§ 5.14 p.m.
§ LORD SALTOUN rose to ask His Majesty's Government whether they will not reconsider once more the system whereby certain ranks are only partially relieved of death duties if killed under orders in war time, and make the relief total for all. The noble Lord said: My Lords, this Question was put down originally for last Wednesday, but for the convenience of your Lordships it was deferred until this afternoon. In the meantime, a discussion on this very matter was held in another place. I entirely concur with what was said by honourable Members on my side in another place, and I shall not repeat a word of that this afternoon. I am not a soldier and. therefore, I hope that your Lordships will allow me to say some things about soldiers that they would not be so ready to say for themselves. Last time I discussed this question the noble Lord, Lord Pakenham, said he could not see why a millionaire should not pay estate duty if. being a sergeant or an officer, he was killed in action. It is only fair to the noble Lord to say that 556 he meant by the word "millionaire" the owner of a million pennies.
I have the noble Lord's remarks here. He said the first £5,000 was exempt that is a million pennies.
My Lords, I do not want to hold up the noble Lord, but it is not a case of post hoc procter hoc. There is no question of my mistaking a millionaire for a gentleman who owns £5,000.
As the proposition affects people who have more than £5,000, I suggest that we drop discussing the millionaire. From what the noble Lord said then, it was shown that the general public escapes a small amount of taxation by reason of these death duties. It was shown that most officers are ignorant of the law in this matter. They think that the relief does not apply to them. The noble Lord inquired how this point could be drawn to their attention and asked me to write to him. I wrote to him and asked whether, when commissions were offered to officers and promotions offered to sergeants, they were definitely informed that the change of status would mean the attraction of death duties if they were killed in action. The noble Lord referred this to the proper quarter, but no answer has been received by me. We can take it that they are not so informed. If they were, I am certain I should have received an answer to my question.
This is a very serious matter. In ordinary business, to offer a man promotion and at the same time to conceal so fundamental a disadvantage would be considered everywhere an act of bad faith. I do not think there is any doubt about that. In this case it is worse, because in ordinary business the man who discovers the truth can resign his position, but an officer cannot return to the ranks or resign his commission, certainly not in time of war, and he always has to ask leave. The matter goes further, because in contracts of insurance which affect payments of money on death a man is legally bound to disclose any material facts which affect the contract. These contracts demand what is called uberrima fides—that is, the greatest possible degree of good faith.
557 To the best of my knowledge and ability, I have shown what are the business standards in this matter and what are the legal standards. Unless the Government are prepared to meet me, I propose that all ranks from sergeants upwards to whom a specific disclosure was not made when promotion was offered to them should be exempt from estate duty. I do not think it is compatible with the credit of the country that people should be caught in what appears to be a trap, though nobody had the smallest intention of laying one. My second reason for claiming consideration of this matter is that it involves what I have always felt to be an important principle. All orders given to soldiers derive ultimately from the authority of the Cabinet and of Parliament, and the law regulating death duties and the persons on whom they shall be levied is derived from exactly the same source. I say it is not proper that the authority which orders a man to what must be his death should derive any advantage or financial profit from that death. I am not suggesting that the left hand knows what the right hand does; all I say is that both hands should not depend from the same pair of shoulders. King David got into trouble because the left hand did know what the tight hand was doing, and he was pilloried through the whole of the Middle Ages. Every Book of Hours has a picture of David and his crime. The Emperor Nero had the pleasant habit of ordering people to die and demanding estate duties, but there are two points about Nero—his duty was limited to 15 per cent., and the people who were condemned to their deaths were not soldiers but senators. Frankly, I think that the system of Nero was more merciful than the system of the present Government.
My Lords, we do not change the nature of a list of killed and wounded men by calling it a "Roll of Honour." A man is none the less dead, even though he is said to have; "made the great sacrifice." The only thing we can do for the dead is to remember them, and to see that their dependants do not suffer more than can be possibly avoided, especially from financial difficulties; and most certainly we should not make money out of them. As for remembering them, I have made it my duty ever since I have been a member of your Lordships' House to go and 558 look at our records and see who it is that I have to remember. I could wish that even now, even if our new Memorial is not embellished, there were a manuscript list of the people we lost in this war, in order that one might know who it is one has to recall before they are entirely forgotten.
