§ THE CHANCELLOR OF THE EXCHEQUER (Mr. ASQUITH, Fifeshire, E.),
in asking leave to bring in a Bill to amend the Licensing Acts, 1828 to 1906, said: Although I am afraid it may be my duty to occupy the attention, and perhaps to exhaust the patience, of the House by a somewhat detailed explanation of the provisions of a necessarily complicated measure, I must—and I think in the long run it will prove a saving of time—preface what I have to say with one or two observations of a more general character. I shall not on 74 this occasion dwell on the magnitude and gravity of the evils which, by universal admission, confront us in the sphere which will be dealt with by this Bill, nor, except incidentally, on the inadequacy of the attempts which Parliament has made in recent years to provide a remedy. Everybody who is interested in social progress, in whatever quarter of the House he may sit, will, I am certain, agree with His Majesty's Government that effective reform of our licensing laws is now long overdue. What do we mean by effective reform? In the opinion of the Government, reform, to be effective, must aim at the attainment—and its success will be judged by the measure in which it effects the attainment—of two main purposes. The first is an immediate and a progressive reduction in the excessive facilities which are now allowed for the retail sale of intoxicating drinks. The second—not less important though, perhaps, less easy of attainment—is the gradual but complete recovery, with due regard for existing interests, by the State of its dominion over and its property in a monopoly which has been improvidently allowed to slide out of its control. Upon the latter of those two points so much misapprehension still prevails that, although I may seem to be reiterating that which is familiar, I will, nevertheless, venture at the outset to restate one or two elementary propositions. By the Statute law of this country ever since, at any rate, the reign of Edward VI. no one has been able to set up or to carry on the retail sale of intoxicating drink except with the express permission and licence of the State. The power of granting that permission was always vested, until the Act of 1904, in the local justices, who had knowledge of local conditions, and who might be supposed more or less at any rate, to represent local opinion and local sentiment. The justices, in the exercise of an unfettered discretion, could multiply the grant of licences at their will; and again, until the Act of 1904, in the exercise of the same discretion and the like freedom they could refuse to renew licences which they had previously granted. So; far as my knowledge goes, there was no case in the annals of bur law over now more than three centuries and a half in 75 which any court has assumed to compel a body of justices against whom there was no charge of corruption and dishonesty to regrant a licence which, in their discretion, they had refused to renew. That is the law of England, and always has been the law of England — plain, simple, indisputable, and, at this time of day, not by any competent authority disputed. How, then, has that which we are accustomed to call the monopoly value in licenses in private hands come into existence and been allowed to grow up? How have these enormous values, which I see variously estimated—though I am not disposed to accept any of the estimates myself—at from 100 to 150, or even 170 millions sterling-—some people say even more—how have these enormous values been allowed to come into existence? The answer is very simple. The State has received nothing, unless, indeed, the very small licence duty that is exacted from the owners of licences of public -houses can be regarded as anything— and, as everybody knows, it is a mere drop in the ocean. The State has received nothing, or nothing that can be described as in any sense a substantial or even partial equivalent for the monopoly value with which it has parted. What the monopoly value really means is this, when it comes to be analysed. It means what people have been ready to pay, not for a right—there never was any right—but for an expectation, or to speak with strict accuracy, for a double expectation. What do I mean by a double expectation? I mean, in the first place, the expectation that licences once granted would, in the absence of misconduct, be periodically and indefinitely renewed; and, in the next place, an expectation that the justices would not allow elective competition with those to whom they had once granted it. I say—and it is most important that this should be clearly understood and laid down at the very opening of our debates—that those were mere expectations. As regards the first of them the justices, as I have said, might and very often did—the law has been administered at one time with greater stringency and at another time with greater laxity—but the justices might and very often did, refuse to renew a 76 licence without any suggestion of misconduct on the part of the licensee. And as to the second expectation, it is also true that the justices could establish and sometimes they did establish, as in the well-known case of the licensing bench at Liverpool, complete free trade in drink within the area of their licensing jurisdiction. It follows that in either case, without any violation of the law, without inflicting any wrong for which any single human being could seek any legal redress, either or both of the expectations upon which the monopoly value rests might be frustrated, and the whole fabric of the monopoly value itself brought down to the ground. I will just notice in passing—not to deal with it in detail—an argument often put forward and as often refuted, that the State by levying death duties upon the value of licences, as though they were perpetually renewable, has given some implied recognition to an assumed right of property which the law has never created or acknowledged. Well, that argument rests upon a fallacy of the most obvious description. When a man dies and when the State takes toll of his property it takes everything of which he died possessed, considers what is its market value, and exacts the toll upon it. Very often his property is of a highly speculative nature. It may consist of a licence. It may consist of a racehorse. The question, and the only question for the State when it is levying death duties is, what anybody in the market will give either for the one or the other. And 'it no more guarantees when it takes 10 per cent, or whatever the percentage may be of the market value of a licence, that that licence will last for ever than when it takes a corresponding proportion of the value of a racehorse it guarantees that the horse will live to fulfil its engagements and satisfy the anticipations of its-trainers. But it is not necessary to labour this point, because we have before us the legislation of 1904, and if it could have been alleged with any show of reason or even of plausibility that for the State to withdraw from the holder of a licence the renewal of that licence at the end of the term, was for the State: to take away a right of property upon whom would that burden of 77 compensation have been thrown? Obviously upon the State. When we emancipated the slaves, one of the most nefarious and discreditable forms of property the English law has ever recognised, this House did not hesitate to vote public money for the purpose. When a Conservative Government, the traditional and hereditary protectors of the doctrine of property, came to reduce licenses, upon whom did they throw the burden of compensation? Not upon the community, but upon the trade. I think it is necessary to lay down these propositions in the plainest possible terms. I want to deal with this matter, if I can, not controversially. [OPPOSITION laughter.] I have not said anything hitherto which anyone acquainted with the history and law of the subject can describe as controversial—I want to deal with it, not controversially, but in a fair, and, as far as possible, in a judicial manner. The law being perfectly plain, as I have tried to define it, interests have been allowed to grow up outside the domain of the law, interests created, or at any rate fostered, by expectations which for so many years were so widely entertained, and, I will add, so commonly realised, and it is impossible for any statesman who has to deal with the matter now to ignore them or to leave them out of account.
Now, Sir, having made that preliminary statement as to the nature of the problem with which we have to deal, I will ask the House, and I am afraid I must make some draft upon its patience, to accompany me while I proceed step by step to show how the Government propose to act in the matter. I said a few minutes ago that the first thing is effective reform of our licensing laws based upon the necessity for immediate and progressive reduction in the facilities for the sale of drink and the provision of some really practical means of bringing that about. How do we stand in regard to that matter? On 1st January of the present year there were in England and Wales 95,700 on-licenses, or a proportion of 27.62 per 10,000 of the population. That figure compares with 99,478 on-licences, or 29.13 per 10,000 of the population, on 1st January, 1905, and shows, there- 78 fore, a substantial diminution in those three years. [OPPOSITION cheers.] I say so—a substantial diminution. But the diminution began before 1905. Indeed, all of us who followed the debate? in 1904 know that the fact that what is called the trade was becoming alarmed at the reviving and formidable activity of the licensing justices in exercising their discretion to get rid of redundant licenses was one of the main causes of the Licensing Act of 1904. I agree that the process of reduction has been accelerated by the provisions of the Act of 1904, but it is wholly inadequate to the needs of the case, and I beg the House to note, if you have regard to all the conditions which surround the case, that it is on the whole more likely to diminish than to grow. Why do I say that? In the year 1907 1,716 licences were extinguished, and the holders were entitled under the Act of 1904 to compensation. The average cost to the compensation fund per licence was £919. The total compensation levied for the year was £1,099,000, which, at that cost of £919 per licence, would only have paid for the extinction of 1,194 licences. The justices were only able to make the reduction which they did— something like 500 or 600 more than the compensation levied for the year would have provided for—by the fact that there was a balance in hand from the fund for the previous year. If you add to that the facts that the smallest and cheapest houses have really been the victims in these first two or three years and that the survivors to some extent—I do not say to what extent— have been raised in value, that there are at this moment thirteen compensation areas in which the maximum levy is not raised and six compensation areas in which no levy is made at all, and, lastly, that you have no guarantee whatever that the licensing authorities who are acting now will continue to show the same rate of activity in the years that are to come, I venture to say you may well look forward with apprehension lest the rate of reduction, inadequate as I believe it to be even now, should slacken in the future. In view of these facts, the Government propose in this Bill—this is the first clause of the Bill— to provide for the 79 compulsory reduction within a specified period of a number of on-licences in the country on a uniform scale operating throughout the country and based mainly on the ratio between licences and population. We have taken as our general guide in fixing that ratio the recommendations of the minority Report of Lord Peel's Commission. That Report recommended that the statutory maximum should be one on-licence to every 750 people in towns, and one on-licence to every 400 people in the country. Now, Sir, when you come to work that out in practice, as we have tried to do, you will find the distinction between town and country is almost as difficult to draw as the impalpable boundary line that separates day from night. When you look at social and economic conditions, it does not follow with anything like strictness the technical division between urban and rural areas, and a sudden jump, whether it be a jump upward or a jump downward, when there is little difference in the actual condition of the locality, is a thing that it is quite impossible to justify. We have given a great deal of thought and attention to the subject, and after much inquiry, and examining the test results in a number of sample cases, we have adopted as the basis of our scale density of population—in other words, the number of people per acre. I will show the House how that works out. We begin with the density—whether it be in a rural parish or an urban area it does not matter for this purpose—of two persons or less per acre. Where that state o: things exists we propose that on-licences should not exceed one for 400 persons That covers practically the whole of what are commonly called the rural districts of the country. Our next step is between two persons and twenty-five persons per acre. Where that condition of population exists we propose that the maximum shall be one to 500. It will be found in practice that that cover the great bulk of some urban parishes and districts. The next step in the scale —and the three minor stages cove practically the same class of population —as between 25 and 50, one to 600 between 50 and 75, one to 700; and between 75 and 100, one to 800. These three stages, which, as the House sees 80 go from 25 per acre to 100 per acre, comprise the ordinary town areas. Therefore, in an ordinary town you have a statutory maximum of from one to 600 to one to 800. Then you get to the highest stage in the scale 100 to 200 persons per acre, one licence to 900, and over 200 persons per acre, one licence o 1,000. Those are the poorer and crowded quarters of the great cities of the country. That, Sir, is, after a great deal of consideration, the best practical method that we have been able to discover of applying the principle laid own—which we have accepted—in the minority Report of the Peel Commission. We quite recognise, and the Bill reognises, that in the otherwise rigid application of that scale you must allow a certain amount of latitude to meet certain special conditions of common occurrence. Let mo point out to the House by way of illustration what I mean. First of all, where the number of licensed premises in a parish or area does not exceed two, and it does not seem expedient for the licensing authority to reduce it to one, which would give a monopoly to that one particular public-house, no reduction need necessarily take place. Next, where there are two or three scattered hamlets which are technically and legally within the area of a single parish, or where, as sometimes happens, there is an isolated roadside public house, we would allow the authorities to make special conditions applicable to that case. Again and this is important, because it is of wider application, in the case of premises that have an on-licence, but have been constructed and are intended to be used in good faith for purposes for which an on-licence is merely an auxiliary, a restaurant, a railway refreshment room, or some classes of hotels, we allow exception from the strict application of the proportionate scale. Finally, and perhaps this is the most important of all, we have to deal with places whose normal and resident population is no index of their real requirements. That may be so in two cases. First, there are places resorted to only in special seasons by holiday makers and seekers after rest, like seaside places; and, secondly, there are the business quarters of great towns, like the City of London, 81 where the day population is very considerable, while the night population is relatively very small. I find in the Market Hall Ward of Birmingham that the strict application of our scale would require the suppression of no less than 141 out of 158 licences. In the central ward of Cardiff, our scale would require the suppression of no less than eighty-five out of 108. In the Market Ward of Nottingham it would require the extinction of sixty-nine licences out of seventy. These are obviously places that require exceptional treatment, and accordingly the rigid application of the proportion or ratio will be allowed in these cases to be mitigated or modified by the licensing authorities. The general result will be this—that applying the scale with due allowance for the modifications I have indicated—the House will take this as a mere rough approximation—we estimate it will lead to the suppression within the specified term of from 30,000 to 32,000 on-licences, or in other words to more than one-third of the whole. It will be the duty of every licensing authority to prepare by the early date named in the Act a scheme for carrying out the statutory reduction according to the ratio I have described in their own district. The scheme so prepared by the licensing authority will show the effect, in the way of reduction, of the application of the scale to each area within their district, and it will provide for a reasonable distribution of the reductions over the whole of the statutory period. As schemes of this kind must be more or less tentative and experimental, the widest powers are given the licensing authority to revise their schemes from time to time. These schemes, whether original schemes or revised schemes, will be submitted for approval, not on grounds of policy, but on grounds of finance, to a central Licensing Commission, in whom, as I will presently explain, the compensation fund will be vested. Assume that a scheme has been prepared, submitted, and approved, as, of course, it will be if the financial exigencies of the case allow, it will then be the duty of the licensing authority to give effect to it by selecting the particular licences to be extinguished. We leave the selection entirely in their hands. In 82 order to provide for the possible case of licensing authorities making default, either in preparing a scheme or in carrying it out, or in the selection of the licences to be suppressed, we provide that the Licensing Commission can act in their stead.
The next point is one of very great moment. Reduction according to the statutory scale is a duty which the licensing authorities are compelled to perform. But their performance of that duty is not to affect their power, during the period of reduction, to extinguish licences still further, subject, of course, in cases where extinction involves compensation, to the sufficiency of the compensation fund. That power we call in the Bill the power of optional reduction. It is a power vested in the authority in addition to its statutory duty. We restore in this Bill—reversing the policy in this respect of the Act of 1904—we restore to the licensing authority the discretion which was taken away from it by that Act with regard to the refusal, renewal, and transfer of all existing on-licences, and we repeal the provision in the 1904 Act vesting such power in the quarter sessions. As I pointed out a few moments ago, until 1904 the local licensing justices have always been regarded as the proper persons to deal with these matters, and we think this power ought never to have been taken away from them.
§ MR. ASQUITH
During the compensation period. We add a special provision which we propose to make with regard to Wales, where opinion in these matters is more advanced and more ripe than in England generally. It is proposed in Wales—and for this purpose Wales will include Monmouthshire—to give by vote to parochial electors in a licensing district power to declare by a direct vote whether a reduction of licences beyond the statutory amount should be made, and upon an affirmative vote the Commission will authorise such further reduction provided during the statutory period that the existing levy gives sufficient funds for the purpose.
