ATTORNEYS' AND PROCTORS' CERTIFICATE TAX. (Hansard, 26 February 1850)

§ SIR DE L. EVANS
seconded the Motion.

§ LORD ROBERT GROSVENOR
said: Towards the close of last Session he had occasion to bring before the House the grievances of the journeymen bakers. He then expressed a fear lest, Parliament being so much in the habit of considering questions of a superior magnitude, he should experience some difficulty in obtaining its attention to one involving the interests of what, comparatively speaking, was a small section of the community. Upon the present occasion, he was about to request the attention of the House to the case of a still smaller class: he meant the attorneys and proctors of this country, by moving for leave to bring in a Bill to abolish the certificate duty which was now annually levied upon them, and which they considered to be unjust and oppressive.
Upon the former occasion to which he had alluded, he had no reason to complain of the kind attention which the House afforded him, but he addressed a very select audience. Upon the present occasion he perceived a very different state of things, and he was not then likely to speak to empty benches; and he was not surprised at it, for if any class of the community ever realised the aphorism, that "knowledge is power," it was that whose cause he was then advocating; for what had been 18 written of them was, he believed, true, that if all the secrets of all the confessionals were laid open to the public, not nearly the same amount of wide-spreading mischief and ruin would ensue, as would be caused were the confidential communications made to the attorneys and solicitors of England to be divulged; and he would mention, in passing, that he thought it highly creditable to their countrymen engaged in that profession, that so few breaches of trust came to their knowledge—a fact which surely entitled them to our respect and consideration.
Were the whole of that fraternity united in their endeavours to get rid of this tax, by an equally suffering sense of grievance, there could be no doubt of the result; but it was so injuriously framed, as he should have occasion to show, that the wealthier members of the profession had by no means the same interest in its removal with the less fortunate; yet notwithstanding this circumstance—notwithstanding the prejudice he must encounter—notwithstanding the feebleness of the advocate—so great was the confidence which he had in the justice of their cause, that even should his noble Friend oppose him, which he trusted he would not do, with the whole strength of the Government, he had every hope of obtaining the sanction of a majority of the House to his proposition. With this preface he would endeavour shortly to lay before the House the origin, the nature, and operation of this tax.
Towards the close of the last century, Mr. Pitt, driven to his wit's end to discover resources to meet the exigencies of the times, induced Parliament to impose a tax upon shops, which it was supposed would realise a considerable sum; however, it was so unpopular that he was obliged to modify it, and it was soon discovered that the sum likely to be derived from that source would fall far short of the calculation. New expedients must therefore be devised; accordingly, Mr. Pitt proposed a tax upon housekeepers and ladies' maids, which was met with such a torrent of ridicule from the Opposition of the day, that he was compelled to withdraw it; and it was then that he, for the first time, took into his serious consideration the plan of taxing this branch of the legal profession—he said his serious consideration, because, on the 23rd of May of the same year, Mr. Mainwaring, the then Member for Middlesex, had made a similar proposition, which Mr. Pitt had himself rejected as inconsistent with 19 the principles of taxation; however, as necessity know no law, so he presumed it recognised no inconsistencies, and accordingly Mr. Pitt shortly after proposed the annual certificate duty, and also a tax upon warrants. When Mr. Pitt proposed this duty, all Parliamentary difficulties vanished; the House (notwithstanding a caustic remark of Mr. Fox, that they Would perhaps find that this tax would be paid out of their own pockets) seemed in an ecstacy at the idea of plucking an attorney, and some language not very complimentary to the profession was made use of in the debate which followed. Sir E. Astley observed, that— He rose because his tax upon dogs had been alluded to. He owned he should be indeed well pleased to see both dogs and attorneys subject to duty. He coupled them thus together, because he thought them both articles of luxury, and that those who made use of them ought to pay for it; indeed he had long wished to see a tax put upon hairdressers and men-milliners, and all those engaged in effeminate occupations. With the certificate duty, Mr. Pitt also imposed a duty upon warrants, and he (Lord R. Grosvenor) begged the attention of the House to Mr. Pitt's observations in proposing the impost. Having no real reason to give for proposing the certificate duty, except that he wanted money, and must have it from some source, and being obliged to say something, he remarked that he thought there were too many of these gentry, and that this would lessen the number. But, in reference to the warrants, his language was, that this was to ascertain the amount of business done by the several attorneys, so that each man should pay according to his gains and this—mark!—would free the tax from partiality. Since that time, the tax upon warrants, which was to free the tax from partiality, had been repealed; but the former part, the annual certificate duty, not only had not been repealed, but it had been augmented till it amounted to 12l. in London, and 8l. in the country, at which sum it then stood. The produce of it in round numbers was 90,000l. for England, 30,000l. for Scotland and Ireland—in all, about 120,000l.
The reason why he sought the repeal of this duty, was the same that originally induced Mr. Pitt to reject it—that it was inconsistent with the principles of taxation. The true principles of taxation he apprehended to be these:—That the tax should be as general as possible, and that it should be as equal as possible in its pressure; but 20 that if it did fall heavily anywhere, it should be upon those best able to bear it. A few minutes would suffice to show that this duty directly contravened every one of those principles. Its very name denoted that it had nothing general in its nature, and that it was in fact a duty upon one portion only of the profession. And, with regard to its equality, the income tax, after exempting entirely a large bulk of income under 150l. a year, proceeded to charge the remaining income of the country at so much per cent, according to the amount of the property enjoyed—on the profits made—and although objection had been taken to taxing all sources of income alike—and be it observed, those very profits of professions were considered as exceptional—yet at least they had an ostensible equality; but in the assessed taxes Parliament carried the principle still farther, for not only were vast numbers exempted, but the duty actually increased in amount according to the supposed ability of the individual to bear it, tested by the number of taxable articles he made use of. But how did the House deal with the attorneys? It first taxed their profits with those of all other professions and trades 3 per cent, and then coolly proceeded to lay an additional duty upon them, equivalent to 4 per cent, levied in such a manner that whilst the wealthiest paid scarcely½ per cent, the neediest paid 12. But the tale of injustice was only half told: not content with that, the House then mulct them in larger stamp duties than those imposed upon any other class of the community. 1201. articles of clerkships; 25l. on admissions, producing another annual sum falling not far short of the former: in England alone by the last return it amounted to upwards of 68,000l. So that they literally paid an annual amount of 10 per cent upon the profits which they earned with great mental exertion, levied in the partial and unjust manner he had described.
