THE BUDGET—WAYS AND MEANS— THE INCOME TAX.

HC Deb 09 May 1853 vol 126 cc1331-80

The House then wont into Committee of Ways and Means; Mr. Bouverie in the Chair.

The Resolution of the Chancellor of the Exchequer, relative to the imposition of the Income Tax upon England and Ireland, having been put,

MR. ROBERT PALMER

rose to move the Amendment of which he had given notice. He said, that after the discussions that had taken place during the last week, it would be unpardonable in him to attempt to raise a new discussion on the subject of the income tax. He could assure the right hon. Gentleman (the Chancellor of the Exchequer) that he should confine himself distinctly to the proposition which he had submitted to the Committee. They were now called upon to give the Chancellor of the Exchequer a new lease of the income tax, and for a period considerably longer than had ever been proposed before since its introduction in 1842. He, therefore, thought that the present was the proper time for those who considered that the tax was neither fairly nor justly assessed, to endeavour to remedy its inequalities and defects. They were told that the tax was not to be a permanent one, but was to continue only for a period of seven years. With regard to the probable duration of the income tax, he entertained considerable doubts of Parliament being able, in 1860, to terminate it, and thought that he must be a bold man who ventured to prophecy that the finances of the country would be in a position, seven years hence, to enable them to surrender so largo a source of the public revenue. Many hon. Members were of opinion that the position of the finances of the country in 1860 would be such that we should find ourselves unable to part with it. The hon. Member for Malton (Mr. J. E. Denison) appeared to have regarded the future financial prospects with a glass of great magnifying powers; but, although the hon. Gentleman had appeared to satisfy himself of the prospect of its actual repeal, he (Mr. Palmer) was inclined to doubt the accuracy of his vision in that respect. The hon. Member for the West Riding (Mr. Cobden), on the contrary, had strenuously supported it because he was satisfied it would be permanent, and that it ought to be permanent. Under these circumstances, it was highly desirable that the tax should now he placed upon the fairest possible footing for all classes who were to be subject to it. Now, there was one class of the community for whom very little relief appeared to be afforded in the financial scheme of the Government. He alluded to the class which was assessed under Schedule A. It was to that class his Amendment applied, and the proposition he had to make was, that after the words "for every 20s. of the annual value or amount thereof," insert "such annual value of any lands, tenements, or hereditaments, being the net annual value thereof, after due allowance made for repairs, insurance, and management." These words applied to the Class of persons assessed under Schedule A. He did not think he was precluded by the form of the Resolution before the Committee, from doing what he believed to be an act of justice to that class, notwithstanding the large majority by which the right hon. Gentleman's Resolution was carried. If he thought so, he could assure him that he would not have put it upon the paper. He would not waste the time of the Committee by entering into any argument to prove that the nominal annual value of any estate, whether it consisted of land or houses, was no just criterion of the actual amount of income which the proprietor of it received. Every one would admit, that a very considerable deduction must be made from the gross yearly income before you could get at the actual value of the estate to the owner. Now, his proposal was, that, in order to arrive at a fair estimate of the class in question, a deduction must be made from the gross rental of the property for certain charges which necessarily attached to it, such as repairs, insurance, and management. And in this position he was fortified by the language used by the Chancellor of the Exchequer himself, in introducing his Budget. The right hon. Gentleman had shown that the trades and professions assessed under Schedule D had no reason to complain; and having enumerated the several charges attaching to real property, and particularly the cost of repairs, insurance, and management, gave it as his opinion that it would not be a high but rather a low estimate to take those charges as amounting to no less than 16 per cent. This was stated by the right hon. Gentleman in his able argument against making any difference between the rates of the various schedules. Therefore he (Mr. Palmer) contended that the owners of land and houses were entitled to a deduction in their assessment, under the head of repairs, insurance, law charges, and management, equally with the merchant who was assessed under Schedule D, and that also an allowance ought to be made for arrears and abatements of rent. The Chancellor of the Exchequer had, in fact, shown that real property was now actually paying 9d. in the pound, although it was professedly charged by Act of Parliament, only 7d, The right hon. Gentleman had, therefore, gone far to prove his (Mr. Palmer's) case. He had opened the eyes of those who were assessed under Schedule A to the real position in which they stood. They had been living, probably, in happy ignorance of the fact that whilst the Act of Parliament fixed the maximum rate at which they should be taxed at 7d. in the pound, 9d. was actually exacted from them; but the right hon. Gentleman had certainly rather let them into the secret of the true state of affairs, and, therefore, he would not be surprised if independent Members asked that the owners of landed and house property should be placed in a fair position as compared with the other classes who contributed to this tax. The tradesman who paid under Schedule D was allowed to deduct for the repairs made on the premises used by him for the purposes of his trade, an average of three years being taken in his case. Now he (Mr. Palmer) would be quite satisfied if the right hon. Gentleman would make such a reduction from the gross rental of a farm as would be equal to the annual cost of repairs on premises used for purposes of trade, the calculation being made from an average of three years; and that, he thought, was only a fair and moderate demand. He contended that the owner of a farm stood in the same position, with respect to repairs of premises, as the owner of a shop; and, most undoubtedly, the man who occupied a farm that was his own property stood in precisely the same position as the owner of a shop, because, Without frequent and extensive repairs, it was impossible for either of them to carry on his business. The tradesman had also this other advantage over the occupier of a farm, that he could go before the Income Tax Commissioners and put in a claim for bad debts. A certain percentage ought, for these reasons, to be allowed to be deducted from the gross rental of real property. Now he was quite certain that there was no man in that House more capable of carrying out the proposition he was now submitting than the right hon. Gentleman (the Chancellor of the Exchequer), if he was only once convinced of its justice and fairness. He (Mr. Palmer) did not ask for so large a deduction as the right hon. Gentleman's own estimate of the charges to which real property was liable—namely, 16 per cent; but the owner ought to be allowed to go before the Commissioners and make a claim to the same abatement as the tradesman was enabled to do in respect of each of the three heads embraced in his Amendment. He would endeavour to show that this proposition was not altogether without a precedent. In former times it was the prac- tice in different parishes to take from three-fourths to two-thirds of the gross rental as the basis for the poor-rate assessment. That was found inconvenient, and an Act, called the Parochial Assessment Act, was passed, requiring the poor-rate assessment to be based upon "the net annual value," that term being defined to mean the rent at which the property might reasonably let, deducting therefrom (as he now proposed to do in the case of the income tax), the cost of repairs, insurance, and other expenses necessary to maintain it in a state to command a rent. The manner in which this Act had been carried out was this:—Two values were estimated, the gross value and the rateable value; and on the latter value the rate was made. Now this was the principle upon which he proposed to assess real property to the income tax. He did not put this plan forward so much for the relief of the larger proprietors of property, although he saw no reason why they should not be fairly dealt with; but he proposed it chiefly for the benefit of the smaller owners of land, and of house property. There were hundreds of small owners of land who lived on their own property, and farmed it themselves, and whose incomes amounted to 200l. or 300l. a year; and it was a matter of great importance to that class that they should not be charged on the gross amount, but should receive the benefit of the same deductions as the tradesman and shopkeeper; and the same remark equally applied to that class of persons who had invested their savings in house property, and were in the receipt of incomes of one, two, or more hundreds a year. He was told that it was not an uncommon thing for at least one-third of the rental of such houses to be swallowed up in repairs, bad debts, and other charges. [The CHANCELLOR of the EXCHEQUER said, that abatements were at present allowed where tenants absconded, leaving their rent unpaid.] If he (Mr. Palmer) recollected right, the noble Lord the Member for the City of London (Lord J. Russell), before the close of the debate the other evening, said, that this proposition was at variance with the proposal of the late Chancellor of the Exchequer (Mr. Disraeli); and, therefore, that he was surprised it should be supported on that (the Opposition) side of the House. Whether there was that variance between the propositions in question which the noble Lord had alleged, he would leave his right hon. Friend (Mr. Disraeli) to settle with the noble Lord; but this the noble Lord at least ought to remember, that the Budget of his (Mr. Palmer's) right hon. Friend contained no such proposition as the imposition of a legacy duty upon real property, which was, strange to say, put forward as a compensation to the trades and professions for the injustice done to them by the income tax, although the argument of the Chancellor of the Exchequer himself was, that real property was assessed 16 per cent above trades and professions, or at 9d.in the pound as compared with 7d. He would not trespass further upon the attention of the Committee. The proposition which he had made he believed to be just and equitable, and likewise perfectly practicable, and he trusted that the House would give to it its serious and favourable consideration.

Amendment proposed— After the words 'for every twenty shillings of the annual value or amount thereof,' to insert the words' such annual value of any lands, tenements, or hereditaments, being the net annual value thereof, after due allowance made for repairs, insurance, and management.'

MR. ALCOCK

said, that having already voted for the present Budget, it was scarcely necessary for him to say that he approved generally of the Government scheme. At the same time, although he was anxious to see justice done to all classes, he could not say that he was satisfied with the Amendment now brought forward. Some thought the Budget went too far; but, for his part, he did not think it went far enough, and he had suggested an Amendment to the effect that the present income tax of 7d. in the pound should be extended to all incomes in Great Britain and Ireland, without exception, and including all wages, even the wages of the labouring classes. It was calculated that at present only one person in every sixty-five was taxed, while the other sixty-four paid nothing at all. The sixty-fifth man, it was estimated, paid on the average 13l. per annum. He would have the tax extended down to even wages of 12s. per week; and he calculated that an average of 30s. per annum might be obtained from 5,000,000 of persons who at present paid nothing. The whole income of the country was estimated, in round numbers, at 440,000,000l., and it was well known that only 180,000,000l. or 190,000,000l. was included under the tax; therefore they would get 250,000,000l. more, and thus, instead of 5,500,0000l. of revenue, they would obtain at least 13,000,000l., which would enable them to repeal the malt and hop duties. He wished to show that the labouring classes were the parties who, above all others, would benefit by such an arrangement, because they contributed now, in proportion to their income, in a greater degree than any other class to the revenue of the country, in consequence of the duties laid upon the articles of consumption. To show that, he would take the case of a farm labourer, with a family of three or four children, whose wages amounted to 12s. a week. If the tea duties were reduced to 1s. a pound, and the soap duties were entirely repealed, both of which propositions were now before the House—if the malt and hop duties were repealed, as they ought to be—and if the duty on tobacco was reduced, as it ought to be, to 1s. a pound, then he calculated that the labouring man, using 10lbs. of tea in the year, would save on that article 12s.; on soap he would save 4s.; on beer, supposing that he now spent 45s. a year, he would save at least 15s.; and on tobacco, allowing him only 5lbs. a year, he would save his., making, in all, 21. 2s.; while his income tax, at 3 per cent, would only amount to 18s. a year, so that he would be a positive gainer to the amount of 24s. a year, besides getting all these articles more free from adulteration. With regard to the reduction of the malt and hop duties, he would not take up the time of the Committee—he believed it rested with the people themselves to say that they would have their beer cheaper, and they would get it; but they would never get it by leaving the question to that House. With regard to the tobacco duties, however, he must say he was astonished that the Chancellor of the Exchequer, who was at the head of a great religious party in the. country, should not have endeavoured to put an end to the frightful immorality and crime that smuggling caused in the country, by lowering the duties on tobacco, which constituted the staple of the contraband trade. It was a perfect farce to come to Parliament and ask for 100,000l. to educate the people in morality and religion, while they stimulated smuggling by raising 4,000,000l. sterling on the article of tobacco. It was said by Sir Henry Parnell, in 1833, that 3–4ths of the tobacco consumed in Ireland was smuggled, and that was proved still farther by the fact that the consumption in the country averaged only 21b. per head; while the tobacco allowed to sailors in the Navy, and which they dared not refuse them, was 131b, per head; and the consumption in Denmark averaged 5lbs. per head, the whole of which was imported. But it was urged against the reduction of the duty on tobacco, that the use of it was a dirty practice. But surely that argument would not be used in the House of Commons, for they had committed themselves to this dirty practice by establishing a smoking room. It might be difficult to levy the income tax upon the labouring classes; but he believed that there was justice enough, and common sense enough, amongst them to submit to the tax, as an equivalent for the removal of the indirect taxation, and he knew that public meetings of the working men had been held at Glasgow and at Sheffield in favour of this very plan. He believed, if an appeal were made to them now, there would be but one feeling in favour of the Chancellor of the Exchequer, who had had the patriotism and the manliness to grapple with the "succession duty on land," and he hoped the Government would go forward in the same direction.

