§ SIR HENRY WILLOUGHBYsaid, that he did not rise to oppose the Motion for granting Supply, being well aware that it was necessary to have a very large one. During the last three years the House had been compelled to vote £212,000,000 for public purposes, and although it was true that there was no war pressure, and that therefore the Supply would not be so large as in previous years, yet there were one or two points to which attention ought to be called at this early stage. One of those points which he wished to press on the attention of the Government was, that whatever might be the amount of Supply required, taxes ought not to be levied in such a manner as to unduly press upon or harass the taxpayers; and the other, which he was not then going to enter upon, was that the supplies, when raised, should be expended with judgment and economy. With regard to the first of these points, he had received information from large bodies of taxpayers stating that they had been subjected to great vexation and annoyance by the manner in which the income tax had been assessed and collected, and he wished to ask the Government who was responsible for the fair and just conduct of the numerous officers employed in the collection of the income tax—the surveyors, inspectors, assessors, and collectors? He would not have put that question unless he was convinced that there were serious grievances oppressing the taxpayer, and he must say that he thought the taxpayers were not always sufficiently considered in discussions upon taxation in the House. The last accounts from India showed that there was something like an income tax rebellion in a portion of our territories, and he hoped the House would take care that something of the kind was not got up in this country. He verily believed that at the present moment the strongest feeling of dissatisfaction existed in the country in respect to the manner in which the income tax was collected in this country; and he greatly feared that if the Chancellor of the Exchequer did not take care, he would run the risk of becoming the most unpopular man in the kingdom. The law was very difficult to get at in respect to the income tax; and if the taxpayers wished to know what remedies they ought to take when they were aggrieved, they were obliged to have recourse to an Act of Parliament containing 194 clauses, and then they 123 were referred to an Act which was passed fifty years previously. He did not believe that there was a single Member could give anything like a clear precis of the law on that subject, and he certainly thought that some change ought to be introduced so as to make it more intelligible. Surveyors and collectors of the income tax had a power of summoning, which, however, he believed, was exercised most unfairly against the taxpayers, who were often brought up, at great loss of time and expense, and, after all, their cases were not heard, but postponed till another day, when it had all to be gone through again. The principal grievance, however, arose from the system of speculative surcharges which was so odious in the year 1815, that Parliament ordered the burning of all documents relating to it, and from the tax being, as it was, he believed, in some cases, demanded before it was due. The functionaries who collected the income tax, and among whom there were many honourable and high-minded men, were professedly under the direction of the Inland Revenue Department, but there was a general impression abroad that instructions had been issued from head-quarters that the tax should be screwed up, and that an attempt was being made by the right hon. Gentleman the Chancellor of the Exchequer to make the 9d. tax produce as much as the 10d. He could hardly believe that that impression was well founded, but he should like to know who was responsible for the mode in which this tax was collected.
§ THE CHANCELLOR OF THE EXCHEQUERSir, I entirely agree with the hon. Baronet with regard to the importance of the question that he has brought under the notice of the House; but, at the same time, I think it is too important, and certainly too complicated, to allow of its being advantageously disposed of by a merely incidental discussion, but that it may well deserve a more distinct and detailed consideration on the part of this House. However, the hon. Baronet has put to me a question which I shall not decline to answer, while I shall at the same time notice in a very few words the more general statements he has made. In the first place, there is the question how far abuse and grievance prevail in the collection of the income tax; and, in the second place, there is the question as to who is responsible for the collection, and to whom the taxpayer should look in any case where he 124 has suffered hardship through the levying of the tax. I must say, my belief is that abuse is rare, and the grievance, so far as it prevails, is incidental to the nature of the tax very much more than to the conduct of those who are concerned in levying it. The general principle, or at any rate a very common practice, on the part of persons who think themselves aggrieved, is to state their case to the Chancellor of the Exchequer. Whenever I receive a statement of that kind, the case is always made the subject of regular investigation. The result of those investigations has impressed on my mind the conviction that great difficulty attends the collection of the tax, considerable inconvenience is frequently inflicted in the collection of it, and that the difficulty and inconvenience are, in the main, inherent in the nature of the tax itself. I should have less scruple in making this statement if the case stood as the hon. Baronet appears to imagine it stands. He has spoken of assessors, collectors, and surveyors, as constituting a body of persons employed in