INCOME TAX BILL.

HC Deb 02 June 1853 vol 127 cc1037-61

On the Motion that the House resolve itself into Committee on the Income Tax Bill,

MR. FRESHFIELD

said, he must appeal to the right hon. Chancellor of the Exchequer to reconsider his determination, and to allow lands and houses to be assessed to the tax upon their net, and not upon their gross, value.

The CHANCELLOR OF THE EXCHEQUER

said, he could not undertake to comply with the request of the hon. Member. The House had had fully in its view the whole of this question during the debates on the income tax. It had been well understood at the outset of those debates that the mode in which lands and houses were valued at the present moment, unquestionably imposed on the classes charged for income tax under Schedule A a tax higher than 7d. in the pound; and it had been deliberately considered by the House whether it would be desirable to re-enact the tax with that undoubted inequality, or whether, on the other hand, it would be better to open up the whole of the question involving the comparative claims of different interests. The House had come to a deliberate conclusion on the subject, on the Motion of the hon. Member for Hertfordshire (Sir E. B. Lytton), and afterwards on the Motion of the hon. Member for Lambeth (Mr. W. Williams). On both occasions the House had been of opinion that it would be better to retain the tax as it was; and that being so, he could not promise that the Government would now reopen so important a question.

House in Committee; Mr. Bouverie in the chair.

On Clause 9.

MR. FREWEN

said, that he had an Amendment to move upon this clause, the object of which could be briefly explained. Under the existing law, seven Commissioners were elected both by the Commissioners of the land tax, and the magistrates in each division of a county, for the purpose of hearing appeals against the assessments to the income tax; and out of the whole seven Commissioners it was frequently difficult to get a sufficient number to attend for the purpose of transacting the business. Indeed, instances sometimes occurred, when only two Commissioners were present to decide appeals. To obviate this objection, therefore, he proposed that the magistrates of each division should be ex officio Commissioners of the property tax as well as Commissioners of land tax and assessed taxes, which latter offices magistrates filled at present. He would therefore beg to move, to add to the words of the clause designating the persons who should hold the office of Income Tax Commissioners, "and all Justices of the Peace for any county, riding, or parts or division of a county or liberty."

The CHANCELLOR OF THE EXCHEQUER

said, it had been already understood that the Bill should be recommitted for the purpose of giving hon. Gentlemen who had proposed to introduce certain clauses with respect to Ireland a full opportunity of discussing them. He should therefore be brief on the present occasion; but he thought it would not be expedient to adopt this Amendment for several reasons. In the first place, it would be a very great innovation, and he doubted whether it would be any improvement upon the existing law. The law with respect to the Commissioners had hitherto proceeded upon the principle that the functions to be discharged by the general Commissioners of income tax, being of a delicate and confidential nature in many cases, ought not to be entrusted to the Land Tax Commissioners generally, but to a select body chosen from among them. Now, the hon. Gentleman proposed to depart from that principle, but without effectually changing the law so as to give his proposition a general application, for he restricted its application to a particular manner, and with reference to a particular class. He (the Chancellor of the Exchequer), had received many representations complaining of the unsatisfactory operation of the law connected with the present machinery; but he had heard of no instance in which the working of the Act had been found fault with through the defective number of Commissioners who attended to transact the business. Again, he was not prepared to assent to the doctrine that any person who was fit to be a county magistrate, was necessarily fit also to be entrusted with the functions of Income Tax Commissioner, and he thought it better to leave the appointment of these Commissioners to the Land Tax Commissioners generally, as the constituent body from whom they should be chosen. Another reason why the Amendment was objectionable was, that very great jealousies existed already in certain trading districts with respect to the mode in which the appeals were determined; and he was sure that these local jealousies would only be aggravated under this proposition. Believing, in short, that this Amendment would render the working of the Act more difficult, vexatious, and unsatisfactory than it was at present, he hoped that the Committee would reject it.

MR. FREWEN

said that he believed his Amendment would effect a very necessary and desirable alteration in the rural districts in particular; but he would not press it if the sense of the Committee was against it.

Amendment withdrawn; Clause agreed to.

Clause 13 (Duties under Schedule A, in Ireland, to be assessed on rateable hereditaments, according to the valuations under the Poor Relief Acts.—On whom assessments to be made).

The CHANCELLOR OF THE EXCHEQUER

said, he begged to call the attention of the Committee to an important alteration, or rather addition, which he now proposed to make upon the suggestion of an hon. Gentleman who had given notice of a proviso, and furnished him with a copy of it. The proviso of the hon. Gentleman (Mr. Seymour Fitzgerald) was to the effect that, whenever any lessor or landlord of lands in Ireland, subject to duty under Schedule A of this Act, shall have paid the duty chargeable by this Act in respect of any rent not received by him at the time of such payment, and which has been subsequently lost by reason of the bankruptcy, insolvency, or absconding of the tenant by whom such rent was payable, then, and in that case, it shall be lawful for the said lessor or landlord to deduct from and set off against the duties payable by him, in the year next following, the full amount of the duties paid by him in respect of the rent so lost. He (the Chancellor of the Exchequer) had prepared a clause based upon precisely the same principle, and designed to carry out the same object which the hon. Gentleman's Amendment had in view; although he thought it would be inconvenient to adopt the exact words of the hon. Gentleman, because the accounts of the tax collectors must be almost hopelessly complicated by the carrying forward of claims for abatement from half year to half year. His own proposition, therefore, was to the effect that if any landlord or lessor of any tenement or hereditament in Ireland, assesed under Schedule A, should have paid the amount of duty chargeable upon him, and it should afterwards be proved to the satisfaction of the Commissioners for Special Purposes that the rent due in respect of such tenement or hereditament, or any portion thereof, was wholly and irrecoverably lost, by reason of the bankruptcy, insolvency, or absconding of the tenant, he should be entitled to the repayment of the tax upon so much of his rent as was so lost, provided he made application for the same within six months. The principle he proposed to apply in this case was now systematically and habitually applied in England in reference to house property. In case of an absenting tenant, when it was shown that the goods of the tenant had been removed from the premises, and that the landlord had no means of recovering his rent, the custom and practice of the Revenue Board was not to exact the tax from the landlord, although, in point of law, he was liable to it. He had already stated the general reasons which had led the Government to think that on the whole the most just and effective mode would be to pass by the occupier, as far as regarded agricultural tenants, and as far as regarded small tenants. The general rule would be to go against the lessor or the rentowner for the tax.