MR. MILES

said, he must express his astonishment that the hon. Member who had last addressed the Committee had not made any observations bearing upon the Motion, but instead of doing so, had favoured them with a Budget of his own. He could not agree with the hon. Gentleman as to the supposed readiness of the working classes to accept the income tax, because it happened that he had, at the last election, mentioned the proposition on the hustings in Somersetshire, accompanying it with the reduction of all other taxes. It was all very well when he spoke of reducing it to incomes of 100l., but it would not do at 501.; and when he spoke of applying it to wages, there was a regular uproar, and it was immediately cried down. If the people of Surrey were like the people of Somersetshire, the hon. Gentleman's Budget would not be very agreeable to his own constituents. The present was the first time the agricultural Members had been able to express their dissatisfaction with the Budget. The hon. Member for the West Riding (Mr. Cobden) had said that his constituents approved of the Budget, as fixing upon owners of real property the burdens they were fairly entitled to bear; but he (Mr. Miles) could not assent to the equitable character of these burdens. Some hints had been thrown out of the local burdens borne by land; and in determining a system of finance, which he believed was intended to be permanent, it would be necessary to consider whether in 1860 this tax would be removed, or whether the then Chancellor of the Exchequer would not say, "You only pay 3d. in the pound instead of 7d.: and if the tax continues, we shall be able to reduce indirect taxation." But by that time all indirect taxation, except upon articles bearing the very highest duties, will have been got rid of. At present, he would merely ask the Committee whether one single farthing of local taxation had been removed from the shoulders of the owners of real property. In 1849, when the landed interest had the benefit of the corn laws, now removed without equivalent, the present right hon. President of the Board of Control (Sir C. Wood), in answer to a speech of the right hon. Member for Buckinghamshire (Mr. Disraeli), made a frank admission that real property had to bear local burdens to the extent of 12,000,000l. Now, he would ask whether one penny of that 12,000,000l. had been removed? Upon that admission the right hon. Gentleman acted, in his next Budget, in which he proposed to relieve land from the charge for criminal lunatics, amounting to 150,000l. a year; but in the Budget, after it was amended and reformed, the boon was finally withdrawn, and real property was exactly in the same position as it was when the right hon. Gentleman made the admission he had alluded to. If this was to be a final and equitable adjustment of taxation, why were not the local burdens on land taken into consideration, instead of the owners of real property being called upon to take upon themselves additional taxes without one single farthing of relief? He, therefore, called upon the Chancellor of the Exchequer to assent to the proposition of the hon. Member for Berkshire (Mr. Palmer), in doing which he would only be recognising a truth he had before uttered, that there was great local pressure upon land, although the right hon. Gentleman had always been most cautious in saying what that pressure was. The hon. Mover of this Amendment had stated that he was not acting for the upper classes of society, and had called the attention of the Chancellor of the Exchequer to the great number of persons with moderate incomes whose funds were invested in real property. It had been estimated that the annual income from real property in England and Wales was 34,000,000l. divided among 200,000 proprietors; this gave an average to each person of 170,l a year, and, of course, a great proportion of those proprietors were persons whose incomes were under the average amount; and yet what did Parliament do for them? They first lowered the income tax to 100l. a year, and then imposed upon them the legacy duty as an additional burden. It had been stated by Mr. Trevor, that, of the present 1,200,000l. of legacy duty, 500,000l. was contributed by real property from the sales which were continually taking place. Thus land had not been exempt from that burden which it was now proposed to increase; but he hoped the Chancellor of the Exchequer would feel the justice of the proposed Amendment, and adopt the principle it involved.

CAPTAIN SCOBELL

said, if the mild proposal of a Motion could win anything from a Chancellor of the Exchequer, he was sure that now before the Committee ought to be assented to. He could not, however, agree with the hon. Gentleman who spoke last, that there had been no remissions since 1849 to the owners of real property, because he believed that the poor-rates, and all similar charges, had been considerably reduced since that period; and he believed that that was the leading reason given by the late Chancellor of the Exchequer for not more directly relieving the landed interest by his Budget. In fact, the right hon. Gentleman showed, by his figures at the time, that the land had been much eased. Of course, when on the hustings they were all Chancellors of the Exchequer, and he had certainly given it as his opinion, without pledging himself, that no income tax should pass which did not distinguish between fixed and precarious incomes. Though he reserved to himself the right of being convinced by argument, he at that time stated his determination to recognise no other income tax than that which he had described. The Chancellor of the Exchequer had perfectly convinced him that the land did pay more than 7d. in the pound as compared with other property, though he thought the right hon. Gentleman had overrated it at 9d. He (Captain Scobell) could only reach up to 8d. in his calculation. But the Budget was to be considered as a Budget of equivalents, and they must take the advantages and disadvantages together. He quite admitted that the legacy duty was not one of the equivalents, although in one sense it might be so considered also; but he thought that the landed interest ought rather to congratulate itself that it had escaped so long, while all other descriptions of property were taxed, than be surprised that they should now be called upon to pay that tax. He must say that at the time he listened to the five hours' speech of the Chancellor, the Budget seemed to him very much like a Chinese puzzle; but since he had read it, and considered it more carefully, he confessed he saw considerable harmony in it, and thought that the advantages and disadvantages were as evenly balanced as they could well be. The case of Ireland had been much discussed; but surely Ireland, of all other parts of the Empire, had got a fair equivalent in having 4,000,000l. of her debt wiped away. He wished Ireland was more identified with the rest of the Empire than it was, and he could not understand why they should have separate Bills for different portions of the Empire. Why should they have Scotch Bills and Irish Bills, taking up whole nights of discussion, when these Bills might just as well embrace the United Kingdom? With respect to the particular proposition then before the Committee, he had admitted that if it had stood alone he should have been ready to support it; but he feared to disturb any part of the superstructure, lest he should bring the whole to the ground, and therefore, although he mainly depended upon land for his income, he should oppose the Amendment. As to whether they would be able to part with the income tax in 1860, he, for one, entertained considerable doubts. The House had wisely resolved that a considerable portion of our income should be derived from direct taxation. At present, he believed, the proportion was one-third of direct taxes to two-thirds indirect; and if they took away the income tax they must find some other direct tax in its place, otherwise they would overburden those who paid indirect taxes.

MR. PHILIPPS

said, that being intimately connected with land, and his whole sympathies being with the landed interest, he owned that the Amendment presented a very inviting aspect to him; but he could not help remembering the exact position in which the Committee were placed. Wisely or unwisely, the Government had committed themselves strongly, and he believed irrevocably, to the opinion that the income tax was incapable of graduation; and, therefore, although as far as mere sentiment went he was in favour of graduation, it appeared to him that to affirm any Resolution expressive of the necessity of graduation was attaching a condition to the, income tax which the Government must consider to be inadmissible, and would be practically refusing them any income tax, at all. He, for one, was not prepared to take upon himself so heavy a responsibility. Besides, he entertained considerable doubt whether this proposed concession would really benefit the landed interest. In the first place, it was one of a trifling nature; and, in the next place, it would put the landed interest in the invidious position of enjoying a privilege which was not accorded to any other class, and which he did not consider would be at all to their advantage. There was another matter which pressed upon his mind, and it was this:—He, for one, entertained hopes of great relief to the landed interest in other directions; and he was not prepared to sell his grievance so cheap as at 1¾d. or 2d. in the pound. He believed that if this concession were granted, and the landed interest were to press for more relief, they would be reminded that a great concession had already been made to them, and that they must not grumble any more. Great injury had been done to the land by the Court of Chancery. The evils arising out of the laws affecting real property were of a more onerous nature than all the income taxes ever inflicted on the land; and it was to that quarter they were entitled to look for relief, and he was not without hope that it would be obtained. In fact, he could not see how they could pick and choose in the Budget; in his opinion they must take it, or refuse it altogether, with all the conditions annexed to it—one of which was the utter impossibility of graduating the income tax.

MR. HEYWORTH

said, it appeared to him that the wisdom and policy of the original imposition of the present income tax had reconciled the people to its continuance. Through the medium of the income tax, yielding 5,000,000l. per annum, Parliament had been able to remit taxes to the amount of 11,000,000l. per annum, and still to keep the Exchequer as full and replenished with funds as before. It was quite clear that besides reducing 6,000,000l. or 7,000,000l. of taxation, they had increased enormously the prosperity of the country by having established the income tax; and it was proposed to be continued for the same purpose. In his opinion where there was good policy there was sound justice—the two always went together. With respect to the inequalities of the income tax, he thought they were too apt to look at those inequalities as regarded individuals, instead of looking at the operation of the tax as a whole. But there was another view which ought not to be overlooked—namely, whether with all its inequalities it was not more equitable than indirect taxation. The income tax interested some 500,000 individuals only, whereas the indirect taxes interested some 30,000,000 of people. Nor should it be forgotten that while the former was only a tax of 3 per cent on the incomes of those who paid it, the working man frequently paid in duties upon the commodities which he consumed 20 per cent of his earnings. He believed that an equal tax upon incomes, from whatever source derived, was equitable in many senses. It might be remarked that this was the principle upon which men voluntarily taxed themselves in their voluntary contributions to charitable and other purposes. It was said that if this tax was just it should be carried down to incomes of whatever amount, and that indirect taxation should be wholly abolished. It should be remembered that we could only arrive at this state of things by gradual progress. As to removing the income tax in seven years, he thought it was impossible the House of Commons could stultify itself in so gross a manner, when they recollected the advantages which had been derived from its imposition. He persuaded himself that before that time came we should have an income tax, not of 3 per cent, or even of 6 per cent, but, perhaps, of 10 per cent. He believed that the country was daily becoming more enlightened upon this subject, and was daily becoming more in favour of direct taxation, which was in fact the only scientific and systematic mode of raising the national revenue. He had himself attended many meetings of working men, and he had never failed to find them favourable to direct rather than indirect taxation when the question was fairly put to them; and it was his impression that this feeling was making considerable progress among the working classes. Such a system, coupled with the remissions of indirect taxation which it gave that House the power to make, benefited the working man by increasing the demand for his labour, in order to supply the additional demand for the commodities upon which that labour was employed; it benefited the landowner by the increase in the price of land which always resulted from the com- mercial and manufacturing prosperity to which it led; and, lastly, it benefited the professional man, who could not fail to share in the general prosperity of the country which it was calculated to produce.

