Section one, Sub-section (4), paragraph (a), of the Finance (New Duties) Act, 1916, shall read as though there were inserted at the end of Section one, paragraph (a), the words:
Provided that this Section shall not apply to subscription of members, paid by means of a lump sum, of sports clubs whose whole income is diverted to the promotion of games, athletic exercises, or physical recreation, and when no profit or surplus is or has been distributed as dividends or bonus.
§ Brought up, and read the First time.
§ Lieut.-Colonel JACKSON
I beg to move, "That the Clause be read a Second time."
The object of this Clause is to amend the Finance (New Duties) Act, 1916, so far as it applies to the assessment of the subscriptions of members of clubs and associations which are paid by means of a lump sum. Sub-section (4) of Section 1 of that Act, when the subscription of clubs and associations is paid by means of a lump sum, and when a charge is made for admission, allows certain rates for the Entertainments Duty. It is felt that this method of taxing members' subscriptions bears hardly and somewhat unfairly especially upon small clubs and, associations whose whole revenue is spent and devoted to the promotion of sports and exercises and physical recreation. The new Clause proposes to exempt from this duty members' subscriptions of clubs run solely for this purpose and where no profit is distributed in any way whatever.
My appeal for favourable consideration is based upon the necessity for promoting the physical well-being of multitudes of young people in this country. It is generally acknowledged that a reasonable indulgence in games and athletics is not only de- 2192 sirable but really is of some considerable national importance. I believe it has been proved beyond doubt that unencumbered opportunities of indulgence in sports, games and athletics has had a beneficial influence not only upon the health and physique of the manhood of the country, but also on the character of the people. I make a special appeal in the interests of small clubs and associations. Those who have had experience of running these small clubs know the enormous difficulty of running them with any sort of success merely by the aid of members' subscriptions. They have to make both ends meet, and in order to do that they have to depend upon public assistance, and this assistance is obtained by matches and competitions of one kind and another where a small charge is made for admission. This small charge naturally means that the subscriptions of the members are liable to assessment for Entertainments Duty.
The result of these enterprises generally means that there is a deficit for these small clubs. I have a kind of idea that many hon. Members have occasionally had some sort of requests to make up these small deficits. This deduction by a tax of the sum paid for members' subscriptions has this effect that economies have to be made in consequence and I have heard of several instances where the sum of £15 or £20 has had to be paid in Entertainments Duty when this is the sum that has usually been paid to some man for his services during three or four months of the year in connection with the ground, and they find that they have not this money with the result that they have to dispense with the services of that man who may be some pensioner or some old man who in his time has been a great sportsman. The result is that he has to leave his job and the ground deteriorates. That is not all because when members are asked to pay another ten shillings upon their subscription I am told they often find it not only very difficult to get. new members but they are likely to lose some of their Gld members on this account. I am not opposed to the principle of an Entertainments Duty, and I do not think sportsmen in general are opposed to it because they desire to do all they can to meet the difficulties of the times. I believe the Entertainments Duty in these hard times is a fairly reasonable and just way of raising revenue. 2193 but I have always found it hard to appreciate the soundness of the principle of taxing the means of providing an entertainment which produces the duty. Members subscriptions are the direct means of the provision of the opportunity of sporting recreation, and of the entertainment of those who go there merely to watch and who pay at the gate. If the Chancellor of the Exchequer wants the goose to go on laying golden eggs, it is not wise for him to cut off its food. In my judgment, when subscriptions are paid by means of a lump sum, it is inequitable to charge the Entertainments Duty on them. Lots of people have to pay the duty who never have an opportunity of seeing an entertainment, and, therefore, they really pay for something they practically never get. It is well known that members often subscribe to these clubs for the purpose of keeping the club going and do not get an opportunity to enjoy recreation on the club premises. They do not subscribe, therefore, for the entertainment which they get out of the club. Old playing members who have finished their active course, go on supporting the club, and seek to keep it going for the benefit probably of their sons and daughters.
I know that many appeals are made and are bound to be made to the Chancellor of the Exchequer for relief from this Entertainments Duty, and many of them are reasonable. But there is something about my proposal which I think differs it from other proposals. I make my appeal in the interests of those who, through these clubs, desire to actively participate in the recreation which these dubs supply by encouraging opportunities for play and recreation. I believe, and I think we all believe, it produces that health and contentment which assist considerably towards efficiency in work. Efficiency in work goes towards making up the prosperity of this country, and the prosperity of the country is by far the most fruitful source of revenue to which any Chancellor of the Exchequer can look. I hope my right hon. Friend may be able to give favourable consideration to this Clause. I have a feeling, having the privilege of his acquaintance, that if he follows his own inclination there can be no doubt that he will accept it, but he may possibly be 2194 diverted from so doing by the fact that he is faced with a financial situation over which he has no control.
