. of the Corn Production Act, 1917, when this comes into force.
    Lieut.-Colonel MURRAY: Are we to understand that the Board of Agriculture has the same power in regard to grazing which they had during the War?
    Mr. MUNRO: I should like notice of that question.

    TRAINING WOMEN.
    Lieut.-Colonel MURRAYasked the Secretary for Scotland whether he is aware that £600,000, to which Scotland contributed, has been handed over by the National Relief Fund and the Queen's Work for Women Fund for the training of professional women whose prospects have been injured by the War; that this fund is at present being administered by the Central Committee on Women's Employment and Training in London, with the assistance of interviewing boards throughout the country; and whether, in view of the different educational conditions obtaining in Scotland, he will take such steps as will secure the setting up of a separate Scottish Committee with power to deal with Scottish applications
    Mr. MUNRO: The answers to the first two parts of the question are in the affirmative, except that the amount in question is £500,000, and not £600,000. The funds at the disposal of the Central Committee were granted by the Executive Committee of the National Relief Fund and are not under my control.

  FOOD SUPPLIES.

    SUGAR.
    Mr. DOYLEasked the Minister of Food if the price of sugar has been recently raised to the manufacturers of sweetened condensed milk to the figure of 1s. 4d. per lb. wholesale, as against 8½d. per lb. wholesale for sugar sold for use by the domestic consumer; whether
    1040
    this constitutes a handicap, both to the consumer and manufacturer of condensed milk; and whether it is liable to seriously interfere with a British industry on the eve of the flush milk season, when provision is usually made for winter stocks?
    The PARLIAMENTARY SECRETARY to the MINISTRY OF FOOD (Sir W. Mitchell-Thomson): The price of sugar for all manufacturing purposes was raised on the 19th April to 150s. per cwt., a figure in accordance with the prices ruling on that date in the markets of the world. While the price for sugar for domestic consumption is being provisionally maintained at 80s. per cwt., this has only been made possible by the utilisation of sugar purchased at dates previous to the recent advances. Any rise in the price of a raw material must involve a certain hardship to both manufacturers and consumers, but I cannot agree that the Government should now subsidise the sweetened condensed milk industry by issuing to manufacturers of that commodity supplies of sugar at a price below its present cost.
    Mr. BILLING: Is it not a fact that they are more than compensated by having vastly increased their prices owing to the extra price of sugar?

    BACON.
    Major BARKERasked the Minister of Food what weight of bacon has been destroyed or has been sold to soap makers during the last 12 months ending 20th April; and why this bacon was not disposed of to the consuming public before it became unfit for food?
    Sir W. MITCHELL-THOMSON: I am glad to have this opportunity of explaining the matter.
    I regret that the Ministry of Food have no records which would give the weight of bacon destroyed or sold to soap makers during the twelve months ending 20th April, as in the early part of the period importation was in trade hands.
    As regards any bacon which was condemned or sold to soapboilers subsequent to the resumption of control, I would point out that this bacon was imported on private account. I understand that in normal times, that is to say, under the most favourable transport conditions from the packing house abroad to the consumer in this country, a certain percentage of bacon always becomes unfit for food and is consequently either

    1041
    destroyed or sold to soapboilers. In the absence of comparative figures it is not possible to say how last year compared with normal years in this respect. I may add that out of approximately 500,000 boxes which have been landed in this country on behalf of the Ministry of Food since the resumption of control, not one has arrived in such a condition as to be or to become unfit for food.

    HOUSES OF PARLIAMENT (VENTILATION).
    Sir H. BRITTAINasked the First Commissioner of Works whether he is able to give the House any information as to the plans which he has had in hand for a general improvement of the ventilation in the Houses of Parliament.
    The FIRST COMMISSIONER of WORKS (Sir Alfred Mond): As my hon. Friend is aware, the problem of ventilation to these buildings is a most difficult one. My officers are examining it in conjunction with the officials of the National Physical Laboratory, but exhaustive tests and analysis are required, and it will necessarily be some time before a decision can be come to as to carrying out a general scheme of improvement.
    Lieut.-Colonel MURRAY: Is the right hon. Gentleman aware that prior to the War a Committee of this House sat to consider this question and brought out a long report. Is he taking that into consideration?
    Sir A. MOND: I am aware of the fact. All reports, and there are many of them on this subject, will be taken into consideration.
    Sir H. BRITTAIN: Can the National Physical Laboratory do anything with the hot air in the lower corridor?

    BAMBERGER CASE.
    Sir J. D. REESasked the Attorney-General whether the cost to the taxpayer of the intervention of the King's Proctor in the Bamberger case has now been ascertained?
    Sir G. HEWART: I cannot at present add anything to the answers which I gave upon this matter on the 29th March last.
    Sir J. D. REES: Will the right hon. Gentleman be able to give information later on?
    Sir G. HEWART: Yes, when the costs have been ascertained.

  MUNITIONS.

    GOVERNMENT FACTORIES.
    Mr. LAMBERTasked the Parliamentary Secretary to the Ministry of Munitions what are the purposes for which the factories at Gretna, Queens-ferry, Swindon, Watford, Sutton Oak, Perivale, Hereford, Banbury, and Lancaster are to be employed; how many employés are now engaged at these factories; and what were the numbers before the War?
    The PARLIAMENTARY SECRETARY to the MINISTRY of MUNITIONS (Mr. James Hope): With regard to the first part of the question, I would refer the right hon. Member to the Secretary of State for War to whose jurisdiction the factories are shortly to be transferred. A statement of the number of employés now engaged in these establishments will be circulated with the OFFICIAL REPORT. All the factories were erected during the War with the exception of the chemical factory at Sutton Oak which was working in 1914 under private ownership, and as to the employés of which at that time I have no information.
    The following is the statement referred to:
    STATEMENT of the number of employés at certain National Factories as on the 16th April, 1920.

    Factory.

    Numbers Employed.

    Banbury

    161

    Gretna

    1,110

    Hereford

    423

    Lancaster

    765

    Perivale

    454

    Queensferry

    382

    Sutton Oak

    45

    Swindon

    137

    Watford

    208

    UNEMPLOYMENT (PERSONS REGISTERED).
    Major BARKERasked the Minister of Labour what is the number of persons

    1043
    registered as unemployed; and how does this number compare with the number on the same date in 1914?
    The MINISTER of LABOUR (Dr. Macnamara): The number of persons on the Live Registers of Employment Exchanges at 16th April, 1920, was 359,139 (of whom 220,000 were ex-service men and women), compared with 106,472 at 17th April, 1914. The returns relating to members of trade unions show at the end of March, 1920, a percentage of 1·1 un-employed as compared with 2·2 at the end of March, 1914. The increase in the number on the Live Registers of Exchanges is largely accounted for by the greater use which is being made of Employment Exchanges at the present time, especially by demobilised members of the Forces. I may mention that during the eleven weeks ended 14th April, 133,000 were demobilised.

  HOUSING.

    FLATS (LETTING CONDITIONS).
    Mr. NEIL MACLEANasked the Minister of Health whether his attention has been called to the growing practice of making the letting of flats and houses conditional on the purchase of furniture by the tenants at inflated prices; and whether he will incorporate in the forthcoming Rents Bill a Clause prohibiting the enforcement of such conditions, which in practice amount to a premium on possession?
    Dr. ADDISON: The point to which the hon. Member refers will be considered.

    LUXURY BUILDING.
    Mr. MYERSasked the Minister of Health whether the building trades employers are organising resistance to the restrictions on luxury building, the authority for which was contained in The Housing (Additional Powers) Act, 1919; and whether, in view of the allegations made against the building trades unions that they are delaying the erection of working-class houses, an assurance can be given that the Government will resist any pressure brought by the building employers with a view to making the luxury building regulations ineffective?
    Dr. ADDISON: I am aware that the restriction of luxury building is exciting
    1044
    opposition in certain quarters, but as the suggestions to local authorities regarding the exercise of their powers in this matter were prepared in consultation with, and were accepted by, the Joint Industrial Council of the Building Trade, I am entitled to assume that they have the support of building trade employers as well as operatives. I shall certainly take all practicable steps to ensure the reasonable application of the luxury building regulations in order to secure the speedier production of houses.
    Sir J. D. REES: Will the right hon. Gentleman guarantee that existing contracts and commitments will be saved in any regulations in this respect?
    Dr. ADDISON: I do not think that I can guarantee that. The Act has been passed, and everybody has seen it.
    Sir J. D. REES: Does the right hon. Gentleman realise what great danger there is to the cause which he has so much at heart in this matter of interfering with existing contracts?
    Mr. DAVISON: Will the right hon. Gentleman see that the interests of the people are safeguarded?
    Dr. ADDISON: All these questions have been considered for many months by the Industrial Council before these proposals were put forward. We have considered all these matters in great detail, and we consider that it is much more important to get the houses put up.

    WOOL STOCKS.
    Mr. MYERSasked the President of the Board of Trade if he will state what are the latest figures available relating to the stocks of wool in the country, together with the quantities purchased and in transit or awaiting shipment, with such comparative figures as are available for the years 1913 and 1916?
    Mr. HOPE: I have been asked to reply to this question. I regret that I have no information as to the stocks of wool of all descriptions in this country. The Government ownership of raw wool extends to Australian and New Zealand wool only. Of these, the unsold stocks in the United Kingdom on 31st March last amounted to approximately 527,000 bales. The quantity afloat on the same date for

    1045
    the United Kingdom was 272,000 bales. The number of bales in Australia and New Zealand appraised and awaiting shipment on 31st March was approximately 1,900,000. The Government control of Australasian wool did not begin until the end of 1916, and I regret, therefore, that no comparative figures for that year and 1913 are available.

    STANDARD BOOTS.
    Mr. WATERSONasked the President of the Board of Trade whether he can make a statement as to the proposed establishment of a standard boot and shoe scheme; and what proportion of the total supplies will be included in this scheme?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridgeman): A voluntary standard boot scheme has been established by the Incorporated Federated Association of Boot and Shoe Manufacturers of Great Britain and Ireland. The scheme was examined by the Standing Committee on Prices of the Central Committee, who found the scheme to be conceived in the public interest and likely to be of benefit, not only in providing the public with standard boots of recognised quality at reasonable prices, but also generally, in stabilising the market as a whole. I am sending the hon. Member a copy of the Committee's Report (Cmd. 592). I understand that the Federated Manufacturers propose to allocate about one-third of their total output to the scheme.
    Mr. TERRELL: Will this involve any sort of Government control in connection with the boot trade?
    Mr. BRIDGEMAN: No. It is a voluntary scheme.

    DEPORTED ALIENS.
    Colonel WEDGWOOD(by Private Notice) asked the Home Secretary whether Mr. Charles Fox, of 5, Newbould Street, Commercial Road, was arrested by the police on 19th April without being charged or any indications of the grounds of arrest; whether any form of trial of this man has been held; whether he has been informed that he is to be deported to Danzig on 28th April; on what authority the police have acted in this
    1046
    matter; and whether similar arrests and threats of deportation are being made in other parts of London, especially directed against the Jews?
    Mr. SHORTT: Charles Fox was convicted at the Thames Police Court on 7th November last for landing in this country without permission, and, in accordance with the policy I have already announced, he and a number of other Polish citizens who have landed illegally in England have recently been arrested and are being sent to Poland. The deportations will be carried out under orders made by me in exercise of the powers conferred upon me by the Aliens Order, 1920. There has been no discrimination against Jews in this matter. Any alien, whether Jewish or not, who lands in this country without permission is liable to be sent back to his own country.
    Colonel WEDGWOOD: Is the right hon. Gentleman aware that this man was fined in November last, and was given an identity book allowing him to stop in this country? He therefore opened a hairdresser's business, and the day that he opened that business he was arrested and his business broken up.
    Mr. SHORTT: I did not know that. I think that, like the suggestion which is made in the question, it is wholly unfounded.
    Colonel WEDGWOOD: May I ask why a perfectly proper question put by a Member of this House should be answered by the Home Secretary with his usual impertinence?
    Mr. SPEAKER: That word has been frequently used and has been ruled not to be a Parliamentary word. I hope the hon. and gallant Member will withdraw it.
    Colonel WEDGWOOD: I withdraw the word "impertinence," and I will say "in his usual casual manner." May I ask the Home Secretary, particularly as he chooses to insult me in this way, which part of the question he considers to be as unfounded as usual? May I have an answer? [HON MEMBERS: "No!"]
    Mr. KILEY: May I ask the right hon. Gentleman whether he is not aware that full details of this case have been supplied to his office, and that they are awaiting his attention?
    Mr. SHORTT: They have been tested by the answer which I have given in consequence.
    Colonel WEDGWOOD: What do you think was wrong in my statement?
    Captain WEDGWOOD BENN: Is it accurate or not?
    Colonel- WEDGWOOD: What do you think was wrong in my statement? This is a personal matter.
    Mr. SPEAKER: If hon. Members insist on asking supplementary questions in the way they do, they cannot expect to have the same correct answer as if they gave notice. The hon. Member has put a number of facts in supplementary questions, and he is surprised at the answer he gets. He should not be.
    Colonel WEDGWOOD: Surely it is not necessary for anyone answering from the Front Bench to insult a man who asks a supplementary question. There is no reason why he should insult a person who puts a question. He may refuse to answer, but there is no reason for insult. We have a perfect right to question the Government in this House as much as we like.

    QUESTIONS TO MINISTERS.
    Mr. J. H. THOMAS: On a point of Order. I desire to ask your ruling, Mr. Speaker, whether the suggestion thrown out to the House by you yesterday is not being acted upon, and whether you are aware that you yourself stated that in your opinion the rule so long in existence had not been abused, and that as a result of the alteration Members of this House who are to-day sitting in Committee upstairs, unable to ask their questions, have been deprived of the opportunity of having the questions asked for them, and that there are Members who never have sat, and have declared that they never will sit upon a Committee upstairs. [HON. MEMBERS: "Name!"]
    Mr. SPEAKER: I threw out the suggestion yesterday. I do not know whether the right hon. Gentleman was present or not. If he was present he would have noticed that what I suggested was received with almost universal acclamation and approbation, and the House is giving it a trial. I think if the House
    1048
    would be patient and give it a few more days' trial it would be in a better position to see whether it works or not.
    Mr. THOMAS: I was present and took part in the discussion, and resented the suggestion. It is perfectly true that, judging by the acquiescence of the House, the majority were in favour of that proposal, but that does not prevent any minority pointing out to you that in the exercise of their Parliamentary duty in Committee upstairs they ought not to be deprived of the benefit of a long-established rule of allowing someone to ask their questions for them.
    Mr. SPEAKER: It cannot be a great satisfaction to any Member to have someone else ask his question. The reply will be received by him at almost identically the same time, being circulated in the OFFICIAL REPORT the next day.
    Mr. BILLING(later): On a point of Order, Mr. Speaker—
    Mr. SPEAKER: It is too late now for a point of Order.

    NEW MEMBER SWORN.
    PATRICK JOHNSTON FORD, Esquire, for the Borough of Edinburgh (North Division).
BILL PRESENTED.
  SHERIFFS (IRELAND) BILL,
  "to amend the Law relating to the offices of sheriff and under-sheriff in Ireland; and for other purposes incidental thereto, presented by the. ATTORNEY-GENERAL FOR IRELAND; supported by the Solicitor-General for Ireland; to be read a Second time upon Monday next, and to be printed. [Bill 89.]

  COUNTY COUNCILS ASSOCIATION EXPENSES (AMENDMENT) BILL.
  Reported, without Amendment, from Standing Committee B.
  Report to lie upon the Table, and to be printed. [No. 84.]
  Minutes of the Proceedings of the Standing Committee to be printed. [No. 84.]
  Bill, not amended (in the Standing Committee), to be taken into consideration To-morrow.

  TRAMWAYS (TEMPORARY INCREASE OF CHARGES) BILL.
  Reported, with Amendments, from Standing Committee B.
  Report to lie upon the Table, and to be printed. [No. 85.]
  Minutes of the Proceedings of the Standing Committee to be printed. [No. 85.]
  Bill, as amended (in the Standing Committee), to be taken into consideration upon Thursday, and to be printed. [Bill 86.]

  SAVINGS BANKS BILL.
  Reported, with Amendments, from Standing Committee B.
  Report to lie upon the Table, and to be printed. [No. 86.]
  Minutes of the Proceedings of the Standing Committee to be printed. [No. 86.]
  Bill, as amended (in the Standing Committee), to be taken into consideration upon Thursday, and to be printed. [Bill 87.]

  NATIONAL HEALTH INSURANCE BILL.
  Reported, with Amendments, from Standing Committee A.
  Report to lie upon the Table, and to be printed. [No. 87.]
  Minutes of the Proceedings of the Standing Committee to be printed. [No. 87.]
  Bill, as amended (in the Standing Committee), to be taken into consideration upon Thursday, and to be printed. [Bill 88.]

  MID-GLAMORGAN WATER BILL.
  Reported, with Amendments.
  Report to lie upon the Table, and to be printed.

  WALLASEY CORPORATION BILL.
  Reported, with Amendments, from the Local Legislation Committee.
  Report to lie upon the Table, and to be printed.

  MESSAGE FROM THE LORDS.
  That they have agreed to,
  Treaties of Peace (Austria and Bulgaria) Bill,
  Army and Air Force (Annual) Bill, without Amendment.

SELECTION (STANDING COMMITTEES).
  STANDING COMMITTEE C.
  Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had added the following Fifteen Members to Standing Committee C (in respect of the Ecclesiastical Tithe Rent-charge (Rates) Bill): Major Barnes, Mr. Bennett, Sir Arthur Griffith-Boscawen, Mr. Broad, Mr. William Carter, Mr. Gange, Lieut.-Colonel Sir Samuel Hoare, Mr. Lunn, Mr. Mallalieu, Sir Robert Newman, Mr. Rawlinson, Captain Tudor-Rees, Mr. Walter Smith, Mr. Sugden, and Major Edward Wood.

  STANDING COMMITTEE D.
  Sir SAMUEL ROBERTS further reported from the Committee; That they had added the following Fifteen Members to Standing Committee D (in respect of the Trade Union Ballot Bill): Commander Bellairs, Mr. Clynes, Lieut.-Commander Kenworthy, Captain Loseby, Dr. Macnamara, Mr. Macquisten, Lieut.-Colonel Malone, Lieut.-Colonel Arthur Murray, Sir William Raeburn, Mr. Remer, Mr. Sidney Robinson, Mr. Arthur Michael Samuel, Mr. Waddington, Mr. Wignall, and Mr. Robert Young.
  Reports to lie upon the Table.

ORDERS OF THE DAY.

  WAYS AND MEANS. [19TH APRIL.]
  Resolutions reported,
  CUSTOMS AND EXCISE.
  Continuation of Duties (Customs).
  4.0 P.M.
  1. That the duties of Customs specified in the first column of the following table which were imposed by Part I. of the Finance (No. 2) Act, 1915, and continued by Section one of the Finance Act, 1919, in the case of the new import duties until the first day of May, nineteen hundred and twenty, and in the case of other duties until the first day of August, nineteen hundred and twenty, shall continue to be charged as from those respective dates until the dates specified as regards the said duties respectively in the third column of the said table:—

  Duty.

  Section of Finance (No. 2) Act, 1915.

  Date to which Duty continued.

  Increased duty on tea

  1

  1st August, 1921.

  Additional duties on dried fruits.

  8

  1st August, 1921.

  Additional duty on motor spirit.

  10 (1)

  31stDecember, 1920.

  New import duties

  12

  1st May, 1921.

  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Continuation of Additional Medicine Duties (Excise)
  "2. That the additional duties of excise upon medicines imposed by Section Eleven of the Finance (No. 2) Act, 1915, and continued by Section Two of the Finance Act, 1919, until the first day of August, nineteen hundred and twenty, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-one.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Spirits (Excise).
  "3. That—
  (a) in addition to the duty of Excise now payable for every gallon computed at proof of spirits distilled in the United Kingdom there shall, on and after the twentieth day of April,
  1074
  nineteen hundred and twenty, be charged the following duty (that is to say):—

  £

  s.

  d.

  For every gallon of spirits computed at proof

  1

  2

  6

  and so on in proportion for any less quantity; and
  (b) that it is expedient that the Excise duty on spirits should be charged on spirits by whatever process manufactured in the United Kingdom as well as on spirits distilled therein.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Spirits (Customs).
  "4. That in addition to the duties of Customs now payable on spirits imported into Great Britain or Ireland there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duties (that is to say):—

  £

  s.

  d.

  For every gallon computed at proof of spirits of any description except perfumed spirits

  1

  2

  6

  For every gallon of perfumed spirits

  1

  15

  10

  For every gallon of liqueurs, cordials, mixtures, and other preparations entered in such a manner as to indicate that the strength is not to be tested

  1

  10

  3

  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

  Beer (Excise).
  "5. That in addition to the duty of Excise now payable in respect of beer brewed in the United Kingdom there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duty (that is to say):—

  £

  s.

  d.

  For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees a duty of

  1

  10

  0

  and so in proportion for any difference in quantity or gravity.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Beer (Customs).
  "6. That in addition to the duties of Customs now payable on beer imported into Great Britain or Ireland there shall on and after the twentieth day of April, nineteen hundred

  1075
  and twenty, be charged the following duties (that is to say):—

  £

  s.

  d.

  In the case of beer called or similar to mum, spruce, or black beer, or Berlin white beer or other preparations, whether fermented or not fermented, of a similar character—

  For every thirty-six gallons where the worts thereof are or Were before fermentation of a specific gravity—

  Not exceeding one thousand two hundred and fifteen degrees, a duty of

  6

  0

  0

  Exceeding one thousand two hundred and fifteen degrees, a duty of

  7

  0

  7

  In the case of every description of beer other than that above specified—

  For every thirty-six gallons where the worts thereof were before fermentation of a specific gravity of one thousand and fifty-five degrees, a duty of

  1

  10

  0

  and so in proportion for any difference in gravity.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Wines (Customs).
  "7. That the duties of Customs charged on wines imported into Great Britain or Ireland shall on and after the twentieth day of April, nineteen hundred and twenty, be double those now chargeable, and that on and after the date aforesaid a further additional duty equal to fifty per cent. of the value thereof shall be charged on sparkling wines so imported.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Cigars (Customs).
  "8. That in addition to the duty now payable there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged on all cigars imported into Great Britain or Ireland a duty equal to fifty per cent, of the value thereof.
  And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

  Mechanically Propelled Vehicles.
  "9. That—
  (a) the duties of excise for motor-cars now payable in the United Kingdom shall cease to be payable on and after the first day of January, nineteen
  1076
  hundred and twenty-one, and that on and after that date there shall be charged annually in the United Kingdom the following duties of excise in respect of mechanically propelled vehicles used on roads:—

  Description of Vehicle.

  Rate of Duty.

  (1) Cycles (including motor scooters) not exceeding 7 cwt. in weight unladen:—

  £

  s.

  d.

  Bicycles—

  Not exceeding 200 lbs. In weight unladen

  1

  10

  0

  Exceeding 200 lbs. In weight unladen

  3

  0

  0

  Bicycles if used for drawing a trailer or side-car, and tricycles

  4

  0

  0

  (2) Vehicles not exceeding 5 cwt. in weight unladen adapted and used for invalids

  0

  5

  0

  (3) Vehicles being hackney carriages.

  In the Metropolitan Police area and such other districts as the Minister of Transport may fix.

  In all other districts.

  Tramcars

  15s.

  15s.

  Other vehicles:

  Seating not more than 5 persons

  £15

  £12

  Seating more than 5 but not more than 14 persons

  £30

  £24

  Seating more than 14 but not more than 20 persons

  £45

  £36

  Seating more than 20 but not more than 26 persons

  £60

  £48

  Seating more than 26 but not more than 32 persons

  £72

  £60

  Seating more than 32

  £84

  £70

  (4) Vehicles of the following descriptions used in the course of trade, otherwise than for the conveyance of goods, and in agriculture, that is to say:—

  Locomotive ploughing engines, agricultural tractors, and other agricultural engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements, or supplies of fuel or water

  5s.

  Road locomotives, and agricultural engines, other than such engines in respect of which a duty of 5s. is chargeable—

  Not exceeding 8 tons in weight unladen

  £25

  Exceeding 8 tons but not exceeding 12 tons in weight unladen

  £28

  Exceeding 12 tons in weight unladen

  £30

  Agricultural tractors, other than such tractors in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture—

  Exceeding 2½ tons but not exceeding 5 tons in weight unladen

  £6

  Exceeding 5 tons in weight unladen

  £10

  Tractors of any other description

  £21

  (5) Vehicles (including tricycles weighing more than 7 cwt. unladen) used for the conveyance of goods in the course of trade—

  Not exceeding 12 cwt. in weight unladen

  £10

  Exceeding 12 cwt. but not exceeding 1 ton in weight unladen

  £16

  Exceeding 1 ton but not exceeding 2 tons in weight unladen

  £21

  Exceeding 2 tons but not exceeding 3 tons in weight unladen

  £25

  Exceeding 3 tons but not exceeding 4 tons in weight unladen

  £28

  Exceeding 4 tons in weight unladen

  £30

  With an additional duty in any case if used for drawing a trailer of

  £2

  (6) Any vehicles other than those charged with duty under the foregoing provisions—

  Not exceeding 6 horse power or electrically propelled

  £6

  Exceeding 6 horse power

  £1 for each unit or part of a unit of horse power

  (b) the unit of horse power for the purpose of duty under this Resolution shall be calculated in accordance with Regulations made by the Minister of Transport;
  (c) on licences for vehicles (other than cycles and tramcars, and vehicles in respect of which an annual duty of 5s. is chargeable) taken out for any quarter of the year duty shall be charged at the rate of thirty per centum of the full annual duty; and
  (d)the abatement of duty granted in the case of motor cars used by medical practitioners or veterinary surgeons for the purpose of their professions shall cease.

  STAMPS.
    "10. That two pence shall be substituted for one penny as the stamp duty on receipts."
    "11. That two pence shall be substituted for one penny as the stamp duty on scrip certificates and similar documents."

    Stocks, Marketable Securities, &c.
    "12. That—

    (a) the stamp duties charged on conveyances or transfers of stocks and marketable securities, whether on sale or whether by way of voluntary disposition inter vivos, shall be double those now chargeable; and

    1078

    (b) the stamp duty charged under Section One hundred and fourteen of the Stamp Act, 1891, as extended by Section Thirty-nine of the Finance Act, 1894, and Section Five of the Finance Act, 1898, by way of composition for stamp duty charge-able on transfers of certain stocks, and the stamp duty charged under Section One hundred and fifteen of the Stamp Act, 1891, by way of composition in respect of the transfer of certain stocks and otherwise, shall be double those now chargeable; and

    (c) the stamp duties charged on marketable securities transferable by delivery and on share warrants and stock certificates to bearer; and on other instruments having a like effect as such warrants or certificates, shall be double those now chargeable."

    Statements as to Capital of Companies.
    "13. That as from the nineteenth day of April, nineteen hundred and twenty, the ad valorem stamp duty charged on statements of the nominal capital of any corporation or company, and on statements of the increase of any such capital, and on statements of the amounts contributed by a limited partner to a limited partnership, and on statements of any increase in any such amounts, shall be at the rate of one pound instead of five shillings for every £100 or fraction of £100."
    Accident and Indemnity Policies.
    "14. That sixpence shall be substituted for one penny as the stamp duty on policies of insurance against accident and policies of insurance for any payment agreed to be made during the sickness of any person or during his incapacity from personal injury, or by way of indemnity against loss of or damage to any property, and that twenty-five pounds per centum shall be substituted for five pounds per centum as the rate of stamp duty payable under any Act by way of composition in respect of the stamp duty on such policies."

    Policies of Sea Insurance.
    "15. That in lieu of the stamp duties Chargeable on policies of sea insurance where the premium or consideration exceeds the rate of two shillings and sixpence per cent. of the sum insured, there shall be charged the following stamp duties, that is to say:—

    (a) For or upon any voyage—where the sum insured—

    s.

    d.

    does not exceed £250

    0

    3

    exceeds £250 but does not exceed £500

    0

    6

    exceeds £500 but does not exceed£750

    0

    9

    exceeds £750 but does not exceed £1,000

    1

    0

    exceeds £1,000 for every£500 and any fractional part of £500

    0

    6

    (b) For time—
    where the insurance is made for any time not exceeding six months, an amount equal to three times the amount which would he payable if the insurance were made upon a voyage;
    where the insurance is made for any time exceeding six months and not exceeding twelve months, six times the amount which would he payable if the insurance were made upon a voyage.

  INCOME TAX.