83 Now I come to the question of compensation for licences suppressed, and I use the word with a caveat, because it does not accurately express what I mean— but licences which are suppressed on the ground of redundancy during the statutory period, whether compulsorily under the scale or in the exercise of the further power which I have just described as optional reduction, will be compensated for. We propose to make no change in the source from which the compensation money is to be derived. The compensation money will continue to be raised as under the Act of 1904 by a levy from what is called "the trade." But it follows from our decision to make reduction compulsory and uniform, which it is not under the existing system, that the area of the levy should cover the whole of England and Wales, that the whole of the authorised levy should every year be raised, and that the fund should become a national fund and should be vested in the central authority, the Licensing Commission. For the purposes of the levy we adopt prima facie the scale of charges in the schedule of the Act of 1904, subject to one or two qualifications which I will proceed to enumerate. In the first place, the annual value of the premises is for the future to be taken as the annual value given for the purpose of Schedule A of the income-tax. In the next place, power is given to the Licensing Commission to raise the charges subject to their being graduated in the same proportion as the rates shown in the scale, but to raise them only for the purpose of compulsory suppression, not for the purposes of optional, for reasons which will soon appear. That is a power which probably will not require to be exercised. Again, the Licensing Commission are not to sanction an optional reduction if it would involve raising the rates in the scale. The Licensing Commission can borrow on the security of the compensation fund, and they are to exercise their powers under the Act so that, so far as possible, the assets and liabilities of the fund may balance at the end of the reduction period.
I come now to the much more important point—namely, the amount of compensation to be paid. It is when we come to deal with the great 84 problem of fixing the amount of compensation that we find ourselves compelled to part company from the Act of 1904, and still more widely from the judicial interpretation which has been put upon that Act—an interpretation contrary to the intentions of the framers of that Act and of Parliament—in what is commonly known as the Kennedy judgment. What is the provision in Section 2 of the 1904 Act? Substantially it says that the amount of compensation payable must be a sum equal to the difference between the value of the licensed premises and the value which the premises would bear if not licensed. The Inland Revenue, when the Act first came into operation, proceeded to deal with the cases generally that came before them on what, I venture to think, was the natural construction of those words. They estimated what, would be the annual value of the premises with the licence and the value of the same premises without the licence; then they subtracted the one sum from the other, and multiplied the result by the number of years purchase. But the Act of 1904 gave what was in fact a freehold interest to the licence-holder, as though he was entitled to the perpetual renewal of his licence. I pause here to point out that the very fact that in our scheme we adopt a reduction period, a term of years during which, and during which alone, compensation is paid, as a necessary corollary it involves a modification, even if the Act of 1904 had been strictly interpreted. It follows as a necessary incident of our scheme that the amount payable as compensation shall only be such a sum as will purchase with interest of course— at the proper rate, 4 per cent.—an immediate annuity for the unexpired years of the reduction period and equal in amount to the annual value of the-licence. We add to that a further sum, and this is very important. I think the interests of the tenant, of the actual licence-holder, the man who is carrying on a public-house were very insufficiently considered. The licence-holder got very little out of the compensation; the great bulk of it has gone into other pockets. We add, and we keep this separate throughout, both in the assessment and in the payment of compensation, such a sum as the Commissioners of Inland 85 Revenue may think just to add, as compensation for the licence-holder's loss of business.
Now I come to the crucial point— what is to be taken as the annual value of the licence. We are going to ask Parliament to go back to what we believe to have been the intention of the Act of 1904, and what, whether it was the intention of the framers of that Act or not, ought to be the rule of common sense and common justice. What is the problem? The licensing justices give to a particular house, in a particular street, a privilege which no other house in that street can acquire, without their consent, of becoming the scene, day and night, of the retail sale of intoxicating liquor. The house next door—precisely similar in structure, having cost the builder the same, standing upon land of exactly equal value, and therefore, before the licence was granted, let presumably at the same rent—is occupied by a grocer or butcher, or whatever tradesman it may be. The problem to be solved is this. What is the additional rent which a person would pay for the house with the privilege of the licence as compared with the rent which he would pay for the house next door, carrying on in that house an unlicensed trade, and not enhanced, therefore, in value by a monopoly price? That is the problem. It is a problem which can be solved with the greatest possible ease when you are dealing with a free house, a house that is to say, which is let to the publican at a rack rent, because you have only got to compare the rent which he pays with the rent which his neighbour pays for the unlicensed premises in immediate contiguity, to find out the additional monopoly value given by the possession of the licence. The difficulty, of course, comes in when you are dealing with the tied house, because, as everybody who is familiar with these matters knows, the rent or so-called rent, which is exacted by the brewer or distiller from the tenant —again I must say the so-called tenant —of the tied house, is a rent which in the majority of cases, at any rate, bears no relation whatsoever to the actual value of the premises. Where the brewer comes in and makes his profit is in invoicing his goods—the only goods 86 which this tenant, sitting, as it appears, at a very moderate rent, is allowed to dispose of—at a far higher price than the same class of goods, or perhaps better class of goods are supplied for to the tenant of a free house. Therefore, it is quite clear that, in the case of the tied house, the rent actually paid is not a criterion of the monopoly value, and you must find out what the monopoly value is, as every rating authority in the country does, by having some reference to the business which is done in the house. Yes, but the business done by whom? The business done by the occupier of the house; and 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 fallacy of the Kennedy judgment, which reversed the whole practice of the Inland Revenue Department, and which added to the sum payable for compensation in the case of these tied houses 50 or sometimes-100 per cent.—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. In other words, you have to deal with the house not as though it were a place simply of retail trade, but you have to consider also its value as an outlet for the wholesale business firms, and for the trade in which they were themselves engaged. And the result is most striking. In the first place, it has vastly inflated the figures which are given by way of compensation, and it has established a most inequitable and indefensible distinction between tied houses on the one side and free houses on the other. It is possible under the law, as laid down in this judgment, and necessarily followed by the Inland Revenue, for the owner of a tied house to get half as much again, and sometimes twice as much, in the shape of compensation as is got by the owner of a free house. Well, we do not think that, that is right, because in addition to its obvious injustice it gives an encouragement to the tied house system, which in our opinion is contrary to public policy. We are going to provide—this will be the rule laid down in the Bill—that the annual value of the licence is to be taken to be the sum by which the actual annual value of the licensed premises, 87 adopted for Schedule A. of the income-tax, exceeds the amount which the Commissioners of Inland Revenue determined would be that annual value if the premises were not licensed. That is a perfectly simple rule which the Commissioners of Inland Revenue are thoroughly capable of applying for themselves, and it avoids the expense and complication of a special enquiry ad hoc, in regard to each particular case which arises; and we propose that in regard to it there shall be no appeal to a Court of Law, and that the decision of the Commissioners of Inland Revenue shall be final.
I come now to the question of the length of the statutory period, or what is commonly called the time limit. The question of the expediency of laying down a time limit is a question which formed the subject of frequent and anxious debate in the last Parliament. The Government of the day, and the right hon. Gentleman opposite, notwithstanding our insistence, and notwithstanding an Amendment moved in the same sense by the Archbishop of Canterbury in another place, refused to insert any time limit in their Bill. Now I should like to quote one or two things that were said in the course of those debates. I quote one passage, a remarkable passage, from a speech of a supporter of that Bill, who is unfortunately no longer in this House, and whose lofty eloquence and great Parliamentary ability those of us who were in the last Parliament miss almost every day—I mean Lord Hugh Cecil. He said—This Bill did not interfere in the least with the future right of Parliament to set up whatever time limit it might think proper under which licences might cease altogether, after due notice given.And I find that in another place—I am glad to be able to quote him—my noble friend Lord Rosebery used these very remarkable words, words which I entirely adopt—I do not care what your limit is, but I am certain of this, that the only way in which you will ever achieve a real temperance reform is by fixing a date at the expiration of which all interest in the licences shall be held to be exhausted, and the nation will then resume its claim, its absolute dominion, over the interests which have been created at the expense of the State and no other than the State.88 The notion put forward frequently in records of those debates that a time limit was inconsistent with the payment of compensation by the trade during that time limit was, I think, over and over again exploded. I quite admit that the enactment of the time limit involves a double insurance on the part of the trade—an insurance, that is to say, in regard to the risk of being extinguished during the currency of the time limit and an insurance against the general and universal change which will take place when the time limit has come to an end. Before I mention the length of the time limit, I would like to mention one or two facts. Everyone interested in the trade has known, at any rate since the celebrated case of "Sharpe v. Wakefield," which laid down no new principle, but which made notorious and a matter of common knowledge that which had for three centuries been the law—everyone has known since that case was decided, now nearly twenty years ago, that the prospect of continuous renewal was no more than an expectation, not founded on any legal title, and in no way guaranteed by the State. But further, since the debates on the Bill of 1904, everyone has known that the expectation of perpetuity was certain not to be realised, that the imposition of some time limit was inevitable, and that the only question was how soon it would be imposed and what would be its duration. What inference do I draw from these two facts? Why this, that for the best part of twenty years probably, and for the best part of four years certainly, every prudent trader engaged in this traffic has been, or ought to have been, setting his house in order by insurance, and, as many of them have done, by strengthening his reserve fund. To us who sit on this side of the House—more particularly those of us who took part, as I and many of my friends did, in the strenuous opposition to the Bill of 1904 — it is a matter not only of justice and expediency, but of political honour that there should be a time limit. We pledged ourselves to it then, and we pledged ourselves to it again at the time of the General Election, and we had then, as I believe we have now, in support of the proposal for a time limit, the 89 sympathy and the active advocacy of every temperance organisation, even the most conservative, including, if I remember rightly, the bishops of the Upper House of Convocation of the Province of Canterbury. The question now is not whether a time limit shall be imposed, but what shall be its duration. However that question is decided I may say two things about it. Most certainly the decision will not please everybody, it is probable that it will not please anybody. On the one hand, whatever the duration we prescribe for the time limit, we shall be charged, I daresay to-night, and quite certainly to-morrow morning, with confiscation and spoliation. On the other hand, however short our time limit may be, I am not sure we shall escape the criticism of some of my hon. friends behind me that we are showing an over-tender regard for interests whose antecedents are doubtful and whose title is precarious. It is a very difficult situation. In a difficult situation it is generally desirable, if you can, to found yourself on some principle that will stand the test both of common sense and common justice. If I may recall to the recollection of the House for a moment the exposition I endeavoured to give of the real condition of the problem in the early sentences of my speech, what, having regard to the legal situation on the one side and to the up-growth of these expectations and interests on the other, is the principle we ought to adopt? I say, then, that your time limit should be as long as and not longer than the time which will suffice for a prudent trader who has carried and is carrying on his business with due regard 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 of his profits which is to be attributed to the monopoly value of his licence. I say it ought to be as long as that, because, though there is no question of legal title, there has grown up, as I have shown, a claim for equitable consideration which I think the State ought not to, and cannot, ignore. I say it ought to be no longer than that, because at the earliest possible moment compatible with equitable regard for existing interests the State ought on 90 every ground of policy to recover posession of the monopoly value which it ought never to have parted with. Well, after much consideration, we have come to the conclusion that these conditions will be satisfied by a term of fourteen years. The community will at the expiration of that term recover complete dominion over licences and unfettered freedom of dealing with them, and in that unfettered freedom I include the power of the locality by a popular vote to deal either by way of prohibition or reduction with the state of things for the future.
§ MR. A. J. BALFOUR
This is a very important point, and perhaps the House would like to have it made clear. Does the right hon. Gentleman provide in his Bill for the establishment of local option?
§ MR. ASQUITH
Yes, Sir, local option as regards either prohibition or reduction, but we do not and, indeed, it would be impossible at this moment to lay down the precise conditions, the machinery, procedure, and so forth, subject to which, fourteen years hence, that right ought to be exercised. But the right itself is clearly stated in the Bill.
As regards authorities. Under the Act of 1904 counties and county boroughs were taken as the compensation areas. Now that we make the area not local but national, we must create a central authority, and accordingly we substitute for quarter sessions and borough justices a Licensing Commission. The Commission will consist of three persons—the Chairman and two other Commissioners appointed by His Majesty on the recommendation of the Home Secretary. Their powers will continue in force until the end of the reduction period and may, if necessary, be continued by Order in Council. The expenses of the Commission will be paid out of the compensation fund. I do not think it will be a very serious charge. As regards the licensing authorities, a much more difficult question arises—a question which deserves and has received much consideration—namely, whether the local licensing authority shall be wholly or in part, directly or indirectly, elective. Personally I confess I was very strongly 91 predisposed in favour of the introduction of an elective element; but there is grave objection to it. It would almost certainly tend to make local elections for general administrative purposes turn on a single issue which was not relevant to them. That is a very grave evil, and when you take that into account and remember further that the first duty imposed on the justices will be to bring about the statutory reduction in their district, as they are bound to do, there seems less reason than there otherwise would have been for making them directly responsible to the ratepayers, and, on the whole—I confess not without doubt—we have come to the contusion it would be best to retain the licensing jurisdiction in the hands of the justices. We have, however, made some not unimportant changes in the large boroughs. A large borough for this purpose means any borough with a separate commission of the peace, which is a county borough, or which has a population of over 25,000. In such boroughs the licensing justices will exercise their powers through the borough licensing committee appointed under the Act of 1872, seven being substituted for three as the minimum number of the committee. In all such boroughs, whether county boroughs or not, there will be set up an appeal authority. In quarter sessions boroughs it will consist of the Recorder and four justices chosen for the purpose by the whole body of justices, and in a large borough not having a separate quarter sessions and, therefore, no Recorder, it will consist of the mayor and four justices appointed by the whole body of justices. A member of the appeal authority will be incapable of acting as a member of the licensing committee. The powers of the appeal authority will be twofold—first, the power of confirming new licences granted by the licensing justices; and, secondly— and this is important—exclusive jurisdiction in appeals against refusal to renew of transfer licences. Such appeals in large boroughs will no longer go to quarter sessions. Licensing justices may pay to their clerk, in addition to his salary, such remuneration as they think fit for special work performed in connection with the Act. Finally, under this head, we remove a grievance which has 92 sometimes operated very harshly, by providing that in cases where the decision of the licensing justices has been appealed against, whether by mandamus, certiorari, prohibition or otherwise, the Court shall direct the local treasurer to pay to the justices a sum sufficient to indemnify them for all costs properly incurred and not recoverable.
