INCOME TAX BILL.

HC Deb 06 June 1853 vol 127 cc1208-30

Order for Third Reading read.

The CHANCELLOR OF THE EXCHEQUER

having moved the Third Reading of the Bill.

COLONEL HARCOURT

said, that he wished to draw the attention of the right hon. Gentleman the Chancellor of the Exchequer to the very hard bearing of the tax upon the pilots belonging to the Isle of Wight and Portsmouth. The earnings of the crew of each pilot boat amounted to about 150l., which was shared in certain fixed proportions amongst the members of the crew; and yet, although their united incomes only amounted to the lowest sum upon which income tax was charged, each of these poor men was charged with the tax. This was an evident injustice, arising, he believed, from an error on the part of the collector, which a simple declaration on the part of the Chancellor of the Exchequer would prevent again occurring.

MR. HUME

said, that all the anomalies in the collection of this tax which had been proved to exist before the Income Tax Committee were continued by this Bill. Retaining, however, all the objections which he had ever held to the tax in its present form, and believing still that no tax upon income could be a just one, and that a tax upon property only was the proper mode of raising the necessary revenue, he should not now offer any opposition to the Bill, because he saw that the Government were determined to pass it in its present forth; and great as he thought its defects, he believed they were more than compensated by the advantages which would be derived from the other financial arrangements by which the reimposition of this tax was accompanied. The imposition of a tax on the descent of real property would, for instance, he so beneficial, that there was hardly any price he was not prepared to pay for it. He believed, however, that the country would not long bear the inequalities of the present income tax, but would insist that it should be levied in the only fair manner, as a tax upon property.

MR. HEYWORTH

believed, that it would be both impolitic and unjust to levy our taxation on property alone, for in that case millions would escape taxation altogether. He believed that the income tax, even in its present form, was as just a tax as any that was paid. The only question was, whether it would be a lasting tax; for if it were, he believed it would be possible to make it as just as any tax could be.

MR. GROGAN

said, that, by the 12th clause, the collector general of rates for the city of Dublin was to transmit to the Commissioners of Inland Revenue copies of the poor-rates "made by him for the relief of the destitute poor in the several electoral divisions, or parts thereof, in which he is by law authorised to make and declare such rates." Now, the fact was that the collector general for the city of Dublin did not make any rate; he only assessed it when made by the board of guardians; and the clerk of the board of guardians was, therefore, as in other parts of the country, the proper person to apply to for copies of the rates. He would also call the attention of the right hon. Gentleman to the amount of remuneration paid to those officers for performing that duty.

MR. KENNEDY

said, that this measure had been maintained on these two distinct grounds; first, that England being liable to an income tax, Ireland should be so too; and, secondly, that the consolidated annuities having been remitted to Ireland, it was only fair she should pay the income tax as an equivalent. He denied, however, that either of these reasons was well founded. Up to the present time it had been a recognised principle that the taxation of Ireland, as compared to that of England, should be in the ratio of one to twelve. This was the first time that that principle had been deviated from; and before this was done, he thought the Chancellor of the Exchequer was bound to prove either that England had declined, or that Ireland had increased, in prosperity, or that all former Chancellors of the Exchequer were wrong. But he had not done any one of these three things, and he (Mr. Kennedy) could not therefore think that he was justified in imposing this tax on Ireland. It had been usual, when Ireland was agitated, to say, "Be peaceable, and you shall have justice." Agitation had now ceased, and what justice was extended to Ireland? Why, her taxation was increased, and the people were placed in a worse position than they were in before. The principle of England was always to divide Ireland when she wished to govern her; and this had not been forgotten in the present Session. He protested in the name of his constituents against the imposition upon them of so unjust and impolitic a tax.

COLONEL DUNNE

said, that he had opposed this measure at every stage, and it was now useless to carry that opposition still further by dividing against the third reading. He should not, however, do his duty, if he did not protest against the injustice, and, as he thought, the illegality, of this measure, as far as regarded Ireland. There were three tests of the amount of the taxation to be imposed on Ireland according to the Treaty of Union. Now whether they took the test of the amount of the exports or imports, or of consumption of the people, it was clear that not only could they not, in accordance with that treaty, impose any new taxation on Ireland, but they were bound to diminish the present taxation. It had been admitted by Mr. Goulburn, that the proportion of the taxation of the empire which was fixed upon Ireland at the time of the Union was unjust; and yet the fact, of her having failed for some time to pay it was now adduced by the Chancellor of the Exchequer to show that there was a debt due from her. He (Colonel Dunne), however, denied it. He hoped that Ireland would never lie down under the injustice that was now being done to her, but that she would in every constitutional manner protest against the imposition of this tax.

