MR. YOUNGER (Ayr Burghs): Will the hon. Gentleman tell the House how these funds are invested? From that it is only fair to deduct that in so far as the reserve funds exist £2,500,000, for that includes the firm of so far they relieve the burden of those Guinness, which is really an Irish firm and who have subscribed the original capital ought not to be counted. That leaves of the companies. But that £11,000,000£11,000,000, and there are many other of reserve funds already accumulated is brewery companies whose reserve funds not all. In the last year there was I have not ascertained, as well as added to the reserve funds a sum of at distillery companies which have con- least £225,000. It was more than that, siderable reserve funds and large interests but those are the figures of the companies. in licensed property, and there are, of whose balance sheets I have been able course, many private individuals who to ascertain. That annual increase in have made provision against the possi- fifteen years at compound interest of 4 bility of such a proposal as the time- per cent., which is not a high interest, limit. would amount to a further sum of £4,500,000. In addition to that there is the compensation levy which is now being paid by the trade, which in fifteen years will amount to £16,500,000. One can only form the vaguest estimate as to what proportion of that will be found in fact to go to the owners of the properties, and what proportion to the licenceholders. At least we may assume that £11,500,000 will go to the owners of the licensed properties. If you add these together the trade will be found at the end of the time-limit to have in hand, without bearing the charge of a single extra sixpence of expenditure, £27,000,000 towards the loss of their monopoly value. If it were fair to add the interest on the existing £11,000,000 or reserve funds, they would have a further sum of £8,800,000. I do not emphasise that £8,000,000, although some people might contend that the interest on the reserve funds now invested might be properly put by. It is impossible to estimate the total value of the licences in this country. No figures exist on which any precise * MR. HERBERT SAMUEL: They are very largely invested in licences and other securities, but that does not in the slightest degree alter my argument. The reserve funds surely stand on a different footing from subscribed capital. If a group of companies has £10,000,000 in licences and then they put by £2,000,000 of reserve in order to make good the insecurity of their licences, and if they invest that reserve in fresh licences, and therefore hold £12,000,000, my contention is that, if the licences do prove to be insecure, the shareholders will already have made provision for £2,000,000 of whatever loss there may be, and that the actual provision remaining to be made is the £10,000,000 which represents their subscribed capital, and not the whole sum of £12,000,000 which represents the subscribed capital plus the reserve fund. Therefore, whether those reserve funds are or are not invested in additional licences, it does not alter the contention or approximate estimate can be formed. It is certainly very much below the sum that was originally paid for the licence values. The Inland Revenue Department stated in December, 1905, that in face of the facts and figures longed to one great trust it would not available dream of maintaining them in the same they felt they must pay very little attention numbers as now, not for the sake of temto the price actually paid in the past by the perance but as a business matter, and it brewers for licensed premises, but must regard │ them as evidence of the accidental value would immediately set itself to work to realised for the property by the holder for reduce the plethora of public-houses. whom it is acquired, rather than as a guide to the prices which the present holder might hope But since competition prevents such a to obtain in the open market." voluntary reduction, since a brewer cannot close one house out of the three he owns in a town unless the competing brewer will also close one house out of his three, the State steps in, from quite another motive it is true, and does by this Bill what the trade would do for itself as a business matter if it had the power. It is true that we carry the process somewhat further for the sake of temperance than the brewers would for business reasons, but out of the 30,000 houses that would go, if they are fairly selected among the competing owners, the trade will be glad to be rid of half of them and the closing of them will be regarded more as a relief than a burden. In selecting the Schedule A value for the basis of the compensation, we are only taking the financial arrangement adopted by the Board of Inland Revenue under the late Government as their interpretation of the Act of 1904, and going back merely to the days before the Kennedy judgment. That fact sweeps away practically all the estimates published in the papers as to the losses which will fall upon brewery companies owing to the time-limit, because almost without exception they are based on the cost value of the licences, and it is notorious that the values have fallen very greatly since the time when they were