MR. I. BUTT

objected to the alterations proposed by the right hon. Gentleman, who proposed now to legislate for the owners of land in Ireland in a manner entirely different from the legislation adopted for the corresponding class in England. The right hon. Gentleman now proposed that it should be at the discretion of the Commissioners whether the tax should be assessed upon the landlord or the tenant. They might, and he was told by the Chancellor of the Exchequer they would, as a general rule, assess the landlord; therefore the Irish landowner must pay the income tax whether he received his rent or not; he must pay it in the greater number of instances before he received his income, in many instances upon income which he would never receive. In the case of the English landowner the tenant paid the tax in the first instance; he deducted it from his rent, so that the landlord only knew of the tax on a deduction from income actually received. In Ireland he must pay it in the first instance: this he would feel as an oppressive advance, and an advance on account of income that might never be paid; and they made this difference in favour of the landowner in England, where rents were punctually paid, and against the landowner in Ireland, where they were almost always in arrear. He (Mr. Butt) asked only that the Irish landowner should be placed in the same position as the English. In England he found the landlord was assessed in every case in which the holding was under the annual value of 10l. There might be a difference in the circumstances of the country; but he was certain he made ample allowance for all of these, if he substituted in Ireland a fifteen pound for a ten pound annual value. He, therefore, proposed that in Ireland, in all cases of a rating above 15l. the tenant should in the first instance be assessed; in all cases under 15l. the landlord. The farmer of a holding rated at 15l. was a man of a certain amount of independence—one from whom there would be no difficulty in collecting the tax, and one who would feel it no inconvenience to advance on account of his rent 7s. 6d. whenever he was called on. He thought this proposal would apply substantially the same rule to Ireland and England, would create no inconvenience in the collection of the revenue, and would impose no hardship upon the tenantry; and, on the other hand, would protect the proprietors from the most grievous oppression. Now, what was the proposal of the Chancellor of the Exchequer? To leave it in each case to the discretion of an exciseman whether he was to assess the ton-ant or to pass him by and assess his landlord! This was a discretion to be exercised in each individual case—not even to establish any general rule—not even to make any regulation for a district—but in the case of each particular estate, nay, of each particular tenant upon each estate, to determine at his own will and pleasure whether the tax was, in the first instance, to fall upon the tenant or upon the landlord! He (Mr. Butt) strongly protested against giving such a power to officials appointed by the Crown; he denounced it as utterly unconstitutional to leave it to any official of the Crown to determine from whom a tax should be levied. No Minister would dare to propose such a measure for England. Yet, in England, the officers administering the tax were to be appointed by local authorities; in Ireland, they were to be officers of excise—they gave no such power to the English officials. In Ireland they proposed to give it to excisemen, and yet they had argued the question of an Irish income tax as if the proposal was to extend the English income tax to Ireland. They now avowed the tax they inflicted on Ireland to be one different in every principle of its administration. He never could consent that the property of Ireland should be thus left at the mercy of the Excise. He must remind hon. Gentlemen who assumed to be the special guardians of the interests of the tenant, that if this was a landlord's question as to one class; as to another—and the largest class—it was a tenant's question too. The Chancellor of the Exchequer gave the tax collector the power, if he thought fit, of resorting to the tenants of small holdings, who in England never could be subject to the tax. In England, the tenant of a small holding was to be absolutely protected: in Ireland, only if the tax collector pleased. He (Mr. Butt) was not prepared to subject this class, at the caprice of the taxman, to all the inconveniences, and in their case the oppression, that would attend the collection of the tax. These were the class, and the only class, of tenants whom the collection of the tax could harass or oppress. He asked those who called themselves the friends of the tenants, were they prepared to vote this arbitrary power of extorting the tax from the lowest and the poorest occupier? He asked them to reflect in what cases this power would be exercised. Manifestly in the very cases in which it would be most oppressive. Whenever there was a difficulty in getting at the landlord, then the tenantry would be assessed. In the case of tenements in large towns, where the landlord might be unknown; in cases where the landlord was an absentee and beyond the reach of process; in cases where he was embarassed, and no mark for the tax; in the very cases in which you might expect a wretched tenantry—in all these cases the tax would be collected from them. The arrangement he proposed was infinitely better for the tenantry as a whole. Let the tenant be assessed in every case over 15l., and in no case under it. If it protected the landlord in the one case, it protected the tenant in the other. It would apply substantially the same rule to England and Ireland; it would place the Irish landowner as to this tax, in nearly the same position as the English one; it would extend the same protection to the poorer tenantry in Ireland which the corresponding class in England enjoyed; and it would get rid of the insulting proposal of leaving it to an exciseman to regulate between Irish gentlemen and their tenants the mode of the collection of this tax.

Amendment proposed— In page 8, line 40, to leave out the words, shall be made upon the landlord or immediate lessor of such tenements or rateable hereditaments, or, if it shall appear to the Commissioners for Special Purposes to be necessary or proper, the said assessment shall be made upon such person as the rate for the relief of the Poor shall be made upon in respect of any such property, under the provisions of the Acts in that behalf,' in order to insert the words 'in every case in which the said annual value shall amount to fifteen pounds and upwards, shall be made upon such person as the rate for the relief of the Poor shall be made upon in respect of such property, under the provisions of the Acts in that behalf, and in all other cases upon the landlord or immediate lessor of such tenements or rateable hereditaments' instead thereof.