There is one feature of war which I feel I must emphasise, as it bears importantly on this matter—namely, that, however we disguise it, war is fought at a higher moral level than most of us touch in our ordinary civilian lives. I will give two short examples. A subaltern in Korea is sent on a patrol. He knows perfectly well that his chances of returning are very small. Perhaps an observer, a listener, goes to some advantage post to see how he gets on. He proceeds up the valley and comes under tire from three sides; he is wounded, and he has several men wounded. It is obvious that he cannot learn any more. He takes stock of the situation, sends back his report, his wounded, and all of his patrol but one man, whom he keeps back to help him work the Bren, and with the assistance of this man he covers the retreat of his patrol. Finally, unable: to move himself, he sends this man back and keeps him covered with the Brea until the sound of the Bren ceases altogether.
That is a common example of the kind of thing that happens in war. I am bound to say that when I consider the issues of character, and the moral qualities involved, I feel my own stature diminish. The officer in command of the Gloucesters took his decision. It was not a simple decision by any means, but every one of us recognises the height of the spiritual level at which it was taken. I am glad to learn that he is alive, but had the decision cost him his life, the duties his estate would have had to pay would have been increased by the reduced expectation of life of men of his advanced age. It is only when the bill comes in that a woman realises the value put upon the: possession of a husband whose sense of duty is greater than his care or thought; for his family or for his life. As I go home, I travel along the east coast of Scotland, and I pass innumerable small properties which were once the possession of families who had lived there in modest comfort for generations. In the wars of the last two generations, two generations have been killed and these places are 559 desolate. That is the true war memorial of Britain. I think it is foolish to keep up the fiction that these people gave their lives for us, if we write them down and by our treatment of them proclaim them fools.
When the historian of our Army, Sir John Fortesque, wished to ascertain whether any troops had been routed or gradually forced to retire, one of his tests was to compare the casualties of the officers and the men. One in thirty was normal; one in twenty gave rise to questions; and more than that was very serious. To-day I think one in ten is the average in the Army; and when anything goes wrong the Army simply "eats" officers, especially subalterns. Moreover, there is the further point that the pressure of war is so great that many men are thrown away through orders which should never have been given. Every one of us can remember instances of that, some large and some small. Since these deaths were unnecessary, and we cannot give back life, we certainly should not make any charge for them.
I have been implored by people outside this House, who feel shame that they are supposed to get off a small quantity of taxation by reason of these sums and the noble Lord has said that they are very small sums that are raised from the estates of people who are killed in war—to press this matter. I share their shame, and I beg the noble Lord to put aside his brief and to be our advocate, and see whether we cannot get something done. We have the fact that a man who, I believe, is certain to be a Minister if there is a change of Government, has spoken on our side in another place. But I would rather that this matter were dealt with now by the Government which the noble Lord represents in this House.
§ 5.27 p.m.
My Lords, the noble Lord who has just spoken feels very strongly about this question, and I am sure he will allow me to say that he possesses many of the qualities that bring about reforms: he has the passion and the single-minded sincerity. But, if he will allow me to say so, when he talked about the trap into which these officers were led, and said that the alleged policy maintained in our far distant past proclaimed them fools, he used certain ex- 560 pressions which, to put it mildly, I regard as very much exaggerated. I will not attempt to use as severe language in reply, because I do not want to cause offence, either to the noble Lord—that goes without saying—or to others who, like him, may feel deeply about this question and who may themselves have suffered. But I must ask the noble Lord to believe (and I speak as someone whose family would be very much better off if the noble Lord's provisions were in force) that those who differ from him are just as sincere as he is in relation to this question.