bought. But it is certain, of course, that the value of the licences will be considerably more than the £30,000,000 or £40,000,000 which the companies will have in hand to recoup themselves at the end of the period. The question really is whether the period of fourteen years is sufficient to enable them to make the provision that is required. The minority of the Peel Commission recommended a period of seven years; Mr. Bruce in his Bill of 1871 proposed a period of ten years. The Government have suggested in their Bill a figure of fourteen. But, as my right hon. friend has said, he is very ready to listen to any well-authenticated facts which will tend to show that such a MR. AUSTEN CHAMBERLAIN (Worperiod is either too long or too short forcestershire, E.): The hon. Gentleman the purpose which it has in view I come now to the question of whether the compensation during the reduction period is being assessed on a fair value. The reduction of 30,000 licences is not net loss to the trade, for they will save greatly in rent, management, and other incidental expenses attaching to those public-houses. One may venture to speaks of the late Government, but surely he does not mean to suggest that that was an executive act of the late Government ? *MR. HERBERT SAMUEL: Yes, of course, it was done on the right hon. Gentleman's authority. MR. AUSTEN CHAMBERLAIN: No. affirm that if all the public-houses be- It was not. I was Chancellor of the Exchequer. A distinct duty was cast judgment has been to increase by 50 upon the Inland Revenue authorities, and the duty was of a judicial character. I did not in any way influence the Board of Inland Revenue in their interpretation of the Act. I regarded it as a matter on which I had no right to express an opinion, I should have felt I was committing the gravest breach of duty if, as Chancellor of the Exchequer, I had endeavoured to influence the Board of Inland Revenue in their interpretation of the Act. tion. per cent., sometimes by 100 per cent., the cost of compensation, and if the necessary reduction is to be effected without a large increase of the compensation levy it is essential to go back to what we believe to be the fair basis of licence value. And the compensation must necessarily diminish as the time. limit draws towards a close. It is obviously wrong that a house suppressed in the fourteenth year should get the same compensation as a house suppressed in the first year. Before 1904 the tenure of a public-house licence may be com *MR. HERBERT SAMUEL: The right hon. Gentleman disclaims responsibility, but the fact remains that the interpreta-pared with an annual lease with some tion placed by the Board of Inland expectation of renewal. After 1904 it Revenue upon the Act for which the was converted into a freehold tenure right hon. Gentleman and his colleagues subject to good behaviour, and a small are responsible is that the right basis of compensation charge. We propose now assessment is the Schedule A valua- to convert the tenure, not into an annuɛl tenancy again, but into a fourteen years' lease, rent free except for the compensation levy. It is clear that if a man has a lease of fourteen years of his house, and that house is closed, he would be entitled to compensation in proportion to the duration of the lease which remained. On that basis only can compensation, consistent with the general provisions of the Bill, be calculated. With regard to the position of the MR. AUSTEN CHAMBERLAIN: Yes, but that was subject to appeal to the Courts, and on the appeal to the Courts the Board of Inland Revenue were found to be wrong. *MR. HERBERT SAMUEL: The basis of valuation which is adopted by Mr. Justice Kennedy in his judgment un-publican, the publican has very little doubtedly goes far beyond what would be the intention of any Member of this House-certainly on this side of the House either in 1904 or at any other time, in interpreting what is really the licensed value of a house. The Kennedy judgment does go beyond the licence value of the public-house as a place of retail sale, and includes an element of the profit which the owner of the premises derives through his wholesale trade from the house. The effect of that reason to be satisfied with his present state of things. If for the most part the publicans are opposed to the Bill it is because their political activities are often tied as well as their custom. [OPPOSITION cries of “Oh, oh!"] But it is not the case that the effect of the measure will be to throw upon the streets 30,000 licence-holders. The reduction will be gradual, about 2,400 a year, and the wastage of the trade already must be far greater than that. There has been some owners of licensed premises and the publicans and their employees, and that is the taxpayers and the ratepayers at large. At the end of the time-limit we believe that the monopoly value will bring to the public purse an abounding revenue, and more important than that, the indirect savings to the community through the operation of the Bill will be large. Millions and tens of millions are being spent in restraint of the criminal, in support of the lunatic, and in the maintenance of the pauper. If by this Bill the Government succeed in lessening, as we believe we shall