MR. FITZSTEPHBN FRENCH

said, he must claim precedence for an Amendment, omitting the words "in Ireland" from the clause altogether. The result of it, as it stood now, would he, to render it incumbent on the landlord to demand his rent as soon as it became due, instead of leaving "the hanging gale" over, as was the practice in Ireland. He doubted if it would be advantageous to the tenant, whom it was intended to assist; but his chief objection to it was that it was a departure from the principle of identity of legislation. That principle was only insisted on when it was necessary to tax Ireland. It was exceedingly disheartening, when he was addressing a few observations to the Chancellor of the Exchequer, that the right hon. Gentleman should select that time for conversation with the hon. Member, though he supposed there was indeed but little use arguing the question. He asked the right hon. Gentleman, if it was advantageous to tax the landlords in the first instance, why he did not extend the principle to this country? He believed the object of the Bill was to force the landlords to drive out the small occupiers. It was one which had been sedulously persevered in by the party in power, and a great portion of the exodus which had taken place was the result. But that was not sufficient for them in their anxiety to get rid of the Catholic and Celtic population of Ireland, which was announced in the leading journal of Europe. In the justice of England he had no confidence, unless it was identical with her interest, and they could only obtain that identity in Ireland by refusing to accept any legislation which was not identical with that by which the interests of England were preserved and governed.

MR. MAGUIRE

said, he objected to the clause, and he wished to know whether it would not be just as easy to come on the landlord of the occupier of 15l. a year, as on the landlord of the occupier of 10l. a year? It was as easy to get at the landlord of the tenant of a house, as at the landlord of a tenant of land. If it was just to except the humbler classes of tenants in England, the circumstances of Ireland rendered the same class in Ireland even more deserving of consideration.

MR. EVELYN DENISON

said, he thought the reason given by the hon. Member for Roscommon (Mr. French) for the Motion he had submitted, was the most extraordinary he had ever heard. The hon. Member entirely distrusted and had no confidence in the justice of England, and said the only thing he could place any confidence in was identity of taxation in Ireland with England; whereupon, to carry out this identity of taxation, he proposed to omit the words "in Ireland" from the clause.

MR. FITZSTEPHEN FRENCH

said, the hon. Member for Malton had not the plea of inexperience for misstating or misrepresenting what fell from any other hon. Gentleman. In proposing the omission of the words alluded to, his (Mr. French's) object was to render the clause applicable to the United Kingdom. He had no desire to exempt Ireland from the operation of the Bill, but he did wish to make the clause a general one.

MR. F. SCULLY

said, the proposition of the hon. and learned Member for Youghal (Mr. I. Butt) was one of which he could not approve. He did not sec the justice of asking the tenant, and particularly the Irish tenant, to pay for his landlord. From the census and agricultural returns of 1851, it appeared that the number of small occupiers in that year was nearly 500,000; whereas the number of occupying tenants who had holdings to the extent of 200 acres, who would come under the operation of this Bill, would not amount to more than 7,000 or 8,000. From the statement of the Chancellor of the Exchequer on previous occasions, he found that this Bill, and this clause in particular, was altered with the sole object of putting the tax upon the landlord, in the first instance, and he was of opinion that it would be better to leave the clause as it stood.

MR. KIRK

said, he was very much obliged to the Chancellor of the Exchequer for the alteration he had introduced into this clause, by which the injustice originally contemplated was remedied. He should decidedly oppose the Motion of the hon. and learned Member for Youghal, and would cordially support the clause as amended.

MR. LUCAS

said, he also felt obliged to the right hon. Gentleman the Chancellor of the Exchequer in the main, for the clause be had introduced; but he wished to ask one question with reference to its operation, which he did not perfectly understand. The object of the clause, so far as he could understand it, was to exempt the occupier, in all cases in which it was not necessary for the purposes of raising the tax, from paying the landlord's share. It was, however, left to the discretion of the Commissioners as to what cases should not be exempted; and he wished to know upon what grounds the Commissioners were to regulate these exemptions?

The CHANCELLOR OF THE EXCHEQUER

said, the hon. Gentleman had stated very fairly and properly the object of the clause, subject to the single reservation of the case of occupiers of messuages of a certain value. The case of occupiers of messuages was materially different from that of occupiers of land. In regard to messuages, a different standard was fixed by the poor-law rating in towns as to the point at which the occupier became exempt, and the landlord became liable to assessment, and he bad reserved under this Bill those cases which might require some consideration from peculiar circumstances, in particular localities, in regard to the point, at which the tax ought to be taken from the occupier. There was certainly a class of tenants in messuages in whose cases the tax ought to be taken from the occupiers; but in regard to lands he did not think it would be safe to take the tax from the occupier, and the occupier only, because the Government might often have great difficulty in getting at the other party. But the case did not he between the occupier on the one side, and the head landlord on the other. The person whom the Bill proposed to substitute for the occupier was not the head landlord, but the immediate lessor; and as the immediate lessor was a person whom they might often have great difficulty in reaching, this reservation was made to which the hon. Gentleman had called attention.

MR. MAGUIRE

said, he wished for some further explanation with regard to towns, and would like to know when the right hon. Gentleman would be prepared to say what class of occupiers were to be exempt?

The CHANCELLOR OF THE EXCHEQUER

said, that, from the nature of the circumstances, it was impossible to arrive at any definite test generally applicable. Whether the landlord or the tenant would be assessed, must be left in many cases to the Commissioners to decide, though he believed the most practicable mode would be to assess the occupier.

