§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ MR. HUBBARD
said, he trusted the House and the right hon. Gentleman the Chancellor of the Exchequer would believe him when he said that he was always unwilling to take a course which was inconvenient to Her Majesty's Government and the House, and that he had taken the earliest opportunity of bringing the subject before them. The House would recollect that the Chancellor of the Exchequer in his Financial Statement had estimated the surplus of the year 1866–7 at £1,350,000, and that he proposed to appropriate £562,000 of it by reductions of taxation in favour of wine, wood, pepper, and locomotion. That left £778,000 of the surplus, and he desired to submit a Motion to the House with respect to the way in which a considerable portion of that balance should be dealt with. His right hon. Friend in his Budget speech made one proposition, and he (Mr. Hubbard) now ventured to make another, which he believed would be more in accordance with the feelings and wishes of the people than if the principle of the Government was adopted. No doubt the origin of the very startling proposition made by the Chancellor of the Exchequer could be traced distinctly to the highly interesting speech made by the hon. Member for Westminster, to whom he could not allude, especially as he was absent, without saying how cordially he welcomed him in that House. As the House was for the most part composed of practical men, it was advisable that philosophers should not be unrepresented, in order that each class might correct the other. But the basis of the hon. Member's speech, and the basis also of the "sensational" propositions of the Chancellor of the Exchequer, formed very debatable matter; and when he (Mr. Hub-hard) heard the not problematical, but almost certain exhaustion of our coal affirmed, he could not help recalling to mind that, in 1860, the Government had, by the Treaty with France, abrogated their right for a period of ten years to alter their fiscal operations with regard to the export of coal, and that by their subsequent Treaty with the Zollverein the Govern- 1203 ment had extended the period within which that self-imposed restriction would operate until 1875. Without proposing for a moment that the Government should prohibit the export of coal, he dissented entirely from a policy which prevented the Government for a period of ten or twelve years from levying upon coal any export duty whatever; and, before dismissing the subject from consideration, he would remind the House that an export duty on coal of 1s. per ton would, with its accumulation of interest if invested in the funds, pay off the National Debt within sixty years, and that without decreasing the trade in coal to the slightest extent. If the future exhaustion of coal were to be the basis of the argument in favour of a reduction of the National Debt, how much was it to be regretted that the Government were debarred from seeking in a duty on coal the means of effecting that reduction ! When compared with the debts of other countries there was no doubt that England's debt appeared to be very large; but when the charge upon the population and resources of England on account of her debt was compared with the charge made upon the inhabitants of other countries on account of their respective National Debts, England's appeared to be very small indeed. From statistics supplied by the Chancellor of the Exchequer, he gathered that the taxed incomes of the people of England amounted to £330,000,000, and the untaxed incomes to £200,000,000, making a total of £530,000,000 per annum. Taking this as the gross income of the English people, and dividing it by £26,000,000, the interest paid on the National Debt, it appeared that the burden of the debt was not greater than a twentieth part of the income of the country. That would certainly not be in the estimation of most persons a very heavy burden. Now, surely, gentlemen would not consider themselves labouring under an overwhelming burden of debt which only exposed them to the payment of one-twentieth part of their incomes. He ventured to assert that the country had made a considerable stride in the diminution of our debt. The Chancellor of the Exchequer, in mentioning the small amount of debt that had been paid off, had invited them to review the past five-and-twenty years, remarking that in 1842 a penny Income Tax produced £700,000 a year, while it now produced £1,400,000; and looking to that enormous increase in our wealth, the right hon. Gentle- 1204 man observed what a miserable fraction of the National Debt we bad discharged. That was true if they looked at the debt only; but as within twenty-five years the wealth of the country had doubled, while the debt remained the same, it followed as a matter of comparative pressure that the debt was but one-half what it would have been a generation since. Therefore if, instead of giving full swing and play to the energies of the country in the creation of more industrial pursuits, Parliament had applied itself during the period in question to a forcible reduction of the National Debt, the country would have been in a comparatively weaker state than it was at the present time. With regard to the debt itself, there was no doubt that it was a very important matter for consideration, but it ought not to be discussed with any exaggeration. The debt of the country was simply this:—It was a mortgage upon the products of the property and upon the earnings of the industry of the country. He included within this definition the earnings of industry, because he, for one, never would admit that that process of taxation could be right or just which dealt with property alone, omitting altogether