The CHANCELLOR OF THE EXCHEQUER

said, that he gave the hon. and gallant Colonel full credit for the perfect consistency with which he had contended against this measure, for—as he thought —the advantage of Ireland. He (the Chancellor of the Exchequer) should not, however, then enter further into this subject, than to protest, once for all, against the assertion that the Budget was intended to impose or did impose, additional taxation upon Ireland. This was a question of figures; and if hon. Gentlemen would set against the income tax and the spirit duties which were to be imposed upon Ireland the amount of the consolidated annuities which were to be remitted, together with the amount of the relief which Ireland was to receive from the reduction of the indirect taxation, they would find that she was a considerable gainer by the present Budget. ["Oh, oh!"] He must remind the hon. Gentleman from whom those peculiar sounds proceeded, that questions of figures could not be settled by arguments of that kind; they could not be settled either by exclamations or by something less articulate than exclamations, which he would not stop to characterise. His main object in rising was to answer two or three questions which had been put to him in the course of the short conversation which had taken place. The hon. and gallant Colonel the Member for the Isle of Wight (Colonel Harcourt) had stated the case of certain pilots who were associated together, and upon whose joint earnings, though they only amounted to 1501., it appeared that the income tax was charged. He (the Chancellor of the Exchequer) apprehended that these parties supposed that they were liable to this tax solely in consequence of their want of acquaintance with the law. In all cases of partnership when the proceeds amounted to 1501., there was a primâ facie case of liability to this tax; but he believed that it was in the power of the partnership to claim exemption upon their individual assessment, supposing that their several incomes from that and other sources did not amount to 1501. a year. With regard to what had fallen from the hon. Member for Dublin (Mr. Grogan) with respect to the amount of remuneration provided by this Bill for the clerks of unions for furnishing copies of the poor-rates, he (the Chancellor of the Exchequer) had reason to believe, from information received on the best authority from Dublin, that the remuneration provided was sufficient; but if it were found to be insufficient, it would be in the discretion of the Treasury to make a larger allowance. The case of the collector general of rates in Dublin would be met by the insertion of two words in the twelfth clause.

MR. MAGUIRE

wished to remind the right hon. Gentleman, when he charged Irish Members with meeting figures by exclamations, that he had been specially challenged by the hon. Member for Port- arlington (Colonel Dunne) to a contest of figures, and that he declined it. Not an Irish Member had come down to the House without figures, and not a single argument from the Treasury bench, or the independent benches opposite, had unsettled these figures. He wished to ask the right hon. Gentleman a question, He now abandoned all idea of opposition to the Bill; but he wished to be satisfied as to the occupiers of houses in towns. Were those who were told they were free from the tax yet to be harassed and annoyed on account of others who had to pay it? He wished an assurance that would satisfy the humbler classes in the towns.

The CHANCELLOR OF THE EXCHEQUER

, after a little delay, and some exclamations from the Irish benches, rose and said, the hon. Gentleman asked him to give an assurance that would satisfy his constituents.

MR. MAGUIRE

Well, one that will satisfy me as a Member of this House.

The CHANCELLOR OF THE EXCHEQUER

said, that he doubted whether any answer he could give would satisfy either. This was a question of administration and detail, and, as he had already stated, it was impossible to give an answer with respect to the point at which it was desirable to draw a line in reference to the person that was to be charged, whether the landlord, the occupier, or the immediate lessor. What the line would be he could not at present state, because there being no organisation of officers in Ireland for the collection of the tax, it would be very imprudent on his part to profess to give an answer with certainty.

Motion made, and Question put, "That the Bill be now read the Third Time."

The House divided: —Ayes 189; Noes 55: Majority 134.

List of the AYES.
A'Court, C. H. W.	Brown, W.
Adair, H. E.	Browne, V. A.
Adderley, C. B.	Butler, C. S.
Alcock, T.	Butt, G. M.
Aspinall, J. T. W.	Butt, I.
Baines, rt. hon. M. T.	Byng, hon. G. H. C.
Ball, J.	Campbell, Sir A. I.
Bell, J.	Cardwell, rt. hon. E.
Benbow, J.	Caulfield, Col. J. M.
Biddulph, R. M.	Cavendish, hon. G.
Biggs, W.	Chambers, T.
Blackett, J. F. B.	Charteris, hon. F.
Bouverie, hon. E. P.	Cheetham, J.
Boyle, hon. Col.	Cholmondeley, Lord H.
Bright, J.	Christy, S.
Brocklehurst, J.	Clay, Sir W.
Brotherton, J.	Cobden, R.

