THE BUDGET—WAYS AND MEANS—THE INCOME TAX.

HC Deb 12 May 1853 vol 127 cc235-58

The House having resolved itself into Committee of Ways and Means; Mr. Bouverie in the Chair,

The Resolution of the Chancellor of the Exchequer relative to the Imposition of the Income Tax upon England and Ireland having been again proposed—

On the paragraph respecting the"occupation,"namely— And for and in respect of the occupation of such lands, tenements, or hereditaments (other than a dwelling-house occupied by a tenant distinct from a farm of lands), for every twenty shillings of the annual value thereof, one moiety of each of the said sums of 7d., 6d., and 5d., for the above named times respectively"—

MR. VANSITTART

said, he begged to move as an Amendment, the omission of the word "moiety," and the insertion of the words "third part;" and he would urge in support of it, that the late Sir Robert Peel had thought it necessary, when he introduced the income tax in 1842, to reduce the assessment of the farmers from three-quarters to one-half the rental, and that the causes which induced him to do so existed to a greater degree now than ever before. No person could question the fact, that the profits upon land were much smaller than they formerly were, and at present they were certainly not greater in England than in Scotland and Ireland, where he understood that an arrangement of this nature was to be adopted. To place the farmers of the United Kingdom on a footing of equality was all he asked, and was a measure of justice which ought to be conceded, for no one could assert that the farmers in England were better off than their brethren in Scotland or Ireland; or that the fall in rents had been at all equal to the fall in prices. The Chancellor of the Exchequer on a former occasion urged as an objection to his Amendment, that in the present state of the law the farmers had the option of being assessed on their profits under Schedule D; but, in nine cases out of ten, it was utterly impossible for the farmer to make his appeal on that schedule. He challenged the right hon. Gentleman upon this point; let him make inquiries of whom he pleased—the surveyors, or any persons living in the rural districts. It was, therefore, a most cruel mockery to tell the farmer, when he complained of the pressure of Schedule B upon him, that he might make his appeal under Schedule D. The farmer seldom kept any accounts. Many persons might ask what business had a man to enter upon farming who did not keep accounts sufficiently accurate to show that he had no profits. But what was the case of the farmer? Every tradesman they knew kept accurate accounts, and why? Because unless he did so, he could not prove his debts. But farming was a ready-money business; the farmer sold on one market day, and received his money on the next. He paid wages on the Saturday night, and all his bills the very moment he got his money; therefore he had no necessity to keep accounts, or a clerk, like persons of any other class. But even tradesmen, when they became amateur farmers, were not quite so competent to keep accounts as farmers as they were as tradesmen. He would even venture to say that even Mr. Mechi himself would find it difficult to prove what, if any, was the amount of his profits. How much more difficult then, must it be for one who had been brought up at the plough's tail to do so? Parliament ought not to take advantage of this unhappy position of the farmers, which was no fault of their own, but was the result of the profession to which they belonged. The most successful instance in his (Mr. Vansittart's) own neighbourhood of a man making large profits, and leaving behind him a considerable sum of money by farming, was that of a man who rose from nothing, and who never kept any accounts, for the very good reason that he could neither read nor write. But, instead of quoting instances, he would rather put this question upon its notoriety. He thought if the right hon. Chancellor of the Exchequer would consult those about him, and use the means he had it in his power to do, he would come to the same conclusion with himself (Mr. Vansittart), and admit that the argument as to the power of the farmer to assess himself under Schedule D was no ground for resisting the Amendment he now proposed. Having placed his case thus far in what he hoped to be a very favourable position, he thought he might now call the attention of the right hon. Gentleman to the speech which was delivered by him on the debate upon the Budget of the late Chancellor of the Exchequer in December last. He (Mr. Vansittart) heard that speech with great satisfaction, because he considered, whatever might be the fate of the measure then under discussion, or whoever might be the future Chancellor of the Exchequer, that, at any rate, those who were concerned in rural affairs would meet with justice from the hands of the right hon. Gentleman, as well as from the hands of the then Chancellor of the Exchequer. Such was his conviction on hearing that speech; but he was sorry to say such was not his conviction now. The right hon. Gentleman on that occasion reproached the late Chancellor of the Exchequer with having betrayed his friends by not doing enough for them; he drew a most striking picture of the position of a yeoman occupying his own farm of 70l or 80l. a year, who was to be called upon to pay an income tax on an income above 50l; a house tax, and other things; and certainly any yeoman farmer who at a market dinner or elsewhere, should have read or heard of that speech, would have felt thoroughly convinced that that right hon. Gentleman would at any rate not have imposed this new tax upon him. Let them take the case of a yeoman at 80l. It was true he might not be assessed to the full amount, but he would be debarred the right of appeal under Schedule D; therefore, he would have to pay the income tax both as owner and as occupier. He would have to pay for the cart in which he drove himself to market, or his wife to church. In addition to that he would have to pay the succession tax, which possibly might compel him to mortgage his estate which it might have been the pride of his family to enjoy as long as the family of any Gentleman in that House had enjoyed their family estate. He thought, therefore, this was a case on which he might fairly appeal to the right hon. Gentleman for a favourable consideration. But if the right hon. Gentleman should oppose his Amendment, he then feared he should fail, because he know there were many hon. Gentlemen on his (the Opposition) side of the House, as well as on the Ministerial benches, who considered that it was their duty, though professedly the friends of the farmers, to recognise the responsible situation of the servants of the Crown, and their right to look for consideration from that House. But he thought he might appeal to the language used on a former occasion upon this subject. The right hon. Gentleman the Member for Halifax (Sir C. Wood) appealed to all who voted for the Budget of the late Chancellor of the Exchequer, and who agreed to the income tax as that right hon. Gentleman proposed it, to support the present Budget. The right hon. Gentleman (Sir C. Wood) pressed that view of the case; and he (Mr. Vansittart) thought he was entitled to press that view of the case also, and to call upon all those who supported the late Government to support his present Amendment; for it was well known that his right hon. Friend the late Chancellor of the Exchequer consented to put upon the English farmer one-third of the tax upon the annual value of the farm occupied by him. In proposing this Amendment, he had no wish whatever to interfere with the conducting of the public business by the Government. This was no party question, nor had he treated it as such, although it was his misfortune perhaps to sit on the Opposition side of the House. He hoped the grounds he had assigned would induce the House to con- sider the proposition he now made to be just and fair. He thought it would be far better for the right hon. Gentleman the Chancellor of the Exchequer to allow his scheme of finance to have such qualifications applied to it as justice and equity demanded, than to resist all appeals, and to determine on carrying it through as a stereotyped plan.

