§ THE CHANCELLOR OF THE EXCHEQUERSir, I have now to ask leave to introduce another measure, which is not without its importance, as bearing upon the comfort and convenience of various classes of persons, and likewise upon the interests of the State and of the revenue. The House will remember that, from time to time, we have had conversational discussions upon the subject of the administration of our laws with respect to the collection of what are called the Queen's taxes through the medium of a voluntary agency. In that voluntary agency are included four different descriptions of persons—first, the Commissioners appointed by Act of Parliament in the various districts of the country, each set of Commissioners having exclusive jurisdiction within its own district; secondly, the clerks to these Commissioners, to whom they look as their legal advisers; thirdly, the assessors, whose business it is to perform the preliminary process of bringing persons under taxation; and, fourthly, the collectors, whose business it is to obtain from the taxpayers the sums which they have become liable to pay. With respect to the first two of these classes, so far as I am concerned, I regard them as permanently established; and not only so, but I conceive that the establishment of such local officers is of almost indescribable value and importance. I very much doubt, indeed, whether it would be practicable to levy some of our direct taxes —the income-tax in particular—if it were not for the extremely valuable assistance which the Government derives from the gratuitous labours of the Commissioners in all parts of the country. Therefore, I need not say that the Bill which I propose to introduce does nothing whatever towards shaking or impairing the jurisdiction of these bodies, nor indicates any disinclination to the continuance of that jurisdiction. The third class is the assessors, with respect to whom I do not take precisely the same view; on the contrary, I think it may be open to consideration, at a fitting period, whether it is expedient that the whole of the assessments for direct taxation should be made by Queen's officers or by local officers. That, however, is a matter upon which I do not profess to have a 235 positive and formed opinion; it is a matter in which there is no great or serious evil calling for redress; and it is a matter which I do not propose in any manner to touch by the present Bill. The Bill, then, has exclusive reference to the class of collectors, and to the business of the collection of taxes; and it aims, subject, however, to certain important restrictions, at establishing in England the system which is at present in operation both in Ireland and Scotland, which, with respect to Ireland, I believe works well, and which with respect to Scotland I may say I know works exceedingly well, and to the satisfaction both of the persons responsible for the collection of the revenue, and of the community at large. Although the Bill might fairly be called a theoretical improvement upon the present system, yet it is not a mere theoretical improvement, for it aims at the removal of certain serious inconveniences—inconveniences which sometimes amount to positive grievances.
There is, in the first place, the grievance of parishes. The collectors of taxes at present are local officers; but, although they are local officers, they are not popularly elected. They derive their nomination immediately from the assessors; the assessors derive their nomination from the commissioners; and the commissioners derive their jurisdiction from Parliament. Therefore, the taxpayers in a parish, as a body, have no immediate connexion with the appointment of the collectors; but, nevertheless, inasmuch as collectors are purely local officers, and are not in any way under the control of the Executive Government, the law has of necessity provided that in case of default on the part of a collector, the parish shall he responsible; and, although I am happy to say—for I am not here to bring any general charge against the body of collectors—that cases of entire default are rare, yet, undoubtedly, when they do occur, they are of a very severe and onerous character. This is no mere abstract grievance, for cases have occurred in different parts of the country, sometimes in smaller parishes, sometimes in larger, where it has been necessary to take the same tax twice over from the community, in consequence of the default of the collector. The law being so severe, of course parishes make every effort to escape from it. Sometimes they endeavour to show a mixed liability, and to bring in the Revenue Department, directly or indirectly, as partly responsible for that de- 236 fault, even though it has not had anything to do with the appointment of the collector. This leads to difficulties of another class, because, wherever it can be shown that the Revenue Department is in any degree responsible, even indirectly, it is impossible for us to proceed to a measure so odious as would then be a second collection of the tax. There arises another public evil— namely, that we are obliged to take into our own hands the exercise of a jurisdiction as to what parishes shall be let off and what not, which is in itself of a very slippery character, and of which we wish to get rid. That is the grievance of the parishes.
