New Clause. — (Repeal of s. 36 of 8 and 9 Geo. V, c. 15.)

Part of Orders of the Day — Finance Bill. – in the House of Commons on 8th July 1924.

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Photo of Mr Philip Snowden Mr Philip Snowden , Colne Valley

I do not think that I misrepresent the hon. Gentleman. I am sure that every Member of the Committee who heard the speeches will agree that I am not doing so. [HON. MEMBERS: "No!"] The hon. Member referred to the effect which it would have on foreign exchange. I was in the House of Commons when the duty was raised from ld. to 2d. and I remember speaking against it, but there is all the difference in the world between opposing a proposition and dealing with a matter which is already an established fact. It cannot be denied that the gloomy anticipations, which were suggested in 1918 when the duty was raised, as to a falling off in the use of cheques, have not been realised. The figures show that the increase in the use of cheques, since the duty was increased, has been in no way affected. Since that date there has been an annual increase in the number of cheques. It is true that in one year, 1920, the figure rose very high, and that in the slump which followed there has been a decline on the figure for that year, but, still, in the last three years there has been an increase each year in the number of cheques issued, and the number for 1923–24 was 367,000,000 in the 12 months. In the year before the duty was raised the number was 298,000,000. There was, therefore, an increase in the number of cheques used, notwithstanding the increase in the duty, of 68,000,000.

7.0 P.M.

I do not think that those figures tend to support the argument that has been advanced in support of the reduction of the present duty of 2d. I was reminded of the Debates which took place six years ago, when the proposed increase was submitted 0to the House of Commons, by the arguments used by the hon. Member for Farnham (Mr. A. M. Samuel) that there was a tendency to draw cheques for larger sums on account of the increase in the duty and to keep the money in people's pockets, but I think that the experience is that, after a falling off in the use of cheques on the part of some people, those people soon returned to the old practice, and they continue to draw cheques with a 2d. stamp just as they have drawn them with the ld. stamp. The hon. Member argued that it would not cost very much, as the amount lost by the reduction would be met by the enormous increase in the number of cheques used, and, therefore, we should get on the penny practically the same revenue as we now get on the twopence. There are not in our experience any facts to justify such an optimistic anticipation. There is not the shadow of doubt that the revenue would suffer by the reduction of duty in proportion to the amount by which the duty would be reduced. The yield last year of cheques was just under £3,000,000. I estimated in my Budget this year that the yield this year would be£3,050,000. If I accepted this Amendment it would not operate in the whole year, but I have no doubt that in a full year I would have to sacrifice—and I am making some allowance for a possible increase in the number of cheques—revenues of not less than£1,250,000 and possibly£1,500,000. For those reasons I regret that I cannot accept the Amendment.