be able to lessen, a main source of these heavy charges, we shall indeed have done much to lighten the burdens that press upon the people. misunderstanding on the point of assessment. Under the present law the value of the licence is assessed according to its value to the owner of the premises. It is assessed on an extravagant scale, as the Government believe. The owner's value is then divided between the owner and the licensee-last year the division was in the proportion of eight-ninths to the owner and one-ninth to the licensee. That is unjust to both parties. It is unjust to the owner, because another interest is compensated out of the sum which is intended to represent the value of his own interest alone. It is unjust to the licensee because, if in a particular case the owner's value is small, the tenant may be awarded quite inadequate compensation. The scheme of the Bill will secure the assessment of the actual owner's value on a moderate but sufficient and just scale, securing to the owner the whole of that value, while the tenant's compensation will be calculated on a Motion made, and Question, "That the Debate be now adjourned,”—(Mr. Long)-put, and agreed to. Debate to be resumed to-morrow. BILL. Read a second time, and committed to a Standing Committee. BUSINESS OF THE HOUSE. Motion made and Question proposed, "That the House do now adjourn."(Mr. George Whiteley.) separate basis and paid to him directly. SUMMARY JURISDICTION (IRELAND)} I think the hon. Baronet the Member for Chippenham overlooked that point when he assumed that the compensation under this Bill would be unduly small. Now I come to the effect of this Bill as regards employment generally, and I must say a few words as to the position of the barmaids. It may be necessary to prevent the possibility of hardship from being done under the Bill to women now engaged in this trade, and we shall, therefore, devise some form of personal certificate for the protection and benefit of those who now hold situations as barmaids. Perhaps in the future in the language of the Licensing Law the term "ante-1908 barmaids may become as well-known as the ante-1869 beer-houses. But there is another party vitally interested in this question, besides the MR. CLAUDE HAY (Shoreditch, Hoxton): Can the Parliamentary Secretary inform me when the Education Bill will be proceeded with? THE PARLIAMENTARY SECRE TARY ΤΟ THE TREASURY (Mr. Adjourned at fourteen minutes after Eleven o'clock. An Asterisk (*) at the commencement of a Speech indicates revision by the Member. HOUSE OF COMMONS. Wednesday, 29th April, 1908. Lighting (Scotland) Act, 1902, relating to Barrhead, Clydebank (Amendment), Dundee (Extension), and Rutherglen (Amendment)," presented by Mr. Kear The House met at a quarter before ley; read the first time; to be referred Three of the Clock. PRIVATE BILL BUSINESS. to the Examiners of Petitions for Private Bills, and to be printed. [Bill 204.] London County Council (Money) Bill."To regulate the expenditure of money London United Tramways Bill (by by the London County Council on capital Order). Read a second time, mitted. and com Local Government Provisional Order (No. 3) Bill.-"To confirm a Provisional Order of the Local Government Board relating to the Boroughs of Burslem, Hanley, Longton, and Stoke-upon-Trent, and the Urban Districts of Fenton and Tunstall," presented by Mr. Masterman; supported by Mr. Burns; read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 201.] Local Government Provisional Orders (No. 4) Bill. "To confirm certain Provisional Orders of the Local Government Board relating to Bromley, Crewe, Milford Haven, Rhyl, Sawbridgeworth, and York, presented by Mr. Masterman; supported by Mr. Burns; read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 202.] account during the current financial period and the raising of money to meet such expenditure; and for other purposes," presented, and read the first time; and referred to the Examiners of Petitions for Private Bills. Petitions in favour: From Aberaman Colliery; Aberbeeg ; Abercwmboi Colliery; Alsager's Bank; Ammanford (No. 1); Arrail Griffin; Ashton Field; Audley; Bargoed; Batley (No. 1) Branch; Batley Bedwellty Pits (No. Allhallows Pit; Electric Lighting Provisional Orders (No. 1) Bill.-"To confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882 and 1888, relating to Bispham-with- West End ; Norbreck, Caldy Manor, Carmarthen, 1); Bestwood; Birlog; Birley ColFleetwood, Halesowen, Heswall, Lowes- lieries (No. 2); toft (Amendment), Lymington (Exten- Blackbreas; sion), Portsmouth (Amendment), Southampton (Amendment), and Woking (Extension)," presented by Mr. Kearley read the first time; to be referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 203.] Bishop Sutton; Bwllfa Colliery; Cædder; Caeren; Callendar; Carluke; Carranhall; Cheadle; Cheadle Park; Cinder Hill; Coalburn; Crown Lodge; Tredegar Valley; Cwm; Cwmaman Colliery; Cwmtillery; Denaby Main; Dinnington; Douglas Water; Dowlais; Dulais; Electric Lighting Provisional Orders (No. 2) Bill.-"To confirm certain Provisional Orders made by the Board of Trade under the Electric Lighting Acts, 1882, and 1888, The Electric Lighting (Scotland) Act, 1890, and The Electric VOL. CLXXXVII. [FOURTH SERIES.] 2 Y |