Now I come to a totally different topic—namely, new licences. As regards new licences, the Act of 1904 contained in its fourth section what I consider a most invaluable enactment— that which secures to the public the monopoly value in the case of new licences. Experience shows that that provision needs amendment in two particulars— first, payment for any year in respect to monopoly value ought not to exceed, and we propose it shall not exceed, the licence value for the year as estimated by the justices. I have a large number of cases here, which I could quote if necessary, in which a very considerable lump sum of money has been paid down as a condition of the grant of new licences, and when that is the case, obviously, however you like to describe it, it fetters the discretion of the authority in years to come. It is much better, we think— and most of the licensing benches agree— that we should provide, as we do, that for any year the payment is not to exceed the licence value for that year; and, secondly—a very important provision— we propose as a condition for securing the monopoly value to provide for the revision of the payment on the renewal of the licence either annually or periodically. It is impossible very often prospectively to estimate what the monopoly value of a new licence will be. In regard to this question of new licences, we introduce at once a new machinery altogether. There is no question here of frustrated expectations or compensation. The monopoly value is declared by the Act of 1904 to belong to the community, and the possibility of the upgrowth of parasitic interests is effectively prevented. It is, in our opinion, not sufficient that the public should be secured in the enjoyment of the monopoly value of any new licence the justices may think fit to grant. We think the people of the locality ought further in such case to 93 have the power of saying, just as the owner of the soil if he pleases may say, that no new licences shall be granted at all. Our Bill by its second clause confers this power on the parochial electors in every licensing district. Upon a requisition signed by not less than one-tenth a poll may be taken on a resolution prohibiting the grant of new licences, and that resolution may be carried by a simple majority. It remains in force until revoked by a rescinding resolution, similarly required and similarly carried.
§ MR. ASQUITH
Three years. Where a poll has been taken on either a prohibitory or a rescinding resolution a further poll is not to be taken until the expiration of three years. Powers a re given to the Local Government Board to regulate procedure in regard to such resolutions, and to apply to them the enactments relating to Parliamentary or local government elections. While the prohibitory resolution is in force no new licences, In the ordinary sense, on or off, may be granted in the district. This will not prevent the licensing justices dealing with business premises constructed, fitted, and intended to be used in good faith for any purpose to which the holding of an on-licence is merely auxiliary. We shall grant for the first time electors the power of saying whether or not no new off- or on-licences shall be given. That I believe to be a valuable and necessary provision. No one can contend that this interferes with any interest either equitable or otherwise, and there is no reason, why it should not come into force at the earliest possible moment.
Now I will say a word with regard to off-licences. The statutory reduction does not apply to off-licences. We propose to repeal the exceptions allowed in Section 10 of the Act of 1902 in the case of spirit dealers and wine merchants and to provide that a justice's licence should be required for every Excise licence for retail and consumption off the premises. In regard to new off licences, we propose that they should be brought under the provisions o: Section 4 of the Act of 1904, and should 94 also be subject to the power of prohibition vested in the inhabitants of 'the district. Further, we apply Section 22 of the Act of 1874 in regard to provisional licences to premises to be constructed for off consumption.
I come now to deal with the still more important matter of registered clubs. Between 1st January, 1904, and 1st January, 1907, the number of registered clubs—clubs in which intoxicating liquors could be supplied— increased from 6,371 to 6,907, and after the expiration of another year they have probably reached the number of 7,110. I need hardly say that there is no intention on the part of the Government to interfere with the freedom of the bona fide club. I need hardly say also that all clubs in which liquor is supplied, whether to the rich or the less fortunate in the community, stand on precisely the same footing. Under the Act of 1902 such clubs already require to be registered, and any club may be struck off the register which is not conducted in good faith or where certain objectionable practices or specified acts are proved to be committed on the premises. We propose to strengthen the law by providing that the registration of such clubs should be annually renewed to afford an opportunity for notice of objection to be submitted and considered by the licensing justices. That sounds at first sight an annoying provision; but since I have had this matter in hand in the last few weeks and months, there have been brought to my notice cases in which the suppression of a licence under the right hon. Gentleman's Act of 1904 has been followed by the upgrowth of clubs, not in the same premises, but next door, carrying on the same business, often tied, to the same brewer, who is financing the whole affair, and frequented by the same class of persons. No licence duty is paid, and there is no restriction as to hours. The place is occupied during the whole of Sunday, sometimes in betting and gambling, as well as in drinking, and there is no effective police supervision. That is a monstrous evil. It is a bad thing in the interests of the community, and thoroughly unfair in the interests of the trade. I can understand the indignation, the perfectly legitimate indignation, which is felt by 95 those who are interested in the trade and have contributed compensation to the levy fund for the suppression of publichouses, and yet see that the moment one of these institutions is suppressed, its place is taken by a club carrying on the same business. I might almost here appeal for the unanimous support of all sections of opinion in the House with regard to this question, anxious and eager as we are not to interfere with the bona-fide club. But this provision for the registration of clubs being annually renewed is urgently needed. If an objection is made on the ground that a club is used mainly as a drinking resort, or on any ground specified in the Act of 1902, and it is upheld by the justices, they may make an order directing that the premises shall not be used for the same purposes any time during the next five years. This order is subject to appeal. To secure an enforcement of the law we propose that power should be given to any chief constable, inspector, or superintendent of police, or an officer of superior rank specially authorised by the chief constable to enter and inspect the premises of any registered club. That is a provision to be applied to all registered clubs alike— in Pall-mall and St. James's Street as elsewhere. The conditions are carefully framed so as to prevent any possibility of offence or any legitimate cause of irritation. We are dealing with an admitted and growing evil. Anxious as I am from the point of view of both sides not to interfere with political and working men's clubs, with bona fide institutions to promote social intercourse and political and economic discussions, we cannot fail to recognise that under the guise of clubs there are springing up in this country a set of ill-regulated public houses, and that it is quite time the law stepped in.
There is one other serious provision in the Bill to which we attach the greatest importance. I classify them under the general head of conditions. Experience has shown various abuses in connection with the use of licensed premises which, apart from any question of compensation or monopoly value, ought to be dealt with in one of two ways or by both—either by increasing the stringency of the 96 general law or by reviving and enlarging the powers of the licensing justices attached to the conditions relating to the renewal of the licence. I will take the first question—namely, that of the Sunday opening of public houses. We propose to apply the Welsh Sunday Closing Act to Monmouthshire, but we do not believe that public opinion in England is ripe for a measure of universal compulsory Sunday closing. On the other hand, there is little doubt that the hours during which public houses are open on Sunday are, as a rule, excessive, in the interests both of the persons engaged in the trade and of the community at large. Both the majority and the minority of the Peel Commission were of opinion that a case was made out in this respect for further curtailment. We propose that outside the metropolis, where the state of things is quite exceptional, no public-house should be open on Sunday more than one hour in the middle of the day or more than two hours in the evening. Further, the justices are empowered to attach as a condition to the renewal of the licence any particulars either of total prohibition or of further restriction on the sale of liquor in particular premises on Sunday. Where the justices attach that condition and convert a licence practically into a six days licence, the Bill provides that the licence-duty shall be reduced by one-seventh. [An HON. MEMBER: Any compensation?] No compensation.
Another evil of a cognate character arises in connection with the definition of the bona fide traveller. At present under Section 10 of the Act of 1874 a person satisfies the definition if he has spent the previous night three miles away. We propose—again following the recommendations of the Peel Commission—to substitute six miles for three miles in all cases. ["Oh, oh,"] Here, again, we empower the justices to attach by way of condition to the renewal of the licence any further restrictions in regard to particular premises in this respect that seems to them to be reasonable. There are cases where some such restrictions might be reasonable.
There are a number of other matters which require elasticity in their treatment 97 and as to which, therefore, while making no change in the general law, we give the widest discretion, subject to due notice to the owner and to appeal, for the justices to attach conditions to the renewal of licences. First, as to the exclusion of children from the bars of licensed premises. I will read the proposed clause—In the case of any licensed premises to which this section is applied, the holder of the licence shall not allow a child to be at any time in the bar of the licensed premises except during the hours of closing. On the grant a renewal of licences in respect of premises other than railway refreshment-rooms, etc, the licensing justices may order that this section shall be applied to those premises, and may, for the purpose of the operation of the order in those premises, fix any limit of age under which a child shall be deemed to be a child.That gives considerable latitude for local conditions, and no doubt, as a rule, the justices will fix a sufficiently high age to prevent this terrible and growing evil of keeping young children in bars. Next, we propose to give the justices power to make conditions as to the employment of women or children on the licensed premises, as to the arrangement of any part of the premises open to the public, as to any access to them, as to the supplying to any person of the measure of liquor exceeding that asked for, as to the closing of the premises at specified hours on particular days, and as to closing the premises completely or for a specified time on polling days, during Parliamentary or municipal elections. If the holder of the licence makes default in any of the conditions so attached to it the justices may, on the next application for its renewal, refuse renewal, and refuse it without compensation. There are a number of other minor provisions in the Bill dealing with special branches of the law which I am sure, after the length at which I have detained the House, I shall be excused if I pass over. I have explained as clearly as I can the main provisions of the Bill; and, whatever be its merits or demerits, the House will see that it is a large and comprehensive scheme. All its provisions are directed, and directed solely, to securing the two objects which I indicated at the outset—first, an immediate improvement, not only by the reduction of licences, in the conditions under which this traffic is 98 now carried on; and, secondly, the ultimate recovery by the State of complete dominion of its property and freedom of action. The Bill is not conceived, I say once again, in a spirit of vindictiveness or hostility to any particular interest. It is not proposed by us at this moment as incapable of amendment. We invite criticism upon it and, as long as that criticism is honest— and by "honest" I mean loyal to the general and governing purposes of the scheme—we shall welcome it; and, if we are convinced of its justice, we shall be ready to defer to it. I beg to move.
§ Motion made, and Question proposed, "That leave be given to bring in a Bill to amend the Licensing Aces, 1828 to 1906."—(Mr. Asquith.)
§ MR. A. J. BALFOUR
Nobody is likely to complain of the length of the speech which the right hon. Gentleman has just delivered. He had to deal with an extremely complicated measure. He has dealt with it not only with admirable lucidity, but, as I think, with great conciseness and a mastery of the art of compression, which is not always easy for those who have to deal with great and complex subjects of legislation to exhibit when they are explaining their proposals to the House. I shall have no excuse for trespassing at great length on the time of the House, and do not intend to-do so on the present occasion. Manifestly the great mass of the questions with which the right hon. Gentleman dealt are more questions which we shall have to discuss on the Committee and the subsequent stages; they do not touch the fundamental and main principles, and it is those to which I shall address myself. I am quite ready to give the right hon. Gentleman credit—a kind of credit which he has in past times been very reluctant to bestow upon his political opponents— that in bringing forward this measure he is endeavouring to further the great cause of temperance. I agree with him that no greater cause exists. I agree with him that among all the social evils which meet us in every walk of life, every sphere of activity, the greatest of all the evils is the evil of intemperance. But let 99 it be remembered—as a general observation which I am sure must have been present to many minds while the right hon. Gentleman was speaking—that what this House or any Legislature can do to deal with vice—for intemperance is a vice—is relatively unimportant. It can aid, but it can do no more than aid, those other great social forces exercised by the preacher, lay or clerical, exercised by public opinion, by the changed and, as I believe, the improving views on this subject which are gradually dominating all classes of the community. All we can do in our capacity as legislators is to aid these other great and fructifying forces upon which we must in the main rely for any great and beneficial change in the habits of our countrymen. And, therefore, the question that we have to ask is not whether a measure of this kind is going to produce some enormous advance in the practice of temperance, I doubt whether the right hon. Gentleman himself supposes it. I was one of the authors of a Bill, much abused, which at all events, it is admitted, has had the effect while in operation of largely diminishing the number of licences, and that was the object of it. And in connection with it I at the time and have since examined what statistical evidence or scientific proof can be adduced that there is any clear and close connection between the number of licences in any district and the temperance of that district, and I think everybody who has endeavoured to carry out the investigations of which I speak will come to my conclusion, namely, that it is very hard indeed to trace that close connection, and that, since it is hard to prove it, we should be rash indeed to base upon any scheme which merely had in view the reduction of licences any too high hopes of any amelioration in the morals of the community in respect of intemperance or excessive indulgence in alcoholic drinks Therefore, when the right hon. Gentleman tells us that his two great objects are to diminish the number of licences and to give to the community the monopoly value of them, I have to observe that the first of those objects is one which, desirable as I quite agree it is, is not one upon which we ought to build too great hopes, and that the other is merely 100 a financial rather than an ethical matter. We have given in the past by reckless legislation this monopoly value; we have created this vast amount of property; we should, I agree, cease to create it; but we should deal with it, where it has been created, in a spirit of fairness and equity. But the control of the community over this monopoly value is after all not an ethical, but a financial question, and it therefore falls into a much lower category in importance, and appeals to much humbler motives than the larger issues to which the cause of temperance so rightly and so properly appeals. With this preface I ask the House to consider what the Government's plan really is. The right hon. Gentleman is going, as I understand, it, to make an enormous reduction in licences, and he is going to do it by destroying what is now the legal, practical, and equitable property of a large and, as far as I am aware, a not undeserving class of the community. I do not think that can be right, even if some great moral end is to be gained by it or appears to be likely to be gained by it; because I do not think that morality can be founded upon immorality, or that you are likely really to advance any great cause, whatever it may be, by basing your whole apparatus upon a foundation of injustice. You are not going to advance any great cause in the sense in which I am speaking. I wish I could believe you were. At all events, it would be a consolation, if the Bill passes in its present form, for the injustice which I think it is going to inflict on a minority of the population to feel that the majority of the population were being substantially and practically relieved of a temptation to which they are now subjected, and that we might look forward to an entirely different spirit pervading our whole population with regard to temperance. But if the Bill passes in its present shape there is no such prospect, and the right hon. Gentleman does not pretend that there is such a prospect, and not one word in his speech suggested that he entertained these vain and illusory hopes. What we have to reflect is that, for no great moral object, with no prospect of some enormous improvement in the morals of our people, you are going to commit what I 101 shall show in a moment to be a gross injustice to a small part of the community; and I am not sure, when I come to discuss another part of his scheme, whether I cannot show that even such machinery as the right hon. Gentleman has in view for dimiaishing drunkenness is not going to break down under the growth of clubs with which this Bill deals, but with which it certainly does, not deal in a manner from the temperance point of view which is likely to be effective. I have said that this Bill is, on the face of it, going to inflict great hardship and injustice on a certain class of people. I listened with some pain, I admit, to the exultant cheers with which hon. Gentlemen opposite greeted every proposal of the Chancellor of the Exchequer which had for its object the injury of existing licence-holders—[An HON. MEMBER: Not licence-holders, but brewers.]