the earnings of industry connected with a very large amount of floating, unfixed property. In considering the subject of reducing the National Debt, it was necessary to do so not merely with reference to its amount or annual burden upon the people, but having regard also to the use which could be made of the money required for the reduction. With this question every Gentleman in the House was perfectly capable of dealing; for, in truth, there was no difference between the right way of dealing with the finances of the country and the right way of dealing with the finances of individuals. He would, therefore, put the following questions to hon. Members:—Would a landowner who owed money on mortgage at 3½ per cent, which enabled him to make 7 or 7½ per cent by draining his land—would a merchant who borrowed money at 4 per cent and made 8 per cent out of it by extending his trade—would a manufacturer who borrowed money at 5 per cent and earned 10 per cent upon it, be taking a wise and prudent course in adopting the straitlaced recommendation to pay off the money they had borrowed, and abstain from making those improvements which would enable them to double the interest they had to pay? This, he contended, 1205 was the way in which the country ought to look at this great question. What use was being made of the money? If it was being used wisely for the enlargement of manufactures, for the extension of trade, and for the internal improvements of the country, then, instead of being an act of wisdom, it would be an act of folly to hurry into a premature closing of the account. Our true policy was to wait till existing circumstances of unexampled stringency had passed away, and we were enabled, without making an enormous sacrifice, to pay off a portion of the debt. The present time appeared to be a most extraordinary period in our history for inaugurating a forcible and unlimited reduction of the National Debt; for while 3½ per cent was being paid for it, the money was worth 6 and 8 and 10 per cent in the public market He agreed with his right hon. Friend as to the advantage of being out of debt, but he wanted the House to consider what was the proper time for setting about its reduction. He would not venture to plunge into the intricacies of the process which had been expounded to the House; he should, however, be very much astonished if hon. Members did not require a further elucidation of the subject. But it was utterly impossible that the yearly devotion of something like £500,000 annually could effect the discharge of £49,000,000, or even of £39,000,000 in thirty years. One lesson long experience in business had proved to him—namely, that nothing was more desirable, either in one's own finances or in those of the country, than to adopt the simplest system possible. There was no greater mistake in the management of the finances of an Empire than to plunge into intricacies; every statement and every account ought to be so plain that every Member of the House might be able to understand it. If the finances were not distinct and clear there was just cause for apprehension in regard to them. He wished, however, to impress upon the House that there was no means of paying off a pound of debt except with a pound; and therefore, whatever was the amount by which it was proposed to reduce the national obligations—whether £18,000,000, £24.000,000, or £60,000,000—that amount would have to be drawn from the pockets of the taxpayers. Figures could not be so manipulated as to produce more than the logical result. With the magician's wand they might be displaced, distorted, and disguised; but in the end they 1206 would assert their supremacy, and prove that facts were stronger than fiction. But if the scheme propounded by the Government were ever so admirable and simple, he would still say that this was not a time to propound it to the House; because he ventured to believe that there were subjects before the House which had a prior and stronger claim to its consideration. The right hon. Gentleman the Chancellor of the Exchequer had proposed various remissions of duty, and he particularly noticed that affecting timber. There was a very large consumption of timber; it was exceedingly useful, indeed indispensable in the construction of dwellings; and it was held to he of great importance that this duty should be remitted, because it was believed that the working classes would be benefited in a better class of houses being erected for them. He heartily concurred in all that was said upon the subject, and he had felt very glad indeed that the timber duties were to be remitted. He would however ask what would be the extent and the magnitude of the proposed reduction of timber duties? Upon a house which cost £160, bringing in the annual rent of £8, the ordinary amount of timber used would be about six loads, and the duty upon it, supposing it to be sawn timber, was 12s.; and thus the difference in the rent of the house through the remission of the timber duties would be 7d. annually. He did not make this observation in order to create a laugh, or to ridicule the infinitesimal small amount of the remission on an artisan's house; on the contrary, he believed the remission, small as it was, was a step in the right direction, proceeding on a sound principle. He drew the attention of the House to the matter now because he should have occasion to refer to it again presently, in order to compare the duty now remitted with other duties which were not, but which he held should be, remitted. The Motion which he ventured to propose to the House was that the marine and fire insurance duties should be abolished as a source of revenue. Doubtless there were Members in the House connected with the shipping