Amendment proposed, to leave out the word "moiety" in order to insert the words "Third part" instead thereof.

The CHANCELLOR OF THE EXCHEQUER

said, he had listened with great satisfaction, so far as he was personally concerned, to the speech of the hon. Gentleman, and although he could not assent to his proposal, he admitted that no one could have presented his case in a more favourable and intelligent manner. He begged to assure the hon. Member that he had not the slightest intention of making any charge against him for not having gone on with his Motion on a former night. It was the duty of Members of the Government to press forward public business as far as they could; but it was no doubt also the duty of others to bring forward what they considered they might in justice propose. He (the Chancellor of the Exchequer) was very glad to hear the hon. Gentleman refer to the succession or legacy duty, because he hoped the Committee would soon arrive at the discussion of that question. He would not expend the time of the Committee by noticing the remarks which the hon. Gentleman had made upon his (the Chancellor of the Exchequer's) conduct in imposing various taxes upon the farmers, notwithstanding the comments he (the Chancellor of the Exchequer) had made upon the taxes intended to be put upon them by the right hon. Gentleman opposite (Mr. Disraeli) in December last. But the taxes which fell upon yeomen—men who cultivated their own land—were not peculiar to that class of persons; they applied to all other owners of land. It should be borne in mind, however, that there was no house tax put upon them (as was the case with the Budget of December last), and that there was no income tax put upon them where their income was under 100l. a year. It was true the yeoman would be subject to the succession tax, but in that case he would pay it in common with the entire community. However, let that pass. The subject would come on for discussion in its turn. He would pass on to state the reasons why, while agreeing with the hon. Gentleman that this was no party question, and that no persons had a stronger claim for consideration than the farmers, he thought that the hon. Member had not succeeded in making out a case on their behalf. In the first place,' the Committee must recollect that since the repeal of the corn laws the income tax had been several times renewed. In 1848, prices had already become low, with every prospect of their becoming lower. In 1851, the tax was again renewed, when prices were exceedingly low; but notwithstanding the state of prices at that period, the House of Commons, and he believed the farmers too, accepted, and accepted thankfully, the settlement of the question proposed by his right hon. Friend the Member for Halifax (Sir C. Wood), who, by a clause introduced into the law, put the farmer, with regard to the income tax, in a position more favourable than any other portion of the community. There was no class of the community which now stood on so favourable a footing with respect to the income tax as the farmer. That, he thought, was a strong reason against proceeding at present to any exceptional legislation in his favour. The hon. Member had demanded that he should be placed in the same position as the Scotch and Irish farmer; but if that were done he (the Chancellor of the Exchequer) would venture to say that that concession would be at once made a standing ground for a further appeal to alter the law in favour of the Scotch and Irish farmer. As for the Scotch farmer, his case was irresistible, and was founded partly on acknowledged facts, and partly on reasonable belief. It was founded, in the place, upon the fact that the public burdens in Scotland, which were mostly borne by the tenants in England, were borne principally by the landlord, and constituted a portion of the rent. But the rent, with reference to which the English farmer was assessed, did not include those burdens, and consequently, if they were to put English farmers on a footing with Scotch farmers, some vigilant Scotch representative would of course get up and urge an irresistible claim for a new concession to the farmers of his own country. The case of the Scotch farmer also rested on the belief that he had a smaller share of the profits from the land than the English farmer had. The hon. Member had stated that the fall of rents in England had not cor- responded with the fall of prices. If that were so, he (the Chancellor of the Exchequer) should say that the speech of the hon. Gentleman was a lively and useful suggestion to be addressed to the landlords; but if it were true that rents had not fallen enough in England, and if that were a reason why they ought to amend the position of the English farmer, he wanted to know how did matters stand in Scotland? Had rents fallen more in that country? Why, it was notorious that if the fall of rents had been small in England, it had been still less in Scotland. The hon. Gentleman had entered, naturally enough, into a discussion of the general condition of the farmer; but he (the Chancellor of the Exchequer) deprecated any change in the provisions of the income tax founded on that ground, and for the same reason that he should deprecate founding any other "legislation based on such grounds. It was the business of the Legislature to proceed on the principle that farming was an occupation which must be allowed to find its level under the influence of competition between man and man. If that were the principle upon which they had to proceed, they had no right to say that the profits of the farmer were smaller than they had been before; and if they looked into the price of commodities at all, they were bound also to examine into the effects produced in the process of farming by the introduction of machinery, and drainage, and many other improvements. But, after all, the main consideration on this subject was one which he had already adverted to, namely, that they had already provided for this case: they had already fixed on a standard for the farmer, which was believed, on the whole, to be equitable; and Parliament had since then taken a material step to improve the footing of the farmer, by allowing him to take his choice whether he would be rated as a farmer, on a fixed proportion of his rent, or as a trader, according to his profits. They had not, indeed, said to him—"Go into Schedule D, if you please," for they had considered that the inquisition into his affairs, in that case necessitated, would not be agreeable to him, but they had given him the means of averting an unfair assessment. He might here remark, that the hon. Gentleman had made a serious error in his calculations of the profits of the farmer. The hon. Member did not regard the maintenance of the farmer's family, the expenses of his living, as any element in his calculations, and, for that matter, the farmers seemed much disposed to take the same view, and to regard the expense of their maintenance as part of the expense of their farming, and as not entering into the question of profits, which was a fallacy not to be admitted. Where, however, the farmer's profits were less than a moiety of his rent, it was not proposed arbitrarily to enforce assessment as upon a moiety; for it would be competent in a farmer who at the end of the year found himself so situated, to go before commissioners—not Government Commissioners, but local commissioners—and, if he could make out his case, to have any excess of assessment allowed him in his payment of the tax. The hon. Gentleman objected to this, that farmers did not keep accounts. There might, no doubt, be many small farmers who did not keep accounts; but he confidently believed that the great bulk of those who would come within the operation of the measure did keep accounts. Most assuredly this was the case, he might almost say, universally with the farmers in the north of England and in Scotland. There was, however, one fact, alone demonstrative that the profits of the farmer were not so small as stated, and this was that in the past year the whole amount of relief from assessment claimed by the tenant-farmers of England and Scotland—upon a total assessment of 330,000l.—was between 5,000l. and 6,000l. only; the whole amount of relief actually granted being 3,419l. This fact, he would repeat, demonstratively proved that the farmers, as a body, had no case to show that their profits, including, of course, the cost of the maintenance of their families, did not represent fully one-half of their rent.