— the owners of property connected with licences, whether they be shareholders in breweries, or publicans managing public-houses. I am not a shareholder in a brewery, but I believe that the shareholders are a most respectable class. They are certainly a widely diffused class, and I have no reason to believe that they are less reputable citizens than the shareholders in any other industrial concern. At all events, I think this House owes them an equal meed of justice to that which it would exercise in favour of any class in the kingdom. The right hon. Gentleman went into a long legal disquisition, admirably stated, with regard to the statute law governing the sale of intoxicating liquor in this country. I have not a word to say against that legal disquisition. No man is a greater master of the law, and no man in this House is better qualified to expound it than the right hon. Gentle man. But we have to deal, not with statute law, but with admitted equities We have to deal with what is treated by every class in the community at the present time as property, saleable, ex- changeable, taxable, rateable property which has to bear all the public incidence of property, property which can be ex-changed, which can be bought, in the open market, and which has a market price. The right hon. Gentleman know perfectly well, and has never denied that the Inland Revenue of which he 102 is the head, exacts from the estate of those who have property in licensed buildings a proportion not based upon the vaule which he is going to give compensation for, but based on the market value of the property. The right hon. Gentleman has invented a new scale by which this property is to be estimated. He does not pretend for a moment that the scale which he proposes as legislator is the same scale on which le is acting as administrator. He does not for a moment pretend that any licence-holder under this Bill is going to retain the amount of property from which every day he is extracting a tax in his capacity of Chancellor of the Exchequer. I frankly admit I am wholly unable to explain or understand the ethical basis of that proposition. I believe that my right hon. and learned friend beside me can expound it much better than I can. I was told the other day—I am not going into the figures—of a case in which the Secretary of State for War got an enormous price— for the country—by the sale of licensed premises. I cannot conceive that the value of those premises will, after this Bill, and on the scale which the right hon. Gentleman is going to put upon them, sink from the sum which the right hon. Gentleman as administrator obtained for them to the level which the right hon. Gentleman as legislator thinks ought to be given for them. How are you going to find any equitable theory on which a transaction like that is based? There is no such theory. Observe, if I understand the right hon. Gentleman rightly, what the Government are going to do is to inflict the following hardships on the existing owner of licensed property:— You are, first of all, going to put all the compensation levy, not into the hands of quarter sessions or of the local authority, but into the hands of the central authority. The result of that will be that those who have paid the compensation in consequence of which the houses in a district have diminished will not gain by that diminution. The gain will or may go to some far distant part of the country, and one of the sets-off against the compensation levy will be taken away from existing owners of licensed premises. The second hardship is that you are going, as I understand the 103 proposition of the right hon. Gentleman, to value this property upon a wholly new and, as I think, an entirely arbitrary valuation. I admit that the whole subject is full of technical difficulties, and if I were to embark on an elaborate discussion of the relations of tied houses to brewers, and how that affected rent and valuation, I might puzzle the House, but I do not think I should enlighten them. But I will put a quite simple case to the right hon. Gentleman and those who approve of this Bill, which, I think, will illustrate my point as to the inequitable character of the right hon. Gentleman's estimate of this property. Let us not consider the case of the tied house at all, but of a free house, of the man who owns the licence of premises where he has liberty to buy from whom he likes. You are going, as I understand the matter, to estimate the value of his property upon methods which are far removed, and which will give totally different results from any plan on which either the Inland Revenue would proceed in taxing his property for death duties or others would act in estimating the capital value of the property for purchase. You are not going to try to get the market value; you are not aiming at paying the man back a sum equal to that which he would get in the market. We spent yesterday in discussing, under the guillotine, the question of substituting for all rating purposes in Scotland the capitalised value of some things of which it is very difficult to get at the capitalised value. Here, you are going to deal with what ought to be capitalised value, and it is quite easy to get at it. But you refuse to get at it in the only fair way by estimating what a purchaser would give in a free market, if the thing were put for sale, before this legislation was brought in or threatened. That is the fair value. Anything short of that is robbery, and I cannot believe that it is right or honest of this House to make themselves collaborators in a scheme which, under various specious names, is no less than a plan for diminishing the number of licences by depriving a lot of innocent victims of property to which they have an equitable title. There is a third grievance produced by this Bill, and I am not sure it is not the most serious of all. The right hon. 104 Gentleman is going to have a time-limit. He turned round to his followers and said, in impassioned and eloquent terms, that it was a matter of honour with his colleagues and himself to impose a time-limit. In other words, they made so many speeches in favour of a time-limit in 1904 that, whether a time-limit were just or unjust, it was quite impossible for them to avoid imposing it. I appreciate the right hon. Gentleman's difficulty. I think it would have been rather hard on him to swallow everything he said on the subject in the impassioned debates which took place three or four years ago, and I suppose he is almost driven to adopt some form of time-limit in regard to his own consistency, if not in regard to the equities of the case. But observe how you are going to work the time-limit. You are going to say that, at the end of fourteen years, a whole class of property now in existence shall cease to exist. You are going to say that, during that fourteen years the owners of the property are to spend annually the sum of money settled under the Act of 1904, known as the compensation levy, and that, in addition, they are to pay a second insurance for themselves which is to be on such a scale that at the end of the fourteen years the whole of their property is to be returned to them in the form of insurance. That seems to me to be a grotesque proposal. Under the name of insurance you are going to require a man or a company so to deprive himself or themselves of his or their annual income that practical bankruptcy must stare him or them in the face. I do not see how you can possibly justify that. Take the case of a man who has, since 1904, been paying compensation. He owns, we will say, a house which is admirably conducted, and which is, probably, the last house which the magistrates are likely to interfere with or to destroy. That man will now have to go on paying up to the fourteenth year all the compensation levy by which his fellows in the trade are to be compensated when their licences are removed, and, at the end of his time, he is either to be beggared, to be turned out in the world without a shilling, or else he has to deprive himself of what must be the bare necessaries of life in order that, within he fourteen years, he may pay, 105 not merely the existing compensation, but the new insurance which is to equal the whole present value of his property. There is no use in quoting bishops to me in a matter of that kind. It surely is a really quite plain matter of common financial equity. It is a perfectly simple case of not depriving a man of that which he owns under the name of compelling him to insure. You call it insurance. It is robbery, and I do not see what dexterity will get over that. I have never supposed for a moment, nor did the other authors of the Act of 1904 suppose, that the owners of licensed property had a freehold in that particular property, and I can quite conceive that after a term of years, during which there was no disturbance, you might say: "You have had time to insure, you have had a security of tenure which is less than freehold, and we gave you ample time in which to make the necessary provision for the moment at which the State will resume the licence." But that is not the proposal of the right hon. Gentleman. The Government are, in the first place, proposing a period which is preposterously short—[MINISTERIAL Cries of "No.,"]— and, in the second place, they are requiring the unhappy man not merely to insure against the extinction of his own licence, but to insure against the extinction of that of everybody else—a double insurance which seems to me to be absolutely outside any conceivable defence upon broad grounds of justice or of equity. I turn from that to what seems to me an even more important aspect of the case. I do not know whether the House was as much impressed as I was by the statement of the right hon. Gentleman to the effect that, as soon as, or soon after, licences were suppressed under the Act of 1904, clubs sprung up to take their place. The right hon. Gentleman told us the two great objects of this measure were the reduction of facilities and the recovery of control. How are you going to reduce facilities if you are going to leave it free to any body of persons in this country, when you have deprived them of the power of going into licensed premises, to form themselves into a club? The right hon. Gentleman is going to introduce a very excellent provision by which any club in which 106 there is gross drunkenness or immorality may be suppressed. Well, that is quite right. If the right hon. Gentleman thinks anything is to be gained by it, send in your inspectors. For my part I do not object to his sending an inspector, even in uniform, into the clubs both in Pall Mall and in the country. I do not think anybody has a right to have their feelings offended, nor do I think their feelings would be offended. But that is not the real difficulty. The real difficulty is that many public-houses are not merely places where people get alcoholic stimulants; they are places where people also get an opportunity of smoking their pipes and enjoying the society of their friends as well as having their glass of beer—perfectly innocent amusements. Very well, you do by this Bill deprive the classes that use public- houses of the power of obtaining those perfectly legitimate social enjoyments in the public-house. They immediately start a club, by which the want which you have caused may be supplied. That is perfectly legitimate. That is not a bogus club, it is a perfectly respectable and proper club. Men meet together and they say: "Very well, the public-house that we have frequented has been suppressed. Let us form a club. We. do not want to encourage intoxication; but we are prevented from playing innocent games at the public -house "[laughter]—there are innocent games at the public-house—" but at a club we shall be able to play what games we like. We were turned out of the public-house at 10 o'clock, or whatever the hour is; nobody will be able to turn us out of a club. A wise Legislature has decided that we should only go on Sundays to a public-house to obtain a glass of beer for an hour in the afternoon and two hours in the evening, except in Wales; let us start a club where, if we desire it, we may have Sunday entertainments, innocent entertainments, undisturbed by police, adorned perhaps by the occasional presence of a sergeant in plain clothes, but otherwise unimpeded and untrammelled." How are you going to prevent that sort of club? I was convinced before, but I am doubly convinced by the speech of the Chancellor of the Exchequer, that the only result of carrying too far this policy of diminishing the 107 number of licences will be not that you will diminish the amount of alcoholic liquor which is consumed, but that you will diminish the amount of alcoholic liquor which is consumed under conditions which are subject to law and the perpetual supervision of the guardians of the law, and where you have a control which, sergeant or no sergeant, you will never be able to get for a working man's or any other club in this country. Does anybody think that the picture I have drawn is exaggerated? Well, have not I got the justification for it in the right hon. Gentleman's own Bill? He told us that even under the Act of 1904, the limited effect of which (though I should have thought it was a considerable effect), is the subject of derisory attack by hon. and right hon. Gentlemen opposite—that Act which only abolished 1,400 licences in the year— very well, even under that Act, small as has been its effects in the opinion of its critics, these clubs have sprung up. That is admitted by the Government. Have they shown in the description of their own Bill the smallest indication that they are going to provide any safeguards against that process going on? They not only provide no safeguards, but they know that it is not possible to provide safeguards. They know as well as I do that men will not submit to these interferences. The idea of telling Englishmen that they may not hire premises to form a club and do in the poorer districts of the country what their richer brethren are allowed to do every day in the rich districts—why, it is ridiculous. Therefore I say that even the limited temperance effects which part of this Bill might be supposed to produce would be more than counteracted by the augmentation of the unlicensed premises which it does nothing to diminish or control. The two objects which the right hon. Gentleman sets out to pursue he himself is defeating. He tells us he is going to reduce facilities, and it merely turns out that he is going to destroy a great many quite innocent licence-holders. That does not mean that he is going to reduce the amount of facilities which citizens of this country have for obtaining liquor. He tells us he is going to recover the control of the licensed trade; but nobody can 108 recover the control of that part of the liquor trade in which the consumption takes place not upon licensed premises but upon premises belonging to clubs. The second part of the right hon. Gentleman's speech exposes the hollow fallacy of the first part, and we are thus left in this unhappy position, that the Government, in consequence of their many speeches and pledges, are driven to bring in a Bill which violates what I regard as in many respects the fundamental equities which should govern our legislative proposals. That is in itself a great evil. But when we ask what compensating advantages the authors of these predatory proposals have to offer us, it turns out that you are not going to diminish the amount of liquor consumed, you are going to transfer the consumption of that liquor from premises over which the magistrates and the police have control to premises over which they have no control. That is a deplorable result, which certainly will not conduce to temperance: and I believe that this Bill is neither honest as regards the property of the licence-holders, nor is it likely to be effective in the great cause in which it is nominally introduced.
