SECOND READING. ADJOURNED DEBATE. (Hansard, 28 May 1891)

§ (12.2.) MR. ROBY (Lancashire, S.E., Eccles)
I desire to refer to the attempts made lately in different places to alter the usual interpretation of the words "charitable purposes," and to make grammar schools and other schools pay Income Tax. I represent particularly on this occasion the Grammar School of Manchester. For many years past we, like all other charitable foundations, have been in the habit of recovering the Income Tax every three years; but a year or two ago we were informed by the Commissioners that they must decline to return it to us, on the ground that there had been a recent decision in the case of the Moravians' establishment, which showed that the words "charitable purposes" were not to be interpreted in the way they had hitherto been interpreted. As to the legal aspect of the case I have nothing to say; a case was brought before the House of Lords in March, 1890, and the decision has not yet been given. The chances are that even when that decision has been given it will not cover our case. What I object to is this attempt to put pressure upon the Trustees of charitable foundations to hand over a sum of money to the Commissioners of Income Tax, which it was not in contemplation when the Income Tax was originally levied should be so handed over, and which is contrary, I 1284 believe, to the whole practice and purpose of the Income Tax Commissioners from 1842 until the last year. I think something may be said in favour of requiring charities to pay Income Tax; but, in my opinion, it is most unconstitutional to attack in this way these small bodies of Trustees and induce them to pay, out of their limited funds, Income Tax. All our funds are expended in charity. We have no money with which to carry on a lawsuit, still less for carrying on a lawsuit against the Government. Whether we won or lost the charity must be crippled for a very considerable time. The point I wish to urge most strongly is that if places like the Grammar School at Manchester are liable to Income Tax the matter should be set at rest by an Act. Now we have practically no choice but to submit to the demands made upon us. I protest against this mode of forcing a payment of Income Tax which I believe to be illegal, and am sure is unconstitutional.

§ (12.9.) MR. MORTON (Peterborough)
I think we have a right to complain that the Bill has been taken at this hour, especially after the promise of the Chancellor of the Exchequer that it should be taken about half-past 10 o'clock Three hours have been utterly wasted this evening over the Newfoundland Bill, and now, after midnight, we are expected to discuss the question of the whole taxation of the country. We had no opportunity on Tuesday last, because the whole of that day was occupied by Members on the Front Benches in a sort of duel in which, by the way, the Chancellor of the Exchequer seemed to get the worst of it. The right hon. Gentleman appears anxious to punish us for what happened on Tuesday by preventing us now from discussing the matter. I had wanted to speak on several topics, but I will reserve my observations to the Committee stage.

§ MR. SPEAKER
(interrupting): The hon. Member has exhausted his right to speak. I see he has already spoken on the Main Question.

§ MR. MORTON
I only moved the Adjournment.

§ MR. SPEAKER
That is speaking on the Main Question.

§ (12.12.) MR. TOMLINSON (Preston)
In reference to the remarks of the hon. Member for Eccles (Mr. Roby), I would 1285 ask the Chancellor of the Exchequer to take into favourable consideration the position of charitable institutions in reference to the payment of Income Tax. The matter has been very much considered by the great charities, and in their interest received much attention from the late Lord Addington. These charities are in this difficult position: that they have in general no funds applicable to conducting legal proceedings, and it is also felt that whatever may be the ultimate decision in the Moravian case, it may not govern that of other Institutions, and they may still be liable to the risk of expensive litigation in order to preserve their rights.

§ MR. SEXTON (Belfast, W.)
I desire to ask a question as to the payment of Income Tax by tenants who purchase their holdings under the Ashbourne Acts. It seems to me that they ought to pay on the occupation value of the holding only. Under the Ashbourne Acts the landlord's interest become extinct, and the tenant becomes liable for 49 years.

§ THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN,) St. George's, Hanover Square
In regard to the last question, I should not like to give an answer off-hand. I will consider the point, and give the hon. Member a reply on a future occasion if he will communicate with me or put a question on the Paper. At present I have not been able to go into the question as deeply as I could wish. With reference to the question of the payment of Income Tax by the Trustees of charitable institutions, hon. Members will acknowledge that the best course will be to await, before adopting a final decision, the judgment of the House of Lords in the pending case of the Moravian schools. Even if that should not cover the whole of the legal ground, I should be guided, to a great extent, by the spirit of that decision in my future action. I should not wish to strain the law. It is contended that the principle adopted in dealing with this matter at present is unconstitutional, but the Inland Revenue Authorities consider that having once placed an interpretation on the law they are bound by it. I do not, however, wish to press their view of the matter unduly.

§ (12.15.) MR. CONYBEARE (Cornwall, Camborne)
We ought not to allow the Government to take the Second Reading of the Bill without a word of protest against their general tactics with regard to this important subject. I presume that the Second Reading of the Budget Bill of the country should be something more than a mere farce, but the arrangements of the Government reduce it to that. They expected the Bill to be taken at the end of the afternoon Sitting on Tuesday, after having laughed over the jokes of the noble Lord the Member for Ipswich in reference to the adjournment for the Derby. Because the Debate did not terminate as they had expected they attempted to closure it—not having thought of the Closure in connection with the Motion of the noble Lord. The Chancellor of the Exchequer himself had the boldness to attempt to closure the Debate when it had not proceeded more than three hours. Failing in that, he can find no better opportunity for the Bill than to bring it on now after midnight, when hon. Members are fatigued by a long discussion on a very important matter, and are anxious to go home for the night. We are here to see that the true principles of finance—on which the right hon. Gentleman prides himself so much, but which he takes care to violate in almost every Budget he brings forward—are respected. When we wish, by way of protest, to emphasise the fact that the right hon. Gentleman cares nothing whatever for the principles of which he used to be so fond, we have a sort of title to be heard. [Cries of "Divide!"] I say we have a right to protest against the soundest principles of finance being constantly violated, and against being compelled to discuss such a Bill as this either at the fag-end of an afternoon Sitting or at an early hour in the morning. We have a right to object to this slip-shod and utterly reckless way of conducting the ordinary business of the country. [Cries of "Divide!"] The principal issue which, I take it, is raised in this Debate is that by forcing the Budget Bill through the Second Reading, the Chancellor of the Exchequer and the Government desire to get the House of Commons committed to the principle that a large sum of 1287 money—which he pretends is a surplus, but which is nothing of the kind—shall be devoted to what some hon. Members opposite call "free education," and others call "assisted education." [Cries of "Divide!" and interruption.] It is perfectly notorious—and no one knows it better than the right hon. Gentleman—that there is great division in the country as to the method in which this so-called surplus is to be devoted to that special object, and I maintain that it is not enough for the Government to come down and say, "We will give yon this sum for the freeing of schools." [Renewed cries of "Divide!"] They should give us some explanation of the method by which they wish to carry out the scheme. [Interruption.] We want to know whether the voluntary schools are to be subject to popular control, and whether or not the grant is to go to all the standards of our elementary schools. [Cries of" Divide!"] In spite of the interruptions of hon. Members I shall claim my right to discuss the Budget proposals. I, for one, refuse to be compelled by this species of coercion to vote this sum which the Government say is to be devoted to a purpose which, though we may approve of it, we have every reason to believe will be worked out in an objectionable manner.