§ Order for Committee read.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."
§ MR. OSBORNEI believe, Sir, that I am now in Order. I wish to ask, whether the right hon. Gentleman at the head of the Government is in receipt of intelligence, and whether he can conveniently communicate it, with 1555 reference to the American negotiations? ["Order!"]
§ MR. SPEAKEROn going into Committee of Supply, Supply Bills, or Ways and Means Bills, the hon. Gentleman would be quite in Order in putting his Question; but this is the Committee upon a Bill relating to Customs and Inland Revenue, and it is not in Order to raise a discussion not relevant to the subject-matter of the Bill.
§ MR. OSBORNEThe question is, that you, Sir, leave the Chair.
§ MR. HUNTI believe that this is a Bill to impose taxes on Her Majesty's subjects; and I thought it was the constitutional privilege of the Members of this House to satisfy themselves on such an occasion of the state of public affairs. Now this is, I understand, an important matter between the United States Government and this country; and on that principle I should have thought that the Question of the hon. Gentleman might be put. I do not wish, Sir, to question your ruling, but I should like to have the principle laid down.
§ MR. OSBORNEThere is a new tax involved in Clause 5. I am extremely unwilling to embarrass the Government by putting my Question, and, if the right hon. Gentleman will only say that it is not convenient to answer it, I will not press it. I wish to ask him whether he is in receipt of intelligence as to the present state of the American negotiations?
MR. GLADSTONEI understand that I am not at liberty to enter into that subject; but my hon. Friend will have an opportunity by-and-by, and I do not think he will lose anything by postponing his Question till the adjournment of the House.
§ Motion agreed to.
§ Bill considered in Committee.
§ (In the Committee.)
§ Clauses 1 to 5, inclusive, agreed to.
§ Clause 6 (Exemption of husbandry carts and horses used on Sunday, &c., from duty under 32 & 33 Vict. c. 14).
§ MR. BROGDENmoved, in page 3, line 30, to insert the words "trade or" before "husbandry," to meet the case of those persons who required the use of their horses and carts on Sunday to convey their families to church.
§ MR. MACFIEproposed to alter the Amendment by introducing the words "or trade carried on in country places."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that the purpose of the clause was to give effect to the wish that had been so frequently expressed in that House—that horses used in the country for conveying the owner's family to church should not be taxed, but it was now proposed to extend it to trade horses. The same reason for exemption, however, in the latter case did not exist, because generally speaking persons engaged in trade lived in the immediate places of Divine worship which they attended.
§ MR. M'LARENsaid, he hoped that next Session the Chancellor of the Exchequer would exempt horses engaged in trade. The employment of horses in manufactures was equivalent to their employment in husbandry.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clauses 7 to 11, inclusive, agreed to.
§ Clause 12 (Exemption when income is under £100 and abatement where income is under £300).
MR. ALDERMAN W. LAWRENCEsaid, that in 1842, during the administration of Sir Robert Peel, when the income tax was imposed, incomes under £150 per annum, were exempted from the tax, and that sum was fully equivalent to £200 per annum at the present time, for the great pressure of taxation, and the rise in prices of every article of food, fell most heavily on persons whose incomes ranged from £150 per annum downwards. The very prosperity of the country by causing labour and all articles to rise in value, seriously diminished the means of living of those who depended upon salaries and incomes under £150 per annum. There was no principle involved in the matter. He therefore moved an Amendment to the effect that the tax should not be extended to persons whose incomes were less than £150 per annum.
§
Amendment proposed,
In page 5, line 25, to leave out the word "continued," and insert the words "extended to any person whose income is less than one hundred and fifty pounds."—(Mr. Alderman Lawrence.)
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he must question the statement 1557 of the hon. Gentleman that no principle was involved, for the principle involved in the Amendment was, whether the Committee—the financial arrangements of the Government having been already assented to—should adhere to those arrangements, or alter them so as really to take away all responsibility for the financial results of the year from the Chancellor of the Exchequer. The consequence of the adoption of the Amendment would be to make a change in the financial arrangements of the year to the extent of £250,000,; and to take such a step would not, he contended, be a wise mode of proceeding. There was no good reason, he maintained, why the decision of the House in 1853, altering the minimum income which should be liable to the tax from £150 to £100 should be reversed, especially seeing that great concessions had already been made in the way of making deductions from the lower class of incomes on which the tax was paid.
§ MR. HUNTsaid, that although not supporting the Amendment, he must protest against the doctrine which the right hon. Gentleman appeared to lay down—that the present was not a fitting opportunity to raise such questions as that which had been raised by the hon. Gentleman.
MR. WHITEsaid, he should support the Amendment, and would remind the Chancellor of the Exchequer that he had admitted in answer to a Question which he (Mr. White) put, that there then was a sum of quite £750,000 in the Treasury receipts of the current year, due to the exceptional and unexplained postponement of the usual annual contribution from the Revenues of India for military and other charges, thereby diminishing to that extent the (otherwise) actual surplus of the year ending the 31st of March last. Hence he (Mr. White) urged that should the Chancellor of the Exchequer remit £250,000 of taxation by accepting the proposed Amendment, he would still have fully £500,000 more to the good than he anticipated when he made his last Financial Statement. Persons with incomes of £150 a-year were—as the Chancellor of the Exchequer had more than once admitted—a class on whom the pressure of the income tax bore most heavily. It seemed to be wholly ignored by the right hon. Gentleman that our present 1558 system of indirect taxation did substantially impose an income tax of the most burdensome and unequal kind. The recipient of an income of £150 a-year ordinarily consumed quite as much tea and sugar as the possessor of ten times that amount—say, £1,500 per annum. If so, whilst the latter individual would pay to the State on the two dutiable articles before-named not more than three farthings in the pound of his income, the former, with one-tenth of such income, would be mulcted to the extent of an income tax of quite eightpence in the pound by our present system of indirect taxation. On those grounds he (Mr. White) held that the existing liability of incomes of £150 to the income tax was a glaring inequality and injustice, and he earnestly supported the Amendment of the hon. Member for London (Mr. Alderman. W. Lawrence).