MR. BUCK

said, that he was induced to offer a few observations on this occasion, in consequence of the remarks which had been made as to the alleged unfairness of the Motion of his hon. Friend (Mr. Palmer). An hon. Member below him (Mr. Philipps) had said that because the Chancellor of the Exchequer had not proposed a graduated scale on incomes derived from different sources, he must oppose the present Motion, because he could not conceive it just that the landowners should receive an advantage denied to persons in towns. But the owners of houses in towns would benefit almost more than any one else from the Motion of the hon. Member for Berkshire. He wished the Committee to consider the case of one of the most industrious classes in the country, and one which was perhaps more numerous than was supposed—the small freeholders, of which the county (Devon) which he represented contained, according to the last return, no fewer than 4,000. They were men who had acquired land by their industry, and who now, perhaps, felt more deeply than any other class of the community the burdens which pressed on land. The hon. and gallant Member for Bath (Captain Scobell) said that that class had been much relieved in consequence of recent changes. He (Mr. Buck) would merely mention these facts. In 1845, when the corn laws were repealed, the poor-rate amounted to 6,765,445l., and 2,762,443 quarters of wheat were required to pay that poor-rate. In 1851, the poor-rate was 6,770,700l., and 3,396,533 quarters of wheat were required to pay that poor-rate, nearly one-third more than before the corn laws were repealed. He could not, therefore, see how the farmers of England had been benefited by the change in the corn laws. He thought that the Committee should seriously consider the amount of emigration that had taken place amongst this class, which had, within a few years, increased from 50,000 to 500,000. He believed, from letters which he had received from the West of England, that the pressure now felt by these small farmers would prove most injurious to the interests of the country. He believed, as he had before said, that no class of persons would feel more grateful for the proposition of his hon. Friend (Mr. Palmer) than the owners of houses in towns; and he, therefore, hoped that the Committee would not refuse its assent to it.

MR. AGLIONBY

said, that it seemed to be thought that any landowner who supported the proposition of the hon. Member for Berkshire (Mr. Palmer) must necessarily be opposed to the Budget; and it had been said that the measure must either be taken or rejected as a whole. He, however, never heard that because a measure was accepted as a whole, hon. Members were not to attempt to amend its provisions. On the contrary, he thought it was their duty to endeavour to do so. He should have thought if the proposition of the hon. Member for Berkshire had stood alone, nothing could be more fair than that the duty should be paid on all real property—both land and houses—according to its annual value or amount. The Chancellor of the Exchequer had said that he conceived some distinction should be made between land and houses. But he (Mr. Aglionby) did not see why that should be, as it would increase the injustice. The hon. and gallant Member for Bath (Capt. Scobell) said that the income tax was to be accepted as a "principle of equivalents." Now, to that he could not accede, when it turned out that by this it was meant that because you were compelled to do injustice to one class, you should therefore do injustice to another. He thought that it was not just that no distinction should be made between the taxation of fixed and precarious incomes. He understood that it was the intention of the Chancellor of the Exchequer to allow a deduction for assurance from annuities. Why, then, should not a similar allowance for insurance be allowed from the rent of land and houses? The allowance would in both cases rest upon the same principle—that it was an allowance for a reduction in the means of living. It had been said that as this was a temporary tax, some injustice in its working must be tolerated. But he could not regard it as a temporary tax; nor did he, as at present advised, hope that it would he; for he believed, that if properly regulated, it was as good a tax as could be. He had no fear that the owners of houses and lands would be held up in an invidious light as seeking exemption from taxes, if, as in the present case, they only asked what was just and right. His feeling was now and always had been in favour of taking off in- direct taxes, which bore heavily upon the large body of the people, and more especially upon the artisans and other classes of workpeople who depended for their daily bread upon their daily work. He was decidedly of opinion that the owners of land and real property should not be made the scapegoats in this readjustment of taxation. He thought, however, that the Amendment of the hon. Member for Berkshire (Mr. Palmer), was one which deserved the consideration of the Government.

COLONEL HARCOURT

said, he could not give a silent vote on this occasion, for he could not forget that the whole party on that (the Opposition) side of the House, had been asked by the right hon. Gentleman the late Chancellor of the Exchequer to vote, on the 16th of December last, the continuance of the income tax for three years, without holding out any hope that at the expiration of that period the tax should cease. The tax then contained precisely the same incidences with regard to houses and lands as it did by the proposition of the present Chancellor of the Exchequer; and, having due regard to his own feelings, he could not in May vote that unjust and inequitable which in December he had voted to be just and equitable. In May last they were asked not only to continue the income tax upon land and houses, but they were asked to increase its burden by diminishing the rates at which it was to be levied on incomes derived from trades and professions. He could not understand the virtuous indignation now exhibited by hon. Members, seeing that by the Amendment they now proposed to impose a still heavier burden on trades and professions by diminishing the tax to be levied on the land. He thought it due to his own honour, and to his constituents, to state his reasons why he could not vote for the Amendment of his hon. Friend (Mr. Palmer), however much he might agree with it as an abstract Resolution.

MR. SPOONER

said, he was not aware that the Committee had come to any such vote on the 16th of December last (in favour of the income tax) as the hon. and gallant Gentleman (Col. Harcourt) had alluded to. He had himself stated on that occasion that he only voted for going into Committee on the house tax, and had moved that the words "not exceeding" be inserted; and stated that although he was prepared to take the proposition into consideration, he was not prepared to vote for doubling the house lax. He thought at the time that his right hon. Friend (Mr. Disraeli) would have done much better to have taken the Budget in detail, and not as a whole. With regard to the property tax, he had always considered it a war tax, unjustifiable on any other ground. He had opposed it when proposed to be renewed in 1851, and he should continue to do so from whatever side the proposition for its retention or reimposition might come in time of peace. Right hon. Gentlemen on the Treasury benches, with the exception, perhaps, of the Chancellor of the Exchequer, and of the First Lord of the Admiralty, had spoken strongly against the property tax. The noble Lord the Member for the City of London had declared, in 1845, that it was full of fraud, vexation, and insupportable inquisition. Circumstances might change; but he was not aware how, if it was full of fraud and vexation then, it was not so now; but still the noble Lord proposed to vote for it. The right hon. Gentleman the President of the Board of Control had proved on a former occasion that the land was charged not merely 16 per cent more, but absolutely 20 per cent more than any other property. Yet both those right hon. Gentlemen were in favour of the tax now. In conclusion, he would state that the peculiar burdens to which land was subject, rendered it just and necessary that the tax should be modified, to afford it some relief.

MR. DRUMMOND

said, the question before the Committee was, not the income tax as an abstract question, but a particular modification of that tax. It was admitted upon all hands that land bore more burdens than any other kind of property. [Mr. BRIGHT: NO, no!] Everybody then, except the hon. Gentleman, admitted such to be the case. The consequence was, that the Chancellor of the Exchequer proposed that certain deductions and modifications should be made with respect to management. He felt sorry they were not discussing the matters rather in Committee upon the Bill itself with all the details before them, than in separate Resolutions, for much depended upon the machinery with which the measure was to be worked out. There was a class in which he felt deeply interested, namely, the small freeholders—the small landed proprietors, to whom no deduction was to be allowed on account of management. As to the question of the continuance of the income tax, he entertained the same opinion as he had ever done—that it would be perpetual— that it never would be taken off. As to the question of increasing direct taxation, and diminishing indirect taxation, he would tell those hon. Gentlemen who had expressed an opinion to the contrary, that they were mistaken in their views, for the smallest consideration would show them that the Government of the country never would be carried on in troubled times without indirect taxation.

MR. BRIGHT

said, that ever since he had sat in Parliament its attention had been mainly directed to diminishing certain privileges which the land had formerly possessed, and, now that those privileges were almost entirely abolished, he found the Chancellor of the Exchequer, who was once considered the advocate of hon. Gentlemen opposite, while he acknowledged the burden of the income tax on land, was at the same time asking them to impose the legacy duty on real property. He applauded the right hon. Gentleman for so doing. In his opinion it was a proof of candour. Having discovered that the course he had taken when a young man was erroneous, the right hon. Gentleman was not ashamed to avow it, and, having become convinced of the truth of what he now believed to be sound principles, the right hon. Gentleman was prepared to carry them out. But the Chancellor of the Exchequer had got himself rather into a difficulty with regard to the Motion now before the Committee. If he had understood the able speech of the right hon. Gentleman right, when he introduced his Budget, he argued that the land paid on its gross income 9d. in the pound, and other property only 7d. in the pound. At the same time the right hon. Gentleman appeared very much disposed to argue—only public opinion seemed to have shaken his own opinion—that the discrimination might be made. But he thought the right hon. Gentleman had committed a great mistake in that respect, for his speech was more that of an advocate than of a statesman. The right hon. Gentleman had alluded to the mode under which land was charged, but forgot altogether the mode under which every other kind of property was charged. If the right hon. Gentleman had had the schedules before him—he (Mr. Bright) did not know under which schedule he (Mr. Bright) paid—but he was quite sure the right hon. Gentleman would have found that with regard to that particular class of trade there was ground for at least an equal amount of reduction as that which the hon. Gentleman (Mr. Palmer) proposed by his Amendment to make in favour of the land. The right hon. Gentleman the Chancellor of the Exchequer had alluded to the charge of insurance as it affected land. Everybody knew that that must be the smallest charge affecting landed property, since the land itself was not liable to it at all. It was paid on the farm-buildings, which were a very inconsiderable portion of the whole property of the landlord; and for this insurance of his farm-buildings he believed the landlord paid no stamp duty. Let them look at the manufacturing trades of Lancashire and Yorkshire, and other parts of the country. There the insurance was charged as profits, and the law did not allow it to be deducted. There were many insurances in Lancashire and Yorkshire amounting to 400l., 5001., and 600l., and, while upon an insurance of 500l. the manufacturer actually paid 100l. to the Exchequer, the law took income tax upon the whole, as if it were net profits. That was bad enough, but there was much more behind. Everybody knew that machinery, however perfect and expensive, could not last for ever, and that in the course of ten or fifteen years, however valuable, it became worth scarcely anything more than the metal of which it was made. He knew this perfectly well, for he had recently been made acquainted with a case which showed it very strongly. The machinery of a single room, which was valued in 1840 at 900l., was valued again in 1851 by a sworn appraiser, who valued it at 100l. It was offered for sale at that price, but nobody would purchase it, and it was therefore broken up, or was in course of being broken up, that it might be sold as old metal, and make room for new and more perfect machinery. But during this period, from 1840 to 1851, this machinery was being gradually depreciated, and the difference in value went to decrease the profits of the concern, yet was the income tax charged all the same, and no deduction allowed on that account. Then there were bad debts. Every one at all acquainted with business knew that it required a longheaded tradesman to avoid making bad debts; but if once made, it was difficult, if not impossible, to get them allowed by the income-tax commissioners, though the parties might take the trouble to prove the Case before them. Adverting again to the question of insurance, he would mention a case he was acquainted with. A friend of his had imported a cargo of cotton into Liverpool from New Orleans, and had naturally insured it; but the income-tax com-missioners would not allow him to charge the insurance, though it bore the same relation to the price of the cotton as the-freight. All these were cases which appeared to him to make out as good a case for the manufacturers as the right hon. the Chancellor of the Exchequer had made out for the landlords, when he showed that they paid 9d. instead of 7d. in the pound. The: right hon. Gentleman would have been more just if he had also given the case of the great manufacturing trades of the country, who, next to the land, paid the greater portion of the revenue derived from the income tax, and then he would not have found hon. Gentlemen opposite using arguments against him, such as they were bringing forward that evening. He had not spoken on the Budget, and he would not enter into details then; but there was one observation he desired to make. He was not one of those who had spoken or urged strongly on the possibility of discriminating between different classes of income. He had always thought it would be more just to make an alteration; but he had long been of opinion that, so far as the commercial classes were concerned, the constant irritation and disputing of returns did more to establish the grievance complained of. Then, there was only one rate. He believed very few persons—he might say not one among his constituents—had ever put forward any very strong opinions on this question. But, with regard to the mode of assessing, many of them had expressed opinions very strongly in condemnation; and he must say, if the tax were now to be reimposed for another period of seven years,—whether it would be prolonged after that time or not—he thought the Chancellor of the Exchequer might very easily make an arrangement by which the assessment could be more fairly made than it was at present. He spoke particularly of the neighbourhood in which he lived; and he could safely declare that there was a general feeling of dissatisfaction with the commissioners, and that that feeling arose more from the mode and manner of the assessment than from the amount of the tax. There might be considerable improvement in the management and collection. There were surveyors in every district of a few miles. There was one within six miles of his own house, but, like most gentlemen, he endeavoured to see as little as possible of him. He thought it would be extremely easy for these surveyors to make a list of all the persons who paid the income tax in the previous year, or in a period of three years, and to have them printed and distributed to every person within their district who paid the tax. A circular might be sent with the list, asking the taxpayer to mark out the twenty-four or twenty-five of the number whom he might deem suitable to fill the office of commissioners. The surveyor would see from the lists thus sent in, the names of those who possessed the confidence of their neighbours as men of honour, integrity, and business character. The commissioners might be chosen from these lists, instead of from the land-tax commissioners, as was the case at present, who were appointed by Members of the House upon no other principle than mere political or personal predilections. He made this suggestion because he was quite satisfied that it would tend to remove the grievances in the mode of assessment which were now so much complained of. He would not go into other matters connected with the Budget; but, after what he had stated, it must be clear that as he had voted for the Budget of the right hon. Gentleman, he must vote against the Amendment of the hon. Member for Berkshire. He thought he had shown that, if he voted for that Motion, and, if it were carried, it would be necessary for him at once to submit another Motion to insure the same deduction being made in favour of other trades and professions as the Amendment proposed to make in favour of land. If they were to deduct equal amounts from everybody, the Exchequer must suffer very considerably, and they would soon have to consider how to raise the tax from 7d. to 9d. in the pound for all, and therefore he thought it would be better for the tax to remain as it now was.