The grievance of the taxpayers, individually and independently of their character as belonging to a particular pariah, is that they have no hold over the collector. The collector may make a premature demand, or he may menace proceedings with regard to the collection of taxes. We have no power to prevent him, and it is difficult for a body constituted as are the local commissioners, only meeting at rare intervals, to exercise over their subordinate officers that kind of close and stringent supervision which ought to be exercised by somebody or other over all persons that are engaged in the collection of taxes. That is the grievance of the taxpayers.
The revenue has its grievance also, because though, as I have said, I have no reason to be dissatisfied with the conduct of the general body of collectors—on the contrary, I believe they do all that we can fairly expect from an ill-paid class of men —a class sometimes not highly educated, and never under the degree of control that ought to be applied to their office,—yet it naturally follows from the collection of taxes, often of a very small amount, by persons not officers of the Government, that the work is sometimes imperfectly done. In some cases, for example, a great deal of unnecessary delay is allowed, thereby increasing the risk of final default, and there is a want of punctuality in the collection which causes serious public inconvenience.
Lastly, there is the grievance of the collectors themselves. I doubt whether many hon. Members are aware how serious that grievance is. It is double; first, it is difficult, with justice to the Exchequer, to give to the collectors in many instances a degree of remuneration that would make it worth while for them to undertake the office; but, secondly, this is not a voluntary but a compulsory office on their part. They are compelled to undertake it, and 237 cases of the most serious vexation often occur. Spite and revenge are motives which, I am happy to believe, lie at the bottom of but a small proportion of human actions; but sometimes there are individuals who will act even from such despicable motives as spite and revenge, and will inflict an inconvenience upon their neighbours because it is an inconvenience. Some of these individuals occasionally get appointed assessors, and there are cases where assessors have nominated particular persons to be collectors—that being a function placed in their hands bylaw—simply because they knew the office was one totally incompatible with the station in life of the parties selected, and with their personal convenience. Among the gentlemen who have been nominated collectors of taxes, the office being one in which personal service is expected, I find a general officer in the army, a retired barrister, merchants absent from home during the entire day attending to their businesses, the principals of grammar schools, the captain of a merchant vessel, and, lastly, a lady. It is a fact also that assessors have sometimes nominated persons of great age, who have long retired from business. That is a serious hardship, and one which it is surprising has been tolerated so long. Of course, general officers and masters of grammar schools do not give up their military or educational pursuits when they are nominated collectors of taxes; but they pay substitutes, and in that way are obliged to make themselves criminal in the eye of the law for not performing a duty that ought never to have been laid upon them. That is a state of things which it is not desirable should be continued. These are, I think, ample grounds to justify an attempt to improve the present state of the law. At the same time I have always been of opinion, that it would be very unwise to force an extensive change in the state of the law against the will of the local communities, even though that change might in certain respects be an improvement; and I have given more than once the double pledge—first, that if the Government attempted to legislate on the question they would do so with ample notice; and, second, that in whatever they did, they would act with great regard to the free agency and assent of the local authorities throughout the country. These pledges I hope to redeem by the present Bill. As respects the question of notice, that is simply a matter of procedure, and I propose, if the Bill is allowed to be brought 238 in, to place it in the hands of hon. Members to-morrow or next day, and to fix the second reading for an early date, because I do not think that on that stage there is likely to be any dispute. Then I propose that a month or six weeks should intervene before we take the Bill into committee, that all who are interested in the measure may have an opportunity of fully considering its provisions.