    Charge of Tax.
    "16. That—

    (a)Income Tax shall be charged for the year beginning the sixth day of April, nineteen hundred and twenty, at the rate of six shillings in the pound; and

    (b) the like provisions shall have effect with respect to Income Tax so charged and the annual value of property as had effect with respect thereto for the year beginning the sixth day of April, nineteen hundred and nineteen.

    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

    Super-tax.
    "17. That—
    (a) the additional duty of Income Tax (called Super-tax) shall be charged in respect of incomes which exceed £2,000 as follows:—

    In respect of the first £2,000 of the income

    Nil.

    In respect of the excess over £2,000—

    For every pound of the first £500 of the excess

    One and

    shilling sixpence.

    For every pound of the next £500 of the excess

    Two

    shillings.

    For every pound of the next £1,000 of the excess

    Two and

    shillings and sixpence.

    For every pound of the next £1,000 of the excess

    Three

    shillings.

    For every pound of the next £1,000 of the excess

    Three and

    shillings sixpence.

    For every pound of the next £1,000 of the excess

    Four

    shillings.

    For every pound of the next £1,000 of the excess

    Four and

    shillings sixpence.

    For every pound of the next £12,000 of the excess

    Five

    shillings.

    For every pound of the next£10,000 of the excess

    Five and

    shillings sixpence.

    For every pound of the remainder of the excess

    Six

    shillings.

    (b) the like provisions shall have effect with respect to the Super-tax so charged as had effect with respect to the Super-tax charged for the year beginning the sixth day of April, nineteen hundred and nineteen.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

    Alteration of Reliefs.
    "18. That the present exemptions, abatements, and reliefs in respect of Income Tax (including Super-tax) shall cease, and that in lieu thereof there shall be granted such exemptions, abatements, and reliefs as Parliament may provide by any Bill of the present Session relating to finance."

    Double Income Tax within the British Empire.
    "19. That—

    (a)for the purpose of Income Tax the amount of any income arising in or received from any British possession or territory under His Majesty's protection shall be taken to be the gross amount before deduction or payment of any Income Tax charged directly or indirectly in respect of that income in the possession or territory; and

    (b)where under Rule 20 of the General Rules applicable to all the Schedules, a body of persons is entitled to deduct Income Tax from any dividend, the tax to be deducted shall in no case exceed the amount of the United Kingdom tax as reduced by the amount of any relief from that tax given in respect of Income Tax paid in a British possession or territory under His Majesty's protection.

    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

    Excess Profits Duty.
    "20. That—

    (a) Excess Profits Duty under Part III. of the Finance (No. 2) Act, 1915, as amended or extended by any subsequent enactment, shall, unless Parliament otherwise determines, be charged for any accounting period

    1081
    ending on or after the fifth day of August, nineteen hundred and twenty, and before the fifth day of August, nineteen hundred and twenty-one; and

    (b) Excess Profits Duty shall be an amount equal to sixty per centum instead of forty per centum of the excess profits for any accounting period commencing on or after the first day of January, nineteen hundred and twenty, or, in the case of an accounting period which has commenced before that date but ends after that date, sixty per centum instead of forty per centum of so much of the excess profits as are apportioned to the part of the period commencing on that date; and

    (c) the Excess Mineral Rights Duty under Section Forty-three of the Finance (No. 2) Act, 1915, as amended or extended by any subsequent enactment shall be an amount equal to sixty per centum instead of forty per centum of the excess rent for any accounting year commencing on or after the first day of January, nineteen hundred and twenty, or in the case of an accounting year which has commenced before that date but ends after that date sixty per centum instead of forty per centum of so much of the excess rent as is apportioned to the part of the year commencing on that date."

    Corporation Profits Tax.
    "21. That there shall be charged on the profits or gains arising in any period of account which includes any time after the thirty-first day of December, nineteen hundred and nineteen, from any trade, manufacture, concern in the nature of trade or business carried on in any place whatsoever by a corporate body incorporated by or under the laws of the United Kingdom, or carried on in the United Kingdom by a corporate body incorporated otherwise than as aforesaid, and on any income (other than any such profits or gains as aforesaid) accruing from sources in any place whatsoever in any such period of account as aforesaid to a corporate body incorporated by or under the laws of the United Kingdom, or any such income accruing from sources in the United Kingdom in any such period of account as aforesaid to a corporate body incorporated otherwise than as aforesaid, a tax of five per cent. of the profits, gains or income.
    First Resolution read a Second time.
    Mr. NEIL MACLEAN: I beg to move in the table to leave out the words "Increased duty on tea—1–1st August, 1921."
    We desire, in moving to omit the duty on tea, to make a general protest against the indirect taxation placed upon the people of this country, the majority of whom are
    1082
    actually working people. The duty amounts to 1s. in the 1b., with a rebate of 2d. in the lb. for Empire-grown tea. According to the statement of the Chancellor of the Exchequer last year, 90 per cent. of the tea consumed in this country is Empire-grown, so that, broadly speaking, the duty actually paid by the consumer is 10d. per lb. This is not an ad valorem duty; it is a fixed duty, and, whether the tea be the cheapest or the most expensive which can be purchased, the duty is 10d. in the lb., which means that the poorer classes are more heavily taxed by this indirect taxation than the wealthier classes in the community. The proportion of tax to the price is largest in the case of the cheapest tea. The duty on tea selling at 2s. 4d. or 2s. 8d. per lb. amounts to one-third of the purchase price, but as the price increases the duty decreases in proportion till it only amounts to one-sixth of the purchase price when the tea is sold at 5s. per lb. This duty shows probably in a better form than any other tax the iniquity of an indirect tax which places such a heavy burden upon the poorer classes in the country. That is one of the reasons why the Labour party desire the deletion or repudiation of this duty altogether. I can quote even the case of the Chancellor of the Exchequer himself, because just prior to the War he and those who with him now sit on that Bench moved a reduction in the tea duty of 3d. per lb. Since then the duty has increased, and it is now nominally 1s. in the lb. If it were good enough for the community to have a reduction in the price of tea when the right hon. Gentleman was in opposition, surely it cannot be bad for the community now, when he has control of the finances of the country, for him to agree to a remission of the duty, or even to do away with it altogether.
    We on these benches do not desire indirect taxation. It is the most iniquitous form of taxation that can be imposed. People do not know what they are actually paying in taxes. When they purchase tea or tobacco or any other article that is taxed, they do not realise, in the great majority of instances they do not even know, that a very large proportion of the price is the tax upon the commodity. Consequently, believing as we do that the best form is direct taxation, so that the individual may know actually how

    1083
    much he or she is contributing to the maintenance of the nation, we wish this duty upon tea to be done away with altogether. We take this tea duty in order to voice a general protest against indirect taxation upon the food of the people. It is many years since I first took an interest in politics, and I can remember the elections 20 and 25 years ago that were waged upon what was known in the Newcastle programme of the Liberal party as the "Free Breakfast Table." A quarter of a century afterwards we find that the breakfast table is more heavily taxed than it was when the Newcastle programme was first placed before the country.
    These taxes continue to increase. There is a shifting of the duties, but there is never an abolition of them altogether. Practically 33 per cent. of the taxes are indirect taxes. That is not a fair proportion. If we wish this country to realise to the full the financial position that it occupies, the best method is to assess the people directly and make them pay in proportion to their wealth. The gross receipts from the duty on tea amount to £16,074,000, and, after giving rebates, making repayments, and allowing for the cost of collection, the net receipts amount to £16,035,319. The working classes are paying the great bulk of this duty, and they pay it in a manner that inflicts a greater hardship upon them than upon any other section of the community. We have heard from the Chancellor of the Exchequer that the country requires all the money that he can get, and I understand that the position he will take up will be that the War has cost us thousands of millions of pounds, and, in view of the great burden upon the country necessitated by the repayment of the money borrowed and the payment of interest upon that money, it becomes necessary for him to search every possible avenue in order to meet the financial necessities of the country. There are other avenues which have not been explored, but which might be explored by the Chancellor of the Exchequer, if he would take his courage in his hand, to meet the deficit resulting from the deletion of the tea duty. One Government official has estimated that the additional war wealth in the hands of 1 per cent. of the population amounts to £4,000,000,000. There is no suggestion of taxing that wealth, but the
    1084
    poor people who have made nothing out of the War—[HON. MEMBERS: "Oh!"]—except sacrifices—[HON. MEMBERS: "High wages!"] High wages do not compensate for the increased prices that the trusts and combines of this country have placed upon the food supplies of the nation. The figures of the Board of Trade show that the cost of living to-day, as compared with 1914, is greater in proportion than the in crease in wages. We have not kept up our wages in comparison with the in-creased prices. Let us be fair and under stand what these increased wages purchase for the people to-day. They do not purchase the same quantity or quality of commodities that people were able to purchase with their wages in 1913, and on top of this decreased standard of living—[HON. MEMBERS: "Oh!"] Hon. Members sneer—
    Sir W. JOYNSON-HICKS: Does the hon. Member really mean to suggest that the great bulk of the working-men to-day who are earning these large wages are no better off?
    Mr. HARTSHORN: Certainly.
    Mr. SPEAKER: Will the hon. Member keep a little more to the point? His re-marks are very suitable to a Second Reading Debate, but we are now discussing one particular Resolution. Let us keep to it.
    Mr. MACLEAN: I was replying to an interjection, and generally interjections are followed up by other interjections, and the Debate is thus widened. This particular tax will fall more heavily upon the workers of this country than upon any other section, and we submit it is a tax which ought to be removed.
    Sir J. D. REES: It is no part of my business to object to any decrease in the tea duty, but anyone listening to the hon. Member would not have thought that the Chancellor had left the tea duty where it was. He has not raised the tea duty, and is simply maintaining it at the rate that was in force. The hon. Gentleman seemed to be arguing on the assumption that the Chancellor had imposed an additional duty on tea.
    Mr. MACLEAN: I did not suggest anything. I was simply pointing out that a tax which is bad and iniquitous in principle ought not to be continued.
    Sir J. D. REES: The hon. Gentleman says that all indirect taxation is

    1085
    iniquitous, but somebody else might say that all direct taxation is iniquitous. The real truth is that all taxation is iniquitous, but since a certain amount has to be endured it is a strange argument to lay before us that a tax is iniquitous because it is indirect. I rose principally to correct a statement made by the hon. Gentleman who said that tea was being sold in this country at twelve times the cost of production. He must have made that statement unwittingly. The fact is that the cost of producing tea has increased very much in recent years. The factors which lead to increases here are not wanting in India, even to the presence of agitators going about pressing the cultivator to object to his lot and claim higher wages.
    Mr. MACLEAN: I made no statement with regard to the price of the production of tea. I merely mentioned the price at which tea was sold in shops over the counter. I made no statement which could be construed as referring to the cost of production.
    Sir J. D. REES: Did the hon. Gentleman not say that it was sold at twelve times the cost of production?
    Mr. MACLEAN: No.
    Sir J. D. REES: Then probably I have done the hon. Member a service in correcting the statement.
    Mr. THOMAS: But he never made it.
    Sir J. D. REES: Since I misunderstood the hon. Gentleman to that extent, possibly somebody else did. Tea is being sold in very large quantities in the United Kingdom at less than it cost the producer to bring it to the market. The profit of growing and selling the tea this year is not likely to be so large. I do demur to the hon. Gentleman stating in this House what is so frequently and so unjustly and so unpatriotically said outside, that wherever prices are high and where that is due primarily to the extent of ninety-nine hundredths to the question of supply and demand, that such prices, including the price of tea, are due to the action of combines. That statement in regard to tea is absolutely contrary to the facts of the case.
    Mr. MILLS: I desire to support the Amendment because the party on this side regard all forms of indirect taxation as being vicious and altogether
    1086
    contrary to sound economics. We believe that all taxation should be equitable and based on sound economic lines, and we think this tea tax is neither. The tea tax operates so hardly that one could not exaggerate the viciousness of the proposal. It is not levied according to the ability to pay, but depends on the size of the family as to how much they contribute to this particular tax. This is a subject which has formed part of the arguments of both of the great political parties for very many years. The people who in the main consume tea are people who live a family life, and the greater the number of children the greater the amount of the tax. The Minister of Labour told us to-day that there were 220,000 ex-service men out of employment, and it may be taken for granted that a large number of those are married men. When we insist on retaining this tax because, forsooth, the cost of government has got to be borne by all sections of the community, I would remind the House that the men who draw unemployment pay, and whose stable food very often is bread and tea, pay by this tax directly for the cost of government. The same applies to an even more helpless section of the community, the old age pensioners, who have to contribute out of the miserable sum which was accorded to them, but not unanimously, by this House. I am only sorry we are not sufficiently numerous on these Benches to bring about the abolition of this tax.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am much obliged to hon. Gentleman opposite for the method they have taken to raise the broad question of public policy which they desire to raise by the Amendment now under discussion. The hon. Gentleman who moved expressly stated that his object was to raise the question of indirect against direct taxation and to take on this Resolution the general sense and decision of the House on that broad principle instead of raising it on each tax. I am much obliged for the businesslike way in which they have raised the question and I quite agree it is one which is worth occupying a little time of the House and on which we must come to a definite decision. I agree with the hon. Gentleman that if you considered the tea tax by itself it would be grossly unfair if it were the only tax we had to consider, because in that parti-

    1087
    cular tax as in certain other indirect taxes people do not contribute in proportion to their ability to pay. If, therefore, indirect taxation was our only taxation or our main source of taxation I agree that such an objection might be fatal. At any rate it might be fatal to the limitations of indirect taxation to the present subjects of that taxation, but that really is too narrow a view to take because the errors and injustices of one tax are corrected by another in so far as human ingenuity is able to correct them. To treat indirect taxation, such as the tea tax or generally, as if it were the measure of the rich man-s contribution as compared with the poor man and to try by this single test to prove that is, I venture to say, to make an argument which cannot be sustained and which rests on far too narrow a basis. The correction of the inequality of the tea tax or other similar taxes is made in the Income Tax, the Super-tax and other charges falling on the direct taxpayer. What is the view of taxation of hon. Gentlemen opposite? The hon. Member who moved says he is opposed to all indirect taxation, not taxation on what you may call the necessaries or simple comforts of life, but to all indirect taxation even if it falls on luxuries or comparative luxuries, such as beer, spirits, champagne or wines. A great number of people can do without those articles, and I am sure the hon. Member will not put them in the same category as tea. We are not to tax one of those, and last year I was told from the Benches opposite that we must not tax entertainments and that that was an improper tax from the point of view of the Labour party. The hon. Member says I am to rely upon direct taxation alone. Will he carry that to its logical conclusion and extend the Income Tax downwards?
    Mr. MACLEAN Mr. MACLEAN indicated assent.
    Mr. CHAMBERLAIN: He will
    Mr. MILLS: Yes, to a minimum standard of decency.
    Mr. CHAMBERLAIN: I will deal with one hon. Member at a time, and I will deal first with the hon. Member who has been here longest. He is ready to do it, but his party is not ready to do it, and he cannot pretend for a moment that such a proposal as that would be sympathetically received by working-class opinion gener-
    1088
    ally. On the contrary, we all know that last year there was the strongest pressure on those Benches that I should raise the exemption limit for Income Tax. I waited for the Report of the Royal Commission on Income Tax, and on this occasion I propose to do it. I venture to say that when the hon. Gentleman opposite has to frame a Budget, he will find that the rich man, as the universal milch cow, is not as productive as he thinks. Unless the whole of the people contribute in proportion to their means, I do not see how the country can pay its way, and the endeavour of my Budget, not through the tea duty alone, but through that and the whole series of taxes taken together, is to apportion the burden fairly in relation to the ability of the different people to bear it. I could not possibly assent, and I do not suppose for a moment that the majority of the House would assent, to the principle that henceforth there is to be no indirect taxation and, least of all, to the proposition that those who at present contribute only or mainly by indirect taxation are prepared to assume their share of the burden through direct taxation.
    Lieut.-Colonel JOHN WARD: An absence of a few years from the House and returning again to a Budget discussion are most interesting. I suppose that if you are in attendance regularly at the House the change is not noticed. When I left the House prior to the War this subject used to be debated every Session. The Liberal Government and the Labour party, largely operating together, were on that side of the House, and the right hon. Gentleman the present Chancellor of the Exchequer and his friends, especially the hon. Baronet the Member for the City of London (Sir F. Banbury), used to sit in Opposition. Every Session when this tea duty came on this same Amendment was moved by the Opposition. It was always considered as a good election stunt. I have not looked through the speeches to see the line that the present Chancellor himself took in those discussions, but it strikes me it would be extremely interesting to see them
    Sir F. BANBURY: The hon. and gallant Gentleman has alluded to me. May I point out that, so far as I remember, there were only one or two of those occasions, and then I always voted against my party and with the Govern-

    1089
    ment in favour of maintaining or of increasing the tax on tea.
    Lieut.-Colonel WARD: That may be perfectly true, but the point I am arriving at is entirely a different one. Times out of number it has been suggested to me, by the officials of the Labour party, that this Amendment was only just a Tory election stunt, something that they wanted for a by-election or something of that kind, and that we were not going to be led astray on a miserable move of this description. As will be shown by the Divisions—this is the point I am coming to, and I think my hon. Friend the Member for Dartford (Mr. Mills) ought to know it—the Divisions will show that times out of number we Labour men in this House, knowing that this Amendment was a mere Opposition stunt, where one party wanted to be able to prove to the working classes in the constituencies that they were their only friends, voted accordingly. We played the game, and I am not sure that the right hon. Gentleman has not played it himself. I know his party have when they were in opposition and we were supporting the Government, and therefore I do not think, if I were the Chancellor, I would take this Amendment quite so seriously as he has done. He has argued it as though it was the first time the proposition had ever been suggested. For the whole ten or thirteen years I have been in this House it has come forward. When it suited our purpose, for ten of those years, we voted against reducing the Tea Duty, and now I suppose, as we are in another position, it is our business to vote for reducing it. That is how the question presents itself to me after an absence of five years. I used to be instructed regularly to vote in favour of maintaining this duty, not because we liked it. I think the hon. Baronet the Member for Nottingham (Sir J. Rees) really represented the feeling of the whole House on the subject when he said that all taxation is wrong and wicked, and that is our attitude, and the most we can ever discuss about it is the question who shall pay the taxation that is necessary? Naturally the next step is, "Well, we want to get the other fellow to pay as much as possible, and not ourselves." That is exactly what the Amendment before the House means, nothing more and nothing less.
    I quite agree that indirect taxation affects the working classes greatly, and
    1090
    probably if we were to go into the matter and find a real and proper basis of direct taxation, even for the working classes, it would be much better than this indirect taxation, but that is not possible. If one were going to relieve from indirect taxation the working people, the poorest people, I should imagine that very likely, purely from a popular point of view, one would attack the increases of the Chancellor of the Exchequer on the price of beer. There is more money got out of the poorest people by the taxes on beer than there is by the taxes on tea. There is not the slightest doubt about that. The hon. Member for Dartford must know that that is the case—beer, and whiskey, and spirits, and things of that description—and if you were really going to relieve workmen of a very serious item of indirect taxation, I should imagine that, except for the sentiment attached to the temperance side of the question, and regarding it purely as an economic proposition, probably the indirect tax on tea would be about the last thing you would think of dealing with. There are so many other means by which the working man is forced forced to pay without knowing it that ought to be dealt with, and that is the reason why I am not myself, knowing the situation as it was six or seven years ago in this House and as it is at the present moment, very enthusiastic about the Amendment now before us. Indirect taxation apparently is necessary until there is some complete revision of our method of taxation. I would most certainly prefer, whatever the Chancellor of the Exchequer might say, if a Committee or some other body could be set up to decide what was a proper proportion of direct taxation that the man with two or three pounds a week should pay. The mere fact that he knew the sum that he had to pay, whether it was one shilling, or two shillings, or three shillings per week, the same as he does with his local rates, the mere economic and political and moral influence of paying taxes direct, even by the poorest man in the State, would be of such an enormous advantage in the education of the people that it would be a good thing if one could undertake it; but it does not want to be dealt with in the piecemeal way of a party move on the Budget. It wants to be dealt with in a much more drastic way than that, and that is why I cannot vote in favour of the Amendment.
    Mr. J. H. THOMAS: I understand my hon. and gallant Friend who has just sat down taking advantage of this opportunity of reminding all sections of the House that this formerly was the stock Amendment used by all parties. It is true, and if the right hon. Member for Paisley (Mr. Asquith) Were here now he would be compelled to admit that he had moved the same Amendment himself, and I believe that the Chancellor of the Exchequer also—
    Mr. CHAMBERLAIN: My impression is that throughout those Debates I supported the grant of a preference on tea, but I do not think I ever said one word that would lend colour to the suggestion that I was in favour of the total abolition of the tea duty, and still less of the total abolition of indirect taxation.
    Mr. THOMAS: All I can say is that if my right hon. Friend will look at the OFFICIAL REPORT, he will find that he moved a reduction of the duty.
    Mr. CHAMBERLAIN: Have you read the speech?
    Mr. THOMAS: No.
    Mr. CHAMBERLAIN: Well, do so.
    Mr. THOMAS: The fact that my right hon. Friend previously moved the reduction by threepence I used as an argument to show that both parties had done the same thing, but I want to take exception to the proposition laid down by my hon. and gallant Friend (Lieut.-Colonel J. Ward) that, viewed from the standpoint of the working classes either as a fair tax or as a popular tax, we ought to associate the tax on tea with that on beer. I, at least, entirely dissociate myself from any such proposition. I do not think any Member on these Benches would dare go down to any constituency or to any body of working men and attempt to defend the proposition that, viewed purely from the standpoint of a tax, we as a party or he as an individual could defend a tax on tea in preference to a tax on beer. I wish to urge this point. There are a large number of people in this country to whom tea is an absolute necessity, and beer, whatever may be the relative merits of the two beverages, cannot be placed in the same category. My right hon. Friend said, quite rightly, that we ought to say from these Benches what is our alternative, that it is not
    1092
    sufficient to say we are opposed to indirect taxation without following it up by suggesting what is our particular method of taxation. I am entirely opposed to indirect taxation, even on local municipal bodies. I always favoured, and I favour today, instead of the rates being paid by the landlords, that the rates should be paid by the tenants. Wherever that is done, there you have developed a higher and better type of citizen, because of the direct personal interest that the payment of the rates brings home to them. I think it is a profound mistake, regardless of party, not to realise that direct taxation, as a principle, is better than indirect taxation.
    In the same way, my right hon. Friend says, "Would you agree to the Income tax limit being lowered if you were to succeed in taping the indirect taxation off?" I say emphatically, Yes, because, always assuming that we are agreed that a certain amount of taxation is necessary, and we are agreed that indirect taxes are bad, it naturally and logically follows that direct taxation must be the alternative. But when we come to figures, I am sure my right hon. Friend will agree that if a pound to-day is only worth in spending power 8s.,as it is, it is unfair to suggest that, whilst we are imposing taxation we should agree that the present Income Tax limit is fair. I put it quite frankly that the previous £150 limit is now equal to about £325, and we are entitled at least to go back to the pre-war standard. Therefore, I want to say quite frankly that this Motion is not moved in the sense of the old party Motion. That aspect of the question has not been debated in the least. But it is, as my hon. Friend says, the general principle of direct versus indirect taxation, because we feel as a party—and I am sure there are Members of other sections who feel the same—that, so far as the principle of direct as against indirect taxation is concerned, direct taxation is best, and we have chosen the tea duty to give expression to our views.
    Colonel WEDGWOOD: I do not think the speech of the hon. and gallant Member for Stoke-on-Trent (Lieut.-Colonel J. Ward) should pass without comment. I think he is wrong when he says the Labour party in the old days always voted with the Liberal Government in favour of these indirect taxes. I think the matter was debated twice, and on both occasions,

    1093
    if my memory serves me aright, they voted in favour of the reduction of the tax. Certainly I did. In any case, it is really a first-rate example to hon. Members who sit on these Benches of the advisability in Parliament of always voting on merits, and not in order to support a particular party. The principle involved in this is really a vital question not only to the Labour party but to the whole House of Commons and the country. If Members of this House have the courage to vote as they believe is right, irrespective of party advantage, the country will get on a long way better. I think the Chancellor of the Exchequer is wrong when he believes that the working-classes of this country are not prepared to have direct taxation in the shape of a lowering of the Income Tax level rather than the present indirect taxation.
    Mr. CHAMBERLAIN: Not only was I pressed again and again to raise the Income Tax level last year, but I was threatened that the working classes—well paid workmen—would strike if I did not.
    Colonel WEDGWOOD: I have constantly had the question put to me at meetings whether I was in favour of raising the Income Tax exemption level, and I have always said I would prefer to have these indirect taxes taken off rather than raise the Income Tax level, and I am bound to say that at every one of these meetings the audience has agreed with me. It is more or less a question of putting these questions before an audience. Immediately they find indirect taxes fall on a large family with far greater weight than on the bachelor or the small family, they always agree they would sooner have a rebate on indirect taxes than on direct taxes. The Chancellor of the Exchequer knows perfectly well that in this country you have only got to tell the people frankly what is the case, and if it is a sound case they will agree. There is always, it seems to me, a little too much nervousness about pointing out to people the incidence of taxation and the necessity of making sacrifices, particularly during the War, and even after the War. But the real reason why I want these taxes reduced to-day is a reason which, I believe, will appeal to the Chancellor of the Exchequer and to most Members of this House. We have
    1094
    not only indirect taxation at the present time, but we have also an indirect bonus in the shape of a subvention towards cheapening the price of bread. We all know that that subvention is a thoroughly unsound system of bonusing the people of this country. It is an old Roman system—panem et circenses. Why not knock on the head that indirect subvention, and at the same time reduce your indirect taxation by an equivalent amount so that you would balance matters, and do away both with the bad indirect tax and the bad subvention at the same time? If we are to get on to sound financial lines in this country, we have got to do away with these subventions. To do away with them at the present moment means putting a large additional charge upon all the big families. Why not balance that by taking off these taxes now?
    More than that, we have heard often enough, not from the right hon. Gentleman, but from the Prime Minister and others, that this Government is not responsible for the high cost of living at the present time. If you want to reduce the cost of living at the present time—and I should have thought it was pretty obvious that it was necessary the Government should do something in that direction—the perfectly plain and simple way is to do away with these taxes on tea, sugar, coffee, and dried fruits. If that were done, the cost of living would immediately fall, and it is really not quite straight to tell the people of this country that the Government are not responsible for the high cost of living, when they could immediately bring down that high cost of living. The Government have invented, in effect, a fresh form of indirect taxation, which the right hon. Gentleman has not mentioned, and which does not appear in the Budget. It is due to their depreciation of currency. Every time they increase paper credit or paper currency in this country they are, in effect, depreciating the paper currency throughout the country, and, as the value of the paper pound falls, so automatically the cost of living rises. That is a new form of indirect taxation. The Government are responsible also, in so far as they keep an adding to the National Debt.
    Mr. SPEAKER: These observations are very suitable to the Second Reading of the Bill, but not to discussions on tea.
    Colonel WEDGWOOD: I thought we were taking, on the tea duty, the general question as to indirect taxes.
    Mr. SPEAKER: The House has no power to do that at all. The rule is that we must discuss one Resolution at a time, and that now before the House is for a tax on tea.
    Colonel WEDGWOOD: I think I am only following the right hon. Gentleman opposite in dealing with indirect taxation generally, rather than the tea duty. However, I will try to confine myself to tea. The real reason why I am going into the lobby is, not in order to
    embarrass the Government to-day, but because we believe the cost of living has got to be brought down, that the Government is responsible for keeping up the cost of living, both by indirect taxes and the depreciation of the currency, and we on this side, at any rate, will vote on merits, in order to bring down the cost of living in this country and prevent the perpetual unrest going on at the present time.
    Sir F. BANBURY: The hon. and gallant Gentleman said that if the tea duty were reduced the price of tea would fall. I should not like to say whether it would or would not, but we certainly cannot assume that it would fall. There was a heavy duty some years ago put on all coal that went into the City of London. There was a great outcry. This duty brought in a large revenue, which was spent on improvements in the city. It was done away with, and coal rose more, and has done so ever since. I do not think we could assume, as a matter of course, that because the duty was taken off the price of the article would fall, although if a duty is put on, I think we might say with absolute certainty that the price of the article would increase. I would say one word with regard to the speech of the hon. and gallant Member for Stoke. What really took place was that the Radical party said that when they came in office that they would reduce the duty on tea, and they always voted against us when we were in power and kept on the duty or raised the duty on tea. When they came into power they did not reduce the duty on tea at all, although they were pledged to do so, and a certain number
    1096
    of hon. Gentlemen sitting on my side of the House on one or two occasions, I think, said they would put them into the lobby to see if they would carry out their election pledges, but they did not. I did, and I remember I was complimented by the Prime Minister that on every occasion I did my best to
    persuade my party to do this. As the hon. and gallant Gentleman has mentioned my name I thought I would put him right on that matter. That is all that took place, and it seems that we are going to have a repetition of the same thing.
    Lieut.-Colonel DALRYMPLE WHITE: The hon. Member for Govan (Mr. N. Maclean) led us to understand that this duty on tea pressed on the poor to such an extent that it actually affected their standard of life, thereby giving the House to understand that, owing to the heavy duty on tea, the working classes were not able to drink as much tea as they did before. I think the Chancellor of the Exchequer said the other day that the consumption of tea in this country, not in pounds worth but in tons weight, had enormously increased during the last year or two. That shows that that extra tea was consumed by the bulk of the population. It was not consumed only by those fortunate people whom the hon. Member stated had amassed something like £400,000,000. They have not had an orgy of tea; they have not bathed in tea. Then, with regard to the question of the Income Tax, I think the Chancellor of the Exchequer would be well advised not to take that as an alternative for indirect taxes at any time, because not only have there been these protests and resolutions passed, threatening to strike unless the exemption rate limit was raised, but also there has been, especially in South Wales, I understand, a very large amount of refusal to pay Income Tax, and in many cases evasion of Income Tax, which involves much difficulty in collection. Indirect taxes are simple to collect, and probably in that way are cheaper to the taxpayer.
    Question put, "That the words proposed to be left out stand part of the said Resolution."
    The House divided: Ayes, 247; Noes, 59.