the collection of the tax. Now, it is not true, with reference to any question of responsibility, that collectors, assessors, and surveyors, constitute a body of persons, and for this reason—they derive their authority from different sources, and they are responsible to different authorities. The collectors and assessors are not appointed by Her Majesty's Government, nor has Her Majesty's Government any control over them whatever, except such as may be supplied by process of law in case of misconduct. The surveyors, on the other hand, are strictly officers of the Government, and are under the control of the Board of Inland Revenue; through that Board they are under the control of the Treasury, and through the Treasury under the control of this House. That is a state of law very peculiar, involving a great deal of possible argument and discussion; and it is one which I need not tell the hon. Baronet is, in the view of Her Majesty's Government, not satisfactory. Our opinion, however, is this, that it would be a more hazardous experiment to alter essentially the basis of our direct taxation, with respect I mean, to the principle of the law which withdraws from the Queen's Government the power of assessing the subject, as a general rule, and places it in the hands of local authorities, independent of the Queen's Government; but that the power of apportioning the taxes, which the law assigns to local au- 125 thorities, and, I think, assigns to them very wisely, is a matter entirely distinct from the question whether the first assessment of the tax ought to be made by officers of the executive Government or by officers appointed by local authorities. I may remind the hon. Baronet that this, so far as we are concerned, is not a new question. I have stated to this House on previous occasions that the Government are ready and disposed to take into their own hands the assessment and the collection of the direct taxes; but the hon. Baronet will, I am sure, agree with me that it would he very unwise in us to provoke a conflict upon that subject with any considerable body of public opinion in the country. We have made application to the various boards of commissioners who are intrusted both with the duty of deter mining the tax to be raised, and likewise with the appointment of those classes of officers. We have made application to these boards to state their views on the question I have referred to—namely, whether in their opinion, it is or is not desirable that the appointment of those officers and the assessment and collection of the tax should be taken into the hands of the Government; and the result has been, although a very large number of these boards are desirous that the charge should be transferred from them to us, so far as the first assessment and the final collection are concerned, yet we have not found that kind of unanimity, or that approximation to unanimity, which would justify our submitting a proposal to the House based upon their recommendations. The hon. Baronet and the House will clearly understand, that if the duty of the assessment and collection are to be assumed by the Government, it must be assumed through the whole country, without exception, or, at all events, throughout large areas; because if we were to undertake these duties here and there, upon minute spots of ground, and the whole system were to be intermixed at every point with the new, considerable; confusion, undoubtedly, and large increase of charge to the public would be the unavoidable result; but, I do not hesitate to say, I think it would be most desirable that those duties of first assessment and collection should, if it were possible, be carried over to the Executive Government, because the consequence of that would be, that every person who felt himself aggrieved by the conduct of any assessor or collector would have a right to such re- 126 dress as the Executive Government could give him, or as, if the Executive Government failed to give him, this House might require.
Another aspect of the question ought to be taken into view. At present it is compulsory upon persons to assume those duties, if they are required to assume them by the local commissioners. It is a duty very often affording insufficient remuneration—frequently clashing, in the most inconvenient manner, with the private occupations of individuals; an I do not hesitate to say, although a good deal of unnecessary hardship is inflicted by the present state of the law upon the taxpayer, still greater hardship is inflicted upon persons who are sometimes called upon and required, against their will, to assume the duty of collecting the tax. I have said, therefore, it appears to me that the duties of those officers, and, in particular, the duties of the Commissioners, are in general extremely well discharged, having reference to the difficulty of the case; but, notwithstanding, I incline to the opinion that that difficulty may be in certain points diminished and limited, if the particular functions I have named were transferred to the Executive Government. I wish now to reply more directly to the question which the hon. Baronet has put relative to the manner in which a taxpayer is to obtain costs for being put to unnecessary inconvenience? Inasmuch as the assessment and collection of the taxes are in the hand of those local commissioners, who afford gratuitous services, and who have not, as far as I am aware, the command of any funds applicable to the payment of costs, I really cannot undertake to say there is any source from which a taxpayer who has had to spend time in matters connected with the assessment and payment of his income tax, can be reimbursed and indemnified for the inconvenience and loss of time. All I can say is, that Parliament, as I have said, has given to the Income Tax Commissioners