§ Order for Second Reading read.
§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. ASQUITH,) Fifeshire, E.
In moving the Second Reading of this Bill I shall not make any extended demand upon the time and patience of the House. In introducing the Bill two months ago I explained at great length and in much detail both its governing principles and its operative machinery, and it would be unpardonable in me now to cover the same ground a second time, particularly as I am still waiting for some reasoned answer to combat the two or three main propositions which I described as lying at the root of our proposal. In the debate which is now opening we shall no doubt hear everything that can be said in the way of criticism and of objection, and I shall hope before it comes to a close that with the added information which this discussion will supply I may be able, perhaps, once more to survey the field. But, as I observe that a hon. and learned Gentleman opposite, with, I understand, the authority and concurrence of the Front Opposition Bench, has given notice of an Amendment inviting the House to decline to proceed further with the Bill, I may fitly occupy a few moments at the outset of the discussion by re-stating that which is fundamental, and only that which is fundamental, in our case. When I introduced the Bill I said the Government had two objects in view. The first was to improve—primarily by reduction of the number of licences, but also by a number of other salutary changes in the law—the conditions under which the liquor traffic is carried on. The 1108 second object was not less important than the first—to recover for the State, with due regard to existing interests—with due but not undue regard to existing interests—its dominion and control over this monopoly. Dealing for a minute or two with the former of these two points, our proposals proceed upon the assumption that intemperance and its attendant abuses are encouraged and increased by the excessive multiplication of facilities for the sale and consumption of drink. I want to know in the first place whether that proposition is disputed. [OPPOSITION cries of "Yes."] It is. That clears the ground to some extent. No one, I think, denies that the evils to which I have referred in a large measure arise from and are fostered by moral and social conditions with which it is difficult, if not impossible, for any legislation directly to deal. That, at any rate, is common ground among us. Nor does any one assert—I, at least, have never asserted—that there is anything in the nature of a mathematical correspondence in any given area between the amount of drunkenness per head of the population and the number of licences per 1,000 or per 10,000. But he must be blind to the facts of life and to the teachings of experience who does not recognise that there is a relation, and a very direct relation, between temptation and excess, between the growth and exercise of a pernicious habit and the invitations and opportunities which are held out for its indulgence. I was rather surprised a moment ago to hear two or three hon. Gentlemen opposite, rather faintly, it is true, deny my statement that, at any rate, there is some connection between the number of licences and the amount of intemperance. I thought in this House, at any rate, that was one proposition that was accepted among all parties and on both sides. If it is not so, what becomes of the temperance side of that great measure of reform—the Act of 1904? On what pretext, and by what argument from the temperance point of view, was the Bill of 1904 presented to this House? It was that unless you gave compensation, unless you facilitated the task of the licensing justices by giving compensation, you could not bring about that reduction 1109 of licences which the authors of that Bill, at any rate at that time, contended was a necessary condition of reform. As I said when I was speaking two months ago on the First Reading, I agree there has been under the operation of the Act of 1904 a considerable and, indeed, a substantial diminution in the number of licences. How do hon. Members opposite justify the expenditure to which the publicans have been put during the past four years to compensate the persons whose licences have been suppressed unless they think that that measure was a substantial step in the direction of temperance reform? I agree that under the Act of 1904 there has been a considerable, and in some parts of the country a substantial, diminution in the number of licences. But that diminution has taken place, for reasons which I pointed out at length on the First Reading, at a rate which you cannot anticipate as likely to be sustained. Moreover, it has been sporadic, uneven, and very costly. What is the change in that respect which we propose to introduce by this Bill? We make the operation of the process of reduction compulsory and uniform throughout the whole length and breadth of the country, having due regard to special local conditions and circumstances. In other words, we make it in such a form as to bring about a really effective reduction in the total number of licences within a specified and prescribed time.
§ MR. ASQUITH
We do, I agree, make it cheaper—to the trade. We make it cheaper to the trade, and we make it more effective and more satisfactory from the point of view of the public by bringing back the basis of compensation to what I have always believed was intended by the Act of 1901—and I have not heard from any hon. Gentleman sitting on the bench opposite who was responsible for the authorship of that Act that I am wrong—and incidentally by recognising the equitable claim of the licence-holder to a larger share in the compensation fund than he has had hitherto. It is in that way that we propose to bring 1110 about what we conceive to be the first step in the direction of really effective temperance reform—namely, a reduction in the number of licences and of the facilities for the sale of drink. If you accept the assumption, which I confess I thought was with general assent taken for granted, that such a reduction is desirable, the only serious criticism which I have come across upon this part of the proposals of the Government is this. It is said, and I think it is said with truth, that it is no use suppressing public-houses if you do not at the same time provide against the revival of the evil by preventing the springing up in their places of bogus clubs. My colleagues and myself are keenly alive to that danger; and while, as was said by my right hon. friend the Secretary of State in answer to a deputation and other representations on behalf of existing. clubs, we are quite prepared to listen to suggestions for removing or mitigating anything in the Bill as it stands which can cause reasonable offence or inconvenience to respectable clubs, I add, with the utmost emphasis and the most complete sincerity, that we shall welcome with interest and sympathy any really practical proposal to do more than the Bill at present does to prevent the up-growing in the future of parasitic drinking shops masquerading in the guise of clubs.
Now, Sir, I come to the second great and governing purpose of this Bill—namely, the recovery for the State of complete and unfettered control over this monopoly. Here, again, we proceed upon certain assumptions, which I will restate in order that this debate may clearly show whether and how far they are desired. What are they? In the first place, What is the real nature of the property in licences? I endeavoured to point out, in introducing the Bill, and I am not going over the steps of the argument again, that it is a clear, undisputed proposition of law in this country that a licence for the sale of intoxicating liquors in public houses is a licence granted for a year and for a year only. No lawyer, certainly not since the decision in "Sharp v. Wakefield," nearly twenty years ago, will dispute that it is and always has been in the absolute discretion 1111 of the licensing authority to refuse the renewal of a licence, just as much as to refuse to grant a new one. That is the legal position, which nobody who knows the law upon the subject can contradict. But I quite agree, as I pointed out when I introduced the Bill, that annual licence has had coupled with it the practice of what I may call two defeasible expectations—the expectation, first, which was never anything more than an expectation which any body of licensing justices could at any time defeat, that the licence would be renewed in the absence of.misconduct, and the expectation, the realisation of which, again, was entirely in the discretion of the licensing authority, that the holder of the licence would be protected by them against free competition by the granting of similar licences to his neighbours. Certainly expectations of that peculiarly fragile kind are not a form of property.
§ MR. ASQUITH
I am going to tell the right hon. Gentleman that. They are not a form of property. But although they are not a form of property—and although I think those who are interested in the maintenance of what are called the rights of property in this country are most ill-advised in associating their cause with this particular case—they do deserve consideration. The legislation proposed by the Government proves that we think they deserve consideration, and they are receiving it, as we believe, in a most equitable form. I would like hon. Gentlemen opposite seriously to consider whether I am not saying something which ought to command their assent when I say that nothing can be more absurd, nor in the long run more injurious to the interests of property, than likening the gigantic transactions which during the last twenty years have taken place in this most speculative business to the sale of other classes of commodities like land and goods, where the vendor can give and the purchaser can acquire a permanent and indefeasible title. If, as I believe, and as I do not think anybody who is acquainted with the law and the practice in this matter 1112 can deny, that is an accurate and adequate account of the nature of the interest which a licence confers, I am brought to the question—What in its real nature and essence is that which passes by the name of monopoly value? That is a subject upon which, I am sorry to say, there is a melancholy abundance of confused thinking. I am going to try to the best of my ability to make it clear. Is there such a thing as monopoly value? Some people say there is not. It certainly does not lie in the mouths of the authors of the Act of 1904 to say there is not. The phrase is taken from that very Act. It is a phrase to which, I presume, they attach some intelligible meaning. It appears, at any rate, upon the Statute-book, and it is a thing which is predicated in that Act, and provided for in the case of every new licence which is now granted in this country. I think a good deal of the confusion which prevails on this subject would be cleared away if we could take the simplest of all possible cases—the case, that is to say, of what is called a free public-house. A free public-house is a house which is let to a publican who can buy his beer and his other liquors where he pleases, and who can sell his beer and other liquors at what prices he pleases. In the case of such a person what is the monopoly value, or, to put the same thing in a different form, what is the added value which the possession of a licence gives to the premises? Measured in terms of rent it means, of course, what this publican tenant, in virtue of his receiving from the State a special privilege which other classes of traders do not enjoy, would pay, as compared with that which would be given or offered by another tenant engaged in a business in which he was not similarly privileged. And, again, if you consider how that additional rent would be arrived at, it is pretty clear, I think, that it represents, roughly at any rate, the comparative extra profit which the publican can make in virtue of his monopoly, as compared with the other tradesman, each being assumed to bring in, approximately at any rate, the same amount of capital, and to apply to his business the same skill and the same energy and the same enterprise. If that is true—and I think it is; I do 1113 not think anybody will dispute it—the monopoly value, measured not as rent but as a lump sum, means the capitalised value of the difference between the licensed and the unlicensed rental of the premises. That is what is meant by monopoly value, I believe, in the Act of 1904—it is certainly what is meant by the Government in this Bill, and in connection with this Bill—neither more nor less. The House will see, the moment they have realised that, that it is a much smaller and a much more manageable thing than that which is often loosely described by the same term. For "monopoly value" is used—and not unnaturally used—very often in a totally different sense. When you come to a tied house you have got a new and quite a different class of monopoly from anything that the State has ever created, or has ever recognised. You have got the monopoly which the brewer has created for himself by judicious arrangements and bargainings—a monopoly for the sale in those premises of his own liquor and his own commodities free from the competition of his rivals in trade. I am certain that everyone who is conversant with the course of business in this industry during the last twenty years will agree with me when I say that a very large proportion of what—admittedly now—were inflated prices paid in the '90's and in the early part of the present century, for licensed premises, which now have to be written off, were paid not for the State monopoly, which I defined a few minutes ago, but for this special privilege, which the brewers alone were responsible for bringing into existence. Now the State has nothing to do with that. Not only are we not going to pay for it, but we are not going to take it into account, and the Bill does not touch it at all. There is no reason why it should, because it has been dwindling and dwindling, and is gradually disappearing of itself. The fact that this competition—a reckless competition it was often, between companies with watered capital and with ambitions far in excess of any legitimate openings for their trade—this reckless competition, fratricidal in intention, turned out to be suicidal in effect. Trying to cut their rivals' throats, 1114 they in too many cases succeeded in cutting only their own. There has been—of course everybody knows it; it has nothing to do with the introduction of this Bill, or the fear of tho introduction of this Bill—there has been an enormous depreciation in this class of property in the course of the last five or six years—probably greater than in any other branch of investment on the Stock Exchange. To what is that depreciation due? Is it due to the fear of temperance legislation? Not a bit. It is due in part—I will gladly recognise that—to the diminished consumption of intoxicants in the country generally, which is one of the most remarkable economic and social phenomena of the last few years. It is due in part also—so I am told, and I think there is very good evidence for the proposition—to the inferior quality and composition of much of the liquor which is sold. But, after full allowance has been made for both those facts, I am sure I am well within the mark when I say that this depreciation—great, unexampled, bringing disaster to hundreds and thousands of innocent or credulous investors—was mainly owing to the money which was lost in the gamble for restricted premises in the attempt of rival brewers to secure in any particular locality a special or an exclusive mIrket for their own wares. Well, I say we have got nothing whatever to do with that. It is a circumstance peculiar to the conduct of this trade for which Parliament is in no sense responsible, and which this Bill will render neither more nor less severe. It may be well—I am not expressing any definite opinion; I am certainly not giving any precise pledge—but it may be well, in view of what I have said, before this Bill emerges from the Committee stage—and I am saying this almost without consultation with my colleagues, and only throwing it out on my own suggestion—to define in terms in the Bill what monopoly value really means. I am not sure whether it may not also be well, in order to prevent the growth of undesirable expectations, to secure in the Bill that monopoly value, however it is defined, shall, when it comes into possession, go not to the locality, but to the State. However, I only throw that 1115 out incidentally. But going back to my argument and trying to restate as clearly and as shortly as I can the fundamental positions on which this legislation rests, I say that, holding as we do the view that I have expressed, first as to the nature of a licence and the interest created by it, and next as to the origin and as to the measure of the monopoly value, it is perfectly clear to us that the logic and the equity of the case are adequately met by a time-limit. There would be no legal wrong, as I have pointed out, in respect of which any person could complain in any Court of law for redress, if we had proposed to enact that every existing licence should come to an end at the end of the current year.
§ MR. ASQUITH
I am not sure that the right hon. Gentleman quite follows my argument. I am not talking about policy; I am talking about law. I say there would be no legal wrong by an enactment to that effect, and that is what they do in the United States of America and in our own Colonies—they have done it over and over again. But we think, and rightly, in my opinion, that not only policy but equity demand the fair recognition of the expectations upon which this industry has so long been conducted. They ought to have—it is only fair that they should have, although many of them have not conducted their affairs with much circumspection or foresight—[OPPOSITION cries of "Oh!"]—they ought to have time to turn round and to provide for the future. I will quote a passage from a speech of mine on the First Reading of this Bill, because it represents the principle upon which the Government proceeded in this matter. I asked the question, "What is the principle we ought to adopt?" and I said, "It is this—that your time-limit, assuming there is to be a time-limit, should be as long as, and not longer than, the time which will suffice for a prudent trader"—I ask the House to observe these words, they were carefully chosen—"for a prudent trader, who has carried and is carrying on his business with due regard"—this is not 1116 a bolt from the blue—"to its special character and its peculiar risks, to make adequate provision against the disappearance at the close of the time-limit of that part "—only that part—"of his profits which is to be attributed to the monopoly value of his licence." That is the principle upon which this Bill is framed, and, if "monopoly value" bears the meaning which I have attempted to affix to it and to justify, it is a principle which, it seems to me, is in strict accordance with even an indulgent view of the equities of the case. I have dealt with this point as clearly as I could, because now I am going to ask the hon. and learned Gentleman who has given notice of a Motion for the rejection of this Bill a definite question. Here we come to an issue of principle. Do you accept the principle of the time-limit? It is a question which I meant the hon. Gentleman to answer. Will the right hon. Gentlemen on that bench accept that principle? Do you agree, in other words—I am not speaking of the particulars, I am speaking of the principle of the time-limit—that the property created by a licence is of such a nature and only such a. nature as I have described? Do you agree, or do you not agree? [An Hon. Member on the OPPOSITION benches: No.] We shall see in time. We are only at the opening of the discussion now, and I am entitled to put these questions, and to expect an answer before the debate comes to an end. Do you agree, or do you not agree, that the State is entitled to resume, after fair notice, the monopoly which it has itself created? Now, if those questions are once answered in the affirmative, we will listen—I certainly should listen—with attention to anything which can/fairly be said, either one way or the other, as to the precise length of the time-limit. But are you going to say, as the organs of the trade say—as the financial magnates of the City of London assembled in solemn conclave say—that law and custom together, coupled with the provisions of your beneficent Act of 1904, have given the publican—no, not the publican—given the brewer, the speculator in tied houses, a permanent and perpetual interest, subject only to being defeated by proof of misconduct or upon payment of compensation? 1117 There is the clear issue of principle between us which the trade has raised. That is the issue which this House, upon the Second Reading of this Bill, has now to decide. Are we going to transform or to assent to the transformation of a speculative counter into a coin of the realm bearing the image and superscription of the King? I do not think we are. Speaking for the Government and my colleagues on this bench, I may say that we were neither surprised nor intimidated by the outcry which our proposals have raised. We have long since been warned of the disaster and the ruin that was in store for any Government or for any party which dared to lay sacrilegious hands upon the monopoly of one of the wealthiest, one of the most widely-diffused, and one of the most electorally influential interests in this country. I say, with all respect to them, that I believe they are living in this matter in a fool's paradise, and have miscalculated the character and potency of the forces which are arrayed behind this measure. However that may be, we shall persevere with our task, and I appeal to the House of Commons with confidence for their support. I beg to move.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ * MR. CAVE (Surrey, Kingston)
, in moving, "That this House declines to proceed further with a measure which, while failing to promote the cause of temperance, violates the principles of equity," said: I rise to move the Amendment which stands in my name, and if I occupy a substantial part of the time of the House it will only be because I shall try to give what may be only a part of the reasoned answer which the right hon. Gentleman has asked for, an answer not to the wild and whirling words with which he concluded his speech, but to the arguments that he addressed to the House and the questions which he has been good enough to put to us. May I begin by saying quite shortly what is the point of view from which I approach this question? We have heard the arguments of the total abstainers; we 1118 have heard the arguments of those who belong to what is called "the trade." Both classes have a right to be heard, but neither of them will decide the question now before this House. It will be decided entirely or mainly by men who, having no kind of interest in the liquor trade, yet know that as things are, the sale of liquor must go on for many years to come—by men who, while knowing and acknowledging, as I do, the evils caused in this country by intemperance, and being willing to take any reasonable course to diminish or put an end to those evils, yet know that in the end no proposals can succeed—whether they become law or not—in putting an end to those evils, unless they are just and fair to all. It is as one of that class that I approach this question, and I may say also as one whose public duty has brought him into constant and close connection with intemperance and the crimes brought about by intemperance, and who is therefore specially interested in any proposals for dealing with the questions raised in the Bill. Having said so much, I come at once to the fundamental principles of the Bill, and I promise the Prime Minister that I am not going to shirk any of the questions which he has put. The two fundamental principles, as I understand, are these: the statutory reduction of licences and the time-limit. Those are the two pillars of the Bill, and I want the House to examine with me on what sort of foundation these two pillars stand. Take, first, the reduction of licences. It is strange there should be still a controversy as to whether the reduction of licences has any effect on intemperance in this country. I believe the controversy is due to this, that when people talk of reducing licences, they are not all speaking of the same thing. Some men, when speaking of reduction, mean cutting off undesirable licences—licences which, owing to the position, neighbourhood or character of the houses, or owing to the fact that they are in a nest or group of houses which compete with one another, and so lead to excessive drinking, or on some similar ground, ought to be suppressed. Other people mean by the reduction of licences cutting down the licences, quite apart from any question of local 1119 needs, to a fixed proportion to the population. If you use the word reduction in the former sense, I am in favour of reduction. I believe that it is a useful thing that licensing authorities should be absolutely free to refuse a licence to an undesirable house; but that power the authorities already have under the Act of 1904. I shall not have any contest as to the law with the Prime Minister on the point that that power of refusal existed before 1904, except in the case of one class of house which the right hon. Gentleman forgot, namely, the ante-1869 beer-house. But although the discretion in form was absolute, in effect it was exceedingly difficult to exercise, and no one who has not sat as I have, hour after hour and day after day, listening to these cases' hearing the petty details of these small businesses, and listening to the appeals that those who are engaged in them should be allowed to carry on what admittedly is a lawful trade—no one who has not gone through that experience can imagine how great was the difficulty, if not the impossibility, before the Act of 1904, of making any large reduction in the number of licences. The Act came as a great relief to magistrates throughout the country, and after three years experience I say without fear of contradiction by anybody who knows the facts that it is a very valuable instrument for the purpose for which it was framed, and it has been very freely used. The figures are not in dispute. For ten years before the Act the reduction was at the rate of nearly 400 houses a year, and during the three years since the Act the average ready reduction has been about 1,500. If you take the figures for 1907 which were recently given by the Home Office, the amount of levy throughout the country was 95 per cent. of the maximum sum allowed, and the amount expended in 1907 was greater than that expended in any previous year. It is quite true that as you come to the more valuable houses the price per house increases, and therefore the number of licences refused under the Act must to some extent diminish. But although the number of houses refused is lower, they will be doing a greater trade and therefore there is the same reduction in the consumption of 1120 liquor as if a larger number of houses were done away with. What I wish to impress upon the House is that, in view of the good work that has been done, the Government might well have had the patience to give the 1094 Act a somewhat longer trial, and in that case they would have found that within a very moderate period of time notable progress would have been made in the cutting off of undesirable houses, and that before very many years had passed all houses which ought not to exist would have been refused, and the Act would have remained as a valuable instrument to be used from time to time as the habits of the country changed, and the demand for intoxicating liquor diminished. Therefore reduction in that sense is, I believe, already provided for; but if reduction means the reduction of licences according to a fixed ratio to population, then I am bound to say that I have seen no kind of evidence to show that there is any substantial benefit to be expected from such a decrease. I have heard it asserted that such a benefit would accrue, but I have heard no one attempt to prove it. The matter was considered by the last Royal Commission, which reported in 1899 in these terms—There is apparently no relation between the number of licences and the amount of drunkenness.That was the opinion of a majority of the Commission, composed of men of great authority and not belonging to one party, who gave to the matter a great amount of careful and thoughtful consideration. But it does not rest there. The Commission did not confine themselves to that conclusion, but gave in support of it some very striking figures, into which I will not go to-day, but which are well worth studying. These figures and that conclusion have been supported year after year by the statistics in regard to public-houses. I will only trouble the House with one reference. Take the Licensing Statistics of last year. I am quoting from page 13 of the book, where you have two columns. In one column the licensing authorities—counties—are arranged in order of the proportion of lieences per 10,000 of the population. Those which have the least licences 1121 in proportion to population are at the top, and those with the most are at the bottom. In the other column you have the convictions for drunkenness. Those having the lowest number of convictions per 10,000 of population are at the head of the list, and those with the most are at the end. The extraordinary result is seen that the four worst counties in the matter of convictions for drunkenness, are the West Riding of Yorkshire, Glamorganshire, Durham, and Northumberland. But in the list showing the number of licences per 10,000 of population, those four counties, all of them, stand extremely high. Northumberland is second, Durham fifth, Glamorganshire ninth, and Yorkshire, tenth. On the other hand, take the best counties in point of convictions, Oxfordshire and Cambridgeshire. They are at the top of the list in the matter of convictions, but in the list of licences, Oxfordshire stands lowest but three, and Cambridgeshire lowest but one. But the matter does not end there; there was an article published the other day by the hon. Member for Blackburn in one of the reviews, and he gave in that review the corresponding figures for two boroughs, viz., Accrington and Nelson, which he stated to be only twelve miles apart, fairly equal as to population, both cotton-weaving centres, both strongly Nonconformist, and their housing conditions very similar. What did he find? He found in Accrington, with three times the number of licences in proportion, to population, only half the proportionate> number of convictions for drunkenness as compared with Nelson. He says—It is no part of my business to assign reasons for this paradox. Many reasons might be suggested; the degree of police supervision is one explanation,[MINISTERIAL cheers]—I am still reading the quotation—although it can scarcely apply to this particular case where the towns are so close together and the whole character of the people so similar. It will be noticed that Nelson has more clubs than licensed houses.The hon. Member might have added