Cockburn, Sir A. J. E.	Layard, A. H.
Cocks, T. S.	Lee, W.
Coffin, W.	Legh, G. C.
Collier, R. P.	Lewis, rt. hon. Sir T. F.
Craufurd, E. H. J.	Lockhart, A. E.
Crook, J.	Lowe, R.
Crossley, F.	Luce, T.
Denison, E.	Mackie, J.
Dent, J. D.	Mackinnon, W. A.
Dering, Sir E.	MacGregor, J.
Divett, E.	M'Gregor, J.
Drummond, H,	M'Taggart, Sir J.
Duncan, G.	Marjoribanks, D. C.
Dundas, G.	Martin, J.
Dunlop, A. M.	Masterman, J.
Egerton, E. C.	Matheson, A.
Ellice, rt. hon. E.	Matheson, Sir J.
Elliot, hon. J. E.	Milligan, R.
Evans, W.	Mills, T.
Evelyn, W. J.	Moffatt, G.
Ewart, W.	Molesworth, rt. hn. Sir W.
Fergus, J.	Monck, Visct.
Ferguson, Sir R.	Monsell, W.
Ferguson, J.	Morris, D.
Fitzgerald, J. D.	Mostyn, hon. E. M. L.
Fitzroy, hon. H.	Murphy, F. S.
Foley, J. H. H.	Norreys, Lord
Forster, C.	Norreys, Sir D. J.
Fortescue, C.	O'Connell, M.
Fox, W. J.	Oliveira, B.
Freestun, Col.	Osborne, R.
Gallwey, Sir W. P.	Palmer, R.
Gaskell, J. M.	Palmerston, Visct.
Gibson, rt. hon. T. M.	Pechell, Sir G. B.
Gladstone, rt. hon. W.	Peel, Col.
Glyn, G. C.	Pellatt, A.
Goderich, Visct.	Phillimore, J. G.
Goodman, Sir G.	Phinn, T.
Goold, W.	Pilkington, J.
Gordon, Adm.	Price, Sir R.
Grace, O. D. J.	Price, W. P.
Graham, rt. hon. Sir J.	Ricardo, O.
Gregson, S.	Rich, H.
Grenfell, C. W.	Robartes, T. J. A.
Grey, rt. hon. Sir G.	Russell, Lord J.
Hadfield, G.	Russell, F. C. H.
Hail, Sir B.	Russell, F. W.
Hanmer, Sir J.	Sadleir, J.
Harcourt, G. G.	Sandars, G.
Harcourt, Col.	Sawle, C. B. G.
Hastie, A.	Scully, V.
Heard, J. I.	Seymour, W. D.
Heneage, G. H. W.	Sheridan, R. B.
Herbert, H. A.	Smith, J. B.
Herbert, rt. hon. S.	Smith, M. T.
Hervey, Lord A.	Smith, rt. hon. R. V.
Hindley, C.	Smollett, A.
Hogg, Sir J.W.	Stanley, hon. W. O.
Hudson, G.	Strickland, Sir G.
Hughes, W. B.	Strutt, rt. hon. E.
Hume, J.	Stuart, H.
Hutt, W.	Thicknesse, R. A.
Jermyn, Earl	Thompson, G.
Johnstone, Sir J.	Thornely, T.
Kendall, N.	Townshend, Capt.
Keogh, W.	Vane, Lord H.
Kershaw, J,	Vernon, G. E. H.
Kinnaird, hon. A. F.	Villiers, rt. hon. C. P.
Kirk, W.	Vivyan, Sir R. R.
Labouchere, rt. hon. H.	Walcott, Adm.
Laing, S.	West, F. R.
Langton, H. G.	Whatman, J
Laslett, W.	Whitbread, S.

Wickham, H. W.	Wyndham, W.
Wilkinson, W. A.	Young, rt. hon. Sir J.
Williams, W.
Wilson, J.	TELLERS.
Winnington, Sir T. E.	Hayter, W. G.
Wood, rt. hon. Sir C.	Berkeley, C. G.

List of the NOES.
Archdall, Capt. M.	Hawkins, W. W.
Bagge, W.	Hill, Lord A. E.
Bailey, C.	Hume, W. F.
Baillie, H. J.	Jolliffe, Sir W. G. H.
Bankes, rt. hon. G.	Keating, R.
Bateson, T.	Kelly, Sir F.
Bennet, P.	Kennedy, T.
Beresford, rt. hon. W.	Ker, D. S.
Blair, Col.	Kerrison, Sir E. C.
Blake, M. J.	King, J. K.
Bland, L. H.	Liddell, H. G.
Booker, T. W.	Lucas, F.
Brady, J.	Maguire, J. F.
Brisco, M.	Manners, Lord J.
Clinton, Lord C. P.	Mitchell, W.
Clivo, R.	Montgomery, H. L.
Coles, H. B.	O'Brien, P.
Corbally, M. E.	O'Brien, Sir T.
Huffy, C. G.	Potter, R.
Dunne, Col.	Stanhope, J. B.
Esmonde, J.	Sullivan, M.
Forster, Sir G.	Taylor, Col.
Frewen, C. H.	Thompson, Ald.
Fuller, A. E.	Vance, J.
George, J.	Williams, T. P.
Greene, J.	Wyndham, Gen.
Greville, Col. F.	TELLERS.
Grogan, E.	Verner, Sir W.
Halsey, T. P.	Brooke, Sir A.

Bill read 3°.