SIR THOMAS ACLAND

said, that the object of the Amendment under the consideration of the Committee was merely to remedy one of the many inequalities of the income tax, while it would leave a vast number of others in full force. He could not, therefore, approve of the policy on which that proposal was founded, and he was consequently unable to vote for the Amendment of the hon. Member for Berkshire (Mr. Palmer). In his opinion his right hon. Friend the Chancellor of the Exchequer pursued a fairer as well as a bolder course when he declared that he despaired of being able to untie the many knots of those difficulties, and that he, therefore, felt compelled to ask the Committee to renew the tax in the form in which it had already been imposed. That tax was like a bundle of very crooked sticks, and his right hon. Friend, instead of making the vain attempt to straighten them all, very wisely left them as they were, and kept them together unbroken. But he would tell his right hon. Friend that in imposing a new tax on the landed interest in the shape of a legacy duty, it would be necessary for him to make a large and liberal allowance in favour of that interest. His right hon. Friend would not be justified in the case of that new burden in imposing the charge on the gross income derived from land. He (Sir T. Acland) could not help remembering that land was already subject to many changes in the shape of local taxation, such, for instance, as poor-rates and highway rates from which money was exempt. He believed the Budget was rather against than in favour of the landed interest; but he also felt persuaded that the proposals which had been brought forward by the Chancellor of the Exchequer, formed on the whole one of the noblest and most comprehensive schemes for righting the financial condition of the country which had ever been submitted to the consideration of the Legislature.

SIR WILLIAM JOLLIFFE

said, he believed no one could dispute that land was already subject to peculiar and very considerable burdens. It had been admitted by the right hon. Gentleman the Chancellor of the Exchequer himself, that the income tax fell more heavily upon land than upon any other description of property. The right hon. Gentleman had told them that land contributed to the tax to the amount of 9d. in the pound; but he (Sir W Jolliffe) believed it contributed to the amount of even 10d. in the pound. And yet the right hon. Gentleman proposed to impose upon the landed interest an additional burden of about 2,000,000l. a year in the shape of legacy duty. He (Sir W. Jolliffe) believed that that additional burden could not be imposed upon any just principle, and that it would be a decided breach of the faith of Parliament. They had heard a good deal of faith to the public creditor, but they had never heard anything of faith to the landowner. Many estates had been settled, perhaps two or three times over of late years, and had at each settlement been subject to enormous charges for stamps and conveyances. Mr. Pitt; and all our great financiers since the Jays of Pitt, had held that the taxes imposed in stamps and conveyances in the settlement of land were an equivalent for the legacy duty. But the right hon. Gentleman the Chancellor of the Exchequer, by his proposed measures, would no longer acknowledge the existence of that equivalent. Under these circumstances he should say he thought the tax a most unjust imposition, and, though it had been extolled as "comprehensive," he could see nothing of the kind in it, as it was levelled at land alone. The whole imposition rested on that article, and therefore he (Sir W. Jolliffe) could not at all consent to the Resolution, and would vote in favour of the Amendment of his hon. Friend (Mr. Palmer).