    Division No. 93.]

    AYES.

    [5.2 p.m.

    Adair, Rear-Admiral Thomas B. S.

    Glyn, Major Ralph

    Nicholson, William G. (Petersfield)

    Agg-Gardner, Sir James Tynte

    Goff, Sir R. Park

    Nield, Sir Herbert

    Archdale, Edward Mervyn

    Gould, James C.

    Norris, Colonel Sir Henry G.

    Ashley, Colonel Wilfrid W.

    Goulding, Rt. Hon. Sir Edward A.

    Norton-Griffiths, Lieut.-Col. Sir John

    Asquith, Rt. Hon. Herbert Henry

    Grant, James A.

    Ormsby-Gore, Captain Hon. W.

    Atkey, A. R.

    Gray, Major Ernest (Accrington)

    Palmer, Major Godfrey Mark

    Baldwin, Stanley

    Green, Joseph F. (Leicester, W.)

    Palmer, Brigadier-General G. L.

    Balfour, George (Hampstead)

    Greene, Lieut.-Col. W. (Hackney, N.)

    Parry, Lieut.-Colonel Thomas Henry

    Banbury, Rt. Hon. Sir Frederick G.

    Greig, Colonel James William

    Pearce, Sir William

    Barker, Major Robert H.

    Gritten, W. G. Howard

    Pease, Rt. Hon. Herbert Pike

    Barnett, Major R. W.

    Guest, Major O. (Leic, Loughboro')

    Peel, Lieut.-Col. R. F. (Woodbridge)

    Barnston, Major Harry

    Guinness, Lieut.-Col. Hon. W. E.

    Philipps, Sir Owen C. (Chester, City)

    Barrand, A. R.

    Gwynne, Rupert S.

    Pickering, Lieut.-Colonel Emil W.

    Barrie, Hugh Thom (Lon'derry, N.)

    Hailwood, Augustine

    Pilditch, Sir Philip

    Barton, Sir William (Oldham)

    Harmsworth, Hon. E. C. (Kent)

    Pinkham, Lieut.-Colonel Charles

    Beauchamp, Sir Edward

    Harris, Sir Henry Percy

    Pownall, Lieut.-Colonel Assheton

    Beckett, Hon. Gervase

    Haslam, Lewis

    Prescott, Major W. H.

    Benn, Sir A. S. (Plymouth, Drake)

    Hennessy, Major J. R. G.

    Pulley, Charles Thornton

    Benn, Com. Ian H. (Greenwich)

    Henry, Denis S. (Londonderry, S.)

    Purchase, H. G.

    Bigland, Alfred

    Hickman, Brig.-Gen. Thomas E.

    Raeburn, Sir William H.

    Birchall, Major J. Dearman

    Hilder, Lieut.-Colonel Frank

    Raw, Lieutenant-Colonel N.

    Bird, Sir A. (Wolverhampton, West)

    Hinds, John

    Rees, Sir J. D. (Nottingham, East)

    Blane, T. A.

    Hoare, Lieut.-Colonel Sir S. J. G.

    Remer, J. R.

    Borwick, Major G. O.

    Hohler, Gerald Fitzroy

    Remnant, Colonel Sir James F.

    Boscawen, Rt. Hon. Sir A. Griffith-

    Hood, Joseph

    Richardson, Alexander (Gravesend)

    Bowles, Colonel H. F.

    Hope, James F. (Sheffield, Central)

    Roberts, Sir S. (Sheffield, Ecclesall)

    Bowyer, Captain G. E. W.

    Hope, Lt.-Col. Sir J. A. (Midlothian)

    Robinson, S. (Brecon and Radnor)

    Breese, Major Charles E.

    Hope, J. D. (Berwick & Haddington)

    Robinson, Sir T. (Lancs., Stretford)

    Briggs, Harold

    Hopkinson, A. (Lancaster, Mossley)

    Rodger, A. K.

    Brown, Captain D. C.

    Hotchkin, Captain Stafford Vere

    Roundell, Colonel R. F.

    Bruton, Sir James

    Howard, Major S. G.

    Royds, Lieut. Colonel Edmund

    Buchanan, Lieut.-Colonel A. L. H.

    Hunter, General Sir A. (Lancaster)

    Samuel, A. M. (Surrey, Farnham)

    Buckley, Lieut.-Colonel A.

    Hunter-Weston, Lieut.-Gen. Sir A. G.

    Samuel, Rt. Hon. Sir H. (Norwood)

    Burdon, Colonel Rowland

    Hurd, Percy A.

    Sanders, Colonel Sir Robert A.

    Burn, Col. C. R. (Devon, Torquay)

    Illingworth, Rt. Hon. A. H.

    Scott, A. M. (Glasgow, Bridgeton)

    Butcher, Sir John George

    Inskip, Thomas Walker H.

    Shaw, Hon. Alex. (Kilmarnock)

    Campbell, J. D. G.

    Jackson, Lieut.-Colonel Hon. F. S.

    Shaw, William T. (Forfar)

    Campion, Lieut.-Colonel W. R.

    James, Lieut.-colonel Hon. Cuthbert

    Shortt, Rt. Hon. E (N'castle-on-T.)

    Carr, W. Theodore

    Jameson, J. Gordon

    Simm, M. T.

    Carr, W. Theodore

    Jephcott, A. R.

    Smith, Sir Allan M. (Croydon, South)

    Carter, R. A. D. (Man., Withington)

    Jellett, William Morgan

    Smithers, Sir Alfred W.

    Cautley, Henry S.

    Jesson, C.

    Sprot, Colonel Sir Alexander

    Cecil, Rt. Hon. Evelyn (Birm, Aston)

    Jodrell, Neville Paul

    Stanley, Lieut.-Colonel Hon. G. F.

    Cecil, Rt. Hon. Lord H. (Ox. Univ.)

    Jones, Sir Evan (Pembroke)

    Starkey, Captain John R.

    Cecil, Rt. Hon. Lord R. (Hitchin)

    Jones, Henry Haydn (Merioneth)

    Steel, Major S. Strang

    Chamberlain, Rt. Hn. J. A.(Blrm.,W.)

    Jones, J. T. (Carmarthen, Llanelly)

    Stephenson, Colonel H. K.

    Child, Brigadier-General Sir Hill

    Joynson-Hicks, Sir William

    Stewart, Gershom

    Clay, Lieut.-Colonel H. H. Spender

    Kerr-Smiley, Major Peter Kerr

    Strauss, Edward Anthony

    Coats, Sir Stuart

    King, Commander Henry Douglas

    Sturrock, J. Leng

    Cohen, Major J. Brunel

    Kinloch-Cooke, Sir Clement

    Sugden, W. H.

    Colfox, Major Wm. Phillips

    Knights, Capt. H. N. (C'berwell, N.)

    Surtees, Brigadier-General H. C.

    Conway, Sir W. Martin

    Law, Alfred J. (Rochdale)

    Sutherland, Sir William

    Coote, Colin Reith (Isle of Ely)

    Law, Rt. Hon. A. B. (Glasgow, C.)

    Sykes, Colonel Sir A. J. (Knutsford)

    Coote, William (Tyrone, South)

    Lewis, Rt. Hon. J. H. (Univ., Wales)

    Talbot, G. A. (Hemel Hempstead)

    Cory, Sir J. H. (Cardiff, South)

    Lindsay, William Arthur

    Taylor, J.

    Courthope, Major George L.

    Lister, Sir R. Ashton

    Terrell, George (Wilts, Chippenham)

    Cowan, D. M. (Scottish Universities)

    Lloyd, George Butler

    Terrell, Captain R. (Oxford, Henley)

    Cowan, Sir H. (Aberdeen and Kinc.)

    Lloyd-Greame, Major P.

    Thomson, F. C. (Aberdeen, South)

    Craik, Rt. Hon. Sir Henry

    Locker-Lampson, G. (Wood Green)

    Tickler, Thomas George

    Curzon, Commander Viscount

    Lonsdale, James Rolston

    Townley, Maximilian G.

    Davies, Thomas (Cirencester)

    Lorden, John William

    Waddington, R.

    Davles, Sir William H. (Bristol, S.)

    Loseby, Captain C. E.

    Wallace, J.

    Davison, Sir W. H. (Kensington, S.)

    Lyle, C. E. Leonard

    Ward, Col. J. (Stoke-upon-Trent)

    Dawes, James Arthur

    Lyle-Samuel, Alexander

    Warren, Lieut.-Col. Sir Alfred H.

    Doyle, N. Grattan

    M'Donald, Dr. Bouverie F. P.

    White, Lieut.-Col. G. D. (Southport)

    Duncannon, Viscount

    Mackinder, Sir H. J. (Camlachie)

    Whitla, Sir William

    Du Pre, Colonel William Baring

    McLaren, Hon. H. D. (Leicester)

    Williams, Lt.-Com. C. (Tavistock)

    Edge, Captain William

    Macleod, J. Mackintosh

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

    Elliot, Capt. Walter E. (Lanark)

    M'Micking, Major Gilbert

    Willoughby, Lieut.-Col. Hon. Claud

    Eyres-Monsell, Commander B. M.

    McNeill, Ronald (Kent, Canterbury)

    Wilson, Capt. A. S. (Holderness)

    Fade, Major Sir Bertram G.

    Macquisten, F. A.

    Wilson, Lieut.-Col. M. J. (Richmond)

    Fell, Sir Arthur

    Magnus, Sir Philip

    Wilson-Fox, Henry

    Fildes, Henry

    Malone, Major P. B. (Tottenham, S.)

    Wood, Sir J. (Stalybridge and Hyde)

    Fisher, Rt. Hon. Herbert A. L.

    Marriott, John Arthur Ransome

    Wood, Major S. Hill- (High Peak)

    Flannery, Sir James Fortescue

    Matthews, David

    Woolcock, William James U.

    Foreman, Henry

    Mond, Rt. Hon. Sir Alfred M.

    Worthington-Evans, Rt. Hon. Sir L.

    Forestier-Walker, L.

    Moreing, Captain Algernon H.

    Yeo, Sir Alfred William

    Forrest, Walter

    Morrison-Bell, Major A. C.

    Young, Lieut.-Com. E. H. (Norwich)

    Ford, P. J.

    Mount, William Arthur

    Young, W. (Perth & Kinross, Perth)

    Ganzonl, Captain Francis John C.

    Munro, Rt. Hon. Robert

    Younger, Sir George

    Gardner, Ernest

    Murchison, C. K.

    Geddes, Rt. Hon. Sir Eric C. (Cam.)

    Murray, Major William (Dumfries)

    TELLERS FOR THE AYES.—

    Gibbs, Colonel George Abraham

    Nail, Major Joseph

    Lord E. Talbot and Mr. James

    Gilmour, Lieut.-Colonel John

    Newman, Sir R. H. S. D. L. (Exeter)

    Parker.

    1098

    1099

    NOES.

    Bell, James (Lancaster, Ormsklrk)

    Harbison, Thomas James S.

    Roberts, Frederick O. (W. Bromwlch)

    Bowerman, Rt. Hon. Charles W.

    Hartshorn, Vernon

    Rose, Frank H.

    Brace, Rt. Hon. William

    Hayday, Arthur

    Sexton, James

    Briant, Frank

    Hirst, G. H.

    Short, Alfred (Wednesbury)

    Bromfield, William

    Hogge, James Myles

    Spencer, George A.

    Cape, Thomas

    Irving, Dan

    Spoor, B. G.

    Carter, W. (Nottingham, Mansfield)

    Jones, J. J. (West Ham, Silvertown)

    Swan, J. E.

    Davies, Alfred Thomas (Lincoln)

    Kenyon, Barnet

    Thomas, Rt. Hon. James H. (Derby)

    Davison, J. E. (Smethwick)

    Kiley, James D.

    Thomson, T. (Middlesbrough, West)

    Devlin, Joseph

    Lawson, John J.

    Thorne, W. (West Ham, Plaistow)

    Edwards, C. (Monmouth, Bedwellty)

    Lowther, Lt.-Col. Claude (Lancaster)

    Walsh, Stephen (Lancaster, Ince)

    Edwards, Major J. (Aberavon)

    Lunn, William

    Wedgwood, Colonel J. C.

    Edwards, John H. (Glam., Neath)

    MacVeagh, Jeremiah

    Wignall, James

    Entwistle, Major C. F.

    Mills, John Edmund

    Wilkie, Alexander

    Finney, Samuel

    Morgan, Major D. Watts

    Williams, Aneurin (Durham, Consett)

    Galbraith, Samuel

    Murray, Dr. D. (Inverness and Ross)

    Wilson, W. Tyson (Westhoughton)

    Glanville, Harold James

    Myers, Thomas

    Wood, Major M. M. (Aberdeen, C.)

    Graham, W. (Edinburgh, Central)

    Newbould, Alfred Ernest

    Griffiths, T. (Monmouth, Pontypool)

    O'Connor, Thomas P.

    TELLERS FOR THE NOES.—

    Grundy, T. W.

    Parkinson, John Allen (Wigan)

    Mr. Nell Maclean and Mr. Water

    Hallas, Eldred

    Redmond, Captain William Archer

    son.

    Question, "That this House doth agree with the Committee in the said Resolution," put and agreed to.
    Second, Third, and Fourth Resolutions agreed to.
    Fifth Resolution read a Second time.
    Motion made and Question proposed, "That this House doth agree with the Committee in the said Resolution."
    Sir G. YOUNGER: I merely desire to say that, as the right hon. Gentleman is going to receive a deputation on this subject on Thursday, I do not propose to do more than enter a caveat against it.
    Question put, and agreed to.
    Sixth Resolution agreed to.
    Seventh Resolution read a Second time.
    Lieut. -Colonel GUINNESS: I beg to move to leave out the words, "and that on and after the date aforesaid a further additional duty, equal to fifty per cent. of the value thereof, shall be charged on sparkling wines so imported."
    I have no objection whatever to all-round duties on wine remaining as they are in the financial Resolution, or indeed to their being increased. It is not competent for any private Member to move an increase, but I think a good many of us feel that the Chancellor of the Exchequer has not gone as far as he might have done in increasing the general level of duties on wines. Many of us object to the increase of the duty on sparkling wine, specially in an ad valorem form. Firstly, there is the reason of revenue, because we believe that the right hon. Gentleman will find he has reached the
    1100
    point of diminishing returns; and, secondly, because we believe that for international reasons it is not advisable to put on this heavy duty, which would probably have the result of destroying an important industry in France which is already terribly affected by the War.
    If the right hon. Gentleman wants to get more revenue from wine the obvious class of wine to which he should apply himself is the heavy wine. My reason for saying that is that in the speech the Chancellor made on the 21st of this month he showed that the increase in sparkling wines over the figure of 1913 was 28 per cent., whereas the increase in the importation of heavy wines was seven times as great, or 203 per cent. Surely that points to getting further revenue, not from these sparkling wines which may be said to have been in a stationary condition as regards imports, but from the heavy wine, such as port wine and the other wines, which do not necessarily come from France, and where the importation was seven times as much increase as in the case of sparkling wines. The duty of 50 per cent. on sparkling wines amounts to 1,000 per cent. increase on the present duty. The Chancellor of the Exchequer based his estimate on the return from this increase on the clearances of 1,300,000 gallons. That is 100,000 gallons more than the average of the ten years preceding the War, and only 190,000 gallons less than in the bumper year of 1919. I believe his estimate will be disappointed for these reasons.
    The year 1919 was an exceptional year for the importation of champagne, because there had been no importations during the War, and the scarcity of stocks had necessarily to be made up after these

    1101
    four years of suspension. Then the importation of champagne is always spasmodic, depending on vintage years. There has been no opportunity of importing 1918 vintage, and it had to be brought in during 1919. That was the year of the Declaration of Peace, and the year in which tens of thousands of our troops were being demobilised, with the result that scores of thousands of people drank champagne last year who do not make a practice of indulging in that form of refreshment. I will give the figures which have been given to me by a wine merchant as to how this new duty will work out in the retail price. May I say, in the first place, that there is some doubt among the Customs authorities as to how this duty is going to be charged, and I hope the Chancellor of the Exchequer may be able to throw a little more light as to the basis of this ad valorem duty. I am informed that there is a difference of opinion between the Customs officials. At one wharf they say that it is to be charged on the price to the shipper, but at another wharf they say it will be charged on the much higher price paid by the public to the merchant. Let me just show how this will work out. If you take the price of a dozen of champagne to the shipper as 140s., with 21s. extra for the duty and carriage, you get up to 161s. to the merchant, paid by the merchant to the shipper after he has met his ordinary level tax. Charging the ad valorem duty on the price received by the merchant from the public if he has to make 40s. on a dozen of champagne, which is 10 per cent. on the sale price, he must sell at 400s. a dozen, or 34s. per bottle. If the smaller basis is adopted, the price to the shipper, the duty would fall to 75s., and the price paid to the merchant would be 280s., or 24s. a bottle. In the restaurants where champagne is consumed it often remains in the cellars for many years before it is drunk, and obviously a considerable increase must be charged over that 24s. or 34s. on the higher prices. A large amount of this champagne is not drunk in that way, but by people in hospitals or invalids who are prescribed it by the doctor. In those cases it is going to be a terrible hardship if the price of champagne is put up to this prohibitive level.
    1102
    There is a very strong objection on many grounds to an ad valorem duty. It was tried thirty years ago on champagne, and it was dropped because it was found impracticable, and led to a vast amount of fraud. If the right hon. Gentleman wants to tax champagne more heavily, he will be well advised not to do it by an ad valorem duty, but by means of a, level duty all round. My last reason is, I think, the strongest of all, that is, the international reason that we do not want at this moment to do anything which seems unfriendly to our great ally, France. No less than 97 per cent. Of the sparkling wines imported into this country last year came from France. There is 44 per cent. of the champagne district out of cultivation owing to the devastation of the War, and I think it
    will be a cruel blow to this industry if, on the top of their present troubles, this duty is to be imposed, which will make it an offence against good taste for anyone in this country to spend money on champagne.
    I cannot imagine anybody in the present gravity of our finances and the necessity for curtailing luxuries daring to be seen drinking champagne when the cost charged at restaurants goes up to £2 or even £3 per bottle. The French realise that quite well. They know this is an absolutely penal tax on champagne. They know that the champagne industry has lost the whole of the market, which used to be so productive in America and Russia, owing to prohibition, and they know that the only chance of re-establishing their vineyards and of rebuilding the town of Rheims is that champagne should be imported without hindrance into this country. I have recently been in the champagne country, and I have seen the devastation that has been done there. I have seen how the peasants are trying to replant their vineyards, hoping they will again be able to get that prosperity which from time immemorial has been brought to their district by the production of sparkling wine. I think it is a most cruel blow to this sorely-tried population if by means of a tax of this vindictive character this great French industry is to be condemned to complete destruction.
    Sir F. BANBURY: I beg to second the Amendment. The arguments I could advance now are practically those which I wish to advance later on, and there-

    1103
    fore I will content myself with simply seconding this Amendment.
    Mr. MYERS: I desire to oppose the Amendment which has just been moved by the hon. and gallant Gentleman opposite, and I wish to support the proposal which has been made by the Chancellor of the Exchequer. The right hon. Gentleman told the House in his Budget speech that the Wine Duties have not been touched since 1899, and that in the meantime a considerable demand had been made upon beer, spirits and the like. The hon. Member who has moved this Amendment has specifically dealt with sparkling wines, and he has more particularly specified champagne. The importation of champagne into this country in 1919 was roughly 300,000 gallons more than the importation in 1913. I know that some interests involved in the production of this article have recently held a meeting, and that the results of that meeting have become public property in the shape of a general expression against this tax being levied on champagne. The Anglo-French entente has been an expensive one to this country, but we can hardly expect it to break down over the price of a bottle of wine. The importation of Spanish, French and Portuguese wines into this country in 1913 was, roughly, 8,000,000 gallons. In 1919, it was over 23,000,000 gallons, in fact the importation had trebled in the interval. The hon. Member referred to the price of champagne being somewhere in the region of 34s. a bottle. It can hardly be a working-class beverage at that figure, and if we take the whole importation of French, Spanish and Portuguese wines, and include the whole of the 23,000,000 gallons, even then it does not come within the category of working-class consumption to any great extent. When we recognise that the imports of these wines average three gallons for every family in the country per year, I would remind the hon. Member that there must be a good number of working-class families who do not get their share, and whose share must be consumed by other people. A year or two ago, on the introduction of the Budget, we heard a good deal about the robbing of hen-roosts. I wish to extend my congratulations to the Chancellor of the Exchequer on having found one to rob. This is one of the departments of
    1104
    taxation where undoubtedly it is desirable to make the consumer pay.
    Mr. CHAMBERLAIN: I have already disclaimed, if that were necessary, any intention to inflict loss upon France, and I have stated that in my opinion no charge which I am now proposing will have that effect. I hope we may be allowed to examine this tax on its merits and not from the point of view of one side of the Channel or the other, but remembering that we have to face an extraordinarily difficult financial position, and are therefore driven to financial expedients not wholly palatable to the one country or the other. I do not venture to criticise the proposals which the French Government have made for the restriction of imports or the taxation of luxuries, even although those proposals may and do exercise an injurious effect on British trade, and I hope that the French will realise that we have our difficulties to face although they may not be as great as their own, and that we must, therefore, be allowed to consider the best methods by which we can meet them. My hon. and gallant Friend comes to rather a lugubrious conclusion on information supplied him by a wine merchant friend as to the effect of this tax. My hon. Friend has had considerable experience in the House, and he will, I think, admit, that the anticipations of traders at a moment when we are discussing new duties are apt to be unduly pessimistic, and that in the result it frequently happens that the portentious evils which they fear, either for themselves or for their customers, do not follow on the modest impost suggested by different Chancellors of the Exchequer. I rather regret that my hon. Friend did not wait, as the hon. Member who spoke from the Bench opposite on a previous Resolution was content to do, until I had received a deputation from the wine trade, which I have undertaken to do if they can make one representative. Considering the number of deputations which have to be received, that is a condition which I am obliged to make. I will, however, see them before we get into Committee of Supply. I will consider what they have to say, and if I find that, without injury to my scheme, some small modification would be more acceptable to them, I shall give favour-

    1105
    able consideration to any such suggestion, but I cannot commit myself beforehand, as I do not know what they desire.
    My hon. Friend sought to know how and when the duty will be levied. It is proposed that the charge shall be levied when the wine is cleared from bond. If it is cleared from the ship's side the charge will be levied on the import value c.i.f.; if it is put in bond and kept there many years the charge will be on the value of the wine as cleared and when it is cleared, and when the ordinary duties are paid. My hon. Friend did not appear, like the right hon. Baronet (Sir F. Banbury), who seconded his Motion, as an opponent of an increased duty on wine. On the contrary, he was quite content that I should raise the general duties on wine still further, provided that I made no special tax other than the existing special tax upon sparkling wines. I chose sparkling wine because it stood in a class by itself, both as a luxury and in the matter of price, and I should very much like to pursue the calculations of my hon. Friend as to the price which it is necessary to charge to the consumer. Perhaps I shall have an opportunity of doing so, but I would like to know how that charge is made up. I cannot help thinking that at the present time there is a profit on champagne somewhere. There are so many stages at which it can be made. The average import value of sparkling wine—this includes champagne, of course—in 1919 was 52s. 5d. per gallon. In the first three months of this year it had risen to 55s. Still wines imported in bottle last year averaged 23s. 6d., but they have fallen in the first three months of this year to 21s. The average import value of port, I think, is 15s. But still wines in bottle, and the heavier ones imported in cask, are not comparable in price or as luxuries with sparkling wines. I quite agree that the amount of champagne drunk last year was quite abnormal, but I doubt if a gallon less would have been drunk if this tax had then been in force. Perhaps it is saying too much to suggest that not a gallon less would have been drunk, but, at any rate, I do not suppose there would have been any material difference if the tax had been in force. I do not think it is likely that this tax, in the circumstances of the day, constitutes an element which will affect materially the amount consumed, nor could I venture to count upon a much larger amount being
    1106
    consumed if I accepted the Amendment of my hon Friend and omitted the special duty on sparkling wines.
    There is one other point to which my hon. Friend alluded, and upon which I must say a few words. As I understood him, he took special exception to the ad valorem duty. Now we have had some experience of ad valorem duties in recent years as we have been enforcing them on a variety of articles for the last four or five years, and it is not found to be such an impossible task to arrive at a fair valuation as my hon. Friend anticipates it will be in this case. Let me remind him that the present ad valorem duty bears no resemblance to the ad valorem duty which was abolished in 1888. This is a pure ad valorem duty. That was a two-rate duty accordingly as the wine was above or below a particular figure. Then there was every inducement to bring the price a 1d. or 2d. below that line, and I daresay there was a good deal of difficulty in showing whether that penny ought to be just above or just below the dividing line. But there is not the same inducement when the tax is ad valorem throughout and is not dependent on whether it falls on one side or the other of a single dividing line. I am hopeful that this tax will be collected without seriously restricting the drinking of champagne beyond the extent to which it would have fallen under any circumstances by reason of last year's level being, as I agree, abnormal. When my hon. Friend says that a patriotic man would be ashamed to be seen drinking wine so heavily taxed, I venture to think that that is a mistaken view of patriotism, especially when we are confronted with the position that the larger the share of taxation which is paid on a bottle of wine the greater is the display of patriotism. At any rate, when we are confronted with a position like the present, we must try and find some new sources of revenue, and I do not know that we could find a better one or one likely to cause less disturbance to the general trade of the country than this extra duty on wines and cigars. I chose the duty on sparkling wines because they are undoubtedly articles of luxury, and because the rates of taxation on the wines have not been altered for many years and bear no sort of proportion to the prices at which the articles are sold. I shall see the deputation mentioned by my hon. Friend, and shall, no doubt, learn something from