and more off-licensed houses than either—And this may have a bearing on the fact that there is more drunkenness at Nelsen than Accrington.1122 That comparison is based upon the number of convictions for drunkeness. The hon. Member went on to give some striking figures showing the increase in the consumption of drink in some of our Colonies and in the United States, as compared with this country. This strange result is found there, that whereas in the United States, Canada, and New Zealand the practice of local prohibition of the sale of drink is constantly growing, the consumption of drink per head of population is steadily increasing; while in this country, where nothing of the kind takes place, the consumption of drink per head is, I am glad to say, decreasing. I must make one more quotation, because it leads up to an explanation I wish to give. The hon. Member says in this article—I am not arguing from all these figures that the suppression of licences increases the consumption of liquor and that increased facilities tend to greater sobriety, but the figures do prove conclusively that there are factors in the drink question which the reduction of licences does not touch, and those other influences seem to operate in defiance of the law of supply.What is the reason for this, which appears to some people a paradox, but which is not a paradox at all? The fact is that the consumption of drink does not depend, as the writer of the article seems to suggest, upon the law of supply, but upon the law of demand; and no amount of tampering with the sources of supply, so long as they are legitimate, affects the consumption of drink. The hon. Member for Spen Valley in 1904, when he was seeking to throw the compensation upon publicans said that if you refuse a licence two-thirds of the custom goes to the other houses; and he might have added that the other one-third, if it represents a legitimate demand, goes to the off-licensed holders or the clubs. If you suppress these, people who want to drink will drink at home, and if you forbid that you will only drive the demand "under." If the demand exists, sources of supply will be found, and you will come, in the end, to the condition of some of the cities of the United States, where not only the sale, but the importation of drink is wholly prohibited and yet you find the amount of drunkenness far exceeding per head of population anything found in the city and 1123 county in London. I do think that the last word about the mechanical reduction of licences was said by Mr. Gladstone when he made the often-quoted statement that—The mere limitation of numbers, the idol of Parliament for the last twenty years, is, if pretending to the honour of a remedy, little better than an imposture.But His Majesty's Government are still worshipping at the shrine of this idol, and they propose a mechanical reduction based upon the scale of population. The estimate the right hon. Gentleman gave was a reduction by 30,000 to 32,000 houses in the next fourteen years. I will assume that to be correct, but I do not accept it as correct, because I have tested it as regards several counties and have found it considerably below the mark. I think you will find when the figure comes to be worked out it will be found nearer 40,000 than 30,000. But taking it as correct, the question, of course, arises, if you increase the number of refusals how are you to compensate the houses refused? If the Prime Minister had said: "I am going to bring about a great public improvement in relation of the sale of drink; I draw from the sale of drink in this country a direct profit to the State of something like 38½ millions sterling a year; I will ask the House to give up the half-million to a public purpose, and so increase the compensation fund and in that manner facilitate the reduction of licences,"—if he said that, I do not think that many people on either side of the House would have very greatly objected. That would have been one way of dealing with the matter, but the Government prefer what I venture to think is a less generous course: instead of increasing the compensation fund they propose to tamper with the scale of compensation. The right hon. Gentleman defended his proposals by an attack upon what is well-known as the Kennedy judgment. I listened with great attention to what he said, and although I say it with great hesitation, I think that he misunderstood that judgment. The effect of the judgment is shortly this. Under the present Act if a licence is refused the owner is entitled to get, by way of compensation, the market value of the 1124 licence. What the learned Judge said was that to get the market-value you must consider what the license would fetch by public auction. Among the possible buyers would be the brewer, who might want to buy the house as an outlet for his commodity but who before bidding would want to know the amount and quality of the beer supplied to and sold in the house. Therefore for the purpose of ascertaining the market-value the Court might have evidence of the supply and the consumption of liquor. I venture to think that the decision is good sense, and in fact a very distinguished Judge has since referred to it as a decision which cannot be attacked. But what the Prime Minister said was this—The fundamental vice—if I may use such an expression in speaking of the judgment of a learned Judge—what seems to us to be the fallacy of the Kennedy judgment consisted in taking into account, not the profit made by the trade retailer but the profit made by the manufacturer in regard to the drink which he supplied to the house.Therefore, the right hon. Gentleman understands the judgment to be this—you may take into account the profit made by the manufacturer, that is the brewer, in regard to a licensed house. But that is exactly what the learned Judge said you must not do. Mr. Justice Kennedy, as he then was, said this—In my opinion the Attorney-General was quite justified in arguing that any evidence as to the profit which may be made by the selling company upon this trade cannot be material.That clearly negatives the very point the right hon. Gentleman made, and I hope that he will reconsider the argument which he addressed to the House on this point; for, if I am right, the whole of his criticisms on that judgment were based on a misunderstanding. On the other hand, there are obvious objections to the method of fixing compensation proposed in the Bill. The Royal Commission said that they regarded rateable value as altogether beside the mark as a basis of compensation, and they gave their reason for that conclusion. They reported that—While the fact that the house is licensed may be considered to some extent in the assessment it is tolerably certain that the goodwill cannot be considered at all. But the licence and the goodwill are the things for which 1125 compensation would be given, not the building, which the owner would retain. We, therefore, regard rateable value as altogether beside the mark as a basis for compensation.And now let us test the fairness of this method by some figures. A most rev. Prelate has said that he approves the Bill, but awaits with expectant interest the discussion by experts and business men of the financial details. I venture to suggest that when you are considering whether justice is done to the owners of these houses financial details are of the essence of the Bill. And if I show that the compensation given under this Bill is but a fraction of that which ought to be given, then I think that he and others will reconsider the provisional approval they have given to this proposal. Let me give the figures in a few concrete cases. Take the houses which were the subject of the Kennedy judgment, and take first the "Hand and Spear" at Woking. In that case £1,123 was given to the owners and persons interested. Of that amount £150 went to the tenant, and the remaining £973, subject to costs, to the owners of the house. Under this Bill the compensation would only be £136, or 14 per cent, of the market value. The other house was the "Crown" at Cobham. Mr. Justice Kennedy, in that case, gave £1,497, of which £250 went to the tenant, and the remaining £1,247, less costs, to the owners. The right hon. Gentleman under this Bill gives £52, which is on the basis of 4 per cent. of the market value.
§ THE UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. HERBERT SAMUEL,) Yorkshire, leveland
Will the hon. and learned Member say how he arrives at the £52?
§ *MR. CAVE
Yes, Sir; it is arrived at by treating the assessment as the basis. I will give the hon. Gentleman particulars afterwards if he desires it. The figures were worked out for me by some very well-known experts. These figures are for the first year of the statutory reduction, and if the licences were refused in a later year, the amounts would be less. Some other valuers, who, I think, have perhaps had the largest 1126 experience of any valuers in these matters, took for me forty-three London houses, not selected houses, but all the houses dealt with by them last year, for the purposes of compensation. They give, as the actual compensation for those houses, £104,578. The owners of those houses, under the Bill, would get in the first year £18,000; and, if you take the mean year, that is the seventh year, which, I think is fair, they would get £10,930, or about 11 per cent. of the market value. Again, they have taken twenty-one London houses not the property of brewers, but the property of the licensees themselves. The capital invested in those twenty-one houses is £550,000; of course, houses are very valuable in London. On these houses the sum of £317,000 was borrowed, not from brewers, but from private lenders. Under this Bill for these houses, which cost £550,000, the total compensation in the first year would be £116,000. In other words the owners would lose the whole of their investment, and the mortgagees would lose nearly two-thirds of their money. I have here case after case of this kind, but I will not weary the House with them, though I think they are important. There will be a chance of giving them later on. Let me deal with one or two points which may be put against me. It may be said that the houses are under-assessed. I know that is said. I doubt whether that is the case in London, or in any well-known centres. Valuers have become more and more expert; they do not accept the rent or the figures given to them by the owner or occupier of the house; they look into the trade, and they are not slow to put up the assessment. But apart from that, I do not believe that, put up the assessment as you will, you can fairly put it up to any figure which would produce, when worked out on the basis of this Bill, any large proportion of the market value of the house. Then it is said: "Oh, whatever may happen to the owner—and we care very little about him—the publican is better off under this Bill." The Prime Minister said so the other day, and it has been said more than once. The hon. Member for Barnard Castle went down to a country place and is reported 1127 to have told the people there hat the publicans would get twenty or thirty times as much as they did under the present system—[AN HON. MEMBER: Ten times]. I think he said twenty or thirty, but in fact it makes very little difference whether it is ten, twenty, or thirty times, because, in any case, the compensation fund, if that were true, would be bankrupt in a year. But what is the justification for the statement that the publican would get anything more under this Bill than he gets under the existing system? Under the Act of 1904 there is a provision for dividing the compensation money; and in attributing a share to the publican, you are to have regard to his conduct of the business and the length of time during which he has been the holder of the licence. Under that provision, in my experience, the publican has had compensation for loss of business, and generally speaking, I believe, a sum equivalent to a year's profit, That is based, no doubt, on the provision of the Act, that he "shall, in no case, receive a less amount than he would be entitled to as tenant from year to year." Therefore the publican has had something. Further, he has the right to appear before the justices for the purpose of putting forward his claim; and if he is dissatisfied he has an appeal. This Bill deals with the matter in very much the same way. The Bill does say in terms that he shall receive compensation for "loss of business," and then uses similar words to those which I have quoted from the Act of 1904, but it omits (rather oddly) the provision in the Act of 1904, that in no case shall he receive a less amount than he would have been entitled to as a tenant from year to year. Under this Bill he is simply to have such amount, if any, as the Inland Revenue Commissioners choose to give him for loss of business. He has, it would seem, no right to be heard before them, and if they give him too little, he has no appeal. The Commissioners are not bound by the provision of the Act of 1904 that he shall be at least treated as a tenant from year to year. They may give him as much, or just as little as they choose, and he must take it. How, therefore, can you say that the Bill will give the tenant more than he would have got under the 1128 Act of 1904? I do not believe it. I have here a Memorandum of the Commissioners published some years ago, in which they say, dealing with the publican's lease or agreement for the purpose of death duties, that he is only a tenant from year to year, and this is sometimes determinable by a three months' notice, so that obviously the publican's goodwill is very trifling.
§ *MR. CAVE
It is a Memorandum dated the 14th May, 1890. If the Commissioners act, as they may act, on the same principle now, the publican would be rather worse off. At all events, I see no grounds for saying that he will get more than under the Act of 1904. And look for a moment at the other side, because when hon. Members go about saying that they are the publican's friends, I think they ought to tell him the disadvantages as well as the advantages of the Bill. On the other side there is this, that during the fourteen years the publican has a greater chance of having his licence refused, and that at the end of fourteen years, he will lose his licence altogether, or pay full value for it. And during that time the compensation levy will be made not over his county or district, but over the whole of England, so that he has no longer any chance whatever of profiting by the reduction of licences. The levy under the Act of 1904 was often called a premium of insurance; and it was said that the publican might fairly be asked to pay this because he would get it back if his licence were refused. But under this Bill it could not be called that, because the policy of insurance never matures. The licensee has to pay his life premium for fourteen years, and to be slaughtered at the end of that period without receiving the policy moneys. It is no longer in any sense a premium, but a heavy and oppressive tax, levied on a part of the population, for it the alleged benefit of the whole. I hope it will not be said again, without some reason shown, that the licence-holder would be in a better position under this Bill. Before leaving this particular part of 1129 the subject, I want to mention one other argument used in favour of this Bill. It is said that it will restore the freedom of the local justices. Nothing was ever less true than that. Under the present Act no licence can be refused except on the initiative of the local justices. They make their recommendations to the county committee, representing the quarter sessions, which are composed of justices of the whole county, and the local benches are represented on the county committee. They have a right, under the rules, to confer with the county committee, and they do confer; and their recommendations, in my experience, are always accepted, unless there is some financial reason against them, or unless, after hearing evidence which is solemnly given in Court, the committee come to the decision that the licences ought to be renewed. Therefore, there is a good deal of freedom under the present conditions, but under this Bill there will be little or none. The justices will be bound, under the statute, to present a scheme for reduction according to a fixed scale. The scheme may be altered by three gentlemen sitting in London, and as so altered it must be carried out by the justices, whether they think it right or wrong, and the only freedom in this respect left to the local bench is this, that they are free to select the victims who are to be sacrificed to the Licensing Commission and to act as executioners for that body. The duty so thrown upon them is an odious duty, for they will know that no proper compensation will be paid. To conclude this part of the subject, I will make one quotation from a speech made by the Prime Minister last year. He said to a deputation of debenture-holders—I can assure you that, in any legislation which the Government proposes, they will keep in view the legitimate interests of all persons who have invested their money in this trade. It is a lawful trade, not prohibited by law, and a trade, therefore, the investors in which ought to be secured, like investors in every other form of commercial or financial undertaking, against unreasonable or confiscating legislation.
§ MR. ASQUITH
The hon. Member did not quite finish the quotation. I think, if my memory serves me aright, that I did say that some people take 1130 very different views of what confiscation is.
§ *MR. CAVE
I am afraid they do. I have dealt at some length with this reduction part of the Bill, because I think that it is not sufficiently understood, and that it deserves careful consideration. In dealing with the time-limit I can be briefer, for my task is simpler. As the House knows, the proposal is that after the fourteen years any application for the renewal of a licence is to be treated as an application for a new licence and the provisions of the, 1904 Act as to confirmation and monoply value are to apply. One of the Ministers—the Secretary to the Admiralty—told one of his audiences that this was simply a proposal to revert to the pre-1904 conditions, but I do not think he will say that in this House. Before 1904 a licensee who wanted renewal was not bound to appear at petty sessions unless he had notice of objection. Under this Bill he must go there every year to fight his case, not only against temperance objectors, but against any others who may come and bid against him. Before 1904, if an applicant got his renewal it was final. Under this Bill it is nothing of the kind. If a licence is renewed the renewal has to be confirmed and the applicant must fight his battle over again before the county committee at his own expense. Again before 1904 no applicant for renewal paid a farthing for monopoly value. Under this Bill he must pay the full monopoly value of the licence. Therefore no one can say this is a reversion to pre-1904 conditions. Nor is it true, as has been said, that a time-limit in this sense was proposed in this House in 1904 and voted for by Unionist Members. The proposal then made was something quite different. It was simply that after a certain number of years, seven or fourteen, the provisions for compensation should cease and the licensee was to revert to his former position. That is totally different. I do not want to dwell upon that, but I want to consider for a moment what is the meaning of monopoly value ill this Bill, because I believe, and I am the more convinced of it after what the Prime Minister has said, that there 1131 is some misunderstanding as to the effect of the Bill. It arises from this. The Government have taken a phrase from the Act of 1904 and have applied it to a totally different subject-matter. The definition of monopoly value in the Act of 1904 is "the difference between the value which the premises will bear in the opinion of the justices when licensed and the value of the same premises if they were not licensed." If you apply that to a new licence, a licence of premises in respect of which no goodwill exists, that difference does pretty well represent the probable value of the licence. But if you apply the same expression to an old licence, the result is very different, because in that case you are dealing with a house which has been licensed and carried on for some time and which has attached to it a goodwill which may be very valuable, and if you apply these words to that particular house, you will find you are taking, not the mere value of the licence itself, but the value of the licence and the value of the goodwill. I believe that every lawyer will say I am right.
§ *MR. CAVE
Then I must withdraw that particular prophecy. But at all events, I gather from what the Prime Minister said that even he sees a flaw in this part of the Bill, and if he does not intend the Act to have the effect which I say it has, I think he owes it to the House to make the matter clear, not only on the debate on the Second Reading, but in Committee, if we ever get into Committee. I believe the effect of the Bill as it stands will be that the State will take the value of the licence and of the goodwill also. A very good authority, Mr. Rowntree, who is a friend of the Bill, has calculated the monopoly value taken under the Bill as £19,000,000 a year. I do not know whether he is right or wrong, but one would like to know whether that is something like the estimate of the Government.
§ *MR. CAVE
In an article published in the Socialist Review for this month. Looked at from this point of view, this part of the Bill is not a temperance proposal at all, but a proposal for a fiscal change, because it assumes that the sale of liquor will go on, and that the profits will go to the State. Temperance will not be promoted by this proposal. The argument used is that you are resuming public control. You are not resuming public control. You are assuming to the public the profits of the trade. It is there that we put our finger on a blot on this part of the Bill which, I believe, must be fatal to the proposals of the Government. In the sense in which the Bill proposes it, I do not accept a time-limit whatever the time-limit may be. Of course, I am only speaking for myself. A genuine proposal under which, after a certain time, the absolute freedom of justices with reference to licences should be restored, I would very gladly consider, but this is not such a proposal at all. It is a proposal that after a period of fourteen years the State shall take into its own hands, not only the absolute control of licences, but the profits and goodwill of the trade. The proposal is that after fourteen years the licensee will pay for his licence. Is that equitable? I say the licensee has paid for it already. Most people now holding licences have bought them in the market. Some have bought them from a public department. I need only mention the "Coach and Horses," Portsmouth, and that is not the only instance. There are many cases where people have bought their licences from the public in a more direct sense. For instance, people have gone to the bench for a new licence, and have said: "If you give us a new licence we will give up one or two old licences." Very often for that purpose they have bought old licences in the market sometimes at £1,000 or £2,000, and have surrendered them in exchange for a new one. Yet now they are to pay for the new licence over again. There is a still stronger case. In this book of statistics under the Act of 1904, certain people are shown to have applied for and obtained new licences on paying not an annual sum but a capital sum for monopoly value. 1133 There are three cases in the book relating to Glamorganshire where licences have been sold by the licensing authority, in one case for £3,000, in another for £4,500, and in another for £6,000. These are annual licences, and yet under this Bill these licences are not only to be subject to refusal with a minimum of compensation, but must after fourteen years be bought from the public over again. Does anybody believe that a man gives £6,000 for one year's licence or even for licence for fourteen years? Is it fair or just that after taking from him the full value of his monopoly, you should make him pay the same price over again? I am not going to discuss at length the question which the Prime Minister touched on to-day as to whether a licence is property. There was a time when the same question was raised about goodwill. It was said that goodwill was not property, but was merely the expectation that the old customers would continue to resort to the old place, and therefore the duty ought not to be paid on it nor could it be protected by the Courts. The good sense of our Judges has long since disposed of that question, and goodwill is treated as property in every sense. A licence is an advantage attached to property and bearing a reasonable expectation of renewal during good conduct, and upon the faith of that expectation money has been expended, buildings have been erected, and businesses; have been built up. Is it right to take away that advantage without giving air compensation? Take the case of the public-house buildings, many of them of great value. Before a man puts up buildings he goes to the magistrates and says: "I am going to put up these buildings, will you grant me a provisional licence?" Plans are approved by the magistrates and he gets his provisional licence and puts up buildings which may cost £2,000, £5,000, or £10,000. Does anybody think he would do that if he thought he was likely to have his licence forfeited in a year? If that were so, it would be true to say that the licence of a London theatre, which may have cost £100,000 to build, and may be let for £5,000 or £6,000 a year, may be taken away because it is a mere revocable licence. Legally, it 1134 may, but equitably and honestly no one can say that it should be. One other point. It has been said: "How inconsistent to say on the one hand that owners are going to be ruined, and, on the other hand, that drinking will go on." That has been said many times, and yet there never was a more palpable fallacy. The answer is perfectly plain. Drinking will go on. That is part of the policy of the Bill. Beer will be made and sold, but the State and not the owner of the house, will take the greater part of the profit. Then it is said: "At all events, you can set aside a sinking fund." That view was encouraged by the Prime Minister in his speech in introducing the Bill, in a passage which he has repeated to-day, and which led us to believe not unreasonably that the limit of fourteen years had been arrived at upon a basis that would give sufficient time for the owner of the house to put by enough to replace his capital. If the figures are looked into it will be found that that period is not nearly enough. Figures were given the other day by the hon. Member for the Walton Division of Liverpool in reference to tied houses, and I have here similar figures relating to other houses. But I need not dwell on that because the Prime Minister, as I understand, has given up that point. He was asked by the hon. Member for Kidderminster whether the period of fourteen years was based upon any actuarial and statistical data. His answer was that the period was not founded on any such data, and he added—The reduction period of fourteen years was adopted as being of a reasonable length, regard being had to all the circumstances of the case, many of which are not of such a character that they could be given any precise mathematical expression.I can well believe it, and many of us call guess what those circumstances are. The fact is that you cannot justify this part of the Bill, except on a principle which is not accepted even by all Socialists, namely, that if you only give notice you may confiscate any interest you wish. What the Member for Blackburn said in the article from which I have already quoted is this—The other valuable feature of the time-limit is that it establishes a precedent by which, 1135 without compensation by or cost to the community, a private monopoly may be transferred to the State.… This precedent furnished by non-Socialists is one which will not be forgotten when public opinion regrets the anti-social privileges conferred by our forefathers and ourselves upon land monopolies, railway monopolies, mine royalty monopolies, and all other monopolies foolishly handed over to private individualists by the community. As a Socialist I have never advocated a time-limit. I have been prepared to treat the drink monopoly as I would other evil things like landlordism and capitalism, and give fair consideration to private interests which the folly of the people has allowed to grow up and even to make some considerable social sacrifices for the good to be gained by the transfer of those interests to the community. But if individualists are determined to abolish private monopoly by a time-limit without monetary compensation I see no reason why as a Socialist I should oppose this convenient precedent.There are many hon. Members opposite who might very well take that statement to heart. I have left myself no time to deal with the minor provisions of the Bill. To me local veto has always seemed to be the least reasonable of temperance reforms. The clauses with regard to clubs, I think, are somewhat insulting, and they are admittedly ineffective. The proposal to empower justices to forbid the employment of barmaids is also I must say a little insulting to an honest and hard-working class. I should be sorry if those who have supported the right of women to vote were to go into the Lobby and deny to these women the right to work. I do not understand why Ireland, which was said by the Royal Commission to require restrictions on drinking more than any other part of England, is omitted, or why Scotland is omitted. Speaking for myself, I think that the clause relating to children will receive fair consideration in every quarter of the House, and my only regret is that it is not found in another Bill already before the House—the Children Bill—where it might have been discussed at leisure. But I rest my opposition on the two points which I have mentioned, and I believe that it is by these two main proposals that the Bill must either stand or fall. We on this side of the House would view with favour any proposal which would really diminish the intemperance of the country, while doing justice to individuals, but this Bill is unjust. If it were passed, I do not believe that because of it there would be 1136 one drunkard the less in England. But even if it were otherwise, if you could prove that the passsing of this Bill would appreciably reduce the amount of intemperance in this country, still I say that in order to accomplish that great good, I would not have the House do this great wrong. And if you taunt us, as you do, with the finding of the Royal Commission that hardly any sacrifice would be too great in order to diminish the evils of intemperance, I accept the statement in that form, but I say that there is one sacrifice which, even for that purpose, we ought not to be asked to make, and that is the sacrifice of the old rule and tradition of this House that even-handed justice shall be meted out to all the inhabitants of this realm. I beg to move.