The CHANCELLOR OF THE EXCHEQUER

Sir, before the Committee proceeds to a division upon this most important question, I am very anxious to state the views which my Colleagues and myself entertain with regard to it. The hon. Member for Berkshire (Mr. Palmer), who made the Motion now before us, commenced his very temperate speech by disclaiming, on his part, everything like factious or party motives. Sir, I give the hon. Gentleman the most entire credit in that respect. I am convinced there is no man less likely to make a Motion of such a character, and, above all, there is no man in this House less likely, if he did make a Motion of such a character, to fix upon that Motion any other character than that of truth. But, with respect to the importance of this Amendment, I think the hon. Gentleman greatly undervalues it. I shall not endeavour to entangle hon. Gentlemen by the discussion of details. It would be very easy for me to enter upon many matters of that description, and to show that, by the adoption of this Motion, you would be involved in many great anomalies; and you would introduce difficulties amounting to confusion into the working of a tax which, unless you fix its detail within certain bounds, would become absolutely unmanageable. A great deal might be said on subjects like that, but there is more important matter before us. There is a stronger, at all events a much higher and broader, ground, on which it is my duty to object to the Motion of the hon. Gentleman. It is not because his Motion is devoid of plausibility, or even is devoid of equity, if it stood as a naked, abstract proposition. It is when we view it in con- junction with other provisions of the tax of which it forms a part—when we view it in conjunction with the present group of circumstances which bear on the renewal of the operation of the tax, in conjunction with the pledges given at former periods, and on recent occasions—that Her Majesty's Government feel that they would be deserting the very first principles of their duty were they either to consent to the Amendment of the hon. Gentleman, or to give it anything less than the most resolute and unqualified opposition. For the same reason, because I am anxious to make my statement on broad grounds, I will not dwell upon the many details which have been referred to in the course of the debate. But with respect to the hon. Member for North Devonshire (Sir T. Acland), whose sympathy has been greatly excited on behalf of the small freeholders, I may be allowed to say that we are proposing an income tax that will leave every freeholder under 100l. scot free; whilst he supported a Budget that proposed to tax every 40s. freeholder—a Budget which, if I recollect right, taxed all real property, irrespective of the amount of income of its possessor, and going down to a very low limit—I believe it was 50l But I will not dwell on these things. In order to understand what are the just expectations of the country with respect to the question, we must travel a little backwards. We must consider what was the situation of affairs in December last. At that time the right hon. Gentleman the Member for Buckinghamshire, the then Chancellor of the Exchequer—the champion, the chosen champion of a large portion at least of those whose interests are connected with the land—proposed his financial plan; and I was asked to-night why it was that I had said nothing on behalf of the land with regard to local taxation, and why I had proposed no reduction of its burdens. Why, Sir, if I had proposed a reduction of those burdens, I should not only have been met and confronted, but overwhelmed with quotations from the speeches of the right hon. Gentleman the Member for Buckinghamshire. He, as you know—he, in your hearing—he, as your leader, your organ, your champion, with your consent and support, consigned your claims to perpetual oblivion. But now, after a lapse of four months, you come forward and make it matter of accusation against me that I have not proposed your relief from local taxation. But was that all that was done by the right hon. Gentleman's Budget in December last? No; you had then the proposal of an income tax; you had then a Resolution laid upon the table, under which that income tax was to be levied; and the Resolution laid on the table with regard to Schedule A corresponded exactly with that which I now ask you to support. I know not what course the right hon. Gentleman is going to take—I know not whether he means to adhere to his own proposition of last December. I will not speculate on that matter at this moment, for an hour or two will solve the question. But this I know, that the right hon. Gentleman made this proposal, with your support, as your leader and your organ—he made this proposal with regard to Schedule A, which Her Majesty's Government now make, and upon which you are asked to decide. Was that all that he did? With an unmitigated Schedule A, what kind of Schedule D did the right hon. Gentleman give you? Whilst land paid 9d.—I will not now go into any detail as to whether that is too little or too much; but I go to the point that at this moment land and houses, including other buildings, such as manufactories, pay a higher rate than other property—whilst that inequality was left unmitigated, the right hon. Gentleman laid another inequality upon the back of it, for he proposed to reduce Schedule D to 5¼d., and that with your approbation and your support. But then, says the hon. Member for Berkshire, there was no legacy duty in the case. Now, was there no legacy duty in the case? There was no legacy in the present case; but there was a legacy duty very legible in the future case. I am sure the hon. Member for Berkshire must have heard these ominous words, "At the same time we have not neglected carefully to examine the question of the stamp duties and the probate duties." I believe the word "legacy" does not appear; but there is no doubt about the meaning of the words— We have not neglected carefully to examine the question of the stamp duties and the probate duties; and we think it not impossible to bring forward, on the right occasion, a duty on successions that will reconcile contending interests, and terminate the system now so much complained of."—[3 Hansard, cxxiii. 906.] Now, I want to know whether these words have a meaning or not. To me they are clear enough. What is "the system now so much complained of?" The system which taxes unsettled personalty, and which exempts settled personalty and realty. That is the "system so much complained of"—that is the system which the right hon. Gentleman, your organ, your champion, your leader, proposed and promised in the name of his Government to terminate. Now, Sir, that was the combination of events—that was the combination of circumstances as they stood in December last. But there is yet one other. You say that, although we talk about the termination of the income tax, it will not end in 1860. Neither I nor you are the masters to determine that question. But every prophet and every seer who rises on that side of the House and says the income tax will not terminate in 1860 adds to the difficulties of bringing it to a termination. I will not talk about its termination in 1860. I have given my own opinion, that it ought to be considered as a temporary tax, and ought not to form a part of the permanent and ordinary system of finance of this country. But while we have not talked much about its termination, we have done this—we have endeavoured to place circumstances in such a train—we have endeavoured, by deeds and not by words—by bringing into play additional resources of taxation, and by introducing the principle of gradual descent into the income tax—we have endeavoured to show by figures that we have put the question into such a manageable form as will enable Parliament when the time arrives to part with the income tax. You now complain of the income tax, in conjunction with the legacy duties, as it stands in our proposal, and yet you supported the tax as it stood in the proposal of last December. What was the proposition of the right hon. Gentleman (Mr. Disraeli)? I think his proposal then was to renew the income tax for a period of three years. What did that mean? You all know what it meant. It meant the tax in perpetuity. I do not mean to say that it implied a foregone conclusion to that effect on the part of those who proposed the renewal of the tax for three years; but what was done was this: the tax was proposed for three years, no provision was made for its extinction at the end of that period, and, indeed, the right hon. Gentleman opposite might just as well have made up his mind to make it perpetual. You cannot afford to part with 6,000,000l. of revenue at a moment's notice. If you are in earnest to get quit of the income tax, you must make provision and prepare the ground. We have done so. You say that you are afraid the income tax may exist after 1860. That is possible—the tax may exist after 1860; but we have prepared the ground for its extinction, and have made such provision that Parliament will be in a condition, in 1860, to abolish the tax if it pleases. Here, then, was the combination of events in December last. You had an unmitigated Schedule A; you had the principle of differentialism established against you in Schedule D; you had no prospect of the abolition of the income tax; and you had the promise of a legacy duty. Well, now, it is supposed that party and factious motives alone could have determined me to resist the scheme of December last. It was not so. I opposed the scheme of December last, because, in the first place, I thought its mode of dealing with the income tax unjust, and J anticipated from it the greatest of evils. That was my conviction at the time. I thought that the mode of dealing with the income tax which was then proposed would lead to confusion, and that impression has been strengthened since I heard the right hon. Gentleman the Member for Buckinghamshire say the other night that his proposal of last December was not a financial measure, but the acknowledgment of a principle. I still remain of opinion that the mode then proposed of dealing with the tax, would have led to financial confusion, would have opened up difficult and impracticable questions, and would have produced a war of classes. I am not ashamed to say, notwithstanding the compliments of the hon. Member for Manchester (Mr. Bright), with regard to my change of opinion, that I thought the plan of the right hon. Gentleman the Member for Buckinghamshire most unjust in its ultimate bearings upon those who are connected with landed property. What has been the result of the proposals then made? The proposal to relieve the other schedules at the expense of Schedule A, did not die with the expiring Ministry. We heard of it last week. I want to know, if such was the situation of last December, what was the situation of last Monday night? We had then the following Motion presented to us:—"That the continuance of the income tax for seven years, and its extension to classes heretofore exempt from its operation, without any mitigation of the inequalities of its assessment, are alike unjust and impolitic." For that Motion 252 Members of this House gave their votes; and it will be matter of no small interest to the country to see how these 252 Gentlemen, who so disposed of their votes last Monday, shall dispose of their votes tonight. "Without any mitigation of the inequalities of its assessment." What was the meaning of those words? I want to know to what inequalities those words referred. You know the meaning they bore, and still bear, in the public mind. Do you attach the same meaning to them, or do you not? There are two quite different kinds of inequalities in the income tax. First, there are those of which we have heard so much to-night. We have been told that the property assessed in Schedule A is taxed at a somewhat higher rate than the property comprised in the rest of the schedules. Was that the inequality which was meant to be pointed out for correction by the Motion of the hon. Baronet the Member for Hertfordshire (Sir B. Lytton)? Now, Sir, I am most anxious that we should have a distinct answer to that question. Was that, I repeat, the idea which hon. Gentlemen had in their minds when they voted for the Motion of the hon. Baronet the Member for Hertfordshire? Did you think that he was going to reduce the rate paid under Schedule A, and, consequently, to impose a new burden upon the trading and professional classes, in comparison with the owners of landed and real property? If that was your idea, I can only say that you were most unfortunate in having adopted words which conveyed to the understandings of the community at large a meaning totally opposite and contradictory, and in having chosen for your organ and exponent upon the occasion an hon. Gentleman of great ability, but one who, in the speech with which he introduced his Motion to the Committee, exhausted all the stores of his rhetoric in setting forth the hardships—what hardships?—the hardships of the landed interests?—no, but the hardships of those whose enterprise, whose intelligence, and whose skill constitute, as the hon. Baronet had said, their only property, and whose continued good health is their only guarantee. Now, I want to show what was the meaning of the vote of last Monday. It was meant to alter the relative position of the schedules: of that there can be no doubt. But what I want to know is, did it mean to alter the position of Schedule A at the expense of Schedules D and E, or did it mean to alter the position of Schedules D and E at the expense of Schedule A? If you had in view anything analo- gous to the Motion of to-night, then you must intend, I will not say to delude or deceive, but to mislead the country; but if, on the other hand, you meant, what it was plain the hon. Baronet the Member for Hertfordshire meant, and what all the speakers who followed him meant—namely, the reduction of the rates charged on trade and professions—then I say you did that which my noble Friend who closed the discussion last Monday told you you were about to do—you cheered and supported, and voted for a Motion diametrically opposite and contradictory to the Motion of tonight. Sir, I must here allude for a moment to what fell from the hon. Baronet who spoke last. I would ask him what meaning he attaches to the Motion of last Monday night? Was the meaning of it, "We want to relieve Schedule A?" or was the meaning of it, "We want to relieve Schedule D?" or was the meaning of it a latent meaning, wisely and conveniently kept back, not expressed—"We do not wish to obtain a legacy duty?" Now, the hon. Baronet (Sir W. Jolliffe) says he can see nothing in this Budget except taxation laid upon the land; and in proof of his assertion he says, "Why, you state yourself that you are going to lay 2,000,000l. of taxation upon land by exacting a legacy duty." Sir, I do not wonder that the hon. Baronet can see nothing in this Budget except taxation upon land, if that is the process by which he arrives at his conclusion. The hon. Baronet says I have myself stated that I am going to lay 2,000,000l. of additional taxation upon land. Why, Sir, I never made such a statement. I stated the very reverse, and I challenge the hon. Baronet to show that the charge of the legacy duty will be 2,000,000l. upon land. What I stated, and what I will repeat until the hon. Baronet understands me, was, that we are going to amend the basis of the legacy duty altogether; that we think the distinctions which now exist are unjust, especially that which exempts all settled and real property; that we are going to take away the exemption which attaches to all settled and real property as such; and that we are going to make the legacy duty applicable to all kinds of property whatever, not to draw such a distinction in regard to the mode of levying the duty as we think would operate to the injury of property which at present bears a heavy burden of taxation. And here I venture to tell my hon. Friend the Member for North Devonshire (Sir T. Acland), who has applied his mind with so much fairness to that portion of the subject, that when he sees the provisions of the Bill we shall introduce for the purpose of altering the legacy duty, he will find them not unworthy of his approbation. Now, Sir, if we were to look at the immediate financial effect of the proposition of the hon. Member for Berkshire, we would see that it would deprive the Exchequer of a sum of about 450,000l. [Mr. PALMER expressed dissent.] The hon. Gentleman shakes his head, and of course I speak in some degree from conjecture; but I am persuaded that, if the hon. Gentleman is permitted to carry his Motion, the deductions which will be made from the gross amount of the tax now levied under Schedule A will be to the extent of about 16 per cent. [Mr. PALMER: The deductions will be much less than that.] I am sure I do not see how they can be less. The expense of repairs, of management, and various other items—why the hon. Gentleman will find it difficult to estimate the deductions at less than 16 per cent. Moreover, the hon. Gentleman proposes to make his plan applicable to house property, and he must be aware that in a great many instances the bonâ fide repairs on house property amount to 15 per cent without any other charge. My belief is, that his deductions would deprive the Exchequer, as I have previously mentioned, of the sum of 450,000l. Now, Sir, I have a very simple answer to make to this proposition; we cannot afford to part with the money. I would return this reply even if I were to suppose that the measure which the hon. Gentleman proposes was to stop at Schedule A. But who imagines that it could stop at Schedule A? Who conceives it possible to vote for the Motion of the hon. Gentleman with regard to Schedule A, and not to carry the principle through the whole of the schedules? When the hon. Member for Manchester (Mr. Bright) said that deductions were likewise necessary under the other schedules, he was greeted with enthusiastic cheers from both sides of the House. Well, then, these deductions are to run through the whole of the schedules; in other words, 16 per cent is to be taken off the whole tax. Speaking in round numbers, that would occasion a loss to the revenue of 1,000,000l. from the present produce of the tax. Now, that is a most agreeable process, and doubtless we would all like to indulge a feeling of enlarged generosity, to strike off one item after another, to go home to-night after agreeing to this Motion with those sentiments with which philanthropy and benevolence always distend the heart, to repeat the process to-morrow night in the case of Schedule C, and so to go on with schedule after schedule, until you reduce the tax to a mere skeleton of its former self. But if you make these deductions upon the whole of the schedules, what becomes of the financial measure. What becomes of the remissions of duty? I am afraid you will be obliged to commence a counter process, and having begun by reducing land from 9d. to 7d., and effecting an equivalent deduction upon the other schedules, you will require to retrace your steps and raise the land from 7d. to 9d., and so on with the rest of the schedules back again in the same way. I am not prepared to enter upon that course. I am convinced you never could carry through such a process, and that the adoption of this Motion would introduce utter and hopeless confusion into the assessment and collection of the tax. If you deduct 16 per cent under Schedule A, you will have admitted a principle of such a character, that it will be impossible for Schedule D to be content even with 16 per cent. After the plans of last December, which were offered as a step in the right direction, it is impossible for you to impose upon that process such limits as may appear to suit your particular inclinations. Indeed, I could not wish you a more fatal gift than the success of this Motion. We cannot, however, afford to enter upon any such process. We cannot afford it as far as regards the mere arithmetical effects upon our calculations. We cannot afford it as far as regards the principle that is involved. The Motion of the hon. Gentleman (Mr. Palmer) if adopted, breaks up the whole income tax; and, breaking up the whole tax, it necessarily breaks up that which rests upon the tax. It breaks up the whole financial measures and proposals of the Government. It is impossible for us to undertake the reconstruction of the tax. If we meddle with it we peril that very extensive remission of taxation which we have laid before Parliament, and which I think I may say without presumption has received and is receiving the approbation of the country. Sir, we will not take the first step in such a course. What has been our position? When we were first called upon to view the financial state of the country, we found the question of the income tax under these circumstances: the right hon. Gentleman (Mr. Disraeli) had pledged himself to the principle of its reconstruction; many Gentlemen on this side of the House had expressed opinions more or less favourable to the same course; but upon examining the question, we found that it was impossible to reconstruct the tax, or to bring the attempt to any satisfactory conclusion, and that by undertaking it we would introduce confusion into our finances, injure the public credit, set class against class, and produce mischief infinitely greater than any good which the most sanguine advocate of such a course could anticipate. We did not conceal these convictions; we stated them; but we said— We sympathise with the feeling that the in-come tax bears more hardly on trades and professions, on industry and skill, than it bears upon property; but we feel, at the same time, an entire conviction that this sympathy could not be practically carried out, in a reconstruction of the tax, without producing evils far greater than any good which could be effected by the change. Well, we were generously met by the House of Commons, and last Monday night we obtained a vote in favour of the general principles upon which we were proceeding. The first of these general principles was to take the income tax in all its main features as it stands at present. I distinctly disclaimed all abstract and speculative arguments as to what might be the best mode, abstractedly and speculatively, of laying an income tax on the community. I am liable to no taunts of that subject by saying I have argued for an equal tax, and now you ask me to make it so. I tell you I never argued theoretically for an equal tax, and I do not believe it is possible. What we said was— We find the income tax defective in some points, but we find also it has achieved great things for the country; we find it accepted to a certain extent by the nation, no doubt calling for amendment in some parts, but on the whole productive of good far beyond the hardships and grievances that attend it. We consequently asked you to consider the income tax as a whole. Now I ask if that was at all compatible with any intention or any willingness on our part to be pressed into tampering with the reconstruction of the tax? Sir, the Motion of the hon. Gentleman (Mr. Palmer) invites us to tamper with the tax; but we cannot do so without destroying its efficiency, We must keep faith with those who have supported us. We must refuse to commence this process. We are bound not to commence it, because it would prove our first step in a path that must lead us upon ground so insecure that we should be obliged to abandon the whole substance of the proposals we have made. From both sides of the House we have received support in asserting these principles—received it, not simply on account of this man's being inclined to one feature in the Budget, and another to that, but because the general proposal holds out something like an outline of a general policy tending to place the finance of the country on a footing of security, to confirm public credit, and to do justice between one class and another of the community. Sir, having received that support, we are not going to shrink from the conduct by which it was earned. We intend to adhere to the measures we have proposed. We do not pretend to interfere for one moment with the discretion of Members of Parliament in bringing forward this or that Amendment; but I do trust the Committee will consider well before they give a vote that will deprive the country of the great good we confidently expect from the proposals we have made; and I trust that hon. Members who, in all sincerity of purpose, voted on Monday for the relief of intelligence and skill, will pause to-night before they give a vote of a totally opposite and contradictory character. I have here words which are not unworthy of the attention of the Committee—of the attention of those who may be considering within themselves, on what principle they voted last Monday, and on what principle the vote of to-night turns. These are the words:— There is nothing in life, especially in public life, more important than to have a principle to guide you. Whatever the perplexity, a principle simplifies everything. However extraordinary the Gordian knot, a principle would almost instantly cut it. The words I have here read are words that were recently used by the right hon. Member for Buckinghamshire in addressing the Committee, and I quite agree with them. Now, the Motion of Monday expressed distinctly enough a particular principle—I think an erroneous one; but I defy the wit of man to show, that the Motion of last Monday asserting one principle, the Motion of this Monday does not assert a principle totally opposite. Those who are guided by the, Motion of last Monday cannot be guided by the Motion of this Monday; that was a Motion for relief to trades and professions at the expense of the land; this is a Motion for the relief of the land at the expense of trades and professions. This view of the matter is perfectly clear to the country; there is no mystifying the matter so as to exclude the public comprehension of its real merits. We have declared that, looking at the income tax as a whole, we believe that it is capable of producing great benefits to the community. To that doctrine we adhere. We are prepared for those who think that precarious incomes ought to be relieved at the expense of permanent incomes. We ourselves propose a plan for placing a greater burden upon property, which we shall soon have an opportunity of bringing under the consideration of the House; but I must confess it will be singular indeed if within the space of seven days the plans of Government are to be assailed by two hostile Motions, each of them supported by a strong party combination, and each diametrically opposed to each other.