§ SIR THOMAS WHITTAKER (Yorkshire, W.R., Spen Valley)
I desire in the first place to thank very warmly the right hon. Gentleman the Chancellor of the Exchequer and the Government for the Bill which they have introduced. It is a very comprehensive Bill, it is a courageous Bill, and it is a Bill which will obtain the support of all lovers of temperance in the country. I will dwell very briefly on some of its provisions before I venture to reply to the right hon. Gentleman the leader of the Opposition. The principle of this Bill the right hon. Gentleman told the House covered two points. The first was to secure a great reduction in the facilities for the supply of intoxicating drinks, and secondly, and in my judgment mainly, to recover for the nation full control of its own licences in regard to the sale of intoxicating liquors. No one can expect, and the Chancellor of the Exchequer has told us that he does not expect to satisfy everybody, and on one or two points of detail I would that the Bill 109 were different; but whether he will satisfy everybody or not, I am prepared to say that, taking the Bill as a whole, it satisfies me. It does not do all I should like to see done, but I hope that I recognise a genuine, a bold, and a courageous effort to deal with one of the most difficult of our modern social problems. May I say one word about the time-limit of fourteen years, which is much longer than some of us want, but I am willing to wait fourteen years, which is a long time in the life of an individual, but a short time in the life of a nation? I am prepared to wait fourteen years to get control of the licensed trade, rather than by rejecting it run the risk of prolonging the period of delay in legislating and then have to accept a still longer time-limit. With regard to the question of the licensing authority the Government have come to the decision that they will leave the authority in the hands of the justices. That is a point upon which you will find there is a considerable difference of opinion in various parts of the country, and that opinion varies very much according to the way in which the law is administered in the locality in which people live. You will find that in some cases the bench will be the best authority, and in other cases representatives of the local council would be more satisfactory. I do welcome very much indeed the extension, of self-governing powers in this matter of compensation from county boroughs to non-county boroughs with a population of 25,000 and upwards. There are a number of non-county boroughs in this country where the compensation levied is as large as it is in some counties, and this provision will free them from the incubus of quarter sessions, which have hung like a millstone round their necks when they are endeavouring to administer the licensing law. Then the power to give a veto on new licenses is a principle which some of us have fought for very long. We recognise the difficulty which the Chancellor of the Exchequer has found in doing everything in the direction which we desire, during the period of this time limit, but there can be no objection to giving the people of tie district power to say that they do not want any additional licences. Just a word about clubs. We hear a 110 great deal from the members of the liquor trade about clubs, but the first thing I ask when the brewers talk about clubs is, who supplies the clubs as well as the public-houses? Who finance these clubs and then complain that they are the bane of their existence? In the Grand Committee of 1902, when some of us on this side of the House desired to strengthen the regulation of clubs, who was it who fought us? It was the members of the liquor trade and the brewers. In the City of Bradford there are 276 fully licensed houses and 160 clubs. A point which was not touched on—I recognise its difficulty—and which seems to be important, is the entertainments given by these clubs and the admission of visitors. Anybody who reads the club papers will see that in many of them on Sunday twice a day, and sometimes three times a day, there are music-hall or theatrical entertainments. Two or three times a week also there are these entertainments and free visiting among the members of the union. A charge of 1d. or 2d is made for programmes, which merely means that charge for admission, and drink is freely sold. We have now two points of policy on which there is widespread agreement—one, that it is undesirable that liquor should be sold in music halls, and, two, that it is undesirable that music licences should be granted to public-houses; but here you have the clubs with these entertainments going on and liquor being freely sold and this free visiting. That is a very serious matter. With regard to the Sunday closing, I could have wished that the Government had seen their way to have gone somewhat further. We are to have a reduction in the hours of selling and power is to be given to the local justices to close public houses in their locality. They need only allow one or two to be open, I wish it had been the other way, and I earnestly plead now that it may be so—that the law should not allow them to be open but should compel them to close, giving power to the justices to allow one or two of them to open. The result then would be very different. But these are minor criticisms. I regard the measure as a great measure, and I hope we shall be found in most hearty and earnest support of it. 111 Now if I might say a word or two in reply to the criticisms of the right hon. Gentleman opposite, he seems to think we shall be able to do very little by Act of Parliament. In Ireland, Scotland, and Wales we have been able to do something by Sunday closing. If there was a sober man in those countries on Sunday last who would have been drunk but for Sunday closing, that man was made sober by by Act of Parliament. He says that we can do but little. If we can do but little, let\is do what we can. The Majority Report of the Royal Commission dealing with this point slid—It is undeniable 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.If we are to take the right hon. Gentleman as the spokesman of the trade, I am afraid there will not be much sacrifice. Even the liquor trade themselves recognise this evil. They speak of the "Temptation inseparable from the trade in intoxicating liquor." Does not that mean that the facility itself is a temptation to the people? They themselves recommended a reduction of a number of public houses and set themselves to work out a scale of compensation. Though we are told we can do but little, we want to go further and do more in the way of reductions. We want largely to revise the Act of 1904. That Act gives a vested interest that did not exist before. The right hon. Gentleman said he recognised that a licence was not a freehold. It certainly is not if it can be taken away for misconduct, but the Act of 1904 practically makes it so. I noticed last week in the Telegraph, which usually sets itself up to defend the liquor trade, that they said, in reference to that Act, that the effect of the Act is to create a vested interest in licences. It put the trade in a much stronger position than before. It did that with great injustice to the nation. We cannot have complete control of the licences unless we get complete possession of them, and by giving the holder a right to claim compensation the Act created a dual ownership in them. We cannot do as we wish until we get complete possession, and in order that we may do that 112 compensation must entirely cease. We do not wish to do an. injustice to anybody. We wish to secure the interests of temperance, and we must in this matter satisfy the public. The right hon. Gentleman objects very much indeed to the resumption of any of these licences at the end of the time limit. He acknowledges, and no one more than he, the folly of the arrangement under which we gave an extremely valuable monopoly to a limited number of individuals for an absurdly small payment. The right hon. Gentleman referred to the folly of the legislation which allowed these interests to grow up, and said we ought to do our best to prevent them growing up in the future. But surely we must go further than that! We must recover the value of the monopoly. That is the object of this Bill. If that be not done the position will grow worse and worse. As you decrease the licences the value of the remaining ones increases. They must become more valuable the fewer they are. If these licences are really the property of the licence holders, under what plea of justice do you make a levy for compensation? It is adding insult to injury to make a man pay money to compensate himself for the loss of his own property. Therefore by that alone you recognise that the licences are not the property of these men. The licence is not their property. It is an expectation. The other day the trade published a manifesto in the papers in which they said—What we have always relied on is not the right to renewal… We relied on the expectation of renewal.If that is true, that at once gets rid of the property claim. It is a speculation —you put money into an expectation. Lord Selborne said it was a locus standi for renewal. All that implies that it might be refused. I now pass to this point, that all these good people who have put their money into the liquor trade have put it in on expectation. That is not new law. Eighty years ago Lord Brougham declared the position as clearly as it could be stated. The nation has been made aware that these licences are subject to refusal at the end of any year, and it was with that full knowledge that people put their money into the trade. I looked up the figures in a recent Stock 113 Exchange Year Book and I found 360 brewery and distillery companies given in the volume. Of those 360, 345 were registered and put before the public after the year 1882, that is the year of the decision of the "Over Darwen" case—that well-known case which made it perfectly clear to everybody that these licences were subject to refusal at the end of any year. It was in that year that a letter appeared in one of the trade papers writted by Mr. Nash, counsel to the liquor trade. In that letter, Mr. Nash said—I am sorry to say, having looked into this question most exhaustively and compared notes with many of my brethern well-versed in these matters, that there cannot be the smallest doubt that in the strict sense no such thing as a vested interest exists and that, subject to appeal, the magistrates can refuse to renew the licence of the largest, most useful and best-conducted hotel in England. I daresay this will stagger many owners, but it is high time that the trade fully realised their position and did not remain an instant in a state of false security.It was after that knowledge that 345 out of 360 brewery and distillery companies were registered and went to the public for their capital. Therefore I say that the people who put their money into them did it with the full knowledge of the position and that they are not entitled to so much sympathy as they now ask for. When we see documents such as have been circulated in the House to-day are we to understand that these men—these bankers, trustees, directors— of trust companies and the rest—deliberately invested the funds in their charge in debentures in these concerns and during all this time have not adopted the precaution of creating a sinking fund or writing down the value of these properties? If so, they have been guilty of negligence and unpardonable recklessness, and there has not been ordinary commercial prudence in dealing with an investment of that kind. I know that some gentlemen have invested their own money in this way, but it is a speculation all the same. You are at liberty to put your own money into it no doubt, but you are not at liberty to invite other people to put their money in without telling them that half, two-thirds, or three-fourths of the security depends on an annual licence. You are not justified in asking people to put money in unless you can protect their interest by 114 setting up a sinking fund, and I think that the time allowed to enable that to-be effected is substantial, liberal, generous and reasonable. The right hon. Gentleman cannot understand the reason abler ness of the proposal under which the owner of a licensed property is to-pay towards the levy for compensation, and also to set up a sinking fund. But it is an ordinary every-day occurrence. Any man who owns a leasehold house in London, for instance, knows that at the end of a certain time the lease will fall in, and the property will pass from him. If he is a prudent man, he sets up a sinking fund during the time of the lease, and he also insures against fire. It is the same with a ship. Any man with a ship sets up a sinking fund against the time when the ship will-be practically of no value, and he also-insures against risk of loss. Under the-time limit, we give to the trade a definite fixed period during which the holder will be in the full enjoyment of the licence, and he can set up a sinking fund to redeem the value of the licence; the compensation contribution is merely an insurance to protect him in case of the loss of the licence during the currency of the time limit. It seems to me quite a reasonable proposal. Another important point is that the reduction of the number of houses will add to the value of the remaining houses, and practically the sinking fund would do almost alone for what they want. A house sells, say, a thousand pounds' worth of liquor. The gross profit upon that is about £400, and the net profit about £200. Take an area in which there are twelve of these houses, each making a net profit of £200. That gives £2,400. Supposing you abolish three of the houses, reducing the number to nine. These nine may make £200 each as before—£1,800; but it is probable that two-thirds of the trade which had been done in the other three houses would go to the remaining nine houses. Two-thirds of the gross profits of those three houses had been £800, and practically that additional trade would go to the remaining nine houses without extra cost of working; that is to say that the gross profit of the three houses would practically be the net profit of the nine houses, and that additional trade would be done by these nine houses without extra working expenses. Therefore, if the gross profit of the three houses is added to the £1,800 115 of the nine houses you have a profit from these nine houses of £2,600. They would be making more profit in those nine houses than they did in them when there were twelve houses. ["No!"] Well, answer it then. Deal with it. They even make more profit in the nine houses than in the twelve because of the reduction of working expenses, and that would go a long way to help them to provide the compensation. Then the right hon. Gentleman objects to this fund toeing made national, because it would be used to compensate for licences that are removed in areas where those who make the payments receive no benefit. That is what takes place now. The compensation fund of the right hon. Gentleman is levied over quarter sessions areas, and quarter sessions areas are often counties. They pay to this compensation fund in all parts of the county without any reference to the fact that there will be no reduction of houses in some parts of the areas from which the payments are derived. Many owners of public-houses pay to this levy without any reduction taking place in their particular locality. The fact is that it is recognised that this is an arrangement for the whole trade—a kind of compulsory insurance, and there is no difference in that respect in the arrangement now proposed. They pay the levy whether or not there be a reduction in their locality, and they will do the same under the arrangements of this Bill. The right hon. Gentleman made a -very useful admission in accepting the Chancellor of the Exchequer's statement -of the law. The right hon. Gentleman's statement of the law was wonderfully clear, and seemed to me to be exceedingly powerful—the absolute legal right of the nation to do what it likes with its own licences. The right hon. Gentleman admits that. Then he comes to what he is pleased to call equity and rights of property. But can a man have a right of property in expectation and not in law? An expectation cannot be a permanency. An expectation is capable of being liquidated by a term of years. That is what the Bill proposes to do. The right hon. Gentleman the Chancellor of the Exchequer dealt with the question of the death duties. The Inland Revenue levies the death duties upon the market value of the estate at the time of death. It does not in any sense or in any way go into the question of the wisdom or 116 justice of that method. People put a value on all kinds of things—race horses, old china, pictures, licences, but the Inland Revenue does not go into the reasonableness or permanence of that value; it takes the market value. If people put an extravagant value on the expectation of the renewal of a licence, the duty is levied upon it. But it does not mean that the Inland Revenue justifies that value. In 1895, British South Africa shares (Rhodesia) were sold at £9, and death duties would be paid on £9 if anyone holding them died at the time they were at that price. To-day they stand at 14s 6d By charging death duties on £9 the Inland Revenue did not in the least indicate that the shares would stop at that value, still less did they indicate that they would refund if they went down. They took them at their market price. But the Leader of the Opposition thinks it very wrong indeed that these licences should be compensated on the value at which they are taxed, and he thinks that it would be wrong to tax them at their market value. The annual value of the premises should be a fair representation of the market value of those premises, the market selling price. The community is being defrauded. The fact is that a number of houses are not paying a fair amount of rates and taxes. They have not been properly assessed. If they were properly assessed, the basis which the right hon. Gentleman suggests would provide a fair and equitable estimate of value and compensation. I expect that we shall have a very curious anomaly when this Bill is passed, as I hope it will be. We shall have owners of public-house property going to the public assessment authorities and wanting them to put up the assessments. We have had this year, and the Return giving full particulars will be published within a day or two, the case of a public-house in the city of London the licence of which was refused, and in regard to which the owner was awarded 100 years' purchase on the gross assessment to property tax. In other cases sixty, seventy, and eighty years' purchase was given, while the owner still has the property. He loses the licence and he is compensated for it a hundred times the annual value at which the whole lot has been assessed. Then there was a case where 117 the house was assessed at £68, and in which the owner got £7,700 compensation for the licence alone, and he is still left with his property. I say that the public are being defrauded. These people have not been paying their fair share of the rates and taxes, and because they have not been doing that, their property has a higher market value. It seems to me that the robbery is rather the other way. I want to renew my thanks to the Government. When Sir William Harcourt introduced his Bill, now more years ago than some of us care to remember, he said he was aware that he was venturing on a sea the shores of which were strewn with many wrecks. An old official of this House some time ago told me that his experience had shown him that the most dangerous subjects for a Government to touch were drink and religion. This Government has enough courage to touch both of them. We have got a strong Government. [OPPOSITION laughter.] Yes, and it takes a strong Government to have the courage to do this. We have had strong Governments who have bowed the knee to the liquor trade. This Government does not do that. It is a strong and courageous Government; and I venture to appeal to the temperance people of this country, to the Liberal Party of this country, and to the Labour men of this country, to support them in taking a substantial step towards removing a gigantic evil which is a national degradation.
§ MR. ARTHUR HENDERSON (Durham, Barnard Castle)
I think that when we are brought face to face with this question one may be permitted to express the hope that as far as possible it may be considered free from the spirit of partisanship. It seems to me that a measure dealing with this great social problem ought to be considered as dispassionately and fairly as ever we possibly can consider it, having regard to the relationship of this great question to the whole nation. Keeping that view before me, I desire to offer my sincere congratulations to the Chancellor of the Exchequer and the Government for what I conceive to be a legitimate attempt to deal with a very difficult problem. Taking the scheme as a whole, I do not know that during 118 the time I have been associated with the House I ever heard a scheme unfolded which gave me such general satisfaction. I congratulate him in the first place upon the application of the principle of trusting the localities themselves, a question upon which those associated with the Labour Party feel strongly. Far too long in connection with licensing have the people who were most affected by the licences been ignored. There has existed for a long time a power resting with the individual in the case of the landlord to veto licences on his estate, but so far as the great wage-earning section of the population is concerned, they have been exposed continuously to the danger of the licensing authority placing licences even in redundancy in their areas, and exposing them to all the danger that that involves. I recently pointed out to the right hon. Gentleman on a deputation on the subject that during the last twenty-five years there had been tremendous improvements in connection with the life of a great number of the wage-earners of the country. They had taken advantage of increased facilities of transit, they had gone to live in entirely new districts. Many of them had put into practice that spirit of thrift that is constantly being preached to working men, and through building societies and other agencies they had become the owners of their own little property in the shape of the cottage in which they reside. But what have we found from experience % As soon as these new districts have become sufficiently populated the working men who have made this investment have been subjected at the hands of the licensing justices to an entirely unjustifiable lack of consideration, and at the instigation of some brewery company licences have been planted down in the midst of this new property, exposing the families living there on to social and moral deterioration and the property to depreciation in value. Therefore, I congratulate the Government that they have had the courage to recognise the value of trusting the people in the localities with a direct vote upon the issue of new licences. I hope I am right in concluding that the principle of the veto will appiy to all licences immediately 119 after the expiration of the time limit. If that is so, on that particular point it increases my satisfaction. I believe no truer word was ever uttered than when the right hon. Gentleman the Member for West Birmingham said—The attempt to deal with this subject for the people and without the people has been a conspicuous failure. Acts have been passed, tried and thrown aside, and the evil remains unabated. I do not wonder that good and earnest men should despair in the presence of the persistent continuance of the evil, of being able to find any successful remedy; but when statesmen have only made matters worse, and Parliament has legislated to no purpose, I am still sanguine that the people themselves, if wholly trusted, would do something to mitigate the plague and stay its ravages.I think the Government have chosen the right line in applying the principle of the veto to new licences and to all licences at the expiration of the time limit. I think the Leader of the Opposition deplored the fact that the Government had selected so short a period as the time-limit. I deplore the fact that so long a period has been chosen. The right hon. Gentleman's speech seemed to run upon the assumption that this position which was going to be dealt with had been practically for all time as his Bill of 1904 created it. The position that he created in 1904, however, was one which had never obtained in the whole history of licensing in this country. Those of us who may be found generally supporting this measure are not alone in holding the opinion that that was an entirely new principle. I should like to quote one opinion from an organ of the Press generally very loyal to the Conservative Party, the Pall Mall Gazette, which at the time that Bill was before Parliament aaid—Neither Mr. Balfour nor any other authority has been able to disprove the obvious fact that the Bill as it now stands will give the publican a vested interest which he has never possessed in law, in equity, or in the calculations of the trade.There is at any rate one opinion that ought to have some weight with the supporters of the right hon. Gentlemen. May I further show, in order to prove what has really been practically for all time, until his Act passed, the legal 120 position. As far back as 1828, Lord Brougham declared—The justices have everything at their absolute discretion, and no one has any control over them in these matters. It is in their absolute power to give a licence to one of the most unfit persons possible, and it is in their power to refuse a licence to one of the most fit persons possible. They may continue a licence to some person who has had it for a twelvemonth and during that time has made his house a nuisance to the whole of the neighbourhood, or they may take away the licence from a house to which it has been attached for a century and which has not only been attended by no evil but has been productive of great public benefit.Then further repeated attempts have been made in the Law Courts to alter this legal position. In the Darwen case which dealt with the tenure of off-licences, Mr. Justice Field said—The Legislature recognises no vested right at all in any holder of a licence. Every licence is a new licence, although granted to a man who has had one before, for it is only granted for one year.Mr. Justice Stephen concurred, and said—The justices can either refuse or confirm these certificates on any ground they like, and whether the application is for a new certificate or made for the twentieth time, and whether the applicant is of unblemished character, as in this case, or of bad character.These legal opinions have been upheld in every case that has been brought for the purpose of upsetting the law, and it has been clearly and thoroughly established that there was nothing more than the mere right of expectation of having the licence renewed right up till the passing of the Act of 1904. Keeping that in mind, surely to be told that a time limit of fourteen years is too short appears to me to be carrying the argument altogether too far. We who think fourteen years rather too long have more argument in our favour than have those who object to the time limit as being too short. Then I congratulate the Government for having been sufficiently able to deal with the question of clubs. Everybody knows, especially those who move in great industrial centres, that this evil has been growing during the last few years at a tremendous rate. I was glad to hear the right hon. Gentleman say that any legislation must apply equally to the clubs of the rich as to those who are not so rich. On 121 this point I should like to ask the right hon. Gentleman, one question. I did not quite understand whether the clubs are to be allowed to enjoy unfettered liberty as to the hours of opening.