§ *MR. EVELYN CECIL (Aston Manor)
I beg to second the Motion. My hon. and learned friend has criticised this measure with great and conspicuous ability, but I will venture to add a certain number of additional reasons why the Bill should be rejected, to which I hope the Prime Minister will do me the honour of paying attention. Seldom has a Bill been brought before this House containing a professed object so entirely at variance with its real effect. Its professed object is temperance, but its real effect is to attack the trade. It is a perfectly legitimate trade, which has as much right to be carried on and which has been carried on as legally and properly as any other trade. Those sitting on the Opposition side of this House do not profess to be in special alliance with the trade, but we do say it ought to be treated as justly and fairly as any other trade. We urge that this particular trade ought not to be penalised, that sober people ought not to be penalised simply because some of their fellow citizens are disgusting enough to get drunk. For the sake of these drunkards we are not prepared to support the Government in confiscating an industry largely without compensation which has been built up relying upon the good faith of the State. I should like by way of preface to say that temperance reform is not a Radical monopoly, because we on these benches are just as keen to reform drunkards as hon. Gentlemen 1137 opposite, and we wish to leave no stone unturned to accomplish this object; but we do not believe that the method proposed by this Bill is the right way to do it. Hon. Gentlemen opposite maintain that this Bill will attain that object. If so, why do they not extend the Bill to Ireland and Scotland, where the statistics show there is more drunkenness than in England? Why do they not also extend the provisions of the Bill so as to include grocers' licences? If this Bill is passed it appears to me that English brewers will have to put up the price of beer in order to provide for compensation and for the confiscation of their property, whilst their Scottish and Irish rivals will be able to undersell them. The Motion calls attention to this Bill as failing to promote the cause of temperance and violating the principles of equity. It is an iniquitous Bill, and I entirely associate myself with what my hon. and learned friend has said with regard to the time-limit. I have no hesitation in answering the Prime Minister's question by saying that I do not accept the principle of the time-limit. I think fair compensation ought to be paid, and it is essential that it should be paid. The country gave its opinion on this subject in 1895 when it pronounced with no uncertain voice on the principle of the Bill of 1893. Under this time-limit of fourteen years only one-third of the trade will be compensated whilst the two-thirds which will have to subscribe to the compensation fund will be extinguished without any compensation at all. Almost from time immemorial, from 1495, it has been the practice to extinguish licences for misconduct. For the last 150 years it has been the practice of licensing benches not to refuse to renew licences unless misconduct has been proved, and I do not know why this custom is to be departed from to-day. Where licences have been renewed from year to year something very like a vested interest has been created. The wording of the Memorandum of the Inland Revenue in 1890 expressly assumes that the licence will be renewed. All the explanations of the Inland Revenue Commissioners are based on the assumption that the annual licence will be renewed and that is a material factor in considering the 1138 compensation and treatment which the licensing trade should receive. If the practice has been wrong, are hon. Gentlemen opposite prepared to refund all the unfair rating and death duties which have been paid up to the present time? Magistrates have frequently compelled structural alterations to be made and have granted licences on the condition that such alterations were made. Would they have compelled those alterations, and would those conditions have been accepted, if they had assumed that those licences would not be renewed annually? Again, we hear that investors in brewery stocks are mere speculators. It is a favourite argument of hon. Gentlemen on the opposite benches. I entirely deny that many of them are speculators. It is a matter of common knowledge that many of the investors in these stocks are insurance companies and banks, and I cannot conceive that anyone in his sober senses would say that, as a general rule, either insurance companies or banks are speculative concerns. On the contrary, they are managed with extreme caution, and these investments were certainly made on the ground that they were safe and secure. But even granting for the sake of argument that investors did not sufficiently consider all the future, I think you are bound to suppose they considered that, while one or two licences might not be renewed in consequence of misconduct, they had no reason whatever to assume that all licences would be swept away at one fell swoop. No person, however little a speculator, could have assumed or had any intuitive knowledge to believe that all the licences connected with the breweries in which he has invested were bodily to be swept away, and that no compensation would be given. It is one thing to invest in a concern of that kind knowing that here and there a licence might be refused, but quite a different thing to say that the investor could reasonably assume that all the licences were to be taken away as this Bill proposes to do. Then we are taunted with bringing forward the argument about the widow and the orphan, as if they did not exist. There are plenty of such widows who do exist, and there are plenty who will be extremely hardly 1139 hit if this Bill passes into law in its present form. There are many who have invested in breweries, and there are many who are in a more hard-up condition than the ordinary investor. Only the other day a case came to my notice in which a widow had been left by her husband a public-house, not very far from London, which had been perfectly well conducted, and against which no cause of complaint had ever been found. It was valued roughly at something like £15,000, but it was necessary to repair it to a great extent, and her trustees applied to the Court to sanction the borrowing of £10,000 in order to carry out the repairs. The Court looked into the circumstances of the case, and sanctioned her borrowing the money. She accordingly went to a well-known bank and borrowed the £10,000 she required to put the house in order. Immediately after that this Bill is introduced. What happened? The value of these premises, even at a liberal estimate, is not more than about £6,000, or £7,000. The bank immediately called in the mortgage, because they will necessarily lose on the new valuation, and the woman who has invested all her little savings in the house, being unable to obtain a continuation of the mortgage, is utterly ruined, while the bank itself loses considerably on the money it had lent. That is a case of a very serious character, and not, I believe, an isolated case, but it very clearly shows the evil and unjust effects of such a Bill as this. Under the principle of the time-limit we know that almost anything can be done. My hon. and learned friend has read some of the socialistic proposals and has referred to the way in which this proposal is likely to be used as a precedent. No doubt it is a very convenient course to fix a time-limit within which all institutions—all property—are to be compensated to some degree, and then to be taken over—"resumed"—without compensation. If that is to be done with land, railways, and mines, why should it not be extended to personal property? Why should banks themselves not be nationalised on a similar system? I cannot for the life of me understand why hon. Gentlemen opposite are prepared to introduce such a precedent as this when it is one of the 1140 greatest danger, and might be applied to any useful industrial concern. Supposing that they secured State management for all public-houses, are they quite sure that it will be efficient? Let the House remember that State management means insecurity of tenure, because it means that since a licence is merely annually to be renewed the licensee may very likely be turned out at very short notice, and the effect of that will be that the beat licensees will not go into that kind of trade at all. You will abolish the most respectable publicans now carrying on the trade, and you will find only the less respectable and those more inclined to be subject to precarious notice willing to take service under State management. The Prime Minister has said something about extending the fourteen years limit, or being willing to be squeezed to some extent on that particular aspect of the question. I should like to know whether the Prime Minister would not be reasonable, and be prepared to put down an Amendment enabling brewers to borrow in the same way as municipalities do from the Government, allowing for a low rate of interest, and a sinking fund to exterminate the capital in sixty years or some such similar term. The State has done it as regards municipal bodies. If they wish to exterminate licences, why not apply that principle to the brewery trade?
§ *MR. EVELYN CECIL
If it is a question of money surely justice comes before money, and either this proposal ought not to be brought in at all or sufficient money ought to be forthcoming to give compensation to the dispossessed trade. Then again, the portion of the trade the heaviest hit after fourteen years is undoubtedly the most respectable. It will be the fittest who will survive and it is those who will have to pay the full monopoly value for renewal or be extinguished without compensation. Another iniquity of the Bill is the loss of employment it will inflict. Assuming that under each licence on an average five people are employed, and that some 32,000 licences will be extinguished by this Bill, it means that 160,000 persons 1141 will be deprived of their employment and will have to find it elsewhere, in trades perhaps to which they have not been trained at all. Still another iniquity of the Bill is the position of the Licensing Commissioners. I believe the Government do intend to alter that. I think it is most improper that the Licensing Commission should not be responsible to the House of Commons as is proposed in the Bill as drawn. There is no means of controlling their action, for, as the Bill at present stands, their salaries will not appear in any Estimate coming before the House.
§ *MR. EVELYN CECIL
I am glad to hear that at any rate one of the bad provisions of the Bill is to be changed. Then there is the question of the use of the Bill. It is contended that the Bill will promote temperance, but we do not think that it will really promote temperance. Is this Bill really wanted? The country, I am thankful to say, has been becoming more and more sober for many years past. Since 1870 the number of public-houses, fully licensed, has been reduced from 53.3 per 10,000 of the population to 27.9. Of course, within the last three years, since the Act of 1904 has been in operation, the reduction has been extremely rapid. Last year 2,010 licences were extinguished, and the average for the last three years was 1,311. Why not give the Act of 1904 a fair chalice of working? It is admitted on all sides to be working very well, and it does seem, not merely unjust, but extremely gratuitous, to put in force fresh measures for extinguishing these licences. I venture to say that in a very few years we should find that the Act of 1904 would do everything for temperance that this Bill is ever likely to do. The number of licences, also, is not by any means an invariable guide to the amount of drunkenness. The statistics show how utterly fatuous any assumptions on that basis really are. In the Blue-book on Licensing Statistics recently published it is stated that Cambridgeshire has now 74.95 licences per 10,000 people. According to the Schedule of the Bill the new allowance will be only 25 per 10,000 1142 people, so that in Cambridgeshire there are three times more licences than the standard, while coavictions, according to statistics, are 12.7 per 10,000 of the population. In the West Riding of Yorkshire there are 24.60 licences per 10,000 people, but the convictions there are 74.22, or more than six times as many as in Cambridgeshire. In the City of Gloucester there are 33.37 licences per 10,000 people, and under the Government proposal it should only have twenty. The convictions there are only 9.73 per 10,000. West Ham has now only 7.17 licences per 10,000 people, but under the Bill it would be entitled to double that number, and the convictions for drunkenness are already 43.8 per 10,000 of the population, or more than four times higher than Gloucester; so that in a temperate place the Bill makes numerous reductions, and in a less sober place it makes none at all, or positively allows an increase. These statistics show the ludicrous absurdity of trying to fix a hard and fast line as is done in the First Schedule of the Bill, of which the modifications are quite illusory. You do not necessarily promote temperance by reducing the facilities for obtaining drink. I am quite sure that the character, tone, and geographical position of a town or district have quite as much to do with it as the number of licences—probably a good deal more—and in abolishing these licences you affect a large number of side interests such as those of commercial travellers who make use of these licensed premises for the purposes of their business. If you are going to reduce the number of licences you will introduce secret drinking. [MINISTERIAL dissent.] There can be no doubt that that will be the case. Remember, the Bill prohibits the grant of new licences, but does not prohibit the establishment of new clubs. The magistrates cannot refuse to register new clubs merely because there are other drinking facilities in the neighbourhood. It is very remarkable that since 1904 the number of clubs registered has largely increased. The total number of registered clubs is now about 7,250. In 1905 there was a net increase of 132, in 1906 186, and in 1907 240; so that the tendency of clubs to increase when the licences are reduced is already 1143 proved by statistics which the House possesses. And it is likely that clubs will increase. Clubs have no licence duty to pay, no compensation fund to which to contribute, no restriction of hours, and there is but slender police supervision over them. Therefore, there is a direct inducement to a vast multiplication of low-class clubs which will be able to be open all night and where the police supervision is of the slightest. There are, moreover, clubs to which public attention has recently been called in which, to say the least of it, not too appropriate entertainments are given on Sundays and Good Friday. It will be a great misfortune if bogus clubs are to increase at all. Already, also, the club promoter is looking about. He sees that in a wide extension of clubs he has the opportunity of financial profit. I am sure it must be the object of hon. Gentlemen opposite, as of hon. Gentlemen on this side of the House, to avoid passing a Bill which is likely to give rise to such an unfortunate condition of affairs. I should like to suggest one or two other criticisms in respect to clubs. The Prime Minister, in reply to my right hon. friend the Member for Croydon, on the 1st of this month said that—The club clauses of this Bill have for their principal object the exclusion of bad clubs front registration. There is no intention to hamper the liberties of bona fide clubs.The intention may be excellent, but I do not think it is at all likely to be carried out, because the clauses are insufficient to eradicate ill-conducted drinking clubs while degrading well-conducted clubs. There ought to be a distinction made between clubs which are not conducted in good faith and those which are: and I would suggest to the Government that they ought to consult respectable clubs before these clauses are passed into law. There are numerous provisions which such clubs object to. They object to the transfer of the control of clubs to the licensing justices instead of being as at present in the hands of the petty sessions and the Metropolitan magistrates. The licensing justices in some districts have strong antipathies. They object also that a common informer, not on oath, should be able to lodge a complaint which would force the club in any year to prove its right to renewal of the registration. The man might be a discharged servant, a 1144 spiteful political opponent, or a blackmailer; and it is most unjust that any such persons should be given power to object to registration of a respectable club merely to gratify personal spite. Then respectable clubs object to being searched by disguised police spies. They have a strong feeling that such ought not to be the case. It calls to mind the days of search warrants condemned by Lord Mansfield 140 years ago; and I am surprised that any Government in these days should introduce anything analogous to that procedure. There is another provision in, I think, Clause 39 in which the secretary to the club is made responsible for misconduct and not the committee of the club. Surely the committee should be made responsible for bad behaviour and not the secretary. In all these respects I think gratuitous insults are levelled at respectable clubs. It is possible that some additional remedy of the existing law may be found which might do good and which might promote temperance; but I do not think that this Bill is the way to do it. I think it possible that something might be done in the direction of combining or co-ordinating the refreshment trade with the licensed trade; but it is not necessary for me here and now to express a definite opinion on that. Of one thing, however, I am quite sure, and that is that public opinion far more than legislation is likely to be efficient to promote temperance. Make people feel, make them realise the disgrace of drunkenness rather than legislate against liberty. Foster voluntary self-control; and better housing has also a bearing on the question. This Bill appears to me to do the maximum of harm to the trade, and to bring the minimum amount of reform to the drunkard. If it passes at all, which may be doubted, it certainly will not pass in any form resembling its present shape. Moderate restrictions, in the history of the world, are what have always been proved to be most successful. Excessive severity provokes evasion; and excessive laxity creates indulgence. Hon. Gentlemen opposite, in their zeal for temperance, which is an excellent cause, are apt to lose sight of the claims of justice, which is a quality of equal worth; and injustice may 1145 parade in the cloak of virtue, but it cannot keep up the disguise.
To leave out from the word 'That' to the end of the question, in order to add the words, 'this House declines to proceed further with a measure which, while failing to promote the cause of temperance, violates the principles of equity.' "—(Mr. Cave.)