MR. DISRAELI

Sir, the question which we have to decide is one, no doubt, of great importance, and which cannot be settled by the assertion of a general proposition. The right hon. Gentleman the Chancellor of the Exchequer has entered into a criticism of the financial statement of the late Government. I shall not shrink from vindicating the policy which I recommended, though it is not from any feeling of egotism that I discuss the subject. The right hon. Gentleman has given a description of the plan which the late Government offered to the attention of the Committee for continuing the income tax. The right hon. Gentleman has said that there was, in that project, the asertion of a distinction between assessments of real and of precarious incomes, and has asked whether that distinction was favourable to the landed interest? The right hon. Gentleman has said that we proposed to extend the tax on real property down to 501. yearly value, and has asked whether that proposal was offered as a benefit to land? The right hon. Gentleman has said, that we made, if not a proposition, at least an intimation of a future measure, that should impose a tax on conveyances and a probate duty—I protest against the use of single passages as a Ministerial statement—and has said, with a logic which I do not follow, that if that was not dealing with the legacy duties, he was at a loss to know what the legacy duties meant. But the right hon. Gentleman forgets that both the stamp duties on conveyances and the duties on probates are matters which he has not introduced to our notice. What I stated, in general terms, was, that we hoped it would be in our power to propose a measure on the general subject of successions which would terminate the controversy which had so long prevailed in that respect. The right hon. Gentleman, in his criticism upon the financial propositions of last December, and in his endeavour to show that his proposition is not more hostile to real property, and especially to land, than the policy recommended by the late Government, has had the candour and the ingenuousness to forget, that whether our policy was right or wrong, our measures were brought forward in order that we might revise the whole system of taxation—in order that we might relieve real property, and especially land—in order that we might carry a proposition which would have reduced the indirect taxation upon land to an amount of not less than 2,500,000l. per annum. If the right hon. Gentleman himself feels that he is justified in having forgotten all this because he may have disapproved of our policy in that respect, there is at least no such excuse for the hon. and gallant Gentleman who represents the Isle of Wight (Colonel Harcourt), because that hon. and gallant Gentleman, who is so sensitive with regard to his political honour—so careful that he shall not be chargeable with inconsistency — that hon. and gallant Gentleman told us on Monday last—that Monday so frequently referred to by the Chancellor of the Exchequer—that there is no impost so grievous on land as the malt tax, and that the principal fault he found with the late Government was that they had not proposed the total repeal of the malt duty. I suppose when the hon. and gallant Gentleman fills the office now filled by the Chancellor of the Exchequer, the total repeal of the malt tax may, doubtless, be expected. But let us look at this matter for a moment. Having called the attention of the Committee to this principal omission, reminding the Committee that the right hon. Gentleman has omitted from the enumeration of his measures a proposition which would have reduced the indirect taxation upon land to 2,500,000l.—reminding the Committee also that one quarter of the revenue is raised by a tax upon a single crop of the English farmer, let me now ad- vert to the scheme of the income tax propos-ed by the right hon. Gentleman. The right hon. Gentleman will not sanction any change in the rate of assessment of the different schedules. Now remember that the argument with which the right hon. Gentleman vindicated his policy, which he says is his great principle, and to which the Government is devoted, proceeded upon the assumption that real property was actually assessed 2d. in the pound more than the other schedules. And the right hon. Gentleman, after having established that point—a point which was not one of novelty, although probably it may never have been placed before this House in so popular and convincing a form—after having established this point, the right hon. Gentleman, with strange inconsistency, immediately proceeded to place a new tax of considerable amount upon the already unfairly taxed real property. That is the position of the right hon. Gentleman. I do not say that the whole of the 2,000,000l.—the estimated amount of the new tax—will be raised from the land. I never said so; but I maintain that the Chancellor of the Exchequer proposes to place a new tax of 2,000,000l. mainly upon real property, which he declares to be already taxed, beyond its fair proportion. That is all I ever said. Well then, I maintain that the course taken by the right hon. Gentleman is marked by great inconsistency. It is inconsistent, I say, to prove that real property is at present unfairly taxed, and immediately to propose that it should be subjected to a new tax. Is this all? I must beg leave to call attention to an important consideration which has not been adverted to in the course of these debates. The Chancellor of the Exchequer's argument was this: To induce you to adopt the policy of the Government, you have my personal promise and a fair political prospect that the income tax will terminate at the end of seven years from this time. Unquestionably there may be different opinions on this point, and some Gentlemen below the gangway may be incredulous on the subject; but the basis of the argument in support of the Budget is the Chancellor of the Exchequer's position, that the income tax is likely to terminate at the end of seven years. Then what does the right hon. Gentleman do? Having established that real property is taxed inequitably, he says, with another inconsistency, "As you have a weakness in favour of precarious incomes, although I have proved to you that real property pays more than incomes derived from any other sources, yet I will propose a succession tax which will make the owners of real property contribute to the State, independent and irrespective of those who enjoy precarious incomes; and this shall be a tax by way of compensation to precarious incomes for the similarity of assessment under the income tax." But if so, it ought only to be a tax for seven years. If the tax is to be a tax by way of compensation, it will be unjust unless you provide that it shall end with the income tax at the termination of seven years. The ground upon which the right hon. Gentleman is convinced that he ought to impose his tax upon successions, namely, that a compensation is needed for those who pay the tax upon precarious incomes, ought to induce him, according to his own argument, to propose that this tax upon successions shall be equally limited in its duration with the income tax itself. I will presently show that the Motion of to-night is the natural consequence of the policy of the Government. So I think also that the natural consequence of the argument of the right hon. Gentleman on this head will be, that when we have to consider the tax upon successions, it will be necessary to move that that tax shall continue only for seven years. That will be another subject for discussion in this Committee at a future period. I come now to the vote of Monday night. The right hon. Gentleman says, this debate must not close without his obtaining a distinct knowledge of the meaning of that vote. I confess that, in deference to the feelings of the great body of the right hon. Gentleman's supporters, I should have wished to have avoided the topic. I think there was something unnecessarily cruel in the way in which the right hon. Gentleman alluded to that subject. I should have thought the right hon. Gentleman might have spared the feelings of those by whose assistance he gained the triumph of Monday night, and who, I doubt not, wish to look back to their vote on that occasion with a satisfaction which, however, I scarcely think awaits them, instead of compelling them to hear a public declaration of the meaning of the vote of Monday. Our object in the vote of Monday night was, to assert on this side of the House the principles we endeavoured to establish when we sat on the other. This was frankly and unequivocally announced by the hon. Baronet the Member for Hertfordshire (Sir B. Lytton). In that attempt we were defeated. The Chancellor of the Exchequer says, that the Motion was supported by those against whose interests it was directed. Well, that is a proof that there are some persons in this House who can sacrifice their interests to their principles. But, says the right hon. Gentleman, how can you reconcile the vote of Monday night, with the present Motion? Why, the very fact of your having negatived the vote of Monday night, and declared that we should not establish our principle, not only excuses us, but imposes on us the necessity of considering your measures. We have now to consider your measure on its merits. ["Oh, oh!"] I can easily understand that this course is distasteful to hon. Members opposite, and especially to those, who, having always advocated a difference in the schedules, formed part of a majority in favour of a vote which, though it will not vindicate their conduct, may establish a Government. But let me ask, is there anything unfair, anomalous, or unjustifiable in the course which my hon. Friend the hon. Member for Berkshire recommends? We advocated a policy which you rejected; surely, then, we are entitled to try your policy on its merits. [Laughter.] Perhaps the hon. Member who laughs so loud will favour us with a speech, and tell us the reason of his mirth: if so, I doubt not it will be a happy effusion. According to the Chancellor of the Exchequer, there is something startling and dangerous in my hon. Friend the Member for Berkshire's proposal. In tones of horror the Chancellor of the Exchequer exclaimed, "The hon. Member invites as to tamper with the income tax; do you imagine the tampering will stop with Schedule A?" I know many persons who have invited us to tamper with the income tax without wishing to stop at Schedule A, and they have maintained that their proposition rested upon arguments which it was impossible to refute. I never will quote—I say so with the utmost sincerity—any speech made in this House by way of taunt; I will never refer to Hansard with the view of annoying any hon. Gentleman. [Ironical cheers.] No; that period has passed. Although Hansard is before me, it is there only that it may be referred to in the event of the opinions I am about to allude to being doubted. I am not about to quote a speech made fifteen, ten, or five years ago, but one made, as it were, yesterday. When I last brought forward a Motion on the subject of local taxation—a Motion which has been referred to in debate as having destroyed the Government of the noble Lord the Member for the City of London, although I was perfectly unconscious of having performed such a feat, and thought it had been achieved by the noble Lord (Viscount Palmerston) on the militia question—a Member of the present Government—I will not say the most distinguished Member, for that would be invidious, but I may say the most distinguished country Gentleman belonging to the Government—expressed great alarm at my proposal. He said it was dangerous, and would disturb the finances of the country, although the present Chancellor of the Exchequer entirely concurred in it. I confess that the right hon. Baronet the First Lord of the Admiralty (Sir J. Graham), for it is he to whom I allude, made a most powerful speech against me on that occasion. The right hon. Baronet said, that the land was distressed, he could not deny; but the measures I proposed for its relief were pregnant with danger, and he saw revolution in the distance. The right hon. Baronet said—"But there are moderate means by which you might attain the object for which you have so long laboured—means which will enlist the sympathy and support of Parliament and the country in their favour. You have an opportunity of showing how unjustly the proprietors of land are taxed under Schedule A. Call the attention of the House to the expenses they are subjected to for repairs, management, and insurances. Then you will have a case which no Government can resist; and you can demand that the owners of land shall be assessed on their net, and not on their gross income." This was said but yesterday, as it were. I think I see the right hon. Baronet pouring forth his glowing eloquence from the Opposition bench, which he has made classical, and I well remember that he carried the whole House with him. Now, however, the Government of which he is a Member abjure the great principle which he advocated, and refuse to to do justice to the land. The right hon. Baronet told me it would be impossible to resist a proposal to remedy the injustice to which the landed property was subjected under Schedule A; but now the Government of which he is a Member resists the irresistible proposition. But the right hon. Baronet said—"You must go further; you must not stop with doing justice to the landowner. You must go to Schedule B, and do justice to the farmer. He is as- sessed upon a scale which is unjust. His profits are taken at too high a rate; and you must take care that the scale on which he is assessed is adapted to the times in which he lives, and the rate of profit which he obtains. "Why, really, Sir, when I recollect all this—when I see the right hon. Gentleman, the greatest ornament and support and bulwark of the Treasury bench—when I remember that all this was said only yesterday, and, I have no doubt, conscientiously believed by the right hon. Gentleman; and then, when I find the Chancellor of the Exchequer getting up and saying that he is the organ of a Government which, on this point, is united and devoted to the policy which he recommends, I confess I am somewhat incredulous; and I believe there are yet some arguments upon the subject, and some appeals even to individuals, that may not be wholly without influence. The tone which the right hon. Gentleman takes is rather curious. Everything is to be carried, because there is a united Government. Well, Sir, the Government may be united in their hostility to the land. The Government may be united in their determination not to do that justice to the proprietor of the soil, which the First Lord of the Admiralty says cannot be resisted. The Government may be united in their determination not to do justice to the farmer by the mode which the First Lord of the Admiralty says is highly politic and irresistible; but I should think it is the only subject on which they are united; and probably before long we shall have to consider subjects of general interest—I am not sure whether to-morrow may not bring one—which may enable us to judge whether this union upon the question of the land, on the whole so complete and admirable, applies to other subjects; and whether it is only when the interests of those connected with the soil are concerned, that the Government show an impenetrable front, and are animated by a unanimous feeling. It is impossible to evade the justice of this case by splitting hairs, like the Chancellor of the Exchequer has done. Depend upon it, the yeoman who is called upon to pay his tax, or the farmer who has to pay his tax, will not enter into a discussion as to a vote on Monday or on Friday; but they will ask, what is the justice of the case? When the Chancellor of the Exchequer asks me to explain why we who voted on Monday can support the Motion of to-night, though I can give with a clear conscience —and though I have given with a clear conscience—what I believe to be a satisfactory answer to that question, I say there is something else to be answered before a reply is given to such a question. I want to know how influential Members of the Government can now resist a proposition which they not long ago declared could not be resisted, but which it would be wise to bring forward? The country, which is interested in these questions, will require from the Government a distinct explanation how these variations of opinion can possibly be vindicated; and they will ask this—Can any one bring forward a valid reason why we should be assessed unjustly under the income tax? If you could say, as we said, "We acknowledge that we cannot attempt a just assessment; we offer you a plan for the income tax, in which we have made differences and gradations, avowedly not in your favour, but as the foundation of a policy intended to obtain you general justice,"—you would at least be in an intelligible position. We have placed before our constituents and friends the motives on which our policy was founded. Right or wrong, they are satisfied with those motives, and they will support that policy; but no taunt shall prevent us from doing our duty to the farmers and the proprietors of the soil to-night. We found our claim upon the arguments of the Chancellor of the Exchequer, and upon the recommendations of the First Lord of the Admiralty.