interest, and he now asked their attention to the duties on marine insurance. In 1844 the then existing marine insurance duties were reformed, and this was the scheme which had been accepted and been prevalent ever since. This was the scale of duties—on a premium not exceeding 10s. the duty was 3d. per £100; if the premium exceeded 10s. and 1207 not 20s., the duty was 6d.; if the premium exceeded 20s., but not 30s., the duty was 1s.; if the premium exceeded 30s., but not 40s., the duty was 2s.; if the premium was 40s., and not 50s., the duty was 3s.,; and when the premium exceeded 50s., the duty was 4s., In this scale it would be seen that there was a graduated increase of duty, and he asked upon what principle of wise legislation was the duty on goods at sea increased because the premium on their safe delivery was obliged to be increased? The fact was that it gradually augmented in intensity and severity where it ought to become relaxed and indulgent. If 6d. was to be paid when the premium was 20s., only 1s. should be paid when the premium was 40s.,; but under the existing system 2s., was exacted, which was double what ought to be paid, even upon the principle of the graduated scale. Nothing was more monstrous in a country which professed to uphold free trade and entertain a liberal commercial policy than the scale of duties he had just read to the House. By far the greater portion of our commerce was carried on between India and China and Australia, necessitating long voyages, upon which the premium was very high, and consequently all that important portion of our trade was taxed at the highest rate. This was a very serious grievance; and it was one which he knew had been brought under the notice of the Chancellor of the Exchequer by the shipowners, not only of London, but of Liverpool, and with how little success the Budget the right hon. Gentleman had recently presented to the House showed. This scale of duties was a grievance not simply to the trade of the country, but it was an obstacle in the way of those exceedingly useful institutions which undertook the important function of insuring goods at sea. By such means trade which ought to be undertaken in our own cities by our own capitalists was driven from these shores, and found its way into the hands of foreigners. Spain was not a country famous for financial ability, enterprise, or legislation; but in Spain there were no duties on fire insurance policies, and the consequence was that she, through the defects in our financial policy, carried on a thriving trade in that business. The Spanish insurance offices attracted customers by offering terms very profitable to themselves, but favourable in comparison to the combined premium and duty payable in this country. Was not this, therefore, a blot in our 1208 financial system which ought to attract the attention of the Chancellor of the Exchequer before he embarked in uncalled for schemes for violently reducing the National Debt? But to return to the question of timber. It was important to trace the duties on timber through their various stages. Sweden, Norway, and the White Sea sent us our best timber, and the spring cargoes from the North of Europe were insured at rates varying from 12s., to 20s., and were subject to a policy duty of only 6d. per cent. But as the season advanced, as the nights grew long and the seas stormy, the cargoes ran greater risks, and being compelled to pay a higher premium, were visited at the same time with a proportionate increase of duty by the Government. The marine insurance duties on timber, as on other commodities, were no doubt ultimately paid by the consumer; but this was not the only charge on timber. The timber merchants or builders in whose yards it remained one or two years to season could not run the risk of having it burnt, and accordingly insured it, so that Government, having taxed the timber at sea, taxed it again upon land. Even when cut up and built into a house timber was not exempted from taxation, for fire insurance duty continued to be levied, not, indeed, on the timber in its original shape, but on the structure of which it formed a portion. He had already stated that the remission of the duty upon timber amounted in the case of a house which cost £160 to 7d. a year; but the imposition of the fire insurance duty retained upon the same house amounted to 2s., 5d., or fourfold the amount remitted by the Chancellor of the Exchequer. There was an axiom, or there ought to be, that the same property ought not to be taxed twice over; but in this case property was taxed thrice; having been taxed first for local purposes, it was taxed afterwards for Imperial purposes, not by the income tax only, but by the house tax and fire insurance duty as well. The house tax came to 9d., the income tax to 4d., and the fire insurance to 3½d. He submitted that such legislation was a disgrace to the intelligence of the House and the country. It might be said that of these taxes some, and especially the income tax, were temporary imposts, being levied from year to year; he was greatly mistaken, however, if a proposition of a different character were not soon submitted to Parliament. Having described, he hoped to the satisfaction of 1209 the House, the objectionable character of these insurance duties, he proceeded to show what effect his proposition would have on the surplus balance in the Exchequer. In 1864 the fire insurance duty, then at 3s., produced £1,600,000. Half the rate, of course, gave half the amount, that was to say, £800,000; and allowing a possible increase of £100,000 consequent on the reduction of the duty, the amount for the present year would stand at £900,000. What he intended to propose in Committee, after