MR. GLADSTONEsaid, he must contend that when the general financial scheme of the Government had been approved as it had been that year, it was not convenient to raise such important questions as the present in Committee on a Bill as if it were matter of small detail. His hon. Friend was, of course, no doubt entitled to move that the exemption be extended to incomes of £150 a-year, or to move the repeal of the tax altogether; but the question was one of very great importance, and, as he thought, entirely beyond the scope of the business immediately in hand, for the sum involved was a large one, and such as would nearly exhaust the surplus estimated by the Chancellor of the Exchequer. It must also be borne in mind that the amount of income which would be absolutely exempted from the income tax raised questions of very great delicacy. The tax was one which was attended with considerable social dangers, and the House having evidently arrived at the conclusion that it might be necessary to continue it, at all events for a considerable time, thought it desirable that its basis should be made as broad as possible. Great questions of financial policy should not be decided in passing a measure such as this, which simply settled details; but should have been brought forward in discussing the Budget arrangements of the year.
§ MR. HUNTsaid, he should like to know what time was so fitting for a discussion of the question under notice as 1559 on the Bill for re-imposing the income tax, while with regard to the time, he thought no one could be blamed for raising the question at this hour. If the exigencies of Public Business required that the Bill should be considered at a quarter to 1, hon. Members could not be blamed if they discussed the question involved in it. The strongest argument urged against the Amendment was that it would result in a deficit of £250,000.
§ MR. FAWCETTsaid, he trusted in future the Customs Bill would be considered simultaneously with the Budget. Upon the question at issue he must say that the small incomes were most heavily taxed, and those who received them were the last to participate in a season of general prosperity, because such seasons made workmen extravagant and caused prices to rise even before the clerk at £100 or £150 a-year benefited by the prosperity of the country. The anomaly of the present system, moreover, would be increased if the Amendment was carried, because whereas a man having an income of £149 would pay nothing, a man in receipt of £151 would pay on £71. The proper method was, that the sum upon which nothing was paid should be the sum subtracted from the gross income, so that if incomes of £100 were exempt incomes of £105 should pay on £5. He could not, therefore, vote with his hon. Friend, although he sympathized with him; and he expressed his disbelief in the statement commonly made on popular platforms, that workmen were the most heavily taxed, because the people upon whom taxes fell with most crushing effect were men such as clerks at a fixed salary of about £150.
§ MR. KINNAIRDsaid, he should like to know what had become of the £750,000 referred to by the hon. Member for Brighton (Mr. White) as the military contribution from India.
MR. ALDERMAN W. LAWRENCEsaid, he did not think this an improper time to bring forward the question. It was not his intention to put the Committee to the trouble of dividing; but he should certainly introduce the subject again on some future occasion.
§ Question put, "That the word 'continued' stand part of the Clause."
§ The Committee divided:—Ayes 108; Noes 65: Majority 43.
§ Clause agreed to.
1560§ Clause 13 (Enactments in schedule repealed, and in lieu thereof exemption from inhabited house duty of trade and business premises under care of servant only).
THE CHANCELLOR OF THE EXCHEQUERSsaid, he had proposed it not because he was enamoured of its principle, but because he had thought the House wished for some relaxation of the duty.
§ MR. W. H. SMITHsaid, he should move the rejection of the clause, on the ground that it would benefit the richer trader, who could afford to live away from his shop.
ALDERMAN SIR JAMES LAWRENCE, in support of the clause, urged that exemptions already existed, and that the clause simply defined them more precisely.
MR. ALDERMAN W. LAWRENCEsaid, he would remind hon. Members that this was the clause of the Chancellor of the Exchequer.
§ Question put, "That the clause, as amended, stand part of the Bill."
§ The Committee divided:—Ayes 78; Noes 79: Majority 1.
§ Additional Clause.
§ MR. F. S. POWELLmoved the following clause:—
No person shall be chargeable with Duty in respect of any dog bonâ fide and wholly kept and used in the care of sheep and cattle, or in driving or removing the same, provided no such dog shall be a greyhound, pointer, setter-dog, spaniel, lurcher, or terrier.
§ New Clause (Exemption of certain class of dogs,)—(Mr. Powell,)—brought up, and read the first time.
§ SIR MASSEY LOPESsaid, he must urge the Chancellor of the Exchequer to accept it.
§ MR. M'LAGANsaid, he must strenuously oppose the clause, for the reason that formerly the exemption in favour of sheep dogs led to much dishonesty.
THE CHANCELLOR OF THE EXCHEQUERSsaid, he was waiting to hear what the author of the tax had to say in favour of it.
§ MR. HUNTsaid, that when he was Secretary to the Treasury, in 1867, the dog duty was reduced from 12s. to 5s., 1561 and exemptions abolished. Previously, there was a large number of dogs which never paid duty at all. He did not think the reduced duty was any hardship upon the farmer, though it might be complained of by those who bred sheep dogs for exportation. The reduction of the duty had increased the pleasure of many who could not have kept dogs at the higher duty. Under all the circumstances, therefore, he should support the continuance of the tax.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he could add nothing to the observations of the right hon. Gentleman.
§ Motion made, and Question put, "That the Clause be read a second time."
§ The Committee divided:—Ayes 55; Noes 86: Majority 31.
§ Clause agreed to.
§ THE CHANCELLOR OF THE EXCHEQUERopposed the clause.
§ Clause, by leave, withdrawn.
§ Bill reported; as amended, to be considered upon Thursday.