SIR FITZROY KELLY

said, he rose to join the hon. Member for Berkshire (Mr. Vansittart) in making a last earnest appeal on behalf of the farmers of England, than whom no class of the whole community was more justly entitled to the sympathy of that House, for they were placed in a most disadvantageous position by the present arrangement. When Gentlemen on that side of the House objected one by one to schedule after schedule of this measure on the ground of its injustice, the only argument used in answer to these objections was, that the same objections would equally apply to every schedule. When it was objected to Schedule A that while it pro- fessed to impose an income tax of 7d. in the pound on land, it in fact imposed a tax of 9d. in the pound; to Schedule B that the income tax on farmers was assessed at too high a criterion; to Schedule C and Schedule D because they treated incomes from trades and professions and those derived from the funds, which were limited in their interest, unjustly, and to Schedule E because precarious salaries were placed on the same footing as permanent incomes derived from land; and when it was shown that they were all unequal and unjust, they were met by the singular argument that taking them altogether they acted fairly, that five wrong things made one right one, and that injustice to each class was justice to all. It must be evident to any hon. Gentleman who knew the condition of the British farmer, that taking half the rent was much too high; and, although it might be said that the farmers had the option of transferring themselves from Schedule B to Schedule D, it was only handing them over from one injustice to another, and he might say that it was difficult to tell under which of these schedules they would suffer the greatest amount of injustice, What was the criterion for the assessment of the farmer which was defended by the Government? It was assumed to be fair in the taxation of the farmer to take half his rent as the criterion on which to charge him with income tax. In former times, during the war and when prices were high, three-quarters of the farmer's rent was taken as the criterion on which he was to pay his income tax. In 1842 Sir Robert Peel reduced the criterion to one-half of his rent; and that was during the existence of the corn laws, and when the cultivators of land enjoyed protection. But the Government, which proposed in 1853 to impose the income tax for seven years, proceeded on the same criterion of assessment as that of 1842, when the circumstances of the farmer were rendered so different by the withdrawal of protection. That question of protection was now for ever set at rest; but still he wished to draw attention to the change in the condition of the farmers since 1846. Some misapprehension appeared to exist with regard to his (Sir F. Kelly's) feelings on that subject. It was supposed that he had denounced the financial measures of Sir Robert Peel, and the commercial reforms he effected between 1842 and 1846. He would, however, venture to say with confidence, that never in or out of that House had he used one word with regard to those measures but that of approbation. He had supported those measures, and believed they had conferred great benefits on the community, and that the Minister who had proposed them was entitled to the eternal gratitude of the country. But he could not, and would not, say the same thing of the repeal of the corn laws in 1846. It was true he had supported that measure, yielding as he did his own doubts to the high and commanding authority of the Minister under whom he served as an officer of the Crown; but he could say with sincerity that he had ever since incessantly lamented the votes he had then given. Although he did not deny that the repeal of the corn laws was the crowning measure of previous financial and commercial reforms, yet he maintained that by passing it without any countervailing measure in favour of the cultivators of the land, great injustice and injury had been done to them. He should not have alluded to this subject, but for its direct bearing on this part of the question which was now under consideration. Would any hon. Gentleman deny that if half the rent paid by the farmers as the criterion of assessment which was fixed in 1842, when the corn laws existed, and corn was at 63s.; now that the corn laws were repealed, and corn was at 40s., could any one say that half the rent paid was a fair criterion, or that more than one-third would now be considered as fair? If he was inclined to quote speeches, or taunt hon. Members, he could cite the language of every Member of the present Government as late as 1843 and 1844 expressive of their opinion, that the burdens on land justified the protection of the corn laws. That was the language of the noble Lord the Member for the City of London in 1844, and of the right hon. Gentleman the Chancellor of the Exchequer, then a Member of Sir Robert Peel's Government, in opposition to the annual Motion of the right hon. Member for Wolverhampton (Mr. C. Villiers)—all of them agreeing in the doctrine which was laid down by the ablest political economists, that it was neither contrary to principle or sound policy to afford protection to that particular class who were interested in the cultivation of the soil, so long as they were borne down by those unequal burdens. He (Sir P. Kelly) would ask—was there any one single burden to which the occupiers of land were then liable, to which they were not liable now? If that was so, the farmers were entitled to some protection on account of the burdens they had to bear. They had a right to ask, that if you would not reconsider the burdens to which they were subject, as the income tax was about to be prolonged for seven years, at least that you would consider whether the principle on which they were assessed was just or not? Let him for a moment call attention to the local burdens which pressed severely on farmers. Besides being liable to all taxes on articles of consumption, assessed taxes, and all other taxes, it was to be found that in 1844 the county rates were 1,237,118l.; the highway rates, 1,169,891l.; the church rates, 481,662l.; making a total of 2,888,671l. All that large sum pressed specially and exclusively on the class of persons whose interests he was now advocating. Besides this, there was the land tax, nearly all of which was borne by the farmers, amounting to 1,447,792l., which would make a total of 4,336,463l.