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ *MR. LEIF JONES (Westmoreland, Appleby)
Last year the Leader of the Opposition, whose absence from this debate we on this side of the House deplore as much as hon. Gentlemen opposite, was good enough to express some solicitude as to the state of mind in which I should find myself in the early part of this session. He feared, he said, that the Government would not fulfil the pledge they had given, and next he thought I should not like the Bill when I saw it. I am thankful that his solicitude may be relieved on both points; and I want to express on this, the first opportunity given me, my gratitude to the Government for their fulfilment this session of the pledge they gave to place this question in the forefront of their legislative programme. It has been not without difficulty and against some pressure that they have done so, and I think that they are entitled to our gratitude for so fulfilling their pledges. The question whether I should like the Bill or not was also raised by the right hon. Gentleman, and therefore I venture to tell him that I like it very much. I desire to congratulate the Government upon the courage they have shown in this Bill. The right hon. Gentleman the Prime Minister told us to-day that he was not surprised or intimidated by the outcry with which the Bill was received, and I think that before the end of the session is reached he and the Government will reap the reward of their courage, and that therefore the Opposition may learn from observation if not from experiment that courage in politics does sometimes pay. Their Government in 1904 preferred to surrender to the brewers and they reaped their reward in 1906. [Ironical OPPOSITION [cheers.] 1146 Hon. Members opposite may jeer, but I believe that the conduct of 'the late Government towards the justices and the surrender which they made to the brewers in 1904 had more to do with their defeat in 1906 than is generally supposed. A shock was given to the moral sense of the nation which was by no means forgotten when the general election came round: and I think this Government has strengthened its position by taking its stand at the head of the moral forces of the country. The Amendment of the hon. and learned Member declares that the Bill does not tend to promote the cause of temperance. I noticed, both in his speech and in that of the seconder of the Amendment, a warm tribute to the cause of temperance and a declaration that if the Bill made for the good of that cause it would have no more earnest supporters than themselves. I have listened to many temperance debates in this House, and I have never heard one in which the mover or seconder of an Amendment did not declare that he was more devoted to the cause of temperance than those who were supporting the Bill, but they have always found that the particular measure which is before the House is one which will not forward the cause of temperance. Outside this House the same method of opposition to this Bill is being pursued by various people. We find that the stockbrokers will have nothing to do with this Bill because it will not promote temperance. I notice, too, that the hon. Member for Hammersmith has been at the pains of collecting the names of a number of solicitors who were against this Bill, because they said it would do nothing for the cause of temperance. I wonder why it has not occurred to that learned profession, for which I have a great respect and which we all consult in certain difficulties, that they make themselves ridiculous by their claiming to pronounce whether this measure is or is not in support of the cause of temperance. If they had given us a lecture on licensing law we might have listened to them, but when they undertake to tell us what is good or not good in the cause of temperance we cannot pay attention to them. There are some bodies in this country who have some claim to be regarded as 1147 experts on this temperance question, and those are the temperance societies. There are many of them who for seventy or eighty years have been working in the cause of temperance, and at the present moment all these societies, which have had their differences in the past and which in dealing with this great national evil of intemperance have suggested different remedies—all these societies are supporting the Government Bill. That is a most remarkable result, and I do not know of any Government Bill on this question which has ever been in that proud position before. That does not mean that this is the Bill of the societies, because it is not their Bill, or that of any or all of them, but the whole of the temperance societies in the country recognise on the part of the Government a statesmanlike attempt to solve a difficult problem, and therefore, sinking all minor differences, they are ranged behind the Government on this Bill. In their judgment, and I claim they are quite as good judges as the hon. Gentleman opposite, it is a measure which makes for temperance reform, and they believe that the reduction proposals of the Bill are of a beneficial nature. They do not express the opinion that reduction alone is going to solve the problem of temperance, and I venture to think that the quotation from Mr. Gladstone which the hon. and learned Member gave has been often somewhat misused. Mr. Gladstone, in his letter to Lord Thring, was not arguing against reduction; on the contrary, it is well known that he was in favour of reduction, but he said that reduction alone is not enough and that reduction, if pretending to the honour of a remedy in itself, was little better than an imposture. You must try other things, and he, in the course of his career, tried other remedies, some of them successful and some of them unsuccessful, and he never supposed, and I do not think anyone ever supposed, that the mere reduction of licences in this country could be a complete remedy for the evils of intemperance. And then let me say with regard to the statistics which have been quoted that I agree with the hon. Member that they are of very little value as proving the use of reduction, for this reason, that there are too many 1148 attendant circumstances in regard to reduction and in connection with arrests for drunkenness—circumstances having regard to different police and different magistrates—to make any comparison between different localities of much value. I do not think, therefore, we have material for estimating what is the real effect of reduction in various parts of the country. But where you have the opportunity of comparing is in a place like Liverpool where the justices deliberately set themselves to a policy of reduction, and at the same time to a policy of strict administration, with this result, that whereas at first there was an increase in the number of convictions because of the stringency of the administration of the law, as time went on and the reduction was carried into effect the convictions in Liverpool became reduced far more than in proportion to the reduction of licences. I believe that that will be the experience everywhere. The hon. Member quoted the majority Report of the Commission. He referred to one extract, and I will refer to another in which they said that it could not be denied that in enormous districts throughout the country, if not universally, owing to past lax administration of the licensing authorities, or in some cases because of the diminution of the population, and especially because of the unlimited increase of beer-shops between 1830 and 1869, an increase over which the licensing authority could exercise no discretion, there was at that time a considerable congestion of licences. They, therefore, regarded a large suppression of them as essential, and though I admit that the majority did not recommend the particular form of reduction of so many houses to so many hundred or so many thousand of population, nevertheless they did suggest that you should have regard to the density of the population and to local considerations—difference between town and country and so forth—such as are taken account of and embodied in the scheme of the Bill. Therefore I think it is not possible for the hon. Member to justify his contention that there is nothing in the majority Report to support the proposals of the present Government. But while we are having this reduction, not solely because it is 1149 going to reduce the temptations to drinking, I do think that it will reduce those temptations in certain places, and that is a consideration which ought not to be lost sight of. It is a consideration which was very much pressed upon the Royal Commission by the evidence of many witnesses, including the new Member for North-West Manchester in his salad days. He emphasised the great value of reduction in diminishing temptation to those who happen to be the victims of the drinking habit. Then, again, the reduction is valuable from the point of view of administration of the liquor laws generally, as it raises the standard. When the process of reduction is going on it raises the standard of the houses in the locality in which it is going on, and there is a sort of competition among the licensees that their houses should be better managed than those of their neighbours, so that when the magistrates are framing their schemes of reduction their licence should not be the one which is taken away. I admit that the force of that has been very greatly weakened by the compensation system set up by the Act of 1904, but it is still desired by the licensees in most cases, though not in all, to have their licences renewed, and there still is the pressure when reduction is going on to raise the standard of conduct of licensed houses. Again, it renders supervision easier on the part of the police and of the licensing authority, and that is a matter of importance. In regard to our licensing system, we start from the proposition that the trade is a dangerous one which requires to be carefully regulated and watched, and if that is not conceded in this House there is little common ground upon this question; but conceding that, it is of great importance that houses should not be in any undue proportion in any particular locality, since it makes administration and supervision very much easier. I should have thought that provided they got the compensation value settled to their satisfaction the trade had no reason to object to the reduction of the number of licensed houses throughout the country. Where a place is over-licensed, and we all agree that some places are over-licensed, they will gain by having the number of 1150 licences reduced to a reasonable proportion to the population, and from that point of view I do not think they can object to the reduction. I also fail to see how any supporter of the Act 1904 can, after all, object to reduction when they passed an Act in which the very aim of its supporters was to bring about a large reduction. We were told by the seconder that this reduction was going to bring about a large amount of unemployment, and, although I should regard that if I thought it was true as a very serious objection to the Bill, I do not accept the figures he gave as to the number of people who are likely to be thrown out of employment by passing this Bill. He estimated five to every licensed house and said there would be some 10,000 annually thrown out of work as the result of the passing of this Bill. I think that estimate is preposterous. I can find no ground for calculating that there would be any such number. I should think the number would be a little over one to every house. It must be remembered that under this Bill it is not the largest and most important houses which are going to be closed, and in many country districts at any rate, in the case of a great many houses, the licensee has another occupation. He is often a blacksmith or small farmer or painter, or is carrying on some trade, and there is no reason to suppose that in the case of every licence reduced someone will be thrown out of employment. I should say, instead of 10,000, between 2,000 and 3,000 would be far nearer the true figures of those who will have to seek employment. But even that number is worth considering. I do not lightly throw 2,000 or 3,000 men out of work in these times, and I ask myself what prospect is there for them to find employment. I find that there are a great many transfers in this trade; I cannot tell the exact number. The Home Secretary has been asked for it, but we have not yet been able to get it. I should put the number of transfers at not less than 3,000 a year, that is well within the mark, and that number alone would suffice to make openings for these men. ["How?"] When there is a transfer a new occupant is proposed, and in such cases the old occupant often has difficulty in getting employment again owing to his having spoiled his 1151 record and lost his character, but the men now in question would be men of excellent and unblemished character, and they would get places. But I do not want to press that point too far. Then there are a large number of deaths in this trade which is the most dangerous industry in the country. ["Oh!"] I do not state that on my own authority, but though I have not the figures by me, the Registrar-General calculates the mortality figures in different trades, and I find that of all the industries of the country far and away the most dangerous is that of selling liquor over the counter to people in our large cities. The people who live longest in this country are the clergy and ministers of religion, because they are good. Lawyers, good as they are, do not live so long as ministers of religion. Whilst ministers of religion are at one end of the scale, potmen and barmen are at the other. The brewers are pretty low down, but the potmen and barmen are at the bottom. From that cause alone there are many vacancies in this business, not less than from 5,000 to 6,000. Therefore, from that cause alone you have ample vacancies to swallow up the men who lose their employment by the reduction in the number of these houses. All that will be necessary is that two or three thousand young men should go into other trades. The money spent in liquor is largely drawn from that required for the necessaries of life, and if it were not spent in liquor it would be spent on furniture, clothing, and other necessaries. Therefore, from the diminished consumption of drink there would arise a demand for these articles in other trades. That is the experience of countries where they have had the wit to banish the liquor shop. They find in those countries that there is a demand growing up for other articles. The phenomenal growth of no-licence areas in the United States, New Zealand, and Australia is not due to the meet speed of teetotalism. It has arisen from the fact that business men have found out that the diminished opportunity for spending money on liquor leads to increased demand for other materials. If I might borrow a term from the Stock Exchange, a slump in liquor means a boom in every other industry. The hon. Member 1152 complains of the changed basis for compensation, but to my mind that is one of the very best things I find in this Bill, and one of the most just. I cannot find any justice whatever in the present system. In the Return granted to my hon. friend the Member for the Spen Valley with regard to the compensation paid for houses suppressed in London, I find houses which have been paid compensation amounting to 120 and 130 times the annual assessment for local purposes. There can be no justification for such compensation as this. The "Golden Fleece" at Bermondsey received £8,598 as compensation for the non-renewal of the licence. The house is still in the possession of the brewery company, who can let it as a shop and no doubt get considerable rent for it. That house, with its licence, was assessed at £67 a year for the London rates, and the compensation was close upon 130 times that assessment. In that case one of two things must be admitted. Either the compensation given was too great or the assessment for the local rating purposes was far too small. The trade can take their choice. They can either be assessed at the proper annual value for the purposes of the rates which they help so much to create, or else when the time comes they will receive less compensation. They cannot have it both ways. They must pay and be paid on the same basis. I will not argue the question of the publican very much. He will receive more compensation than at present, and his position will be better in this respect, that when this Bill becomes law it will go far to destroy the tied house system. An hon. Member complained that certain hon. Members of this House had gone round appealing to the publicans of the country to support this Bill because it would be beneficial to them; I think they have done quite rightly, because the Bill will go far to end the tied house system. Now, let me turn to the time-limit. As I understood the hon. and learned Member, he does not object to the time-limit in the sense in which the words were used so much in this House during the debates on the Act of 1904. I am glad 1153 that he has drawn attention to the twofold character of the time-limit, because I agree with him. The time-limit in this case is two-fold. At the end of fourteen years the compensation arrangement set up in 1904 is to come to an end. I always thought the State made a mistake when it entered into that business at all and helped the trade to insure itself. I believe the trade was quite competent to insure itself, and if it had been left to itself we should have been better off to-day. But with fourteen years notice, I think they will be able to insure themselves at a small cost just as they were able to insure themselves prior to 1904. For the purpose of considering the time-limit from the other point of view we may put the Act of 1904 on one side, and suppose it had never been passed. It is contended by hon. Members opposite that the State has no right at the end of any period of years to change the system of the taxation of the liquor trade, because that is what the "monopoly value" of the houses amounts to. It amounts to putting a tax of some magnitude on the trade at the end of fifteen years from now. Reference has been made to the two lines of criticism supposed to be contradictory, namely, the statement that the brewers are going to be ruined, and that the consumption of beer is not going to be less. Those statements appear to destroy each other, but that really is not the case, because the brewers are affected by this Bill, not solely because they are brewers, but because they are the owners of licensed houses. They have changed from brewers into speculators in licensed houses. That is the root of the opposition to this Bill. Much of the talk upon this matter would seem to throw on the Government the responsibility for the depression of brewery shares. It has been pointed out by The Times, which is certainly not a great friend of the Government or of this Bill—it is not in the leading columns certainly—but in the financial and commercial supplement where one is supposed to find facts it has been pointed out that it is not this Bill that has killed the brewery market:The market was dead before, and dead as the result of the speculation in tied houses 1154 which culminated ten years ago and has been collapsing ever since.The predicament in which the brewers find themselves is not of our creation, and they have no right now to ask us to stay our hand in order that they may have more time to get back what they have lost in speculation. They knew what they were doing; they knew that the monopoly value which they were buying was a most precarious value. I have had several circulars sent to me; I have here a circular from Meux's Brewery Company, from which I find that the paid up capital is £2,000,000, of which £1,500,000 is debentures and preference stock, and £500,000 ordinary share capital. Of the debentures and preference stock I find that only £8,861 is held by the licensed and allied trades. That was sent to me to impress upon me the number of widows and orphans who would be ruined by this Bill, but it makes a very different impression. It shows me that the brewers knew very well what they were investing in, and they have sold out to a less instructed public. They knew perfectly well that the monopoly value was most precarious; it depended on the law remaining as it was. They had no right to assume that Parliament was not going to alter the law. Parliament has perpetually altered the law in regard to the liquor trade. If you look at the Statute-book you will find that hardly a year has passed without some law being placed upon it which affects the liquor trade and its profits. Very stringent laws are passed sometimes. Mr. Ritchie, who sat on that side of the House, in 1882 was instrumental in passing a Bill which brought the beer off-licences under the discretion of the magistrates, and many of those beer-houses were closed without any compensation being given. That was done without any time-limit and without any compensation whatever being provided. Parliament has never parted with its right to legislate on this matter; it is the one thing which it has got in return for the monopoly value granted for nothing. The monopoly value depends also on the habits of the neighbourhood. When a great advocate like Father Mathew arises, the consumption of drink sinks to almost nothing in the neighbourhood where his influence is felt. 1155 Monopoly value depends also on the action of the justices. I am sure the hon. and learned Member will not deny that the justices were free, if they chose, to grant licences to all and sundry who applied. They tried in Liverpool the experiment of free trade in licences, and the result of it was that there was no monopoly value left in a licence, because the monopoly value depended solely on a continuance of the policy of restriction. It has not been contested, and cannot be contested—I am not going to enter into a legal argmnent—that the justices have a full discretion to refuse the renewal of the licence of an individual house if they think fit to do so. Therefore, in buying up any licensed house it is clear that the brewers were purchasing a most precarious interest. They ran all those risks because of the high profits which they thought they would make. All I can say is that, if they have not written down the value of the licensed properties as they bought them—many of them have, I know—it is one of the most scandalous chapters in the whole history of rotten finance, either in this or in any other country. They ought never to have paid those high values for precarious properties, and they ought to have written them down by a large percentage each year after the transaction. But, instead of doing that, they have distributed large dividends, and disposed of shares in their companies to a confiding public, and I hold that they must bear the blame for any difficulty which widows and orphans may at present experience. I think this monopoly value is enormously exaggerated in all the current talk. I think in the estimates that are made of it a great deal is reckoned which is not monopoly value at all; and I was very glad indeed to hear the statement made by the Prime Minister to-day that he had it in his mind to try to give some clear definition of what this monopoly value is. I believe that in the estimate of £100,000,000, or thereabouts, ordinary profits are included; but as I understand it, it is not the intention at all to include in the monopoly value anything except those extra profits which are conferred upon the liquor trade over and above all other trades, as a result of monopoly. I believe, for 1156 the purpose of writing down that monopoly value, the limit of fourteen years is a generous one. I noticed that the hon. Member for Walton in his speech on the First Reading of the Bill did not expect such a generous limit. He had prepared his figures on the basis of a ten-years limit, which, I imagine, was the basis on which he expected the Government would start. Personally, I wish the Government had chosen ten years, a limit which would have met the justice of the case. The Government have been most generous, I claim, to the trade, and, if anything, they have not perhaps been quite careful enough of the great interests of the nation. Certainly, if there be a failure anywhere, it is not towards the liquor trade but rather towards the nation. But the trade in the time-limit allowed can easily, I think, write off the monopoly value. I am glad to see that they are already making an attempt to do it. I understand that a great brewery company in Watford have declined to renew their subscription of 10s. 6d. a year, which they have contributed for some thirty years to the Ragged School Fund to provide a holiday outing for the children. For thirty years they have paid the subscription without grumbling or demur, out of the gladness of their heart and the fulness of their pocket, but now, without warning, without a fourteen years limit, with only twenty-four hours notice, they have cut off that 10s. 6d. I do not complain. They are within their rights. But so are we within our rights in proposing that in fifteen years from now the nation shall be in a position to make a new arrangement with regard to licences. I welcome very heartily the local option proposals of the Bill, and, unlike the hon. and learned Member who moved the Amendment, I regard with the greatest hope the application of this principle. I believe that when the people get the power into their hands they will use it for the better regulation of the trade, and for the improvement of their own condition, just as do the people of the United States, and of our Colonies. The local option provisions will operate immediately in regard to new licences, and that is a point which has been much emphasised by my hon. friend, the Leader of the Labour Party 1157 in this House, the Member for Barnard Castle. He has pointed out that working men very often invest their savings in house property, and, with the aid of cheap transport, they take their families to live in places where there are no public-houses. But, unfortunately, in too many cases the brewers' agent follows them up, and sometimes precedes them, and working men, having invested their money in houses situate in areas where they hoped to be free from the public-house, find that they have not escaped it after all. This provision for local option in regard to new licences will be of great importance in the growing suburbs of our cities, and the people will be able to keep them free from public-houses, if they desire to do so. Let it be remembered that when a public-house comes into a neighbourhood other property goes down in value. I noticed in the speech of the Prime Minister, in introducing the Bill, what I venture to think was an error. He said that you could arrive at the value of a licensed house by comparing it with the value of the house, exactly similar, next door, but without a licence. That, I think, is a fallacy. The moment you grant a licence to one of two houses exactly similar and next door to each other, that house which has not got the licence immediately becomes diminished in value. Indeed, a great part of the value of licensed property in this country is positively sucked from the surrounding property. We have this proved by the rents which are obtained in districts where there are no public-houses. Not only is there to be local option with regard to new licences, but it will come into operation with regard to all licences at the end of the time-limit. On this point I would like to ask the Government a question. Section 2 of Clause 3 provides that—Local option shall, after the term ination of the reduction period, become exercisable in such a manner as Parliament may determine, both as to prohibition and as to the limitation of the number of licences.What I want to ask the Government is this: As I understand it, if no fresh legislation be passed by Parliament, the licences, being new licences at the end of fourteen years, will become subject to the local option provisions of Clause 1158 2; that is to say, the majority of the population may decide by their votes that there shall be no licence in their neighbourhood. I ask the Government if they can give me an answer on that point. ["It is so."] I am told that it is exactly as I have interpreted the Bill, namely, that unless Parliament does legislate, this local option becomes automatically operative under the provisions of Clause 2. That is a provision to which we attach the utmost value, because the Parliament of some future day, not being like the present one, might not be so keen to entrust the people of this country with the right to veto licences. Let it be remembered that to those who advocate temperance, local option is the one great issue between the forces of temperance and of drink the world over. It is by local option that the people of the United States have been successful in vetoing the liquor traffic. In the debate on the First Reading, statistics were quoted to show that local option had not diminished drinking, but I noticed that the licensed trade in America became so alarmed by the results of local option and prohibition in the States that they summoned a great convention which met a month or two ago. Its purpose was to put the trade right before the American Press and public, who had misunderstood that trade, and to offer to assist towards obtaining a model licensing law for the solution of the great problem of regulating the liquor traffic. That does not altogether look as if they were satisfied with the progress of local option in the States, where some 36,000,000 are living to-day in no-licence areas. Another feature of the Bill to which I attach value is the increased power which is given to the local licensing authority. Power is given to the local licensing authority to put an end to on sale of liquor on Sundays. I do not see why the option should not be the other way, and that there should be complete Sunday closing unless the justices decided otherwise. I accept the justices as the authority, but there is a certain amount of inertia about the benches in some parts of the country, and, I cannot but think it would be better to enlist on the side of Sunday closing all the power of inertia which resides in them, and only enable them to escape 1159 from Sunday closing if they actually take the trouble to do so by administrative act. Then I should have preferred to see election day closing made statutory instead of being left to the magistrates. That has been tried in many parts of the world, and there is only one testimony in regard to it, that elections are purer and more satisfactory where this disturbing element is removed from the electoral system. Another point on which I welcome the words of the mover of the Amendment is the exclusion of children from public-house bars. I think Members would be almost unanimous in strengthening this clause. Whatever you may think of public-houses as a resort for grown-up people, they are not nurseries in which our children should be reared, and if the Government could see their way to make the exclusion of children under fourteen from public-houses a statutory provision in that part of the Bill there would be little or no opposition in this House. In regard to clubs, may I say I think these provisions at all events have not been wholly understood by the people of the country. They have been criticised from two points of view. One is that they are too drastic. By the way, the seconder of the Amendment managed to combine both points of view in his criticism. The second is that they do nothing to check the evils which exist in clubs. Very great powers under them are given to the licensing justices. They have power to close any club which in their judgment is used mainly or wholly for drinking purposes. I think that is a very large power to place in the hands of any body of men, and if they desire, and I have no doubt they will desire it, to put down bogus drinking places—clubs merely for drinking purposes—they have full power under the provisions of the Bill as it stands. I noticed the hon. and learned Member for Liverpool made a most eloquent speech outside this House almost entirely taken up with the weakness of the Government Bill in this matter of clubs. I want to assure him that I would support him most heartily in any Amendment which he might think fit to propose to strengthen the clauses of the Bill in regard to clubs. I am sure the wish 1160 of the Government is to go as far as the House will support them in going in this matter, and I should be only too happy to place my services at the disposal of the hon. Member. At the end of the time-limit, when the Bill has been in operation for fourteen years, we shall reach a licensing system on what Sir Henry Campbell-Bannerman, in his speech to a deputation in 1906, called a clear logical basis. Then the system will recognise that the trade exists for the people of this country, and that it never was intended that the people of the country should be the victims of the trade. They will have the right to decide for themselves whether or not the trade shall be carried on in their neighbourhood. If they so decide the number of houses will bear some reasonable relation to the requirements of the population to be served, and the local authority, the licensing justices, will be armed with great power to protect their districts from bad methods of carrying on the trade. That is a system which will be vast change for the better, and for which, I think, the country will greatly and heartily thank the Government. I know how strong is the trade agitation against the Bill. It is well organised, but it is on a very narrow basis, and in my study of the process I have received against the Bill I have found very few which did not come from people who are in some way or other interested in the carrying on of the trade. The circulars and letters that come to me are very nearly all from brewery companies or investors. I have to remind myself that there are other interests to be considered in this matter besides those of investors in the liquor trade and those who are interested in carrying it on. The trade opposition to the Bill has not been altogether scrupulously exercised. Threats are held out to the bishops of the withdrawal of subscriptions, and have met with a dignified protest. When the Bishop of Birmingham speaks in support of the Bill he is instantly reminded that he would not be a bishop to-day if it had not been for the brewers' subscriptions, and that there will be no more cathedrals built if the Bill goes through. The threats of boycott to traders, which were recommended 1161 at the great Queen's Hall meeting, are no idle threats. They are being carried out. I have brought with me a notice from a brewery, which has been circulated through the North with orders for goods to the tradesmen—In sending you this order we may respectfully call your attention to the proposed Licensing Bill which means, if carried, the ultimate extermination of our trade, when orders from brewers must cease. Soliciting your opposition to this unjust proposal, we are, yours faithfully, the Newcastle Breweries, Ltd.
§ *MR. LEIF JONES
Then I am glad you are not a trader. Traders have no difficulty in realising the threat. What meaning has this if it is not a threat?
§ *MR. LEIF JONES
The fact sent to a trader in a small way has made the trader so nervous that he has sent it on to me asking whether this sort of thing is fair. I should be thankful if I could have the support of the hon. Member in explaining to the traders in the North that this is not a threat but merely a statement of the expectation, of the brewery company, that it is no threat, implied or expressed, and that the orders will go on just the same as long as they have the money to give the orders. I shall be grateful for the support of the hon. Member in making that clear. The traders of the country, unfortunately, who depend for a living sometimes on these orders, are more stupid than the hon. Member and read a threat where he thinks none is meant. All I can say is that the traders are entitled to protection from this sort of treatment by the trade, and I shall be thankful if as a result of my bringing it before the House that protection is promised. But there is more than that. It is not only the traders who are threatened. We here are all threatened, 1162 and the candidates at elections are threatened. I think it is an evil thing for this nation that a particular trade interest dares to send to Members of Parliament such letters as I have been receiving. It is a national danger, and therefore I ask the Government to support public men and Members of this House against this narrow, bitter trade opposition. After all, if the opposition is strong, so is the support for the Bill. The Prime Minister stands to-day in a proud position, for he has at his back in this struggle, which I regard as nothing less than a I struggle between the forces of good and evil in this country—I place it no lower than that—he has at his back practically every agency for uplifting the people that is to be found in this country. The Churches are behind him, with the Archbishop at their head, and the Nonconformist ministers vieing with one another in the support which they give to the Bill, and temperance societies, which after all have no selfish end to serve. I heard the right hon. Gentleman opposite cast a jibe which, I thought not worthy of him, at teetotallers. What have teetotallers to gain through this agitation?
§ MR. JESSE COLLINGS
When the hon. Member talks about threats from the brewers, we receive as candidates or Members more threats from the temperance societies than from the brewers.
§ *MR. LEIF JONES
I did not know it. I am told that we are an insignificant minority of the population, incapable of putting pressure to a successful extent on anybody. But it is a very different thing to put the pressure of persuasion, which is all teetotal societies have to put, and the financial pressure which can be put by others. The Churches are behind the right hon. Gentleman, the temperance societies, which have worked at this problem and at last see some solution within their grasp, are with him. The trade unions, to whom all Members of the House pay homage for what they have done for the working classes, are behind the Government in this matter. The Labour Members to a man, I believe, are supporting the Government Bill. The 1163 co-operative societies and, I confidently claim, every agency for uplifting the people of the country are behind the Government. Let the Prime Minister persevere with the Bill and his Government will be remembered hereafter as a Government which staked its existence to deliver the county from the grip of a dangerous monopoly and prevailed.