In the debate in another place my right honourable friend the Chancellor of the Exchequer reiterated in somewhat greater detail the view which I indicated in your Lordships' House last March. I would say that I have personally taken up the matter with the Chancellor of the Exchequer. After this mature consideration, the Government still take the view—and I question whether there are many people in the country as a whole who differ from them, although it is a matter of opinion that the present estate duty law deals fairly with the estates of officers and senior N.C.O.'s who die or are killed on active service. I am afraid that I cannot hold out to the noble Lord any hope of a change of policy. I need hardly say that I cannot throw away my brief, as he invited me to do; that is hardly what I am here for, and it would not be of much value to the noble Lord, or to the House, if I began operating in that fashion.
Under the Stamp Act, 1815 (I recall these facts not for the noble Lord, who is aware of them, but for the record, and for those who may be following our debate), the lower ranks of the Services—broadly speaking, all below the rank of sergeant are completely exempted if they die in the service of His Majesty, as the honourable Member, Mr. Pickthorn, said in another place, in peace or war, in the cold war, or in other circumstances. The position of officers and senior N.C.O.'s is governed at the present time by Section 38 of the Finance Act, 1924. That applies to officers and senior N.C.O.'s who die on active service, or what is considered the equivalent by the Treasury. Unless pressed, I will not go in any length into the question of what constitutes active service, but I would remind the House that from the moment mobilisation is ordered, every member of 561 the Forces is on active service against an enemy and therefore, his estate would get relief, ever if he died of illness in this country. I understand that in the First World War an officer fell from the window of an hotel, and the Law Officers advised that his estate was entitled to the relief. So much for the meaning of "active service."
As regards the exemption for these officers and senior N.C.O.'s, I would again remind the House that the first £5,000 of estate is totally exempt from estate duty, and that or everything over £5,000 there is further relief, which varies according to the man's expectation of life. I am not sure whether, in our brief exchanges last time, this fact was brought out—I think I did touch upon the point, but perhaps not adequately. The exemption varies from over 50 per cent. of the duty at age forty-six to over 70 per cent. of the duty at twenty-two. Therefore, if we take the else of the young officer—in which all are so vitally interested—his estate would get relief of 70 per cent. of the duty over £5,000, and be exempted for £5,000. That is not total exemption, but it is a very considerable exemption, and we must not dismiss it lightly. It gives the greatest relief to the widows of those who die youngest and to the largest estates.
The noble Lord suggested that all ranks should have complete exemption. I do not think anybody's heart can remain entirely untouched by the language that he used in this matter. I do not suggest that he has no case at all, but I should like to draw his attention to the position of all those outside the Services in dangerous occupations, often of vital importance to the State, who get no relief from estate duty at all, whether they be in the higher or the lower grades. I need only mention coal mining or the Merchant Navy. One could point also to special cases, such as that of a civil pilot on the Berlin Air-Lift, and other cases of that nature. I know that there will always be a feeling—in which to a considerable extent I share—that the man killed in action hold: a unique place in the minds of us all; but, of course, active service conditions do not apply only to those killed in action. As I pointed out earlier, it applies to somebody who falls out of a window during war time.
I am not making any offer to the noble Lord. I was just explaining the present situation and relating it to his own claim for those who were killed in action in the front line. Speaking only for myself, I agree that where the noble Lord makes his most appealing point is when he argues that if a man is ordered to embark upon some dangerous course, then it seems very hard to place a duty on his estate if he is killed. I feel that that is the strongest of the noble Lord's points.
Again speaking only for myself—because I am not sure whether it was put in this way in another place—in relation to the point, I would ask the noble Lord whether he considers the volunteer as somebody who has been ordered. If somebody volunteers for active service and goes to the front, I do not know when one can regard him as somebody "ordered," in the noble Lord's sense. Therefore, one is bound to ask whether he is applying his proposal mainly to conscripts. The problem then arises whether it is to be related only to soldiers or to those ordered into dangerous occupations. In war time, people are directed hither and hither, and if the noble Lord is to be logical, to my mind he would have to extend it to everybody who was ordered to work in industry and was bombed to his death. Such a man is ordered into a dangerous occupation and is killed while under orders. So we could go on elaborating. Yet one inevitably comes back to the starting point. It is very difficult to know where to draw the line, and one can only say that the custom of this country has decided to give exemption up to £5,000 and give very substantial exemption in the case of a young man and to those whose estates are larger than £5,000.