On Question that the Bill do pass,

SIR FITZROY KELLY

then moved to add the clauses of which he had given notice. The hon. and learned Member said he would not at that advanced stage of the Bill occupy more than a very short time in making the observations which he felt it his duty to offer to the House; but he could assure the House that his proposal was not brought forward from party spirit, nor, indeed, was it in reality at all opposed to the general principle of the measure; and he appealed with full confidence to Gentlemen on both sides of the House for an impartial consideration of his proposal. He had fixed upon the limit of 3001. a year, because, however great might be the inequalities of the tax yet uncorrected, still it must be admitted that persons having an income of more than 300l. a year, although they might be perplexed to make their income meet their expenditure, would nevertheless be able, with ordinary economy, to secure all the necessaries, and even some of the comforts of existence; but going below that sum, and considering more especially that class of persons possessing incomes of from 1001. to 2001. a year, many of whom were to be found among the constituents of nearly every hon. Member in the House, they had, he considered, the highest possible reason to complain of the application of the tax to their incomes at all. The first class of persons upon whom the new system would fall with great severity was that of the poorer clergy and curates, who were in possession of incomes little greater than 100l. a year, and who, having hitherto been exempt, were now to have the tax extended to them; and this appeared to be still more hard when it was considered that these persons were compelled to maintain a certain position in society; and were also, in respect of that position, often called upon to extend charitable relief to others. Another class of persons who would suffer by this measure were the class of small tradesmen, and, although he did not now intend to recapitulate the arguments which he had on former occasions addressed to the House, still he could not help observing that it did appear to him unfair that the same tax should be levied upon incomes which were permanent, and subject to no deductions, and upon the incomes of those poorer tradesmen who were struggling to make both ends meet by their own industry, and who, with limited capital, were subject to bad debts. He hoped he would not appeal in vain on behalf of that class of persons to those hon. Gentlemen who had thought fit to support the Government in all the propositions of the Bill; and that he should receive support in his proposal, which tended, according to his judgment, to mitigate the severity with which the tax fell upon many persons who found extreme difficulty in contributing to the revenue at all. There was another class of persons who had suffered greatly from recent legislation—he meant the class of small farmers in the agricultural districts—and he might say that there were farmers residing at no very great distance from himself, whose incomes had been, on account of recent legislation, diminished one-half, and on such persons the extension of the income tax would fall very heavily. He would not unnecessarily detain the House; but he would repeat that, in his opinion, that class of persons possessing incomes no larger than from 100l. to 200l a year ought not to be taxed upon the same scale as those possessing a larger competency. He had a precedent for the appeal he was now making, for it was well known that in the year 1806, when the income tax was raised from 6½ to 10 per cent, a distinction was made in favour of various classes of persons almost identical in form to the one which he was now proposing, inasmuch as at that time the tax was reduced in respect of certain classes, from 10 to 5 per cent. If, in the midst of the greatest and most expensive war in which this country was ever engaged, and at a time when the exigencies of the State were more urgent than they had ever since been; when, also, no Minister was able to point out how to raise a sufficient sum to meet the necessary expenditure—if at such a time a reduction such as he had mentioned bad been made, he could see no reason why such a reduction should be denied now. After the many discussions the Bill had undergone, he would do no more at present than place his case before the House; and he believed that no one could reflect upon the application of the tax to the various classes of persons to whom he had alluded without perceiving its hardship; that no one could reflect upon the condition of those persons without feeling some sympathy for them, or without an inclination to support the measure which he was proposing. He would submit to the Government that the adoption of his proposal would not make any serious difference in the amount actually produced by the tax; and even that was of less consequence, inasmuch as he believed that the right hon. Gentleman the Chancellor of the Exchequer had, in the financial views which he had brought before the House, considerably underrated the income which would be derived from the sources of revenue to which he had referred. Considering, then, the small difference which would be made in the revenue of the country by acceding to his proposal, and the incalculable advantage which it would bestow upon the poorer classes of the community, he did hope that the right hon. Gentleman would take it into his favourable consideration, and would grant the remission which he ventured to recommend.

Clause (That nothing in this Act contained shall be held to make any larger sum than threepence-halfpenny in the pound payable upon any income whatever under two hundred pounds a year; or any larger I sum than fivepence farthing in the pound upon any income under three hundred pounds a year),

Brought up, and read 1°.

The CHANCELLOR OF THE EXCHEQUER

said, he was sorry that he could not accede to the request of his hon. and learned Friend to take this clause into his favourable consideration. His reasons for not doing so were obvious. All persons knew that one of the great dangers by which the income tax was beset, was the exemptions by which it was accompanied. The consideration on which exemptions had been formerly justified was, that there was a certain point in the progress down the scale of direct taxation beyond which it was not advisable to pass. The sums to be levied, for instance, might be so small that they would not pay the cost of collection, or if they were collected, the vexation attending it would be such that it would not be expedient to attempt it. When Mr. Pitt introduced the income tax, he proposed 60l. as the limit; and between that sum and 200l. he proposed a variety of graduations; he likewise introduced exemptions similar in nature to those proposed by the hon. and learned Gentleman, namely, in favour of married persons having a number of children, and others in favour of the clergy, and of officers, under certain circumstances. It was gradually found out to be unwise to continue these exemptions, and whatever might have been the particular privileges before enjoyed, it was thereafter determined to make one fixed exemption. Such was the Act of 1842. When the income tax was first framed it was on a very complex basis, and the lesson which experience had taught was, that it was wise to get rid of all graduations, and simplify distinctions as much as possible. His hon. and learned Friend, then, asked Parliament to go back to a system which experience pronounced to be bad, and to abolish a system which had worked well. His proposal involved a breach of principle, and, without his hon. and learned Friend at all intending it, it tended to communism. It was dangerous to property. If he were asked why he stopped at 1501. a year, his answer was, he did so because he found that margin recognised by law, and because he found a system already at work which embraced such a limitation; and he would impress upon the House, that in matters of this kind a very little experience was worth a great deal of abstract reasoning. If, however, he had to argue the question upon its abstract merits, he was willing to admit he might find it very difficult to prove that the limitation ought to be placed at 100l. a year. Still the proposition of the Government was so far intelligible, that it proposed the exemption of a class, that is, the labouring class, from the operation of the tax. That, at all events, was based upon the perfectly understandable ground that it was very difficult to get at such a class, for most of them in the populous districts were lodgers, not housekeepers, which would make it impossible to collect the tax with any degree of efficiency. The hon. and learned Gentleman, therefore, called upon the House to reverse the principle which experience had taught to be the best, and the principle of his Amendment was one which, if admitted, ought to have a much wider application; for he defied him to prove that the man with 400l. a year was always better able to bear the tax than the man only in receipt of 100l. a year. Considering the range of income in this country, if the hon. and learned Gentleman thus opened the door, the consequence would be that great numbers would be found rushing through it, and he therefore hoped the House would reject the Amendment.