§ MR. ASQUITH
The Bill as it is drawn at present does not contain any provisions as to the hours of closing. In regard to the whole of this matter I am very open to suggestion.
§ MR. ARTHUR HENDERSON
I thank the right hon. Gentleman for that observation. It seems to me that it is almost useless to attempt to remedy the evils associated with club life as many of us know it to-day if there is to be this full discretion as to the hours of opening and closing. In fact, in many cases I do not know that it comes to be a question of opening, because I doubt whether they are ever really closed, and I hope the right hon. Gentleman will very seriously consider this. His provisions for dealing with the clubs seem to me to be based very largely upon a desire to remove an injustice from the licence holder. If that be so, if the licensed holder is restricted in his hours of sale we are not doing anything like full justice if we allow the club unlimited hours. The right hon. Gentleman must recognise the point of my argument that he ought to do justice to a fuller extent than he hinted in his speech. Another observation which I should like to submit to the right hon. Gentleman is this: He gave us to understand that so far as the Metropolis is concerned there is to be no difference in the hours in regard to Sunday sale. Do I understand from that that any restrictions which he is going to impose against clubs will also apply to the whole of the clubs in the Metropolis.
§ MR. ARTHUR HENDERSON
There again that will mean that there will be a differentiation if he accepts my suggestion about the restriction of the hours of the clubs in the country, and there will be too wide a distinction between the provisions as applied to clubs in the country and clubs in London. If he restricts the hours of the clubs in the country, 122 they would I suppose be restricted on S. in day; at least I should sincerely hope so. Then we should have that listinction between the hours that clubs can open on Sundays and the hours they would open in London.
§ MR. ASQUITH
Perhaps I had better mike the point clear in order to avoid a misapprehension. We propose to alter the general law on Sunday as regards the whole of the country, giving the magistrates certain discretionary powers.
§ MR. ARTHUR HENDERSON
Again I have to thank the right hon. Gentleman. I was anxious to get this point made clear. I am pleased to learn that the powers to be given to the justices are to apply to the Metropolis. That was one of the most disappointing parts of the speech, when I heard him say that no difference was to be made in the hours of opening and closing as they obtained in this great Metropolis. During the few years I have lived in London, I have learned a great deal, in fact I have learned more than I ever did before upon this question, and I must say that if there is a place that appears to me to have an unanswerable case for curtailment of hours on Sundays, it is this great Metropolis. I saw within half an hour at the "Elephant and Castle" more people go in for liquor during the opening hours of Sunday than I have ever seen in any single week before during the whole of my life. The more you go about London, whether at midday or evening on Sunday, the more evidence you can find of a strong case being made out for a reduction of the hours of opening on Sunday. I regret that the Chancellor of the Exchequer has had to admit that in this England of ours we are not as far advanced as the country from which I came. I do not agree with the statement made with regard to Scotland as to increased drinking there. From what I know of it, I believe that Sunday closing has been to that country as it has been to Ireland and "Wales, an immense benefit. I only wish that the Government had gone the whole hog and given us entire Sunday closing. It is, however, a satisfaction to know that we can use all our influence with our local authorities, and if the local 123 authorities are at all in earnest it will not be long before a great limitation, if not an entire closing, of public-houses takes place in many districts. In regard to the children, I was not quite clear as to whether in the Bill any age at all had been fixed at which children could be taken into a public bar and supplied with liquor.
§ MR. ARTHUR HENDERSON
Then that is a source of regret to me, for I believe there is no subject upon which there is in this country to-day such a volume of opinion in favour of restriction and a limitation of age—say the age of sixteen—at which children shall not be permitted, either to receive liquor in the bar or to enter a public bar, or that part of the public bar where liquor is usually supplied. I believe there would be an almost unanimous note of congratulation to the Government, if they could see their way clearly to accept an Amendment stipulating that sixteen should be the age limit. I venture to express the hope that before the remaining stages of this Bill have been got through, the right hon. Gentleman will be willing to receive an Amendment on this point on the lines I have indicated, because unless we make up our minds to protect the children from the demoralising atmosphere of many of our drinking bars—and I say this, having read recently those terrible facts brought to light by Mr. G. R. Sims—the probabilities are that in years to come we shall have to deplore much of the evil we deplore today, which arises from the sale of intoxicating liquors. In conclusion, let me say that I am delighted that the Government have given us what I would venture to call a comprehensive measure. I hope there will be no weakening of the main principle; if anything, let us strengthen the Bill. I was a little surprised to hear from the Leader of the Opposition that we could not do much good by legislation of this character. What we can do, however, is to lay down such conditions as will prevent a tremendous amount of harm being done.
§ MR. BOTTOMLEY (Hackney, S.)
I regret that I must dissociate myself from the hon. Member who has just sat down and the hon. Member who preceded him in felicitating the Government upon the measure they have today introduced to the notice of the House. I will preface my observations with the hope that it may not be assumed that because any Member of this House, more especially if he happens to sit on this side, entertains that view, he therefore is in any way lacking in the enthusiasm or the interest of the most earnest temperance reformer. There is a fundamental difference between us on the question of method. I find there is a certain party in this House which stands aghast at the magnitude of the drink evil, and confessing itself helpless to grapple with it, deifies the State, canonises the Government, and prostrates itself before the Chancellor of the Exchequer and asks him to endeavour to accomplish by Act of Parliament something which only human and social evolution can do. That being my view, I am amazed that the Chancellor of the Exchequer on behalf of the Government should respond to such an appeal. I am surprised that with all the great financial and social problems with which he has to deal, and pledged as he is up to the hilt to raise more funds for all kinds of pressing social need, he should now deliberately tamper with his principal source of revenue, and abandon that which I hold to be the legitimate symbol of his office, the rake of the croupier, for the crook of the Good Shepherd. However that character may become him in his private capacity it is certainly out of place in his official character. I now venture to ask him with great respect, and I would also ask any hon. Member who supports this Bill, one or two simple questions, to which I think I am entitled to receive an answer. Why is this' Bill introduced? Is the evil of intemperance on the increase? Is the consumption of alcoholic drink on the increase? Has there been any increase in the number of licences granted? Is there any increase of crime attributable in any way to drink? If none of these questions can be answered: in the affirmative, then the substratum 125 of this measure has gone. [Cries of "Oh, oh!"] If it be the fact that intemperance in this country is an ever lessening evil, if the licences are being automatically reduced, and if the class of crime attributed to drink is decreasing, (except in. those districts which enjoy the blessing of prohibition legislation) if all this be true, then the foundation of the Bill is gone. The right hon. Gentleman the Chancellor of the Exchequer says the two - fold object of this Bill is a reduction in licences and the resumption of State control. ["Hear, hear!"] An hon. Member says "Hear, hear," but I would like to remind him what the late Mr. Gladstone said upon the matter. Speaking of the reduction of licences Mr. Gladstone said—If the reduction of licences aspires to the honour of a remedy, it seems to me that it is little less than an imposture.That is the dictum of the late Leader of the Liberal Party and I leave my hon. friend who interrupted me to reconcile it with the first principle upon which this Bill is based. As regards the resumption of control, if I understand the English language at all I am at a loss to understand how the State can resume the ownership of something which it never possessed. I also want to know how certain Members of this House who regard the drinking habit as the greatest curse in the world are going to reconcile themselves to a position which arises under this Bill when every man in this House and every citizen of this country will become a licensed victualler and an owner of licensed premises. For myself I decline to take any such responsibility. It is quite enough for me that the law entails upon me a certain responsibility in regard to the internal affairs of the Church of England, and whilst I object to be made sober by Act of Parliament I also object to being made a licensed victualler by Act of Parliament. I am going to make myself responsible for a comprehensive statement, and then I will leave my hon. friends to dispute it. So far as the whole history of restrictive legislation goes there is no part of God's earth to which any hon. Member can point to-day and say "Here it has done good." Take general statistics of drunkenness. If you take Ireland it 126 is 18 per 1,000; Scotland, 10 per 1,000; Wales, 10 per 1,000, and England 6 per 1,000. A few weeks ago a meeting of' the City Council of Glasgow was held for the purpose of considering "the recent large increase of drunkenness." While in England drunkenness has been steadily decreasing, in Scotland and Wales it has been steadily increasing. These are facts vouched for by official documents in the possession of every Member of the House. [Cries of "No!"] Will any hon. Member get up and say in what respect I have misrepresented the facts? The "Licensing statistics of England, Scotland and Wales" are my authority for these statements. They show that in 1901 there were 13,500 convictions in Glasgow; in 1905, 15,000; and in 1906, 20,000. These figures if they tell you anything tell you that you cannot by a mere reduction of drinking facilities reduce drunkenness and that you must trust in the wisdom of what was said by Mr. Gladstone that a reduction of licences is an imposture if it aspire to the dignity of a remedy. I observed that the other day a speech was delivered by a great American whisky mignate—the chairman, indeed, of the great whisky Trust. He was addressing the shareholders, and referring to the great extension of prohibition areas he said that it would make no difference to the whisky trade; that men would have liquor if they wanted it, and that it is only the area of distribution which will be altered by legislation. Then I observe, coming nearer home, that the chairman of the Preston bench of magistrates asked the chief constable whether he could explain why it was that with a continual reduction of licenses in that town drinking was going up. The chief constable could give no explanation except that the weather had been rather unsettled of late. Speaking therefore from the argument of experience, I ask the Chancellor of the Exchequer if it be a fact that in Scotland, Ireland, and Wales, the drink statistics compare every year more unfavourably with those of England if it be a fact that prohibition legislation has never lessened the consumption of alcoholic liquor—then at least to dismiss the theory that the reduction of licences is a remedy. Leaving that point I wish to 127 ask one or two questions. We are told that a fourteen years limit is to give sufficient time to everybody engaged in the trade to make provision for the ultimate loss of his property. I thought that one object of the Bill was materially to lessen the consumption of drink. In fact if the Bill is to have any effect at all in the course of the fourteen years the drink evil ought to have disappeared altogether. If its effect is to be that, what is the good of telling the licensed dealer: "We are taking away your trade on the one hand, and on the other, if you be a prudent man you will be able to save sufficient to compensate yourself." I am told that there has never been property in a licence. I am told it has been only a matter of "expectancy." I would ask the right hon. Gentleman whether property in this country does not rest upon the foundation of "expectancy"—the expectation that there will be no alteration in the fundamental basis of the law. What does a reversion rest on but expectancy, not only of the death of the life tenant but of the sanctity of contract, and the justice of our laws? What does a solicitor rely on for his annual Certificate except the expectancy that if he is honest and respectable—and some solicitors I have heard are neither—he will get his Certificate renewed as a matter of right? Having read the judgment in the case of Sharpe v. Wakefield I have to say that I do not agree with the construction put upon it by the Chancellor of the Exchequer, which was swallowed by the hon. Member for the Spen Valley Division as such a grand exposition of it—from his own particular point of view. To my mind it decided the opposite. The judges said that there had grown up such an expectancy of renewal that the justices were bound to exercise "judicial discretion" before taking away a licence. That strengthened rather than weakened the contention of the licensed victualler that he should have his position recognised. If we look at it from another point of view we find the Chancellor bf the Exchequer saying that in charging death duties on licensed property, we must have regard only to the market value of the day. The right hon. 128 Gentleman gave the instance of an unfortunate man who might die possessed of a racehorse. The animal was taxed up to its full market value although there was no assurance that it would fulfil the expectation of the trainer, or (what is more to the point) the secret intentions of its owner. I confess if I had any prospect of impending dissolution, and that having the misfortune to possess a few quadrupeds courteously called racehorses and if there was any chance of the Government stepping in and saying: "We will resume possession of the racehorses, for all horses originally belonged to the State," I think I would enact that the poor animals should be taken to a convenient place and shot, and thus put both them and my heirs out of their misery and suspense. Every licensed victualler has invested his money in the belief that this expectancy was a real thing. The right hon. Gentleman the Leader of the Opposition has said that surely the shareholders and general investors in licensed property were worthy of some consideration. A few days ago I visited the joint stock registry of this country. I have taken out these sheets of names and addresses of ministers of religion of all denominations, mainly ministers of the Established Church I admit, who, believing in the permanency of that expectation, have invested some of their hard-earned savings in licensed and brewery property. Here are the names of 1,280 ministers of religion whose little all is to-day represented by their shares in breweries and other licensed undertakings. If any hon. Member is anxious to know the particular inclination of his rector in these matters, he may have full access to these sheets. The Chancellor of the Exchequer also referred in a casual sort of way to the fact that there may be £100,000,000 or £150,000,000 invested in the licensing trade. I would say that there are £300,000,000 invested in it. There is £100,000,000 in mortgages and debentures stock alone, and I could produce a list of names showing that they are held largely by widows and in trust on behalf of minors throughout the country. The hon. Member for the Spen Valley Division may say that the shareholders had invested their money in these concerns 129 with their eyes open. I have looked at the prospectuses of a number of the undertakings and I venture to say that not one contains a special clause calling attention to the decision in the cases to which he referred. Leaving the time limit may I say a word about the extraordinary proposal in relation to Sunday closing? If there is one aspect of licensing legislation which has been the most dismal of all failures it is the attempt to deal with Sunday closing. An hon. Member has said that he did not admit that in Scotland it had been a failure. If he will refer to the statistics, he will alter his view in relation to arrests for drunkenness on Sundays. I asked the right hon. Gentleman the Home Secretary a few days ago to give me information as to arrests in the Metropolitan district for drunkenness. In round figures the arrests were: On Saturday, 4,000; on Monday, 2,000; and on Sunday, 946. With all the facilities for drinking on Sunday, when working-men had time on their hands, there were only 946 arrests. [An HON. MEMBER: There are less hours on Sunday.] The hon. Member seems to forget that some working-men really do go to work on week-days. On Sunday in London working-men have six or seven hours absolutely available to do nothing but drink, and yet on ordinary week-days when they have their working hours intervening, there is the immense disparity in arrests which I have pointed out. If the object of the Bill is to promote temperance, why does not the Government introduce two clauses—one to close the public-houses on Saturday and the other to close them on Monday? As it stands, one is led to suspect that it is a Church and Chapel Relief Bill as regards closing of public-houses on Sunday. I am encouraged to take that view when I read a dismal moan by the hon. Member for Finsbury in which he points out that of the 6,000,000 of people in London no more than 15 per cent. of them attend places of worship. The number of places of worship, he tells us, is 4,000, and the average attendance is 194; while the number of public-houses is 14,000 and these have a daily attendance of many hundreds if not thousands. And then the hon. Member