    1107
    them. At any rate, I shall listen attentively to all that they have to say. I must frankly say, however, that, as regards detail, I must, on this and other matters, keep an open mind, but I do not anticipate that I shall see any reason to recommend any material alteration, and perhaps it may be none at all, in the proposals which I have laid before the House.
    Mr. RONALD McNEILL: I agree that the right hon. Gentleman is quite right, at this time, to impose taxation wherever possible upon matters of pure luxury, and also that, if you are seeking luxuries which in themselves are worthy of being taxed, it would be difficult to find any article more worthy than expensive wines and cigars. One thing, however, that fell from my right hon. Gentleman surprised me extremely. I have always understood that consumption varied in proportion to the amount of taxation put upon the article, but I understood my right hon. Friend to say that, although he is putting admittedly extremely heavy fresh taxation upon a certain class of luxuries, he anticipates that it will have no substantial result in reducing their consumption. I am very sceptical about that. It is easy in this House to make light of the cost of an article like champagne, and I have no doubt that there will be a considerable number of people who will drink champagne no matter what is its price. Surely, however, the revenue to be derived from an article of this sort depends, not so much upon whether a comparatively small class of persons can continue to afford it as upon whether there may not be a large class of consumers who, under the new price, will be unable or unwilling to touch the article at all. I believe there is a large number of people who, perhaps on rare occasions, but still on occasions, go in for the luxury of champagne, but who, under the proposed taxation, will drop it altogether. Therefore I believe that my right hon. Friend will lose rather than gain revenue from the taxation he proposes.
    I sympathise with the Mover of the Amendment on account of the last of the grounds on which he supported it, namely, the effect which this taxation must have on France. I cannot believe that my right hon. Friend is really proposing this taxation for financial reasons at all. I think his difficulty became apparent from the
    1108
    speech made by the hon. Member opposite (Mr. Myers), who, in speaking to the Amendment, said that champagne is not a working-class beverage. It is quite new to me that a good reason for taxing an article beyond what its consumption will bear is that it happens to be used by one class more than another That seems to be quite an irrelevant consideration, but I believe that is what is at the back of the mind of my right hon. Friend. I am quite sure that, as he explained to us, he desires to do nothing which would be detrimental to France, and I do not believe he wants to put on taxation which will crush consumption and defeat its own object. What really is in his mind, and I sympathise with him in his difficulty, is that great prejudice might be excited if he put taxation upon articles consumed by the working classes, and refrained from putting it on an article consumed by the wealthier classes. I think, however, that he ought to resist the temptation to put on a tax for that reason, unless there are better reasons as well. I am sure my hon. Friend is right in saying that this tax cannot fail to be a serious blow to our French Ally. It affects just that part of France which is suffering most, and just at a time when it is vital to France to get back her export trade with a view to reestablishing her exchange—at that very moment, when we ought to show her every possible sympathy, we put a tax or. one of her chief articles of export merely for a political reason at home.
    I do not know much about the wine business of the world, but I understand that before the War there was a very considerable import into this country of less valuable sparkling wines from Germany. If you put an ad valorem tax upon sparkling wines you give a direct preference to these German wines, because they would be of lower value. You do that at a moment when the valuable French vineyards have been largely destroyed by the War, while the German vineyards have been left untouched. While I should not have a word to say otherwise against this particular taxation on its merits, I think that, under these circumstances, the present is an extremely unfortunate moment for it, and I hope that my right hon. Friend will reconsider the matter and see whether, avowedly as a concession to France and as a token of friendliness to her, he could not see his

    1109
    way to foregoing it. I am glad that my right hon. Friend is going to see a deputation and is keeping an open mind on the subject. That deputation, I understand, is coming exclusively from the trade of this country. I do not know whether it would be possible for him to receive a deputation representative of the growers in France; they are the people who are really going to be hit, and for whom we ought to show consideration at such a time as this.
    Mr. CAUTLEY: My right hon. Friend has been discreetly silent upon two points. He has not told us what the ad valorem tax on champagne really is, and he has not told us what the tax per bottle will be.
    Mr CHAMBERLAIN: I gave in my Budget statement the figures for the yield of the taxation on sparkling wines, and I said that, on last year's values, the average tax on a bottle would be 6s. As it is an ad valorem tax, it would depend on the value at the moment when the duty is payable.
    Mr. CAUTLEY: I am aware of that, but my question was directed to champagne, and I am still at a loss to know how much the ad valorem tax is. With the doubling of the ordinary taxation I think everyone will agree, but what I want to understand is, what is the amount estimated to be derived from the ad valorem tax on champagne? If it is only going to amount to £500,000 or £700,000—and I think it cannot be more—it seems to me to be a very small matter over which to run the risk of annoying the French nation, and causing trouble in the relations between ourselves and the French people. I should also like to ask the right hon. Gentleman how much this tax will increase the price per bottle of champagne. We are told that the actual price of this wine is going to be at least 34s. per bottle, and the Chancellor of the Exchequer says he estimates that the consumption will not be decreased. I should like to ask him upon what he bases that opinion. I should have thought that the enormous price of 34s. would be almost prohibitive except for the wealthiest people, and I am convinced, so far as we have heard to-day, that this tax will not increase the revenue at all, and, on the other hand, will do us enormous harm in our relations with France.
    Question, "That the words proposed to be left out stand part of the said Resolution," put, and agreed to.
    Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
    6.0 P.M.
    Sir F. BANBURY: I hope the House will omit this Resolution altogether, not only in regard to champagne, but in regard to all the wines which come from the countries of our Allies. We should do nothing which would in any way irritate or impede the recovery of France from the dreadful state into which she has been brought by the War. My right hon. Friend the Chancellor of the Exchequer, in introducing this Resolution on the 19th April, said:
    "Nothing but consideration—pushed to its utmost limit—for the feelings of our Allies, especially Prance and Portugal, would have justified me in making so large an increase in the beer and spirit duties last year whilst leaving the wine duties untouched."—[OFFICIAL REPORT, 19th April, 1920, col. 87, vol. 128.]
    I have looked through his speech again, and that is the only reason I can find why my right hon. Friend proposed this alteration in the duty, unless it were the reason to which my hon. Friend the Member for Canterbury (Mr. McNeill) referred. I fail to see what the increase in the beer and spirit duties has to do with it. It was a little unfortunate that the hon. Member opposite (Mr. Myers) was in such a hurry to speak, because I think he has really informed the House what was at the bottom of this Resolution. As my hon. Friend the Member for Canterbury said, the working classes are going to have the price of their beer increased, and to a far larger extent than the duty on tea, and, that being so, you are going to inflict a grievance upon other people. That is always a short-sighted policy. Because someone says to me, "I am going to take 5s. out of your pocket," it is no satisfaction to me to take half-a-crown out of the pocket of my hon. Friend unless I can keep it for myself. My right hon Friend picked out the weak spot in my hon. and gallant Friend's speech and said it would be most patriotic to drink wine because you will be paying a higher tax. Still greater would the patriotism be if you did not during champagne but drank water, and advertised to the Labour party and other people who are extravagant that you were showing the true way to bring

    1111
    about an equilibrium in the finances of the country by practising economy, which is the only way in which you can bring about an equilibrium.
    That being so, and there being no real sound reason advanced by the Chancellor of the Exchequer for putting on these duties, let us see what they bring in. The Chancellor of the Exchequer said he looks for an increase of £3,800,000 in the present year and I think £4,000,000 in a full year. Is it worth while, when we have a Budget of £1,400,000,000, to obtain a sum which is not greater than £4,000,000 if by doing so you will in any way inflict an injury upon our Allies? An hon. Member opposite said he did not think the friendship between this country and France would in any way be vitiated by the fact that you were putting a duty upon these wines. If you want to annoy anyone you touch his pocket. I have actually seen signs of a revolt amongst Members of this House during the last three or four days, a sign which I have not seen since this Parliament came in, and the only reason I can think of is that either their or their constituents' pockets are being touched. That is the sort of thing which will occur in France. I have had a little experience of the French. I do not want to say anything against a gallant race with whom we have fought during the last five years, but if there is one thing that the Frenchman is a little touchy upon it is his pocket. We shall touch him very much if we in any way check the opportunities he has of exporting his produce. My hon. Friend says in the wine district in France there has been very great devastation. There is no question about that. I cannot help thinking that if we put this enormously increased duty upon these particular articles the result will be that we must check consumption. During the last year or so there has been a very large number of people who by some means or another, I do not know how—it has not come my way—have made very considerable sums of money. All that comes quickly goes quickly, and they have been spending in a very extravagant manner and amongst other things they have been drinking a very considerable quantity of wine, especially champagne. It is quite possible, especially with the enormous burdens which are being put upon us in the form of taxation, that that will cease and we may find that the result
    1112
    of these duties will be that instead of receiving something like £3,800,000, very likely very little more will be received than has been received up till now.
    Under these circumstances, I will only ask my right hon. Friend if he thinks it really worth while, for the sake of a saving of possibly £4,000,000 of revenue, to do something which, as certain as I am standing here, is bound to irritate our Allies. It is true that we do not interfere with the taxation of France, even though that taxation may possibly injure us. But are we in exactly the same position as France? We have not suffered as France has suffered. We have not had all our towns and cities and houses destroyed and our cultivation ruined in the same way that the French have. They are grateful to us for the assistance we have rendered them, but, at the same time, we must take into consideration the tremendous suffering the French have gone though, and we ought, if possible, to endeavour to extend to them some consideration. I hope when the deputation interviews my right hon. Friend he will reconsider the whole position. I hope he will remember that there are, I believe, a large number of people who have sympathy with France, and who think this is an imposition which, while it will not much advantage this country and will not much lighten the burden upon us, will do a great deal to destroy the friendly feeling which exists between this country and France, and will annoy our neighbour without conferring any corresponding benefit upon ourselves.
    Mr. CHAMBERLAIN: My right hon. Friend challenges the whole policy of making any addition to the duties on wines. He appeared to suggest that it was an improper consideration for me to have in mind that if I was taxing beer and spirits, the cheaper drink of the humbler classes, it might be proper to add to the more expensive drinks in the main, though not exclusively, consumed by the better-to-do classes. I am not at all ashamed that my proposed addition to the wine duties is to be taken and judged in connection with the proposed addition to the duties on spirits and beer. If you make these enormous increases in the duties on spirits and beer and leave wine untouched, you do something to induce people who have been accustomed to drink beer and spirits to turn to wine. There is no moral objection to that and

    1113
    no social objection. But you are introducing a disturbing factor into normal trade relations, and it certainly seems to me a very curious argument that it is an improper thing for the Chancellor of the Exchequer, when he proposes to increase the tax on an article of common consumption, to propose as part of the same scheme an increase on the tax on articles similar in character but of a more expensive type. My right hon. Friend says, "Is it worth while? After all, what do you get from the increase in the wine duties?" I am rather surprised to hear that argument from him, because it assails me at every turn. Either the proposals bring in a great deal, in which case it is monstrous and excites opposition, or it brings in little revenue, and then it is such a trifling matter that it really is not worth while to stir up all this trouble and incommode so many people. But my right hon. Friend preaches the doctrine of small things. He wants small savings. I want the small taxes as well as the big ones. We have had the great sweeping taxes in wartime. I think it is time we looked around to these smaller sources of revenue as a contribution, not merely to our immediate expenditure this year, but as a permanent addition to our revenue for some years to come until we have greatly lightened the burden of our debt and can begin to think about lessening the total taxation, and therefore reducing taxes instead of increasing them.
    Sir F. BANBURY: I did not object to this tax on the ground that it was a small one, but because I thought it would embitter the relationship between our Allies and ourselves, and that being so, was it worth while to do that for a small sum? That is where the small sum came in.
    Mr. CHAMBERLAIN: The £4,000,000 that I get from these increased wine duties is part of the total increased sum which I am raising from alcohol generally, and I ask my right hon. Friend to think of the duties on alcohol as a whole rather than to begin pulling them to pieces by picking out this article or that, first one and then the other. I can add nothing to what I have said already on the general subject of the effect of the proposal upon our Allies. No one who knows how gladly I acknowledge, in addition to the strong feeling we all have for our great Ally in the last War, the personal debt which I
    1114
    owe to France for the education which I received and the friendships I have made there, will think for a moment that I should be likely to add to her difficulties or inflict unnecessarily any injury to her trade. I do not believe, in the circumstances of to-day and with the taxes at no higher amount than I have proposed, they will have this disastrous effect which my right hon. Friend and others have assumed.
    Question put, and agreed to.
    Eighth Resolution read a Second time.
    Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution"
    Mr. HOOD: I should like to ask the Chancellor of the Exchequer for reconsideration of this tax, in the hope that he will, at any rate, receive a deputation from those members of the trade who are particularly interested. I do not pretend to have a very extensive knowledge of this particular branch of the trade. About 10 years ago I occupied, for a limited time, the position of Chairman of the Havana Cigar and Tobacco Factories, Ltd., although I confess that I have never smoked one of their cigars. There always has been a difference between the rate levied upon leaf tobacco and upon the manufactured product. Prior to the War the rates levied upon leaf tobacco or raw tobacco was 3s. 8d. per lb., and the rate on imported cigars was 7s. The present rate is 8s. 2d. upon leaf tobacco and 15s. 7d. upon the imported cigar. There was a very good reason for the difference when it was first made, a difference of nearly 50 per cent., the reason being the loss in the manufacture of leaf tobacco in the process of the manufacture, and in addition there was also a measure of protection for the British manufacturers The Chancellor of the Exchequer by his new tax now proposes to add 50 per cent. ad valorem duty upon the imported cigar, leaving leaf tobacco untouched. Therefore, to that extent there is a very considerable measure of protection to the British cigar manufacturer. I believe that 80 or 90 per cent. of imported cigars come from the Island of Cuba, and the rest mostly from the British Dominions. Cuba, to whom, I believe, we were indebted during the War for very considerable supplies of sugar, will be the hardest hit, and the Dominions will also be hit, be-

    1115
    cause the cigars which they send to us will pay two-thirds of this additional duty that will be imposed ad valorem. Unfortunately, from the point of view of the importer, there are very large stocks of imported cigars in the country, due to the increase of price which was made at the beginning of the year.
    The importers say that the Chancellor of the Exchequer will be disappointed in the proceeds which he expects to get from this increased duty. They also say that they will be unable to dispose of their very large stocks of cigars, and they ask that some consideration should be extended to them in that direction. Very reputable firms say that unless some measure of relief is extended to them in that direction that one half of them will have to go out of business and the other half will be subject to serious financial embarrassment. I hope the Chancellor of the Exchequer will see his way to receive the deputation from these Gentlemen so that they may lay their views before him. They say that the Chancellor of the Exchequer will not get what he thinks he will get from this new taxation, and that in view of the hardship which will be imposed upon them they ask that this duty should not be imposed for some months to come. They also point out a fact which possibly is not thoroughly known—namely, the enormous discrimination which will now be adopted in favour of the British cigar, to their disadvantage, because at the present time leaf tobacco only pays 8s. 2d. duty per lb., while the imported cigar will at least, in future, be taxed something like 30s. 7d.
    Mr. HURD: I would ask the Chancellor of the Exchequer to consider the excessive character of this increased duty, representing an addition of 15s. per lb. If the Leader of the House were present I would invite his support of my case, because when he was Chancellor of the Exchequer he once said that the enjoyment of an excellent dinner was largely dependent upon the quality of the cigar which followed the dinner. I cannot quite appeal on the same ground to Members of the Labour party.
    HON. MEMBERS: Why not?
    Mr. J. JONES: We like a good cigar as well as anybody. Who has a better right to a good dinner?
    Mr. HURD: We know that they prefer the cheapest Indian cheroot.
    Lieut.-Colonel WARD: I like a good cigar as well as anybody.
    Mr. HURD: I can, however, appeal to the Labour Members on the ground of principle. This is an indirect tax. We have heard just now of the fearful nature of indirect taxes. I hope, therefore, that on this Amendment we shall have the support of the Labour Members. I would especially call the attention of the Chancellor of the Exchequer to the hard case of the importer. I have a statement which a number of importers have made out at my request, which shows how very seriously they will be hit. They tell me that this tax will stop the sale of cigars now in bond. The Chancellor of the Exchequer knows the way the trade is run on very large stocks. It will be practically impossible to sell the large stocks at this enhanced price. Moreover, these large stocks are financed by advances from the banks, and the appreciated value of the stock will, in their opinion, very gravely embarrass them in their financial relations with the banks. They say in the statement that the position of many of them will become desperate, and may even lead to bankruptcy. I do not know whether the Chancellor of the Exchequer can see his way to enable them to continue clearing from bond at the old rate for six months. At any rate, I hope he will consent to receive the deputation so that their hard case may be considered.
    Mr. CHAMBERLAIN: I receive a great number of letters, not all of a complimentary character, and I receive a great number of deputations of often angry and generally perturbed individuals. I will receive a deputation from the cigar trade and will discuss this matter with them; but if I am going to do that, it would be better for me not to enter into a discussion of the details now. I will listen to what the deputation have to say and discuss the position with them, and will come back to the House on the Committee stage. I will only say that the anticipations that have been expressed have been exaggerated. Let me give a sample of what is involved. Take a medium-sized cigar, running 80 to the lb. The total tax on an Havana cigar of that kind will be 30s. 7d. per pound on the basis of the 1919 import value. That is about 4 ½d. each on the medium-sized

    1117
    cigar, 80 to the lb. Of that 30s. 7d., 15s. represent the ad valorem duty, so that of the 4½d. per cigar, the ad valorem duty means, approximately, 2d. I do not think my hon. Friends really believe that the Havana cigar trade is going to be stopped and the trade ruined because on a medium-sized cigar, running 80 to the lb., there is an additional charge of 2d.
    Mr. HOOD: Will the right hon. Gentleman allow me to give an illustration?
    Mr. CHAMBERLAIN: No illustration can fit every case where it is an ad valorem tax. We had better leave the discussion of details to take place between the deputation and myself. My hon. Friends will be perfectly entitled, if I do not satisfy the deputation or themselves, to raise the matter on the Committee stage of the Bill. They will not be prejudiced in the least by allowing the discussion to be postponed until then.
    Question put, and agreed to.
    Ninth Resolution read a Second time.
    Colonel WEDGWOOD: I do not wish to move the Amendment standing in my name.
    Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
    Colonel WEDGWOOD: I want to draw attention to these duties, because they are extremely heavy, and also because there is the grossest form of discrimination between a mechanically propelled vehicle which is to be used for farming and one which is to be used for any other purpose. If used for farming it is to get off with 5s. duty or, if it is a tractor, with a charge of £6, £10, or £21 a year. Similar vehicles used for locomotion or for distribution to shops or co-operative stores are charged £25, £28, or £30, or, roughly speaking, rather more than twice as much from the same vehicle. Considering how well farmers have done out of the War and that the landlords of the country are all selling their land at at least 50 per cent. more than its pre-War value, I do not see why they should be treated so lightly and at the same time these crushing duties should be laid on other forms of enterprises. These taxes mean that the ordinary motor vehicle used for distributing goods will have in future to pay very high duties. Take the smallest vehicle of all, the ordinary
    1118
    mechanically propelled tricycle which propels a distribution van. It has got to pay £10 a year. That capitalised at 20 years' purchase means £200 added to the cost of the vehicle. The vehicle itself would not cost more than £200. Here you are doubling the cost of a means of transport which is not only coming more into use, but which is obviously of great advantage to the whole community. The more mechanically propelled vehicles we have the less is the transport congestion, the more quickly the goods are delivered and the less the labour involved in distributing them. The whole secret of the solution of the transport question is to get our goods distributed by mechanically propelled vehicles instead of by horse, car or by the slow cumbrous transport used at the present time.
    These duties are imposed nominally upon the people who have got these distribution motors or lorries, but they would all be transferred to the consumer at the earliest possible moment. It is exactly like putting rates on machinery. They become an additional standing charge on the industry, and that tax is at once transferred to the consumer. But something extra goes on to the consumer as well. The first thing a business man does is to calculate his standing charges. Then he puts down the ordinary cost of production, including wages, and then he adds his profit on the total amount, and the consumer is not only going to pay these extra duties, but he is going to pay more, and when we are protesting against increasing the cost of living, the House should understand that by these duties we are putting an increase on the cost of retailing goods in this country, and even on the work of distributing them from the railway depots to the wholesale houses.
    An admirable system has come in lately, particularly in our mining villages, of getting people out into the country for a holiday from the towns on big char-a-bancs, which have opened up the country to the people in the great towns in Lancashire and the Midlands, and which take them out 10 miles or so and allow them to see something of the country. These vehicles, if in London, are now going to pay an annual tax of £84 a year, and if in the country an annual tax of £70 a year. Obviously, the use of these vehicles for the purpose must die out when the charge is so enormous, and it will actually prevent that form of holiday

    1119
    being taken altogether. There are only about 26 weeks in the year during which these char-a-bancs can run, and this will mean a charge of £2 a week, which will prevent this use of these vehicles. It may be said that these vehicles use the roads, but they are pneumatic-tyred vehicles, and the consequent wear on the road is nothing like what is caused by motor 'buses and lorries. The disadvantage of these taxes is that they are going to discourage an efficient and rapid distribution of goods, and they are also going to put an end to one of the best forms of holiday-making which exists at the present time.
    Mr. MACLEAN: I asked a question several weeks ago of the Chancellor of the Exchequer regarding certain disabled soldiers who had to sit in invalid chairs and whose friends provided them with small motors which drive those chairs at a very slow rate, and thereby relieve these invalids from the physical strain of propelling the chairs with their hands. The revenue officials in several cases in my own constituency, and possibly in other constituencies, assess these chairs and come down on these disabled soldiers to make them pay the motor-cycle tax on these invalid chairs because of the small motor attached. The question I asked the Chancellor of the Exchequer was whether any relief from this tax would be granted to those people. The answer I received was to wait until the Report of the Committee considering the Income Tax had been presented to the House. That Report had now been delivered, and we are here considering the taxation of motor vehicles, including vehicles not exceeding 5 cwt. in weight unladen, adapted and used for invalids, 5s., but in another part it states, any vehicles other than the foregoing, not exceeding six horse-power or electrically propelled, £6. Unless there is some assurance given by the Minister of Transport or the Chancellor of the Exchequer that these vehicles to which I have been referring are not expected to come under this heading, the revenue officials would be quite within their rights under this Resolution in assessing such invalid chairs at the motor-cycle rate, and I would wish either of these right hon. Gentlemen to make a statement as to what the Chancellor of the Exchequer is prepared to do in order to secure to those
    1120
    indviduals, who are unable to walk and who feel themselves compelled to use this means of adding to their comfort, relief from paying a £5 or £6 a year tax, because their friends have looked after their comfort. It is one of those cases which should be sympathetically considered.
    Sir W. JOYNSON-HICKS: I would like to welcome the support of my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood). I dare not make a speech like that. At any rate, I experienced opposition from the Labour Benches on former occasions when I spoke against such taxation, and I only hope that if there is a Division when these matters are discussed on the Finance Bill my hon. and gallant Friend will carry his friends into the Lobby against a form of taxation which I have always said was bad for the country. No doubt the whole of these taxes will be discussed fully when the Finance Bill comes before the House and I will not go into them now, but I will ask two questions. The first is with regard to motor cycles. It is provided that motor cycles must be of less weight than 7 cwt. I am informed that they are already being made heavier than V cwt., and I would ask the right hon. Gentleman, when the Bill comes on, to amend this and to make it 8 cwt., so as to cover the cycles which have already been manufactured, and weigh somewhat more than the 7 cwt. The second question is in regard to the old familiar steam roller which up to the present has not been taxed. It is not a vehicle which injures the roads. It exists mainly for the purpose of improving the roads. I am not quite clear whether under the provisions of this Resolution steam rollers would not come under one of these forms of taxation, but
    I am quite sure that my right hon. Friend does not intend to tax steam rollers which do not damage but improve the roads, and I will ask him to make a statement which will relieve the minds of those in the steam-rolling trade, including the large number of workmen who are engaged in steam-rolling. It will mean a considerable difference to small proprietors if they have entered into contracts for steam-rolling and find that a large tax is placed on them. I hope that my right hon. Friend will give me that undertaking to remedy this before the Bill gets into Committee.

    1121
    There was a statement made contradicting me on the last occasion when I spoke, suggesting that the Committee which the right hon. Gentleman set up some little time ago to consider this form of taxation was set up with the view that the Petrol Tax has got to go, and that it was not open to them to consider whether the Petrol Tax should remain or some other form should be substituted. My right hon. Friend contradicted me on that, but I do want to call his attention to a statement, which he will probably see in the Press very soon and which lies before me, from one of the members of that Committee, in fact, the member who produced the greater part of the Report, to the effect that the Motor Taxation Committee was appointed from the panel of experts by the Minister of Transport, and was invited to consider some system of solving the problem: what is the most equitable way of raising no less than £7,000,000 per annum by taxation of motors, in view of the wish of the Chancellor to abolish the Petrol Tax. That looks very much like what I said in the Debate some weeks ago. The Chancellor said very nearly that in the Debate last year. He had made up his mind that the Petrol Tax had got to go, and something must be substituted for it. If that was really put before my right hon. Friend's Committee, the whole value of their Report in favour of different forms of taxation is gone, because any proposal to continue the Petrol Tax was not possible, because the Committee were told that it was the wish of the Chancellor of the Exchequer that the Petrol Tax must go and that they should find some substitute for that tax. I thought it right to put this before my right hon. Friend at this stage, in order that he might confirm it or otherwise.
    Mr. FINNEY: I should like to have some assurance from the right hon. Gentleman with respect to vehicles used for the purpose of conveying injured workmen from collieries to hospitals. Accidents are taking place every day, more or less, at all the collieries of the country. I am very pleased to say that employers generally nowadays try to provide vehicles suitable for the purpose of conveying these injured workmen. I ask for special consideration in this matter. I want these vehicles either to be totally exempted from the tax or to be subjected only to a light tax.
    Mr. HAILWOOD: I would join with the hon. Member for Newcastle-under-Lyme in protest against the heavy taxation of the vehicles to which he refers. I should also like to ask how this new taxation is to be carried out. Are the vehicles to be assessed on the weight of the vehicle and in another case on horse power? Who is to decide? Is a Ford car to be assessed at 20-horse power, and to pay a tax of £20, or is it to be assessed on its weight? We were given to understand that this was to take the place of a tax on petrol, but the proposed taxation is much higher than the tax on petrol. A tax of £20 is equal to 1,600 gallons of petrol. It will be putting a heavy strain on the various industries. I fail to see how the multiplicity of taxes can help. It means only further staffs of clerks, the consumption of more paper, and much inconvenience, and in addition I take it that the taxes will have to be paid in advance, whereas petrol is paid for as it is obtained, week by week. If more taxation has to be raised, I hold that it will be better to concentrate on one or two taxes.
    Major PRESCOTT: Reference has been made to the Departmental Committee which sat in regard to the taxation of motor vehicles, and to an instruction said to have been given to that Committee by the Chancellor of the Exchequer that the petrol tax must go and a motor tax be substituted. I find on reference to the report a paragraph which says that roads are to be repaired and improved, that users of the roads will have to make a large contribution. It was also stated that the Chancellor of the Exchequer considered the petrol tax was not a satisfactory means of finding the revenue required. I think the House will see that no such instruction was given to the Committee which considered the problem. Personally, speaking as a road engineer who has given the whole of his life to the construction and maintenance of roads, I think the House will do well to consider the very great problem that confronted that Committee. It was the raising of an annual net revenue of between £7,000,000 and £8,000,000 for the upkeep and maintenance of the roads of the country. The central authority, the Roads Department Branch of the Ministry of Transport, will contribute this money to the highway authorities for the upkeep and maintenance of their roads, and they