—while the county rates had risen from 1,237,118l. in 1844, to 1,355,644l. The case of the farmers, which he wished to put before the House, was, first, that by the loss of protection by the repeal of the corn laws, or, not to use an invidious term, he should rather say by the loss of the means of carrying on more profitably their occupations, they were placed at a disadvantage of thirty or forty per cent now as compared with their position in 1842, when the criterion of assessment was fixed at half their rent. There were other considerations also which ought not to be lost sight of. He knew of a case in his own county in. which, last year, a farmer whose profits were about 300l. or 400l. a year, lost by a blight a sum of 1,000l. or 1,200l., and no allowance was made for that loss. It would be said that the same argument applied to tradesmen who might lose by bad debts in particular years; but it was no reason because one class suffered from injustice that it should not be corrected with regard to another. He protested as much against Schedule D as against Schedule B. It was said that an alternative was given to the farmer, and that if he pleased he might be assessed under Schedule D. It appeared to him that the boon was not worth acceptance, and was in most cases not capable of being accepted. The hon. Member for Berkshire had given the true solution of the matter: the farmers did not keep their accounts in such a manner as to enable them to avail themselves of the alternative. It appeared to him that the case of the farmer stood upon the plain and indisputable principles of justice and fair play. Their incomes were now assessed at one-half the amount of the rent, and that was obviously, even from the admission of hon. Members opposite, an overrated and enormous estimate. Let them only contrast for a moment the difference between the condition of the farmer before and after the framing of the corn laws; and if they did that, they must admit that they are at present suffering under a grievous and almost intolerable injustice. They had to encounter bad and good seasons—they applied all their capital and skill to the soil, and at the end of the year they find their capital diminishing, year after year, being unable, with all their industry and all their efforts, fairly and comfortably to support their families as they had been accustomed to do; and they thought they were justly entitled to appeal to Parliament, and to ask it in its justice to give them this small measure of relief. If that was not guaranteed, he should take every opportunity permitted by the forms of the House to urge again and again their claims on the justice of Parliament for relief, and for some mitigation of the evils under which they suffered. He should hereafter move that an exemption should be made under this schedule by means of a graduated scale of the tax on all incomes under 200l. a year, and all under 400l. a year, not only with regard to this, but other classes who were unequally dealt with in Schedules B. and D.

MR. BRIGHT

said, he thought that the hon. and learned Gentleman who had just sat down had been speaking from what he should call "a Suffolk brief." He had been badly advised, for the facts were not precisely as he had represented them to the Committee. Now, first of all, with regard to the string of local taxes which he said' the farmer had to pay, it must be within his recollection that the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), when he sat upon the Treasury bench, disposed of all those taxes in one of his able speeches in a very summary manner, and satisfied the House that all the arguments on which he had formerly based his Motions for the redress of the grievances of this class were utterly fallacious; and, in fact, that this category of peculiar burdens was to be included among the obsolete matters henceforth not to be referred to again in that House. But, even supposing that this had not been so, certainly the hon. and learned Gentleman had sought to take advantage of the credulity of the Committee by asserting—because he must have known by the returns on the table that more than one-half of the local taxes to which he had alluded was paid by property that was not land, and that was in no way whatever connected with the agricultural interest—he must have known, also, that the proportion that was paid by land had been greatly reduced since 1842, and that, in point of fact, from year to year the amount of this local taxation borne by the agricultural interest was steadily diminishing, while the proportion borne by property other than agricultural was constantly increasing. The hon. and learned Gentleman's acuteness must have shown him that fact—

SIR FITZROY KELLY

said that, if he was wrong, he should be happy to be corrected; but the figures he had given showed the proportion charged upon land.