MR. SPOONER

thought that the right hon. Gentleman opposite overlooked the fact he himself recognised—the principle of a graduated income tax, which was all that his hon. and learned Friend (Sir F. Kelly) was contending for. No one pretended to say that in many instances of persons possessed of an income of 400l. a year, the payment of income tax might not be found very oppressive. But what his hon. and learned Friend wanted to effect was, that the labouring classes should not be taxed. Now, surely his right hon. Friend the Chancellor of the Exchequer did not mean to contend that parties with but 100l. or 150l. were not often mere actual labourers. Why, what did the right hon. Gentleman mean to do with artisans who receive but two guineas a week? And when he talked about his only subjecting this class to a very trifling tax after all, the right hon. Gentleman was arguing the question upon a very narrow basis indeed. Some allusion had been made to the precedent afforded by Sir Robert Peel, and to the fault found with him for placing the limitation where he had. He (Mr. Spooner), however, had no recollection whatever of any such objection having been raised; but he distinctly remembered the protest entered more than once by his hon. Friend the Member for the University of Oxford (Sir R. H. Inglis) against the very great cruelty and injustice of making persons possessing incomes of only 150l. pay the tax upon the full amount of that income, rather than making it take effect only upon a certain proportion of that income.

SIR GEORGE GOODMAN

was of opinion, from what he knew of them, that the agricultural constituencies were generally satisfied with the income-tax scheme of the Government, so far as it affected them; at all events the proposition of the hon. and learned Gentleman (Sir F. Kelly) was not likely to give them more relief than the scheme of the Government.

MR. E. BALL

said, that though the larger class of farmers throughout the country were at present in a thriving condition, the small farmers had not in any way shared their prosperity. He believed that the right hon. Gentleman had not dealt with the proposal of the hon. and learned Member for Suffolk (Sir P. Kelly), in a correct manner, by treating it as if it involved the non-payment of the tax at all by those in the receipt of but small incomes. It amounted to nothing of the kind. He called upon the House to accept the Amendment as a matter of justice to the small farmers.

MR. LAING

had great experience with respect to small farmers in Scotland, namely, men with rents of 101. or 151., and up to 511. a year. The prosperity of that class might be measured by the circulars of the Manchester cotton manufacturers, for the welfare of the two classes fluctuated together. He happened to have received that very morning a letter from a friend who had supposed that the recent commercial legislation would have been ruinous to the small farmers; but he now confessed that he had been agreeably disappointed, for they had never been so well off before. If any class had suffered at all, it was not the large nor the small, but the middling agriculturists—the position of whom had become analogous to that of the small manufacturers, who were unable to compete with men of more capital and intelligence. The principle of the proposed clause was really of a very revolutionary character. If it were admitted, they could not stop short of constituting every board of income-tax commissioners a court of equity to assess each man's tax according to his supposed ability to pay; and if they did that, confiscation must follow. These Amendments were grounded upon a mistaken estimate of the supposed unpopularity of the income tax with those who paid it under Schedule D. He believed that if those persons were offered the option of continuing the income tax, and of having an equivalent amount of indirect taxation restored, or even of having other direct taxes imposed in its stead, they would, in nine cases out often, prefer the first alternative. Take the hardest case that could be cited—that of the professional man, struggling into practice, who was obliged to make a certain appearance without actually earning anything. At present, as those men had no income, but were consuming their own capital, they were excused; but if they had to pay a heavy house tax, for instance, they would be made to contribute as much as if they were in the receipt of large earnings. He (Mr. Laing), believed that the income tax was really a very popular tax.

MR. BANKES

said, the result of his own observations induced him to differ from the remarks of the preceding speaker, so far as regarded the condition of a corresponding class of small farmers in England. Many of that class were at present unable to derive a profit from their trade, or to pursue any other trade; they were not willing to emigrate and so abandon their native land, though at the present moment they did not know how they were to live by farming. It was with a view to relieve that class that he would support the Motion of his hon. and learned Friend (Sir F. Kelly). He could not deny that farming, in many instances, was a prosperous trade at the present moment; but in connexion with that admission was the fact, that numbers of the class of small farmers were rapidly quitting the country, because they could not find a living in it.

Motion made, and Question put, "That the said Clause be now read a Second Time."

The House divided:—Ayes 31; Noes 144: Majority 113.

SIR FITZROY KELLY

then moved to deduct 5 per cent from the amount of the tax paid upon all incomes under 400l. a year, in respect of each child of the party paying, born in wedlock, and under twenty-one years of age, and unmarried, He would say in a single sentence that he had founded that Amendment upon a principle which was already recognised by Parliament, and acted on by Mr. Pitt. But the real principle upon which he proceeded, was the principle that every man should be taxed according to his ability to pay.

Clause (That every person shall be entitled to a deduction or return of 5 per cent from the amount of any tax payable or paid, by virtue of this Act, upon any income whatever not exceeding 400l. a year, in respect of each and every child of such person born in wedlock, and unmarried, and under 21 years, when such Tax accrues due),

Brought up, and read 1°.

Motion made, and Question, "That the said Clause be now read a Second Time," put, and negatived.