With regard to the other point, I have said that I think a Bill of this kind ought to depend as far as possible on what may be called voluntary operations. To give effect to this view we provide that it shall be in the power of the Department of Inland Revenue to give notice, in any county or any place where there are Parliamentary Commissioners with exclusive jurisdiction, that they propose to take into their own hands the collection of the Queen's taxes. That notice will be brought to the knowledge of the various Boards of Commissioners. An interval must then be allowed, within which the Board of Inland Revenue can take no further step; and we propose that if, for example, in any division of a county, within the time specified by the Bill, one-third of the number of Boards existing shall declare their dissent from the intention of the Board of Inland Revenue, it shall not be permitted to that department to carry its intention into effect. It is obvious that we cannot undertake to deal in every case with each Board of Commissioners singly. The Bill will require a very considerable change in the arrangements of the Inland Revenue Department; and it would not be possible for that department, without very great inconvenience and large public expense, to effect that change unless it were made over considerable districts. We therefore deal with the local unit of jurisdiction which Parliament itself has created; and if one-third of the Boards there do not dissent—that is, if two-thirds of them are presumably favourable to the plan—then it shall be put into operation. We also propose, in all cases where a district comes, as far as the collection of taxes is concerned, under the supervision of the Board of Inland Revenue, to make one other important change—namely, no longer to require that there shall be a personal call at the house of every taxpayer in order to obtain payment of his taxes, but to substitute for it the obligation to transmit to him a notice that the taxes will be payable at an office in the nearest market town. That is the 239 system on which the collection of the taxes now rests in Scotland, and it is found to be in the highest degree economical and convenient. We all know that the visit of the collector as it now takes place is a most burdensome affair. He is not bound to give any notice when he will come, and when he does come probably his victim is not at home; or, if at home, he may not be in the humour, or may not happen to have the money, to meet the demand. We admit the importance of the change we propose in this respect; but we think it beneficial as regards the taxpayer, if we are to judge from the experience of two out of three of the divisions of the United Kingdom. I believe it will also realize a very considerable saving in the public establishments, and thereby relieve the taxpayer in another form. These, then, are the most material provisions of the Bill. It contains, however, other provisions, which I hope will contribute largely to the convenience of the taxpayer, particularly in relation to those parts of the law which now concern the making out of the assessments and the time of the appeals. The arrangements as to these points are at present very defective. But I will not attempt to explain verbally what the Bill itself will serve best to make clear, the subject being very dry and complicated. I trust hon. Members will take the pains to read the Bill, which is not of very great length. I have confined myself to the leading and fundamental provisions of a measure which I think deserves the favourable attention of the House. We are by no means moving in this matter without invitation and incitement from various parts of the country. We have received memorials from Clifton and other places, requesting us to take over the collection of the Queen's taxes. I am aware that there will be districts where the Commissioners will probably be against this change, and such districts probably will frequently be those in which the collector-ships are most valuable. I do not complain of that; we do not wish to override the power of the local authorities, but we believe, from actual information we have obtained, that the majority of the Boards will be found friendly to the change. I therefore hope the House will be of opinion with the Government, that the time has come when the attempt may fairly be made to introduce a measure which I trust will be useful, beneficial, and economical. I will, therefore, conclude by moving for 240 leave to bring in a "Bill to alter and amend the Laws relating to the collection of the Land Tax, Assessed Taxes, and Income Tax."
MR. HENLEYsaid, he understood that the right hon. Gentleman did not intend to meddle with the assessors. He did not know what might be the practice in towns, but, in the country districts, the assessors were remunerated for their trouble—which was considerable and disagreeable — in making the assessment by being appointed collectors afterwards. He therefore thought it would be very difficult to get assessors to act if they were not to be paid. [The CHANCELLOR of the EXCHEQUER: We provide for that.] He would postpone giving any opinion on the general question till he had seen the Bill. But another point which struck him as material was how the notices for payment were to be served. Many of the taxpayers were assessed for very small amounts, and if the notices were to be served by post he was afraid that many persons might not get them.
§ MR. HUBBARDsaid, he thought nobody would complain of the proposed alteration as regarded the land and assessed taxes, but the question of the income tax was one of a different character. The land and assessed taxes were in their nature permanent, but before the Bill passed which the right hon. Gentleman was about to introduce, there would be no income tax at all. The impost expired on the 1st or 5th of April next; and, therefore, the right hon. Gentleman was asking for leave to bring in a Bill for amending the system of collecting a tax which was to be raised by virtue of a law not yet passed. [The CHANCELLOR of the EXCHEQUER: There are arrears.] He objected in the strongest manner to a different and more stringent mode of collecting the arrears of the tax: being adopted from that contemplated when the tax was temporarily imposed. Were they to infer that the income tax was to form an important feature in the next Budget, and re-appear as a permanent tax? The income tax stood in a different category from the other taxes, because it proceeded to a large extent on the principle of self-assessment. He thought it would be far more convenient if they knew what they had to pay, and to whom it should be paid, through one and the same Act. As regarded the income tax, at all events the question as to its collection had better be taken in connection with legislation on the tax itself.