§ MR. BARNARD (Kidderminster)
I am sorry the last speaker should have ended his speech by fancying that those who do not agree with him are prompted by unworthy motives. I can assure the House that as far as I am concerned I have no share or any interest of any description in matters affecting this trade, but I happen to have been associated with it twenty years ago, and it would be a very mean and cowardly thing if under those circumstances I did not try to say one word in connection with a subject which to some extent I understand. It appears to me that the last speaker is very much mistaken in supposing that the brewery companies of this country have intentionally in any way whatever misled the public or tried to make them invest in their shares. I am very sorry myself that the Act of 1904 was ever passed, because I dislike its having taken away the magisterial discretion. But at the same time that Act established three principles: first, it established compensation from the trade to the trade; secondly, it created the position to-day in connection with granting of new licences, of which I think we all approve; and thirdly, it dealt with the ante-1869 licences which I, for my part, should have liked the Prime Minister to have mentioned in his speech, and I should be very glad if the last speaker had dwelt upon that point a little more. I am not going to try and deal with the big principles which are involved in this measure, but just to point out one or two minor points which I fancy may be easily overlooked. The Conservative Party dislike this Bill because it touches the rights of property, but they need not talk so much about that, because in the Act of 1904 they deliberately took away the rights of 30,000 licence-holders which, before, nothing could have taken away except misbehaviour. The Member for Blackburn says he likes the Bill because it 1164 establishes the elementary points of some form of socialism. I dislike the Bill because I do not think it does what it professes, and in a great many ways it does that which it does not profess to do. There are four different means of distributing liquor, the clubs, grocers' licences, steamboats, and public-houses. I do not want to touch further upon clubs, but I distinctly put it to the House that the Bill appears to single out public-houses and leaves the other three means of distributing liquor out of consideration and does not treat them in any way with the same severity. It is a mockery to say that a policeman may, just when he pleases, march through these clubs. It is certain that the uncontrolled clubs are getting rid of an enormous quantity of alcohol at the present time, and if we get rid of another 30,000 houses this evil will become still more pronounced. It seems to me that the Bill does not apply the same principle to the other three distributors that it does to public-houses. The bishops say that they do not want anything unfair, either in the time-limit or in the business considerations. The Prime Minister has been reminded of a speech he made in the City in which he stated that he desired to have regard to the rights of property, and that the Government were willing to give a business consideration to the parties concerned. But that is just what the Bill does not do. The principle of the time-limit and its interpretation is a thing which, in my opinion, is not well understood. Up to the present I always thought that the time limit meant coming back to the position before the Act of 1904, and now I find that it means something quite different. It means that at the end of fourteen years the monopoly position is to come into force. The hon. Member for the Spen Valley Division says that the brewers will not be injured because they will do the same volume of trail. Quite so, but they are doing it now under conditions with which we are well acquainted. I am not going to prophesy, but already the weak breweries are in trouble. People who have invested money in these breweries are inclined to withdraw it, and before the end of the time-limit is reached the trouble will become something gigantic and terrible. The last speaker asked 1165 "Why don't you insure?" It is difficult to insure now, but at the end of fourteen years it will be still more difficult. If you consider the way in which people have traded from the beginning up to now it appears to me that everything that the brewers and publicans have done has been done in the open with perfect frankness. Nothing has been concealed, and public-houses have been openly bought and sold, taxed and rated. I wish to make good the point that it was well understood that publicans have a right, and they had been led to expect a renewal of their licences. It has been said by the hon. and learned Member opposite that this Bill does not appear to be based upon ally scientific or actuarial method. It appears to me that we have a right to expect something more than a mere arbitrary decision as to the time-limit and the other matters included in this Bill. There is another inconsistency with regard to local option. If we are to have local option then let us have it. When we hear complaints made about the effect of beer during an election why have not the Government the courage to legislate upon this question? It is a very regrettable thing, if the Bill remains as it is now, that we should leave it to 960 licensing benches to decide what charge they shall make in the future against these licences. That proposal is altogether out of place, and the Government might very well take upon themselves the duty of dealing with this question. The matter of redundancy is not of great importance if accompanied by right conditions. I would sooner leave this matter to the locality than draw the hard and fast rules which are placed in the Bill. There are two points to which I wish to refer, namely, compensation and the time-limit. As to compensation, the system of the Bill is to take the rate-book and find what the valuation is. The hon. Member for the Appleby Division says the rate-book cannot be relied upon. That is the fault not of the owner but of the rating authority. If any of us knew of houses rated below their proper value we should not feel ourselves called up to tell the Assessment Committee. If I take the figures which have been quoted here, the Chancellor of the Exchequer's idea, the view of the Inland 1166 Revenue, or the last idea of Lord Justice Kennedy, what does it amount to? You have been told that the sum is a mere fraction; but why should the Government mind if the trade is providing the money? What can it matter to the Government which system is adopted if the money to pay for it comes from the trade? I was glad to hear the Prime Minister say that the tied house tenant would receive greater consideration under this Bill than under the previous measure. I think we should have this point put more definitely than a mere reference to the Inland Revenue Commissioners, and it should be put in a form in which we can understand it. The Prime Minister drew special attention to this great monopoly and dealt with free houses. The last speaker, who is an expert on temperance, said that he had no quarrel with the free houses. There are however only about 7 or 8 per cent. of this class of public-houses in the country. In the town I represent, out of 124 houses there are no less than 84 free houses belonging mostly to little breweries. Under this Bill they will be reduced from 124 to 50, and it stands to reason that the effect upon them will be very terrible. In the case of these small breweries, if the licences of these public-houses are taken away the trade of the breweries will go also; consequently, I hope that further consideration will be given to the effect of this particular section. I am very sorry that I cannot see eye to eye with the Government upon this matter, but I welcome the announcement that the Prime Minister is ready to accept Amendments, and I hope he will strengthen the Bill by treating all the distributors of drink alike. I trust he will alter the method of calculating the compensation, and make clear what his treatment of tied houses is going to be. I want the Government to do something for the free houses, and if the time-limit is to remain, I hope it will be made clear that they are to have the first option and the choice of the monopoly value when fixed so that they may go on in the future.
§ SIR JOHN KENNAWAY (Devonshire, Honiton)
I have all my life been deeply impressed by the national evil of intemperance, and filled with an 1167 earnest desire both in and out of Parliament to do something to alleviate it. On my first election to Parliament, thirty-eight years ago, speaking on the evil in Exeter, I said that we had to consider how, without a bridging individual liberty, and with due regard to vested interests, we might so regulate the liquor traffic that it should be a blessing and not a curse. Looking back upon the many years that have since elapsed, it is melancholy to observe how little has been done, and the causes of this inaction. In the first place, the trade seems very generally to oppose anything which appears in any way to limit their powers and discretion. On the other hand, I can not agree with the hon. Member for Appleby when he says that because the temperance societies approve of this Bill it must be right. I think that in many cases temperance societies, instead of advancing the cause of temperance, have hindered it, because they have again and again opposed good measures on the ground that they did not go so far as they would have liked. In looking back at the attempts at legislation. I find that the first matter that came before us in Parliament was a question of local option. We all recognise the great efforts of Sir Wilfred Lawson in this direction. We know how he brought that matter forward again and again, and how the House would not listen. My first speech in the House was made on that question. I earnestly desire to help forward the cause of temperance, but I could not support the proposal of local option, and I think the judgement of the House has affirmed what I did. Then we had the Licensing Bill of Mr. Bruce, which effected a good deal in the way of shortening hours and in many ways greatly benefited the cause of temperance. After that the right hon. Gentleman the Member for West Birmingham brought forward a Resolution in favour of the municipalisation of the drink traffic. The right hon. Gentleman did me the honour of asking me to second the Resolution, and I did so. It was rejected by a large majority, and it has never been attempted again. The next occasion on which the licensing question came to the front was when Mr. Ritchie's Bill proposed the establishment of local 1168 authorities, and it will be remembered that in setting up county councils he gave them power to diminish or to close unnecessary public-houses. To carry out that power he put an extra tax of 1s. on every barrel of beer sold. What happened? The temperance societies and the whole temperance forces of the country, led by Mr. Caine, raised such a cry that the clauses had to be dropped. If that had been carried into effect there would now be in the country of Devon 300 public-houses less than there are at the present moment. The extra 1s. on a barrel of beer had already been voted, and Parliament had not power to take it away, and so the tax which was intended for the purposes of compensation was applied to technical education. I cannot but feel that a very great hardship was done to the trade at that time in putting this tax upon them. It has never been taken off. It was applied to technical education, and the cause of the failure of that power to close public-houses was the temperance party. Then came the appointment of the Royal Commission which sat for five years and went into the matter most fully. I think we must have continually before us one of their recommendations, as follows:—It is an undeniable fact that a gigantic evil remains to be remedied, and hardly any sacrifice would be too great which would result in a marked diminution of this national degradation.After that Report, any Government could hardly help taking up the question and attempting in some way to deal with it. Any Government that takes it up has a right to demand that there should be impartial, if not favourable, consideration given to its proposals, in view of the difficulties of the question and the risk to them which the talking of it up involves. I would ask, was there anything like impartial or fair consideration given to the Bill of 1904? It was opposed from the first in every way, and thereby what might have been a very good Bill was not properly and fully discussed. There is no doubt that that Bill required amendment. I quite agree with the hon. Member for the Appleby Division that on the question of the assessment of compensation it needed amendment, 1169 but the principle I maintain was the right one. That principle ought to have had a fair trial, and with amendment the Bill would have done much to improve the position of the licensing question. After all, when we come to deal with the question, it is not merely a matter of pious sentiment or pious aspirations; it is a question of what is just and right; it is a question of what is practicable and what is common sense. By these principles I should like to try this Bill. In the matter of justice, I think it has been shown that it does confiscate altogether the interests which are affected, or at least take away a very large portion of their property. If there was anyone more earnest than another in the cause of temperance it was Archbishop Temple, and he said at a great meeting at Exeter—There is a feeling abroad that you contemplate an act of injustice to your fellow-country-men. I say you will never succeed nor deserve to succeed in your attempts at legislation until you have disabused the public mind of that impression of injustice.That impression of injustice is very strong at the present time. If this evil is to be dealt with, why should it be done by confiscating interests? Why not pay compensation? When England made up her mind to grapple with the question of slavery in our Colonies she did not hesitate to lay down £20,000,000 to carry out that principle of justice. Why is it that now a different course is to be taken in attempting to carry out the recommendation of the Royal Commission which said that—Hardly any sacrifice would be too great which would result in a marked diminution of this national degradation.But the sacrifice of a money payment to those whose interests are to be taken away is deemed a sacrifice too great, and therefore the simpler plan of confiscation is adopted. The question has largely turned on the time-limit. Many of us in 1904 voted for a time-limit. I did so myself, but the time-limit then proposed was very different from that now proposed. I was doubtful of the effect of the 1904 Bill, and in voting for the time-limit I guarded myself at the time by stating that after a short time there should be power to revise the Act, and to say whether it 1170 was working rightly or wrongly. The time-limit then proposed was intended to secure full control of the trade with a view to a further reduction if the country saw fit. I do not think it ever contemplated the confiscation of the monopoly value which it is now proposed that the surviving houses should pay. Then there is the question—Is it a temperance measure? Will it not result largely in the substitution of clubs, not open to inspection or control as in the case of the regulated public-houses? The Prime Minister showed in his speech on the introduction of the Bill that he was alive to that. The clauses contained in the Bill provide for increased control being given to the Justices over clubs, but if I understood rightly the reply which the right hon. Gentleman gave the other day to a deputation, he has given in to the clubs altogether, or to a large extent, and ho has undertaken to remove from the Bill those provisions which would allow of clubs being satisfactorily dealt with.
§ SIR JOHN KENNAWAY
I am very glad to hear that that is not the case, because the question of clubs is a very serious one. The suppression of public-houses hitherto has resulted in the establishment of clubs, and the drastic proposals of this Bill will, I am sure, result in the establishment of clubs. Those clubs ought to be properly dealt with. How can you subject clubs to the restrictions which apply to public-houses? How can you limit their hours, occupations, or amusements, or the days on which they are to be open? The Financial Secretary to the Admiralty will be able, I hope, to tell us something about clubs for which, I think, he is responsible in Camberwell and other places, where, judging from the accounts which we read, most remarkable proceedings take place on Sunday, as well as on other days. I believe a reduction in licences is a desirable thing in itself, but if you go beyond or contrary to public opinion, you will do more harm than good to the temperance cause. It is not commonsense to go so far beyond public opinion as this Bill really does. Might not a Bill be agreed upon which would do a great deal in this direction without upsetting and arousing the whole feeling 1171 of the country in the way that has been done by this Bill? I think the question of the severe punishment of the drunkard ought to have been dealt with. I think he five-shilling fine which has been inflicted in the past is absurd; that on a second conviction there should be a heavy punishment; and that for a third offence a man should be confined in an inebriate home or some place where this malady can be treated. I think there is much need for a stronger public opinion for the enforcement of existing penalties against publicans who break the law. The earlier closing of licensed premises would do much good in many towns and I think that that could be carried out with considerable beneficial effect. These are practical measures which would do much to diminish the evils which we are all anxious to lessen; but the Government have not been content with that. They have gone in for heroic measures. In listening to the speech of the right hon. Gentleman in introducing this measure I felt tempted to quote the expression made use of by a French officer who looked on at the Balaclava charge: "C'est magnifique, mais ce 'est pas la guerre." The Bill embodies a splendid and glorious idea, but it is certainly impractical and visionary in its character. I am afraid the Government have been caught and let in on the principle of confiscation. I consider that confiscation is applied in this Bill. I look to another measure of the Government, which I believe still survives, and that is the Education Bill. There the Government deliberately confiscates thousands of schools belonging to private individuals and trusts and takes them for the public service without any compensation whatever. These are very dangerous principles for a Government to enunciate and seek to put into a Bill. I see it has been said that this is a matter which is likely to spread a good deal further. It has been said that if you confiscate the property of some brewers, why not that of all brewers? And then the Socialists would go on to the confiscation of manufactories and railways. One thing comes after another. Once sanction is given to a dangerous principle, there is no saying where it will end. The country is not prepared to go such a length as this Bill invites 1172 them to go. I believe that the Bill, while having good aims, has gone the wrong way about securing them. Much as we admire the courage of the right hon. Gentleman and of the Government, much as we join in the sentiments expressed by the hon. Member for Appleby as to the great evil caused by drink and desire to meet it, I believe that this Bill does not go the right way to do it.
§ *SIR J. DICKSON-POYNDER (Wiltshire, Chippenham)
In rising to support the Second Reading of this Bill I do not desire to go at any length into many of the provisions embodied in it with regard to temperance. I think that all sections of the House are in favour of temperance, and if it can be carried out on fair and equitable lines it will receive general sanction. There are many provisions in the Bill which, obviously, will make for temperance in the future. There is, first, the limiting of the hours on Sunday; secondly, the proposal to exclude children from the bars of public houses, and I hope that that clause will be strengthened in its various stages through the House and that it will be made compulsory. Thirdly, the regulation of clubs will, I think, meet with the sanction of the House. We are all anxious to have the clauses dealing with clubs very materially strengthened. I should like myself to see a licence duty imposed on clubs as it is on licensed houses; and I think something in the direction of closer regulation of clubs should be made, especially of those particular clubs which derive their revenue or a large proportion of it from the profits on the drink sold therein, as distinguished from the revenue derived from subscriptions. I think that in cases where two-thirds of the revenue are derived from the profits on the sale of alcoholic drinks, they should with perfect justice be placed on the same footing in respect to regulation as public-houses. Before the termination of the debate I should like to have further informaton as to how temperance on the lines proposed in the Bill can be effected without imposing an undue burden on the trade, for I am confident that the most certain way to ensure temperance reform in this country is to establish it in such 1173 a way as to avoid, by every means in our power, an undue sacrifice and severity on those concerned in the reform. In approaching this question I do not do so in any hostile spirit to temperance reform, but with the most earnest desire to secure it on lines of reasonable equity, and that is the only way in which it can be secured in this country. There are two main principles in the Bill, viz., the compulsory reduction of licensed houses within a prescribed period of time, subject to compensation; and the ultimate resumption by the State of those houses after the time-limit. With those two principles I am fully in sympathy and entirely approve of them. In 1904 when the subject of a time-limit was before the House I, with other hon. Gentlemen now on the Opposition Benches, voted for that particular principle being embodied in the Act of that year, That Act undoubtedly directed attention to the reduction of public-houses, but it was marred by the refusal of the then Government to introduce a time-limit. By that refusal they precluded any guarantee that a really substantial number of licensed houses would be reduced over a reasonable period, whilst the second effect on the licensed houses that were left was to emancipate them from any close control by the State. The more houses are reduced under the Act of 1904 without a time-limit, and the more the remainder are emancipated from State control, the greater the value of these houses will become. The Leader of the Opposition in 1904 admitted by his Act that there were too many public-houses for the requirements of the country, and in the interests of the trade itself; and although the present Act has made a very good start in the direction of reducing the number of public-houses—for I think 1,100 have been reduced every year since the Act came into operation—the very weakness and incompleteness of the machinery of that Act must render it impossible to maintain that scale of reduction or the character of that reduction where it is most wanted, owing to the lack of funds that must result from the process of the necessary proceedings, as was pointed out by the hon. Gentleman who in a most interest- 1174 ing speech moved the rejection of the Bill. The most redundant and least valuable public-houses have been extinguished, whilst the licensing magistrates will find themselves more and more reluctant as years proceed to extinguish the remaining public-houses, owing to their increasing value and the lack of funds. The argument has always been advanced that redundant public-houses have a direct bearing on the amount of intemperance in districts. That was admitted in 1904. Undoubtedly that is the case, because where the public-houses are redundant the publicans are induced, owing to increased competition, to use undesirable methods in the sale of their drink. Therefore, in that respect, I fully agree that there is a direct bearing between redundancy of public-houses and intemperance. But I am not quite prepared to put it so high as some hon. Gentlemen. I would put it as one of the potent contributing influences of intemperance; but an equally important influence is the density of population in a district and the insanitary character of that district, both of which conditions induce drunkenness in an active and virulent form. This opinion has been borne out by the Home Office Returns. It is equally important that the State should establish a practical machinery to reclaim for itself that thorough control over public-houses which it possessed but has never enforced in days gone by. There had, however, arisen a deliberate policy in many districts of encouraging the granting of licences rather than the contrary. This, of course, accentuates the difficulty of now reclaiming for the State complete control of the licences. I prefer to call it control of the licences, rather than use that hackneyed phrase which nobody understands, but which I hope will be explained to us before the end of this debate, "monopoly value." "Monopoly value" conveys some ambiguous idea, but the control of the licences by the Sstate is perfectly unambiguous. It is idle, moreover, to talk of monopoly value and deny, at the same time, the continuance of a licence from year to year. So much for the two main principles of the Bill, with which I am in complete agreement; but let me deal for a few moments with 1175 the proposals as to compensation. The provisions which I am going to deal with may be deemed details to be dealt with hereafter on the Committee stage, but they assume such great importance in their proportions that they become almost principles. In dealing with a complicated question such as licensing, you cannot concentrate your eyes upon temperance with any hope of realising real temperance, without taking note of the effect which that reform must have on the industry concerned and those interested in it as investors. To ignore the latter is to risk obtaining the former, and in the course of your policy you may incur such unpopularity that you will deprive yourself of the power of carrying through the reform. It is argued that under the financial proposals of this Bill the whole of the principles upon which the rights of property are based are involved. Though I think that argument has been a little overstated on public platforms and elsewhere, still at the same time I think there is a good deal of truth in it. The rights of property in this democratic Parliament, of course, are looked upon in varying ways by those who sit on the various benches. Some, undoubtedly, exaggerate their sanctity, some under-rate it, but I refuse to admit, in this instance, whatever may be said to the contrary, that I exaggerate it because I refuse to accept in my argument that the licence is an annual licence, that the investment has been purely speculative in the past, and that the trade has been warned of impending legislation. But although, of course, the licence is in theory an annual licence, in actual practice everyone who has had any experience of the licensing bench knows that, provided the holder of the licence has behaved himself and conducted his house properly, whenever that house came up for the renewal of the licence, it has always been granted; and, therefore, although it has been an annual licence, throughout the country in practice it has been something more than that. Having conceded so much, however, there appear to me to be very important points in the Bill which I will venture to deal with successively and which, I think, should undergo some change in the course of the 1176 Committee stage. First, I will deal with the precise basis of valuation for compensation under the Bill during the period of compulsory reduction. In the first place, what is a fair basis of compensation? A fair basis of compensation is that which will meet the actual loss incurred by the reduction. The present basis of the 1904 Act as interpreted by Mr. Justice Kennedy is, I think, admitted on all hands by those who are conversant with licensing benches to be largely excessive in its amount. The 1904 Act lays down the method by which that compensation is to be arrived at, but the way in which it is interpreted by licensing benches to-day is excessive. They take an average of the profits on the beer and whisky sold for the three years previous, and that is multiplied by ten to allow ten years profits to run. That is taken into account, and having deducted the amount which relates to the house itself, as distinguished from the house as it is licensed, the amount is multiplied by eighteen years purchase. The result in almost all cases of this mathematical calculation is that an excessive valuation is come to, and the result would be, if this goes on in its operation for a period of years, a very considerable diminution in the number of houses reduced owing to the insufficiency of funds. But if that is too high it appears to me that the proposal of the Bill estimates the valuation of the premises on too low a basis. It lays down the proposition that the annual licence under Schedule A, which is the assessment for the rent, shall be estimated according to the number of years that are to expire within the fourteen years period. We have seen a number of tables and we have also had many figures given us by hon. Gentlemen on the other side of the House, showing the enormous disparity which exists if it is worked out under the present Act or under the proposals of the Bill. Whether these figures are accurate or not, I am unable to say, because although during the recess I have taken the trouble to try and arrive at the method by which this second calculation is to be made, I am bound to say that I have totally failed in my endeavours. If these figures are correct, I think the disparity between the two 1177 calculations will appear in most people's minds to be too great, and that something should be done to bring together these two extremes. It seems to me that it might be done in two ways. It might be done by maintaining the present basis of valuation, although I have no doubt my right hon. friend would demur to that proposal, because it would involve a complete redrafting of Clause 10 of the Bill, or it might be done by making an Amendment in the present clause, which would authorise the Commissioners of Inland Revenue to arrive at the true and proper assessment of these premises under Schedule A, because In many cases they are not assessed at; their proper rental value. Whether a proper assessment, if a provision were introduced in the Bill to that effect, would give a basis which would realise a figure nearer to the one which would be just as between the present basis of compensation and the proposed one, I am not prepared to say, but I must say that something should be done to ensure that a higher basis of valuation should be given in this case. The basis of ten years profits is too much, but if you were to multiply the profits by six years—not the brewer's profits, but the real profits of the public-house—it seems to me that you would arrive at something like a proper amount of compensation which might be granted in respect of a house upon its extinction. I leave that point, because in the discussion of the Second Reading one cannot go into details as to how it could be worked out in Committee, but I do hope that something will be done in Clause 10 to bring about what in my judgment would be a more equitable basis. If it is necessary to have a higher basis of compensation it will require a larger fund being provided by the brewers who have got to find the money, and this brings me to the second point, which is that the period during which compensation should be paid should be extended over a greater period than fourteen years. We have received from many sources information as to how it would work out at fourteen years, and I think there are many hon. Members on this side of the House who would gladly welcome an Amendment which would give more generous treatment and probably twenty-one or even twenty-five 1178 years would not be too much as the time during which compulsory reduction should be made and compensation given. It must be remembered that we shall at the end of the time-limit reach the period when all redundant public-houses will have been extinguished throughout the country, as 32,000 are to be extinguished. There will be a co responding increase of the population during that period and therefore I think it may fairly be assumed that the number of the houses which will then exist will about correspond to, or not be sufficient in many districts to meet, the requirements of the population. Therefore from a temperance point of view the reduction of houses will have been carried out and the number surviving will only be that which is, reasonably speaking, the requisite amount for the population of the day. I do not think that those who are enthusiasts in temperance reform should look with too keen an eye on the actual number of years, because what difference can it make in the history of the country in regard to the great reform of temperance whether it is fourteen years or twenty-one; and certainly if by extending the period from fourteen to twenty-one, you are able appreciably to lighten the burden on the trade concerned, you will correspondingly facilitate the passage of this measure not only in this House, but in another place. There is one more point which I wish to bring before the House in connection with the Bill, and that is the position of the surviving houses at the expiration of the time-limit. As I understand the provisions of the Bill at the expiration of that period those 62,000 odd houses have first of all to undergo a general local election to decide whether or not they are to continue in existence, and when they have passed through that ordeal they will come up before the magistrates who in their turn will decide whether the licensee or someone else is to be granted a licence. It must be remembered that they have been paying their share of the compensation throughout the time-limit. What is to be their position at the end of the time-limit under this proposal? Here again money has been spent quite properly by those who have invested it in a perfectly legitimate concern, and they have every right to hope that 1179 throughout their time they may, if they so desire, withdraw from that business and have a possession which shall be a realisable article in the market, so that if it is put up for sale it will sell for a figure which is within reasonable distance of what they have invested in it. But it seems to me that by this Bill that is taken away. What is wanted at the end of this time-limit is that the State should get complete control over the licences. It seems to me that, provided they get the control, the arrangements made by the State through the bench of magistrates do not much matter. I think these houses that are left might be granted leases under the State for a period, say, of five years. That could be done quite consistently by the State without impinging on the temperance principles of the Bill. Because I think you are far more likely to get a respectable man to manage a public-house if he knows he is there for five years, than if you have a man who has to come up every year for a licence, and knows he may be turned out any year. I think, therefore, a lease of five years under the State would meet the case in every way as regards control, while at the same time it would be in the direction of temperance. It is on these three points, on which I lay special stress, that I venture to speak this evening. Of course, as regards new licences full control may be introduced. I have nothing to say against imposing most stringent conditions with regard to those, but as regards these old licences, after all that has taken place for their reduction and when a levy has been imposed on the trade, I think more generous treatment should and might be meted out to them in the Bill. It may be said that these are matters of detail, but I believe they are also matters of great principle. I believe the points I have brought forward are the main essentials of the Bill, because without these modifications I do not see how this Bill can pass both Houses of Parliament. I am sincerely anxious that the Bill when it passes this House shall not show any provision which does manifest injustice to the trade or any person connected with the trade which would have to be amended in another place. I believe that upon the exten- 1180 sion of the time-limit, the enlarging of the basis of compensation, and the position of these houses after the Bill becomes law—on the modification of Clauses 1, 3, and 10—largely depends the fate of this measure. The object of those who sit on this side of the House, in the laborious weeks which lay before us, should be so to mould and fashion this measure that when it leaves this House it should present a permanent and just scheme of temperance reform such as can be accepted and defended by all reasonable people in the country.