SIR ARCHIBALD CAMPBELL

said, his principal reason for bringing forward the clause of which he had given notice was, that the hon. and learned Member for Youghal (Mr. I. Butt) had given notice of moving a clause upon the third reading to a similar effect as this, relating to Ireland; and if that clause had been agreed to, the Scotch landowners would have had an unanswerable case to bring forward. He understood, however, that that clause had not yet been acceded to. He was not asking for an exemption in favour of Scotland which did not exist in England, but he only asked for the same boon to be extended to Scotland that was going to be, or had been, granted to Ireland. The case was one of comparison between the owners of land and of houses. In Scotland there were many rates or assessments which were paid by the landlord, who, consequently, received a larger rent, to enable him to defray those expenses in proportion to the value of the property of which he was the owner. In England the same taxes were paid by the occupier; therefore the money did not pass through the owner's hands, and did not come within the clutches of the income-tax collectors. There were throe of these heads of rates: first, one-half of the poor-rates; secondly, the assessments for the repair of churches, parsonages, schools, and school-houses; and, thirdly, the expenses of prisons, of the prosecution of criminals, of the constabulary, of the building of bridges, and other things—all these were paid by the landlord in Scotland. In some counties, also, the highway rates were levied, partly from the owner and partly from the occupier. Altogether, the Scotch landlord paid about 6 per cent upon the rent more than the English landlord. He might put the case in another way, which would make it clearer to the House. The profit derived from landed property could be put under three heads: first, there was the rent, or the landlord's profit; secondly, there was the tenant's profit; and, thirdly, there was the sum devoted to the payment of these rates. In both countries the landlord and the tenant each paid the income tax upon his own share of the profit; but in England the money paid for these rates was paid directly to the collector without passing through the landlord's hands, and was not known to the income-tax collector— not taken cognisance of by him. In Scotland it was paid by the occupier to the owner, and in passing through his hands 7d, in the pound was, deducted from it by the income-tax collector. The arguments which had been urged against this proposition were, first—although this argument had not been much relied on—that the rate of assessment under Schedule B in Scotland was different from that in England. The payment of these rates would, to a certain extent, give a tenant a claim for deduction; but this could not have been the ground on which the difference in the rate of assessment under Schedule B was made, because the greater portion of the farms in Scotland did not pay a largo enough amount of rent to bring them within the income tax. Therefore, the rate of assessment under Schedule B could make no difference to them. The principal argument of the right hon. Gentleman the Chancellor of the Exchequer against this proposition was, that the system of repairs in Scotland was different from that in England. He had some difficulty in understanding the course which had been taken by the right hon. Gentleman with regard to this argument. Before the right hon. Gentleman had announced his financial scheme to the House, there had been a meeting held of thirty Scotch Members, at whose request the hon. Member for Dumbartonshire (Mr. A. Smollett) had written to the right hon. Gentleman respecting the inequality in the assessment. The right hon. Gentleman, in answer to that letter, repeated the argument of the difference in the system of repairs. His hon. Friend again wrote to the right hon. Gentleman, stating that, in his opinion, and that of thirty other Scotch Members, no such difference existed; and he (Sir A. Campbell) entirely agreed in that opinion. After such a denial of his argument, he thought the right hon. Gentleman owed them some statement of the reasons upon which he had formed his opinion. He had, as yet, given no reasons whatever. When the right hon. Gentleman was stating his objections to this plan, he had been met with cries of "No, no!" but he merely turned round to hon. Members and said, "I differ from you," but had given no reason for doing so. He believed the right hon. Gentleman had been examining the usual form of Scotch leases, in most of which there was a clause to the effect that the landlord was bound to put the premises in proper and tenantable repair, and the tenant was bound to keep them so during his lease; but this clause was added—"ordinary wear and tear excepted." The object and the practical effect of these clauses was merely, in case of any disagreement between the landlord and tenant, to prevent the tenant from injuring his landlord by unfair play to the premises. An hon. Friend near him had just told him that he had that morning received a letter from his steward, asking for the repair of a farm in the middle of a lease. His usual practice was, that, at the beginning of a lease for fifteen or eighteen years, the landlord expended one year's rent in putting the farm in proper order. The only other argument urged against the proposal was, that if they once interfered with the mode of assessment of the income tax, they would have so many different claims from various quarters, that the whole thing would be set wrong. He referred to the 16th clause of the Income Tax Act of 1842, to show that the present case was not without a precedent. It might be asked why the Scotch landlords did not make covenants with their tenants; but the fact was that they were precluded from doing so by the clause he had just mentioned. The question was mooted, in the year 1844, before Parliament, when it was negatived simply upon the understanding that the income tax should continue only for three years. Now, however, they were asked to pay it for seven years, and, therefore, he thought it was high time that this injustice to Scotland should be remedied. He believed he had put before the House the true state of the case—namely, that there was money which was not actually paid to the Scotch landlord for rent, but which passed through his hands to be paid over to the tax collector; and that a similar system did not exist in England. He had shown there was a precedent for the Motion before the House: firstly, in a clause in the English Income Tax Act; and, secondly, in the clause just about to be proposed, granting to Ireland that same justice which he now asked for Scotland.

Clause (In charging the duty under Schedule A of this Act, in respect of lands, tenements, hereditaments, and heritages, in Scotland; an allowance or deduction shall be made for the amount of all parochial and county rates, taxes, and assessments, which by law or custom are paid by the owner thereof),

Brought up, and read 1°.