I cannot help recalling, for the benefit of the noble Lord, what was said by Sir John Anderson, his own Chancellor of the Exchequer, if I may not unfairly describe him so. He said in 1944:If you leave out of account, as I believe you must. the sharp contrast between the position of the common soldier and the position of the officer, I believe that the treatment given under the existing law to the estate of the deceased officer is as fair as it could possibly be made.563 There is a kind of condition attached to that, and the noble Lord may wonder, as I do, what was in Sir John Anderson's mind. The noble Lord referred to an eminent Conservative who is likely to receive office if and when the Conservative Party come to power, and I can only assume that he is referring to Mr. Ralph Assheton. If the right honourable Member is to be quoted, let us quote him when he was himself in a responsible position and not, as now, in a comparatively irresponsible position awaiting office. In 1944, as Financial Secretary to the Treasury, he was good enough to explain what Sir John Anderson had in mind. In his responsible capacity he spoke as follows of Sir John Anderson's speech:I was not here during the whole of the Chancellor's speech but I am quite certain that if I had been I should have heard him say that the logical remedy for this anomaly—I know he regards it as an anomaly—would he to repeal the exemption of the common soldier.That was the view of the Conservative Party, as pronounced by Sir John Anderson and interpreted by Mr. Ralph Assheton, who then had the power and the responsiblity for dealing with this matter. I am not making a debating point, but I am explaining that that is the line which the Conservative Party have taken in the past. I am not coming here this afternoon to say that they are wrong; I am saying that this is where the broad wisdom of the country has tended to reach an agreed conclusion, irrespective of Party.
There, I am afraid, we must leave this matter for this afternoon. I would refer to only one other point, which the noble Lord mentioned to-day and on a previous occasion, and with which he has dealt in correspondence. He has asked me—and I again put it to the House to-day—whether the Services inform a young man below the rank of sergeant, or the equivalent, to whom they are offering a commission, that by accepting a commission he is completely altering his position with regard to death duties. I have made inquiries, and I find that they do not give this information. I seriously ask whether noble Lords really desire a step of that kind to be taken.
The noble Lord does desire it. But I do not think such information would be regarded at all favourably by young men at the moment when they are being given a commission. Warnings about their position in regard to death duties would strike a very jarring note. Indeed, it might be regarded as a poor type of official joke. I am offering my opinion, and the opinion of some of those who have been concerned with this problem. Whilst I am not going to say that in no circumstances can this particular point be looked at again—it is obviously a matter for the Service Departments—I do not for a moment wish to suggest that I feel that a change is either likely or desirable. It is, however, something on which opinions may be expressed without bringing the Chancellor of the Exchequer into it either way. I conclude by once again thanking the noble Lord, and by paying a tribute to his sincerity. I hope that he for his part will recognise the sincerity of those who differ from him.
§ 5.41 p.m.
THE MARQUESS OF READING
My Lords, I should like to say a word or two in regard to the expectedly disappointing answer which the noble Lord, Lord Pakenham, has just made. He said that he thought that any intimation to a candidate for a commission that he would be put in a worse position in regard to death duties by accepting a commission would be taken as a kind of bad official joke. I, for one, profoundly disagree. I do not know how much experience the noble Lord has had in that particular field, but I happen to have had a great deal of experience in selecting or nominating men for consideration for commissions; and I have found that, unfortunately, the economic consequences of taking a commission are one of the factors that enter very deeply into the decision of a man as to whether or not he should accept the honour. One of those economic consequences arises from the fact that when you commit yourself to battle you do not know whether or not you will survive; and one of your considerations from that aspect must surely be, in what position your wife and family will be placed if you do not. So far from being taken as a bad official joke—and most official jokes are bad—it would have been taken as a perfectly proper word of warning if a 565 word were said to a man on the economic side which would assist him in coming to a decision.
The noble Lord then said that Sir John Anderson and Mr. Ralph Assheton had taken a different line in 1944. But the point is that that was in 1944. It would have been a very difficult matter to alter the law then. By that time large numbers of people had been killed. I should base thought that, unless the legislation was made retrospective, and the death duties that had been paid on the estates of these men who had been killed were handed back to their heirs, to introduce this reform in 1944 would have been an almost impossible task.