    1123
    expect to derive a substantial sum for carrying out works of reconstruction and effecting necessary road widenings. The House may remember that the Minister of Transport is now engaged on the great task, in conjunction with the Roads Advisory Committee, of which I have the honour to be a member, of classifying the roads of the country. The county councils and the highway authorities are now occupied with that work.
    When that has been completed the highway authorities will get something like 50 per cent. towards the maintenance of first-class roads and 25 per cent. towards the maintenance of what are known as second-class roads. I do not think any Member, or even the hon. Baronet (Sir W. Joynson-Hicks), who is the principal spokesman of the Automobile Association in this House, has ever denied the necessity for spending this money on the great highways of the country. Road repairs and road improvements are very much in arrear. Nothing whatever has been done during the last five years. As a road engineer I Ray it is one of the worst possible forms of economy not to carry out these repairs at the earliest possible date. There are thousands of miles of the great highways in a thoroughly bad condition. It is a costly thing for road users not to have roads which are serviceable for mechanically -propelled vehicles. As to the cost of the maintenance of roads, though I have no actual figures to give to the House, I should say from my own experience that it is now something like 100 per cent. more than it was in pre-War days. Suppose we raise this £8,000,000 of money by this taxation, what does it mean? The equivalent of something like £3,500,000 before the War, which is a very much less sum than the old Road Board had to spend.
    I want to refer to a circular letter that has been sent out by the Automobile Association and Motor Union, dated 14th April. It is signed by Mr. Stenson Cooke, the secretary. They say that the Petrol Tax should be retained as against any alternative proposal. Any alternative proposal, no matter what it is, no matter how good or desirable it may be, must be rejected. A more selfish attitude on the part of a body such as this could not be imagined. If roads are to be re-surfaced and the great highways to
    1124
    be reconstructed and the necessary road widenings carried out, the road users of the country must be prepared to make a largely increased contribution towards the upkeep. I go further and I say it is very necessary in their own interest that they should do so. I am afraid they have not paid sufficient attention to that aspect of the question. The better the roads, the less will be the cost in maintaining engines and gear and the less will be the wear and tear of tyres. I should like to refer also to the meeting that took place at the Automobile Association last January. The Automobile Association was represented at that meeting and the resolution passed was a unanimous resolution. The other persons who were parties to that resolution will certainly regard it as a breach of faith if at the present stage it is thought fit to depart from the resolution. I do not know whether hon. Members noticed a letter in "The Times" to-day signed by Mr. Shrapnel Smith, the chairman of the committee of the Mechanical Transport Association.
    7.0 P.M.
    We must have the money for these roads. To those who prefer the present system my reply is that we cannot get the money unless by a severe imposition on petrol. It will simply mean that the tax per gallon now charged to motor cars will have to be raised from 6d. to 1s. 2d. or 1s. 3d. per gallon, and for commercial cars from 7d. to 7½d. The only opposition to the tax, as far as I can gather, comes from the Automobile Association, that is, from the pleasure motorists. It is necessary only to consult the table on the back of the Report of the Departmental Committee, which has been issued by the Minister of Transport to every hon. Member, to see how very little the pleasure motorist can make complaint. I think I have said sufficient to clench this matter and to show that the main roads of this country are in a very bad state of repair and a great many of them require to be absolutely reconstructed, and also that this sum of seven or eight millions is required by the Central Authority to disburse to the various Highway Authorities in order that the roads may be put into a proper state of repair. This single tax system and the scale of duties laid down in the Report of the Departmental Committee is a just and equitable one from every point of view.
    Mr. CAUTLEY: The hon. and gallant Gentleman who introduced this discussion suggested that there was unfair differentiation in this tax in favour of agriculture. I will try to enlighten him if he will try to be fair. These taxes are imposed solely for the purpose of improving the roads and the theory of the taxes is that the heavier tax should be put on the vehicle which uses the road most and the lightest tax on those vehicles which use the road least. To anybody, except the hon. and gallant Member, it would appear that those vehicles that do not use the roads should not pay the tax. Agricultural motor vehicles which do not use the roads are to pay 5s. duty. That arrangement is obviously fair in the case of such a vehicle and to the occupier of the agricultural land. Does the hon. and gallant Member maintain that the agricultural motor vehicle which is used on the roads for haulage for agricultural purposes is more lightly treated than the char-a-banc which carries a complement of thirty-two people and comes from the town and cuts up our country roads.
    Colonel WEDGWOOD: Do not farm carts cuts up the roads?
    Mr. CAUTLEY: The char-a-banc with its enormous weight, and which carries such a number of people, does not pay a farthing for the upkeep of the roads, whereas practically the whole of the maintenance of the roads falls on the agricultural occupier and the residents in the districts, and more particularly the farmers who occupy the land and use such implements. Whatever differentiation is shown is hardly sufficient in favour of the farmer occupier to be really fair. The hon. Gentleman who spoke last pointed out that the roads were in very bad condition, and, although I object in principle to the taxation of the vehicle, this will do something to raise a sum of money towards putting the roads in proper repair, but it will do little or nothing to lessen the burden of local taxation, which falls on the local residents in rural districts, who are taxed out of all proportion for the maintenance of roads which are damaged by men who come out of the towns in all sorts of vehicles which do not pay a penny towards the cost of the roads.
    Lieut.-Colonel PINKHAM: I rise to support the Resolution, and I do so for the reason that the yield of the present
    1126
    tax is altogether insufficient for the necessities of the roads. I am told that one of the largest omnibus companies in London does not pay a single penny to the tax, as that company does not use petrol, but uses benzol. The yield of the tax to-day under the old system is only £4,500,000, and under the proposed new system will be £8,575,000. The whole of that sum will be distributed among the local authorities to put their roads in order. I do not think there is any man who will claim that our roads are now in the state in which they ought to be and in which we wish them to be. If they are to be put into anything like that order which will enable them to carry heavy motor traffic and fast luxury traffic, both of which cause considerable damage to the roads, then we ought to have this tax or a similar one to raise the money required. The condition of the roads today is altogether different from what it was a few years before the War. At that time six inches of concrete under asphalt or wood paving was all that was required, and all that any local engineer thought was sufficient, to carry the traffic, and so it was. To-day it is wholly insufficient. The heavy motor pounds the concrete, and when your wood paving is removed you find that the concrete is all gone to pieces, and instead of putting in six inches you have now to put in 12 or 15 inches of concrete, and often to reinforce that. Therefore I hope that this system will go through. Those who do not use petrol and use benzol have, I believe, in some cases an ingenious system of having one-third petrol and the other two-thirds something on which they have not to pay. If this tax goes through the local authorities will have some money at their disposal, and we shall be able to get the roads back into a condition which will not only carry heavy traffic, but which possibly will give some sense of comfort to the luxury user of the motor car.
    Commander Viscount CURZON: I desire to intervene as one who motors a very great many miles in the course of the year. What the ordinary motorist wishes is not so much that the general sum that he has got to find in taxation for the improvement of the roads should be lessened as to see that the incidence of the taxation is changed from horse-power and put on use. In that way you would make the man who uses the road most pay most. I believe that this country is faced in the

    1127
    future, and I think the Minister of Transport will bear this out, with the probability of a very serious shortage of petrol. Even though the petrol is reduced, some people will go in large extravagant cars on unnecessary joy rides and consume a lot of petrol. If you simply put the tax on horse-power, and if at the same time the petrol supply is reduced, the motorist will not be able to use his car so often, but will still have to go on paying the same amount in taxation. An hon. and gallant Member said just now that the only opposition to this system of taxation came from pleasure motorists. I do not think that is quite correct. I think this system of taxation is rather in the interest of the pleasure motorist. Take the man who owns a Rolls-Royce car, the present value of which is somewhere about £3,000, and the man who owns a Ford car, the present value of which is about £400. The horse-power of the Ford car will be about 20, so that that man will have to pay £20 per year, while the owner of the expensive car will pay about £40. Speaking as a motorist pure and simple, I would personally like to see the petrol tax retained as well as a horsepower tax, but I do not want to see the whole taxation transferred to the horsepower of a car. The horse-power of a car is a very indefinite figure. It is stated in this scheme that the Minister of Transport will make regulations about the horsepower. I would like to know what sort of regulations they will be. Will they be those of the R.A.C., which take no account of the stroke? Is the right hon. Gentleman going to take no account of the measurement of the stroke in his calculations? In this scale of taxation vehicles not exceeding 5 cwt., and adapted to the use of invalids, are to pay 5s., while locomotive engines, agricultural tractors, and other agricultural machines are to pay 5s. Is it contended that the motor Bath car does as much damage to the roads as the steam tractor? Again, road locomotives, agricultural engines, and such like, not exceeding eight tons in weight, are to pay £25 per year, but a motor lorry, and the three-ton lorry is, I understand, becoming very common in transport, exceeding three tons but not exceeding four tons, is to pay £28. That does not seem to be quite fair. There are other anomalies in this taxation to which I hope I shall have other opportunities of referring. As motorists we do not object
    1128
    to the amount to be raised, but to the way in which it is to be levied.
    Mr. PEMBERTON BILLING: I must say in my opinion, and in the opinion of many Members with whom I have discussed this question, the fact that the Chancellor should have chosen this time to impose taxation on transport is the greatest paradox of a Budget which is full of them. We wish to relieve congestion on the roads, yet on the one hand the right hon. Gentleman calls on the taxpayers to pay an immense sum of money to subsidise railways, and on the other hand the only thing which can relieve the railways he penalises by excessive taxation. I am not referring to motor cars so much as to motor vehicles, which are necessary for ordinary commercial work, in taxing which he is adding much to the chaos and confusion which already exists in the transport service of this country. It is the incidence of the tax that I object to. In the first place it is unsound to take the tax off petrol. The immediate result of the Chancellor's action was a boom in petrol shares. "Shell" shares to-day are in a great deal happier condition than they were before the Chancellor's statement. We shall undoubtedly have to pay just as much for our petrol in a few weeks' or in a few months' time, because the profiteers in petrol will say, "If they will stand the 3s. 8d. before the Budget, they have got 3d. off, and they will stand the 3s. 8d. now." If the right hon. gentleman is not prepared to protect us from the profiteers, at least he might not deliver us into their hands. I am sure the Chancellor of the Exchequer is utterly ignorant of motor cars, and that the advice he has received on them is erroneous, or otherwise he would not have suggested taxing motor cars by cylinder capacity. Cylinder capacity has little or nothing to do with the horse-power of an engine.
    By increasing the stroke of a standard engine you can put it up 25 per cent. horsepower in a few hours, and by increasing the compression you can do the same thing. Two engines side by side, of the same bore and stroke, one with large induction valves and the other with small induction valves, will give two totally different horse-powers. The Minister of Transport is interested in motors, and I believe he drives a Rolls-Royce car. I will undertake to take over his car for

    1129
    him and increase his horse-power by 30 per cent. in a few days or weeks by changing his carburettor. Horse-power depends on the condition of the gases when they enter the cylinder. A perfect carburettor will cause one engine to give off 50 per cent. more horse-power than another, and yet, in spite of all this, the Chancellor of the Exchequer chooses the most elastic part of the whole thing to measure as his means of taxation. If the Chancellor of the Exchequer had decided to make men pay for wearing out footpaths, what would he have taxed? The food which gives us the strength to walk, or would he have measured our muscles and taxed us on our strength?
    Sir H. NIELD: On our weight.
    Mr. BILLING: No, I think it would have been on our boots with which we rub the pavement, and that is where the incidence of the motor tax should fall—on the tyres. I cannot understand why the right hon. Gentleman is so anxious to protect the rubber and petrol trades. There is not a motorist who would not be prepared to pay a tax on tyres. If you tax tyres you tax that which comes into contact with the road, and if you tax petrol you are taxing a man unfairly in relation to the horse-power, but you are taxing him in relation to weight, because the heavier the motor car, the more petrol you take to drive it along, and therefore the greater taxation is being paid for the heavier car. It makes us feel that there is some reason why the rubber industry and the petrol industry are being thus protected. It is going to do an immense amount of harm, and I appeal to the Minister of Transport in the matter. As a motorist he will benefit by it, I suppose. Indeed, this is a rich man's tax, for the simple reason that any man, like the right hon. Gentleman the Minister of Transport, who drives a Rolls-Royce two hundred miles a week, is well home on this tax. He pays £40 a year; the petrol consumption of a Rolls-Royce is eleven miles to the gallon, and therefore he saves his petrol tax, threepence, on every eleven miles. Therefore the owner of a Rolls-Royce stands where he did before, but saves his petrol tax. Then the Chancellor of the Exchequer asks us to believe him when he says he is protecting the poor man. The whole of the incidence of the taxation in this Budget is in favour of the rich man. Personally
    1130
    I shall vote against this Resolution, and I trust that hon. Members will not think they will bring the Government down by registering their protest against this very unjust tax.
    The greatest contribution to road repair funds in the past ten years has been from fines. Whenever any local council wanted some money, they used to get a couple of policemen and put them on a straight road and get in some £50 or £60 an hour through catching motorists exceeding the speed limit. I know it to my cost. I ask the right hon. Gentleman if that is the case—and I think he has experienced it himself—that at least he might abolish the twenty miles speed limit, which is a very foolish thing at the present day. To permit of a car to be built with 60 horse-power, and make a man pay tax on 60 horse-power, but not to allow him to use anything like that horse-power on the roads without fining him is another paradox. The whole question of motor cars should receive the careful attention of this House. In the next five years we are going to see a revolution take place in the whole of the road transport of our country, and to bring in this nasty little tax, which will put the small man off the road, is ridiculous. Those admirable vehicles known as "rubber-necks," which take people out for a little fresh air on Saturdays—again the poor people who cannot afford a motor-car and who go out occasionally in charabancs—are being taxed £84 a year, according to the seating capacity. Is the right hon. Gentleman aware that that represents about 25 per cent. greater than the capital cost of the vehicle? It represents a capital charge of about £1,600, and the cost of the vehicle is only about £1,200. He is taxing it about 30 per cent. more than its total cost per annum, and what business can be conducted on those lines? It is putting these people right out of business, and it is putting the small motor trader out of business too, because he prefers to pay his tax in some more indirect way than by these large lump sums. I do not know whether the right hon. Gentleman is going to make any concession to us at all, but I am almost certain he is not. I do ask him, however, to give our suggestions a little consideration. Will he tax tyres? If he does, he will get the whole motoring public in

    1131
    exact and just proportion to the amount they use the roads.
    The MINISTER of TRANSPORT (Sir E. Geddes):Will the hon. Gentleman send me a workable scheme?
    Mr. BILLING:I thank the right hon. Gentleman for giving me that opportunity, and I will certainly do my very best to comply with it. That is the spirit, if I may say so, that one appreciates in Ministers of the Crown—a genuine desire to get suggestions. Under these circumstances, I have nothing further to say, but I will save up my strength and ingenuity and ability to produce for the Minister of Transport a workable taxing scheme for motors.
    Sir H. NIELD:I think the last speaker is to be congratulated on the humour he has been able to show and the skill with which he can develop horse-power in order to defeat Regulations as to speed. He has confessed himself as having been a victim on many occasions to those Regulations, the breach of which involves a substantial fine. I think, as I entered the House to-day, I saw that curious looking vehicle which is awaiting his pleasure, and which is, no doubt, the vehicle in which he is able to break the law.
    Mr. BILLING:That vehicle is only taxed £27 under this tax, and develops 109 h.p.
    Sir H. NIELD: By the look of it I should like to double the tax on it. I am not concerned about the niceties of generating horse-power, of adjusting carburettors, or any of those mysterious portions of these road monsters of which I know nothing, but I do know what it is to have to provide estimates to mend roads, and I know the condition in which the main roads of this country have got, and the main roads of my own county. Incidentally, I was glad when I came in to hear the Chairman of the Highways Committee in the county of Middlesex giving his experience, and I hope supporting the proposal of the Government in this matter. The White Paper points out the difficulties in getting a really just tax based upon petrol spirit, and I think that is unanswerable, and when you are told, as you are in the White Paper, that not only have you got the steam-driven vehicles, those enormous monsters
    1132
    that carry trailers and heavy weights over the roads and bridges, but you have also a number of spirits which can be made in this country with the aid of a skilful chemist in such proportions as to escape the spirit duty, it is clear that you have unfair competition on the roads, because they are worn out by vehicles which do not come under the duty, and it is necessary that there should be equality as far as possible in the tax which is imposed. You cannot go back to the old tax and put it upon horse-drawn vehicles as well as motor-propelled vehicles. I see no other proposals by which money can be raised and the roads repaired than by taxing the horse-power of motors.
    My hon. Friend said it is extremely hard that people should be taxed upon a horse-power which ho has the fortune or misfortune to possess. I can quite understand ardent motorists like my hon. Friend having a tremendous temptation when they have got the power almost to fly upon the road if they only move a little lever. But it seems to me that a man who drives a Rolls-Royce car of 60 horse-power is more likely, when he gets into a quiet spot, to let it go, thereby injuring the road very materially by the high speed he makes. I can see no other way than the Government's proposal to put the tax upon the horse-power. It may be necessary to keep a petrol tax on, too, in order to ensure justice between the various users of the road, but, as one who has had to do with county government for many years, now that motor cars have become so universal, and there are so many motor tractors on the main roads radiating from London, I say the cost is so excessive that without some equitable system of taxation, such as is proposed in this Budget, the burdens on those counties are out of all proportion to what they ought to be.
    Sir E. GEDDES: I will deal first with all the points which have been raised, to which I have been asked to give answers.

    ROYAL ASSENT.
    Message to attend the Lords Commissioners,
    The House went, and, having returned,
    Mr. SPEAKER reported the Royal Assent to—

    1. Treaties of Peace (Austria and Bulgaria) Act, 1920.

    1133

    2. Army and Air Force (Annual) Act, 1920.

    3. De Vesci's Divorce Act, 1920.

    WAYS AND MEANS. [19TH APRIL.]
    Postponed proceeding resumed on Question proposed on consideration of the Ninth Resolution, "That this House doth agree with the Committee in the said Resolution.
    Question again proposed.
    Sir E. GEDDES(continuing): I should like to reply to the two points raised by Members before I deal more generally with what has been said about the proposed motor taxation. As regards agricultural preference which has been mentioned, that, I think, has been so fully replied to by my hon. Friend behind me, that I can really add nothing to what he has said. I do not think that there is any agricultural preference, except in so far as is justifiable in considering the extent to which motor tractors use the road, and considering also the fact that they are very large agents in the important food production of the country. The hon. Member for Govan raised the question of invalid chairs, to which, as I understand it, auxiliary motors are attached. He suggested that they were charged at a higher rate than they should be. The matter is one which I shall be very glad to consider before the Finance Bill comes forward. The hon. Baronet the Member for Twickenham (Sir W. Joynson-Hicks) asked whether it would be possible to alter the weight for motor-cycles from 7 to 8 cwt. This is a matter where we can probably meet the point, but I would not like at the moment to bind myself. Steam rollers was the subject of another question from an hon. Member, but they are not charged at all.
    The hon. Baronet raised the point about it having been an instruction to the Committee to abolish the Petrol Tax, and he suggested that it was upon that basis that the Committee were directed to pursue their investigations I was not at the Committee, and certainly no instruction was given by me to the Committee, or heard in this House, but the hon. Baronet's points were very clearly answered by an hon. Member. I think
    1134
    that if the hon. Baronet will consider the wording of the Report, and, still further, if he would review the shorthand notes which have been circulated, I think, to Members of the Committee, he will find that the possibility of taking off the Petrol Tax, far from being ruled out, was very fully considered. I have had the opportunity of consulting the Chairman of the Committee since the hon. Baronet made the point, and he assures me there was no such ruling out of the Petrol Tax at all.
    Sir W. JOYNSON-HICKS: I did not say there was any formal ruling out by the Chairman, but it was distinctly impressed upon the Committee that it was desirable to get rid of this tax.
    Sir E. GEDDES: Well, impressions by various Members of the Committee may differ, but I am sure, as my hon. Friend has been assured, that the matter was very fully considered. I think those were the two points then put to me specifically.
    This taxation, unlike any other portion of the Budget, comes forward as a specific effort on the part of the Committee which has argued it, I think, with great ability, and with a great desire to arrive at a solution of the problem. Unlike any other part of the Budget, this is a specific act to assure a specific revenue to be devoted to a specific object. It is to raise, roughly, £8,000,000 a year. For what? From whom? From road-users for the improvement of the roads. I think it is common ground amongst all motorists and all others interested in mechanical traction that we have got to do something for the roads in order to develop mechanical traction in the country. It is not in the interests of a class. There has been a certain amount said in this House abount this being a Report that favours the Rolls-Royce, or the agricultural tractor, and that it favoured or did not favour—I hardly know which—the char-a-banc. But there was no favouritism in it at all. It is a reasonable way of raising a revenue. It is almost common ground. I think that the Chancellor of the Exchequer ought not to be called upon at this stage of the country's finances to improve the roads. This is an endeavour to get money by the fairest way possible from those who use the roads, and who want us to improve the roads. This is not for horse-owners, who do not necessarily want the roads im-

    1135
    proved in this way at all. There was no dispute, I think, about the classification of the roads, or that the concurrent expenditure of bringing them up to a proper state was desirable.
    How did this Committee arrive at the basis of taxation? They considered first of all whether the petrol tax should be continued as a proper Measure for road users. Every Member of the House is familiar with the reasons why the Petrol Tax cannot be continued. Hon. Members may disagree as to whether the reasons put forward are strong enough reasons. These are that it is so easy to evade the Petrol Tax, and with the increased price of petrol, and increased taxation on petrol, if we were going to raise this necessary money for the roads by this means the inducement to evade the tax would become greater and greater. If you were to raise this amount of money, the necessity of which has never been disputed by petrol alone, the man who pays 6d. would have to pay 1s. 2¼d., and it is too much to put on an additional tax of that kind. It is a very costly tax. One hon. Member, speaking from behind me said, why impose this costly tax, why do not you go with the Petrol Tax? Well, the rebates alone of the Petrol Tax cost £65,000 to administer—money chucked away, and we have nothing for it! You do not wish to penalise the commercial user, the man who is going to use his motor for his trade and the trade of the country.
    The Petrol Tax is not a fair tax at all. By the process suggested by some hon. Members you are simply going to tax the motor vehicle out of the country. This is an attempt to get a tax failing the Petrol Tax, and failing the appearance of, as my hon. Friend says, a workable scheme of tyres. When my hon. Friend gets a workable way of taxing tyres, I shall be very glad to hear of it.
    Mr. BILLING: Why not in the re-treading of tyres have a distinctive mark upon them which an officer of the law could see, and in seeing, judge whether or not there had been evasion.
    Sir E. GEDDES: When my hon. Friend has put together a scheme by which he proposes to raise £8,000,000 a year by a tyre tax, a scheme which will be simple to impose and cheap to collect, I will be
    1136
    glad to hear of it. There will be no question of resilience of tyres and it must not be capable of evasion. I shall be glad, then, to hear of it. The Committee considered this matter, and could find no way of taxing tyres. Petrol, for reasons I have given, and which the House knows perfectly well, was found to be a tax, a costly tax, and one which created a great deal of evasion, being very easy to evade. It did not tax the user of the roads by any means at all For that reason there are heaps of buses running which do not pay a penny tax because they do not use taxable fuel. They use benzol.
    Sir W. JOYNSON-HICKS: Tax benzol.
    Sir E. GEDDES: That is one of the difficulties. Again in the matter of petrol it is almost impracticable to divide what the owner of a private motor car uses for his business and what he uses on account of his industry. This sort of thing is going on all over the country. Hon. Members must know many cases. It is impossible to check that sort of evasion. Having disposed, as the Committee thought, after the most exhaustive and earnest inquiry of various possibilities, they were driven to a tax on vehicles. It is a remarkable thing that outside this House—and, of course, this House is a judge of its own proceedings—there is no one who objects to the tax. It is not the commercial users. A letter has already been quoted from "The Times," which says that the Standing Joint Committee of the Mechanical Road Transport Association are entirely in favour of it. It is true that the Royal Automobile Club, one of the great bodies which represents motorists, would have preferred to see a tax imposed more accurately on the road user. As that has been found impossible the Royal Automobile Clubs, represented on the Committee remember, have accepted our proposals. The Commercial Motor Union, and the whole of the motor building trade, have accepted it. The only organisation, I believe, which dissents is the Automobile Association. There is no other dissent from outside.
    Sir W. JOYNSON-HICKS: Does the right hon. Gentleman quite state the position in that respect?
    Sir E. GEDDES: I myself have received no complaints or protests from them, and I understand that they are

    1137
    agreed now. Failing free roads, or failing a Petrol or a Spirit Tax which accurately represents the user of the roads, no alternative can be seen by the Association. A great many of the commercial users as well, as my hon. Friends know, are strongly in favour of it. The traders say that, at any rate, they know where they are. In these circumstances, let us look at what the position is. We are agreed that we have got to get money for the roads, and we have devised what we believe is the best scheme. It is not argued that any of the great motor interests of the country, except the Automobile Association, dissent, and that, I believe, is not true. Anyhow, they have sent no objection to me, and I have seen none of the papers. They were represented as fully as possible on the Committee.
    8.0 P.M.
    Let us see how the proposed tax affects the private motor user, the man who is the owner of a private car. I have circulated with the White Paper a statement in which I have illustrated this aspect as well as I could illustrate it. It shows that the more a man uses his car the less will the tax hit him. Briefly, the car owner who uses his car only for week-ends, and who keeps it as a luxury and does not use it regularly like the doctor, is the man who is worst hit, and he is not badly hit. If you look at the table you will see that. Further, the doctor and the veterinary surgeon, whose cases have been raised, are rebate users to-day, and there is no reservation in it, and I do not see why there should be any. In the letters which we have got from the two large central selling corporations they say that they are giving 7d. reduction in petrol as soon as the sixpenny tax is off, so that these two very deserving users of motor cars, the veterinary surgeon and the doctor, get an advantage which is not shown in the statement at all. It is claimed by my hon. Friend the Member for Newcastle-under-Lyme that the charabancs will be killed. There I would say that that has not been put forward strongly either by the owners or the builders, but on the other hand the proposed tax does provide for what I believe will be a considerable benefit, namely, the quarterly licence. If the owner of the charabanc wishes to run only in the summer season he can take out a quarterly or a half-yearly licence, and
    1138
    that applies to commercial vehicles. The only exception is motor cycles. That is really the only answer I can give, and which I think the House would wish me to give at this stage. We have to get the money. We have devised what we believe to be the best method. A tax on petrol would never raise the money we require, and it is inconceivable that we should put a tax which used to be 3d. per gallon, which was put up to 6d. during the War, up to 1s. 2¼d. with the price of petrol what it is to-day, because that is unthinkable.
    The people who are going to pay this tax are not conplaining. The owner of the commercial vehicle is prepared to pay because he says that the greatest enemy to his trade is bad roads, and the greatest benefit to his trade is good roads. He is prepared to pay because it will mean that his trade will flourish, and that is my answer to all those who have criticised this system of road transport. I am anxious to develop motor traction on the roads, and you can only get that if you have good roads. Now we have got almost complete agreement from all those interested except the Automobile Association, which does not represent the commercial motor user. Personally I hope that this will not be a permanent tax. I hope the day will come when the Exchequer will be able to bear a portion of the burden of the roads, but if we can get this scheme into operation we shall have turned a milestone in motor traction on the roads which will be a landmark for all time in regard to this means of the development of transportation.
    Dr. McDONALD: I have listened with interest to the speech of the Minister of Transport, and I wish to know whether the question of the position of medical men and veterinary surgeons has been raised to-day?
    Sir E. GEDDES: Not to-day, but it has been mentioned to me by several hon. Members.
    Dr. McDONALD: I should like to make a strong appeal on behalf of doctors and medical men throughout the country. The Medical Committee of Members of this House met a strong deputation of the Medical Association, and they specially requested us to bring before this House the fact that formerly medical men

    1139
    and veterinary surgeons had a rebate of the tax on their cars. With the increase that is now taking place many medical men in the country districts will be very hardly hit indeed. At the present time many of them are paying only £3 3s. a year, and under the new regulations that will be increased to £20 a year. Therefore I appeal to the right hon. Gentleman to seriously consider the question, both of the medical men and the veterinary surgeons, and extend to them a half-rebate, as has been done in previous Budgets.
    Sir E. GEDDES: May I explain that I was not quite accurate in what I said just now about the quarterly licence? I should have said the only exceptions are motor cycles, tramcars and vehicles, which are taxed at 5s.
    Mr. BARTLEY DENNISS: I support the principles laid down in this proposal for reasons which have been given at very great length, and I shall not further discuss them. I wish, however, to call the attention of the Minister of Transport to what may seem a small matter, which affects a very large class of tradesmen. It is the case of a tradesman who distributes his goods, such as newspapers, who cannot rely upon one motor vehicle, and he must have a stand-by, especially on bad roads, where his motor vehicle is continually breaking down. A tradesman in my constituency writes to me that he keeps twelve motors to distribute his goods, and he never uses more than eight of them on any one day. The other four are stand-bys. He thinks that he ought not to be taxed on the whole twelve motors, but only upon the eight which really use the roads. Therefore I ask the Minister of Transport between now and the introduction of the Finance Bill to consider whether he cannot take that point into consideration and either reduce the tax on what I may call the stand-by or abolish it altogether in bonâ fide cases. I do not know whether the right hon. Gentleman will agree to answer my question now.
    Sir E. GEDDES: Certainly I will consider it.
    Mr. ATKEY: I appeal to the Minister of Transport as to whether he could grant some relief in regard to these taxes It is true, as he has stated, that quarterly
    1140
    licences may be taken out, but I believe that there is quite a considerable penalty by the additional increment with reference to these quarterly licences I hope the Minister of Transport may see his way to grant the quarterly licences on the same terms as annual licences, although there is more trouble in connection with the quarterly than the annual licences, but I think this would help to meet the cases which have been alluded to by the hon. Gentleman who has just sat down. It will be the poorer users of the roads who will have to resort to the quarterly licences, and the Minister of Transport might very well consider how to meet their claim in that regard.
    I realise that whatever form of general taxation is imposed it is bound to bear unevenly and hardly upon some of those who are affected by it. It so happens that this particular form of taxation hits the user of a certain type of car which is applied to the trade and the poorer section of those who desire to use the roads in this way, and still that is the very type of car which damages the road least of all. It is a light car which has to have engines of very considerable horse-power. The number of that particular type of car on the road would be considerably in excess of all other types at present in use in this country, and there is a tendency for the number to increase. The car is used very largely for commercial work, especially by travellers, and I am wondering if the right hon. Gentleman has considered whether the same amount of revenue could not be raised by modifying the scale so as to allow the users of these cars some advantage either on account of weight or of price. Could not the scale be graduated on that basis? It would be a benefit to a considerable number of users of the roads who, I think, are entitled to the greatest amount of sympathy.
    Dr. MURRAY:I want to say a word or two in support of the appeal advanced by the hon. Member for the Wallasey Division (Dr. M'Donald). Under the old regulations medical men were allowed a rebate on the petrol tax—not as a special favour to the profession, but for the reason that the medical man has to use his car for very necessary work. I believe medical men generally would have preferred that the duty should have been kept on petrol, because they have some justification for feeling that if abolished