the passing of the Resolution, was that 6d. of the 1s. 6d. now levied be struck off from the 25th of June next. The total loss on the year at this rate of reduction would be £300,000, but the actual amount absorbed from the surplus for the nine months over which the reduction extended would be £225.000. The marine duty now levied amounted to £400,000, and if this were not absolutely abolished, but reduced to a minimum rate of 3d., yielding on £400,000,000 the value of our imports and exports a sum of £37,500, the loss, limited in like manner to a period of nine months, would be £262,500. Adding the amount of this remission to the former remission of fire insurance duty, the total loss would be £487,500, leaving to the Chancellor of the Exchequer £14,500 more than he himself had reserved in his own financial operations. It was necessary, however, to look ahead still further, for his principle being that these various taxes ought not to be levied, he would not be satisfied until the fire insurance duty was reduced to 1d Any higher rate would still have the effect of a prohibitory duty. He had been unable to support the Resolution of the hon. Member for Dudley, as that hon. Gentleman distinctly announced in his Resolution that his object was to reduce the duty to an amount at which it would be recuperative, and bring back all that had been previously remitted. But this he maintained to be a delusive view of the question, as what had been remitted could not be recovered. A fire insurance rate of 1d., on the contrary, would act simply as a registration fee, serving to indicate the wealth of the country. In the ensuing year—for he did not shrink from following out the consequences of his policy—a loss of £600,000 upon the fire insurance duties must be incurred; but from this £600,000 should be deducted £50,000 collected, as had been explained, under 1210 the rate of 1d., making the net sacrifice £550,000. But then against this there would expire a yearly payment of £585,000 in the dead weight of the Bank of England—and so the account would be squared. He had now gone through the whole of his little financial statement; he had not placed any difficulties whatever in the way of the Chancellor of the Exchequer, but had shown the House a way in which, consistently with the funds at their disposal, a change, long the object of desire in (his country, might be accomplished without any inconvenience to the Government. He was quite aware that the Chancellor of the Exchequer had proposed another mode of appropriation, and naturally whatever proposition originated with the right hon. Gentleman was made by him and received by the House with a great deal of confidence. It happened, however, that not many months ago the Chancellor of the Exchequer expressed a deliberate opinion with regard to the very taxes now under discussion. During the Session of 1865 the right hon. Gentleman thus expressed himself—I do not grudge the reduction which has taken place, because that tax applied to stock-in-trade was unquestionably a tax upon industry, and the benefit of the remission, and of any consequent increase of insurance, whether in itself small or great, is certain to find its way to the consumer of the commercial or industrial products which are the subject, of the tax…. resisting Motions for the repeal or reduction of the duty, I have not been used to defend the tax upon its merits…. However, I think that the definition of the tax as a tax on prudence may be amended; and that we might call it, as to the chief part of it, with greater accuracy a tar upon property, but with a double exception—the one being an exemption in favour of improvidence, and the other an exemption in favour of those large holders of property in the form of houses and buildings, who are able to take their chance and perform for themselves the function which is called self-insurance. I must say that no part of the argument ever used on the subject of fire insurance has appeared to me to tell so strongly against the present state of the law as this, because it is said and, as I think, said unanswerably, 'If you are to make insurance against fire the means of imposing a duty upon property it ought to be imposed equally, and there ought not to be a virtual exemption on behalf of large holders of property.' That, as it appears to me, is an argument to which there is no reply."—[3 Hansard, clxxviii. 1122.]He agreed in thinking that there was no reply. He accepted the verdict of the Chancellor of the Exchequer; and he asked the House to agree to it also. He ventured to anticipate the right hon. Gentleman's decision on the question, and to ask the House to adopt the Resolution 1211 which he was about to propose in harmony with the right hon. Gentleman's own opinion. He had little more to say; but before sitting down he would request of the House to impartially consider the facts which he had taken the liberty of adducing. On the part of the Government a measure had been presented for their adoption as an act of patriotic virtue. Let not that measure be marred by an ungracious act of injustice and impolicy; let not the funds which were destined to the removal or the diminution of the National Debt be derived from taxes which pressed upon and obstructed the industry of the country, and which, as the Chancellor of the Exchequer himself had pointed out, pressed with the utmost force on prudence and poverty while it exempted improvidence and princely wealth. The hon. Gentleman concluded by moving, that it is inexpedient to retain, as part of the Inland Revenue for the service of the year, the present Duties on Fire and Marine Insurances, which are unjust in their incidence on property, and injurious to the national industry.