MR. MAGUIRE

said, he would beg to impress upon the right hon. Gentleman the fact that there was scarcely an occupier rated to the poor, from 8l., 10l., to 15l. in Ireland, to whom the payment of the tax in the first instance would not be a great and harassing burden.

COLONEL GREVILLE

said, that rents in Ireland were paid in many parts of the country but once a year, and, therefore, in many instances, they would be making the landlords pay upon incomes which they had not received.

MR. FITZSTEPHEN FRENCH

said, he would withdraw his Amendment.

MR. I. BUTT

said, that the new clause proposed by the Chancellor of the Exchequer would leave it in all cases to the discretion of the taxing officers whether they would assess the tenant or the landlord. Now, according to the English law, the tenant must be assessed if his rent were over 10l., but could in no case be assessed if it were under that sum. The object of his Amendment was to take away all discretion from the Government officers, and to enact that the tenant in Ireland should be assessed in all cases where his rent was above 15l., and that he should never be assessed when it was under that sum.

MR. M'MAHON

said, he hoped that the Chancellor of the Exchequer would resist the Amendment, for there was high authority to show that the landlord ought to pay all the taxes to which the land was liable.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided:—Ayes 170; Noes 61: Majority 109.

MR. CAIRNS

said, he believed the Amendment he now begged to propose would alleviate a great hardship in the mode of assessment proposed by the right hon. Chancellor of the Exchequer, without diminishing the amount received under the tax, or without altering the persons upon whom the burden was to be imposed. The Chancellor of the Exchequer had on a former evening stated that the tax was to be paid irrespective of the receipt of rent, because, as the owner of the rent was armed by the law with sufficient power to recover it, it was to be attributed to his own fault if he did not. If that answer had been given by a person conversant with the state of the relations between landlord and tenant in Ireland, he should have been entitled to characterise it as a bold and inconsiderate statement. But he acquitted the right hon. Gentleman of any other error than that of looking to the theory of the matter rather than to the practice in Ireland. He proposed, instead of assuming that every landowner in Ireland could recover his rent on the day on which it was due, to enact that if any owner of land in Ireland thought it would be an unsafe thing for him to pay his tax in advance, he should be allowed to state his unwillingness to do so in twenty days after the assessment had been delivered, and to offer to give a return of the actual receipts of the year last past; and that he should then pay upon those actual receipts, from which no deduction should be made, except for the half of the poor-rate, which the landlord in Ireland was obliged to pay. The Chancellor of the Exchequer said, indeed, that this was met by subsequent clauses, which enabled the landlord to demand a return of the tax if the rent was not paid within six months after it was due, and the tenant was bankrupt, insolvent, or had absconded. But was he not aware that no tenant in Ireland expected to be asked for his rent until six months after it was due? The result of the proposed clauses as they now stood would be to inflict the greatest evil upon the occupiers of land, by making it a matter of the greatest importance to the landlord to enforce the rent as soon as possible, and to take the most stringent means to ascertain whether the tenant could pay, in order that he might either recover his rent, or satisfy the Commissioners that it was irrecoverable. Then how was it to be determined whether a small tenant in Ireland was bankrupt or insolvent? These words were a mere mockery, as applied to that class of persons. As for a tenant "absconding," every one knew that the great annoyance in the management of landed property in Ireland was, that the tenants would not abscond. They stayed in possession, and would neither pay their rent nor leave the land. Under these circumstances he thought that the proposition made by the Chancellor of the Exchequer on this point was quite illusory, and it was on these grounds he had brought the Amendment forward, not from any personal interest, but from a wish of exempting a class of persons from a hardship which seemed to him gratuitous and unnecessary.

Amendment proposed— To add at the end of the Clause, the words 'Provided always, That any landlord or immediate lessor of any tenements or hereditaments in Ireland, charged with Duties under Schedule A of this Act, may, within twenty days after notice of such charge, by writing under the hand of himself or his agent, delivered to the officer making such charge, elect to be assessed in respect of such tenements or hereditaments upon his actual receipts, and thereupon the Duties shall be charged on such landlord or immediate lessor, computed on a sum not less than the amount actually received by him in respect of such tenements and hereditaments, within the year ending on the preceding fifth day of April.'