§ MAJOR STUARTsaid, he had to complain of the inconvenience to which small ratepayers were put by the great distance of the place of appeal. He resided within two miles of the town of Bedford, but one place of appeal was twenty miles away, without a railway, and the other seven or eight miles across the country. He believed that the same inconvenience existed in many other counties.
§ SIR BALDWIN LEIGHTONsaid, that the right hon. Gentleman had forgotten to mention the grievances of the local commissioners, who had often to deal with a set of collectors who were perfectly ignorant of their duties. He thought it would be a great boon to the rural districts to have collectors appointed and paid by the Government. But there was one change proposed which he did not approve. It would be a hardship on the taxpayer to require him to call at an office with the money instead of having the collector to make his calls as at present. That hardship was felt with regard to the Excise duty in his neighbourhood, where the farmers had to walk eleven or twelve miles to pay it. There might be a saving to the revenue from the proposed change, but undoubtedly there would be no saving, but rather an increased cost, to the public at large. He hoped the Chancellor of the Exchequer would not insist on that part of his scheme.
§ SIR HENRY WILLOUGHBYsaid, he believed there was not that unanimity in Scotland in relation to the matter that the right hon. Gentleman had intimated. There was, on the contrary, considerable difference of opinion on the subject. He hoped, therefore, the second reading of the Bill would not be taken without giving sufficient time to consider its principle. There could be no greater mistake than to pass the second reading lightly, and then discuss the principle on some subsequent stage.
§ MR. HADFIELDsaid, he wished to inquire if any provision would be made with regard to payments in anticipation. He would put the case of a tax paid for a whole year. The second half, being voluntary, remained in the hands of the collector; he wished to know at whose risk.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he was not aware that the payment of a tax by anticipation was known to the Inland Revenue. "Wherever it was paid by anticipation, it was entirely a matter of local arrangement, under local authority, and might lead to considerable 242 difficulties. It was certainly not desirable that the State should be in possession of any portion of the taxes before the time they were due, and still less desirable was it that those taxes should be in the possession of the collector. With regard to places of appeal, he thought it very far from desirable that Government should take into their own hand compulsory power for fixing them, because although they might be disposed to exercise it in the interest of the taxpayer, they might exercise it very inconveniently for the Commissioners, and probably without sufficient consideration. He sometimes received complaints from taxpayers that the places of appeal were inconveniently situated, and the course pursued was this—he immediately communicated with the Commissioners, and he invariably found every disposition to accommodate matters to the wishes and convenience of all parties. If the hon. and gallant Gentleman (Major Stuart) would favour him with the particulars of any case on paper in which complaint had arisen, he would take care that it was attended to. With reference to the time he should fix for the second reading, he certainly had proceeded on the assumption that, as far as the second reading was concerned, the House would desire to pass it over lightly, because the Bill purported to be not for any general transfer of powers, but only in cases where it was agreeable to the wishes of the Commissioners of the local community; but even as regarded the second reading, he had no disposition to hurry it. The Bill was already printed, and would be ready for distribution on the next or following day, and he should propose the second reading, probably, on Thursday week; but what he thought material was, that there should be ample time before the Committee on the Bill, which he proposed to fix not less than a month after the second reading. The hon. Member for Buckingham (Mr. Hubbard) would therefore have the opportunity of throwing the full light of day on the whole subject of the income tax before the Bill passed through committee.
§ Motion agreed to.
§ Bill to alter and amend the Laws relating to the collection of the Land Tax, Assessed Taxes, and Income Tax, ordered to be brought in by Mr. CHANCELLOR of the EXCHEQUER and Mr. PEEL.