§ Sir R. HORNE
There is no Member of this House who has more right to propose this Clause than the hon. and gallant Gentleman who has just spoken, nor is there anyone who should be listened to with so much respect on the topic on which he has discoursed. His speech has been so moderate in character that I think the views he has represented will naturally meet the appreciation of all of us. But for the reasons I am now going to state to the Committee I regret very much I am not in a position to accept this proposal, not so much because of what it contains, but rather because of the effect it will have on the ramifications of the Entertainments Duty. If we are to make this particular exception I do not see at the moment where the exceptions can be ended. Let me remind the Committee of the position of this tax in relation to sports clubs at the present time. If there is any playing member who pays his subscriptions in a lump sum, he is entirely exempt from any imposition of the Entertainments Duty on any portion of his subscription. On the other hand, in the case of a non-playing member only so much of the subscription as may be regarded as representing what he pays for admission to the ground at all times is held to be subject to the Entertainments Duty. In that way a large part of the subscription of non-paying members of sports clubs is held to be exempt from the duty. If one were to carry the matter further, and say that all subscriptions to sports clubs should be exempt from duty, it is easy to see what the result would be. People would take up membership cards which would entitle them to free entry to all matches in which the club is interested, mid then the Entertainments Duty would almost entirely disappear in such cases. Take the case of a football club from which possibly the largest amount of revenue is derived from the Entertainments Duty. People supporting that club are on the club ground practically every Saturday, and all they have to do accordingly is to join the club for that purpose and get a season ticket for admission to the club ground to witness the matches. Thousands of people who never play the game could do that, and in that way the object of the Entertainments 2195 Duty would be entirely defeated. Indeed, I cannot see how, if I adopted the suggestion of the hon. Member, one could discriminate between the spectators who pay at the gate and those who pay by a lump sum a subscription to the club for the year. Under these circumstances I fear it is impossible for me to do as my hon. Friend suggests.
But I would say this. He has stated there are many members who keep up their subscriptions to clubs for the purpose of maintaining them in existence, and who never enter on the club premises at all. The Customs officials have a discretion conferred on them by Statute in dealing with the subscriptions of members as to the amount of the subscription which shall be subject to the duty. In any case, where in fact it is true that a member take's out a membership card, not for the purpose of attending the club premises, but rather in order to support the institution, I can assure my hon. Friend that the instructions of the Department are that every possible consideration should be extended in those cases, and that a generous view should be taken of the position. I should myself think that the result would be that in cases where it is reasonably clear that subscriptions are paid, not for the purpose of obtaining entrance to the club premises, but for the purpose of maintaining its existence, in such cases no part of the membership subscription would become subject to the duty. I think that is really as far as I can go in the matter.
§ Sir R. HORNE
The machinery is in existence. For example, if I might just repeat what I said, it is the duty of the Customs officers to come to a conclusion with the representatives of the club as to how much of the subscription could really be allotted to the privilege of entrance to the grounds of the club, and, since they have that task to carry out in any case, it is equally simple, in dealing with the secretary of the club when that arrangement is being made, to discover—of course, it will not be very meticulous—what membership subscriptions are really paid without any real desire to enter the club premises at all. I have discussed 2196 the matter, and have no doubt as to its possibility.
§ Sir R. HORNE
It will be possible to arrive at a rough calculation. These rough calculations must be made in the administration of a duty of this kind, and I have no doubt that it is quite feasible.
§ Sir D. MACLEAN
I hope that my hon. and gallant Friend, who moved this Clause in a speech which found general acceptance throughout the Committee, will press the right hon. Gentleman a little more closely than he has done to-night, in order to achieve the object he has in view. What the Chancellor of the Exchequer said he said, of course, with perfect good will and with a desire to carry into effect the concession he has given, but the experience, unfortunately, of all Members of the House of Commons in regard to Chancellors of the Exchequer of all parties who, I will not say have given undertakings, but have expressed good will, has not been particularly happy in the way in which it has worked out, and I really think, if I might make the suggestion, without any disrespect to the Chancellor at all, that between now and Report, my hon. and gallant Friend should endeavour to see how far the proposal can be reduced to working with the authorities, and it might be put down on Report. Of course we do not desire to press this Clause at all, after what the Chancellor of the Exchequer bas said about the obvious way in which it would lead to very large evasions of tax, but this concession is one which would be difficult to administer, and, in so far as it is practicable to do it, I hope that by the time the Report stage arrives, the House will be in possession of rather more particular information as to bow it is to be carried out than is available at present.