MR. BRIGHT

That might be, but if other property was equally charged for these taxes, where was the special case for demanding relief for the land? Therefore that argument entirely failed. But what was the proposition of the hon. Member for Berkshire (Mr. Vansittart)? Why, in a simple form it appeared to be this, that farmers who paid 300l. a year rent, and paid on 150l. to the income tax, should hereafter pay only on 100l.; and that whilst the income tax was about to be made to descend to incomes of 100l. derived from trades and professions, and made to include the artisan who earned his 2l. a week, all farmers paying a rent of between 200l. and 300l. a year should be altogether exempt from the tax. That, he thought, was the most extraordinary proposition that he had ever heard, even from the other side of the House. What was the position of a farmer with a rent of 300l. a year? He supposed he would rent 250 acres, at 24s. an acre. Now, would the hon. Gentleman have the conscience to ask a mechanic who earned 2l. a week to pay the income tax, and exempt a tenant-farmer who rented 250 acres of land? On such a farm he ought at least to have a capital of 1,600l.; and would hon. Gentlemen opposite attempt to persuade the Committee that capital employed in agriculture yielded no returns whatever? He thought the farmer would at least have a return of 5 per cent, which, on 1,600l., would be 80l. a year; then there would be the return for his own labour, and the profit that he would make above the actual interest on his capital. Look at the style in which farmers renting from 250 to 500 acres of land lived. They had good homes—many of them kept their carriages, not always with one horse, and some of them, having a weakness for hunters, were accustomed to follow the hounds. He was acquainted with some tenants on farms of this nature, and he knew the comfort, the abundance, the what was called "gentility" in which they lived to be far beyond that of persons engaged in trade, who paid a great deal more of income tax. The hon. Gentleman (Mr. Vansittart) put the case of such a farmer on the same footing with a clerk at 100l. a year, or a mechanic of a superior class earning 2l. per week. It was an insult to the ability and the good sense of the hon. and learned Gentleman (Sir F. Kelly) to suppose that he had persuaded himself this was a just proposition. The hon. and learned Gentleman had drawn one of those pictures of the farmer which they were accustomed to some years ago, but which, he thought, had been obliterated for ever. They really ought to put a stop to such speeches. The hon. and learned Gentleman argued as if the farmers were not in a condition to pay their taxes now, as it used to be said of them a few years ago. In his opinion, the case was now entirely reversed. Formerly a farmer was supposed to have no capital; but now he had, or at least he ought to have, a large capital, and he had no doubt that his returns were on an average much greater now than in any former years, with the exception perhaps of the prices during the war. The hon. and learned Gentleman (Sir F. Kelly) said that Schedule D was no advantage to the farmers, and that very few of them had recourse to it. He (Mr. Bright) admitted that it was no relief to them, for the fact was that the maximum rate at which they were charged was far below the average rate of their profits, and they would be silly indeed if they had accepted the offer, and subjected themselves to the same inquisitorial process as persons in trade were subjected to. He knew that if a system could be devised—though he was afraid it could not—by which persons in trade could be charged upon a steady, settled, maximum rate, and be freed from all the harassing inquiries which so often took place before the commissioners, they would gladly and unanimously accept of it. Still, he thought that when the right hon. Gentlemen the Member for Halifax (Sir C. Wood) agreed to this change, he was guilty of an unfair proceeding towards the revenue. But with respect to farming, he was of opinion that there was no trade in the country at the present moment which yielded more satisfactory returns than it. He met a gentleman in the lobby that evening, an eminent carpet dealer from Westmoreland. He asked him the condition of the wool trade; and he said that the prices were extravagantly high, and that the farmers were selling fleeces now at nearly double the prices which they obtained only a short time ago. In fact, the farming trade was more prosperous now than it had ever before been known in the memory of man, and he could not, therefore, understand why they now kept up the old cry of distress. The political capital which they used to make out of it, was now entirely gone, never more to return; and he thought it would be much better if hon. Gentlemen opposite, who were mostly great landed proprietors, were now to disabuse the minds of their constituents, and show them that they could now have no hope of a remission of taxation except on such terms as equally affected the whole country. He was certain that everybody who read the speech of the hon. and learned Gentleman to-morrow would feel that he had now taken in hand the worst case which it ever was his fortune to defend, either before a Committee of that House, or before a jury of his country. As for the hon. Member for Berkshire (Mr. Vansittart), he was a young-Member of that House, and he was probably better acquainted with the conversation of the farmers in the country than with the tone and temper of the House; or he thought the hon. Member would never have brought forward this Motion, which was, in his opinion, the most imprudent one he had ever heard propounded to the House of Commons.

SIR FITZROY KELLY

said, if the hon. Member would make a Motion exempting mechanics, artisans, and small tradesmen from the income tax to the extent of one-sixth of their income, he would give him his cordial support.