goes on to urge that legislation for 130 Sunday closing should be introduced. I also find a paper called the Christian, which I do not pretend to take in or read regularly, bemoaning that "the result of the recent Welsh revival has now disappeared owing to the popularity of licensed premises." In view of the fact that there is on Saturday four times and on Monday twice as much drunkenness as on Sunday, why has the Chancellor of the Exchequer singled out the Sabbath Day in this Bill for closing? And where has Sunday closing anywhere in any way diminished the evils of intemperance? Turning to the question of Clubs, I confess that I feel very strongly on that subject. I listened with real amazement to the unfolding of the right hon. Gentleman's plan. I remember that the Prime Minister attributed the death of the late Government to an over indulgence in tactics; but I cannot help feeling that a total abstinence from tactics will prove equally fatal. Tactics! Why, Mr. Speaker, the present Government is throwing them to the winds. The licensed trade as a body always has been, is, and probably always will be, the enemy of the Liberal Party. But hitherto that Party has been able to rely to a large degree upon the counteracting and counterbalancing influence of the working men's clubs of the country. Now they are to be flouted and insulted. Surely the proposal to allow an ununiformed police officer to enter a working men's club to see whether the members are misconducting themselves or are guilty of improper practices is an overdose of tactics of the stupidest kind. [An HON. MEMBER: All clubs are to be treated alike.] My acute friend below me reminds me that this measure is to apply equally to all clubs whether working men's clubs or clubs in Pall Mall. I wonder if this Bill becomes law what he would say if he met a plain clothes constable in his club every night. Sir, since I heard that specious argument I confess that I have been wondering what is the Parliamentary phrase for "spoof?" I have been unable to find an answer to the query, and I have come to the conclusion therefore that the proper phrase to use is that the right hon. Gentleman has been "pulling our legs." The hon. Gentleman who speaks for the Labour Party spoke as if working-men went into their clubs solely for the purpose of 131 getting drunk. I always understood that before joining a club, even a working man's club, the applicant had to give satisfactory references. [Cries of "No."] I only speak from my own experience. That, at all events, is the rule in South Hackney. And if a policeman is to be allowed to enter a club in this manner it is a monstrous invasion of the liberty of the subject; and from the point of view of tactics it is one of the most foolish, things that the Government has done during its career. Looking it the general provisions of the Bill it has to be remembered that the reduction of licences can never have and never had the effect of producing a reduction of the drink consumed; and, secondly, that the State had never the right to claim the property of licences. I know I shall be told to-morrow by my friends that I always oppose licensing reform and temperance legislation. I remember the right hon. Gentleman the Under-Secretary for the Colonies paying the hon. Member for Preston the magnificent compliment that he had an intellectual predilection for unfashionable causes. I am quite prepared to be put in that category. I, however, repudiate the suggestion that I am not desirous to do everything I can to alleviate and diminish this great evil of intemperance. But all statistics point against the proposals in the Bill as dangerous and useless. That is not all. I think it was the First Commissioner of Works who told a deputation that they should take what they could get now. They might not be able to obtain all they desired in a single session, but the more they could get now the more support they would get for a more drastic measure in a future session." The Prime Minister himself said that we should pave the way for "effecting in after years those reforms which temperance workers had at heart." Therefore this Bill is only the beginning of a policy of drastic restriction. I regard this measure as indicating the drift of the Liberal Party on to the rocks. The First Commissioner has denied that the Local Veto Bill of 1895 was the cause of the utter annihilation of the Liberal Party. May I say that at that time he was a very young man and had probably not contracted what the Leader of the Opposition would describe as the 132 bad habit of reading the newspapers. But if he will refer to the papers of those days he will find that of fifty odd Liberal candidates for election who were then successful forty-six said that they had managed to win even despite-the disadvantages of Sir William. Harcourt's Bill; and of 136 unsuccessful candidates 130 attributed their defeat to that particular measure. The late Sir William Harcourt himself lost his seat on that occasion, as did Mr. Caine, whilst Sir Wilfred Lawson, only just managed to keep his seat. I say that the Government are therefore by introducing this Bill getting on very dangerous ground. If I thought that any provision in the Bill would reduce by one iota the evil of intemperance I would sit up night and day and devote myself heart and soul to furthering the passage of the measure. Although temperance reformers will not give me credit for it; I am as keen as-they on the subject. It is not those who talk most about temperance who are-most interested in it. It is not necessarily those who obtain a reputation for being great temperance agitators who do-the best for the temperance cause. While I honour every earnest man who takes a deep interest intemperance—my honest conviction is that there is an even greater asset even than temperance—especially when made by Act of Parliament, and that is the robust manhood and sturdy independence of a self-reliant people.
§ MR. F. E. SMITH (Liverpool, Walton)
In spite of the speech of the hon. Gentleman, I confess that I do not share his surprise or indignation at the nature of the proposal which the Government have submitted to the House. The real fact is that any one who read the speeches which were made by the Leaders of the Opposition at the time my right hon. friend introduced the last Licensing Bill would have been able to forecast with accuracy what the nature of the plan of the present Government would be in regard to licensing reform. The Opposition of that day founded themselves upon certain facts and certain inferences which they drew from these facts. I maintain that every, fact and every inference drawn from the facts has been 133 proved by the experience of the last three years to have had no foundation at all. We have had the Chancellor of the Exchequer, in introducing the Bill, saying that, without putting precise figures, he would take £100,000,000 as representing the capital value of the licences of the country. An hon. Member opposite put forward as an alternative figure £300,000,000. But will it be believed that the present Lord Chancellor, at the time of the introduction of the last Bill, said that—If the discretion of the justices is to be limited, if compensation is to be provided for licences to be suppressed, as this Bill proposes, the value of all the licences proper which is estimated to-day at £300,000,000, and which I believe to be below the mark, would be £600,000,000 the day after the Bill is passed.Is there any man sitting on that side of the House who will get up and say that the whole case on which that prediction was based has not been completely falsified by the events? The extraordinary statements that the value of brewery companies was to be so increased by the compensation to be given that it would be doubled in a comparatively short time have also been falsified. The hon. Member for Spen Valley spent his time in a disinterested and noble eulogy on His Majesty's Government which must have been very gratifying to them. The hon. Gentleman said in the debate on the last Bill that he put the value of licences at £150,000,000.
§ MR. F. E. SMITH
I took it that the hon. Member stated so in the debate, and I will give him my authority, but of course if he says he did not, I accept his statement. A few days ago, however, the hon. Gentleman, writing to The Times, put the present value at £100,000,000, and I must take that statement. I venture to lay before the House a proposition which everyone will accept. There has been, during these few years in which we have had an opportunity of testing the Act of my right hon. friend, one tendency, and that is that instead of increasing the value of licensed property—I do not say by reason of the Act but subsequent to the Act—the securities have depreciated enormously in value, and far more rapidly 134 than any other class of security. At the present moment no expert valuer will come forward, nor can any temperance reformer cite one who will, and deny that there has been a great depreciation of the value of licenses since the time when my right hon. friend introduced his Bill. I refer the House to a quite impartial organ, the Statist, which gave statistics on this question. It took seventy-eight typical companies as fairly representing the largest and most prosperous brewery companies in the Kingdom, and it found they had a total capital of £90,000,000. Of this £41,000,000 were debentures, £25,000,000 were preference shares, and £23.000,000 ordinary shares. The net profit on that total sum of £90,000,000 was £3,556,000, the return varying between 5 and 9 per cent., a very considerably lower interest than the interest which was shown in respect of the same companies in the previous five years. If it is true that we wantonly introduced a Bill which has endowed the brewers, will anyone in the course of this debate inform us why every brewery security has depreciated, and why the total value of licenses is smaller than it was at the time that so-called Endowment Bill was introduced? That is not consistent with the case put forward in the House and in the country at the time when the last Bill was introduced. But that was not the only prediction by which that Bill was opposed. We were also told on every platform and in this House that the Bill which we were introducing would not have the effect of diminishing the number of licences. We do not hear much to-night of that, although I do not fail to observe that many of the same hon. Members are still in the House. So vehement was the protest which was raised on those Benches that my right hon. friend was actually interrupted in the course of his speech, as the pages of Hansard will show, when he ventured to predict that the result of his Bill would be enormously to increase the speed with which licences were reduced. He was received with such dissent from those benches that he had to ask the indulgence of hon. Gentlemen opposite to be allowed to proceed. What are the facts? They deserve 135 a little more attention than the Chancellor of the Exchequer or any other speaker has given them. During the eight years before the Act, the average reduction of licenses was 218. That was all that could be done by temperance reform up to then, and I might even go a little further and point to the action of the liberal Party who had an opportunity of showing whether they knew any better method of reducing licenses, but did not avail themselves of it. I have given the figures of the new licenses which were granted before the Act. Take the eight years before the Act was passed, there were 218 new licenses granted. I take the three years since the Act, and the annual average was fifty-six. So far at any rate the temperance measure introduced by my right hon. friend very considerably reduced the number of new licences granted, and for the first time in our history of this question secured the monopoly value to the State without injury to anyone. Now let us take the case as far as the renewals of old licences are concerned. From 1894 to 1902 the average annual reduction of old licences of all kinds was 296, but from 1902 to 1904 the annual reduction was 644. The Chancellor of the Exchequer founded some observations upon that circumstance and said that the licensing justices were then beginning to show for the first time that they were prepared to refuse the renewal of licences on the ground that they were not required by the neighbourhood.
§ MR. F. E. SMITH
I by no means dissent from that, and may I venture to remind the hon. Member of another reason for introducing the Bill, and that was that representations were made to the Government by no less than 100 licensing benches in the country that they found themselves in this position, that while there was the sense of injustice which prevailed, it would be quite impossible for them to continue to refuse licences which had been granted in the well-founded expectation of renewals. I take the figures for the two years 1903 and 1904, and the re- 136 ductions then ware 644. I then take altogether the averages from 1894 to 1904, which gives the House a ten years average and shows what you could do before my right hon. friend took the matter in hand. In these ten years the average reduction was 359. What are the figures since this Brewers Endowment Act, which, according to hon. Members opposite, struck the deepest blow at the heart of temperance? The figures since the Act, for 1905 and 1906, for those two years show an average of 1,305; while in 1907 there were 1,507 licences which were refused renewal. That compares favourably with anything the temperance party and previous temperance reformers had been able to do. Who says that that was not a Bill in the direction of temperance? I followed the speech of the right hon. Gentleman with all the care that I was capable of giving to it, and I very much wish that he or someone else will tell us in figures what is the estimate of their desirable annual reductions in these licences. Does he think that 1,500 licences a year is an adequate and satisfactory reduction in the number of licences.
§ MR. F. E. SMITH
The right hon. Gentleman assents. Let me consider that view with reference to the total number of licences in this country. The right hon. Gentleman said that there were 95,000 licences in this country. We do not share the right hon. Gentleman's prediction, which is not founded upon facts, that the diminution in the number of licences will not be sustained. Such predictions are of very little weight with us, as the right hon. Gentleman was one of those who told us that our Bill would produce no diminution at all. We are faced with the fact that there are 95,000 licences in this country. If reduction is made at the rate of 1,500 a year, in twenty years, a very fleeting period as the hon. Member for Spen Valley has reminded us in the social evolution of the nation, 30,000 licences will have disappeared. That is to say one-third of the total number of licences in the country will go in twenty years without injury to anyone. I need not 137 remind the hon. Gentleman of what the result would be at the end of forty years, but if the process was automatic the necessity would arise in time for creating new licences all over England. I now come to consider what is after all the Achilles heel of this Bill. The Government have bound themselves and their followers to one solution only of the temperance problem, and their solution is that if you reduce the facilities for obtaining drink you will at least to some extent have solved the drink problem. I am doing no injustice to the Government when I say that that is the position of the Liberal Party. That position demands one conditional precedent before you can even say that you are giving it a fair trial, and that is that you should draw no sort of distinction between the nature of the premises to which these facilities are extended. Is the legislation likely to succeed in diminishing the number of premises in the country on which drink can be obtained? I do not think anyone in the house will get up and say that if the Government are driven to admit that side by side with the reduction of licences there has gone on in the past, and is likely to go on in the future, an increase in the number of clubs, on their own theory this legislation will be a failure. We, however, have never pinned ourselves to this as the one supreme method for dealing with the licensing problem. We have never pinned ourselves to the idea that you must deal with clubs in Pall Mall and with working men's clubs. It is not our panacea, but it is yours, and if after this Bill you have made no progress in reducing the number of clubs in which drink can be obtained, then your Bill will not be worth the paper it is written upon. What has the Government done in regard to the reduction of clubs? When I listened to the heroic words with which the right hon. Gentleman heralded the proposals of the Government, I thought here at last we have a strong man; here at last we have one who has the resolution to wrestle with a great problem. The right hon. Gentleman reminded us of what he said outside the House, that it was idle to effect or try to effect temperance reforms by preventing the sale of intoxicating liquor on licensed pre- 138 mises if you continue to afford facilities for drinking in clubs. What is his remedy?His only remedy is that he is going to make the registration of these clubs annual instead of being made once and for all. I am sure that no more futile method of dealing with clubs was ever put forward. What a disappointment this will be to those who desire that something effective should be done to limit the drinking facilities afforded by clubs. What was said when the 1904 Bill was introduced by the late Lord Ritchie—or Mr. Ritchie as he then was—when Members of the House made suggestions in regard to this annual registration. Mr. Ritchie said—We regard registration as almost purely ministerial. I do not think it would be right at all to say that the registration should not take place until the registering authority was convinced by re-inspection that the club was a club properly conducted. It would be almost giving to the club a licence, which is not what we desire to give. We regard registration as almost purely ministerial.So that what the right hon. Gentleman has done is to cause the Pall Mall and other clubs once a year to do a purely formal act of registration, which gives no one any control over them and gives no guarantee that their number will not be multiplied. That is a great revolution. Mark what the position is. The whole Liberal position is that you cannot deal with the drink traffic unless you suppress the places in which drink can be obtained. What is the position between the club and the public-house to-day? Public-houses pay a very largo licence duty. That is point number one. Clubs pay a registration fee of five shillings. Perhaps the right hon. Gentleman will make them pay a fee of five shillings every year.
