EXEMPTIONS TO FOREIGNERS FROM THE PROPERTY TAX. (Hansard, 17 May 1811)

Mr. Howarth
rose to make his promised motion on the Exemption of the Funded Property of Foreigners from the Property Tax. When the Bill in which this ex-emption originated was first proposed, it was contended, that without the violation of a precise act of parliament, no duty could be imposed on Funded Property. It appeared to him that this argument proceeded from a misapprehension of those acts; for it never could have been 203 intended by the legislature that income arising out of whatever description of property, should be exempted from the general contribution necessary to the security of the state. In 1803, the Bill for collecting the Income Tax on Funded Property at the Bank passed, and in 1806 it was amended, still leaving the clause which exempted from the tax the Funded Property of Foreigners. To this clause he now wished to call the attention of the House. It had been argued in 1806, that the exemption would operate as an invitation to foreigners to place their money in the British funds. This expectation, however, had proved unfounded; for the Funded Property of Foreigners had remained nearly the same ever since that period. The hon. gentleman next stated the manner in which the drawback on this tax was obtained, namely, by a power of attorney granted by the foreigner resident abroad, to whom the stock belonged; and exposed the opening which was thus afforded to the most flagrant abuses. It was not, however, so much on the impolicy and inconvenience of the exemption, that he founded his objection to it, but on the injustice of the measure. Let us examine, said the hon. gentleman, into the relation in which the foreigner stands, who residing abroad, possesses property in our funds. Let us examine under what conditions be became possessed of that Stock, what faith has been either expressed or implied, what honour pledged to him under which he can derive any colour of right to be placed on a different footing from the general mass of stockholders. In the first place, none of the government loans have been contracted with foreigners. The loan is necessarily completed before the stock is created. There is then no pledge on the part of government towards foreigners. Why then, there can be no violation of national faith—there can be no sacrifice of public principle; and I call upon the advocates of this clause of exemption to shew the contract, if it exists, by which any exception is taken, or any exemption secured, or even promised, to the property of aliens. I can find no such contract. Foreigners become stock-holders by purchase. The stock is in the market before they can become proprietors. They can only purchase that right in it which the seller was possessed of; and by that purchase they are placed in the same situation, subject to the same regulations and liable to the same contin- 204 gencies with the original subscribers. If then you break no faith in taxing the annuities payable to natives, you break none to foreigners. Taxing natives and exempting foreigners is a gross injustice.—The hon. gentleman concluded by moving, "That the account of the Amount of all of all Exemptions granted to Foreigners in respect of the duty on dividends in the various funds of Great Britain, and on the dividends of the East India and South Sea companies, under the Property Tax, from the quarter ending in October 1809 to the quarter ending in January 1811, be referred to the Committee of Ways and Means."

Mr. Baring
opposed the motion, not so much because the abolition of the exemption would be impolitic, as because it would be inconsistent with good faith. An act of parliament distinctly stated, that persons who lent money to the public should never have that money taxed. In conformity to this pledge, when the Property Tax was first imposed, it was not deducted from the dividends: but it was afterwards found convenient to lake it at the period of paying the dividends, rather than at any other time, and, in his opinion, with great propriety. But a foreigner who had property in the British funds stood in a very different situation. He was not taxable. If parliament taxed him, they must tax him as the holder of stock, which they were pledged not to tax at all.

The Chancellor of the Exchequer
did not think, if the Property Tax were a new measure, that it would be any breach of faith to tax the Funded Property of foreigners; but the question was, whether, having granted the exemption in the first instance, and having confirmed that grant after various discussions, it would be honourable for parliament to take advantage of that property which they were not sure would now be in the funds, but for the security from duty to which the holders of it conceived the British parliament was pledged. If the exemption were with-drawn, the period of withdrawing it must be fixed for a distant day. The state of the world and a variety of circumstances combined to render it necessary for the House to be very circumspect in such a proceeding. It was the great object of the enemy to embarrass our finances. Thus attacked, it was due to the British character to show that this country would not resort to any mean shifts—that it would 205 not, for the paltry advantage of gaining 50 or 60,000l. violate its faith, by doing that which all preceding governments and parliaments, since the origin of the measure, had refused to do. It was not probable, that any great fraud could be practised on this subject, the amount of stock held in the name of foreigners being nearly the same as formerly. But even such a consideration would be trifling, compared with the honour of the country, which was deeply implicated in the transaction, and which, he trusted, parliament would preserve unblemished.

§ Sir T. Turton
contended that ministers ought to have some regard for what might be the feelings of the English, as well as for what might be the sentiments of foreigners. Our former forbearance was no reason why the exemption should be continued. We had granted them the indulgence a long while, and now the circumstances of the times rendered it necessary that it should cease. He thought we might call upon them without being guilty of any breach of faith. The parties themselves would, he thought, be the last to complain of such a measure; and he would ask if it was not due to the people of this country, to name some period, however distant, at which this distinction should be done away?

§ Mr. Pole Carew
was surprised that any gentlemen who knew the laws of the country, as the hon. baronet did, could think such an alteration as that proposed, could be made without a breach of the public faith.

Mr. Howarth
in reply, contended that foreigners were not lenders of money to the state, but purchasers of property in it. He should like to know why that property which Was taxed while in English hands, should be exempt from taxation when transferred to hands of a foreigner? No pledge to that effect had been given. When a foreigner came here, we protected him and his property too; and when he went hence, he left us to defend his properly in his absence. Was it not then reasonable, that he should pay a something for this protection? And as to what had been said of what might be advanced by our enemies on our taking such a step, could it be imagined that Buonaparté would calculate on our situation, from any regulation we might make which might add a few thousands to our annual revenues, when he knew that in the Peninsula we carried on the war at an 206 expence of not less than a million per month? he, however, was willing to with draw his motion with an understanding that the subject would be again brought forward on a future day. He was confident the right hon. gent. must ultimately feel the justice of that which he would suggest; and so long as he (Mr. Howarth) had a seat in that House, he would bring the business forward year after year, till redress was obtained.