§ MR. MARSH
, in seconding the Amendment, said, that the hon. Member for Buckingham having gone into pretty nearly the whole of the questions raised by the Budget, he would likewise make a few remarks on some of these topics besides the one to which the Amendment more particularly referred. His hon. Friend had said a great deal about the timber duties, but he did not appear to approve the policy of doing away with them. [Mr. HUBBARD: Yes!] There was much inconsistency in the way those duties were charged, and decidedly they were objectionable. Then as to the modification of the duty upon wine imported in bottles, he thought the alteration made by the Chancellor of the Exchequer was advisable, because anything which caused as much public inconvenience as that caused by the former system must be mischievous, He spoke with feeling on this point, because having imported wine some time ago, parties who sent it put it in a cask to avoid duty, and it was spoilt. He now came to the proposition to pay off the National Debt, which was indeed a very serious one. He was not prepared to express a decided opinion against the proposition to pay off part of the National Debt, but he hoped the House would pause before wholly accepting the views expressed by his right hon. Friend the Chancellor of the Exchequer. It was a dangerous thing 1212 to anticipate Budgets, for as disturbing causes might constantly arise we could not tell when our financial arrangements might be set at naught. At one time his right hon. Friend proposed to repeal the income tax within a certain number of years, but the Crimean War interposed, and he was unable to carry out that intention. He could not but think that his right hon. Friend's present proposition—namely, to tie up the House to the obligation of paying off a certain amount of the National Debt every year for eighteen-and-a-half years, was not an advisable one. It was very like the old proposition of a Sinking Fund which was so thoroughly exploded by Lord Grenville in the celebrated pamphlet which he published in the year 1828. In Lord Grenville's able and logical pamphlet there was this passage—It can be neither consonant to the dignity nor to the wisdom of an enlightened Legislature to guard against its own presumed improvidence by an engagement directed only to distant and contingent benefits, and which under many supposable events may in the meantime be found to have been of very doubtful policy.Lord Grenville also says that reference to similar transactions in private life is the best of all instruments for the discovery of truth in political economy. Now, what would be the case in private life? Would any merchant or manufacturer owing a debt which he was not bound to pay at any particular time within the next ten or twenty years hind himself to pay it in instalments at certain periods? Would he not rather take his own opportunity? Would he not choose for payment a time when he had a good deal of ready money or when his trade was flourishing? and that was the course which ought to be adopted in regard to the National Debt. It was not improbable that within the next eighteen-and-a-half years we should have to borrow money; in which case we should be paying with one hand and borrowing with the other. He believed that in modern times there never had elapsed so long a period as eighteen-and-a-half years without a Government loan having been contracted within the period. Then the House must remember that we might have to borrow at a very high rate of interest. There was a time when we had to pay as much as 8 per cent; the funds being at 50, and the guinea being worth 28s. He had not gone into details; but it would at once appear to any one that £1,000,000 for eighteen-and-a-half years, at 5 percent compound interest, would amount to a 1213 great deal more than £24,000,000. It certainly appeared to him that there would be little or no advantage in trafficking with our own money in that way. Lord Grenville remarked—They will admit perhaps without hesitation that a nation can no more profit by this trafficking with itself in its own securities by buying debt with debt, and money with money, than an individual can do by shifting his purse from one pocket to another.To clear off a debt for which we were only paying 3 and a fraction per cent, when by leaving it in the pockets of the people they might be making 6 or 7 per cent, was certainly not good policy. Here he would take the liberty of quoting another extract from Lord Grenville—Suppose, for instance, that instead of a whole community only one of its numerous merchants or manufacturers has borrowed money at interest which he can only repay by withdrawing a portion of his capital invested in trade, will be voluntarily resort to pay off this money? What will be its consequences? It will neither increase nor diminish the sum total of his wealth; he will owe less, but he will also have less; he will cease to pay interest on the debt which he discharges, but he will also