§ Mr. LINDSAY
The Chancellor of the Exchequer based his argument against this Clause on the plea that great revenue was derived from what are really professional football clubs, and, of course, that revenue is very large. He overlooks the fact that this Clause only applies to clubs which do not distribute dividends, but all the big association grounds are owned by clubs which are really limited companies, run for profit, and paying dividends.
§ Mr. LINDSAY
As a very old football player, I must claim to know more about it than does the right hon. Gentleman, and I think that if he will take the trouble to investigate the matter he will find that what I am saying is correct. Therefore, I submit that as far as that is concerned, his contention has entirely failed.
§ Mr. BRIANT
I do not think that even now the Chancellor of the Exchequer fully appreciates the real effect of this tax. He seems to imply that unless there is revenue from admission charges there is no tax at present, but that is not so. Clubs which have no entrance fee whatever are being taxed at the present moment, and are being asked for the tax. Even where there is no gate, and not a farthing is charged, claims are made by the Inland Revenue Department for so much in respect of each member. If the right hon. Gentleman has forgotten, I can fortify his memory by reminding him that, as late as the 15th June, the Department wrote as follows:In view of the fact that non-playing members are not entitled to take part in any game, and have, in virtue of their subscriptions, the privilege of watching games from which non-members other than the friends of members are excluded, the Commissioners have no alternative but to regard seine portion of such subscriptions as representative of admission fees.There is no charge for admission to anyone. The Inland Revenue has drawn up a list that they are going to charge even where only friends are admitted. I could show the right hon. Gentleman a long correspondence with a well-known club in which the Inland Revenue not only claim for the present year, but ask them to send in an account for the three pre- vious years, and demand for that time certain payments of which they had drawn up a long list. I do not think the right hon. Gentleman understands how this affects the smaller clubs. The Duke of York yesterday took the chair at a meeting in reference to the Industrial Council, which has for its object to assist sport among the working people connected with factories. That very Council has written to me repeatedly complaining of the action taken by the Inland Revenue. There is an Old Boys' Union at Port Glasgow. They pay half a crown for the whole year and the Inland Revenue demands 2d. out of each 2198 half-crown because the boys play some sort of game and go to meetings where at the end of, say, a lecture a few lads may sing a song. They are charged Entertainments Duty, although next door there may be a dance where an orchestra may be paid £25 for playing, and because in theory when you dance you do not amuse anyone else, except your partner, you escape the Duty. The Port Glasgow Boys' Union got nervous. They had down on their membership card at one time that they would have a Church parade. They wondered if it would be chargeable, and they wrote and got a reply that the Church parade would be exempted from the Duty if there was no music or singing.
The right hon. Gentleman has been very busy with more important items in his Budget, and has probably not been able to give time to the details of this. I have been overwhelmed in the last twelve months with letters about the ridiculous impediments put in the way of small clubs. We do not object in the slightest to payment of duty on the man who comes in and pays at the door. Every hon. Member knows full well the number of times he has to be an honorary member in order to support a club in which he is interested, and yet so keen are the Inland Revenue on getting duty that you are only allowed to go on to the ground without paying it so long as there is nothing going on. I do not think the right hon. Gentleman can have examined the correspondence, which I should be pleased to show him, from his own Department. I appeal on behalf of many hundreds of small clubs with which, in one way or another, I have been associated. To the working lad and the working man this is a matter of first importance, and it is also of first importance to the nation. I hold no brief for professional sport because sport in the end will depend upon amateur sport, for which I appeal. I hope the Chancellor of the Exchequer will give further consideration to this question, and examine the archives of his Department, and some of the mysterious letters which some members of his staff have time to write. I trust that he will see that there is a real case for some more drastic concession than he has suggested. There is already in existence some method by which a certain amount is allocated. That is already done, but that does not meet 2199 the case. I ask for something much more drastic in order to meet a real want and a real grievance amongst hundreds and thousands of young fellows, whose sport is the one entertainment and the most important recreation of the week.
Colonel LAMBERT WARD
I ask for an assurance from the Chancellor of the Exchequer that he will instruct his officers to give a more lenient rendering of the letter of the law, which he has promised in the case of some clubs, to the case of the National Rifle Association. It may be news to a great many hon. Members that the National Rifle Association is actually charged Entertainments Duty. It is a most extraordinary thing that it should be so. Rifle shooting is not an entertainment. The only entertainment that ever takes place at Risley is the annual match between Members of this House and representatives of the Chamber at the other end of the corridor. I have shot in that match, so I ought to know. The work that the National Rifle Association has done in the past for rifle shooting is well known. Eight years ago, when rifles were so much required, no one could speak too highly of the work that had been done by the National Rifle Association in training men to defend this country. Amongst the things the National Rifle Association has done may be mentioned the evolution of the modern small-bore rifle, a weapon with which all civilised countries are now armed. The evolution of that was entirely due to the scientific side of the National Rifle Association.