§ *MR. SNOWDEN (Blackburn)
As very frequent references have been made to myself in the progress of this debate I should like an opportunity of explaining my position in regard to this matter. I approach the consideration of this question from the point of view of temperance reform. I can speak, I think, also in the name of those with whom I am associated. We recognise the great necessity of removing every stumbling block from the path which makes for the social and moral betterment of the people. This Bill is not a panacea for all the evils of drink, but so far as it is a temperance measure, it seeks to promote social reform in the direction of curtailing the opportunities of obtaining drink. Quotations have been made from an article I wrote, with the object of giving the impression that I hold the opinion that the reduction of facilities is not likely to cause a reduction in intemperance. My purpose in giving the figures which have been quoted this afternoon was to point out that while I admit that there is a connection between facilities and the amount of drink consumption and drunkenness, it is not the only, or, in my opinion, the most important factor in the case. In my opinion, there are other factors of far greater influence and importance. The drink question is not a simple question. It is not a question that can be treated as an isolated question; it is part of the whole social problem, and if we approach the consideration of this question, or indeed the consideration of any with a reasonable hope of arriving at a proper solution we shall have to consider it as a whole. The two other factors for consideration 1181 to which I attach great importance, are the social and industrial condition of the people and the method of supply. By that I mean the financial interest which the brewers and publicans have in the supply of drink. I do not say that the brewers and publicans are worse than any other people. They go into the drink traffic as others go into other trades in order to make a living; but, unfortunately, so far as the drink traffic is concerned, it is only by the encouragement of drunkenness that they can get rich. This Bill does not propose to touch those two important factors. The hon. Member who moved the rejection of the Bill sought to prove that there was no connection between facilities and drunkenness, and referred to Durham, Glamorganshire, and Yorkshire, and showed that these counties had the highest percentage of drunkenness. But it is not the question of facilities at all in those three counties. In those counties the factor is the social and industrial conditions, especially housing. There are instances where with a small number of licences convictions for drunkenness are high, because there are other important factors. Apart from these things I do not think it is possible to prove connection between facilities and drink consumption. When prohibition was established in the State of Maine, the number of arrests for drunkenness increased. But nobody would maintain that there was more drunkenness after the establishment of prohibition than before. This is not a matter to be decided by convictions for drunkenness but by common sense. I think all are convinced that there is a change coming over the drinking habits of the people. I think that change is most manifest among what I might describe as the better part of our artisan population. I believe there is one class who drink much more than they formerly did: men of the commercial class who have the command of their own time. That is the class which is numerically increasing so much. They do not spend hours together in a public-house, but they visit public-houses very frequently with friends in the course of business, and in obedience to very foolish ideas they think that it is a social obligation to take drink. 1182 I think that drinking due to that cause could be very greatly diminished if the facilities were reduced. But that would not justify the conclusion that the reduction in the consumption would be in proportion to the reduction of facilities; still, if the number of houses were reduced, there would be less incentive to a publican to push the sale of drink for the sake of making a living. I believe the fact is that something like one-third of the licences change hands every year because of the difficulty of making a living. Only a few years ago the chief constable in my constituency reported t the licensing magistrates that, owing to the conditions under which the tied house tenants held their licences, it was practically impossible for them to make a living, and they were therefore compelled to resort to various methods of encouraging men to visit their houses. But a reduction of that class of public-houses would remove, I do not say entirely, but to some extent at any rate, the incentives which the publican is compelled at the present time to offer to men in order to push the sale of drink and make a living. These reasons—they might be added to—are quite sufficient in my opinion to justify our support of this Bill, which proposes to promote temperance reform by the reduction of licences. The other factor, a very important factor, namely the social and industrial condition of the people, cannot be embodied in a Licensing Bill nor in any one Bill of any kind. Speaking paradoxically, we shall have to be moving in a great many directions at the same time in order to attain the improved condition of the industrial classes. I now come to the second part of the Bill, namely, the time-limit. Supposing we had reason to believe that a reduction of the number of licences would be followed by a proportionate reduction of drinking, or supposing we reduced the number of licences by one-half, believing that the amount of drinking would be reduced by one-half, then, although I do not admit that the publican has a moral right to one penny of compensation, yet, if I believed that the reduction in the number of licences would be followed by a proportionate reduction in drinking. I would advocate that the State should 1183 pay a monetary compensation in order that that should be brought about at once, and I venture to think that it would be the best bargain that the State had ever made. But I do not expect, as I have said, that the reduction of facilities would be followed by a proportionate reduction in drinking, but it would be followed by some reduction, at any rate. Now, as to this time-limit, I do not admit the right of the drink traffic to a monetary compensation. Men on the Toy benches, or who ought to be on those benches, acknowledge the same thing. The Act of 1904 is an admission that there is no permanent interest in a licence. A quotation was given in the course of the debate this afternoon in which the opinion was expressed that the time-limit would form a precedent for future legislation. May I be permitted to expound my opinion on that matter? I am no lawyer; thank heaven I have not come to that yet; but I know sufficient of the practice and theory of English law to be aware that it recognises no such thing as a permanent right, either in a licence or in any other form of property. The only thing the law acknowledges is the right of the individual to protection in the enjoyment of his property, so long as that enjoyment is not against the public welfare. But as soon as any kind of injury is inflicted on the public welfare then the public welfare must be supreme. That has been admitted over and over again. The Lands Clauses Act is an interference with the right of private contract with such compensation as the community shall decide to be fair and equitable; and mark you, that compensation va[...]i[...]s according to what has been regarded as the permanent nature of the property to be appropriated it varies in different degrees. It has already been admitted that there is no permanent right to any licence, and therefore the amount of compensation cannot be the same as it would be in the case of land, or railways, or mines, where undoubtedly the State has admitted the right of the individual to enjoy the property so long as that right to enjoy the property does not conflict with the public welfare. I do not see that those who are objecting to the time-limit have any right to complain 1184 that this thing has been suddenly sprung upon them without any warning. It is nearly forty years since a responsible Government proposed it. It is something like thirteen years since another Government introduced a local veto Bill which, if it had been carried, would have given the people the right to close public-houses without compensation. It is only ten years since hon. Members, who were then associated with the Conservative Party, introduced into this House, at the instigation of the Church of England Temperance Society, a Bill for a time-limit. Ten years ago a Royal Commission reported in favour of a time-limit, or, at any rate, certain members of it did so. Then, again, so far as I am aware, there is only one country, or only, one State in the world, where monetary compensation has been recognised, when the State has decided to assume control of the licences or to abolish the licences altogether—that is the State of Victoria. I submit, therefore, that the trade has had ample warning, and they ought to have been preparing for what they knew must come sooner or later, because every sensible man was aware that the present condition of things was not permanent. Then as to the period proposed by this Bill for the trade to recoup itself. The estimate of what is called the monopoly value of the licences is given as£100,000,000. Five per cent. over fourteen years would give something like a redemption of that sum, and yet we are told that the trade is incapable of increasing its profits by 5 per cent. Suppose the Chancellor of the Exchequer was in need of revenue, and he proposed to increase the beer tax by£5 000,000. The Conservative Government increased the taxation on beer by£3,000,000, and the trade adapted itself to that increased revenue. By that Party the taxation on beer has been increased 20 per cent. within the last fifteen years, and the trade, I repeat, has adapted itself. In order to recoup themselves under the terms and conditions of the Bill, they would require to find£5,000,000 or at the very most£6,000;000 a year, and they certainly are lamentably lacking in business capacity if they are not able to do that. Of course, we know who will have to pay it. The customers 1185 will have to pay it. The customer is paying it now. So much for the objections to the time-limit. There are just one or two other matters upon which I want to touch. One is the application of the principle of local veto in regard to the number of licences. I believe in local veto as a principle, but ever since I began to make inquiries upon this matter I have doubted whether in operation it will do very much to reduce the amount of drunkenness. But there is a great difference between local veto as applied to existing licences, and local veto in regard to the issue of new licences. In Queensland they have local option which enables a vote of the locality to close existing public-houses. A clause in the same Act enables a majority of the electors to veto the issue of proposed new licences. In not a single case has the veto been exercised in regard to existing licences, but nearly 80 per cent. of the proposed new licences have been vetoed. The reason for the difference is, of course, obvious. In the one case an interest has been created. The people who vote know the man. He is probably a neighbour or a friend, and sympathy enters into the consideration of the question, but in regard to new licences no interest whatever has been created. I believe, under the operation of that clause in the Bill, when it becomes an Act, that in the overwhelming majority of cases the people will veto the issue of new licences. I prefer that the people should have this decision rather than the bench of licensing magistrates. The people know the needs of the locality better than the bench of magistrates. There is no difference in principle between the two things, but there is a little difference in form. The magistrates, at any rate, are supposed to be acting on behalf of the people, and local veto is simply allowing the people to act for themselves and not merely through their proxies the licensing bench of magistrates. There is another reason why I approve of the proposed adoption of local veto, even in this limited form. I think it is better that a new thing should begin in a small way rather than in a more extended form. Fourteen years will accustom 1186 the people to voting on these questions, and at the end of that time, therefore, I think an educated public opinion will be far better able to deal justly with the question of continuing or vetoing licences than if the full power of local veto were conferred at the present time. I believe that during the period of the time-limit public opinion with regard to the temperance question will have opened very much, and that at the end of fourteen years public opinion will be prepared to deal with the third factor in the question of which I have spoken, namely, the method of supply; and I believe the people will take the control of the drink traffic in the fullest and most complete sense of the word. The elimination of all financial interest is at any rate an option I should like to see given to the people at the expiration of the time-limit. Just one word upon another aspect of the question, and I speak now for myself only, and that is the question of clubs. I have already referred to the provision which enables the people to veto the issue of new licences. What is the use of vetoing the issue of new licences if the minority who want the licences are going to have liberty to form a club in which, practically without regulation and without control, they can drink every hour of the day and night? I feel most keenly upon this question, because I believe temperance reform is absolutely impossible unless you are prepared to deal drastically with this question of clubs. There has been in the past few years an increase in the number of clubs. It has not been very rapid, I admit, because there has not been the encouragement to form clubs, but with a reduction in the number of public-houses, with the exercise of the power of local veto over the issue of new licences, it is perfectly certain that there will be a much more rapid increase in the number of clubs than has taken place during the last few years. Therefore, if the power to form these clubs be left even as it is proposed in this Bill it will defeat the end of all other parts of the Bill which have aimed at temperance reform. Many of the clubs which have been formed in the last few years are nothing more than 1187 public-houses owned by brewers, as much tied houses as any tied public-house. I deplore the want of courage on the part of certain politicians in grappling with this question. I do not fear the club vote. I do not believe the club vote is so strong numerically as some seem to think. I feel so strongly the need for dealing drastically with this question that I am prepared to defy the club vote. Without the treatment of this question drastically you might as well give up all hope of temperance reform. There is just another matter in connection with the Bill to which I have heard no reference made so far, and that is the fact that it does not deal with grocers' licences. Had it proposed to deal with grocers' licences I believe that would have been the most popular clause in the Bill. No one supports grocers' licences except grocers who have licences, and I think it is universally admitted that they are as potent a cause of intemperance, especially among women, as the ordinary public-house. The last speaker made a suggestion that the time-limit should be extended. I hope the Government will do no such thing. From what I know of the feeling in the country I am convinced that if the Government extend the time-limit they will take the heart out of those who are agitating and supporting this Bill in the country. Fourteen years is far longer than the trade had any right to expect. It is far too generous. We want something doing in our lifetime. We do not want to wait twenty-one years. Very brave words have been uttered from that bench and even braver words have been uttered in the country by responsible Ministers. They have declared that they mean to stand by the main provisions of this Bill. I hope they will. They have upon their side in supporting this Bill such a combination as I think has never supported a measure before. They have all the churches and religious organisations of the country, they have the organised labour movement solid in their support, and the enthusiastic support of those of us who sit upon these benches. Therefore I hope they will not take their hand away from the plough, that they will persevere and pass this measure into law, and I am perfectly certain that by so doing they will have made a beginning which 1188 eventually will bring untold happiness, comfort and health to the people of this country.
§ *MR. ELLIS GRIFFITH (Anglesey)
We all recognise the authority with which the hon. Member speaks and the sincerity of purpose that inspires all his speeches, and I am sure all Liberals, as far as I know on this side, are especially glad to know that we have organised labour also upon our side. It has been gratifying, at any rate, to know in the course of the debate that everyone who has spoken, whether on this side or that, is a very strong supporter of the temperance movement, especially hon. Members on the other side. Their voices grow quite pathetic when they declare their adhesion to the great temperance cause. Their only regret is that they could not support this particular Bill because it did not attain the purpose so dear to their hearts. The remedy of the right hon. Gentleman the Member for Honiton was quite simple. When he found a man who got drunk he would fine him the first time at a pretty big figure, at a still bigger figure on the second occasion, and send him to prison on the third—a very drastic and heroic remedy for drunkenness. As far as the Royal Commission is concerned, the unanimous Report has been referred to more than once in the course of the debate. There were direct representatives of the trade on that Commission, and they came unanimously to the conclusion that there was a gigantic evil to be remedied, and that no sacrifice was too great in procuring the diminution of what they unanimously called a national degradation. I have listened during the debate to discover what is the remedy and who is to make the sacrifice. So far as I can understand, everyone recommends everyone else to make the sacrifice and find the remedy. I take it that this Licensing Bill, at any rate, is the answer of the Liberal Party to the remedy and to the sacrifice asked of the country. With regard to this, I think the leading point of difference between the two sides on this occasion has been that the Conservative Members say: "You really cannot do much by Act of Parliament. What you want to do is to enlighten public opinion." It is said you cannot make a man 1189 sober by Act of Parliament. In a certain sense that is true. You cannot make him industrious, educated and learned. But that does not prevent us from passing Acts of Parliament on these questions. If I were asked the question I should think an Act of Parliament has more power over the sobriety of the people than almost any other part of public life. The existence of licences and the restrictions with which the trade is surrounded is the very admission of the right of Parliament to regulate the trade, and why should we not say that Parliament will diminish the number of licences—that is, the temptation to drinking? In the second place, as far as local option is concerned, it will not make a man sober, but it will give him the opportunity to make himself sober, which is a much more important thing. Is there or is there not any relationship between the number of licences and the temptation to drinking and to drunkenness? There are two answers to that question. First of all, the experiment of free trade in drink, that is, an unlimited number of licences, has been tried. If the number of licences has nothing to do with drinking, how comes it that when the free trade experiment was made drunkenness was more rife than it had ever been before, and when the converse of that movement took place in Liverpool, the city again grew more sober? Is not that really almost a conclusive answer? It proves that the increased number of licences increased the facilities for drinking, and led to drunkenness. In the Act of 1904, the whole principle underlying the measure was that if you decrease the number of licences you have a great temperance measure. It seems to me that there is no answer to those two suggestions of mine. The Liverpool free trade experiment and the Act of 1904 prove conclusively that there is a relationship between the number of licences and the facilities for drink. In regard to the second principle in the Bill—the time-limit—that is a point on which there is considerable difference of opinion. I do not propose to go as far as my hon. friend's philosophical disquisition on this point. Yon must look, when you have regard to the time-limit, at what you are time limiting. Something is said about 1190 licences and freeholds. The Leader of the Opposition, whose absence we all regret, has said more than once that he never pretended for a moment that there was a freehold in licences in this country. That being so, we must look at the property that we are time limiting. As far back as eighty years ago an. Act of Parliament was passed which said that these licences should be for one year only. At the end of the year it was not a continuation of the old licence, but the granting of a new licence for the subsequent year. That went on until 1882, when a case was tried in the High Court which decided the principle that we say has always been the law of England as to the discretion of the magistrates. In 1883, Thomas Nash, the legal adviser to the Licensed Victuallers' Association, wrote to the papers saying that this was no new thing to him, but a secret of the trade for many years past, and it had been divulged, perhaps unnecessarily, by this case, and that they all knew that subject to the appeal to quarter sessions the justices had unlimited discretion over the licences. In 1891, it was put beyond controversy in the Sharpe and Wakefield case. The trade knew all about the matter, and so it remained until the Act of 1904. What we have to consider is what difference the Act of 1904 made. What the Act of 1904 does is to provide that, when a licence is taken away simply on the ground that it is not required, compensation shall be paid by the remaining members of the trade. The Conservative Government of that time did not venture to say that there was a freehold in licences. It was never suggested that they were taking something which the licensee possessed, but that the surviving licensees should compensate the man whose licence was taken away. Under these circumstances I venture to suggest that really the 1904 Act was simply the corollary of what took place under the boom of 1896. During those years the brewers tied the houses, and in 1904 the Conservative Government tied the magistrates. The question of the principle is not in doubt, and it is simply a question of how long. Although not much is heard about it in this House, the licence is talked of in the country as if it were a freehold. In the case of a 1191 freehold a man would be entitled to twenty, twenty-five, or thirty years' purchase as compensation. But licences are not freeholds, and the time-limit of fourteen years is simply a concession made for the expectancy which the holders have had. These so-called freeholds are not insured; nobody ever heard of a man insuring his freehold. [OPPOSITION cries of "Yes."] What, insuring your freehold title? [An HON. MEMBER: Yes, against fire.] That, of course, is a very wise precaution to take.