LORD JOHN RUSSELL

I think, Sir, it requires no splitting of hairs in order to understand the purport of this question, and the difference between the position now taken by the right hon. Gentleman (Mr. Disraeli) and that which he took not only last December, but no longer ago than Monday last. The principle which the right hon. Gentleman stated with respect to the property and income tax in December last, when the Budget was brought forward, was this:—"I have to state another principle which Her Majesty's Government are prepared to assert, and that is, to acknowledge a difference between permanent and precarious incomes." The right hon. Gentleman further declared, after laying down his first principle with reference to direct taxation, "secondly, that a difference should be recognised by the Legislature between realised and precarious incomes." That was a very intelligible principle—the principle that they would endeavour, at least, to discover what income should be considered precarious, and what should be considered permanent; and no man can doubt that among the permanent incomes were to be land and houses, and among the precarious incomes trades and professions, and that an advantage was to be given to the trades and professions over the lands and houses which were contained in Schedule A. But now the right hon. Gentleman (Mr. Disraeli) comes forward as the advocate of a totally different principle—and that principle is, that permanent incomes shall have their burdens lightened, and that precarious incomes shall not have their burdens lightened in any way. If the hon. Member for Berkshire (Mr. Palmer) means to comprehend trades and professions in his proposal, why does he not so shape his Motion as to comprehend an allowance for repairs, and at the same time to include trades and professions? The right hon. Gentleman (Mr. Disraeli) accounts for being now the advocate of a totally different principle from that which he maintained last Monday, by saying that the House decided against him upon that question, and therefore he had taken a totally different course. The case is precisely this:—Last Monday the right hon. Gentleman said the stick was bent in one direction. The House refused to assent to the course which the right hon. Gentleman and his friends then proposed; and now they say the stick is bent in an opposite direction, and they propose a totally opposite course. Last Monday they said there was too great a weight in one scale, and they proposed to lighten it; but, because the House refused to accede to the proposal, they now say the opposite scale has become too heavy, and they propose that it should be lightened. Why, what is this conduct on the part of the right hon. Gentleman and those who follow him, but treating the great question of the income tax—a question which is now, and has been for the last ten years, so intimately connected with our whole financial system—as a plaything with which they may tamper, and which may be used for party purposes without any regard to the permanence of our finance or to the settlement of the question? The right hon. Gentleman said, "Oh, but last December we proposed a reduction of the malt tax." Yes, the right hon. Gentleman did propose a reduction of the malt tax, but he did so on the ground that it would be for the benefit of the consumer. The right hon. Gentleman having failed in that proposal, which, as I consider, was very dangerous to the finances of the country, and would have deprived us of 2,000,000l. which are easily collected and easily obtained without any very great pressure upon the people, now comes forward and says, "We must break in upon the system of the income tax." Now, who can doubt that my right hon. Friend the Chancellor of the Exchequer was perfectly justified in saying that if you make this change in Schedule A—if you make a change in the income tax which has never been made before—which was not made between 1798 and 1816, or or between 1842 and the present year—you will have to go on to the other schedules, in which you cannot make merely the same reduction, but that you will have to consider the question of precarious incomes, and also that which I always look upon as the greatest inequality of all—namely, that with regard to professions. The right hon. Gentleman (Mr. Disraeli) says, "Oh, but I wonder how the supporters of the Government can agree to this income tax of 7d. in each of the schedules, when so many of them have complained of its hardship. Now, I think those Gentlemen have given perfectly intelligible reasons for the votes they have recorded. They have said that they see so much advantage in the Budget, upon the whole, that so much indirect taxation is taken off, that there is so much justice in the proposed tax upon successions, and that they see such progress made towards confirming and extending the policy of free trade, that they are willing to forego one of the advantages which they looked for in a financial system, and, like men of sense and straightforward conduct, they will support a Budget which they approve upon the whole, although it does not contain every proposition they could wish. Well, Sir, this appears to me to be a course of conduct which is not unusually pursued in this House by men who have at heart the public interest. On the other hand, what have we to expect from the conduct of the right hon. Gentleman opposite? Only last December he was the advocate of a distinction in the income tax in favour of trades and professions. He now comes forward aggravating the inequality which at present exists with regard to trades and professions by proposing to make a new inequality as regards the land. That is the position of the right hon. Gentleman. It must show, I think, to the House, and it will show to the country, that those, great and mighty interests of finance-interests upon which the safety and well-being of the country depend—are treated by the right hon. Gentleman, if not merely in a manner to suit his party interests, at least with such levity and caprice—that he so changes from week to week the principle upon which his policy is founded—that it would be impossible for this House or this country to rely upon any financial plans of which the right hon. Gentleman may be the originator. Last week he told us trades and professions deserved all our compassion; this week it is the land which is to be the sole object of our regard. Well, I would ask—using a somewhat vulgar expression, which has, however, been ennobled by the high authority by which it was once adopted—"Under which thimble is the pea?" Last week it was one interest; this week it is another; and no one is able to say what the proposal of the next week may be. I trust, Sir, that this House will feel, as the country has felt, that this measure is, upon the whole, a great measure, likely to be a benefit to the country at large; and that if it imposes, sacrifices upon various classes, the great, body of the consumers of this country—the great body of the people—will find their taxes lessened, and themselves in the possession of greater enjoyments and greater comforts. I trust, then, the House will not adopt the wavering and uncertain line which is now proposed to them by horn Gentlemen opposite, but that they will adhere to the scheme of my right hon. Friend the Chancellor of the Exchequer; and I feel confident that, if they do so, the country and the people at large will approve and admire their determination.

LORD JOHN MANNERS

So enamoured is the noble Lord (Lord J. Russell) with; the height of financial injustice, that he cannot even comprehend how hon. Gentlemen; should be anxious to render an income tax more consonant with justice on one Monday night in one respect, because on another Monday night they attempted to render it more consonant with justice in another respect. The noble Lord asks us to inform the country how it is that in one week we could invite the House of Commons to rectify some of the injustice of the income) tax, which presses upon trades and professions, and how, in another, we can ask it, to do something like justice to the landed interest of this country. Why, Sir, I say for myself that it is because I was most anxious and ready to afford all the relief which equity and justice can demand for trades and professions in one week, that I now feel perfectly justified in endeavouring to render justice to the land on this occasion. I cannot conceive or comprehend bow the noble Lord thinks he can answer the claim of justice which has been put forward by my hon. Friend the Member for Berkshire (Mr. Palmer), by saying that he himself and the Government, and hon. Gentlemen who voted with them last Monday, managed to defeat the claim of justice which we put forward for trades and professions. The noble Lord would visit upon us the wrong which he himself was the party to perpetrate, and would charge us with betraying the principles and the cause which we advocated on Monday, because, believing that there is an equally just and equitable claim on our side, we call upon him to carry into practice the declarations of his own Chancellor of the Exchequer. Why, Sir, the Chancellor of the Exchequer, using the argument so often wielded with more or less of success in this House, and pointing out how difficult it frequently is to do justice in this world, asked my hon. Friend the Member for Berkshire whether it would be possible to do this justice to Schedule A, without going through all the other schedules and doing justice to them? Why, the right hon. Gentleman answered that question himself when he introduced his Budget. It was he who showed that the justice which my hon. Friend now asks you to do to Schedule A, was already done in the case of all the other schedules. And it was my hon. Friend the Member for Berkshire who took even a more moderate view than the right hon. Gentleman himself did, and told you that he did not think the right, hon. Gentleman's view was quite consistent with the facts of the case. But, be that as it may, it is upon the admissions of the right hon. Gentleman himself that this Amendment is now proposed. We have it admitted by every Gentleman who has spoken in the course of this debate, that abstractedly the proposition of my hon. Friend is just and equitable; and I leave it with confidence to the Committee and the country whether the arguments of the noble Lord ought to be permitted to prevail against the admission of justice which' We have had from every hon. Gentleman who has spoken in the course of the debate.

