PROPERTY TAX BILL. (Hansard, 9 May 1851)

§ The CHANCELLOR OF The EXCHEQUER
Sir, I wish to make a statement which I certainly would have deferred until after the Amendment of the hon. and gallant Member for Lincoln (Colonel Sibthorp) was moved, were it not my intention to propose a clause which I think will render that Amendment unnecessary. I intend to bring up a clause referring to a question which, to a certain extent, was discussed by the House on a former occasion, namely, giving the right of appeal to the occupying tenant in the event of his profits not being equal to the amount for which he was assessed. When I last addressed the House, I certainly thought and felt that when, in concurrence with the general wish of the House, and the proposal of the hon. Gentleman the Member for Montrose (Mr. Hume), the Motion was acceded to limiting the duration of the Bill to a single year, and providing that a 773 Committee should be appointed to consider the modifications that might be made in case there was any future renewal of the Bill, that it would be renewed in its present shape for this year, and that no alteration or amendment should be made in the measure in the course of the present Session. That seemed to be the general impression when the subject was first broached on the last occasion, and I thought that it would be adhered to. I have, however, received so many representations on the subject of the tax paid by the occupying tenant, that since the time I last addressed the House I have been in communication with the officers of Inland Revenue, for the purpose of ascertaining whether some right of appeal might not be given to those persons without affecting the general principle of the measure. And what I propose to do at present is, to bring up a clause which I think will carry into effect substantially the object, so far as the occupying tenants are concerned, of the hon. and gallant Member for Lincoln, the hon. Member for North Warwickshire (Mr. Spooner), and the hon. Gentleman behind me, the Member for Salisbury (Mr. Chaplin). I think the present arrangement for making the assessment is a beneficial arrangement for the tenant-farmers, and that it would be very unwise on their part to ask us to depart from it; but I do not see the same objection to giving them the same right of appeal that has been conceded to parties who are assessed under Schedule D. I don't propose to put them into Schedule D. I propose that they should be assessed as they are at present, but that at the end of the year, they should be at liberty, if they think it worth while, to appeal against the assessment, and appear before the Commissioners; and if they can then satisfactorily prove that their profits are not equal to the amount for which they have been assessed, they will receive relief to whatever extent they can satisfy the Commissioners they are entitled to it. I am not prepared, however, to make this concession in the cases of gentlemen occupying their own farms. There would be no great difficulty, I apprehend, in any gentleman farming his own park to show that he derived no profit from it. I suppose the experience of other gentlemen coincide with my own on this point; and I do not expect to receive profits under such circumstances. They are not the parties for whom relief is sought; but the parties seeking relief are those who earn a livelihood by the 774 land. I am prepared to give them relief, but not to extend the relief beyond them. The words of the clause are taken from the 133rd clause of the existing Property Tax Bill, with some words taken from former Acts. The clause is to the effect that, if at the end of the year of the assessment under this Act, any person occupying land for the purposes of husbandry only, and obtaining his livelihood principally by it, and assessed for such year for the duty chargeable under Schedule B, shall prove to the satisfaction of the Commissioners that his profits and gains fall short of the sum on which the assessment was made, it shall be lawful for the Commissioners, on an appeal made in three calendar months after the expiration of the year, of which notice shall be given to the surveyor of taxes, to order an allowance to be made on the amount charged proportionate to the deficiency in the profits. I now move that the clause be read a first time.

§ COLONEL SIBTHORP
said, they were told on high authority that there was more joy over one repentant sinner than over ninety-nine righteous. He had to express satisfaction that a measure should have been taken on the part of the Government which would tend to allay the feelings of irritation that had arisen among agriculturists with respect to the mode of assessing them to the property tax. He would not then press his Amendment, but would not be debarred of the opportunity of bringing it forward at a future period if necessary.

§ MR. DISRAELI
said, that he must congratulate his hon. and gallant Friend (Colonel Sibthorp) on attaining the object he had so ably and indefatigably pursued. The Government had assented to the proposition for the relief of the tenant-farmer with great good sense and great good feeling. So far as he (Mr. Disraeli) could catch the language of the clause, it appeared to him to meet the difficulties of the case; and, therefore, he trusted his hon. and gallant Friend would not have any necessity for again bringing the subject before the House. The present was an additional instance in which his hon. and gallant Friend had shown himself the able and successful champion of the interests of the tenant-farmer.

§ MR. CHAPLIN
could not suffer the matter to pass without acknowledging the condescension of the hon. and gallant Member (Colonel Sibthorp) in adopting his (Mr. Chaplin's) words in his amended pro- 775 position. He could not sit down, however, without expressing his entire satisfaction at the manner in which the right hon. Gentleman the Chancellor of the Exchequer had extricated the subject from the difficulties in which it had been entangled. He hoped the hon. Member for Dorsetshire (Mr. Bankes) would now give him (Mr. Chaplin) credit for sincerity in bringing forward his Motion.