But a reply might be attempted, that this was not a duty, but a licence to practise, which they paid in common with auctioneers, pawnbrokers, and one or two other callings; or that the attorneys were wealthy, and levied large contributions upon the public, and were well able to pay it; or that, in fact, they did not pay it, but it came out of the pocket of the employers. He would answer these objections in the order in which he had placed them; and, first, with regard to its being a licence. 21 They might call it a licence, although it was not so called in the Act of Parliament; but call it by what name they pleased, they cauld not diminish its injurious and oppressive operation; and with regard to the auctioneers, and one or two other callings paying annual duties, there was no strict analogy between those cases; and oven if there were, the fact of there being two unfair imposts levied, unless two negatives made an affirmative, could never justify such a tax as that. But it was said the attorney levied large contributions upon the public, and, therefore, should pay. If they thought so, the duty was an illegitimate method of reducing his gains; other and better ways were open which they had not hesitated to make use of, and which he hoped they would carry still further. But if it was said that, after all, the attorney need not complain, because it was not he who paid, but the suitor, then, granting, for argument's sake, that the supposition was true—and he should presently show it was not—how perfectly inconsistent it would be, after repealing the duty on warrants as a tax on the administration of justice, and doing all in their power to diminish legal expenses, were Parliament to retain this tax, because, in fact, it was not the attorney but the suitor who paid it. But if it were true that the suitor paid the tax, and not the attorney, how happened it that hundreds of petitions had come to Parliament praying for its abolition? and that last year, 600 attorneys, being unable to continue their payments, were struck out of the law list, and rendered incapable of earning a farthing, and some indeed had been reduced to so great distress, that, in one instance which had come to his knowledge, a man who had contributed, in the various methods he had described, 600l. to the revenue, which, paid into an assurance office, would have secured him a comfortable provision for his declining years, and guaranteed him against all contingencies, was absolutely compelled to resort to public charity, if not to the very workhouse itself, to save him from starvation?
No doubt at one time the profession did make great and undue profits; but times were changed—Parliament was daily reducing them. Amongst other measures which had already been passed with this object were the Acts for the abolition of fines and recoveries, of leases for a year, and of outstanding terms; there were also the Acts called the Law Amendment Act, 22 and the Uniformity of Process Act, by which the pleadings were reduced from thirty to three folios. Then there was the County Courts Act, which he saw there was, in that very night's Paper, a notice to extend; and actually last year, by one stroke of the pen, the Legislature deprived them of a revenue amounting to 40,000l. a year, by discontinuing the discount formerly allowed on the purchase of stamps above the value of 10l.
And there was another Act which would greatly tend to reduce attorneys' profits, and simplify proceedings, which he hoped to live to see passed; and he only trusted that his friends the Protectionists opposite would not do as they did upon a former occasion—try to perpetuate one of the greatest burdens of land, when it was proposed to remove it—he meant a register of all deeds and intruments affecting real property.
The Member for Bucks, in the course of several able orations which he delivered to several justly-admiring, though he must think somewhat bewildered audiences, said much about cheap capital, by which he (Lord R. Grosvenor) presumed he meant that the landowner should be able to borrow at a moderate rate of interest. In the desirableness of that, he most fully concurred; but he confessed he was surprised at the cumbrous machinery by which the hon. Member proposed to effect his object, when so simple a method was at hand, for he (Lord R. Grosvenor) was convinced that with a good registry, a landowner would be able to obtain money at 3 per cent instead of 5, and that not to a little more than half, but to the full value of the property he desired to charge. He would not, however, then pursue that subject further.
He had shown what the legitimate means were which they possessed, if they so pleased, of diminishing the profits of the attorneys; they had already made use of those moans, and the attorneys themselves, he presumed, did not much admire this process of elimination, but they made no complaint. What they did complain of, and that most bitterly, was, that Parliament continued to subject them to this most unjust tax, whilst every day they were making them less able to boar it. Were it necessary, he could show to the House some curious specimens of the manner in which this, like all other unjust taxes, operated injuriously to the comfort, the independence, and morality 23 of the managing clerks, and other subordinate functionaries of the profession; but independent of his desire not to weary the House, he thought he had already established a case for his clients, which would insure a verdict in their favour, and he should sit down, were he not desirous to combat an objection which he knew existed in the minds of some Members, namely, that this duty operated as a check upon an undue influx into the profession of a low class of men. In the first place, let him observe, that if the tax deserved the character he had given of it—and it could not be refuted—it was bad policy to do evil that good might come of it; but there was another consideration which, perhaps, might have still greater weight, namely, that like almost every other specimen of such crooked policy, it did not answer its end. The grandees of the profession once thought so too. They had since altered their opinion, and they had found that in this, as in all other cases of unjust and immoderate duties, temptation begot the illicit trader, who stepped in and made a profit at the expense of the honest and conscientious practitioner. He called on them to listen to the language of Mr. Maugham, the secretary of the Incorporated Law Society, and executing the office of registrar of attorneys, a man perfectly cognisant of the facts to which he deposed, and the whole status of the profession. He says— The Incorporated Law Society have received numerous complaints that attorneys, practising in a limited and inferior class of business, derive emoluments from other attorneys, who are unable to take out their certificates, and who practise in the name of such certificated attorneys, and participate in the profits of the business, contrary to the express provisions of the statutes, and to the injury of the public. By these means, they not only evade the payment of the duty, but commit act" of malpractice, and of oppression, against the poor suitors of the court, and generally escape punishment. For, if complaint be made against the attorney, in whose name the malpractice took place, he denies that he authorised the use of his name, and, generally, there is no sufficient evidence to contradict him. But besides that, had they no other guarantees for the respectability of the profession?—had they forgot the 70,000l. a year that they would still levy upon the profession after the certificate duty was gone? 120l. for articles, 25l. upon admission, not to mention 200l. or 300l. premium, five guineas in fees to the courts on admission, and, above all, a strict examination into their general knowledge, as well as their legal attainments. Why, if this were not 24 enough to secure the selectness of the profession, additional precautions in the shape of pecuniary barriers would only have the effect which this duty had already effected, of encouraging illicit practice, from the temptation it held out, of the profits of dishonesty. In a former part of his address he had demonstrated the abuses of the tax, he had then shown that it had not even the meagre uses which some had imagined to belong to it; and he had only to advert to the considerations of revenue involved in its repeal. A very few words would suffice: although some doubt was thrown, in the course of a recent debate, upon the actual amount of two million surplus, which was announced the first night of the Session; yet it was quite clear that there would be more than an ample margin for the revision of this tax, without in any way at the same time prejudicing that calm consideration of all the interests of the country, which his right hon. Friend the Secretary of State for the Home Department claimed the other evening, when the financial statement should be made. But even were that not the case—even were the state of the revenue such as to require the substitution of some other means of taxation on the repeal of this, his case was equally made out. He had shown that it was unjust in principle, and most oppressive in its operation—in short, as Mr. Pitt-truly said, that it was inconsistent with every principle of taxation. And, however pardonable such an impost might be, when the country was surrounded with difficulties and perplexities, it was high time, after thirty-five years of European peace, that these war taxes were swept from the Statute-book. He was well aware of the imperfect manner in which he had performed the duty entrusted to him; but at the same time, so strong was the conviction he entertained of the justice of the case, that he had no fear of the result. He therefore moved for leave to bring in a Bill to repeal the tax.