MR. BANKES

said, if the hon. Member for Manchester (Mr. Bright) had attended to the speech either of the hon. and learned Member for East Suffolk (Sir P. Kelly), or of the hon. Member for Berk- shire (Mr. Vansittart), he was sure he would have at least attempted to answer them, which at present he had not done. Their arguments rested upon this, that there was no reason why the English farmer should be called upon to pay more than the farmers in Scotland and Ireland. He (Mr. Bankes) listened with the utmost attention to the speech of the Chancellor of the Exchequer, but he could not perceive on what ground he continued a higher rate on the English than he did on the Scotch and Irish farmer. He knew cases of great distress in his own county, which he was sure could not be equalled either in Ireland or in Scotland, and it seemed hard that the farmer should be called upon to pay simply because he was an Englishman. But to all this the hon. Member for Manchester had not paid the slightest attention. He said that in his opinion farming was now the best trade going. Well, he was not there to deny that; but it was to be remembered that they were going to vote this charge upon the tenant-farmers for seven years to come; and how did the hon. Member know that that prosperity would continue all through the seven years? Of course, then, it became the duty of those who represented their interests to look carefully to the manner in which the tax was reimposed. The present appeared only a fair and just proposition. The farmers had been deprived of protection and promised a compensation, no trace of which had they at present perceived. Their claim, therefore, was one founded on simple justice, and it was impossible to refuse it them with any regard to what was fair and equitable.

MR. WHALLEY

said, he took that opportunity of entering his most solemn protest against the reimposition of the income tax, though he approved generally of the Budget. The income tax was not on the pockets but on the morality of the middle classes; it touched the very life-blood of their principle and honour, and though the tax had existed according to law since the establishment of the poor-law, it had never been carried out in the various parishes in assessing property for the poor, on account of its mischievous effects. He must say, the mere fact of giving the farmers a fixed amount, to be ascertained by a certain standard, was an inestimable boon, and did much to place them in an advantageous position. He should oppose the Motion of the hon. Member for Berkshire.

MR. AGLIONBY

said, though he in- tended to oppose the Motion of the hon. Gentleman opposite (Mr. Vansittart), he would not go into any details on the question, but he felt bound to protest against the exaggerated and highly-coloured statement of the hon. Member for Manchester (Mr. Bright) about the condition of the tenant-farmers. [Mr. BRIGHT: It is admitted on the other side.] He did not care who admitted it. He would not place his judgment under any man's belt, not even under that of the hon. Member for Manchester. He had long lived in the country, and he knew the north of England well. Had he not known that the hon. Member for Manchester had travelled through a great part of England, he should have thought he had never known anything of an acre of land in his life; the hon. and learned Member for East Suffolk (Sir F. Kelly) probably knew as little. He (Mr. Aglionby) did not represent a county constituency, but he thought that was not necessary to make a man know something of land; and he thought, if such statements as that of the hon. Member for Manchester were allowed to pass sub silen-tio, they would give just ground of complaint to a very large and important class of the people of this country. He (Mr. Aglionby) still thought the repeal of the corn laws was a wise and beneficent measure. He hoped the farming interest would be yet more prosperous, but he maintained that, so far from the farmer having hitherto had a fair return for his labour, he believed he had not even received any advance either for his labour or his capital. He knew that in the north of England that had been very generally so, and that both the rent and the maintenance of the family had been paid out of the capital. The hon. Member for Manchester had talked of farmers keeping their hunters; he (Mr. Aglionby) knew of no farmers living in that style, save the exceptions to the general class. The hon. Member for Manchester talked of the capital the farmer had—[Mr. BRIGHT: Ought to have.] "Ought to have." Unfortunately, people have not always what they ought to have, nor do what they ought to do; but there was one great drawback the farmer in the north of England had to contend with—there was no valuation. Would any Gentleman connected with the land, and who knew the common class of tenants, tell him that there was more than one in forty or fifty who could go before the commissioners with any chance of getting an exemption—not because the commissioners were unwilling to do justice, but because the farmer had not the means of convincing him, as he kept no books.

MR. KENDALL

said, he was sure the hon. Member for Manchester (Mr. Bright) could never have travelled through the district which he had the honour to represent (Cornwall), or he would not have made the statement he had done. It was true the price of wool had risen of late, but the farmer had been obliged to sell his fleeces before the rise took place. It was true, also, mutton had risen; but they had been constrained years ago to reduce the amount of stock on their farms. It was not the fact that they were in a state of prosperity: all that could be said for them was, that they were now in a state of existence. And now another difficulty had come upon the farmers, for the price of labour had risen by one-third what it was a few years ago. He thought it due to the farmers to make these observations; but at the same time he must say he regretted the present Motion was brought forward, though, if it were pressed to a division, he would vote for it.