    1141
    the advantage will go ultimately into the pockets of petrol proprietors. If the Minister of Transport sticks to the tax on power rather than on petrol, he ought to apply to medical men under the new Regulations the same principle as applied to them under the old Regulations; otherwise they will be very hardly hit. They will also be hardly hit in this respect, that in some parts of the country they have to keep two cars of high power because they cannot afford to wait, if their ordinary car breaks down, until it can be repaired. They must have a standby in order to carry on their practice, and I do suggest, therefore, that the tax should apply to only one car, provided there is reasonable ground for thinking that only one car is used at a time. I hope that that suggestion will have sympathetic consideration at the hands of the right hon. Gentleman. I have one other point I wish to refer to. In some parts of the country very high power cars are employed in order to overcome the hills. I have seen many so-called hills in England which in my part of the country would be termed "gentle undulations," suited probably for exercise by people suffering from heart disease. But in some parts of Scotland we have hills to climb for which very high power cars are required, and, therefore, the tax in this respect falls particularly heavy on the owners of the cars. This is a point which the right hon. Gentleman should take into consideration. At any rate, I hope that the advantage of the rebate on the petrol duty will in some way be extended to medical men in regard to the power duty, and that where they are compelled to keep two motors the tax will only be charged on one.
    Mr. SPENCER: I want to enter a protest against this method of levying taxation on the people of this country. The right hon. Gentleman the Minister of Transport, replying on behalf of the Government to the criticisms of the opponents of this tax, stated that the burden would fall most heavily on the users of commercial cars, who, however, were willing to bear the burden because they desired to have better roads for the purpose of increasing their trade. My own opinion is that those who stated that did so because they could the more easily transfer the burden to the shoulders of someone else. This seems to be part of the general policy of the Government to
    1142
    devise methods of indirect taxation rather than to face the difficulty of getting rid of the enormous debt which has accumulated during the War. The party to which I belong would rather face that difficulty by means of a levy upon capital, but the Government are not willing to accept that solution and prefer to devise other means of raising the money; they are therefore resorting to methods of this kind to extract money from those least able to bear the burden. I therefore desire to enter my caveat, because I think the time will soon come when the general public will realise that they are being his on every side for the purpose of paying the enormous interest which has to be found year by year as a result of this huge debt. Take the case of char-a-bancs. The workman in summer time wants to get a day or two's holiday in the country but he will have to pay a proportion of this tax out of his wages. The tax has in fact, been framed for the purpose of extracting the greatest possible amount of money out of his earnings. It is the working classes of this country that will have to bear the burden, unless someone on the Treasury Bench is bold enough to come forward with a plan for reducing the debt and the annual charges for interest and for placing the burden on the right shoulders.
    Question put, and agreed to.
    Tenth and Eleventh Resolutions agreed to.
    Twelfth Resolution read a Second time.
    Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
    Sir F. BANBURY: I desire to oppose this tax which proposes to make the Stamp Duties on transfer of stock and on marketable securities double those now charged. The duty charged at the present time on the transfer of stock is ½ per cent. on the consideration money, and it is proposed to make it 1 per cent.; that is to say, if a person purchases any stock, he will have to pay to the Government, in addition to the price which he has to pay for the stock, a duty of 1 per cent. on the money. The seller, although he pays nothing, will be penalised, because this heavy duty will render the market less free, and prevent people from changing their stock in the manner to which they have been accustomed. If a person

    1143
    who happens to own certain stocks thinks it will be advantageous to get rid of them and purchase something else, he will, if he is under the liability of paying 1 per cent on the consideration money, pause before he makes the change, and that will act seriously upon the people who deal in these securities. At the present time it is one of the great interests of the country that ample capital should be available for the various undertakings which are being carried on. If we are ever to come back to the world which existed before the War, not to mention the new world which the Prime Minister has talked about so often, but about which we do not hear so much now, the only way in which we can do that is by increased work and increased production. You cannot have increased production without capital, and if you are going to put difficulties in the way of companies or corporations raising money, you will do more harm than the good which would be gained by the amount received in tax. I am rather glad that my right hon. Friend the Minister without Portfolio (Sir L. Worthington Evans) is here, because he has considerable knowledge of these matters, and will be able to understand what the effect of the tax will be.
    In addition to the hindrances and drawbacks which I have already enumerated, this increased tax will have the further disadvantage of reducing the marketability of various stocks. My right hon. Friend knows that it is necessary that dealers in these stocks should buy them at times when they are not absolutely certain that they will re-sell them at once, but will have to hold them until they can find a seller. If such a heavy tax as one per cent. is put upon them for doing this, they will have to take it into consideration when they purchase the stock, and, unless they can do so at such a low rate as to be able to recoup themselves, they will hesitate to purchase unless they have a buyer to whom they can pass the stock immediately. Some taxation, of course, must be imposed, but it always in the long run comes back to the consumer. That is what is occurring now, and it is one of the reasons why prices are so high. In this particular case, there is no doubt that the tax will be passed on to the ultimate purchaser. If it cannot be thus passed on there will be no market, and
    1144
    it will be difficult to realise stock. What we want at the present moment is to facilitate and encourage business as far as possible, and not to put any impediments in the way. I do not know whether my right hon. Friend is authorised to make any concession, or whether we must await the return of the Chancellor of the Exchequer, but I appeal to him, as a man of considerable business knowledge and ability, whether I am not right in this matter, and whether it would not be advisable in the interest, not of the people who are going to pay the tax, but of the community as a whole, to leave this tax alone. I hope I shall be able to get some satisfactory assurance on this point.
    Lieut. - Colonel Sir J. NORTON-GRIFFITHS: I would ask my right hon. Friend on the Treasury Bench (Sir L. Worthington-Evans) to take into consideration, in connection with this particular tax, the jobber. If there is any financial depreciation on the Stock Exchange, the jobbers stand to be shot at by other professionals, and they claim that, in cases in which they have to take stock, and are holding it and supporting the market, and not for transfer to a permanent holder, some consideration should be shown to them in regard to this tax. I do not think that there is anyone on the Front Bench more capable than my right hon. Friend of realizing what that means to jobbers, especially in Consols, War Stocks, and what are called heavy securities. I have a letter from a gentleman who is one of the leading jobbers and one of the most respected members of the Stock Exchange, pointing out that the tax is
    "much too heavy on the jobber, who in the ordinary course of business is constantly transferring the one or more special stocks he deals in, in and out of his name. Some days he has more stock on hand, on others less; and it seems unreasonable that, every time his stock-in-trade increases and he has to take up stock, he should have to pay a 1 per cent. duty. Security for loans is transferable to a banker at nominal consideration on a ten-shilling stamp, and our suggestion is that transfers of his own specialities should also be allowed to a recognized jobber at nominal consideration. We do not ask this in order that the jobber shoulid get off paying, but because the increased stamp will necessarily contract markets and make the dealing prices wider, with the result that the public will do less business and the tax be so far less productive. For these reasons we do not think the proposed concession would decrease, but rather increase, the revenue. There would

    1145
    be no practical difficulty. All that would be required would be an endorsement on the transfer setting out the lawful reason for nominal consideration, as is done now in other cases."
    I think it would allay great anxiety amongst members of the Stock Exchange, who are above any suspicion of trying to get out of paying their fair share of taxation if my right hon. Friend would make some answer to that point.
    Sir LAMING WORTHINGTON-EVANS(Minister without Portfolio): The right hon. Baronet has brought objections to this tax which, of course, are general objections, and apply to almost any tax dealing with stamps. We are now putting stocks and shares transferable by deed on the same footing as real estate was put in 1910. It is an increase of taxation which will bring in a considerable revenue, and I am not prepared on behalf of the Government to do away with it; but when we came to marketability, there I think we can get a little closer together. As matters now stand, a jobber may be called upon not to pay the increased tax once but twice, merely because he as not completed his business in the course of five days, because all transactions on the Stock Exchange are cash transactions, and names have to be passed within five days or within a very short period afterwards. The stock jobber would be specially taxed if no exception were made, because he has, quite unlike any other trader, to pay a stamp duty upon the turnover of his stock-in-trade. I am authorised to say by the Chancellor of the Exchequer that that is a position which he recognises would not be wise in the interests of the marketability of stocks and shares in general, nor would it be fair to that particular class of transaction, and between now and the Finance Bill the actual method can be looked into, but it will be a concession strictly limited to the jobber, not to extend beyond the jobber in respect of stocks and shares which are his stock-in-trade, that is which he deals with daily as part of his business. It is not to extend to his investments or his dealings in other markets than his own, and it must be also in connection with transactions which are completed within a reasonable time, say two months—some such considerations as these which will protect the revenue. My own belief is,
    1146
    that there will be little or no loss of revenue if that method of dealing with the hardship is acceptable to the Stock Exchange and those who are affected by it, and if that is so and we find it is practicable, a Clause will be inserted in the Bill to bring that into operation.
    Sir F. BANBURY: As far as I am concerned, that will go a very long way to meet the objections which I have to the tax. I do not know about the general public. That is another thing. My chief point was the marketability, and I am very much obliged to my right hon. Friend for going so far as he has done.
    Sir J. NORTON-GRIFFITHS: I should like to add my appreciation to that which my right hon. Friend has expressed.
    Question put, and agreed to.
    Thirteenth, Fourteenth, and Fifteenth Resolutions agreed to.
    Sixteenth Resolution read a Second time.
    Mr. G. LOCKER-LAMPSON: I beg to move, after paragraph (b), to insert the words
    "Provided that, if either a husband or a wife who are living together claims to be separately assessed for purposes of Income Tax, neither of them shall be liable to pay a larger sum in respect of Income Tax than they would be liable to pay if they were each unmarried."
    I do not feel that it is really necessary to offer any apology to the House for putting this Amendment down and asking the House to support it. To my mind it contains a great matter of principle. I believe these debates on this question of the marriage tax have come to stay. I believe it is a hardy annual which is going to remain a hardy annual until the tax is finally repealed. I also believe there is a growing feeling thoughout the country against this extraordinary anomaly of the marriage tax. I am not surprised that this is really a growing thing, because, after all, we live now with the burden of an enormous Income Tax. In the old days, when the tax was 6d., 1s., or 1s. 6d., people did not feel it so much, and when persons happened to marry, and they immediately became liable to a joint rate on their income, it was so small an additional tax that the injustice of it did not strike them so deeply. Now that we

    1147
    live under an enormous tax of 6s. in the £, the injustice of the tax naturally makes itself more heavily felt than in the past. The Chancellor of the Exchequer has rather unfairly led the House to suppose that this agitation is in favour of the rich. In answer to a question to-day he rather led the House to believe that if this marriage tax was abolished it would enormously and naturally benefit the rich. That is not really the case. Rich people marry as well as poor people, and if you take off the marriage tax you necessarily must benefit the rich as well as the poor. That cannot be helped. I do not think that on that account you ought to be prevented from doing what you can to maintain a great principle. It is not correct to say that very largely the rich will benefit. I am prepared to show that if my proposal is accepted people with very small incomes will benefit to a very great extent. I should fight this just as strongly on the matter of principle if it concerned only millionaires. I am sorry that it does not only concern poor people, because if it did only concern poor people so much political pressure would be brought to bear that the Government would give way.
    I will give two illustrations to show that if my proposal is carried out it will benefit people with very small incomes. Let me take two persons who have unearned incomes. Take an unmarried man with an income of £400. Under the proposals of the Royal Commission the Income Tax will be 3s. in the £ on £250, so that he will pay a tax of £.37 10s. 0d. An unmarried woman with an income of £300 will be taxed on £150 at 3s. in the. £, and will pay a tax of £22 10s. 0d. The total tax payable by these two people before they are married will be £60. Under the proposals of the Royal Commission what happens? If they marry they will have a total income of £700. That is not a rich income. It means an income of about £12 a week. The Chancellor of the Exchequer cannot call these people rich. They will be taxed partly at 3s. in the £, and partly at 6s. in the £, so that their total tax when they marry would amount to £97 10s. compared with £60 before they marry. That is to say, under the proposals of the Royal Commission on Income Tax, which the Chancellor of the Exchequer,
    1148
    I understand, is going to carry out, the penalty on marriage will be £37 10s. 0d.
    Take an illustration where two people have earned incomes. I will not take rich people, but comparatively poor people, an unmarried man with an earned income of £400 and an unmarried woman with an income of £200. Before they marry the man will pay a tax of 3s. on £225, amounting to £33 15s. 0d., and the woman before marriage will pay a tax of 3s. in the £ on £45, amounting to £6 15s. 0d. The total tax of the two before marriage is £40 10s. 0d. What happens on marriage? They have a total income of £600. They are not rich people. They have an income of about £10 a week. The Chancellor of the Exchequer cannot say that they are rich. On marriage they pay on part of their income a tax of 3s. and on another part 6s., or a total tax of £60 15s., compared with a tax of £40 10s. 0d. before marriage. Under the proposals of the Royal Commission on Income Tax, which the Chancellor of the Exchequer is going to adopt, these two poor people will pay a penalty tax on marriage of £20 5s. 0d. That is an unfair and unjust tax on the married woman, and I believe it absolutely indefensible. It is absolutely unfair to tax her upon somebody else's income, by which she may not benefit at all. She may not even know what her husband's income is. She may get no share of it, and yet her income is treated as part of her husband's income, and she has to pay a higher rate of tax.
    Why do the Inland Revenue treat people who marry on an entirely different footing from anybody else who live together and enjoy a joint income? You have two sisters living together, very often, enjoying a joint income for all domestic purposes. You have two brothers living together, a mother and two daughters, a father in a mining district, with three or four sons bringing £30 a week into the house. All these people have the advantage of a joint income. You also have, unfortunately, people living together, a man and woman, unmarried. They enjoy the advantages of a joint income, but directly you get a man and woman to marry, and they have the advantage of a joint income, in that one instance alone the Inland Revenue step in and put a penalty on the marriage. It is more of an anomaly than that, because in the case

    1149
    of death duties you do not adopt the same principle at all. In the case of Income Tax you treat these two people as having a merged capital, and the income from that merged capital you treat by a joint rate; but when a man dies and leaves his capital to his wife you immediately treat that as separate capital. You do not treat it as the capital of the survivor and get death duties when the survivor dies. You treat the capital as separate capital, and the Chancellor of the Exchequer steps in and gets his tax. Therefore, you have two entirely different principles, and I cannot see any logic in it.
    The Report of the Royal Commission was a very great disappointment to anybody who studies the Income Tax Law, and a great disappointment to people in the country. One hon. Member of this House was a member of that Royal Commission. I do not want to say a single disrespectful word about the Royal Commission, because their Report is one of the ablest I have ever read. I am certain that a vast number of their representations were sound representations, and I hope that they will be carried out, but I hope the Chancellor of the Exchequer is not going to shelter himself behind the Royal Commission, so far as this marriage tax is concerned. The Commission was not constituted so as to carry any real weight so far as that tax was concerned. There were 26 members of the Commission in and out—some resigned and others came on—and only one of these was a woman. There were 186 witnesses examined and only five were women. In regard to the marriage penalty 11 persons gave evidence, no fewer than eight were against the marriage tax and three in favour of it. And those three were Inland Revenue officials. It is not surprising in face of those facts that the marriage penalty was not abolished, and if you had another Royal Commission to-morrow and there were the same facts the same result would follow.
    I am sorry to say that not only did the Royal Commission report that this marriage penalty should continue, but actually went out of its way to make this penalty worse. The Chancellor of the Exchequer is certainly putting on £100 abatement. He is taking off £50 to start with. Therefore, nominally, he is giving £50 extra, but he is doing it in such a way that the marriage penalty is increased. Under the
    1150
    present law there is only one instance where there is not a marriage penalty. That is where the joint income is not more than £500 and where both wife and husband earn. That fragment of justice has been swept away by the recommendations of the Royal Commission. Under the present system, in the case of a wife and husband with a total income of £370—which is not a rich income—the total tax at present, which would be at 2s. 3d., payable on that income would amount to £9. But under the recommendations of the Royal Commission, with the deductions and allowances, they would have to pay a tax at 3s. on £108, or £16 4s. in all, which is an additional penalty of £7 4s., or nearly double. Therefore the recommendations of the Royal Commission which the right hon. Gentleman is going to adopt, not only do not abolish the marriage tax, but discourage marriage by placing an extra penalty on the marriage bond.
    This is not only an unjust tax, but I believe that it is an illegal tax. Before 1882 the Inland Revenue certainly had an excuse for treating a woman's income as part of her husband's income. The Married Woman's Property Act had not passed then. Before that Act was passed the woman on marriage lost the whole of her property in whatever she possessed. The whole of her property was treated as the property of her husband. But the Act of 1882 definitely laid down that the pro fits accruing to a wife should be her sole property. I have never heard the Chancellor of the Exchequer answer that case. I believe that under the law as it stands to-day, as the wife's income is her own—
    Mr. DEPUTY-SPEAKER (Mr. Whitley): If that be so, the hon. Member is out of Order.
    Mr. LOCKER-LAMPSON: I am only suggesting that it seems to me that the Inland Revenue in dealing with this tax is evading the provisions of a Statute. I will not proceed with that argument. I submit that the right hon. Gentleman ought to make very close inquiries from the Law Officers of the Crown in regard to the attitude of the Inland Revenue in this respect. It is perfectly ridiculous when you consider that women are nearly half the electorate and are able to sit in this House, vote on Finance Bills and tax the people, that the identity of their pro-

    1151
    perty should be completely wiped out. The Chancellor of the Exchequer will say, I am sure, that if he accepts this Amendment it may cost a great deal of money. I need not repeat the old argument that the greater the cost the greater the injustice it means. By the cost you practically measure to a penny the present injustice of the marriage tax. The Chancellor of the Exchequer has made a note—
    Mr. CHAMBERLAIN: What do you tell me, because I have not made it yet?
    Mr. LOCKER-LAMPSON: It is not quite the measure to a penny, because there will be evasions. But cannot he save what might be lost in this way by cutting down public expenditure of various kinds—for instance, cutting down superfluous labour exchanges, or dealing with the Super-tax. Super-tax payers might not like to have to bear the burden of course, but I am quite certain that the cost could be met by existing Super-tax payers. If my right hon. Friend tells me it would lead to evasions, I might suggest to him a way of preventing it. At present, in dealing with the death duties, you prevent evasion by saying that if somebody, within a certain period of his death, hands over property to another person in order to escape death duties, that property shall bear the tax. In the same way it would be perfectly easy, if a wife or a husband chose to hand over property to another in order to evade a certain proportion of the tax, to say that, except on a limit of ten years, the tax should be borne by that portion of the income which was handed over.
    9.0 P.M.
    I do not believe there is any difficulty in that at all. If the Chancellor of the Exchequer replies unfavourably, I intend to go to a Division. One is liable to misconstruction. Before this Debate I was told in the Lobby that if I went to a Division my attitude would be misunderstood, that people would say I was doing it merely for the sake of the rich. One may be misunderstood, but one cannot help it, and one must take the risk. This tax is an intolerable anomaly. I will not allude again to the words of the Financial Secretary. He said a year ago that it was an intolerable anomaly. I should very much like to ask the Chancellor of the Exchequer now, that I have him and
    1152
    the Financial Secretary together, whether he agrees with the Financial Secretary that it is an intolerable anomaly. I am quite certain that the agitation in this House and outside will not cease until this injustice has been wiped off the Statute Book.
    Mr. ATKEY: I beg to second the Amendment, and I hope that the Chancellor of the Exchequer on this occasion will give a more sympathetic reply than those we have hitherto had from him. Whatever point of view one may take with regard to this particular tax, it can be described as my hon. Friend has described it as a penalty tax, surely there is no justification whatever for it. The cynic, I suppose, would say that marriage in itself is a sufficient penalty without an additional tax, while on the other hand those who take the opposite view would surely desire to impress upon the Chancellor of the Exchequer the necessity of a rebate to those who decide to enter into matrimony. There is one point of view which, if it does not impress itself upon the Chancellor of the Exchequer to-night, will certainly do so before very long. It arises from the circumstance that we in this House are now dominated by the voice of the sex which feels most resentful with regard to the imposition of this penalty. The number of women who are affected by this tax is growing year by year. Even before the War there were large numbers of women who were going into business and commercial life and the War has increased their numbers very largely. That section of the electorate will certainly resent having to suffer the payment of an additional tax if they decide to get married. I hope, therefore, that the Chancellor of the Exchequer will assure us that there is to be some redress for this intolerable state of affairs and that he will give practical effect to the excellent sentiments of the Financial Secretary to the Treasury.
    Mr. CHAMBERLAIN: It will perhaps be for the general convenience if I state at one the attitude of the Government towards this proposal. I recognise the sincerity and the depth of feeling with which my hon. Friend speaks upon this question. I have to admit that I differ from him in principle and fundamentally as to where justice lies. As a preliminary, may I try to clear up a misconception which has, I think, underlain

    1153
    some previous speeches of my hon. Friend? It seemed to me to betray itself, though to a lesser extent, in his speech to-night. But it was obvious in the speech of the Seconder. The hon. Gentleman, who had, I think, given an imperfect study to the question, appeared to think that it was a question as between women and men, and colour was lent to that by the Mover of the Amendment, when he suggested that because there was only one woman on the Income Tax Commission and because out of a great number of witnesses who gave evidence on an immense number of questions only a very few were women, therefore the report of the Commission was biased and prejudiced, and not a document behind which the Chancellor of the Exchequer ought to shelter himself. Whatever else this question is, it is not a question as between women and men. It is a question between married people and people who are not married, or between married people where the fortune available for the establishment is divided between husband and wife, and married people where the fortune is wholly in the hands of one or the other, one party either earning or bringing in investments in the form of acquired capital, whilst the other party brings in a pecuniary addition to the resources of the household. I think a great deal of prejudice would be removed if we could get that clearly into our minds. It is not a sex question.
    My hon. Friend repeated an argument which I have heard him address to the House on several occasions, and to which I have replied, that this is an infringement of the Married Women's Property Act. It is nothing of the kind. My hon. Friend is usually very clear-headed, but he is so biased by his strong feelings on this subject that his usual clarity of thought deserts him. The Married Women's Property Act enabled the wife to hold property in her own control instead of having her property under the control of her husband. There is nothing in the Income Tax to alter that or to diminish the right of the wife in any respect whatever. What it does say is that where there is a married couple living together, whatever the incomes of either of them, each shall be assessed on the scale appropriate to the joint income of the two. The husband in the normal way is called upon to make the return, and he obtains the necessary information from his wife to
    1154
    enable him to fill it up. The wife is entitled to demand that she shall be separately assessed, and she can be separately assessed. Similarly, the husband is entitled to demand that he shall be separately assessed, and he can be separately assessed. There is no question of a compulsory assessment on one for the two if they demand separate assessments, but the rate of assessment is appropriate to the joint income, and that is the real issue between us. I hope that I have made my argument clear on this occasion, and that my hon. Friend will see that it is no infringement of the Married Women's Property Act and does not run counter to the decision of the Legislature at that time. I do ask the House to consider the Report of the Royal Commission upon this subject. I must trouble the House with some quotations. In paragraph 256 they say:
    "We feel that the demand of those who favour this change is in effect not so much a demand for separate assessment or separate recovery of the tax—this"—
    as I have just explained—
    "they can have under the existing law—as for a diminution of Income Tax liability on the ground that part of the joint income assessed happens to belong to the wife. There are two methods of recognising, by diminished taxation, the obligations of marriage. One is to make an allowance, a wife allowance or marriage allowance, from the joint income. This wife allowance is already granted under the present law, and we have made proposals"—
    which the House will remember the Government have adopted—
    "which will in effect increase it considerably. The other is, by a complete severance in the treatment of husband and wife for Income Tax purposes, to effect a differentiation the results of which will depend entirely"—
    I would ask the House to note this—
    "on the particular manner in which a given income chances to be distributed between the two members of the household. The first method, seeing that it affects every married couple, is far more likely than the second"—
    which is the method of my hon. Friend—
    "to encourage marriage."
    I omit some words, and I continue in para. 257—
    "It seems to us that it would be quite illogical, under the same system of taxation, to make an allowance which recognises the joint responsibilities of husband and wife, and at the same time to grant relief to each of the parties to the union as though they were complete strangers. If separate assessment were granted, the marriage allowance should equally be abolished"—

    1155
    I think that is common ground—
    "and the result would be"—
    Again, I call the attention of the House to this—
    "a shifting of burdens from the rich to the poor, because in the vast majority of cases the wife has either no separate income at all or a separate income less than the amount of the present marriage allowance, and far
    less than the allowance we suggest should be made,"
    and which the Government propose to make. Under these circumstances the Commission, who gave a great deal of time and attention to the subject and considered with the utmost care all the arguments put before them, conclude:
    "We therefore recommend that the aggregation of the incomes of wife and husband should continue to be the rule."
    My hon. Friend will see that at any rate I have the support of the Commission, to whose ability and care, and to whoso work on every other point he paid a tribute. Does he not think it conceivable that the Commission may be right even where they disagree with him, since they are right and since he so readily
    recognises the care and attention that they have given to these matters? The Commission have made an increased re cognition of the responsibilities which marriage and fatherhood or motherhood bring. I think that they were inadequately recognised before, and I am very glad to adopt the recommendation of the Commission for an increased recognition of them. The result is that one of my hon. Friend's arguments has really lost its force to a great extent. It is quite true that at one stage last year I pleaded, almost incidentally, that in any case I could not forego the revenue which would be involved by the adoption of the proposals he then made, and that I must at least wait till the Report of the Royal Commission was received before taking any steps in the matter. If I now made the change which he asks me to make, the result would be, with the increased marriage allowances, that the revenue would not be a loser but a gainer. I should lose immediately some £18,000,000, but I should save on the marriage allowances £20,000,000. I should lose, as the Commission point out, on the rich, but I should gain at the expense of the less wealthy. I do not mean to say that is universal. The hon. Member takes the case of two people living separately, and
    1156
    says that when they marry such and such a result follows, but he never considers the case as between different married couples. That is the difference between us. I am considering it as a question of the taxation of married couples in the first place, and there he will see that the statement that I have made that his proposal would relieve the rich and penalise the poor among Income Tax payers is amply borne out by the Report of the Commission.
    I will take some illustrations of my argument. Let me take, first, some cases of large incomes, cases where the joint incomes belong equally to the husband and the wife. I must in these cases take Income Tax and Super-tax together to get the true effect of the Royal Commission's proposals as contrasted with my hon. Friend's proposals. Suppose the joint income of husband and wife be £3,000, of which each has half, the Super-tax under the Budget scheme is £87 and the Super-tax under my hon. Friend's proposal would be nothing. If they had £4,000 equally distributed between them the Budget Super-tax would be £212, and it would be nothing under my hon. Friend's proposal. If they had £6,000, the Super-tax under the Budget scheme would be £537 and under his proposal it would be £174. There is a gain to married people with a joint income of £6,000, of which each have half, of £363 per year. If the joint income were £8,000, the gain would be £538, and if it were £10,000 the gain would be £738. The House will observe that as their income rises the relief under my hon. Friend's proposal is greater. Let us look at some of the smaller incomes. Take what is the far commoner case amongst the smaller incomes of the married couple, where the husband is making all the income and the wife has none. In that case, the wife having no income, the husband gets the advantage of the marriage allowance. If his total income earned is £200, then under the Budget proposals he pays nothing, and under my hon. Friend's proposal he pays £6 15s. If he has £250 to maintain himself and his family he would pay nothing under the Budget proposal, and under my hon. Friend's he would pay £13 10s. If his income is £300 per year, under the Budget he pays £6 15s., and by the alternative scheme, £20 5s. If his income is £400, under the Budget he would pay £20 5s., and under the