cease to receive profit on the wealth which effects the discharge.But we were in a stronger position than the merchant or manufacturer. The fact was, our National Debt was no debt at all. A debt was a sum which might be demanded either at one time or at several stated times; but our National Debt was nothing of the kind. It was simply the payment of an annuity. There was an old maxim which said, "Out of debt out of danger," and which applied to the ordinary case of a debt which the debtor might be called on to pay at an inconvenient time; but that was not our case. We could not be called on to pay the National Debt at all. It might be urged that all the money which the people saved from taxation was not invested—but that a portion of it at least was spent in enjoyment. Now, having regard to the habits of the people who paid income tax, he believed that when there was a remission of 2d. in that impost much of the saving was invested directly by the taxpayers; but, even if the money passed away from the taxpayers to tradesmen, sooner or later a great portion of it was invested. But, supposing it all went for enjoyment, would not a most desirable object be achieved by the Government? On this point he would again quote Lord Grenville—Wisely, therefore, would the rulers of any community in the most prosperous condition of its finance apply themselves to the direct interest 1214 of those whose happiness is their primary and especial charge. Such a decision would be of no doubtful expediency, even if we could dismiss all present concern for the public welfare and look only to the ultimate increase of wealth. All possible advantage of these operations, in whatever form conducted, must at last resolve itself into a diminution, more or less remote, of the public burdens, and to postpone for so long a period so great a good, when already partially within our reach, is to presume far too much on the powers of human foresight and the stability of human institutions. An earlier, although more gradual, repeal of taxes would spread its benefits in a thousand fertilizing channels in the wide fields of social industry, and never could its absence be compensated by any forced direction given after a dreary vacancy to the produce of the same sources pent up till it bursts their artificial barriersOne of the great arguments with regard to the paying off of a portion of the National Debt sprung from the apprehended exhaustion of our coal-fields. Now that, in his opinion, was a most fallacious argument. It was applying mathematical reasoning to the ordinary purposes of life, a proceeding which Aristotle said was as absurd as to apply ordinary reasoning to the exact sciences. The argument, in fact, was founded entirely on the argument of geometrical progression. It had been shown by a curious calculation that if the Wandering Jew, at the time of the Crucifixion, had invested 1d. at compound interest, the sum would by this time have increased to about 200,000,000 of solid lumps of gold, each as largo as the East. But reasoning of this kind did not apply to the common purposes of life. Supposing, for instance, we should want at the end of the century twenty-four times as much coal as we did now, we should have, as a natural consequence, twenty-four times as much smoke and twenty-four times as much fog, so that we need not consider the interests of our posterity, as all the poor children would be choked. Then, again, we should have twenty-four times as many smuts on our noses. And as the population and wealth of the country would have greatly increased there would be an inadequate supply of water. He knew of no instance of coal becoming scarce; but cases had come under his notice where manufacturers had been unable to extend their trade operations in consequence of want of sufficient water. But the argument of geometrical progression told both ways, It appeared, for example, that an income tax of 4d. in the pound brought in nearly £7,000,000 a year, which sum was doubling itself every twenty-five years. Well, it 1215 followed that at the end of the century it would have produced no less than £106,000,000, so that the people might snap their fingers at the Consols. His right hon. Friend had said that all our prosperity and wealth might be summed up in one word—coal. But he maintained that our prosperity was not owing solely to coal, but was in reality produced by our industry and enterprize. In Bohemia and France there were large coal mines, but not the same amount of industry that existed in England. If coal were to fail in this country, some method of supplying its place—such as burning water—would be discovered, and we and our children after us should always keep the lead. For his part, he had very great faith in the fortune of this country and in the industry, which he hoped would be transmitted to our great grandchildren, and he felt confident, therefore, that if there should be a failure of coal, our posterity would rise superior to the difficulty.