§ MR. HAYTER
trusted he should stand excused to the House if he abstained upon the present occasion from entering into any discussion with regard to the merits of the question which the noble Lord the Member for Middlesex had been pleased to bring before the House, and that the House would concur with him in the suggestion he would venture to make. It would be in the recollection of the House that the noble Lord (the First Lord of the Treasury) in the course of yesterday 25 stated that his right hon. Friend the Chancellor of the Exchequer was prepared on the 15th to lay his financial statement before the House. Now, the question which the noble Lord had introduced involved in itself directly a diminution of annual income. The noble Lord had stated, and correctly, that the amount received in respect of these certificates was upwards of 120,000l. a year; but he must permit him to say that there were other considerations involved in the discussion of that question, and which would be materially affected by a decision in favour of the Bill. There was a vast variety of personal taxes, for licences and permission to carry on businesses which affected many branches of industry in this country. The decision on this question would have a material, or at any rate some, effect on the question of how far these should be continued. Now, the amount that was received by the revenue in respect of certificates and licences together amounted to more than a million and a half of money. This was too large a consideration to enter upon at the present moment, and while there was an uncertainty with respect to the statement of the Chancellor of the Exchequer. But this was one of the evils of having a surplus, that a thousand interests were putting in their claim for relief. His right hon. Friend the Member for Manchester proposed to abolish at once all the taxes on knowledge. Another hon. Gentleman had given notice for the abolition of the duty on bricks; and the hon. Member for Bridport was desirous that all the duty should be taken off timber. And they had had a Motion proposed which some Gentleman might think had not been decided rightly, which would have absorbed the whole surplus. Under those circumstances he trusted that the noble Lord the Member for Middlesex would postpone his Motion, or rather that the House would permit him to suggest that the wiser and better course would be to adjourn the present debate until after the Chancellor of the Exchequer had been enabled to lay his statement before the House, when all the claims on the surplus could be made at the same time, and those who made out the best case would be successful. He proposed, as an Amendment, that this debate be adjourned till Friday, the 22nd of March.