MR. HUME

said, that he could not agree with the hon. Member for Cockermouth (Mr. Aglionby), or the hon. Member who had just sat down, in thinking that any man was entitled to begin farming or any other business without capital. He believed that the statement of the Members for Manchester and Cockermouth were quite reconcilable, and that while, according to the former hon. Gentleman, farmers who had adequate capital were now doing well, those, on the contrary, who had not were suffering. He thought that the assessment of the farmers to the income tax proceeded upon an unsound principle; that they ought to be assessed upon their exact profits—neither more nor less—and not upon any assumed proportion of their rent, which must necessarily be too much in some cases, and too little in others. It had, however, been always contended that it was in vain to expect from farmers a satisfactory account of their profits, because they did not keep sufficient accounts, and that therefore it was, upon the whole, better to fix a certain sum. He believed that this was yielding to a bad principle—no one should be tolerated in business who did not keep accounts. It was the only way in which a trader, which a farmer was, could be made to keep right. He had no doubt that the sufferings of farmers who had not capital had during the last three years been very great, nay, that in the cases of small farmers their losses almost amounted to confiscation. But the fact was that they had undertaken more than they could do, and had suffered the consequences which would attend such a course, whether in farming or any other branch of business, He believed that a capital of 10l. per acre was requisite to carry on farming operations to the best advantage. With the change that had taken place, and was still taking place, farmers would be compelled to keep accounts, and when they did so they should, as regarded their assessment to the income tax, he placed in the same position as other traders. In the mean time the present system might be allowed to continue as a compromise. In that case, however, he could not assent to the Motion of the hon. Member opposite (Mr. Vansittart), as he thought that an assessment of one-third of the rent would be quite insufficient.

MR. MALINS

said, there was one point which the hon. Member for Cockermouth (Mr. Aglionby) had made clear to his mind, and, as he thought, clear also to the mind of the House, and that was that the hon. Member was a Protectionist, and that as a Protectionist he ought to have voted with hon. Members on that (the Opposition) side of the House. It was another of the proofs they received how frequently men's better judgment and experience were influenced by party considerations; for the hon. Member depicted in glowing colours the great distress which the agricultural interest had suffered for many years past, and was still suffering, and yet he would take the present and every other opportunity of voting against that interest. And then came the hon. Member for Montrose (Mr. Hume) with one of those disquisitions which he gave the House so frequently on political economy, and laid down the principle that no man ought to hold a farm who could not put down 10l. for every acre of land he hired. The hon. Gentleman was a friend of the people, and yet he would exclude from the opportunity of making his way in the world every man whose father had not made it for him beforehand. That might be political economy, but it was subversive of every principle upon which the greatness of this country was founded. Every man who had perseverance and ability might begin with small means and make them large; but the hon. Gentle- man denied that. [Cries of "No, no!"] How many men in this country, agriculturists, merchants, and manufacturers, had begun the world without a farthing, and yet, by their perseverance, industry, talents, and character, had made great means. If he were a landowner, he would say, let him have skilful, industrious, honest, and straightforward men, and he would put them in possession of his land, and they would gradually make capital; and never would be hear it said that a man should not begin without capital without protesting against it as a principle subversive of the best interests of the country. But the hon. Member for Montrose had admitted what Gentlemen on that side of the House had always contended—that the repeal of the corn laws had led to the confiscation of the small landowners. He was one of the much despised class—the Protectionists—and would admit that that question was now settled; but that had been entirely in consequence of a combination of circumstances which could not have been foreseen—the discovery of gold in Australia being one of the most important. The House would recollect that in 1847 the noble Lord (Lord J. Russell) then at the head of the Government, and the right hon. Gentleman (Sir C. Wood) the then Chancellor of the Exchequer, wrote a letter to the Bank of England authorising them to issue notes in excess of the law beyond the limits allowed by Sir Robert Peel's Bank Charter; but now they had a different state of things, and instead of there being only 900,000l. of notes unemployed in the Bank, there were 9,000,000l The financial difficulties of that time had ceased, and the agriculturists had struggled through their difficulties; but, without desiring to keep up that worn-out subject, representing as he did an agricultural borough and district, he had taken great pains to ascertain whether the representations of agricultural distress were real or fancied, and he had perfectly satisfied his own mind that the representations made to the Government presided over by the noble Lord, when' Her Majesty was advised to address Parliament, and point out that great distress existed in the agricultural interest, were not in the imagination of the noble Lord, but were real. With respect to the particular measure proposed by his hon. Friend the Member for Berkhire (Mr. Vansittart), he agreed with the hon. Member for East Cornwall (Mr. Kendall), and did not attach much importance to it, on account of the smallness of the relief it afforded; hut, as a matter of principle, he thought it was just, and he should therefore vote for it. To a farmer paying 300l. a year, it would not give greater relief than 1l. 9s. 4d. a year; to one paying 400l, 1l. 19s. 2d.; and to one paying 600l., 2l. 6s. 2d. He believed, therefore, that if the question were put to the farmers, they would say they did not care one farthing about it, and would not ask the Legislature to make the alteration proposed; but he believed it to be just in principle, and therefore, if his hon. Friend pressed his Motion to a division, he should vote with him.

SIR JOHN SHELLEY

said, from what had fallen from the hon. and learned Gentleman (Mr. Malins), he seemed to be the schoolmaster of the agriculturists and landowners, to teach them their business; but he could only say, after hearing his opinion about capital employed in farming, he should be very sorry to be his client. What he had understood his hon. Friend the Member for Montrose (Mr. Hume) to say was, that which every landowner knew very well—that the great distress among the agriculturists had arisen from persons taking farms without considering what amount of capital they had to cultivate them with. Formerly 10l. an acre was supposed to be the requisite amount; but now, from the benefits of free trade, not more than 7l. or 8l. was required. That, too, was a circumstance which went in favour of hon. Gentlemen opposite, the landowners; for as farming was brought within the reach of smaller capital, the competition for farms increased in the market. But as to farming itself, notwithstanding the doleful accounts which had been given of it, he did not know any more profitable business than it at this moment, and he understood the hon. Member for Manchester (Mr. Bright) to have said as much. With the exception of wheat, there was not one article which was not paying the farmer better than it had ever done. The price of wool was most satisfactory; although, if he understood the hon. Member for East Cornwall, he said that the farmers of his neighbourhood had no wool, no stock, and no capital; all they had was poverty and distress.