The noble Lord spoke about officers, warrant officers and senior N.C.O.'s having the benefit of a reduction based upon the expectation of life, whereby the younger men would get a bigger reduction. But he did not make any attempt throughout his speech to deal with the fact that there does exist this glaring anomaly between those who are exempt and those who arc subjected to some graduated benefit. That is the gist of the objection which exists at present, from our point of view. The moment has surely come when we might reconsider this matter. I cannot help feeling that there is something singularly unattractive in the idea of the State, or the Government, or the Treasury, whichever you like to call it, receiving money from the estate of a man who has been killed in the service of his country. If the noble Lord says he thinks that "active service" has become a wide expression in the course of time, so be it. We might perhaps reduce it to something like "killed by enemy action." I am only suggesting that on the spur of the moment: I do not commit myself to it; it might be that some narrower definition of the circumstances in which a man or woman met with his or her death would be right. I agree that "active service" is a very wide term, with the introduction of total war, especially war in the air. But sonic attempt should be made to remove this long-standing, though, I hope, by no means permanent, anomaly. We on this side feel very strongly; and I am sorry that the noble Lord has only produced or reproduced —the answer recently given in another place, which can give little satisfaction 566 to those concerned with the welfare of the services.
§ 5.46 p.m.
§ LORD MANCROFT
My Lords, I should like to reinforce the words which have just fallen from the noble Marquess, Lord Reading. The noble Lord, Lord Saltoun, encouraged the noble Lord, Lord Pakenham, to throw away his brief. Unfortunately, Lord Pakenham was unable to comply with that request. I am certain shat had he done so he would have given a very different answer. He gave us a perfectly logical and a perfect Treasury answer, one with which it is very difficult to quarrel. But surely this is not a subject for logic. If we had been talking of some hundred years ago, when officers bought their commissions and the distinction between officers and other ranks was very sharp, there would have been much to say for the argument put forward by Lord Pakenham. But those days have gone, and we have been moving gradually towards equality of sacrifice between officers and other ranks.
I have no idea of the financial sum involved, or what the loss to the Treasury would be if Lord Saltoun's request were complied with. But I do know that very great satisfaction would be felt throughout the Forces, and a great sense of injustice would he removed, if that request were complied with. I suppose that a political tag which is heard as often as any in this House is that "Not only should justice be done, but justice Should be seen to be done." Whether justice is done in this case I am not prepared to argue. But I know that there is a sense of injustice in the Forces that there should be this sharp distinction. I am sure that the financial loss to the Treasury would be very small indeed if Lord Saltoun's request were complied with. I hope the noble Lord, Lord Pakenham, will bring pressure to bear on his right honourable friend to see what can be done to alleviate this very real sense of injustice.
§ 5.49 p.m.
My Lords, I am placed in some difficulty because I understand that I am precluded from replying further, and in any event I do not wish to detain the House. But it seems discourteous not to say ore word after what has just been said. With the leave of the House, therefore, perhaps I may say that the suggestion of the noble Marquess that 567 information concerning the economic implications should be given to young men when they are being offered a commission is one which can be put forward and looked into again—though I do not want to suggest that any decision other than that which I have mentioned to-day is likely to be announced. The Chancellor of the Exchequer has, I know, reviewed the whole matter very carefully this year, and it would be wrong for me to suggest that he is likely to depart from the policy which I have explained. As to the noble Marquess's point concerning certain decisions made in 1944, I can only indicate to the best of my understanding (Mr. Ralph Assheton is, happily, alive and with us, and can interpret his own statements) the view which he expressed on behalf of the Conservative Party when they last had any responsibility: that if any change was to be made, it should be made in the other direction—what the noble Lord, Lord Saltoun, would regard as the wrong direction.
My Lords, I should like to thank those noble Lords who have supported me in my Question, and I apologise to the noble Lord opposite if my attention was momentarily distracted. I was shocked for a moment when he explained the very ample relief granted to the subaltern who has no estate and the very much more limited relief granted to his commanding officer, who has an estate and a family.