At the present time, the National Rifle Association, and the riflemen of this country through the association, are called upon to pay Entertainments Tax for the work that they do. Subscriptions, which are sent to the National Rifle Association, are not sent for the privilege of going to look at rifle shooting. No one would go to look at rifle shooting as an entertainment. It is one of the dullest things that one could possibly imagine. The subscriptions are sent to encourage rifle shooting throughout the Kingdom. The subscriptions go to that object and are sent for that purpose and no other. A certain amount of gate money has been collected during the past few years, but that has not been for 2200 letting people in, but rather for the purpose of keeping people out. At Bisley, during the meeting, as is customary in connection with functions of that kind, a very large number of undesirable people collect, and it is necessary to fence in the ground so that the men who are in camp there, under canvas, may not have their equipment and their things stolen by these very undesirable characters. The expense of fencing in the camp has hitherto been met by the small sum which is charged to the few people who go in. Rifle shooting to-day is every iota as important to this country as archery was in the Middle Ages. In the Middle Ages people were not taxed for practising archery. On the contrary, they were taxed for not practising archery. Anybody who did not practice archery on every Sunday was fined ld., which was a considerable sum in those days. This concession will cost nothing this year, because arrangements have already been made that no entrance fee shall be charged at the gate. Rather than submit to the clerical work entailed in filling in all the forms which have to be sent in, it has been decided this year to dispense with gate money. Should gate money be charged in some other year, then taking into account the subscriptions which people might send in to encourage rifle shooting throughout the country, it is possible that the Exchequer might lose between £25 and £30 in a year. If the Chancellor of the Exchequer cannot afford that sum to encourage rifle shooting, so that people may learn to defend their country, it is time that we got a more patriotic Chancellor of the Exchequer.
§ Major Sir KEITH FRASER
I did not expect the Chancellor of the Exchequer to accept this Clause. I felt that he was up against a number of ramifications and that if he had accepted it these ramifications would have sprouted on every branch. But I think that the Chancellor of the Exchequer must make a start—whether he makes it over rifle shooting or cricket does not matter. I say with all respect that he has got to get a move on. I am a strong supporter of the Coalition. I realise fully the terrible legacy which was left with the Coalition by the former Government in the matter of finance, to say nothing of the Irish situation to-day. I realise that the Co- 2201 alition Government has many difficulties but it has got to make a start. The Chancellor of the Exchequer should put on his considering cap. Taxation in this country is most unjust to every class.
These general observations would seem to be more appropriate to the Second Reading of the Finance Bill than to this particular Amendment.
§ Sir K. FRASER
I know that I am not quite in order. There is a certain amount of trouble in Ireland just now. But the present system of taxation in this country is far worse than anything which Sinn Fein has done.
§ Sir K. FRASER
I do not intend to take up the time of the Committee. [HON. MEMBERS: "Go on!"] I ask the Chancellor of the Exchequer to accept this Clause as a start. Let us begin from now on a new basis, and when the next Finance Bill is introduced, we must have a new system of taxation. First of all, let the Chancellor of the Exchequer bear in mind our national game, cricket. You cannot educate the youth of the country better than by teaching them cricket.
§ Lieut.-Colonel JACKSON
After the speech we have just heard I feel that the Chancellor of the Exchequer may have been moved further than by any previous speeches on this Clause. I appreciate very much the suggestion of the right hon. Member for Peebles (Sir D. Maclean) that one might be allowed to meet the Inland Revenue authorities for the purpose of trying to get from the Chancellor of the Exchequer a concession on this particular point. It happens that I once made some remarks on this subject when another right hon. Gentleman was Chancellor of the Exchequer, and it was then suggested that I should take that course. I had the privilege of accompanying various deputations from the people interested, with the result that some considerable advantage was got and no one was particularly hurt by it. I was impressed by and obliged for the very sympathetic tone of my right hon. Friend in offering to do what he can to meet our request. If the Committee will allow me, 2202 I would prefer now to withdraw the Amendment and depend upon the undertaking which the Chancellor of the Exchequer has given most definitely—an undertaking in which I trust absolutely.
§ Motion and Clause, by leave, withdrawn.