    1157
    alternative, £33 15s. If his income is £500, under the Budget he would pay £33 15s., and under the alternative, £60 15s. With an income of £700, under the Budget he would pay £87 15s., and under the alternative, £114 15s. If his income is £1,000, under the Budget he would pay £168 15s., and under the alternative, £195 15s. Surely that does not make the taxation fairer.
    Mr. LOCKER-LAMPSON: I wish the right hon. Gentleman would deal with the case of the penalty on marriage.
    Mr. CHAMBERLAIN: It is common ground that husband and wife will pay more when living together as married people than they would pay if they lived separately unmarried or if they lived together. I am dealing now with married people and with the contrast between the two proposals as they affect married people among themselves. Nobody I think can doubt that the Budget proposals are much fairer to married people than the alternative suggested by my hon. Friend. I have shown by example that in the larger incomes where the income was half owned by wife and husband my hon. Friends proposal would give relief from the taxation which the Budget imposes, but where the income was on a smaller scale and wholly earned by the husband, and it would be equally true if wholly earned by the wife, and where the incomes ranged from £200 to £1,000 in every case the Budget proposal is more favourable to these small taxpayers than my hon. Friend's. The number of cases where the total income of husband and wife does not exceed £800, and where the wife has no income is estimated at 2,200,000, and in those vast number of cases the proposal put forward by my hon. Friend would involve an additional tax imposed on people quite unable to bear it, and imposed, I will not say in order to give relief, but with the effect of giving relief to people with a much greater capacity to pay. Therefore in both directions in effect the change would be to make the tax obey less closely than it does now the test of ability to contribute to the revenue.
    Let me give one other illustration of the effects of my hon. Friend's proposal. Take the case of three households side by side inhabited by three married couples, and let us assume that for each household
    1158
    there is an income of £400. In the first house the income is all earned by the husband, and in the second house all earned by the wife, and in the third house it is derived from investments, or what we have been accustomed to call unearned income, and in their case it is equally divided between husband and wife, each of them drawing £200 per year from investments. In two of the houses the income is dependent on the continued earning capacity of the member of the household who is earning it, and in the third house the income is derived from investment which would presumably continue, and which would be independent of the life of the possessor. Which of those three households, if there be any distinction, has the greater capacity to pay? Surely it is the household which derives its income from investment and an income independent of the life or exertions of the possessor. Let us see how the Budget and my hon. Friend's proposal affect the two. Under the Budget proposal the tax payable by the two members of the household who derived £200 each from investment is £26 5s., as compared with £20 5s. in each of the other houses where the income is derived from earnings. Under my hon. Friend's proposal the household which I think is the one best able to make a larger contribution would be reduced from £26 5s. to £19 10s., and the two households in which all the income is earned would have their tax raised from £20 5s. to £33 15s. I have dealt with this subject at length, partly in deference to my hon. Friend's strong feeling on the subject, and partly because I know the subject is one which has evoked a great deal of interest in the House. I do not shelter myself behind any sum. I do not say I cannot afford the money to redress an injustice. I say boldly that the proposals in the Budget are much more just as between taxpayer and taxpayer, as between married couple and married couple, than the proposals of my hon. Friend. I say that the case which we deal with most leniently is the case which is commonest amongst the people of small incomes, and the case which he deals with most leniently, though that is not his object, the case that he relieves to a much greater extent, is the case in which there is the greater ability to pay.
    Mr. W. GRAHAM: I think it is not inappropriate that on this important topic at least one Member of the Royal Commission on the Income Tax should try to make plain the reasons which actuated us in arriving at this conclusion. I can assure the hon. Member for Wood Green (Mr. G. Locker-Lampson) that we appreciate very highly the kindly reference which he made to the labours of the Commission. I should also say at once that I personally regret the fact that only one lady was a member of that Commission, a point for which none of us was responsible, but one which might have been remedied at an early stage and so have removed the only grievance which I think can be urged in this connection. On that point, however, I have no hesitation in saying to the House that it would be quite impossible to argue that women had suffered in the consideration of their claims as regards the Income Tax law and practice of this country. Very few women appeared as witnesses before the Royal Commission, but the few women who did appear appeared at least in a number of cases as representatives of organisations of women, and claimed to speak for hundreds of thousands of the women of this country, and framed a programme which we have every reason to believe was the result of the deliberations of their societies. I think it is my duty to make also this statement, which may be by no means agreeable to many Members of this assembly. Many of us on these Benches have fought in season and out for Women Suffrage, for the rights of women in public life, and we will not be accused of doing anything which would penalise either married or unmarried women in this country. I think it fair to say, however, and I believe I am expressing the opinion of nearly all the members of the Commission on the Income Tax when I urge that the women witnesses were on the whole disappointing, and at least one of the witnesses made statements which would not bear examination and which did no service at all to the cause which she was sent there to promote.
    We are grateful to the right hon. Gentleman for making it perfectly clear that under the existing system each spouse may elect to be separately assessed, and in the second place if a business is carried on there is power to make a separate claim for abatement or
    1160
    exemption up to a general limit of £500 as regards the total income. That seemed to us in the Royal Commission—and I remember the state of our minds well— to be as far as we could possibly go in the recognition of this claim, because, it led on to what was really the kernel of this controversy, which amounted simply to a claim from the point of view of citizenship. Five times out of six, the consideration which was advanced was that of citizenship and the right of women to what was thought to be their protections and safeguards in keeping with what we may call the development of British law from the point of view of the Married Women's Property Acts and kindred legislation. That is clearly what was in the minds of many of the advocates of this movement, and when we have regard to the fact that a separate assessment is possible and that that applies in regard to the exemptions and abatements to business, we felt we had already conceded the principle of citizenship and that on that head we could not carry our concession any further. I want now to try and refer to one or two of the arguments which were used. I think it unnecessary to debate the financial side of this proposition, because the Chancellor of the Exchequer has put exactly what was in our minds. I have not the least hesitation in saying that the adoption of my hon. Friend's proposals would penalise the comparatively poorer people in this country and would lead to a state of affairs which would confer in the long run no real advantage even on the class which he has particularly in mind.
    A very curious argument was used It was argued by one of the witnesses on behalf of the Women's organisations that the effect of the present system was to compel a comparatively large class of people in this country to live in a state of immorality for the purpose of evading Income Tax. I am sure hon. Members will agree with me that in cross-examination a proposition of that kind was bound to break down, but I mention it here in passing to show the temper and disposition which actuated a good deal of this campaign. We are all engaged in tasks of social amelioration, and we do not want, either from the side of law or of taxation or anything else, to perpetuate a system which is going to give rise to immoral conditions in this country, but I suggest that an argument of that kind

    1161
    really does not apply. If people prefer or wish to live in that state, all the taxation of all the world, or of any country in the world, will not prevent it, and I should say the influence of a consideration of this kind on that particular problem is practically negligible. In the second place, what did the representatives of the women's organisations say? They said that this tax penalises marriage. I may be, and I rather think I am, a very stupid Scotsman, but I am quite sure of this, that if two people genuinely love one another, all the taxation in the world will not keep them apart, and I am quite satisfied also that the incidence of the Income Tax has very little influence on the number of people who get married in this country, either before they are married or after the marriage itself takes place. The real problems affecting marriage are very different They are problems of remuneration, and above all, of housing, and of a prudent Scottish caution which I wish were better recognised south of the Tweed. In this connection the argument really did not hold water What did we do? We raised the limit for married people to £250, and I think I can give a kind of popular explanation of the position of the Income Tax on married people with two or three children in this country when I say that they will have, with two or three children, approximately between £350 and £400 before they are liable to be taxed at all. We on these Benches—and I desire to make this plain—stand firmly by direct as opposed to indirect taxation, and it is only logical on our part to say, immediately following that argument, that we should prefer an In-come Tax at an even lower limit but for the fact that we are compelled to safeguard a standard of life for the great body of the population in this country, and that we require to apply that to direct as well as to indirect taxation. That is our position. I think on the whole—and I believe I express the mind of the great majority of the Members of the Labour movement—the Royal Commission has been very generous in this respect. I think, in existing circumstances, we have gone as far as it was possible to go, and, having done so, we have to a very real degree met the case of my hon. Friend—a case which, I admit, he put with great ability and great sincerity—so far as we humanly and possibly
    1162
    can. In the third place, may I direct attention to a very curious contradiction on the part of witnesses for separate assessment. They argued very strongly for the individual rights of husband and wife, but the very same people who made that proposition asked for increased allowances for the children, thereby recognising the joint obligation so far, and, having pleaded in that connection, some of us did not understand why they should seek to rule out entirely what we may call the major proposition in this problem.
    There is one question which I am going to put in conclusion. This agitation is not an agitation of revenue at all. It is partly an agitation of history and partly an agitation of an artificial kind in a sort of controversy between the sexes. I read an article in a review which said that the aim of this campaign, added to all the other campaigns which were being carried on, was to free the married woman from what this writer termed "mediæval subordination." I think that is a quite good cause, and it is one which we certainly support, but we are not going to lift people from mediaeval servitude or subordination by a few pounds per annum under the Income Tax Law of Great Britain. I think a race of free wives depends on education, on social improvement and economic law. These were the things which were in the minds of all the members of the Royal Commission, and this proposition found support only from the one lady member and from one other member of that very representative body. I think we have applied our minds to it fairly, and I think I can say also that the Labour movement stands behind the Chancellor of the Exchequer in this matter, because we believe that, on balance, his proposals are much more just and much fairer than the proposals of my hon. Friend.
    Mr. PALMER: I should not have intervened in this Debate but for the fact that I have somewhat recently been in touch with a constituency in which this question largely exercised the minds of the married women. I need not say that I have been very much impressed with the arguments of the hon. Gentleman who has just sat down, but I take the view that we are claiming, not a matter of Treasury expediency in the raising of taxation, but we are standing for what I may call social justice and the equality of woman with man. I do most sincerely feel that

    1163
    we have no right to penalise a woman because she is married. The Chancellor of the Exchequer denied my hon. Friend's contention that this was an illegal impost, but I would, if I may, quote to him the terms of the Married Women's Property Act, and contrast it with the terms of the Income Tax Act under which he is electing to put on this impost. The Act—and I think it was the first charter of the women, and one which they are not going lightly to give up, even for Treasury ex-pediency—says:
    "Every woman who marries after the commencement of this Act shall be entitled to have and to hold as her separate property all the real and personal property which shall belong to her at the time of marriage, or shall be acquired or devolve upon her after marriage."
    That is a very explicit statement of the right of the woman to separate treatment and to have and to hold property which belongs to her. Against that we have the Income Tax Act which, in a humiliating clause in my opinion, declares that
    "The profits of a married woman living with her husband shall be deemed to be the profits of the husband, and shall be assessed and charged in his name and not in her name or in the name of her trustee."
    Those two quotations show where we opponents of this stand. We stand on the question of social justice, and I say it is a wrong thing at this time of day that you should say to a woman, "If you choose to get married you shall cease to have your own identity in the property you hold, and you must throw it in with that of your husband, and we shall assess you on the whole amount." I read in the Income Tax Commission's Report that what guided them is ability to pay. If you are going to have ability to pay as a test, I could point out hundreds of houses in this country where there are rich sons and daughters with incomes, and fathers with good income too. Do we ever suggest that all their incomes should be lumped together? What a gorgeous Super-tax you would get from many of the big homes. It is only where the married woman is concerned that this preposterous proposal is put forward by the Chancellor of the Exchequer, and the hon. Gentleman who has just sat down quite rightly sneered in his Scottish way—if there is anything offensive in that, of course it was not intended—let me say in his Scottish humour he threw aside the idea that there was any possibility of
    1164
    people who love one another not marrying because of the tax. Anyone who has anything to do with social work in this country knows very well the great difficulty to-day in getting certain classes of people to go through the ceremony of marriage.
    Let me quote what an hon. colleague of the Chancellor of the Exchequer said on this subject a year ago. I refer to the Secretary to the Treasury. I am not surprised at any change of view. We shall hear very likely later on to-night some quotations from what was said about the Excess Profits Duty, and we shall see how; easy it is for right hon. Gentlemen and hon. Gentlemen on the Treasury Bench to forget their words. This is what the Secretary of the Treasury said only a year ago:
    "I agree freely as an individual, and as a married man, that there is a great deal to be said for the case that has been presented to-night. It has always been an intolerable anomaly to feel that, so far as taxation is concerned, it would be cheaper to live with a woman who was not your wife than with a woman who was. That is an intolerable anomaly."
    I hope the hon. Gentleman will stick to that. It is my opinion and the opinion of many of those who support my hon. Friend in his Amendment. I hope some better reasons will be given for this tax than the fact that it brings in a certain amount of money. More money will not do away with a great social injustice that married women should be treated differently from other women. It is a social injustice. The great charter that the women received through the Married Women's Property Act you are taking away by the present scheme and saying that the woman is still a chattel of her husband by lumping their earnings together, whatever they may be. I ask the House to mark its sense of their feeling in this matter by supporting my hon. Friend in the Lobby if he carries his Amendment to a division.
    Sir F. BANBURY: I did not hear my hon. Friend opposite (Mr. Locker-Lampson) speak to-night, but I have heard him on this subject before, and I have always found his statements were very accurate, and carried very great weight, to my mind at any rate, and I have not any doubt that he has repeated his arguments again this evening. I listened very carefully to the statement made by the Chancellor of the Exchequer

    1165
    against accepting the proposal of my hon. Friend. Whatever the reason I do not know, but I could not follow his arguments. The object of this Amendment is to provide that where a man and a woman, married, each have an income of their own—I do not for the moment go into the question of whether it is earned or unearned—those incomes should be assessed separately. I fail to see how the argument of my right hon. Friend that this would act hardly upon poorer people can be maintained. For the sake of argument, suppose that a man has an income of £300 a year and marries a woman with £100 a year. The instances that were taken by the Chancellor were always instances where the amount of the income was the same in each case; but there are many instances where they are not the same. The amount of the husband's income may be £900 and that of the wife £200. This brings them over the £1,000 limit. There are all sorts of instances of that sort with which the Chancellor did not deal. I fail to see why, because a man with £200 a year marries a woman with £200 a year, that that income should be assessed as one. This is really an important matter. If there are any exceptions they could be dealt with in the Finance Bill. Yet at the same time the Chancellor could accept the Amendment of my hon. Friend.
    The reform advocated would not bring about any of the terrible things which the Chancellor of Exchequer fears, with one eye on the party opposite. Supposing it did? What we have to consider is whether the thing is right or wrong. We have not to consider whether a man who happens to be working with his hands will lose a little, or whether the man who happens to be working with his brains will gain a little. What we have to aim at is a right and a just tax. If you are going to take the question of the ability to pay where will you stop? There are a large number of hon. Members opposite who consider—well, who did consider, I think!—that £400 a year was a sufficient income. I understand now they think that on the whole £600 is a better. There have been suggestions lately for an increase of the salaries of hon. Members. Supposing the salary is raised to £800. Then is it the idea of hon. Members opposite that if the ability to pay is compared with the greater ability to pay of a man in receipt of £8,000 a year that you should take
    1166
    from that man £7,200 and leave him as the others, with the £800 a year? We may come to this if we proceed upon the argument of ability to pay.
    Three instances were taken by the Chancellor of the Exchequer. He spoke firstly of an earned income by the husband of £400 a year; secondly, of an earned income of £400 by the wife; and in the third case, the £400 was unearned income derived from investments, part of which belonged to both. He suggested that it was quite right to apply the higher plane of taxation to the third case. I think he is quite wrong. All investments and unearned income, so-called, are the result of saving, and what is it we want at the present time if not to encourage saving? The income for investments is the result of savings, and savings made probably during a life of hard work. It may be that both husband and wife instead of going to cinemas and smoking—and I am sorry to say that women smoke nowadays—instead, I say, of spending their money on amusements, they saved in order that there might be something for their old age. They did not come, and say: "Let the State provide us with old-age pensions." They saved, and that is the proper thing to do. I think they ought to be taxed less, if there is to be any difference, than other people who spent their money.
    10.0 P.M.
    After all, to what does this amount? The real reasons is that a certain amount of income will be lost. If the income is wrongly taken why should it wrongly taken why should it not be lost? The hon. Member opposite (Mr. Graham) said it was absurd to think that people who were in love would be deterred from marriage by this particular tax. If a man marries a woman why should he be taxed differently to what he would be if he lived with that woman without marriage. The ability to pay may be exactly the same in both cases, and that is a point you cannot get over. It is said that the burden would fall more upon the rich than the poor. In a great many cases the rich man has got this world's goods by hard work, or by common-sense in keeping that which his father left him. The only other argument I heard advanced was that the Royal Commission on the Income Tax decided against what is now proposed in this Amendment.

    1167
    Of course, it is not for me to call in question the decisions of a Royal Commission. No doubt they gave great care to their considerations. I do not attach very great importance to the fact that there was only one woman on that Commission. It should be equally right and just whether women were on the Commission or not, but the Commission heard what the women had to say from their point of view. I do not think, however, it follows that the Commission were a divine body, and that their decisions should not be criticised. They have issued a very voluminous document. I have not read it all, or even any very great part of it, but I cannot understand the fashion of Governments shelving their responsibility on Royal Commissions, and treating them as something sublime whose decisions can never be ignored. I do not believe the decisions of Royal Commissions are any better than anybody else's decisions. They come to conclusions, some of which may be right and some of which probably are wrong. I hope my hon. Friend will go to a Division, and if he does I shall have great pleasure in supporting him.
    Mr. BILLING: The one point which I thought the right hon. Baronet who last spoke would have made was that in the opinion of the majority of Members who watch the deliberations of Royal Commissions, those bodies are generally appointed by a Government which wishes to bury a rather difficult topic. If there is any serious opposition to anything a Government proposes to do, a Royal Commission is usually appointed, and, after that body has given its verdict, nothing more is heard of it. Royal Commissions, be it remembered, are appointed by the Government themselves, and really we ought not to take seriously the verdict of judges appointed by the prisoner in this or any other matter. The Committee, in this question of Income Tax, gave a great deal of time and attention to the particular subject now under consideration, and in their report they say:
    "We have considered with the utmost care all the arguments that have been put before us, and we have been forced to the conclusion that the grievance complained of is more vocal than real; in other words, that it is a grievance rather than a hardship."
    I do not know whether any members of the Royal Commission happen to have incomes of £400 a year. It is quite
    1168
    possible they may have done so. But I believe there were 26 members, one only of whom was a woman, and she is entitled to say that with respect to the financial load the two sexes were not equally represented. Let us assume for one moment that they were dealing with a case in which the income was £400 a year. Let us assume that a man with £400 a year decides to take in matrimony a lady also with an income of £400 a year. Before marriage the amount of income tax which these two paid was £78 6s. per annum. The day after they were married—and I seriously submit this to the Treasury—the day after they had taken on responsibilities which cannot lightly be undertaken, and which if lightly undertaken bring with them their own burdens, responsibilities which if not undertaken will conduce to the suicide of the race, responsibilities which therefore ought not to be penalised, but which they should be rather encouraged to undertake—the day after they have undertaken these responsibilities, the tax upon their joint income, instead of being £78 5s. per annum, amounts to £125 l1s.! Can any Chancellor of the Exchequer come to that box and tell the House of Commons it is sound policy, either socially or financially, to tell a young man and young woman who contemplate entering for the matrimonial stakes in the interest of the nation—for I would remind hon. Members that the Prime Minister himself has said that the capital of the State is in its good citizens—that they will be specially taxed? Can the right hon. Gentleman suggest that when two people desire to enter into matrimony they should, because of their wish to produce good citizens, be taxed to the extent of £47 5s. per annum, or approximately a 5 per cent. increase of taxation? It is unfortunate, to say the least of it, that such an argument should be advanced. If we were not led aside by various other conflicting interests, but applied ourselves to this one question of joint Income Tax, and if we were free to vote as our hearts and our reason dictate, the Government would lose in the Division Lobbies to-night. I understand that the hon. Members of the Labour Party rely entirely on their £400 a year, but assuming they were fortunate enough to find a lady who not only possessed all the charms they desired, but also an income of £400 a year, their tax would be increased by £47 5s. per annum. The Chan-

    1169
    cellor of the Exchequer says, "Look at the rich people," but surely there are other ways of getting their money than by penalising the unfortunate middle class, who are the backbone of our race, and who, between capitalist attacks on the one side and labour attacks on the other, are being squeezed almost flat on a hopelessly inadequate income. They are the people who pay every time, and they are very inadequately represented in this House. They do not organise and have no unions. Any union they have ever attempted, so far as we have seen, has not proved politically successful. They cannot threaten to withdraw their labour. Probably hon. Members on the Labour Benches here would consider it to be of little value. [HON. MEMBERS: "No, no! We welcome it."] I am glad to hear that we have at least that admission, that it is not only the person who soils his hands who labours in this country to-day. [An HON. MEMBER: "They are our principal supporters."] If that is so, why are not the Labour Members supporting them?
    These people often have four or five sons, to whom they are endeavouring to give the education they enjoyed themselves, and which could be enjoyed to-day were the purchasing power of the pound different from what it is. We have got to a stage when it is the grim necessities of life that count. The prices of essentials have been raised so much in the last two or three years that there is a class in this country who are up against the question of the grim necessities of life, which they never expected to have to face. What does it matter to the man with £20,000 or £30,000 a year whether he pays an extra £1,000 or £2,000 because his wife has an income too? But if a man has only £400 a year, to tax him to the extent of 10 per cent. extra on that because he decides to get married is penalising marriage, and is a most unjust and immoral tax. I hope we shall find sufficient hon. Members in this House to show the Government that there is a determination among them, whether they be rich or poor, to take the part of the new poor in this country to-day. and to do what they can to represent that great unorganised class which has done so much in the past for this country and to whom we look for stabilising our industrial state. The class of people penalised by this are penalised by every other form of legislation which has been
    1170
    introduced. They are penalised because they have no representatives here. Whether it be in housing or in any other matters, no provisions are made for this class. They have to look after themselves. I ask Labour Members not to support the Government on this tax simply because they think they are getting money out of the rich. If they want to get money out of the richer classes, why cannot the Chancellor of the Exchequer make a limit of £1,000? Why cannot he say he will not tax joint incomes unless they exceed £1,000 or £1,500, which is the equivalent of £600 to £800 before the War? Why cannot the Labour Members insist upon his making that joint income exempt? I appeal to what representatives of the Labour party are present to remember that they themselves enjoy a salary which may subsequently be penalised by this new tax, and that there are a vast number of men and women who are really suffering to-day, who have no spokesman in this House, who have no strike with which to threaten a very nervous Government, to say the least of it, who have no power to bring pressure to bear on the Government. I am perfectly confident that if the leaders of the Labour party told the Government point blank that if they proposed to go on penalising the marriage of the middle classes they would call a general strike, the Government would capitulate within 24 hours.
    Mr. T. GRIFFITHS: I want to ask if I put a question down, will the Financial Secretary to the Treasury supply the figures given by the Chancellor of the Exchequer as compared with the figures given by the hon. Member (Mr. Locker-Lampson), and then we shall be able to make comparisons instead of listening to the repetition of speeches?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): Of course, any specific question the hon. Member likes to put down will be answered. I will confer with my right hon. Friend to see if it is possible to make any statement of the nature he desires. The figures given by my right hon. Friend to-night will be found in the OFFICIAL REPORT to-morrow.
    Sir W. DAVISON: Before we go to a Division, I desire to say on behalf of a large number of people of this country that I consider this tax an unprincipled tax, not only because it is a tax upon

    1171
    marriage, but because it is devoid of principle. You must make up your mind whether you are going to tax the individual or the family, and follow one or other of these principles throughout. We had an extremely interesting speech from the Chancellor the Exchequer, but the arguments that he used with regard to married couples apply equally to two brothers or two sisters living together, or to a man and woman living together who are not married. Therefore, they can all be discounted for that reason. One other point which shows how unprincipled this tax is is this: either a man and a woman who are married retain their individuality or else they become one person for the purpose of taxation. You
    cannot have it both ways, but the Chancellor of the Exchequer does have it both ways for the purpose of taxation. He says that for the purpose of Income Tax and Super Tax the income of a man and his wife are to be added together; but no sooner has the breath of that woman passed out of her by death than the Chancellor of the Exchequer says to the husband: "This is not the same person as you having the same income; you must pay Death Duty on the property of this person." This is entirely devoid of principle, and I hope the House will reject it.
    Question put, "That those words be there inserted."
    The House divided: Ayes, 96; Noes, 203.

    Division No. 94.]

    AYES.

    10.23 p.m.]

    Atlair, Rear-Admiral Thomas B. S.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Oman, Charles William C.

    Archdale, Edward Mervyn

    Harbison, Thomas James S.

    Palmer, Charles Frederick (Wrekin)

    Atkey, A. R.

    Harmsworth, Hon. E. C. (Kent)

    Pinkham, Lieut.-Colonel Charles

    Banbury, Rt. Hon. Sir Frederick G.

    Hayward, Major Evan

    Ramsden, G. T.

    Barnes, Major H. (Newcastle, E.)

    Hilder, Lieut.-Colonel Frank

    Redmond, Captain William Archer

    Barrand, A. R.

    Hinds, John

    Rees, Capt. J. Tudor- (Barnstaple)

    Barrie, Charles Coupar

    Hoare, Lieut.-Colonel Sir S. J. G.

    Remnant, Colonel Sir James F.

    Billing, Noel Pemberton-

    Hotchkin, Captain Stafford Vere

    Renwick, George

    Bowyer, Captain G. E. W.

    Johnson, L. S.

    Richardson, Alexander (Gravesend)

    Breese, Major Charles E.

    Jones, Sir Evan (Pembroke)

    Samuel, Samuel (W'dsworth, Putney)

    Brittain, Sir Harry

    Jones, G. W. H. (Stoke Newington)

    Scott, A. M. (Glasgow, Bridgeton)

    Burn, Col. C. R. (Devon, Torquay)

    Jones, Henry Haydn (Merioneth)

    Seddon, J. A.

    Campbell, J. D. G.

    Kenyon, Barnet

    Smith, Sir Allan M. (Croydon, South)

    Cecil, Rt. Hon. Evelyn (Birm., Aston)

    Kiley, James D.

    Sprot, Colonel Sir Alexander

    Child, Brigadier-General Sir Hill

    Kinloch-Cooke, Sir Clement

    Sugden, W. H.

    Colfox, Major Wm. Phillips

    Knights, Capt. H. N. (C'berwell, N.)

    Surtees, Brigadier-General H. C.

    Colvin, Brig.-General Richard Beale

    Lane-Fox, G. R.

    Sykes, Sir Charles (Huddersfield)

    Coote, Colin Reith (Isle of Ely)

    Law, Alfred J. (Rochdale)

    Terrell, Captain R. (Oxford, Henley)

    Coote, William (Tyrone, South)

    Lister, Sir R. Ashton

    Thomas-Stanford, Charles

    Cory, Sir C. J. (Cornwall, St. Ives)

    Lloyd, George Butler

    Warren, Lieut.-Col. Sir Alfred H.

    Cory, Sir J. H. (Cardiff, South)

    Lyle-Samuel, Alexander

    Wheler, Major Granville C. H.

    Curzon, Commander Viscount

    MacVeagh, Jeremiah

    Wigan, Brig.-Gen. John Tyson

    Davies, Major D. (Montgomery)

    Magnus, Sir Philip

    Willey, Lieut.-Colonel F. V.

    Davison, Sir W. H. (Kensington, S.)

    Mallalieu, F. W.

    Williams, Lt.-Com. C. (Tavistock)

    Entwistle, Major C. F.

    Mitchell, William Lane

    Wilson-Fox, Henry

    Finney, Samuel

    Moles, Thomas

    Winterton, Major Earl

    FitzRoy, Captain Hon. E. A.

    Moore, Major-General Sir Newton J.

    Wood, Sir J. (Stalybridge and Hyde)

    Glanville, Harold James

    Morris, Richard

    Young, Sir Frederick W. (Swindon)

    Goff, Sir R. Park

    Newbould, Alfred Ernest

    Young, Robert (Lancaster, Newton)

    Gould, James C.

    Newman, Sir R. H. S. D. L. (Exeter)

    Gritten, W. G. Howard

    Nicholson, William G. (Petersfield)

    TELLERS FOR THE AYES.—

    Guinness, Lieut.-Col. Hon. W. E.

    Nield, Sir Herbert

    Mr. G. Locker-Lampson and

    Hailwood, Augustine

    Norton-Griffiths, Lieut.-Col. Sir John

    Colonel Willoughby.

    NOES.

    Agg-Gardner, Sir James Tynte

    Brace, Rt. Hon. William

    Craig, Colonel Sir J. (Down, Mid)

    Archer-Shee, Lieut.-Colonel Martin

    Bramsdon, Sir Thomas

    Craik, Rt. Hon. Sir Henry

    Armitage, Robert

    Bridgeman, William Clive

    Davidson, Major-General Sir J. H.

    Astbury, Lieut.-Commander F. W.

    Briggs, Harold

    Davies, Alfred Thomas (Lincoln)

    Baird, John Lawrence

    Britton, G. B.

    Davies, Sir David Sanders (Denbigh)

    Baldwin, Stanley

    Bruton, Sir James

    Davies, Thomas (Cirencester)

    Balfour, George (Hampstead)

    Buchanan, Lieut.-Colonel A. L. H.

    Davison, J. E. (Smethwick)

    Barnett, Major R. W.

    Buckley, Lieut.-Colonel A.

