HOUSE TAX.—RESOLUTION. (Hansard, 13 July 1869)

MR. ALDERMAN W. LAWRENCE
said, that in bringing forward his Motion for a repeal of the tax on inhabited houses at that late hour, he would not detain the House with any lengthened remarks, but he wished to show its mischievous effects. He undertook to show that it limited small houses in the size and number of their rooms; that it interfered with the erection of and restricted the mode and manner of construction of blocks of buildings which were specially designed for the working classes; and that it caused great waste of habitable dwelling accommodation and an increase of police surveillance and expense. Large merchants, manufacturers, and warehousemen almost wholly escaped having it levied on their business premises, while it was levied on the premises of those in a smaller way of business and of professional men. The tax pressed most heavily upon the poorest of the population in our large towns, and most lightly upon the rich and wealthy, decreasing in force as income increased. The history of the house tax was somewhat singular; in 1802 the house tax and the window duty were considerably increased, and most minute regulations and restrictions were enacted. These taxes were constantly attacked, and an agitation for their repeal was carried on for many years, until, in 1834, the house tax was unconditionally repealed, and all the restrictions connected with it abolished. The agitation for the repeal of the window duty was continued and increased in force every year, and when, in 1851, there being a considerable surplus in the Revenue, the Chancellor of the Exchequer (Sir Charles Wood) brought forward the Budget, and instead of making a clean sweep of the window duty proposed to reduce it and place it on a most objectionable footing, the dissatisfaction was so great that he was compelled to withdraw his Budget and bring forward another, in which he abolished the window duty but re-imposed the house tax at a lesser rate than the old tax and revived all the injurious regulations and restrictions of 1802. In the metropolis great care was taken to avoid building houses of £20 annual value; to keep them below that value the builder refrained from putting a room over the 1803 washhouse, and from building rooms so large as he otherwise might, although the extra accommodation would be greatly appreciated by the working classes, who would gladly pay a small additional rent for it. But that additional rent would render the house liable to the charge of 15s. a year, and, therefore, improvement in houses stopped at a certain point below £20, until the higher annual value of about £30 was reached. Then with regard to blocks of buildings, the blocks built by Miss Burdett Coutts; by the Peabody trustees, and by several joint stock companies established for providing improved dwellings for the working classes and others, were so constructed as to be liable to the house tax of 9d. in the pound per annum. In the buildings which had been erected by Sir Sydney Waterlow, the tax had been avoided by building the houses without a front door, and having an open staircase. But the increase of such open staircases would require extra police watching; and, though he believed Colonel Henderson had been asked whether these staircases, in some instances, might form a portion of the policemen's beats, he doubted whether the adoption of such a plan would be advisable. The tax, too, involved a great waste of habitable dwelling, because in many cases the upper rooms over offices and warehouses which are now vacant would be inhabited but for the fact that such occupation would involve the exaction of this tax. In one instance a Member of that House had permitted one of his old servants to occupy the upper rooms of his warehouse in one of the northern cities free of rent, but upon being charged £37 10s. per annum for this duty, being 9d. in the pound on a rental of £1,000 a year, he was obliged to withdraw the permission he had granted. The large merchants had their goods stored in the dock warehouses, and these did not come under the charge for house duty; the large manufacturers, brewers, builders and distillers had managers living in houses adjoining their premises, which premises were free from house duty. Now, what was the case with respect to the small manufacturers, watch makers, jewellers, cabinet makers, and others who used part of their houses for business purposes or had workshops attached to them? Many who lived in Clerkenwell and other parts of the me- 1804 tropolis and elsewhere, had to pay the 9d. duty, not only for the rooms in which they lived, but for the whole of their premises. The tax also pressed unduly upon professional men—such as surgeons, schoolmasters, and artists, who used their houses for professional purposes. But, above all, the most severe pressure was felt by the poorer classes of the population. There were large old houses let out in rooms at rents of from 2s. 6d. to 1s. 6d. a week. These houses were liable to pay the tax of 9d., whilst large blocks of new buildings, like those of Sir Sydney Waterlow, were free from the tax. If the tax were regarded as a superior kind of income tax it would be found that it failed, because its pressure decreased in proportion to the largeness of a man's income. It was, moreover, not only unjust and unequal, but it stood in the way of the improvement of the dwellings of the working classes. This was the more important because if they desired that the working classes should have better lodging, they must lighten the taxation upon it, as they had done in the case of the food and clothing of the poor. When the great number of charges already existing upon this kind of property were considered, it would, he thought, be acknowledged that the first opportunity ought to be taken to secure the remission of this tax, because it was based upon principles now out of date, and because it was the result of a compromise assented to for the purpose of getting rid of the window tax. He might quote the opinions of many eminent men in favour of the object of his Motion. He would content himself with citing one. On the question of the repeal of the window duties and the imposition of the house tax, in 1851, the present Prime Minister said— He objected to it because it was the re-introduction, without the slightest qualification, of those great anomalies in the imposition of the tax which, he would venture to say, were the sole cause of its abolition in 1834. He alluded to the inequality of its incidence upon the mansions of the great as compared with mansions of a medium character—with houses for the middle classes and houses used for the purposes of business. He had not heard this objection maintained on the present occasion on the principle, he supposed that people did not like to look a gift horse in the mouth, because the right hon. Gentleman (Sir Charles Wood) though proposing a house tax proposed at the same time to remove the window tax and the objections to the former imposts were therefore 1805 allowed to pass in silence. But he for one could not regard the house tax as resting on a secure foundation which re-introduced those very objectionable features which had once before been the cause of the abolition of the tax.—[3 Hansard, cxvii. 1447.] He thought he need say nothing more to show that the tax ought to undergo revision and be abolished at the very first opportunity. The hon. Gentleman concluded by moving his Resolution.