MR. ALDERMAN THOMPSON
begged to ask the right hon. Gentleman the Chancellor of the Exchequer if he would allow the persons assessed under Schedule B to compound on the average of the last three years?

§ The CHANCELLOR OF THE EXCHEQUER
The proposition is limited to one year, and there can be no composition for one year.

MR. ALDERMAN THOMPSON
The question I ask is this, will you insert a proviso authorising persons who have compounded for three years to exercise the option of being assessed according to the average of the preceding three years?

§ The CHANCELLOR OF THE EXCHEQUER
The new assessment will be on the average profits of the last three years.

§ MR. MASTERMAN
said, that the object of the question was to ascertain whether parties who had compounded would be required to make any fresh returns, or whether they would not be allowed to pay as when last assessed.

§ The CHANCELLOR OF THE EXCHEQUER
replied that a new assessment would be made under the new Act.

§ MR. SPOONER
wished to ask the right hon. Chancellor of the Exchequer whether he could not insert words to bring the class of yeomen occupying small farms of their own, and living entirely thereby, under the operation of the clause he had proposed. There was another obervation he wished to make. The clause, he knew, was taken from an old Act; but he doubted whether the words were quite correct. It was directed that the appeal should be made to the Commissioners by whom the assessment was made; but that was different from another provision of the Bill by which it was directed that no Commissioner who made the assessment should sit on the appeal cases.

§ The CHANCELLOR OF THE EXCHEQUER
said, his hon. Friend would see that a small yeoman could hardly be considered a person having a farm the rental of which would be 300l. a year. The 776 words he (the Chancellor of the Exchequer) had adopted would provide for the case where the party earned his livelihood by farming.

§ MR. BRIGHT
could not help complimenting the right hon. Chancellor of the Exchequer on the facility with which he had proposed this alteration in the Bill, seeing that within the last few days he had expressed an opinion that the Bill was nearly perfect, and that no valuable alteration could be made in it. He wished to call the attention of the right hon. Gentleman to a point which, he was afraid, was not generally understood. There was a very considerable difference between the mode in which farmers were taxed under this Act, and persons in trade. Both modes were, he believed, somewhat inconvenient to persons who paid the tax; but the difference was this, that farmers were never liable to be surcharged. They were not liable to be charged above a certain sum, which they knew, and which in an ordinary run of years everybody would admit to be a moderate charge upon the ordinary profits of farming. ["No, no!"] He would not go into that question then. But it could be easily shown that, taking the amount of capital a farmer employed on 300 acres of land, he must have made, during thirty years, under the system of protection, a much larger income than that which became chargeable to the income tax. The farmers were not charged on more than 150l., if the rent was not more than 300l. But if in addition to that the occupiers of land were to have a right of appeal, their position was better than that of traders under Schedule D. If a farmer paying a rent of 300l. a year made a profit of 200l. a year, according to the present system he would not be charged on more than 150l. He had a right of appeal if he made less than 150l. a year; but the Government had no appeal against him in case he made more than that sum. He (Mr. Bright), therefore, asked the right hon. Chancellor of the Exchequer to take that matter into his consideration.

§ MR. CHRISTOPHER
said, the hon. Member for Manchester was quite mistaken in supposing that tenants were never surcharged. He had met with two instances of surcharge in his own county (Lincolnshire). Tenants were charged higher than the rents which they actually paid, and encountered much trouble and vexation in their efforts to obtain a reduction.

§ MR. BRIGHT
thought the surcharges 777 must have arisen from some mistake as to profit.

§ MR. J. E. DENISON
said, when this arrangement was originally proposed, as matters then stood it was a favourable one to the occupying tenant; but since that time there had been an interference by law with that state of things. That change had materially interfered with the immediate profits of the occupying tenant, and therefore the Chancellor of the Exchequer proposed, for this year, to give this right of appeal under the circumstances which he had stated. He (Mr. J. E. Denison) thought the proposition was a just and equitable one, and that his right hon. Friend the Chancellor of the Exchequer had not rendered himself liable to the charge of unfair and partial dealing with which he had been taunted by the hon. Member for Manchester (Mr. Bright).

§ SIR JOHN TROLLOPE
wished to explain, that in cases where the tenant-farmer paid less than the Commissioners thought he should be assessed at for income tax, they had the right of putting their own value on those lands, and charging him, not according to his rent, but according to that ascertained value. Such circumstances did occur when the tax was first laid on, because there might be cases in which the tenant paid less for the lands he occupied than they were worth. But, thanks to the hon. Member for Manchester and his friends, the advocates of free trade, such instances were now not only infrequent, but it was to be feared absolutely impossible.