    Dawes, James Arthur

    Barnston, Major Harry

    Bull, Rt. Hon. Sir William James

    Denniss, Edmund R. B. (Oldham)

    Bell, James (Lancaster, Ormskirk)

    Cape, Thomas

    Doyle, N. Grattan

    Benn, Sir A. S. (Plymouth, Drake)

    Carr, W. Theodore

    Edwards, C. (Monmouth, Bedwellty)

    Bennett, Thomas Jewell

    Carter, W. (Nottingham, Mansfield)

    Edwards, Major J. (Aberavon)

    Birchall, Major J. Dearman

    Cayzer, Major Herbert Robin

    Eyres-Monsell, Commander B. M.

    Bird, Sir A. (Wolverhampton, West)

    Chamberlain, Rt. Hn. J. A.(Birm., W.)

    Fell, Sir Arthur

    Blair, Major Reginald

    Coates, Major Sir Edward F.

    Flannery, Sir James Fortescue

    Blane, T. A.

    Coats, Sir Stuart

    Foreman, Henry

    Borwick, Major G. O.

    Cobb, Sir Cyril

    Forestier-Walker, L.

    Bowerman, Rt. Hon. Charles W.

    Courthope, Major George L.

    Forrest, Walter

    Boyd-Carpenter, Major A.

    Cowan, D. M. (Scottish Universities)

    Fremantle, Lieut.-Colonel Francis E.

    Galbraith, Samuel

    Locker-Lampson, Com. O. (H'tingd'n)

    Seager, Sir William

    Ganzoni, Captain Francis John C.

    Lorden, John William

    Sexton, James

    Gibbs, Colonel George Abraham

    Lort-Williams, J.

    Shaw, William T. (Forfar)

    Gilmour, Lieut.-Colonel John

    Loseby, Captain C. E.

    Short, Alfred (Wednesbury)

    Glyn, Major Ralph

    Lunn, William

    Shortt, Rt. Hon E. (N'castle-on-T.)

    Goulding, Rt. Hon. Sir Edward A.

    Mackinder, Sir H. J. (Camlachie)

    Simm, M. T.

    Graham, W. (Edinburgh, Central)

    McLaren, Hon. H. D. (Leicester)

    Smith, Harold (Warrington)

    Grant, James A.

    M'Lean, Lieut.-Col. Charles W. W.

    Smith, W. R. (Wellingborough)

    Gray, Major Ernest (Accrington)

    Macleod, J. Mackintosh

    Spencer, George A.

    Green, Albert (Derby)

    Malone, Major P. B. (Tottenham, S.)

    Stanier, Captain Sir Beville

    Green, Joseph F. (Leicester, W.)

    Manville, Edward

    Stanley, Lieut.-Colonel Hon. G. F.

    Gregory, Holman

    Martin, Captain A. E.

    Stewart, Gershom

    Greig, Colonel James William

    Matthews, David

    Strauss, Edward Anthony

    Griffiths, T. (Monmouth, Pontypool)

    Mond, Rt. Hon. Sir Alfred M.

    Sturrock, J. Leng

    Grundy, T. W.

    Moreing, Captain Algernon H.

    Sutherland, Sir William

    Guest, Major O. (Leic., Loughboro')

    Morrison, Hugh

    Swan, J. E.

    Gwynne, Rupert S.

    Mount, William Arthur

    Talbot, G. A. (Hemel Hempstead)

    Hacking, Captain Douglas H.

    Munro, Rt. Hon. Robert

    Taylor, J.

    Hamilton, Major C. G. C.

    Murray, Major William (Dumfries)

    Terrell, George (Wilts, Chippenham)

    Hartshorn, Vernon

    Myers, Thomas

    Thomson, T. (Middlesbrough, West)

    Hayday, Arthur

    Nail, Major Joseph

    Thomson, Sir W. Mitchell- (Maryhill)

    Hennessy, Major J. R. G.

    Neal, Arthur

    Thorpe, Captain John Henry

    Henry, Denis S. (Londonderry, S.)

    Palmer, Brigadier-General G. L.

    Tryon, Major George Clement

    Herbert, Dennis (Hertford, Watford)

    Parkinson, John Allen (Wigan)

    Wallace, J.

    Hickman, Brig.-Gen. Thomas E.

    Parry, Lieut.-Colonel Thomas Henry

    Walsh, Stephen (Lancaster, Inee)

    Hirst, G. H.

    Perkins, Walter Frank

    Walters, Sir John Tudor

    Hohler, Gerald Fitzroy

    Pickering, Lieut.-Colonel Emil W.

    Walton, J. (York, W. R., Don Valley).

    Hope, James F. (Sheffield, Central)

    Pollock, Sir Ernest M.

    Ward, Col. J. (Stoke-upon-Trent)

    Hope, J. D. (Berwick & Haddington)

    Pownall, Lieut.-Colonel Assheton

    Waterson, A. E.

    Hopkinson, A. (Lancaster, Mossley)

    Prescott, Major W. H.

    Wedgwood, Colonel J. C.

    Howard, Major S. G.

    Pulley, Charles Thornton

    Weston, Colonel John W.

    Hunter-Weston, Lieut.-Gen. Sir A. G.

    Purchase, H. G.

    Whitla, Sir William

    Hurd, Percy A.

    Rae, H. Norman

    Wignall, James

    Hurst, Lieut.-Colonel Gerald B.

    Raeburn, Sir William H.

    Williams, Aneurin (Durham, Consett)

    Irving, Dan

    Raw, Lieutenant-Colonel N.

    Williams, Col. P. (Middlesbrough, E.)

    James, Lieut.-Colonel Hon. Cuthbert

    Reid, D. D.

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

    Jameson, J. Gordon

    Remer, J. R.

    Wilson, Colonel Leslie O. (Reading)

    Jephcott, A. R.

    Richardson, R. (Houghton-le-Spring)

    Wilson, W. Tyson (Westhoughton)

    Jesson, C.

    Roberts, Frederick O. (W. Bromwich)

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

    Jodrell, Neville Paul

    Roberts, Rt. Hon. G. H. (Norwich)

    Wood, Major M. M. (Aberdeen, C.)

    Jones, Sir Edgar R. (Merthyr Tydvil)

    Roberts, Sir S. (Sheffield, Ecclesall)

    Wood, Major S. Hill- (High Peak)

    Jones, J. T. (Carmarthen, Llanelly)

    Robinson, S. (Brecon and Radnor)

    Woolcock, William James U.

    Kelley, Major Fred (Rotherham)

    Robinson, Sir T. (Lanes., Stretford)

    Worsfold, Dr. T. Cato

    King, Commander Henry Douglas

    Rodger, A. K.

    Worthington-Evans, Rt. Hon. Sir L.

    Law, Rt. Hon. A. B. (Glasgow, C.)

    Rogers, Sir Hallewell

    Yeo, Sir Alfred William

    Lawson, John J.

    Rose, Frank H.

    Young, Lieut.-Com. E. H. (Norwich)

    Lewis, Rt. Hon. J. H. (Univ., Wales)

    Roundell, Colonel R. F.

    Lewis, T. A. (Glam., Pontypridd)

    Royden, Sir Thomas

    TELLERS FOR THE NOES.—

    Lindsay, William Arthur

    Rutherford, Sir W. W. (Edge Hill)

    Lord E. Talbot and Mr. James

    Lloyd-Greame, Major P.

    Sanders, Colonel Sir Robert A.

    Parker.

    Question put, and agreed to.

    Sir F. HALL: I beg to move, in paragraph (a),after the word "income" ["in respect of the first £2,000 of the income" ] to insert the words "after deduction of Income Tax."
    We hear a tremendous lot of all the advantages which should be given to the working classes. We have heard to-night that some consideration should be given to the great middle classes, who are not represented in this House as many of us would wish. I maintain that a tax should not be charged on an amount that is not obtained. I will take the case of anyone having an income of £5,000. If you deduct Income Tax at 6s.in the £, it is a question of
    1174
    £1,500, and the net amount left is £3,500 My contention is that it is not fair or equitable or just that the Super-tax should be charged on an amount that is not obtained, and that, instead of being charged on £5,000, it should be charged on £3,500. If it were charged on that basis, there would he £500 at 1s. 6d., £500 at 2s., and £500 at 2s. 6d., making a total of £150, instead of
    £362 10s. If it be necessary to obtain the amount which the Government require, then let them put the tax fairly and squarely on the amount that is obtained, and not, having deducted first of all the Income Tax, say, "Although you have £3,500 per year, we consider that we should tax you on £5,000." Really, by the time it is done, the £5,000 comes
    to about £2,800 net. The right hon. Gentleman will recognise the responsibilities that are applicable to people with such incomes, and that the £2,800 does not amount to anything approaching its value in pre-War days.

    1175
    The Super-tax presses very heavily on people with incomes of this amount,
    who have to provide for the proper education of their family, and to bear all the responsibilities and duties appertaining thereto, and I venture to hope, if my right hon. Friend cannot see his way entirely to remove this anomaly this year, he will meet it in some way by making some reduction.
    Sir HALFORD MACKINDER: I sat on the Royal Commission, and, although I did not sign the Report, I heard the discussion of this question. It is a question of Tweedledum and Tweedledee.
    Mr.SPEAKER: Does the hon. Member rise to second the Amendment?
    Sir H. MACKINDER: No, Sir.
    Sir W. DAVISON: I beg to second the Amendment. It would be much more equitable to charge a higher Super-tax to bring in the necessary revenue than to charge a lower tax on a fictitious sum. It is absurd to charge Super-tax on a nominal income of £5,000 when the income actually received is £3,500. We would much rather be taxed on the income we receive at a higher rate, than at a lower rate on the income we do not receive.
    Sir D. MACLEAN: It would perhaps be for the convenience of the House if the Chancellor could tell us how far he intends to proceed to-night with the Resolutions?
    Mr. CHAMBERLAIN: I would suggest that we should finish this Resolution dealing with Super-tax and the other Resolutions with regard to relief, and the Resolution with regard to double Income Tax within the Empire. If we finish these Resolutions that would enable us to begin with the Excess Profits Duty and, indeed, leave us nothing but the Excess Profits Duty and the Corporation Tax to-morrow. I would not ask the House to begin the consideration of those questions at this late hour, and I take it that the House would be willing to come to a decision on those two remaining questions, and if not completed to-morrow evening, when business is interrupted, then I should be obliged to resume on those Resolutions after eleven o'clock, so that we may finish to-morrow night. We can dispose of the
    1176
    Income Tax and Super-tax Resolutions down to the Excess Profits Duty this evening, and the Resolution which was taken on a different day for a general amendment of the law and on which no discussion arises at this stage. In courtesy to my hon. Friend (Sir H. Mackinder), if the House will allow me, I should like to conclude now and subsequently, by leave, reply on the Amendment.
    Sir H. MACKINDER: I apologise for having forgotten the necessity of a Seconder. The point I desire to put is that, so far as the actual incidence of the tax is concerned, it really does not matter whether you pay a lower rate on a larger sum or a higher rate on a smaller sum. The sum total which the individual taxpayer will have to pay will work out the same. There is a practical point involved which is really of some importance, and it is this. The large incomes on which the Super-tax is raised involve very extensive consideration, both by the taxpayer and the Income Tax authorities and usually by the two in consultation. Those large incomes are considered continuously, that is to say, from year to year, you go on with certain understandings and the income is modified from year to year, as may be necessary under the circumstances, but a great deal is already understood, and has been settled between the surveyor or inspector of taxes and the taxpayer or
    his representative. If you change the standard rate of tax, say, from 6s. to 5s., what is the effect? If you raise your super-tax on the net income, that is, after deduction of Income Tax, then all your sums will be changed. You will have to alter the whole basis of your Super-tax, whereas if you keep to the realities, and impose your Super-tax on the total income which is due, you have no alteration to make in the complicated calculations which go on from year to year. You thus save an enormous amount of trouble and expense to the large taxpayer, who usually employs an accountant to make up his accounts, and you save taxation in order to pay the bureaucracy, that is to say, increased servants in the Inland Revenue. There-fore, while there is no actual injustice done, although there may seem to be, to those upon whom the tax falls, as a matter of fact there is a good deal of saving both to the individual and to the State by the

    1177
    method which is proposed by the Chancellor of the Exchequer.
    Sir F. BANBURY: I do not follow the statement of the hon. Member who has just sat down, who began by saying it made no difference whether you paid a higher rate on a lower sum or a lower rate on a higher sum. My experience of the Income Tax is that it is never reduced but always increases, and therefore that argument leaves me cold. In regard to the second argument, that you would inflict greater labour on the bureaucracy, that also leaves me cold. We have a very large number of people employed in Government offices, and here is something for them to do, and it is much better in their own interests that they should have something to do. Therefore I dismiss the arguments of the hon. Member opposite. Now I come to the sounder arguments of the Mover of the Amendment, who says it is very wrong that you should be charged a tax upon something you have not got. Let me point out to him that this is not the only occasion on which you are charged on something you have not got. The Treasury charged me last year Super-tax on £1,100 which I never had and which I never shall have, and I could not make my right hon. Friend the Chancellor of the Exchequer understand it, but he was kind enough to allow me to see one of the Revenue officials, and he understood it at once. My hon. Friend the Member for Oxford (Mr. Marriott) was with me at the time and will bear witness that at once the official said, "Yes, the Chancellor of the Exchequer"—fortunately he was not there—"is mistaken"—which was rather a strong thing for an official to say—"and you are right." Therefore there is nothing new in this; it is a habit the Treasury have got. If they can find something you have not got, they charge you Super-tax on it, and I suppose the Labour party will support that charge.
    There are really only two courses open with regard to this Amendment. The first is to accept it, and that, I am afraid, my right hon. Friend will not do. The second is to do what I have constantly advocated, and that is, that if you will charge the Super-tax as if it were an Income Tax, make it Income Tax and charge it in one, and then everybody will know what is happening. Very few people know the amount that is paid in Income Tax and Super-tax. The general
    1178
    idea in the country is that people pay an Income Tax of 6s., and some very rich people pay Super-tax, and they do not realise the great sacrifice which a certain class of people is making at the present moment—a sacrifice which during the War they made without a murmer, but now that the War is over they naturally begin to think that, while they were willing during the War to bear an excessive burden and a greater burden than was borne by any other class, at any rate now they should be treated with some consideration. The only answer of the Chancellor of the Exchequer can be that Super-tax is part of the Income Tax, and as you charge Income Tax on the whole income, you must charge Super-tax on the whole income even before Income Tax is deducted. The simple way is to abolish Super-tax altogether, and to have a higher Income Tax at certain rates of income. I do not employ accountants, but I sit up late at night and then I make mistakes. A great part of that could be avoided. At the present day when we are governed by a democracy, and when vast numbers of electors do not pay anything at all, and the burdens are imposed on a small class, it is vital that they should know what that class is paying.
    Mr. SPENCER: I have listened to three speeches at least of a remarkable character from the right hon. Baronet. In the first place, he wanted to get rid of the champagne tax; in the second place, he wanted to get the tax upon the separated incomes of the husband and wife, which is to get rid of part of the burden falling on the rich people. [HON. MEMBERS: "NO!"] I might have had some doubts as to the Vote which I have just given against the proposal which was made by the hon. Member for Wood Green (Mr. G. Locker-Lampson) but the last speech of the right hon. Baronet has convinced me that I and the Labour party do not need to be lectured by the right hon. Baronet or the hon. Member below the Gangway on the methods of taxation. Now that the burden has got to be borne, the right hon. Baronet, and those associated with him, do not desire to meet the liability; but want to bear as little a part as possible. [HON. MEMBERS: "NO!"] The only conclusion anyone can arrive at to-night, after listening to the speeches of the right hon. Baronet, is that that side of the House do not want to bear direct

    1179
    taxation upon themselves, but they want to transfer it to the working-classes of this country. [HON. MEMBERS: "No!"] The time has come when the financial burden has to be faced. During the War, when a levy was made, the rich classes, to their credit, gave up their sons. But they are not now prepared to give up their money. [HON. MEMBERS: "Oh!"] They gave up their sons, and are not now prepared to give up their money.
    Mr. SPEAKER: The hon. Member has forgotten the Amendment that we are now discussing—that Super-tax shall be charged after the deduction of the standard Income Tax.
    Mr. SPENCER: Yes, the effect of which is that they will pay less upon £5,000.
    Mr. HAROLD SMITH: What has that to do with their sons?
    Mr. PALMER: This is not Hyde Park.
    Mr. SPENCER: I say the rich preferred to give their sons.
    Mr. H. SMITH: A very offensive observation.
    Mr. SPEAKER: Giving their sons has nothing whatever to do with the Amendment. Will the hon. Gentleman kindly confine himself to the question we are now discussing?
    Mr. SPENCER: I will, Mr. Speaker. [HON.MEMBERS: "Divide, divide!"] We will divide when I have finished. The effect of this—[HON. MEMBERS: "Divide, divide!"]—I will wait—[HON. MEMBERS: "Divide, divide!"] I will stand my ground.[AN HON. MEMBER: "Apologise!"] For what? [AN HON. MEMBER: "Insulting remarks!"]
    Mr. MACQUISTEN: What for? For saying that we like our money better than our sons?
    Mr. SPEAKER: I have already invited the hon. Member to bring his mind to bear upon the particular Amendment before us.
    Mr. SPENCER: If my remark was offensive to the House, I will willingly withdraw it. [HON. MEMBERS: "Hear, hear!"] But it does seem to me that now the time has come for payment, you are
    1180
    trying to evade your obligations. [HON. MEMBERS: "No!"] You are not setting a very good example in seeking to get rid of the champagne tax. You were trying to get rid of the burden falling jointly on man and wife. Now you are seeking to get rid of your further financial obligation. If this burden is not borne by those rich enough to bear it, it will naturally fall upon those less capable. It is because this Budget seems framed to impose a burden upon the less capable; because it is suggested we should derive the greater share from the Excess Profits Tax and other similar taxes, which, in my opinion, are indirect taxation, that I am opposed to the Amendment. If it is pressed to a Division, I shall support the Government.
    11.0 P.M.
    Mr. E. WOOD: I regret that the hon. Member who has just spoken (Mr. Spencer) has misunderstood the Amendment and has made observations which are resented in every part of the House. I ought to apologise for standing any further between the Chancellor of the Exchequer and the right hon. Gentleman the Member for the City of London (Sir F. Banbury).We have it, on the authority of the right hon. Baronet, that the Chancellor of the Exchequer finds it difficult to understand and appreciate his arguments, and no doubt he would like to reply while those arguments are fresh in his mind. I think the general argument of the hon. and gallant Gentleman who moved this Amendment is something that must carry general assent. There is no suggestion in the Amendment of the wealthy classes seeking to evade any just method of taxation, and it is purely a question of what is the best method by which that taxation should be levied Whether the case made out by the mover of the Amendment is likely to influence the Chancellor of the Exchequer is one upon which I have my doubts, but I am not without hope. On the strength of the right hon. Gentleman's speech I was moved to vote in one of the most critical divisions of the Session relating to the married Women's Income Tax, and I induced many of my hon. Friends to vote with the Government, because I was moved by the right hon. Gentleman's exposition of the great principle of taxation according to the ability to pay. I want to apply that prin-

    1181
    ciple to the class for which I am pleading, namely, the agricultural landowner.
    The general case of levying Super-tax on what you have already paid Income Tax upon is one that has been argued on its general merits, but the case of the agricultural landowner is not quite on all fours. Over and above what is deducted by way of Income Tax before the Supertax is levied, what I may call the nominal income is very much smaller than the nominal income of the professional classes. Therefore there is a special claim for the consideration of their case This is not the moment to press the point, but I want the Chancellor of the Exchequer to bear in mind before he replies that there is a very strong argument that may be advanced from another point of view which lends support to the case which has been made out by the hon. Member who moved this Amendment.
    Mr. BILLING: I would like the Chancellor of the Exchequer to tell us whether, having regard to the conflict of interests involved, the Government will take their Whips off in the Division to-morrow on the Excess Profits Tax? I wish to express my regret at the speech we have just had from the Labour Benches. The hon. Member (Mr. Spencer) has tried to foster hatred even on the question of taxation. The speeches one hears and the propositions now brought forward from day to day make us strange bed-fellows. At one minute one is in the Lobby supporting a Labour Motion, the next time one is supporting the Government. There is a good deal in what has been said by the right hon. Baronet the Member for the City of London, in his suggestion that the Chancellor of the Exchequer should make capitalists more popular by showing in spectacular figures the enormous amount of taxation capital is paying.
    Sir F. BANBURY: There is always a good deal in what I say.
    Mr. BILLING: Joking aside, there is a great deal in bringing home to the poorer classes the amount of taxation which is levied on the more wealthy classes in this country. I do not put this suggestion forward as a means for relieving them of any part of their taxation. But I for one will never come within the £5,000 range of Super-tax. After all, a man with £5,000 income is not so much
    1182
    better off than a man with a smaller income. These incomes carry with them great responsibilities, and there are many men, both in and outside this House, who find they are merely guardians of the income which is distributed, to a very large extent, among the working clasess. Take the landowners and those especially who keep up large estates. If one goes through their books it will be found that the greater part of the income is paid out in keeping working-class people in positions of comfort and in realising the obligations which exist between capital and labour, and in paying fair and reasonable wages, and when it comes to the bitter end, they have to sit up at night with towels round their heads trying to make the two ends meet. I know that many members of the Labour party feel that unless they had capitalists in this House they would lose a good deal of their stock-in-trade when they go to the constituencies. I am tired of hearing political powder and shot used in this way by one party towards another. The last speech from the Labour Benches would have been better addressed to a Hyde Park audience than to Parliament. To say that capitalists gave their sons but would not give their money—
    Mr. SPEAKER: I hope the hon. Member will not return to that subject which is now closed.
    Mr. BILLING: I will refrain from addressing myself to it any further. I will simply say that I hope the Chancellor of the Exchequer in his reply will do two things which he has been asked to do—one by the capitalists and the other by Labour speakers. I hope he will make the tax that is payable by capital understood by the non-capitalist class, that he will make it perfectly clear that a proportion of the tax which he is now imposing will first of all tend to defeat class hatred such as has been evidenced and that it will further tend to abolish at least some of that huge bureaucratic Department which the Government are now setting up to collect their taxation.
    Mr. CHAMBERLAIN: The most remarkable thing about this Debate is the extent to which the speeches have strained the proposals of my hon. and gallant Friend (Sir F. Hall) who Moved this Amendment. I must thank my right hon. Friend, the Member for the City of

    1183
    London (Sir F. Banbury), for the hand-some tribute which he paid to the much abused Civil Service. He stated, quite truly, that he spent a good deal of time last year in trying to explain to me a case of injustice within his personal knowledge, which I failed to understand. That is not peculiar to me. My right hon. Friend, as he stated in the Debate immediately preceding this, entirely failed to follow my arguments. The Civil Service is superior to us both. They understood my right hon. Friend, whom I could not follow, and they understood me, whom he could not follow.
    My right hon. Friend did not really support the Amendment before the House. He gave it a perfunctory blessing. He said, "If, as I suppose, you cannot do that, do something totally different." What he asked me to do was to charge Super-tax and Income Tax as one. What does he mean by that? Super-tax and Income Tax is proposed in the Budget, at the highest rates, are 6s. in the £ for Income Tax and 6s. in the £ for Super-tax. Am I to deduct tax at the source at the rate of 12s. in the £ from the income of everyone throughout the country?
    Sir F. BANBURY: I said graduation. As graduation is now in existence, it would be perfectly easy to graduate, in the case of larger incomes, by putting the Income Tax and Super-tax together and distributing that in stages, as is done now with the Income Tax and Super-tax separately.
    Mr. CHAMBERLAIN: My right hon. Friend must surely see that that carries him no further for the purpose which he has in view than our present arrangement, when we publish from time to time a White Paper showing, in respect of all the steps of income, what is the combined effect of Income Tax and Super-tax. To talk of levying the two in one is to talk of an impossibility. No Minister could come and propose to the House to deduct Income Tax at the source at the rate of 12s. in the £, and to return money on all but the highest class of incomes. It is perfectly impracticable, and if it were practicable, it would add heaven knows how many to the Civil Service, who understand my right hon. Friend so well, but of whose existence he is so impatient.
    1184
    With regard to the actual proposals of my hon. and gallant Friend (Sir F. Hall), he does not propose that any Super-tax payer should pay less than he does now. What he proposes is that you should, before charging Super-tax, allow him to deduct from his income his Income Tax, and that then you should charge upon the balance such an increased rate as will obtain the same amount that you now get by charging on the original income. In that case no taxpayer gets any relief, but the only result of that is that, without bringing relief to anyone, because you do not want to bring relief for the sake of a change in the form of your taxation without any change in its reality. You increase the labour of the taxpayer and of the tax levier. You put increased trouble on the taxpayer to make out his return and increased cost, and you require an increased staff for the Inland Revenue in order to levy the tax. It would have been quite wrong at the inception of this tax to pass it on the principle proposed by my hon. and gallant Friend. When it has been at work for several years, when the change which he proposes would not affect the burden upon a single man or woman throughout the country, is it worth while to upset your whole system, which by this time everyone is subject to?
    Sir F. HALL: Surely, if you charge on the net amount instead of the gross amount, the taxpayer would get some advantage?
    Mr. CHAMBERLAIN: Oh, yes. That was the proposal of my hon. and gallant Friend, but all of his supporters have repudiated the intention of bringing relief to the Super-tax payer. My hon. and gallant Friend stands alone if his purpose in this Amendment is to relieve every Super-tax payer of part of the Super-tax to which he is now liable. No one speaker has given him any support. Of course if you allow him to make a deduction and charge a tax at the same rate you give him relief, but the proposition normally expressed by every other speaker was that you were to increase the rate so that you got the same amount. That being so, it is not worth while to disturb the whole system with real inconvenience to the taxpayer and the revenue for the sake of a change from which no one derives anything but a purely sentimental satisfaction.
    Colonel, Sir ALEXANDER SPROT: I should like to place before the House one instance in which, in my opinion, injustice is done by the existing system of levying Super-tax. I refer to the case of a retired officer on a pension which may be £200, £300 or £400 a year. In the case of a colonel it is £420 a year. The proposal of the Mover of the Amendment is that Super-tax should be levied upon the net income after deduction of Income Tax, and not upon the gross income before the deduction of Income Tax. A retired officer has served perhaps a great many years under the promise of a pension colonel who retires on a pension of £420, and whose private income obliges him to pay, the standard rate of Income Tax, receives on account of his pension, not the £420 promised him, but £298 a year. The sum of £420 he has to add to his other income for computation of Super-tax. I submit that is an injustice, because not only is he called upon to pay Super-tax upon income which he never receives, but the mere fact of his having earned a pension will often lift him into a higher rate of Income Tax or Super-tax. This is a concrete case which ought to bring home to hon. Members the great injustice which is imposed upon retired officers, and I dare say upon other people who are in the same position, by the present system of assessing Super-tax.
    Question, "That those words be there inserted," put, and negatived.
    Remaining Resolutions to be considered To-morrow:

    Amendment of Law.
    Resolution [21st April] reported,
    "That it is expedient to amend the Law relating to the National Debt, Customs, and Inland Revenue (including Excise), and to make further provision in connection with Finance."

    IMPERIAL WAR MUSEUM [EXPENSES].
    Order read for resuming adjourned Debate on Question [22nd April],
    "That this House doth agree with the Committee in the Resolution, "That, for the purpose of any Act of the present Session to make provision for the management of the Imperial War Museum and for other purposes connected therewith, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred by the Trustees of the Imperial War Museum in carrying the Act into effect, including any salaries or remuneration paid to the Director-General and the Curator of the Museum, and to any officers of the Trustees.'"
    Question again proposed, "That this House doth agree with the Committee in the said Resolution." Debate resumed.
    Sir D. MACLEAN: A Debate took place on this Motion two or three nights ago, when some questions were asked by hon. Friends behind me, and a reply was made by my right hon. Friend (Sir A. Mond). I do not think that my hon. Friends desire to take up the time of the House to-night by further discussion, and I simply want to indicate to my right hon. Friend that, when the Second Reading of the Bill comes before the House, he should be prepared to receive from these Benches very active and searching criticism of the expenditure which he proposes under that Bill, as we consider that all questions of this kind should be subjected to the severest scrutiny to see that national money is only expended on subjects which, however attractive in themselves, are absolutely necessary in existing conditions.
    The remaining Orders were read and postponed.
    ADJOURNMENT.—Resolved, "That this House do now adjourn."—[Lieut.-Colonel Sir R. Sanders.]
    Adjourned accordingly at Twenty-seven Minutes after Eleven of the Clock.

  LEAGUE OF NATIONS (PERMANENT COMMISSION).
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  FREE TRANSPORT (SOLDIER'S WIFE).
  RETIRED OFFICERS' WAR SERVICE (PENSIONS).
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