MR. KENDALL

said, he must explain that he had said they were so hardly pressed for the last two years, that the moment they had any wool they sold it, being unable to wait until they could get a high price for it; they were obliged to sell stock to meet their rents.

SIR JOHN SHELLEY

It did appear; then, that the landowners got their rents!. It was rather a quiet proceeding on the part of the landowners to ask them to put their hand into the public purse in order to make these rents last a little longer. He believed that in all these cases there was growing up a feeling among the tenant-farmers, which would tend ultimately to the benefit of all. They were looking to the question of what capital was required before they took a farm, instead of that absurd competition which took place at one time for farms, when a man who was doing tolerably well with a farm of 300 or 400 or 500 acres was anxious to rise in the scale of farmers, and, without looking to the capital required to carry on his business, went and borrowed a certain amount of capital to enable him to take a larger farm. But there was another thing they were looking too, and that was, tenant-right; and if landowners would let their farms at an honest profit, they need not be afraid about finding men with capital enough to carry on their business. As to the Motion before the House, he thought that, having agreed to the income tax when agriculture was not so prosperous as it was at present, hon. Gentleman opposite had brought it forward at the wrong moment, and he should therefore vote against it.

MR. BANKS STANHOPE

said, after what had fallen from the hon. Member who last addressed the Committee, about' the profitable returns of farming, he had no hesitation in saying that, in Lincolnshire, where farming was quite as high as in the county where the hon. Member farmed, taking the last three or four years, the farmer had not only been making no profit, but actually had been living upon capital. As to the boasted advantages of free trade, he was prepared to admit that there had been a change; but if he considered in what way that change operated on those who held those farms at the time, he would find that they had reaped but a very doubtful advantage. If hon. Gentlemen imagined that farming was conducted during the last few years at a cheaper rate, he must explain to them that it only arose from the fact that implements and machinery were much cheaper than what they previously had been. At the same time, however, it should be remem- bered that that was an advantage which operated entirely in favour of incoming tenants. Now, he wished to put it to the Committee that night, ought they to make the arbitrary assessment of the farmer at one-half of his rent; or whether the injustice of that arbitrary assessment was in any way diminished by placing the tenant-farmer in another schedule, and giving him the power of appeal? The fact was, the whole difficulty of the question lay here, that there was a total absence of accounts in the farming districts. He would, however, in order to illustrate the fairness of the proposal now before the Committee, give them the result of his inquiries among the farmers. And, first, he would take the case of a large farm, say of 600 acres—allowing the rent to be 30s. per acre—which would make up a sum of 900l. a year. On the other hand, the farmer's capital, at 8l. per acre, would be represented by a sum of 4,800l.; on which, allowing 6 per cent, would make the interest amount to a sum of 288l. a year. But if you assess that man to the income tax, you assess him at half his rent; and therefore you assess him at 450l. a year instead of at 288l a year. Again, to take the case of a smaller farmer, one holding 400 acres of land, his rent he would take but at 25s. per acre, for it was generally found that the larger the farm the greater the rent per acre. Well, the capital of this man he could only assume to be 7l. per acre, which would represent a sum of 2,800l. And, again, taking the rate of interest to be 6 per cent, his profits should be assessed at but 168l., whereas, under the proposal of the Government, his profits would be assessed at 250l. a year. If, as had been said, the farmers put the expense of their living down as part of the expense of their farm, he was sure that their returns could not be estimated at more than five, or even four per cent; at the same time, he admitted it was impossible to calculate what was the cost of a farmer's living with the same strictness that was possible in the case of a person living in Manchester. A great deal had been said about the boon which was conferred upon the farming classes by the right hon. Baronet the Member for Halifax (Sir C. Wood) in 1851, by giving them a right of appeal. On the other hand, much had been said about the farmers being totally exempted from the vexatious and inquisitorial process which made their affairs known to the world. Now, he thought there was much inconsistency about these two positions, for if by assessing the farmer's profits at half his rent, an appeal was rendered necessary, he would have to make a complete disclosure of all his affairs before the assessor, and before the country at large. And if the man happened to have any outstanding engagements, it would be anything but convenient to make such a statement, or to publish to his landlord he was not doing well by his farm. And, again, the Committee must be aware that the difficulty and expense attendant on making the appeals were such as almost to deter farmers from making them at all. It was only the other day that a farmer had told him that, in order to make his appeal, he had to travel two or three times over twenty miles, and that when at last his case came to be heard, the assessor, amongst other things, asked how many quarts of milk and glasses of ale he drank; whereupon he turned round and told the assessor he might as well ask him how many bees he had in his garden, in order to ascertain what quantity of honey he made in the year. He did not wish to make an appeal to the Committee ad mise-ricordiam, he wanted them merely to examine whether the facts of the case warranted their assessing the farmers at half their rent; at any rate, he wished them to place the farmer in the same position as the rest of the community, by assuming his income on an average of years.

Question put, "That the words 'third part' be there inserted."

The Committee divided:—Ayes 60; Noes 120: Majority 60.

Original Question put, and agreed to.