§ *MR. ELLIS GRIFFITH
But you do not insure your freehold. No man can run away with an acre of land and you would not think of insuring your freehold.
§ *MR. ELLIS GRIFFITH
I am surprised to hear that from the hon. and learned Member who is the great Socialist Member for Liverpool. I am astonished at his interruption. My submission is that nobody insures a freehold. You may insure against fire, spoliation, or even an earthquake, but you never insure your freehold. When these licences are sold, what is the principle which a valuer applies to them? He goes down to the house, and having found out how many barrels of beer and gallons of spirits are sold in the house in the year, puts 10s. profit per barrel on the beer and 5s. profit per gallon on the spirits, and calculates the annual profit in this way. Then he asks how many years purchase he should allow, and if he is a wise valuer he considers the structure of the house, the number of public-houses in the neighbourhood, and whether the local magistrates are energetic or supine. If the result is unfavourable in all these respects, he will allow perhaps five years purchase. If the result is favourable, he will go as high as eleven or twelve years' purchase. A man who received nine or ten years purchase on his annual profit may in general be considered to have been handsomely dealt with; but the period 1192 proposed in this Bill is fourteen years. Therefore, the Bill is perfectly just from that point of view. It is said that we have not got all the religious bodies on our side. I know there are some bishops who are not with us, but I think there are at least six bishops who support us very strongly. No Welsh bishop opposes this Bill, or at any rate the majority of them have refused to join the movement against this Bill. I agree with the view that it is not advisable to legislate too much in front of public opinion. As a Welsh Member I am glad special provision has been made for Wales, because Wales is far in advance of England on this question of temperance. I am glad the Government has recognised that fact and given the people of Wales an opportunity of saying how many licences there shall be in a licensing district. I recognise that the reduction will be subject to compensation, but I nevertheless think that considerable good will accrue from this provision. But as to that part of the Bill dealing with clubs, it is absolutely no good whatever taking away a licence if a club is to be substituted. My hon. friends on the Government Bench must take their courage in both hands and deal with clubs. It is no good passing a Licensing Bill upon these lines. We ought to make a club pay licence duties. I do not stand up for the publican especially, but it does seem hard on the publican, who has to pay a licence, that he should have a club next door paying neither licence nor compensation. I know a club the receipts of which are£90 a week, and the publican close by takes£50 a week, and while the publican has to pay£40 for his licence and£60 compensation levy, or£100 a year, the club simply pays a registration fee of 5s. a year. That is ridiculous. Financial arguments have been very much gone into in the debate, but the financial considerations should not have too much weight, because higher considerations are involved in this case. I agree that it would be well worth while making a great sacrifice to get a proper control over the drink traffic. [OPPOSITION cries of "Hear, hear."] I am still of that opinion although my hon. friends opposite agree with me. In my view this is a matter 1193 which must be fought out. Everyone knows that the liquor trade lies at the root of most of the poverty, crime, and misery in the country, and until this problem is dealt with drastically we shall never have that happy and contented England which we all desire.
§ MR. WILLIAM RUTHERFORD
I desire to offer a few words in opposition to this Bill on the ground that it is a destructive and restrictive measure which is only masquerading as a temperance measure. It has been said that we on the Opposition side of the House are devoting ourselves to the interests of the brewers and publicans. I will leave others to speak for the brewers and publicans; I wish to give the view of the man in the street—the man who is a moderate consumer of alcoholic drinks, who does not get drunk—in short, the representative person in England and Wales, who is not a teetotaller and not a drunkard. I think that in considering this question it is certainly desirable to look at the question from the point of view of the consumer. I admit with the last speaker, and with the most fervent of the teetotaller orators we have heard on the other side, all the evils of drunkenness. In 1907 we had 197,000 convictions for drunkenness in England and Wales, and every man in this House knows of cases in his own experience where homes are blighted, where prospects fail, and where homes are broken up by this terrible evil. We on this side claim to be as anxious to put down drunkenness as any of those hon. Members who have addressed the House in support of the Bill, and we are prepared to make allowances for some of our friends, because those who are total abstainers themselves honestly think that the same course of conduct would be the best thing for everybody else. Those men are certainly entitled to put their views before the community in the face of the terrible evils which undoubtedly exist, but their views should not be allowed on an occasion like this to obscure our views, or to cause us to take any mistaken view of the general position. My proposition is that it is not the use of alcoholic liquors that ought to be interfered with; it is the abuse, and mere repression is no remedy. There are countries, and there 1194 are religions, where the use of alcoholic liquors is entirely prohibited, but it is a, matter of common knowledge that a certain proportion of the people of every country are devoid of self-control, and in those countries evils of a kind to which, in comparison, drunkenness is a very feeble one, undoubtedly abound. Where potable alcohol in our own country and in America cannot be obtained the people take to such liquors as methylated spirits, and there are things worse than that, such as the drug habit. I venture to lay down two principles: firstly, that all excessive drinking is admittedly a great evil, and that we should take all reasonable means to put an end to it, provided that in doing so we avoid the risk of incurring even greater evils; and, secondly, that the moderate consumption of alcohol is not in itself wrong or harmful. Whilst, therefore, we should not be concerned to interfere with the moderate and legitimate refreshments of the people, we ought to be directly concerned—and. we ought to be prepared to do everything that in us lies to diminish it—with this great national vice. How are we to carry this into effect? Well, the offhand answer to this question is that we should begin by closing up one-third of the public-houses. That is the answer made by this Bill, and I venture to say that the off-hand answer made in this way is made by people who have not studied the question of intemperance, or by people who have no practical experience of public-houses themselves. Those people who have no practical experience of public-houses may be divided into two classes. There are the teetotallers themselves, whose views are absolutely prejudiced on the question, and we who claim to be reasonable men should not allow ourselves to be misled either by teetotal views on the one hand, or by the arguments of merely interested people on the other. We should try to look at the thing fairly and squarely The other class includes the whole of the better classes in this country. The bishops, to whom my hon. and learned friend referred just now, know nothing at all in practice of the inside of public-houses. They have got their private cellars, and they have got their clubs, the Athenæum and so on, where they 1195 may meet their special friends and talk over matters with them. When they travel they go to first class-hotels. The common inn or public-house knows not the bishops or the gentlemen of the superior class, and it is equally true that they are not qualified by personal experience, and much less by necessity, to say anything really important on the subject of licensed houses. Without any disrespect to the Members of this House who are present to-night, may I say that the same thing applies to them? Members of Parliament in dealing with the question of licensed houses are merely legislating for classes of the community of whose habits and necessities, by experience at all events, they know little or nothing. They know nothing about their homes, their work, their leisure, or their requirements. Members of Parliament can get at any hour of day or night—those who are not teetotallers—any alcoholic liquors they like within the precincts of this House, and therefore there is no necessity for their going into public-houses. I venture to point out that there is not merely one means of obtaining alcoholic refreshments. There are four means open. First of all you have the wine merchant to whom any member of the public can go, and by paying for them get wines and spirits to replenish their cellars. Then you have clubs, with respect to which a good deal had been said in the debate. In 1904 there were 6,371 clubs registered in England and Wales, in 1905 the number had increased to 6,589, in 1906 the number had increased to 6,721, and in 1709 the number was 6,907. There has been a steady and regular increase in the number of clubs. All classes of the community have got their clubs. You have the House of Commons, which has been called one of the best clubs in London. You have clubs for the bishops and others, the Athenaeum, the Carlton, and the Reform, and then you have clubs in which a few poor working men meet in small inexpensive rooms in back streets. This Bill does not reduce the number of clubs automatically or in any other way; it practically imposes no restrictions upon their formation, but it imposes five distinct annoyances. Here I am opposed to my hon. and learned friend who has just spoken, because I think that 1196 clubs are harshly and improperly dealt with. Everyone of the five restrictions imposed on clubs are practical hardships, not upon the best and wealthiest clubs, but upon poor men's clubs, and that is a kind of class distinction to which I very much object. What are these distinctions? First of all, the Bill provides for the compulsory annual renewal of club registration. That is a trifle in the case of the Athenaeum or the Reform; the club would send down the secretary to carry out the formality. But it is a serious thing to a club consisting of a few poor men, because it involves the expense of getting the renewal. Then there is the transfer to the licensing justices of jurisdiction over clubs which is an intolerable thing to inflict upon a voluntary assembly of Englishmen. They do not want their clubs to be put in the category of licensed houses. They prefer the court of summary jurisdiction which has always had charge of these affairs in the past. Then there is the right of police entry. That, as you know, would be a mere farce with regard to a club like the Reform or the Devonshire, but it is a very serious thing indeed in the case of a club of a few working men. [An HON. MEMBER: Why?] Because a police inspector would not dare to go into the Reform or the Atheneaum and act as he would do in a poor man's club. In a poor man's club he would say to a member "You walk this chalk line." The police inspector would behave himself in the same way as when he goes into a public-house. The indignities to which the poor man's club would be subjected by the police inspector would never be dreamt of in the case of the wealthy man's club in Pall Mall. Then there is the question of the £20 fine. If Lord So-and-So, or the Duke of Something, had been keeping a birthday at his club and, if coming out apparently the worse of liquor, he should be "spotted" by an extra intelligent policeman, a £20 fine might be imposed. That would be nothing to the wealthy club, but such a fine in the case of a working man's club would be ruination. And, further, the penalty of five years' forfeiture is the most outrageous suggestion in regard to clubs ever heard of in any Bill previously brought before this House. I have described two of the means which are open to people to 1197 get alcoholic liquors; the third is off-licensed houses, of which there are 25,143 in England and Wales. There is a wide difference of opinion as to whether anything should be done with regard to off-licences; but it is practically admitted by the Government that nothing can or ought to be done in the way of reducing them, because the Bill does not attempt to do it. The fourth means of obtaining intoxicating liquor is the public-houses. In 1907 there were 97,554 public-houses in England and Wales—a great reduction since 1904. Every licensee of a public-house is bound to be a man of good character, or he cannot get a licence; the premises must be suitable or the licence will not be granted; there is police supervision of the premises, and practical publicity while the liquor is being consumed. All these things render the licensed public-house the safest place for the sale and consumption of alcoholic liquors. But what does this Bill propose to do? It only attacks the public-house, as has been practically pointed out by the Prime Minister and all his supporters, and fails in dealing with the other sources of supply. The Bill proposes to leave three means of supply entirely unreduced—the wine and spirit merchant, the club, and the grocers' licence. The Bill proposes to close only one-third of the existing licensed houses, and there is no doubt that that will not accomplish any practical result in the way of greater sobriety. Let us take an illustration. Supposing in a given hamlet you have three public-houses, a grocer's licence and a club, and that you have in that hamlet one or two habitual drunkards, and twenty or thirty teetotallers, and 5,000 people who are moderate consumers of alcoholic liquor. [MINISTERIAL cries of "Oh, oh!"]
§ MR. WILLIAM RUTHERFORD
Yes, that is all. I do not say how many professing teetotallers there are, but I give what I really believe to be the actual true figures of those who carry out the teetotal principle. Supposing you close one-third of the licensed houses, 1198 or one, two are left, and you have still a club and also a grocer's licence. I put it to the House, will the closing of one licensed house out of three reform these one or two drunkards? I submit that the idea is absurd. If drink is to be got from any source whatever these habitual drunkards will, in spite of the closing of a licensed house, get it; and the effect of closing the house will be that a large number of law-abiding, respectable people who do not get drunk, but indulge in a moderate amount of alcoholic liquor, will be greatly inconvenienced. In fact, the closing of one licensed house out of three, and leaving two other modes of acquiring liquor entirely untouched, will do nothing whatever for sobriety. This is not merely a matter of argument, but is proved by the facts published in the Blue-books, which establish beyond all possible doubt that the mere number of public-houses per 10,000 of the population has nothing whatever to do with and no relation to the number of convictions for drunkenness. For instance, take the County of Northumberland. I find from the returns that there are in that county 20.25 licensed houses per 10,000 inhabitants, and that the convictions for drunkenness are no less than 146 per 10,000 of the inhabitants; whereas, in Oxfordshire we have three times the number of public-houses per 10,000 inhabitants and 11.29 convictions for drunkenness, or less than one-twelth of the convictions for drunkenness in Northumberland. I have taken the trouble to extract from the Blue-books four sets of counties and four sets of county boroughs, with the corresponding figures, which I will offer to the House, as I venture to think that the subject is one of very great importance. In Oxfordshire we have 64.7 public-houses per 10,000 inhabitants and the convictions for drunkenness are 11.29. In Cambridgeshire we have 74 public-houses per 10,000 inhabitants and the convictions for drunkenness are 12 per 10,000 inhabitants. In Norfolk we have 56 public-houses per 10,000 inhabitants, and the convictions for drunkenness are 17. In Buckinghamshire we have 62 public-houses per 10,000 inhabitants, and the convictions for drunkenness are 19. Contrast these with the following counties. In 1199 Carnarvonshire we have 28 public-houses per 10,000 inhabitants, and the convictions for drunkenness are 55. In Lancashire, my own county, we have 23 public-houses per 10,000 inhabitants, and I am sorry to say that the convictions for drunkenness are 59. In Durham, we have 23 public-houses per 10,000 habitants, and the convictions for drunkenness are 101. In Northumberland, there are 21 public-houses per 10,000 inhabitants, and the convictions for drunkenness, are 146. It might almost appear from these figures as if it were true that the more public-houses there are in any district the less the drunkenness, and that the less the public-houses the more the drunkenness. However, I do not put it so high as that. In the county boroughs the figures are just as bad if you compare them in the same way. I only give the names of the places, and hon. Members can refer to the Blue-books for themselves. The places where there are the fewest public-houses and the most drunkenness are West Ham, Bootle, Middlesbrough, and Birkenhead; and the places where there are most public-houses and the least drunkenness are Gloucester, Norwich, Canterbury, and Bath. This also applies to towns where there are technical manufactures like Wolverhampton, where there are 37.54 public-houses per 10,000 inhabitants, and only 14.7 convictions for drunkenness. I put this question: why should Birkenhead, with only one-half of the licensed houses per 10,000 of the population as compared with Wolverhampton, be fifteen times as drunken? It is almost as curious a fact as that a good many teetotallers have red noses. It is one of those singular facts which nobody can explain. I do not assert for these figures that it is proved that the more public-houses the less drunkeness, or vice-versa, but what I do say is that it is perfectly clear there is no correlation between the number of public-houses and the putting down of drunkenness. During this debate, some temperance reformers have demanded the suppression of off-licences, and some have demanded the suppression of clubs. But my point is that so long as the wealthy man can go to the wine merchant and buy his spirits and wine, so long must you 1200 allow the poor man to go to the grocer to buy his bottle; and so long as you allow men of means to form a club in Pall Mall or Piccadilly you cannot prevent an equal number of poor men from forming a club and registering it equally free from restrictions. The time has gone by when the Government will be permitted under any guise to make any distinction between one section of the community and another. In my opinion you cannot and you ought not to stop the moderate consumption of alcoholic liquors, and public-houses are the safest places where these liquors ought to be consumed. The publicans must be of good character; the premises must be of approved construction and arrangement; you have publicity, and therefore these are the safest places where a glass of beer can be consumed. That is no mere opinion; it is proved by the figures of last year, where you have 197,000 convictions for drunkenness, and only 744 publicans convicted of selling alcoholic liquor to drunken people. That proves conclusively that 96 out of 197 times a drunkard is convicted of drunkenness before the magistrates he did not partake of that drink in a public-house. ["Oh."] Well, those are the facts, and that is my inference from them. Hon. Members can form their opinions, and draw their inferences. I do not pretend to give their opinions. This Bill proceeds upon the basis that the licensed house itself is the evil to be suppressed, but that I venture to think is a complete mistake. It is not the house, but it is the conduct of the man who overslips the limits of sobriety, either in the licensed house, or by buying a bottle of drink or getting it in a club, which has to be dealt with. This Bill makes as its boast that it is to put down the brewer and the publican, whereas the real temperance measure should take as its basis the putting down of insobriety. Houses of public refreshment and entertainment are a public necessity, and instead of suppression their conditions should be reformed and improved. There are two classes you have to deal with, not merely one. There are unfortunately a few thousands of drunken people in England and Wales, 1201 but there are millions for whom the public-house is an essential convenience, and you ought to help them to make a right use of it. There is another point, that catering for the public properly demands on outlay of very considerable capital, and if you strike a blow at that capital, you will certainly interfere with the enjoyment of the public, and the public who will be the sufferers. This Bill, if really a temperance measure, should contain some provisions such as the following:—It ought to deal first with the drunkard, with the man who has been three or four times convicted in one year. There are several things that might be done to him. He might be disfranchised; he might be deprived of the charge of any young children; he should be prevented from teaching in school; he should not be allowed to be a member of any incorporated profession or any trade union; and if these penalties were inoperative he should be locked up. Then, secondly, as to the drink. There is nothing in this Bill which goes to help the man who wants a glass of drink to get a better glass of drink than he has to-day. How about adulteration and false description of goods? I know of cases where that kind of thing is going on every day. I say that something should be done to put down, in a far more drastic manner than has ever been attempted, adulteration and false description. Thirdly, there is the conduct of the business. If this were a real temperance measure, why should there not be a clause making every licensee provide on demand such things as tea, coffee, cocoa and soup of a fairly good quality, and simple eatables such as bread and butter, bread and cheese, and biscuits, which you cannot get in some licensed houses to-day? Things of this kind should be made compulsory. The principal reason why the majority of licenses do not do that to-day is that they are so magisterially restricted in their space that they have found it impossible. Lastly, there are the premises to be attended to. I have always been an advocate of the policy that the licensed house should be large, open and airy, well-ventilated, well-lit, warm in winter, clean, comfortable, respectable, not a place from which 1202 you should pass an Act of Parliament to keep children, but one where no child would be soiled by entering. That is the opposite side of it. Such a house ought to be provided with abundance of chairs and tables, and be carried on with as little as possible standing at the bar, where the idea is to drink up and order another or go our. But there again you cannot have that, because of the magisterially restricted space at present. Newspapers should be provided, and there should be an abundance of games instead of their being prohibited. Music also should be encouraged instead of being prohibited. I am giving a sketch of what would be an ideal public-house. The important point is that there are thousands and thousands of men who have nowhere else to go. Alternative places have not been provided by the United Kingdom Alliance or by any of the other temperance bodies, and men are obliged to go to a public-house in order to get that legitimate refreshment and entertainment to which after a hard day's work they are entitled. I say they would behave more respectably if they and respectable places to go to. The public-house should be made as respectable as possible and not as disreputable as it is at present. ["Oh!"] I know what I am speaking about, and a good many Members of this House do not. If the Legislature and the magistracy would only give permission, I believe the large majority of licenses would make these improvements themselves if they had an opportunity. I believe that this Bill is merely destructive. There is not a world in favour of sobriety in it, and from one end to the other there is not a world ion suppression of drunkenness. It will do no good, and I oppose it because it is wanting in every possible element with regard either to the drink itself or to the premises, or to other conditions which would make for sobriety or temperance.