the power of determining the tax to be levied, without any appeal to the Executive Government, unless in those cases in which parties have chosen originally to come before the Executive Government themselves. There is no appeal from the judgment of the Commissioners to the Executive Government; but, notwithstanding, in cases—I must say that the cases have been exceedingly rare—in cases where the Commissioners appear to have committed 127 some palpable error of principle, such as in any court—if the matter were one of law—would be held to justify an application for a new trial, in such cases I have thought it might be the duty of the Executive Government to give relief; but, as a general rule, the answer to the hon. Baronet must be taken to be this: the discretion to determine, and the authority to determine, the amount of taxes payable is intrusted to the Commissioners, and that there is no appeal from the decision at which they may arrive. With respect to what the hon. Baronet has said in respect of arbitrary surcharges, I have no doubt that loss and inconvenience is frequently inflicted upon individuals; but 1 am bound to say it is inconvenience inherent in the nature of the tax. It is no very easy matter to get at the income of a man. Either you must give most stringent powers to be exercised in the first instance, whereby the public officer may obtain positive evidence, or else you must say to such an officer, "Use due diligence and the best discretion in your power to form an estimate of a man's income upon the basis of the judgment you may so form; and then the matter will go forward for decision. "One of those two courses you must take; and I am bound to say I think the course now taken is, although attended with inconvenience, by far better than the other course, which would be a course absolutely intolerable. The hon. Baronet will see, however, in the absence of the power of demanding direct evidence in the first instance, there is nothing left except the formation of an estimate according to such evidence as may be at the command of the assessors, and the evidence is necessarily, from its character, very imperfect. To arm the taxing officers with powers of investigation, in the first instance, to avoid arbitrary surcharges, would be to institute a system a hundred times more oppressive than the present system should be thought to be, even in the case which might be the worst example of its working. I am afraid the difficulties to which the hon. Baronet refers are in the main inherent in the subject matter. There cannot be, I am bound to say, a more gross misapprehension than the idea which seems to prevail in certain quarters, that because the levy of indirect taxes is a thing grievous and oppressive, we have only to levy direct taxes and we Should at once get rid of all practical difficulties and inequalities. I am afraid, 128 on the contrary, the practical difficulties would be aggravated in a tenfold degree.
§ MR. BENTINCKsaid, his hon. Friend the Member for Evesham (Sir Henry Wil-loughby) had told the House that in 1815 so odious and detestable was the income tax that all the documents connected with it were ordered to be burnt. He might with truth have added that the same feelings towards it were entertained in 1862; but whether it would be advisable to take the same proceedings with respect to the documents he would not say. The hon. Baronet had spoken of what he happily termed speculative surcharges, which appeared to him (Mr. Bentinck) to involve a most objectionable system. A speculative surcharge, in fact, amounted to this, that in the collection of the income tax an imaginary value was put upon certain property or income, with the chance that that over-valuation might not be disputed, and thus a man might be mulcted in that which he could not be fairly called on to pay. During the recess his attention had been called to another grievance of a serious character. He was told that in cases where persons had appealed against what was justly called speculative surcharge, they had been called upon to pay a fee to the legal functionary who conducted the investigation. Thus the monstrous injustice was imposed upon them, first, of having to defend themselves against an overcharge, and next, of being compelled to pay for so doing. He hoped the Chancellor of the Exchequer would deny his statement if he (Mr. Bentinck) had been misinformed, and otherwise that he would take the trouble to have some inquiries made on the subject. He did not mean to say that such had been uniformly the practice; but in the metropolis and in other parts of the country, he believed it had prevailed. The right hon. Gentleman had told the House that the difficulties complained of were inherent in the tax. He (Mr. Bentinck) quite agreed with the right hon. Gentleman, but it was a singular admission for the Chancellor of the Exchequer to make. Some years before, the right hon. Gentleman had expressed his reprobation of the tax, though he had since advocated the removal of other taxes less obnoxious. He hoped that when the income tax was under discussion at a future period the right hon. Gentleman would remember what he had just said as to the inconveniences that were inherent in that tax. The right hon. Gen- 129 tleman had further admitted that there was no fund from which the cost to which persons were put in appealing against speculative surcharges could be paid. If that were the case, there ought to be some better regulation than that which at present existed, and under which persons were put to great expense when making those appeals. There ought to be some cheaper and more simple mode of proceeding, and he hoped the right hon. Gentleman opposite would consider the subject, and take steps to put the matter on a very different footing.
§ Motion agreed to.