§ MR. F. E. SMITH
All I will say is that that fiscal change will really represent the value of the right hon. Gentleman's proposals. In the second place, public-houses contribute to the compensation fund, but clubs do not. Lastly, licensed premises are licensed by the justices who see that they are suitable and are also subject to constant police supervision, which clubs are not. The Government is going to leave these clubs in every town in England, and they may 139 grow up next door to the licensed premises which you are going unjustly to suppress. They are to be allowed to grow up without restriction, except the trivial change which the right hon. Gentleman is making.
§ MR. ASQUITH
It is not a trivial one. The hon. Gentleman did not do me the honour of listening to my statement. The object of the annual renewal of registration is not merely to go through a repetition of what is purely ministerial. That would be pure folly. The object of the annual registration is to enable anybody to come forward who is so minded and raise an objection to the registration being renewed, amongst other grounds, on that of the premises being mainly used as a drinking club.
§ MR. F. E. SMITH
I was not saying anything about misconduct or drunkenness. It is so wonderful that the right hon. Gentleman should not perceive the nature of the case which I am trying to make against him. I am not suggesting that there is a case for saying that every one of these clubs is a drinking club. That is not the case. Many of these public-houses which are being suppressed are also not drinking shops. The case which is being made against the right hon. Gentleman is this, that he comes before the House of Commons and the country and says: "We are going at last to effect temperance reform, and the way we are going to do it is not merely by closing drinking shops, but also perfectly reputable licensed premises, where drink can be obtained under respectable conditions." Side by side with that he will permit the survival and sanction the creation of other clubs where all the people who were previous drinking in the public houses can go and obtain as much drink as they want. The right hon. Gentleman does not even deal with that proposition when he says that any person can come forward and say that they are drinking clubs. I am not saying that they are drinking shops, but I say that they are clubs in which drink can be obtained. The right hon. Gentleman has prepared an elaborate scheme which will cause the greatest injustice and hardship and sense of rankling throughout the country when he permits of the survival 140 of institutions in which drink can be obtained with the same freedom as it can in the public-house. May I say a word about the time limit? I gather that every Member on that side of the House has rather marvelled at the moderation of the Government in allowing the licensed victuallers so long a period of time. The hon. Member for Spen Valley has indicated what his view is of how this time limit may be made effective for the purpose of securing full compensation by the publican. He suggested the other day, in a letter to The Times, that the publican by affecting the quality of his beer, might be able to effect economies which would protect him against such a time limit. If the hon. Member will come to my constituency and recommend this particular argument, that the publican should practically extend the time limit by watering his beer, my constituency will listen to him with very great interest, and no doubt other constituencies will also do so. What is surprising in the attitude of the right hon. Gentleman is that he has not given the slightest evidence that he has based this time limit on any actuarial basis at all, when surely from the beginning to the end of the problem it is actuarial. One cannot judge of the reasonableness of the figures brought forward by theories or prejudice, but you test their application in relation to representative companies, and see whether such proposals would or would not be unduly oppressive to the individuals who are either members of a partnership or a company. I have taken some little trouble to obtain some figures, which will, I think, astonish some hon. Members of the House who would like a short time limit, because they show what very remarkable consequences will follow from it. The figures which I give to the House show the annual amount required to be set aside, taking the rate of interest at four per cent., in order to provide the estimated value attaching to the licences in the event of a time limit, first of ten, then of fifteen, and then of twenty years. I think it better to take three figures, because the Government only deals with one, and because if this Bill gets any further I think the time limit will have to undergo considerable modification. This statement that I have deals with fifteen representative companies, and I am quite prepared to give privately to any hon. Member, the names of the 141 companies and the figures and calculations which I now offer to the House. I hope the House, however, will take it from me that they are fifteen of the largest, most reputable, and best known brewery companies in London and the provinces, and I want to know how the time limit such as is proposed in the present Bill will work out in regard to the companies and to the small investors who have taken an interest in them. Taking the whole of the profits of these fifteen companies, the net result is £1,227,123 and ths figure, it should be noted, is arrived at before deducting the compulsory levy to the compensation fund, because it was assumed that this levy would not continue to be raised during the currency of the time run, at all events not at the full rate. Deducting from this aggregate profit of £1,227,123 the annual sum required to be set aside to provide for the estimated value attaching to the licences, on a ten years basis the whole profit would be exhausted and leave a loss of £615,907. On a fifteen years basis the profit left would be £122,047, and on a twenty years basis the profit left would be £484,039. The sums distributed in dividends by the fifteen companies during the past year were approximately, on preference shares, £645,274, on ordinary shares £424,631, making a total of £1,069,905. It follows, therefore, that upon a limit of ten years, there would be no dividend to the preference or ordinary shareholders, and there would be a deficiency of £615,907 in the payment of debenture interest. Upon a limit of fifteen years the preference shareholders would receive less than one-fifth of the dividends distributed during the past year, and the ordinary shareholders would receive nothing. Upon a limit of twenty years the preference shareholders would receive about three-fourths of the dividends distributed during the past year, and the ordinary shareholders would receive nothing. I will take the figures of an individual company, and I hope the House will not think them uninstructive. The profit, including compensation levy, is, say £125,000. Upon a ten years basis the whole profit would be exhausted and leave a loss of £107,552. Upon a fifteen years basis the whole profit would be exhausted and leave a loss of £14,438. Upon a twenty years basis there would 142 be a balance of profit of £31,238. What is the position 1 It will be observed that upon a limit of ten or fifteen years, the debenture holders would go without their interest, and upon a limit of twenty, the preference shareholders would receive about one-half the dividend distributed during the past year, and the ordinary shareholders would receive nothing as against three and a quarter per cent, last year. I venture to ask the House to consider whether in view of those figures they will be able to commend the time limit to the people of this country. The Government should consider how they are going to recommend their proposals and justify them to the small shareholders— poor people who have invested in licensed securities with the same well guaranteed confidence as they invested in railway securities. [" Oh."] If that is challenged, let hon. Gentlemen carry the quarrel to the country, and we will be prepared to meet them on the clearly defined issue of whether there is some special right entitling the Government to deal with investors in debenture stock in licensed securities in a different way from investors in railway securities. That is a quarrel clearly defined, and let them carry it to the country. What is the result of this time limit? Temperance reformers for years have been urging the importance of licensees being men of respectable character, and of the buildings being maintained in a sanitary condition of the highest efficiency. Nobody therefore can say anything against the licensees or their respectability, or the suitability of the premises in which they carry on business. Now by their time limit they are going to give no one any interest in maintaining the character of the licensee or the suitability of the building. I am reminded of a statement made by John Stuart Mill, who was quoted with approval from those benches last night. He says—The limitation of beer and spirit-houses, with the express purpose of rendering them difficult of access, is suited only to a state of society in which the labouring classes are treated as children or savages.Hon. Gentlemen have listened in one week to the introduction of two highly controversial Bills, and now the Government have introduced a Bill in which they treat the working classes as children or savages. Let me read to them four 143 lines, which may be useful, from the poet Gray—Alas, regardless of their doom,The little victims play;No sense have they of ills to come,Nor care beyond to-day.
§ MR. CHARLES ROBERTS (Lincoln)
I desire to express my thanks to the Government for a Bill which, whatever we may think about it in detail, is undoubtedly an act of courageous statesmanship, deserving of our admiration. I would add that it has received the necessary complement of a good Licensing Bill—the opposition of the Member for South Hackney. Before I deal with the Bill, I should like to attempt some reply to the interesting speech to which we have just listened. The hon. Member quoted John Stuart Mill. I would remind him that John Stuart Mill, when he stood for Westminster, said that public-houses were so often public nuisances that he would support measures to make them as few and as little conspicuous as possible; and he did so. Perhaps I might remind the hon. Member of another thing said by John Stuart Mill, which, I think, is applicable to the question before us. He said that, when you are in the presence of great evils, small reforms do not produce small results, they produce no results at all. If, therefore, some hon. Members think this Bill contains large and far-reaching remedies, I say that powerful remedies are really required. The Licensing Commission reported that we remained in the presence of a gigantic evil, and that hardly any sacrifice could be too great which would result in a diminution of a national degradation. What were the hon. Member's points? He had three. First, that we had miscalculated the effect of the Bill of 1904; secondly, that the time limit of fourteen years was unjust; and, thirdly, that the good done by the Bill would be destroyed by the institution of clubs. It has been urged that Government action is powerless to promote temperance. The hon. Member for South Hackney challenged me to name any single case where the diminution of facilities for drinking had remedied the evils. There are dozens of cases which could be quoted both in this country and outside it. Let him read the story of Norway and Canada. Let him go, if he wishes, to Liverpool and see what has been done there by the diminution of facilities, where 144 drunkenness was reduced by half by the well judged action of the magistrates there. If he wants further evidence, let him look into the judicial statistics just published. Since 1903 there has been a reduction in drunkenness, not a great reduction, but a reduction at least as great as one would expect from the small diminution in licences yet accomplished. There has been a marked reduction too in the number of cases of permitting drunkenness. All this betokens that a. restrictive policy since 1903 has had a good effect upon the conduct of the trade. I believe it is within the power of Parliament, if it chooses, and if it has the courage to use the proper remedies, greatly to mitigate the existing evils. At all events the Licensing Commission had no doubt about it. They proposed elaborate remedies, a long list of detailed proposals which have been largely incorporated by the Government in their Bill-Then we were told we had miscalculated the amount of reductions under the Act of 1904. It is entirely misleading to compare the reduction effected within the last ten years. I know something about the movement for the reduction of licences which has been, going on. It did not begin till 1903. The whole movement was held up by the Licensing Commission. The Licensing Benches were implored to hold their hands until the Commission had reported, and, when it had reported, they were then implored to take no steps until the Government had legislated. It was not till 1902 that the Bill of Mr. Ritchie was passed, and it left over the problem of reduction. The Licensing Benches, finding that this House took no part in the matter, took up the task. They were not encouraged by the Government; they were severely lectured and reprimanded. During the two years 1903 and 1904 the Inland Revenue returns show that there was a, gross diminution of 2,088 on licenses of all kinds. In the debates of 1904 Members of the Unionist Government prophesied that under their Bill there would be a reduction of 2,500 on licences a year. Not half that diminution has-been realised. After all, we have not to-deal with the merely historical and statistical question whether the reduction in the three years after the Act has been quicker than in the two years before it. There has been 145 no appreciable quickening, although a slight acceleration has taken place. The real question is whether under the Act of 1904, you can get any reduction at all adequate to the interests of the nation. We are limited by the Act to a timid, niggardly, partial, and tentative reduction. I am glad to think that the Government is going to hasten the progress of reduction, but I do not think it is going to hasten it very much. Apparently, we are going to get rid of some 30,000 licences in twenty years. That is about 2,300 a year. In 1904, we were promised a reduction of 2,500 a year. The present amending Bill, so far as the reduction scheme is concerned, is only going to do compulsorily what the enthusiasts among the late Government thought the Bill of 1904 would do. It is not a stiff reduction which we are going to get after all. Then the hon. Member stated that the time limit was far too short. Of course, it is utterly impossible to appreciate the figures which he threw at the House, but I should be extremely grateful to accept his invitation to see them. What about these companies' reserves and their capitalisation? I want to know something about their history. There is, for instance, one brewery company which I could quote where the reserves are higher at the present time than its debenture stock. When I alluded to the fact that Guinness' Reserves stood at £2,900,000 at the present moment, and Bass' at £1,460,000, an hon. Member wrote to the Press to say that Guinness' and Bass' would be "utterly unaffected," or, at all events, "not hardly hit" by the time limit. If you will look through the reserves of the brewery companies, you will see that very largely the companies have already safeguarded their own position. It has been asked whether the monopoly value stands at £100,000,000 or £300,000,000. Three hundred million pounds is the sum claimed to be invested in the trade, including site, structure, breweries, stock in trade, and all the rest; and £100,000,000 is the estimate, which is merely approximate, of the monopoly value of the licences apart from site, structure, stock in trade, etc. It does not matter to us for a moment what this monopoly value actually, is, because, thanks to Mr. 146 Justice Kennedy's judgment, we know that the value is ten years' purchase of the wholesale profits made in the premises concerned. The Chancellor of the Exchequer has said that Mr. Justice Kennedy's judgment gives an exaggerated value to the trade. That is indeed the case. Ten years' purchase of the profits is equivalent to the price with interest of an annuity running for fourteen years. Therefore, taking the market value under the Act of 1904, and Mr. Justice Kennedy's judgment at its face value, what the Government is proposing to give is a commutation of the extreme measure of value, which liquor sellers can claim. It seems to us, therefore, that the time limit is more than is necessary to grant. For Liberal statesmen in 1904 declared that the Act of 1904 had no moral validity, and we decline to accept the Kennedy judgment as a fair measure of value. The Chancellor of the Exchequer stated; that he had an open mind on this subject, and would welcome criticism. I am not, therefore, failing in any recognition of the value of the Bill in making some criticism. I hope he will be able to see his way to shorten the time limit; because, I believe, he has gone to the extreme limit. If you give one day longer than fourteen years, you are giving more than the liquor sellers are getting at the present time. You are raising the amount of compensation that will have to be paid on the suppression of licenses and pro tanto crippling the power of the State to carry through this diminution. That is my answer when these figures are brought forward. I believe this time limit is as far as you can go, and I believe it has gone too far.
And, it being a quarter-past Eight of the clock, and there being private business set down by direction of the CHAIRMAN of WAYS and MEANS under Standing Order No. 8, further Proceeding was postponed without Question put.