The CHANCELLOR OF THE EXCHEQUER

said, that the hon. Gentleman who had just sat down had handled the concession which he proposed to make in a different way from his hon. Friends on the lower benches. He must say that the concession was not made to the necessity of the case, but was owing rather to the indulgence with which he desired to deal with the case, and with some recollection in his mind of the disposition which existed amongst the great bulk of the Members of that House to meet the demands that were advanced by Irish Members. With respect to the Amendment which he proposed to make in regard to bankrupt and absconding tenants in Ireland, he did not hesitate to express his apprehensions that Gentlemen connected with land in England would complain of his making such concessions in favour of the Irish landlords, and would ask to be placed on the same footing. [An Hon. MEMBER: Give us the same law as you have in England.] All he could say was, that a great number of Irish Members had made representations to the Government that valuation should be the basis of those proceedings. [An Hon. MEMBER of the Opposition: Not on this side.] The hon. Gentleman should know the rules of the House better than to make those interruptions. And a provision was introduced in the Bill to enable those persons who found they were aggrieved by the valuation, to show that the annual value was less than the valuation. That was a provision to which there was nothing analogous in England. The hon. Gentleman (Mr. Cairns) said the concession with respect to bankrupt and absconding tenants was illusory. He did not think it would be thought illusory if it were proposed with respect to Ireland; but with regard to Ireland every concession appeared to be thought illusory by some Gentlemen. He now came to consider the proposal of the hon. Gentleman opposite, and he had never known a proposal made to that House during the discussion on the income tax which appeared to him to be open to more fundamental objections. If there were any evil greater than another, it was that which was called self-assessment. If there was one reason more than another which disinclined people to the income tax, it was because they could not get rid of that tremendous evil of the income tax, self-assessment. At the commencement, when self-assessment was generally resorted to, they only levied one-half of the amount which the tax might have given. They had now got rid of it except in Schedule D; but here was an hon. Gentleman proposing to introduce it into Schedule A, thereby leading to fraud and demoralisation in every form, and introducing a most invidious feature, because it would not apply to the owners of land universally, but merely to the owners of land in Ireland. But suppose the hon. Gentleman had proposed it universally; let it not be thought that on that ground it would meet with a favourable reception from him. He would say, on the contrary, that having found a certain mode of levying the tax mischievous in every way, from the fraud it produced, they were not going to adopt that mode of levying that tax again. The hon. Gentleman had objected to the measure as being likely to inflict hardship upon the occupier of land by causing him to be called upon for punctual payment of his rent; but if it had that effect, he could only say that it would, in his opinion, place the relation between landlord and tenant on a better footing, and, so far from considering that an objection, he thought it an argument much in favour of the measure. The hon. Gentleman complained that the landlord sometimes did not receive his rent, and yet had to pay the tax; but he would ask him if it did not sometimes happen that a tradesman made bad debts, and yet had to pay the tax; and why should the landlord be placed on a different footing from the tradesman? The hon. Gentleman said there was a hanging gale in Ireland; but was there no such analogous thing in England? Of course there was. But the question was, were the necessary expenses of the State to be raised by a tax which should be a primary charge upon the man's income, or was it a charge that must be postponed until every local and personal demand was fully satisfied? The hon. Gentleman spoke as if the system of arrears in Ireland was a very good system; but he (the Chancellor of the Exchequer) conceived that if this proposition tended to the punctual levying of rent, so far from considering it an objection to the clause, it should be deemed a recommendation of it; for nothing was so mischievous to the tenant as that system of long arrears. The principle they proceeded on was this, that a year's rent was received during the year; and he protested against the Amendment, as aiming at the establishment of a system entirely exceptional in favour of a particular class, and tending to bring them back into all the worst abuses that had ever prevailed in the system. The hon. Gentleman proposed by his Amendment to deduct any sum paid by the lessor during the year for poor-rate of such hereditaments or tenements; but the landlord did not pay the poor-rate—

MR. CAIRNS

He pays one half of it.

The CHANCELLOR OF THE EXCHEQUER

Is it not paid in the first instance by the tenant?

MR. CAIRNS

It is taken from the tenant in the first instance, but he only deducts one-half from the landlord.

The CHANCELLOR OF THE EXCHEQUER

The tenant paid it in the first instance, and the landlord did not receive it. He was to be charged on what he actually received; but the hon. Gentleman proposed that the landlord should deduct the amount of the poor-rate which he had never received. Suppose the landlord had 1,100l. a year, the sum payable for poor-rate was 100l., the landlord therefore got 1,000l.; but he said he was not to be taxed upon 1,000l., but should deduct the poor-rate which had been already deducted. He protested against an Amendment of such a character, which aimed at the establishment of a system tending to introduce all the evils which had ever attended the operation of the tax. He would oppose the proviso on the broad ground that it introduced, without any necessity, the obnoxious principle of self assessment, and that in a form much more objectionable and exceptional than any in which it had before existed.

SIR ARTHUR BROOKE

thought it was hopeless to expect any justice from that House, so far as Irish proprietors were concerned, after the vote that had taken place upon the Motion of the hon. and learned Member for Youghal (Mr. I. Butt), which had been opposed by a very large majority of English Members. He considered that the income tax ought to be levied upon the ordinary valuation of property, and not upon the poor-law valuation, which was most defective and unsatisfactory. He should support the Amendment, because he believed that a fairer proposition had never been presented to the House. The measure of the right hon. Gentleman the Chancellor of the Exchequer might be satisfactory to some of his supporters below the gangway, the Brigade; but if he appealed to the Irish Members on (Sir A. Brooke's) side of the House, they would give an opinion very adverse to it.

MR. F. SCULLY

said, he should support the measure as an independent Member of the House, and he thanked the right hon. Gentleman for the alteration he had made; and if he had no other reason for thanking him, he would do so on the ground that the measure was objected to by the hon. Gentleman opposite. As the clause stood at present, landlords would have to pay the income tax whether they received their rents or not, and he thought the proviso would have the effect of inducing landlords to reduce their rents, which would, in that event, be more punctually paid. He might remark, that landlords would be called upon to pay the income tax in March, or April, while they would not, in many cases, receive the rents upon which the tax was paid until the months of November or December following, and he thought, therefore, it might be arranged that the Commissioners should not apply for the tax until the period of the year when the rents were paid.

MR. H. HERBERT

said, that, though opposed to the clause as it stood, he was inclined to make every possible allowance for any misappreciation of the state of Irish property which his right hon. Friend the Chancellor of the Exchequer had been guilty of. He confessed, however, the right hon. Gentleman did not seem to show himself so practically acquainted with the management of Irish estates as it was to be wished; for when he attempted to draw an analogy betwen the circumstances of English and Irish property, he fell into an error, which very much depreciated the estimate to be formed of his plan. He regarded the proposal of the hon. Member for Belfast (Mr. Cairns), to be a necessary corollary to the imposition of the income tax upon Ireland. For the fact was, there was no such thing as a half-yearly collection of rents in Ireland; they were collected just as one could get them, all the year round. Neither was there any such thing as audit days, as was the case in England; and instead of 2½ per cent, Irish proprietors had to pay their agents 5 per cent upon the rents coming in; while in this country and in Scotland, agents received the lesser remuneration. [The CHANCELLOR of the EXCHEQUER dissented.] He (Mr. Herbert) could speak from experience, for he knew many properties in Scotland where the agents only received 2½ per cent. Nor had hon. Gentlemen any clear idea of what was meant by "absconding tenants" in Ireland. That term did not imply tenants who ran away. [Laughter.] His words might produce a smile, but still such was the case; for the term rather applied to such occupants of land as removed all their produce and cattle from off the farm, leaving some one in occupation who was utterly unable to meet the demands of the landlord. He therefore believed the Amendment to be quite just and fair, and should accordingly support it.