§ *MR. HERBERT SAMUEL
On this occasion, and it may be said also in the debate on the First Reading of this Bill, no Member of this House who has spoken, no matter how bitterly opposed to the Bill he may be, has endeavoured to minimise the evils with which it purports 1203 to deal, and the hon. Member who has just sat down has emphasised the fact that drunkenness and intemperance are among the greatest social evils of our country. The hon. and learned Member who moved the Amendment which we are now discussing emphasised it also, and the Leader of the Opposition, speaking on the First Reading of the Bill, said that of all the social evils that affect our country unquestionably the greatest is the evil of intemperance. We have had no attempt made to show that because the consumption of alcohol has been somewhat reduced in recent years, therefore intemperance has ceased to be a great, a gigantic, and an urgent social problem, and indeed the lesson to be drawn from the figures of the consumption of alcohol would be a false one if it led us to draw any such conclusion. For it must be remembered that the fall in the figures during the last six or seven years followed on a very rapid and very large increase, and at the present time if you take the average of recent years and compare the consumption of alcohol with that of twenty years ago you will find that our population consumes more now than it did at that period. Drunkenness undoubtedly is less frequent and less obvious than it has been, but we still have the colossal total of nearly 200,000 convictions every year, an immense number, and to that must be added the large number of cases that go undetected and uncharged. It is one of the gravest aspects of the matter, and it is a fact which is notorious to all who study social conditions, that drinking among women in public-houses has been very rapidly on the increase. The effect of that upon the state of the country cannot fail to be injurious. The hon. and learned Member who moved the Amendment which we are now considering and who spoke with the forceful moderation which the House always expects from him, did not devote himself to any effort to prove that temperance reform was unnecessary. What he said was that this Bill would not effect it. This Bill is built upon the principle that the excessive number of facilities for securing alcoholic liquor is most fatal to the cause of temperance, and other things being equal we assert that the 1204 greater the facilities for the distribution of liquor the larger will be the consumption. Every public-house is in the nature of an advertisement of the pleasures tat drinking. It is one of the most interesting discoveries of modern commerce that people of weak will can be hypnotised by advertisement into buying things which they do not need. One public-house in a street has the effect of one advertisement, ten public-houses have the effect of ten advertisements, and the effect is multiplied more than ten-fold. In addition every public-house is an active agency for the sale of drink, each one has its circle of habitués and each publican has his own clientèle. If you have 90,000 public-houses and 90,000 publicans then you have 90,000 agents pushing the sale of drink, and if you reduce that number by one-third pro tanto you reduce the inducements to drink. For all these reasons prima facie one would naturally suppose that the more public-houses there are the more drunkenness there would be, and other things being equal we believe that a ward in a town with fifty public-houses would be less temperate than a ward with five or ten. It is quite true that if you pay no regard to the character of the population, if you fail to take into account the severity or the laxity of police administration, you may pick out particular counties or particular towns and say that there is no correspondence between the number of licences and the number of convictions for drunkenness; but what a futile thing it is to take a county such as Oxfordshire, which is an agricultural county of small villages, and compare it with Northumberland, which is full of crowded mining towns, with a comparatively small number of houses where spirituous liquors are to be bought and sold. And we at the Home Office are well aware that, with regard to the number of convictions, we cannot fail to take into account the obvious fact that a new and energetic Chief Constable can, almost by a stroke of the pen, by altering the methods of administration, increase the number of convictions for drunkenness by ten or twenty per cent. At the same time, where we have a homogeneous group of towns or counties, with a fairly uniform administration, we often find a remarkable correspondence between the figures for licences 1205 and the figures for drunkenness. Take a group of South of England ports, Plymouth, Devonport, Portsmouth and Southampton. Those towns are fairly comparable with one another. Plymouth has 23 licences for 10,000 population, and there are 18 convictions for drunkenness; Devonport has 25 licences and 26 convictions; Portsmouth, 37 licences and 41 convictions; Southampton, 37 licences and also 44 convictions. Let us take another group of ports on the North-East coast with a different class of population and a much higher ratio of drunkenness: West Hartlepool, South Shields, and Tynemouth. West Hartlepool had 11 licences and 75 convictions; South Shields, 16 licences, 109 convictions; Tynemouth, 31 licences and 314 convictions. Let us take Cornwall and Devonshire. Devonshire with 50 per cent. more licences to the population has also almost exactly 50 per cent. more cases of drunkenness to the population than Cornwall. There are, of course, many exceptions to these figures, and I attach very little importance to them and merely quote them as contrary illustrations to those already given; but I adhere to this, that if you eliminate the disturbing factors of police administration and differences in character of the population, you do find that the larger the facilities for obtaining liquor the larger the intemperance is. But I ask the House to view the question on a larger scale than this. If you view it on a historic scale, and take the experience of the nation as a whole over long periods of time, you arrive at the certain and indisputable conclusion that where the restrictions on the sale of liquor have been relaxed, drunkenness has increased. Towards the end of the seventeenth century Parliament threw open the trade of distilling and all restrictions were removed. Everybody was free to distil spirits and what was the consequence? The consequence was that the consumption of spirits, following on that change in the law, increased tenfold in fifty years, and history records that a large part of the nation sank into an orgie of degradation. The hon. Member who moved the Amendment said that consumption depended upon demand, and not upon supply. The experience of this country has proved the contrary. It has proved that when the restrictions on supply were 1206 relaxed, at once the demand leaped up to meet the supply, and you had a consumption of liquor which did not exist before the alteration of the law. Then from time to time there were some more or less futile attempts to reduce the facilities for the sale of liquor; but in 1830 Parliament once more threw open the trade, this time the trade in beer, and within a few years beer licences were obtained literally by tens of thousands, and the results were disastrous. A great flood of intemperance spread over the country, from which we are only now painfully and slowly emerging. Take, again, the experience of those parts of the United Kingdom in which there is general Sunday closing: Scotland, Wales and Ireland, except in the four great towns. Take the Reports of those inquiries by Commission of Committee which have reported to the Sovereign or the House. They have in every case reported that the result of Sunday closing in Scotland, Wales, and Ireland have been in the direction of producing greater sobriety amongst the people. They have all recommended the maintenance, and when necessary the strengthening of the Sunday closing laws. We shall watch with interest the course of this debate in order to see whether a single member for Scotland, Ireland, or Wales will get up and say whether the Sunday closing law, in the interests of temperance, should be repealed. The Minority Report of the Royal Commission on the Liquor Licensing Laws of 1899 urged emphatically the necessity of a large and drastic reduction in the number of licences for the sake of temperance; and the majority, which contained eight representatives appointed to safeguard the interests of the liquor trade, were, with two dissentients, emphatically of the same opinion. The hon. and learned Member who made so able a speech this afternoon was not quite fair to the House when he quoted one sentence only from that Report; to the effect that there is apparently no relation between the number of licences and the amount of drunkenness. If he had continued the quotation he would have read that "It is generally admitted that the number of licences in a great many parts of England and Wales is in excess of the requirements.… Where an excessive 1207 and unnecessary number of licences are crowded together in a limited area, more drinking probably does prevail, and a large reduction is much to be desired." The majority on the Royal Commission recommended first, that the law should be simplified and secondly "that the number of licensed houses should be largely reduced." Why, if not in the interests of temperance? At that time there were 102,000 licensed houses, now there are 95,000. I think no one will hold that that is a reduction which fulfils the demand that there should be a large reduction. At the present time I am endeavouring to establish this proposition, and this only, that the reduction of a percentage of the houses is in itself a measure of temperance reform. I may quote in support of my argument the right hon. Gentlemen on the Front Bench opposite. The late Home Secretary, who had charge of the Bill of 1904, declared emphatically that what he and his colleagues desired to see as a result of that Bill was a general reduction in the number of licences. The Leader of the Opposition, then Prime Minister, on the Third Reading of the 1904 Bill said—I am perfectly convinced that when the Bill is working, and when it is seen that by this Bill, and by this Bill alone, you can without gross injustice and discontent really diminish the number of licences in this country, all Parties, forgetting the differences which have unhappily divided us during the past three months, will admit that this is the greatest contribution ever made to the cause of temperance reform.What I wish to emphasise in this is that the right hon. Gentleman-declared loudly and emphatically that his Bill was a great measure of temperance reform because it reduced the number of public-houses. It is trifling with the subject and with the House for hon. and right hon. Gentlemen opposite, who said in 1901 that their Bill was a great temperance measure because it reduced the number of public-houses, to say now that the Government Bill is not a temperance measure because to reduce their number is useless. Now if we take into account the experience of England in earlier days, and the experience of Scotland, Ireland, and Wales in the matter of Sunday closing, if we consider the emphatic recommendations of both the majority and the minority of the 1208 Royal Commission, and particularly the declarations of the Leader of the Opposition and his colleagues, the proposition is absolutely established that to reduce the opportunities for selling liquor is to promote temperance reform.
But we are told that the Act of 1904 does good service in accomplishing the reduction of licensed houses. We are further told that our Bill will not have any effect because as fast as we reduce licensed houses clubs will arise to take the place of those houses. We find the Act of 1904 wholly inadequate for its purpose. It reduces only one house a year in each district—a most trifling reduction. My right hon. friend the Home Secretary has been accused of hampering the administration of the Act of 1904, because he has prevented money being borrowed on the security of the compensation fund for the purpose of reducing the number of public-houses. Of course, my right hon. friend has refused to allow money to be borrowed to compensate houses on a lavish scale when he knew the Government was introducing a Bill to alter the basis of compensation. And it is obviously a fallacy to assert that to prevent borrowing is to prevent the Act being put into full operation. All that the Government has done is to prevent the forestalling of the future compensation fund. The Act of 1904, in our view, has two grave and radical defects of principle. The first is that each district is nude dependent upon its own fund to reduce redundant licences, and a redundant licence, therefore, is a licence in a district which happens to have a surplus in its compensation fund. The second is that it makes the reduction of licences entirely dependent upon the voluntary action of the local justices. We know that the task of reduction is difficult and invidious, and I think the justices will be glad to have behind them the compulsory mandate of this Bill. They will be pleased when, in effecting the necessary reduction, they can place upon this House the blame for any inconvenience which may be caused to their neighbours. This Act, inadequate now, will become more and more inadequate as it becomes more expansive to purchase houses. The disease we have to eradicate needs far 1209 bolder surgery than the Act of 1904 can supply. I turn from that to the difficult and complex question of the right method of dealing with clubs which sell alcoholic liquor. We fully agree—the Prime Minister has stated it again and again with the utmost emphasis—that if clubs, existing for the sale of liquor, are to be allowed to grow up as fast as the public-houses are closed, then the purpose of this Bill will be defeated. That has been clearly and definitely stated; and we agree with the remarks on that point which fell from the hon. Member for Blackburn. Twenty-five men with a barrel of beer in a cottage do not constitute a club. There may be clubs which are nothing more than public-houses on the co-operative principle. Or men may set out with the best intentions to provide counter-attractions to public-houses, and find in the result that they have provided merely a substitute. On the other hand, however, no one proposes—I do not think any hon. Member opposite would propose—to prohibit all sale of intoxicating liquor in clubs, and I do not think anyone would propose to impose irritating and unnecessary restrictions. Neither hon. Gentlemen opposite nor we desire to destroy well-conducted, soberly-conducted working-men's clubs. Life is dull enough and drab enough for the majority of the population without depriving them of such facilities for healthy social entertainment and recreation as may exist. Under the Act of 1902 there are already very considerable powers for preventing the formation and for the suppression of drinking clubs. It is true that clubs are increasing in number. The increase is about one-seventh as fast as the decrease in the number of public-houses; but, on the average, never a week passes without a club being closed under the existing law for being conducted in a way which gives rise to drunkenness. As a matter of fact, as large a percentage of clubs have been 1210 closed under the Act of 1902 as of public-houses under the Act of 1904. This Bill adds greatly to the powers under the Act of 1902. The hon. Member who has just spoken is utterly in error when he says the Bill does nothing to increase the control over the drinking clubs. As the Act of 1902 stands, a club can only be struck off the register for certain defects or offences. One thing is for permitting frequent drunkenness to take place on the club premises. We go much further by adopting the words regulating clubs in Ireland and Scotland. We say that if a club is conducted mainly as a drinking club—a very wide form of words—it may be closed by the direction of the proper authority. Under the old Act there is no means for inspection except with magistrate's warrants; we provide for the entry of a policeman. [OPPOSITION cries of dissent.] Do hon. Members opposite oppose that entry? ["Yes."] That is an interesting fact to obtain from them. We propose, at all events, a form of inspection which will be effective for its purpose and which will enable the authorities to know in what way a club is conducted. Thirdly, we prohibit the retail off-sale of intoxicating liquor to members of clubs, a sale long disapproved by the best leaders of the club movement. Further, we provide that no premises which have been used as a public-house can be used as a club within a period of five years from the time they cease to be a public-house. As the Prime Minister has said, other provisions may be proposed without infringing the principles we have laid down, which will further strengthen the law, and we shall watch with interest what Amendments for strengthening the clauses dealing with workmen's clubs will be placed upon the Paper by hon. Gentlemen opposite.
§ *MR. HERBERT SAMUEL
There are some provisions which we have reason to believe may cause some irritation and resentment and which, without in any degree weakening the powers under the Bill for suppressing the undesirable club, may, we think, perhaps be modified with the consent of the House. In the first place, the Bill provides that, pending an appeal against a conviction, the club's registration shall be cancelled, and the club may, therefore, legally be required to be closed. There is no such provision of the law with regard to public-houses. Where a public-house is discontinued by the licensing authority, that house, pending appeal to a higher authority, may be allowed to remain open. We think the same facility should be extended to clubs. Secondly, it is provided that for an offence against the provisions of the Bill, a club may be struck off the register for a period of five years. A period so long as that would make it impossible to reorganise and restart the club on better lines. The penalty of five years was not intended to be a penalty for a first offence, but was intended as a maximum penalty. Maximum penalties are often on a scale which no one would dream of applying to first offences. I remember passing over a bridge not twenty miles from London and reading an inscription that any person damaging that bridge was guilty of a felony, and liable to penal servitude for life. No one imagines that a man who damaged the bridge would be sentenced to so cruel a term of imprisonment as that, and no one imagines that a club for a single and first offence would be struck off the roll for five years. The House may, however, think it advisable to limit the penalty to one year for a first offence. To allow off-sale in wholesale quantities while retail off-sale is prohibited is regarded as an invidious distinction, and we attach no importance to the provision, which, perhaps, may be altered. There are two other points. First, what should be the tribunal to 1212 adjudicate in cases of offences committed by clubs; and, secondly, what should be the character of inspection? The representatives of the clubs prefer that they should be subjected to the jurisdiction of the stipendiary magistrates in the towns rather than to that of the licensing justices; and they urge that, although the police inspection is limited to inspection by superior officers out of uniform, yet because it is-police inspection it offends the susceptibilities of a large number of club members. It is difficult to find alternatives to these two provisions, but the Government will be very happy to consider any suggestions which may be made, subject to the conditions that the tribunal shall not be more lax and that the inspection shall not be less efficient than that proposed in the Bill. We believe that with the existing powers under the Act of 1902 strengthened as they will be, this Bill, in no degree weakened by the concessions to be made, will be fully adequate to prevent the creation or to secure the prompt suppression of clubs which are really drinking clubs. When we add all the minor proposals which make up its bulk, we believe we have in the Bill a very large body of temperance reform. The control of the people over the grant of new licences, the further restrictions of the hours of Sunday opening, the larger powers of reducing licences in Wales, the greater control in many particulars of the local justices, the restrictions on children being taken into the bars of public-houses—a clause which I sincerely trust the House will be willing to strengthen—the regulations for the sale of liquor on passenger vessels, the more effective provision for dealing with the hawking of liquor, all these and many other details constitute, we venture to, say, really a large measure of temperance reform. Of course, the representatives of the liquor trade must say it does nothing for temperance. Nobody expected them to say it did anything for 1213 temperance. We cannot imagine them going about declaring: "I know this Bill will do good, but I make an income oat of the evil, and I shall oppose it." Consequently, their process of thought appears to be this: "I draw an income from the liquor trade. This Bill will lessen my income. I must, therefore, find a justification for opposing it. So I must argue and believe that it will do nothing for temperance." And so close often is the connection between faith and interest that I have no doubt many of them do come in time absolutely and conscientiously to believe that this Bill will really effect nothing for temperance. But we claim, and are entitled to claim, that this Bill is by far the most comprehensive and effective measure of temperance reform ever submitted in modern times to this House, and that it fulfils to the full the pledge given to the nation by our Leader whose loss to-day we so deeply deplore.
I turn now to deal with the second portion of the attack upon the Bill—the argument that its finance is unjust. First, with reference to the time-limit. The time-limit, of course, is of the essence of the Bill. We stand upon the principle that what has been created by the State belongs to the State. There can be confiscation from the State as well as from the individual. There can be robbery of public property as well as of private. The nation in this Bill is not endeavouring to take from any man what is rightfully his; it is only determined to resume what is rightfully its own. There has been, and it is apparent in this debate, much misunderstanding as to what is really the monopoly value which is proposed to be taken at the end of the time-limit. The hon. Member who proposed the Amendment has said that drinking will go on, and that the only difference will be that the State will take the profits; and the hon. Member who seconded him declared 1214 that the object of the Bill was to confiscate the whole industry. The monopoly value that can be taken under the Bill at the end of the time-limit does not include—and let this be emphatically stated and clearly understood—the ordinary trade profit of the publican. It does not include the normal trade profit of the brewer. It does not include the goodwill of either. It does not include the value of the buildings. All that it includes is merely the value of the advantage which is conferred on the owner of particular premises by the exclusion of free competition from his neighbourhood. The right to impose this time-limit we assert can hardly be contested. The Act of 1828, on which the whole of our licensing system is now based, declares that a licence is to remain in force for one whole year and no longer. Hon. Members opposite interpret these words as meaning that the licence shall remain in force indefinitely unless forfeited by misconduct or bought up at full value. Those are not the words of the Act. That has not been the practice of the justices. In the year before the Act of 1904 no fewer than 837 licences were reduced, the majority of them on the ground merely that they were not required, and no penny of compensation was paid for any one of them, and that fact, as we all know, was the real reason for the introduction and passage of the Act of 1904, and the right hon. Gentleman's cheers show that he agrees with that view. But when they introduced that Bill of 1904 the very scheme of their Bill gave a denial to their own contention. As my right hon. friend the Prime Minister said on the First Reading of the Bill, in an argument which no Member opposite has attempted to answer, because it is unanswerable, if licences are property, why were the owners of that property called upon to compensate themselves? I invite the right hon. Gentleman opposite who I believe will follow me in this debate to give an answer to the question 1215 and explain why it is, if these licences are property, the licence-owners and not the State should be called upon to compensate them for suppression. It is indeed a strange kind of property for which, when it is taken away, the owner of the property has to pay compensation out of his own pocket. That there is an expectation is admitted; it is undeniable and undenied. We are of course bound by the conditions of the past. All progress is a compromise between the past and the ideal, between what has been and what ought to be. If there had not been that expectation in the past there would be no compensation and no time-limit, and the compensation and the time-limit are inserted in consequence of the existence of that expectation.
Before coming to the question of the length of the time-limit and the method of payment of compensation, I should like to answer one preliminary point which has been made by some hon. Members opposite, who have asserted that we are treating with unfairness at all events the ante-1869 beerhouses. In 1870, by an astounding provision, for no reason that one can ascertain, those licences were given the privilege that they were not to be forfeited except on grounds of misconduct; but as early as 1879 a committee of the House of Lords, which is no very confiscatory or revolutionary tribunal, unanimously recommended that the ante-1869 houses should be put on precisely the same footing as the ordinary public-houses, and in 1904 the right hon. Gentleman seized the opportunity and carried that recommendation into effect. They have already had a time-limit of thirty-nine years and they will have fourteen years more after the Act comes into operation, which is surely a sufficient period to meet the equities of the case. In reference to the number of years' time-limit I may point out in the first place that, although fourteen years is the number stated in the Bill, 1216 the time-limit is really fifteen years, for the end does not come until April, 1923, since the Act only comes into operation at the beginning of next year. There are two questions before us, first, whether the period of fourteen or fifteen years is really long enough, and, secondly, whether the assessment of compensation meantime is just and equitable. A gloomy picture has been painted of the position of the brewery trade. We are told of the decline in demand, of higher taxation, and of the burden of the compensation levy, and now this crowning blow of the forfeiture of the monopoly value at the end of the time-limit. Against this there are many off sets to the advantage of the trade which ought in fairness to be taken into account. In recent years there has been a great fall in the price of materials used by the brewery industry. There has been a remarkable concentration into fewer hands. There are only a tenth of the number of brewers now that there were half a century ago, and that has resulted in economies that come from production on a large scale and from more scientific methods of manufacture which, though they may not always produce a more wholesome product, bring more profit to the brewer. It should be remembered also—and this is a point which has not yet been made in this debate, though it is of great importance—that many of these companies in anticipation, as we believe, of this very time-limit, and in view of the insecurity of their licences, had made it their business to build up reserve funds for the protection of their shareholders. I have had an examination made from the sources of information which are generally open, and also from many balance sheets of brewery companies that are not usually published, and I find that taking the companies to the figures of which I have had access, not all, by any means, there exists at the present time in England and Wales a reserve fund of no less than £13,500,000. 1217 From that it is only fair to deduct £2,500,000, for that includes the firm of Guinness, which is really an Irish firm and ought not to be counted. That leaves £11,000,000, and there are many other brewery companies whose reserve funds I have not ascertained, as well as distillery companies which have considerable reserve funds and large interests in licensed property, and there are, of course, many private individuals who have made provision against the possibility of such a proposal as the time-limit.
§ *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 plusthe reserve fund. Therefore, whether those reserve funds are or are not invested in additional licences, it doesnot alter the contention 1218 that in so far as the reserve funds exist so far they relieve the burden of those who have subscribed the original capital of the companies. But that £11,000,000 of the reserve funds already accumulated is not all. In the last year there was added to the reserve funds a sum of at least £225,000. It was more than that but those are the figures of the companies whose balance sheets I have been able to ascertain. That annual increase in fifteen years atcompound interest of 4 per cent., which is not a high interest, 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 licence-holders. 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 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, 1219 1905, that in face of the facts and figures availablethey felt they must pay very little attention to the price actually paid in the past by the brewers for licensed premises, but must regard them as evidence of the accidental value realised for the property by the holder for whom it is acquired, rather than as a guide to the prices which the present holder might hope to obtain in the open market.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 period is either too long or too short for 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 affirm that if all the public-houses be- 1220 longed to one great trust it would not dream of maintaining them in the same numbers as now, not for the sake of temperance but as a business matter, and it would immediately set itself to work to reduce the plethora of public-houses. But since competition prevents such a 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.
§ MR. AUSTEN CHAMBERLAIN (Worcestershire, E.)
The hon. Gentleman speaks of the late Government, but surely he does not mean to suggest that that was an executive act of the late Government?
§ MR. AUSTEN CHAMBERLAIN
No. It was not. I was Chancellor of the 1221 Exchequer. A distinct duty was cast 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.
§ *MR. HERBERT SAMUEL
The right hon. Gentleman disclaims responsibility, but the fact remains that the interpretation placed by the Board of Inland Revenue upon the Act for which the right hon. Gentleman and his colleagues are responsible is that the right basis of assessment is the Schedule A valuation.
§ 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 undoubtedly 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 1222 judgment has been to increase by 50 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 compared with an annual lease with some expectation of renewal. After 1904 it was converted into a freehold tenure subject to good behaviour, and a small compensation charge. We propose now to convert the tenure, not into an annual 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 publican, the publican has very little 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 1223 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 separate basis and paid to him directly. 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 beerhouses. But there is another party vitally interested in this question, besides the 1224 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.
§ Motion made, and Question, "That the Debate be now adjourned,"—(Mr. Long)—put, and agreed to.
§ Debate to be resumed to-morrow.