Mr. Alderman Thompsonrose to present a petition from the Insurance Offices of London and Westminster. It was signed by two chartered companies—the Royal Exchange and the London Assurance—and by fifteen other bodies of the same kind, which had been established with a capital of many millions. They contended, that the rate of duty on Fire Insurances had sensibly affected their progress, and lessened the amount of property that would otherwise have been insured; they confidently believed that a reduction of the duty would increase the practice of Insurance, and thus indemnify the country from any loss in the revenue. The duty amounted to a tax in some cases of one hundred per cent. The subject was of vast importance, not only to the petitioners but to the public at large; and when it was stated that an insurer to the extent of 20s. paid 40s. duty upon his policy, it would be obvious how much it must obstruct insurances, and the effect was, to increase the destruction of property and the loss to individuals, especially in the middle classes of society. The duty first imposed in 1782, amounted to 1s. 6d. per cent.; in 1798, it was increased to 2s.; in 1804, to 2s. 6d.; and in 1816, to 3s. According to returns 1336 before the House, the number of inhabited houses in England, Wales, and Scotland in 1801, was one million five hundred and seventy-five thousand two hundred and thirty; in 1811, it had increased to two million one hundred and one thousand houses; and in 1821, to two million four hundred and twenty nine thousand six hundred and thirty houses. The amount of duty paid in England, Wales, and Scotland upon insurances from fire, was 547,845l., which covered property to the extent of about 400,000,000l. sterling. This sum might appear large, yet it was, in fact, small, compared with the real amount of capital invested. According to the best calculation, 400,000,000l. sterling was not more than one third, or one fourth of the property in England, Wales, and Scotland, liable to be destroyed by fire. The petitioners were unanimously of opinion, therefore, that if the duty were reduced to one half, insurances would be greatly multiplied, and the revenue increased; that it would be followed, in short, by the same results that had attended the reduction of duty upon wine, coffee, and other articles; while private losses and distress would thereby be greatly avoided. The Royal Exchange and London Assurance Companies also dealt in marine risks, the duty upon which, in 1814, amounted to not less than 485,066l., which had been gradually reduced, until, in 1826, it had fallen to 219,629l. The cause of this diminution was very obvious—that Insurance Offices had been established on various parts of the continent, and in the United States of America. The premium in London upon a policy from London to Calais, was 5s. per 100l., and upon 10,000l. the amount of premium would be 25l., and the duty upon it no less than 12l. 10s. Bullion was the great article of commerce between London and Calais, and as there was no corresponding duty in France, what cost here 37l. 10s. for the insurance, might there be done for 25l. The same proportions were kept in the insurances to Holland; the premium being 7s. 6d. per cent and the duty as before 12l. 10s. On a voyage to the United States, the duty was 21s. per 100l., and the duty upon it twenty per cent. The hon. member then read a letter from a large manufacturer of Birmingham, complaining that the heavy duty operated most grievously upon all shipments to the United States, and was a 1337 sufficient inducement to merchants in America to effect insurances at home instead of ordering them to be made in England. The writer added, that two thirds of the shipments now making for the United States were insured there. The hon. alderman also stated, that a house in London, which formerly effected insurances in London for a mercantile establishment in Amsterdam to the extent of 6,000l. per annum, now did no business of the kind for it, all the insurances being effected in Holland. The merchants in London were thus deprived of a considerable branch of business, and government of a large amount of revenue. He hoped he had stated enough to induce the Chancellor of the Exchequer to turn his serious attention to the subject.
§ Mr. Alderman C. Smithsupported the prayer of the petition, and expressed his hope that ministers would find themselves warranted in reducing the duty.
The Chancellor of the Exchequersaid, that as the hon. alderman had confined himself to requesting the full consideration of the subject, he had no hesitation in assuring him, not only that he would do so, but that he had already taken measures to ascertain the facts of the case as far as regarded marine insurances, in order to decide whether the duty could be reduced without injury to the revenue. The income derived from the duty on insurances exceeded a million, and it would be the height of imprudence to give the House or individuals an expectation that it would be possible to make any arrangement which might put in hazard that amount of revenue. As to fire assurances, when the hon. member stated, that the amount of duty at present was such as to impede the insurance of property, the data before the House did not warrant such a position. The amount of duty on fire assurances had been regularly progressive; and whatever the check might have been on the ordinary principles governing financial arrangements, it had not been sufficient to put a stop to the increase. In one year it was 600,000l.; in the next, 613,000l.; in the next, 620,000l.; in the next, 627,000l.; in the next, 659,000l.; in the next, 692,000l.; and in the last instance, 727,000l.;—without a single intermission of progress, or any thing like a decrease. He must deny that the amount had not considerably increased with the extension of property; for instance, in three years after the 3s. duty had been imposed, there had been 1338 an increase of 100,000l., showing that 60,000,000l. or 70,000,000l. of additional property must have been insured at the offices during that period. Although he agreed that the increase of capital had been great within the time mentioned, the increase of insurances to which he had alluded was great also. With respect to marine insurances, he believed they had in some degree decreased; in the comparison between the years 1826 and 1814; but if his hon. friend took the average of the last six years, with those of the preceding six, and then referred further back, pursuing the same relative scale of average, he would find that the declension had not occurred in the degree he had supposed. It was quite evident that in a time of peace this business could not be carried to the same extent as during a war. Now, in the last year, insurances had been effected upon 92,000,000l. of property; in 1812, the last year of the war, insurances had been only effected upon 93,000,000l.; thus showing only a difference of one million in the amount covered during these relative periods. He was here speaking of the London business; for they had no other returns before them. He would turn his best attention to the subject, to see if any new arrangement could be made for the satisfaction of the parties; but when his hon. friend said that British insurances would be transferred abroad, if the duty were not lowered, he seemed to forget the superior security which was assigned to the character of the British merchant, and the greater facility for the recovery of these losses in the tribunals of this country. He believed that, in many instances, insurances had been effected abroad, but not to the extent which had been supposed.
Mr. Warburtonremarked upon the want of the relative proportion of property insured, to the general increase of property. Before the year 1814, the insurance duty amounted to 514,000l.; and in 1824 it was 631,000l. [The Chancellor of the Exchequer here said, that it had afterwards increased to 727,000l.] He called upon the right hon. gentleman to bear in mind, that houses were the principal property insured, and it was obvious that, when the rate became so high, the owners of them preferred incurring their own risk, and they therefore generally omitted the rebuilding clause in their leases; by which they put into their 1339 pockets, as landlords, three times the amount of their risk. That was the main reason why the amount of the fair insurances had diminished. With reference to the impolicy of these high duties, he rather thought that while the insurance offices were proceeding in this way, they were also engaged in a sort of juggle with the government, to introduce compulsory clauses in the bill for marking policies. With respect to the foreign insurance companies, they were of the highest character.
§ Mr. Sykescalled, the attention of the government to the marine insurances, from their manifest operation upon the shipping interest, which was already so seriously, and he feared dangerously, restricted.
Mr. Baringsaid, he could not agree with the chancellor of the Exchequer in the propriety of this tax, which he had always looked upon as a grievance. It was a tax upon the prudence and providence of persons in trade, and as objectionable an impost as could well have been introduced. He believed that the amount of the rate imposed diminished the desire to insure. He, for instance, would never himself insure his own property on any large scale, because the price to be paid greatly exceeded the ratio of the risk. He wished to suggest to the chancellor of the Exchequer the risk he ran of having this business transferred to Ostend, or some of the opposite ports, where, through British capital and agents, it might be done so as materially to affect the revenue here.
§ Ordered to lie on the table.