MR. NAPIER

said, he believed that in dealing with Ireland their purpose ought to be to look rather to the collateral, than to the direct, effect of any particular measure. He could not help feeling that it was rather an Irish practice to charge income tax upon incomes never received. Nor was it, he must say, a case of self-assessment at all—the proposition of his hon. Friend (Mr. Cairns), was in noways open to any such objection.

MR. FORTESCUE

said, that having supported the proposition that was favourable to the tenant, and having now to deal with a question which had reference solely to the interest of the landlord, he should from a sense of justice and equity of the case give his vote for the proposal of the hon. Member for Belfast.

MR. MACARTNEY

said, that in Ireland three-fourths of the rents did not exceed 12l., while in England only one-fifteenth was under 12l.; and therefore it was not right to take England as an example when laying down a principle for the collection of this tax in Ireland. He would beg to call the attention of the House to a case where an estate being in the Court of Chancery, the tenant did not pay the rent until two years were due; and he would ask how, in such a case, the tax was to be levied? Was it to be demanded from the Court of Chancery, where there were no funds to the credit of the estate, or was it from the estate it was to be levied? At the end of eighteen months or two years, a tenant might come before the Court to ask for a reduction of rent, and the rent might be reduced while the tax was levied on the high rent. That would be the case with a number of estates in Ireland at the present moment; and in other cases, the rent days in the south being the 25th of March, and 29th of September, and in the north the 1st of May and 1st of November, it would be found very difficult to levy the rate on the 5th of April.

SIR DENHAM NORREYS

said, that when he voted for an income tax, he voted for a tax that was to be imposed on every man's income, which he conceived to be the average amount of receipts; but to tax it upon the hypothesis of what that property might be would be a grievous injustice.

LORD NAAS

said, that the English landlord merely paid the income tax on his actual receipts; and the object of this Amendment was to enable the Irish landlord to pay only as much in respect of his income as the English landlord paid in regard to his, and no more. Independent of the inconvenience of the tax, he believed that the proposition of the right hon. Gentleman the Chancellor of the Exchequer would have a very severe and harsh effect on the Irish landlords. He thought the Members of that House who set themselves up to be the true friends of the Irish tenantry were perhaps inflicting as great a hardship upon that class as was ever inflicted upon them by the original Irish Poor Law Act, which had led to such disastrous consequences.

VISCOUNT PALMERSTON

said, his hon. Friend behind him (Mr. H. Herbert) had intimated that his (Viscount Palmerston's) right hon. Friend (the Chancellor of the Exchequer) was not deeply acquainted with the management of land in Ireland; but the noble Lord who had just addressed the House had shown himself very imperfectly acquainted with the details of land in England. The noble Lord had stated that ID England landlords paid income tax only on the rent they received. The fact was, that in England each tenant paid the landlord's income tax upon the rent which the tenant was bound to pay, deducting- such tax when he came to settle with the landlord; but it did not follow that the landlord received the rent. The landlord had to get the rent as he could, and when he could. In England the landlord paid the tax only on what he ought to receive, but it did not follow that he did receive it. Moreover, if the tenant absconded, he meant in the English sense of the word, without paying the landlord's tax, the landlord must pay the tax on the whole of the rent of the absconding tenant, and even if he should lose his rent.

MR. CAIRNS

said, in reply, he would take the case of a landlord in Ireland, with five tenants, who bad to pay him 100l. a year each; and he would assume a landlord similarly situated in England. What was the difference between them? In England, the landlord paid no income tax till he got his rent, and if he did not get his rent he had not a shilling to pay. [Cries of "No, no!"] In the case of the Irish landlord he would be called upon to pay the tax in the first instance, and if he did not get his rent he would be out of pocket to the amount of the tax he had paid.

MR. J. BALL

said, he thought the hon. Member had forgotten that, by the Bill as it now stood, the Irish landlord had the alternative of being assessed on the net annual value as fixed by the public valuation, or on his actual rent; and the knew that the valuation was generally below the rent. [Cries of "No, no!"] He meant, with certain exceptions. It seemed to him that the justice of the case was fully and far more satisfactorily met by the Amendment on the paper of the hon. Member for Horsham (Mr. Seymour Fitzgerald), which did not interfere with any of the essential provisions of the Bill as applicable to Ireland, whilst it provided for the case of a landlord making a bad debt.

COLONEL DUNNE

said, the Bill was unjust throughout; it began by taxing Ireland in a higher proportion than this country was taxed; and this injustice was carried out. It was well known that in some cases landlords never got any rent at all; and they would be in a worse position after this Bill passed, as it would make the country poorer. He should support the Amendment, believing it would tend to mitigate the injustice of the measure.

Question put, "That those words be here added."

The Committee divided;—Ayes 66: Noes 94: Majority 28.

Clause agreed to.

Clause 15.

MR. I. BUTT

said, he must remind the right hon. Gentleman the Chancellor of the Exchequer that there was no such person as surveyor of taxes in Ireland, and he therefore could not understand why such an officer should be mentioned in the clause. He also wished to call attention to the variation of the wording of the clause with that of Clause 18. As some difficulties were likely to arise from these circumstances if the measure was passed in its present shape, he would reserve to himself the right, upon the bringing up of the Report, of framing a clause that would obviate those difficulties.