To leave out from the word "That" to the end of the Question, in order to add the words "it is inexpedient to retain, as part of the Inland Revenue for the service of the year, the present Duties on Fire and Marine Insurances, which are unjust in their incidence on property, and injurious to the national industry,"—(Mr. Hubbard,)
§ MR. H. B. SHERIDAN
said, that he would adopt the suggestion of the right hon. Gentleman the Chancellor of the Exchequer, and would defer the proposal of the Amendment of which he had given notice upon the second reading of the Terminable Annuities Bill until the House was asked to go into Committee upon that measure. Although he concurred in many of the remarks which had been made by the hon. Member for Buckingham, he was afraid that the adoption of the Resolution which the hon. Gentleman had proposed might embarrass the financial arrangements of the Government, and therefore he hoped the hon. Gentleman would not press the Motion to a division.
SIR STAFFORD NORTHCOTE
said, he had intended to make some remarks on the speeches which had been delivered, but what the hon. Member for Dudley had said had rather changed the position of affairs. In his judgment it would be far more convenient to discuss this matter as between terminable annuities and the proposal of the hon. Member for Dudley, and he should, therefore, defer any observa- 1216 tions which he had to make until that Resolution was before the House. In the meantime he expressed a hope that the Chancellor of the Exchequer would favour the House with some more complete explanation of his plan for the reduction of the National Debt than they had yet received.
§ SIR FITZROY KELLY
agreed that it was desirable to shorten this discussion, but he did not understand what was the present position of the House, nor what position it would be placed in if it accepted the proposal of the right hon. Gentleman the Chancellor of the Exchequer. He would ask his right hon. Friend at once to open to the House the whole question to which he proposed to call attention, as it involved the taxation of the people for a very great number of years to come. There were other points on which he hoped the House would receive information; but if the nation paid between £3,000,000 and £4000,000 a year until the year 1905, subject only to the diminution from time to time of interest or dividends, he would ask the right hon. Gentleman whether the immense sum was to be raised by new and additional taxes, or whether his right hon. Friend calculated that there would be year by year an increasing surplus, sufficient, even if there were no remission of taxes, to allow for so large a sum being applied exclusively to the reduction of the National Debt.
§ THE CHANCELLOR OF THE EXCHEQUER
said, his right hon. Friend had materially misapprehended the extent of the obligation in which the public would be involved in the event of the adoption of the plan now before the House, and upon which he hoped to offer explanations shortly. He could not dissemble his regret that the hon. Member for Buckingham (Mr. Hubbard) had occasioned inconvenience to the public service by causing the postponement of the necessary measure now before the House through endeavouring to attach to it a discussion of propositions which were quite irrelevant to the subject of the Bill, This was the first time in his recollection that a proposal had been made in that House to set aside the second reading of a Bill when the author and seconder of the proposal both desired that the Bill should pass, and that every proposition therein should be maintained. This Bill had been delayed for some weeks in order that his hon. Friend might raise a discussion upon matters which were 1217 totally and absolutely irrelevant to it. It was quite clear that the proposal of his hon. Friend related to the Sill which stood as the next Order of the day. His hon. Friend did not propose to substitute fire and marine insurance duties for the proposals respecting timber and wine duties; but he did propose to substitute them for that disposition of public money as prescribed in the other Bill. Under these circumstances, he would refer only to the observations made on the Bill before the House by the hon. Member for Buckingham and the hon. Member for Salisbury— observations the tendency of which, he thought, was to recommend the proposals contained in the Bill. With respect to the fire insurance duty and the marine insurance duty, his hon. Friend had put his own proposals (which under present circumstances he could not accept) in the most disadvantageous possible position, for he had made them upon an occasion when it was, he thought, the universal sense of the House that they must either be withdrawn or negatived. With respect to the matter of the Motion it was not his intention to say anything in vindication of the duties which had been attacked by his hon. Friend, but he might say that the fire insurance duty was a duty upon property for the most part. It might be wise in the House to consider the propriety of dealing with it on the first suitable opportunity; but when dealt with it ought to be dealt with extensively. At the same time, there were serious and broad considerations connected with that matter which could not be kept out of view. They must consider the relation of taxes upon property to taxes upon labour, and the immense relief recently given to property, not only by various remissions, but by a large reduction of the income