§ SIR F. THESIGER
said, although he certainly felt it would be almost useless to resist the suggestion of his right hon. 26 Friend, yet he could not help fearing that if the noble Lord yielded to it, his Motion would be indefinitely postponed, and he would never obtain the justice to which those whose interests he had advocated were entitled. He therefore hardly knew under the circumstances what course to adopt; but if the noble Lord desired to press his Motion, he (Sir F. Thesiger) was quite ready to go on and support him by the arguments which occurred to his mind. Yet he could not help thinking the most prudent course for the noble Lord to adopt, would be to accept the suggestion to adjourn the debate till after the financial statement. The right hon. Gentleman the Secretary to the Treasury had very properly stated that a Chancellor of the Exchequer with a surplus was a much more lamentable object than a Chancellor of the Exchequer with a deficit; because a Chancellor of the Exchequer with a deficit had no rival claims for relief to puzzle and perplex him, but had only to go to the attorneys or some other good easy class of people, and lay whatever new taxes he required upon them. Mr. Pitt, in laying on a tax, experienced not so much embarrassment as his successors would probably find in taking one off. Possibly, under the circumstances, the noble Lord would accept the suggestion made by the Secretary to the Treasury and adjourn the debate.

§ LORD R. GROSVENOR
replied, that he should be glad to hear the opinion of independent Members as to the question of adjournment. Private Members were placed under great disadvantages in cases of this kind. This was the third time that he had given notice of the present Motion, and it was the first occasion upon which he had any opportunity of being heard; he should therefore have been better satisfied if a decision could have been come to, but as the hon. and learned Gentleman who spoke last recommended adjournment, he had no alternative but to accept the advice of the hon. and learned Gentleman, whose junior he was upon this occasion, and who must understand better than himself the feelings of the profession, and to acquiesce in the Motion for postponing the debate.

§ MR. COCKBURN
had come down to the House prepared to support the Motion of the noble Lord the Member for Middlesex; but he quite concurred in the impossibility of pressing the Motion after the appeal made by the right hon. Gentleman the Se- 27 cretary of the Treasury. He trusted that in the interval the Government would take the matter into their most serious consideration, for the tax was one of the most unjust and oppressive at present existing. The attorney paid the income tax upon his income, and taxes on consumption—which other people paid; and yet the Government compelled him exclusively to pay an additional sum on account of his profession, from which every other profession, be it that of barrister, physician, clergyman, architect, or any other, was entirely exempt. Therefore, although there might be numerous applicants seeking to divide the surplus which the financial statement would disclose, on the other hand, the Government ought to remember that it was their duty to be just before they were generous, and first make remissions of burdens that were unjust and oppressive, before they came to consider remissions of mere policy and expediency.

§ COLONEL CHATTERTON
was prepared to support the Motion, but he perfectly agreed that it would be better now to defer the discussion.

§ SIR DE L. EVANS
hoped it would go forth that the Motion had not been met by a negative, but that the debate was merely adjourned.