The CHANCELLOR OF THE EXCHEQUER

said, when officers were appointed for collecting the tax in Ireland, the officers of excise might be made available in some cases; but these were matters of detail which must necessarily be deferred.

MR. I. BUTT

said, he still thought there would be extreme difficulty in carrying out the clause. The 18th clause provided that the assessment under Schedule D should be made by the officers of inland revenue; but that provision did not extend to Schedule A. He therefore thought an additional clause would be necessary either on bringing up the Report, or on the third reading.

Clause agreed to.

Clause 16.

MR. FITZSTEPHEN FRENCH

said, he wished to call the attention of the Committee to the power proposed to be given under this clause. The Chancellor of the Exchequer proposed that the collector shall be authorised to put in force against the landlord or lessor the most stringent remedy for the recovery of the tax. Now, one of the extraordinary powers given for the recovery of poor-rates in Ireland had been the sale of the fee of the land. He asked the right hon. Gentleman whether it was his intention to give the same power under this Bill for the recovery of this tax? He thought that such a power would be most unconstitutional.

MR. H. HERBERT

said, that, under the poor-law, power was given to sell the land of a proprietor for a debt contracted by a tenant who had fled to America, or any other place. He wished to ask whether the right hon. Gentleman proposed to give a similar power under this Bill—namely, to sell the property of the landlord for income tax upon an amount of rent which he never received; and whether a power existed in England to resort to a sale under similar circumstances?

The CHANCELLOR OF THE EXCHEQUER

The sole object of the clause is to provide an easy remedy. [A loud laugh from Col. Dunne.] The hon. and gallant Colonel may adopt any mode of proceeding which he pleases in this House. I have seen quite enough of the insulting manner in which he conducts himself not to be moved by it. ["Hear, hear!" and "No!"] I must say I think the loud laugh with which he has received my statement was insulting.

The CHAIRMAN

I think the right hon. Gentleman will see that this is an expression which he ought not to use.

The CHANCELLOR OF THE EXCHEQUER

Oh, I will withdraw it readily; but I must insist on being protected against such a course of proceeding.

COLONEL DUNNE

said, that his laugh was not directed against the right hon. Gentleman, but was in consequence of an observation made to him by an hon. Member near him.

The CHANCELLOR OF THE EXCHEQUER

I beg the hon. and gallant Member's pardon. It will be for the Committee to consider the best course of proceeding. It may be that the remedies provided by the poor-law are the best; but that is a practical question, and one for the Committee to consider.

LORD NAAS

said, it was most difficult to ascertain what those powers really were which the Bill proposed to give; for it referred to one particular Act, and when they turned to that Act they were again referred to another Act for an elucidation of its meaning. He would suggest that the power of recovering arrears should be the same as was given in the first poor-law passed for Ireland.

SIR JOHN YOUNG

said, that in England the corpus of the estate could not be sold for arrears of poor-rate; in Ireland it was different, for, by a process of law, the estate itself might be reached. He did not think the Amendment of the noble Lord would give a sufficient remedy, as the original poor-law was very defective in this respect. Under the first poor-law the greatest losses were sustained in seeking to recover the poor-rate from the immediate lessor. His right hon. Friend the Chancellor of the Exchequer had no intention to give power for the sale of the estate itself, in order to recover this tax, but merely to give power of proceeding in the Civil Bill Court against the lessor.

MR. NAPIER

said, he thought the better way would be for the Chancellor of the Exchequer to hold this clause over for further consideration. He would suggest an alteration in the early part of the clause, where the occupier who was charged with the tax was liable to a distress for the recovery of the amount; for, supposing that this party had nothing to be distrained, there appeared to be no alternative proposed as against him. He was of opinion that the whole of the clause ought to be well considered.

SIR ROBERT FERGUSON

said, that the powers given under the Land Improvement Act for the levying of instalments had been found to work most efficiently. The sums levied had been paid very regularly, and he hoped the Chancellor of the Exchequer would consider whether similar powers might not be put in force with advantage under this Act.

COLONEL DUNNE

said, as he understood the right hon. Gentleman, the powers to be granted to Ireland were to exceed those which were in operation in England.

MR. G. A. HAMILTON

said, he concurred with the hon. Member for Londonderry (Sir R. Ferguson) in the opinion that the powers given under the Land Improvement Act had operated efficiently in Ireland; and if that were the case, it might perhaps be a saving of expense to adopt them in the present instance.

MR. GROGAN

said, he thought that however efficient the machinery under the Land Improvement Act had worked, it would be preferable to extend to Ireland the system which had been found to work so well in this country.

Clause agreed to; as were also the remaining clauses.

The CHANCELLOR OF THE EXCHEQUER

said, he had now to bring up several new clauses. The first was one to which he had referred early in the evening, and which was in substitution of the one proposed by the hon. Member for Horsham (Mr. Seymour Fitzgerald). It entitled landlords in Ireland to claim repayment of the tax paid on rent lost by the bankruptcy, insolvency, or absconding of tenants; and he had added the words "by the land being left waste."

MR. SPOONER

said, he did not mean to oppose the clause, but merely to say that its principle was the same as the pro- position he had made that landlords should not be called on to pay income tax on rent which they had never received. The right hon. Gentleman had opposed that proposition, and he wished to call his attention to his having adopted the principle; and he now asked him to extend it to all land.

The CHANCELLOR OF THE EXCHEQUER

said, it was refreshing to him to be found fault with for having dealt more kindly with English than with Irish landlords, for hitherto he had heard of nothing but the immunities enjoyed by English over Irish landlords. This was, no doubt, an advantage the Irish landlords possessed over the English, who only enjoyed the right as regarded houses. There was, however, some inconvenience in levying the tax in the same form in Ireland as in England; and considering that the Irish landlords were made primarily liable to the tax, he thought, on the whole, that there was a balance of advantage.