tax; and his own feeling was that, although they might be quite right in dealing further with the fire insurance duties, something ought to he recovered from property in a better and less exceptional shape. With regard to the marine insurance duty he admitted that it had a very fair claim for consideration, but he did not consider it one of the most urgent cases, looking at the many points of taxation a remission of which might be fairly and justy urged. Undoubtedly the scale was very defective, although it had been reformed in modern times. That duty was not felt to be very oppressive, BO far as might be judged from the augmentation of the duty itself. We 1218 were not entitled to say that the growth of the fire insurance duty had been more rapid—possibly it might have been somewhat less rapid—than the growth of insurable property. With regard to marine insurance, however, this was the state of the case—in the five years 1855–9 it produced £1,568,000, or about £316,000 a year; and in the years 1860–64 it produced about £1,833.000, or £366,000 a year, the quinquennial increase of the revenue therefore being 16 per cent, while that of shipping was 10 per cent; which showed that the duty was not felt to be one of those oppressive duties with regard to which it was necessary to make exceptional claims. With regard to the Motion, the House was not called upon to give a vote upon its merits; it had rather to affirm by the second reading of the Bill that there was nothing in the Motion that ought to delay the Bill. There was one matter connected with the Bill on which he desired to make an observation, more especially as it related to a matter which had been brought under his consideration by the right hon. Gentleman the Member for Oxfordshire (Mr. Henley). The right hon. Gentleman had represented to him that there should be some provision in the Income Tax Act to allow abatements from assessments under schedule A in respect of abatements of rent allowed by landlords on account of the cattle plague, or in respect of rates paid by the landlord or the tenant on account of the cattle plague. But according to the system of administration under the income tax there was a rule applicable to all such cases, and therefore there was no necessity for legislation on the subject. In 1863 authority was given to afford relief with respect to the assessment on cotton mills during the cotton famine, and that power had been exercised from time to time, as it would be in the present case in respect of abatements of rates made on account of the cattle plague. Indeed, it was almost involved in the nature of the income tax, because it would be a mere fiction and subtlety to tax what a man did not and could not get owing to such events as the cattle plague and the cotton famine. It should, therefore, be clearly understood that the power of allowing these abatements did exist and would be exercised. So far as regarded the losses sustained by farmers from the direct operation of the cattle plague, they had the remedy in their own hands, because Schedule B allowed them the option to be 1219 taxed according to certain proportions of the rent of the farm; or if the farmer choose to show that his net receipts were less than that proportion, he was at liberty to do so, and would, of course, make allowance for losses by the cattle plague. He hoped that the House would now allow the Bill to be read a second time.
§ MR. WHITE
inferred that the House did not wish to protract the discussion, but he would observe that the hon. Member for Buckingham was not responsible for the inconvenience which might have resulted to the public service, because the Chancellor of the Exchequer requested the House not to discuss the Budget on the night it was brought forward. But the right hon. Gentleman had never given the House an opportunity of discussing the Budget, and then he reproached the hon. Member for Buckingham for the great inconvenience which had resulted to the public service from the postponement of the second reading of this Bill in consequence of the Amendment of which the hon. Member had given notice. He did not think therefore that the House had been treated fairly by the right hon. Gentleman. The hon. Gentleman the Member for Buckingham, on the other hand, deserved great credit for the course he had pursued, and he begged to tender him his personal thanks for what he had done.
§ THE CHANCELLOR OF THE EXCHEQUER
begged to be allowed to say in explanation that he had not attempted to limit the discussion as to the Budget. His observations were directed to the specific Motion of the hon. Member for Buckingham.
was very glad to hear the right hon. Gentleman speak as he had done with respect to the remissions of duty in consequence of the cattle plague. He might, however, remind the right hon. Gentleman that ordinarily these remissions would come after the assessment, and therefore the tenant would not have the power of availing himself of the alternative to which the Chancellor of the Exchequer had referred. What the tenant wanted was that he should get protection under the clause. That was a question which the right hon. Gentleman would do well to take into consideration, so that the Commissioners might be able to remit the duty where it would be right to do so.
§ Question, "That the words proposed to be left out stand part of the Question," put, and agreed to.1220
§ Main Question put, and agreed to.
§ Bill read a second time, and committed for To-morrow.