The CHANCELLOR OF THE EXCHEQUER

said, the hon. Gentleman, in proposing this clause to the House, founded it partly upon the general argument, and partly upon the special ground of the exception made to Ireland. As far as regarded the general argument, they had discussed it on a former occasion, when he opposed a clause much more limited than this, and it was rejected by a large majority, on the ground that it was impossible to concede it without unsettling the general structure of the income tax. The hon. Gentleman had said nothing to show that that argument was not applicable to this clause, and on that ground he was compelled again to oppose it. It was not the mere question whether the Scotch landlord paid 6 or 7 per cent, which was not paid by the English landlord. The income tax as it stood was a system of compensations, and if they were not to re-enact it until its inequalities were removed, he could not lay upon the hon. Gentleman a more difficult task than to remove them. He thought the hon. Gentleman would rise from such a task a sadder and a wiser man. The hon. Gentleman had little conception of the structure of the tax, when he talked of removing all inequalities. If the Scotch landlord were worse off than the English landlord with respect to rates, there was still another question to settle, whether he was worse off on the whole. If this claim were conceded to the landlord, what would they say to the householder? The Scotch landlord paid 5 per cent on repairs, including all he laid out when he renewed his leases. The householder in England, if not in Scotland, had to spend from 15 to 20 per cent for repairs. If they made a deduction of 15 or 20 per cent under Schedule A, or if the hon. Gentleman succeeded with this Motion, there would be a host of the most formidable claims under Schedules D and E, which were now in abeyance. This was a small corner of a great question. It was whether they should have the income tax in its present shape, full, he granted, of inequalities, but which in a considerable degree compensated one another, or whether they should enter on a task, perfectly hopeless to perform, of endeavouring to remove those inequalities. That was all he should say on the general question. But the hon. Gentleman had referred to a special case, and thought because a concession was about to be made to-night to Irish landlords, the same concession ought to be made to Scotland. Now, he bogged to assure the hon. Gentleman that no concession was about to be made to the Irish landlords. From the first introduction of the present Bill, it was founded upon a basis which did exempt, and was intended to exempt, Irish landlords from the payment of income tax on poor-rate. As the Bill was first introduced, the income tax in Ireland was to be assessed on the poor-law valuation, and the poor-law valuation in Ireland was framed on a principle which actually excluded the poor-rate from the calculation; and therefore, from the first, the Government bound themselves to the Irish landlords that they should not be assessed with the poor-rate. Perhaps it might be said, "Why did you do so?" He could not answer on the abstract question. His answer was, on the whole case, as a measure of policy and prudence, as a measure applied to Ireland for the first time, and as a measure for which there were not the same facilities of correction in Ireland as there were in England. Rental and real rent were not the same in Ireland as in England and Scotland, and the Government had made the Irish landlords liable to the income tax instead of the occupiers. It might be said that was an insignificant matter. In England or Scotland it might signify very little whether they went against the landlord or the occupier. He was not sure that it would signify very little even in England and Scotland, but it signified a great deal in Ireland. If they attempted to push too far the argument with regard to inequality, it would end only in aggravating inequality and injustice. But that was not so much the point. The point which he wished to dwell on was this: that with regard to the proceedings of the Government, there was no change in principle; that the Bill was founded from the first on the basis of assessment in Ireland upon the poor-law valuation, and the poor-law valuation entirely excluded the poor-rate. The clause proposed by the hon. and learned Member for Youghal (Mr. I. Butt) was simply intended to apply the principle, already recognised, to particular and exceptional cases where the valuation included the poor-rate. So much with regard to the particular case of Ireland. With regard to the general case of England and Scotland, he should allow it to stand as it stood the other night, when the House decided by a large majority against the alteration.

MR. CUMMING BRUCE

said, the right hon. Gentleman who said that no one could attempt to remove the inequalities of the income tax without rising from the task a sadder and a wiser man, showed himself every time he spoke a more unjust man. They assessed the proprietors of land in Scotland on incomes which they never received; they compelled them to act as unpaid collectors of taxes, and then charged them on the amount they collected. The injustice was monstrous; but it did not at all shock the right hon. Gentleman, His hon. Friend had understated the case. In one parish where he had property, on the occasion of building a new church, the demands in the shape of legal and positive burdens absorbed the whole of his rent for one year. The next year the clergyman's house had to be repaired and the garden put in order, and he had to pay between 2001. and 3001. The following year there was a new school-house to be built; so that in three years he did not get a third of the amount of rent on which he had to pay income tax. If the right hon. Gentleman had not lost all feeling, he would appeal to his sense of justice upon this question. The distinction which the right hon. Gentleman had endeavoured to draw between Ireland and Scotland was a mere shuffling of the cards—a mere delusion— a mere sophistry, in which, as a master of that kind of argument, he delighted sometimes to indulge. The Scotch were a tax-enduring, long-suffering, and uncomplaining people; but it was a little too much to deny them all justice, and if he stood alone he would divide the House upon the clause,

MR. SMOLLETT

thought that as the Chancellor of the Exchequer had intimated his intention to allow the poor-rate to be deducted from the Irish proprietors, they were justified in taking the sense of the House again upon this question. The right hon. Gentleman had given some ingenious reasons why this boon should be bestowed on Ireland, and not on Scotland. Perhaps there were other reasons. Ireland was disloyal and turbulent; Scotland was orderly, loyal, and submissive to the law. The Irish Members opposed the Government in every possible way; the Scotch Members, or a great majority of them, had supported the Government in passing this income tax. For these services the people of Scotland were to have the injustice and inequality continued for the remaining seven years, which had been so ably pointed out by preceding speakers. He trusted the hon. Member would divide the House, and he should certainly vote with him.