Question put, "That those words be there inserted."

The Committee divided—Ayes 201; Noes 276: Majority 75.

List of the AYES.
Adderley, C. B.	Gooch, Sir E. S.
Alexander, J.	Gordon, Adm.
Annesley, Earl of	Gore, W. O.
Anson, Visct.	Granby, Marq. of
Arbuthnott, hon. Gen.	Greaves, E.
Archdall, Capt. M.	Greene, J.
Bagge, W.	Grogan, E.
Bailey, Sir J.	Gwyn, H.
Bailey, C.	Hale, R. B.
Baird, J.	Halford, Sir H.
Ball, E.	Hall, Col.
Barrington, Visct.	Halsey, T. P.
Bateson, T.	Hamilton, Lord C.
Bellew, Capt.	Hamilton, G. A.
Bentinck, Lord H.	Hamilton, J. H.
Bentinck, G. W. P.	Hanbury, hon. C. S. B.
Beresford, rt. hon. W.	Heathcote, Sir G. J.
Blair, Col.	Heathcote, G. H.
Booth, Sir R. G.	Henchy, D. O.
Bowyer, G.	Hildyard, R. C.
Brisco, M.	Hotham, Lord
Brooke, Sir A. B.	Hudson, G.
Bruce, C. L. C.	Hume, W. F.
Buck, L. W.	Irton, S.
Bunbury, W. B. M.	Jolliffe, Sir W. G. H.
Burghley, Lord	Jones, Capt,
Butt, G. M.	Jones, D.
Butt, I.	Kelly, Sir F.
Carnac, Sir J. R.	Kendall, N.
Chandos, Marq. of	Kennedy, T.
Chelsea, Visct.	Ker, D. S.
Cholmondeley, Lord H.	King, J. K.
Christopher, rt. hn. R. A	Knatchbull, W. F.
Clinton, Lord C. P.	Knight, F. W.
Clive, hon. R. H.	Knightley, R.
Clive, R.	Knox, Col.
Cobbold, J. C.	Knox, hon. W. S.
Codrington, Sir W.	Lacon, Sir E.
Coles, H. B.	Laffan, R. M.
Colville, C. R.	Langton, W. G.
Compton, H. C.	Lascelles, hon. E.
Conolly, T.	Lennox, Lord A. F.
Corry, rt. hon. H. L.	Lennox, Lord H. G.
Davies, D. A. S.	Leslie, C. P.
Davison, R.	Lewisham, Visct.
Dering, Sir E.	Liddell, H. G.
Disraeli, rt. hon. B.	Long, W.
Dod, J. W.	Lovaine, Lord
Drax, J. S. W. S. E.	Lowther, hon. Col.
Duckworth, Sir J. T. B.	Lowther, Capt.
Duncombe, hon. A.	Lucas, F.
Dunne, Col.	Macartney, G.
East, Sir J. B.	Magan, W. H.
Egerton, Sir P.	Malins, R.
Emley, Visct.	Manners, Lord G.
Farnham, E. B.	Manners, Lord J.
Farrer, J.	March, Earl of
Fellowes, E.	Maxwell, hon. J. P.
Filmer, Sir E.	Meux, Sir H.
Forbes, W.	Miles, W.
Forester, rt. hon. Col.	Michell, W.
French, F.	Montgomery, H. L.
Freshfield, J. W.	Montgomery, Sir G.
Frewen, C. H.	Moody, C. A.
Fuller, A. E.	Moore, G. H.
Galway, Visct.	Moore, R. S.
Gaskell, J. M.	Morgan, O.
George, J.	Morgan, C. R.

Mullings, J. R.	Swift, R.
Mundy, W.	Talbot, C. R. M.
Naas, Lord	Thesiger, Sir F.
Napier, rt. hon. J.	Tollemache, J.
Neeld, J.	Tomline, G.
Newdegate, C. N.	Trollope, rt. hon. Sir J.
Newport, Visct.	Tudway, R. C.
Noel, hon. G. J.	Tyler, Sir G.
North, Col.	Tyrell, Sir J. T.
Ossulston, Lord	Vance, J.
Pakenham, E.	Vane, Lord A.
Pakington, rt. hn. Sir J.	Vansittart, G. H.
Palmer, R.	Verner, Sir W.
Parker, R. T.	Villiers, hon. F.
Percy, hon. J. W.	Vivian, J. E.
Portal, M.	Vyse, Capt. H.
Potter, R.	Waddington, H. S.
Prime, R.	Walcott, Adm.
Repton, G. W. J.	Walpole, rt. hon. S. H.
Scott, hon. F.	Welby, Sir G. E.
Seaham, Visct.	Whiteside, J.
Seymer, H. K.	Whitmore, H.
Sibthorp, Col.	Williams, T. P.
Smijth, Sir W.	Wodehouse, E.
Smith, W. M.	Woodd, B. T.
Smyth, R J.	Worcester, Marq. of
Somerset, Capt.	Wyndham, Gen.
Spooner, R.	Wynn, H. W. W.
Stafford, A.	Wynn, Sir W. W.
Stanhope, J. B.	Wynne, W. W. E.
Stanley, Lord	Yorke, hon. E. T.
Stuart, H.	TELLERS.
Sturt, H. G.	Taylor, Col.
Sullivan, M.	Mandeville, Visct.

MR. DISRAELI

said, he would now suggest to the right hon. Chancellor of the Exchequer the propriety of the Chairman reporting progress, on the ground that they could not at that hour (half-past twelve) fairly discuss the Amendment of his hon. Friend the Member for Berkshire (Mr. Vansittart) to leave out the word "moiety" and insert "third part" in the second Resolution on the income tax.

LORD JOHN RUSSELL

said, he thought it could not take very long to discuss an Amendment of that nature. He certainly hoped the Resolution would be taken that night—that any further Amendments would be postponed—and that they might proceed with the legacy duties, in order that there might be no undue suspense with regard to the tea and other duties.

MR. DISRAELI

said, the Amendment of his hon. Friend the Member for Berkshire (Mr. Vansittart) was really one of very great interest; it affected the farmers very greatly; and he did not think they could have a fair discussion at that hour of the question, which involved accounts and matters of great detail.

LORD JOHN RUSSELL

said, that certainly was a very late hour to go into the discussion of such a question, but he thought, nevertheless, that the interests of the country demanded that there should be no unnecessary delay in proceeding with the discussion of the various subjects involved in the financial scheme of the Chancellor of the Exchequer.

MR. DISRAELI

said, this was a question which had never before been properly discussed in that House, and he, therefore, must press on the noble Lord the propriety of reporting progress.

MR. VANSITTART

said, he could not consent to go on with his Amendment tonight for the convenience of the noble Lord opposite.

The CHANCELLOR OF THE EXCHEQUER

said, it was not a question of convenience to any noble Lord; it was a question in which the trade of the country was deeply concerned. He begged to assure the hon. Member he could have no conception of the amount of inconvenience to which the whole of the mercantile community were daily put by these protracted discussions, or even of the serious amount of loss to which they were exposed. He had heard a statement of the amount of entries at the Custom-house for applications for a change of duties, which he was almost afraid to repeat. He would undertake to say that the answer of the Government, whether the Amendment of the hon. Member was good or bad, would be contained in one sentence—namely, if the farmer did not like the rate at which he was assessed under Schedule B, he had by law the right of going into Schedule D. That was the whole and entire case of the Government. He repeated that this was not a question of the convenience of Government, but of the suspension of the trade of the country.

MR. DISRAELI

said, he wished to inquire whether the right hon. Gentleman would in that case object to leave out the schedule altogether? The matter was not so small as the right hon. Gentleman seemed to think, and there certainly must be some limit to his general argument, because he would not assent, because the Government had an answer to make to the proposition, that, therefore, they should accept the view of Government.

SIR CHARLES WOOD

said, he conceived it would equally answer the purpose of the hon. Gentleman who proposed the Amendment to discuss it in the Committee. When he was in office, and a proposal was made to enable the farmer to appeal, if ha felt aggrieved, under the Bill, he acceded to that request, and that really met the case in the end.

MR. DISRAELI

said, if the noble Lord (Lord J. Russell) persisted, he should be under the disagreeable necessity of moving that the Chairman report progress. If he stood alone, he must do so. They had been the whole night discussing a schedule which interested landowners. Now, here was a question which interested farmers very much. Would it not be said, very properly and with justice, "You can pass a whole evening discussing questions which affect yourselves, but when there is one that affects us, you pass it in a hasty and shuffling manner, without discussion?" If he stood alone, he should move that the Chairman report progress.

LORD JOHN RUSSELL

said, it would be a quite sufficient answer to the argument of the right hon. Gentleman, that the debate was reserved for the Committee on the Bill; because, if the Committee decided as the hon. Gentleman wished, of course his Amendment would be adopted just as if it were agreed to now. With regard to reporting progress, he felt that the responsibility of delaying the trade of the country for a purpose quite unnecessary was so great, that he refused to take it upon himself. If the Committee decided upon reporting progress, the responsibility must rest with them.

COLONEL SIBTHORP

said, to see his right hon. relative, who was once Chancellor of the Exchequer (Sir C. Wood) coming to the rescue of the present Chancellor, was like one political sinner attempting to defend another. The present Chancellor of the Exchequer said that delay would cause great inconvenience to the trade of the country; but if the Government were bringing in bad measures, it was not the fault of hon. Members on his (Colonel Sibthorp's) side of the House. He stood up there as the guardian of the public interest. Because delay would be attended with great inconvenience to the trade of the country, the House was called upon by the Chancellor of the Exchequer to inflict an injury on a large and respectable body of Her Majesty's subjects. Such a course was exceedingly unbecoming a Chancellor of the Exchequer; and then, forsooth, that he should have been supported in that course by the noble Lord the Member for the City of London. Par nobile fratrum, indeed. It was really too bad. He hoped hon. Members on his side of the House would remain there until five o'clock in the morning rather than allow the Government to bully the House because they had got a majority, which was not very creditable to them.

MR. BRIGHT

said, it was quite clear that the income tax in its main features was perfectly safe; and he thought the proposition that was about to be made by the hon. Gentleman opposite (Mr. Vansittart) would be less dangerous than any that was likely to come from that side of the House. The right hon. Gentleman (Mr. Disraeli) said he had never had an opportunity of defending the proposal involved in the Amendment of the hon. Gentleman (Mr. Vansittart)—a circumstance which he (Mr. Bright) thought fortunate for the right hon. Gentleman. He congratulated him upon the near prospect of such an opportunity being presented to him. He (Mr. Bright) thought the proposition to report progress was an exceedingly reasonable one at that time of night.

The House resumed. Committee report progress.