MR. G. M. BUTT

said, he would suggest that there should be some definition of the word "insolvency," so as to make it include cases of assignments to creditors and deeds of composition.

The CHANCELLOR OF THE EXCHEQUER

said, he was assured by the legal adviser of the Board of Revenue that the word would bear that legal sense; but he would look into the matter again before the third reading.

Clause agreed to.

The CHANCELLOR OF THE EXCHEQUER

The next clause had been suggested by some observations made during the discussion on the Bill. It amended the position of parties with regard to the assessments in Schedule A. If on an appeal there was any dispute about the annual value of the land, the Commissioners now had power to order a valuation; and this clause was for the purpose of extending that advantage to the parties appealing, who would be enabled to require a valuation to be made; which power they did not hitherto have.

Clause agreed to.

The CHANCELLOR OF THE EXCHEQUER

The next clause had been suggested by the noble Lord the Member for Northumberland (Lord Lovaine), and referred to the description of relief given two years ago under the 3rd section of 13 & 14 Vict., c. 12, which allowed tenant farmers who gained their livelihood solely by husbandry to have the power of a half-yearly appeal. It was proposed to extend that relief by making it applicable to tenant farmers who gained their livelihood "principally" by husbandry; but it was to be confined strictly to tenant farmers, and not to persons farming their own land.

Clause agreed to.

The CHANCELLOR OF THE EXCHEQUER

The next clause had been prepared in consequence of a suggestion of the hon. Member for Meath (Mr. Lucas), and enabled clergymen and ministers of every denomination to deduct from their assessable income charges incurred in the exercise of their professional duty. It did not exempt them as clergymen, but only put them on a footing of equality with other professions. For instance, a medical man, if he used an equipage, was entitled, as a matter of course, to deduct the expense of it from his assessable income; and, in the same manner, a clergyman who used a horse wholly and exclusively in the discharge of his professional duties, would be entitled to deduct the expense attending it.

Clause agreed to.

The CHANCELLOR OF THE EXCHEQUER

There was one other clause, one which had been suggested by the hon. Member for Newcastle-upon-Tyne (Mr. Blackett), and it was intended to enlarge the power of deduction with regard to bad and doubtful debts. At present, the Commissioners had no power to make allowance for bad debts, except those which were proved to be such; and although it seemed to be, in some degree, doubtful whether they had the power of allowing for debts proved to be partially bad, yet, on the whole, he believed that a more rigid interpretation had prevailed than was altogether consistent with fairness. The effect of this new clause would be to allow the Commissioners, in cases of composition, to put down as good whatever the composition amounted to; in cases of bankruptcy to allow them to put down the whole as bad, and to charge the party afterwards upon the dividends when received; and in cases of doubtful debts to allow them to make a reasonable estimate of their value.

Clause agreed to.

MR. M'MAHON moved a clause to the effect as to the propriety of exempting a certain portion of a person's household furniture and wearing apparel from seizure.

The CHANCELLOR OF THE EXCHEQUER

said, it would be impossible to introduce the clause proposed into the Bill. The question to be considered was, whether the claim of the State was a primary secondary one. The doctrine of the law was, that the claims of the Crown were paramount; and, indeed, the existence of law and order, which could only be maintained by means of the public revenues, might almost be reckoned amongst a man's implements of trade. The proposal of the hon. Gentleman, however, would place those claims in a position of inferiority as compared with those of the landlord. The proposal was certainly humane and philanthropic in its character, but its adoption would be impolitic and unwise.

Clause withdrawn.

MR. I. BUTT

then brought up a new clause. He said, by the present law, if there were any defalcation it must be made good by a reassessment of the district. That provision was just, inasmuch as the collector was in the hands of the local authorities; but in Ireland the fact was the reverse, and to apply the same enactment would be manifestly unjust. The object of the clause, therefore, was to prevent its application to the sister country.

Clause agreed to.

MR. I. BUTT

then proposed a second new clause, the object of which was to allow the Irish landlords to deduct the amount they paid for poor-rates from the income to be assessed. There was this difference in the cases of the two countries: in England the rates were paid entirely by the tenant, but in Ireland the landlord was compelled by law to pay at least one-half of the rate. Thus, if a man had a farm in England worth 100l, net, on which the rates were 10l., the tenant would only give the landlord 100l., and pay the rates himself. In Ireland he would give 105l., so that in the latter case the landlord would have to pay income tax on 5l. more than in England upon a property of exactly the same value. Besides, there was an enactment by which an English landlord, if he agreed to pay any portion of the tenant's rates, or, in other words, if he voluntarily placed himself in the position in which an Irish landlord was placed by law, he was allowed to make the deduction.

The CHANCELLOR OF THE EXCHEQUER

said, he would beg the hon. and learned Gentleman to postpone the clause till the third reading. In its present shape he could not accept it, because from the valuation, which was the basis of the assessment, the poor-rate had already been deducted. There might, however, be cases in which the valuation was too high, and in which the tenant might appeal and prove that his rent was under the valuation. Some provision, therefore, might be necessary to meet that case.

Clause postponed.

MR. I. BUTT

then moved a third clause, the necessity for which he admitted had been in great measure removed by alterations already made. Its object was to provide, that wherever the Special Commissioners adopted the option of assessing the tenant, the latter should only be assessed to the amount which he would himself be entitled to deduct from his landlord.

The CHANCELLOR OF THE EXCHEQUER

said, he objected to the proposed enactment. It would afford only an insignificant amount of relief, at the expense of a great deal of inconvenience and expense.

MR. BUTT

would not divide the Committee.

Clause withdrawn.

Bill reported as amended.

House resumed.