MR. DUNLOP

said, it was his intention to give a vote directly in the teeth of a vote which he gave the other night. When the Chancellor of the Exchequer then stated that Government would act upon the broad and general principle of not attempting to equalise the income tax, letting a little too much justice on one side go against a little injustice on the other, he said that he did not desire that an exception should be made in the case of Scotch landlords, though they were unjustly treated. But the right hon. Gentleman had departed from that general principle of allowing no deduction for rates in any case, and now allowed it in the case of Ireland, and refused it in the case of Scotland, the reduction in England being already effected by the way in which the rates were laid upon the occupier. His Irish friends would say, "Look at your conduct and look at ours. You supported the Chancellor of the Exchequer against us and against everybody through thick and thin, and now he conies at last to a reduction of rates, and he takes it off us and keeps it on you." He did not like to be exposed to that taunt. He thought the right hon. Gentleman ought to have some consideration for them, and he should certainly endeavour to obtain that consideration by voting with the hon. Member opposite.

MR. KINNAIRD

would, for the same reasons as the hon. Member for Greenock, record a different vote to-night from that on a former occasion.

MR. I. BUTT

was bound in justice and fairness to confirm the statement of the right hon. Gentleman, that the Government had not departed from the principle of the Bill with regard to Ireland. The Amendment he proposed did go beyond that principle, and the right hon. Gentleman steadily and determinedly resisted it. The clause he now proposed was simply for the purpose of placing exceptional cases upon the same footing as the general assessment under the poor-law valuation. He was very unwilling to give the slightest support to the Government; but as an honest man be was bound to state that they were merely carrying out the principle on which the Bill was originally framed, by assenting to the clause, and they had steadily resisted an alteration which he had pressed upon them.

CAPTAIN SCOBELL

said, as he understood the Government were about to con-code something to Ireland which had not been conceded to Scotland, he should certainly feel it his duty to vote in favour of this Amendment.

MR. WILKINSON

did not understand that anything was to be given to Ireland which was not to be given to Scotland, and he must appeal to the forbearance of the Scotch Members, to their loyalty, to make allowance for the difficulties in adjusting the different claims in a way which was confessedly unjust and unequal. As Scotchmen had proved to be the best agriculturists in consequence of the difficulties of their climate and similar causes, so he hoped that the taxation to which they were subjected would be equally good for them.

SIR JOHN YOUNG

said, there was no disposition on the part of the Government to favour one party more than another. The only reason why they took the poor-law valuation as the ground of their assessment was, that in Ireland there were so many different interests, that it would be Impossible to levy the tax upon any other principle.

Motion made, and Question put, "That the said Clause be now read a Second Time."

The House divided:—Ayes 54; Noes 98: Majority 44.

The CHANCELLOR OF THE EXCHEQUER

then brought up clauses allowing the poor-rate to be deducted from the assessment in Ireland, which were agreed to.

The CHANCELLOR OF THE EXCHEQUER

said, he had another Amendment to propose. The House would remember that he proposed to provide that the receipts for insurance in certain insurance companies should be accepted as deductions from a man's assessment on the income tax. Now, his hon. Friend the Secretary to the Treasury was engaged in presiding over a Committee who were engaged in examining into the state of insurance and joint-Stock companies. As the new tax could not demanded before the 10th of October next, he proposed to take advantage of the remaining part of the Session to introduce a Bill determining some fixed and simple provisions which would be required to be complied with by all companies before their receipts for the payment of premiums would be received as exempting their holders to that amount from the income tax. In this way no preference would be shown to one company over another, and he would therefore strike out the description of these companies in the 43rd clause, and insert in lieu of it, "any insurance company which shall be registered according to any Act of Parliament that may be passed this Session."

MR. COWAN

said, he was a Member of the Committee referred to, and the right hon. Gentleman would be aware that a difficulty had arisen with respect to the word"registered"—whether it meant provisional or complete registration. The right hon. Gentleman was probably aware that many of the older companies were unwilling to be registered under the Act of 1844, and to get over that difficulty he would propose the insertion of the words, "or any company established prior to the passing of the last-mentioned Act."

MR. APSLEY PELLATT

supported the view of the hon. Member for Edinburgh, as he knew one company in the receipt of a quarter of a million per annum which was not registered at all, and who would not avail themselves of the clause referred to by the right hon. the Chancellor of the Exchequer. He thought the more open the matter was left the better.

MR. J. WILSON

said, that was precisely the object of the clause, which, as it stood, would leave the matter altogether open.

MR. SPOONER

said, if the matter remained open, it would be quite right; but it appeared to him that the Bill to be afterwards passed would confine the privilege to those companies who were registered according to its provisions.

The CHANCELLOR OF THE EXCHEQUER

They must submit to some registration.

Amendment agreed to.

CAPTAIN ARCHDALL

said, he wished to know whether any provision would be made for the repayment of advances made by the Lowther's Town Union in Ireland under the Temporary Relief Act, and the repayment of which had been promised by the Government to the union?

The CHANCELLOR OF THE EXCHEQUER

said, he had communicated with the Poor Law Commissioners on the subject, but they disclaimed any such assurance as that referred to by the hon. and gallant Member. If, however, the board of guardians of the union would state the names of the persons who bad given the assurance, he (the Chancellor of the Exchequer) would be in a position to state whether the Government was or was not responsible for the repayment.

Bill passed.