§ MR. BOOKER
said, the hon. Member for Manchester (Mr. Bright) seemed to think it was still possible for the farmers to make exorbitant profits upon their capital. Take, however, as an example, a farmer with 300 acres of land, and suppose that he employed on an average 8l. on the cultivation of each acre, that would make in the whole 2,400l. employed by him. At ordinary times a fair rate of interest, namely, five per cent, upon such a capital, ought to yield him 120l. a year—upon which sum the assessment ought to be made. A tax of 7d. in the pound on that amount would be about 3l.; but the farmer subject to income tax paid about 4l. 10s. a year. But it was known how the capital of the farmer had been wasted, and few could say that 8l. per acre was the amount of capital invested in their farms. It would be nearer the mark to say 5l., and instead of 5 per cent, to estimate the return at 2½ per cent. 778 At that rate a capital of 1,500l. would yield only 37l. 10s. a year, on which the assessment ought to be made.

§ MR. HENLEY
was sure the hon. Member for Manchester (Mr. Bright) would be glad to be put right on this question. If they took the case of a farmer who paid 500l. a year rent, the Commissioners might be in a position to prove that the land he occupied was worth 600l. a year. In that event, the farmer was not only called on to pay 3½d. in the pound, under Schedule B, upon 500l. as his rent, but 7d. in the pound under Schedule A on the additional 100l. with which he was surcharged. In other words, he paid not only on the excess under Schedule B, but also on the excess under Schedule A.

§ MR. ALDERMAN SIDNEY
wished to press on the consideration of the right hon. Chancellor of the Exchequer the necessity of a more careful mode of collecting the tax, for at present it frequently happened that the taxpayers had to make good the defalcations of collectors.

§ The CHANCELLOR OF THE EXCHEQUER
must oppose the Motion; he asserted that the officers of the Army and Navy ought to be included with other public officers in the same category.

§ The CHANCELLOR OF THE EXCHEQUER
said, that officers belonging to the Army permanently resident in Ireland were not obliged to pay the income tax; but that officers who might be quartered there in a temporary manner had to pay it. He now proposed to leave out the two last clauses of the Bill, which were inserted under the supposition that the tax would be continued for three years.

§ SIR HENRY WILLOUGHBY
wished to call the attention of the House to the necessity of providing some effectual custody of the papers relating to the property tax returns. The original Property Tax Act provided that official persons should not disclose the particulars which came to their knowledge in reference to the assessment and collection of the tax; but there was 779 no provision for the effectual and safe custody of papers. It had come to his knowledge that in some of the towns in the kingdom the papers relating to the property and income tax had been sold for waste paper. In one city in particular a barrowfull of these papers had been so disposed of, and the consequence had been that the affairs of the principal residents had become matters of notoriety, and some most injurious disclosures took place. When the property tax expired in 1815, the papers connected with it were considered of so much importance that they were delivered over to be burnt by persons specially employed for the purpose.

§ The CHANCELLOR OF THE EXCHEQUER
said, it was difficult to make that a matter of enactment; it must be a matter of discretion. He could only say, the strictest instructions had been given to observe all possible secrecy with respect to the contents of the returns. With regard to the cases to which his hon. Friend (Sir Henry Willoughby) had alluded, he did not doubt his hon. Friend's accuracy; but the House did not usually take for granted that all such stories were well founded, for a strict inquiry often proved them to be otherwise. A complaint had been made by Lord Brougham in the House of Lords with respect to the negligent keeping of these papers; but upon inquiry it turned out that there was no ground for the complaint, and that the papers in question contained nothing that might not have been posted at Charing Cross.

§ MR. REYNOLDS
said, it was not his intention to interfere in this matter. His object was to call the attention of the House, and particularly the attention of the right hon. Gentleman the Chancellor of the Exchequer, to a Bill which he held in his hand, which might be considered part and parcel of the income tax—he meant the Stamp Duties Assimilation Bill. The House had decided that the property and income tax for Great Britain should be confined to one year, and it also decided that this Bill, which he called the income tax in Ireland, shall continue for a period of three years. His object in addressing the House was to ask the right hon. Chancellor of the Exchequer whether he considered it fair play towards Ireland to impose a tax of 140,000l. per annum for three years, in lieu of the property and income tax for one year? It was distinctly stated by the late Sir Robert Peel that this Bill was to be a substitute, as far as Ireland 780 was concerned, for the non-extension of the property tax to that country.

§ The CHANCELLOR OF THE EXCHEQUER
said, the Stamp Duties Assimilation Bill, which was limited to three years, had been sent up to the Lords before that House had come to a determination to confine the income tax to one year. It was, however, his intention to assimilate the two Bills in respect to the limitation to one year, though he did not think Ireland had a bad bargain in reference to the income tax.

§ MR. GRATTAN
would tell the Chancellor of the Exchequer and every Member on the Treasury bench, that if he at tempted to impose an income tax on Ireland, he must levy it at the point of the bayonet. He might as well impose such a tax on Siberia as upon Ireland.