§ MR. CRAWFORD
seconded the Motion.

§ THE CHANCELLOR OF THE EXCHEQUER
said, he could not acquiesce in the general scope of the advice given to the House by the hon. Gentleman, whose arguments were chiefly founded on the devices employed for the evasion of this tax. The question was not what mischief might be done by evading the tax, but whether the tax might be imposed fairly, properly, and equitably. It was not fair to charge the tax with all the tricks that might be resorted to in order to evade it. The arguments of the hon. Gentleman were not so much against the tax itself as against the evading of the tax. The tax only fell upon houses of £20 a year, and it was 9d. in the pound in the case of an inhabited house, and 6d. in the case of a shop. There was a partial exemption in the case of shops, and an entire exemption in the case of houses under the value of £20 a year. It was inevitable that such an arrangement should have its effect on architecture, and lead to the building of houses of the stunted appearance referred to by his hon. Friend, but that was an argument against the exemption of houses under £20 a year rather than one against the tax. The hon. Gentleman had alluded to Sir Sydney Waterlow and his company having evaded the tax by having no front door, and putting up an open staircase. Again, that was an argument not against the tax, but against the ingenuity of those who evaded it; and though, perhaps, the hon. Gentleman would not go this length, he thought a legitimate inference from his speech was that the 1806 Government ought to consider whether it would not be well to abolish the exemptions. His hon. Friend was, perhaps, right in complaining that this tax did not bear the same proportion to the value of the house as the window tax had done, because, with all its faults, the latter did fall most heavily on sumptuous mansions; but that would be an argument for such a change as would increase the rate of taxation in proportion to the size and style of the house. Those two points his hon. Friend had succeeded in establishing, but that they were arguments against the tax he could not admit. Mr. M'Culloch, in speaking on this subject, said that taxes laid on houses in proportion to the rent paid for them would be pretty nearly in proportion to the ability of the person to pay those taxes, and Mr. Mill said that a house tax justly proportionate to the value of the house, was one of the fairest of all taxes. To say that there were objections to this tax was only to say it was a tax. In law, when a plea in abatement was objected to, the person objecting was expected to suggest a better plea. If the hon. Gentleman wanted him to take off a tax that yielded £1,000,000, he ought to suggest a mode of raising that amount by less objectionable means. He must observe that he did not think it would be wise to have all our taxes too uniform. He was afraid that in the desire for simplicity, which more or less beset all Chancellors of the Exchequer, they were rather too apt, to use a vulgar proverb, to put their eggs into too few baskets, and therefore he thought the fact of the house tax being a diversity in our taxation was something in its favour. Another ground on which this tax might be advocated was that, as a rule, though not always, it ultimately fell on the proprietor. It might be said that if this were so the proprietor would levy it in his rent. As persons must inhabit houses, the demand for them could not be contracted; but the proprietor who did not want to let his houses stand empty, must submit to accept such rents for them as were fixed by general competition. This tax was not very large, very heavy, or very severely felt. He thought, therefore, it would be a pity to do away with it, particularly as we could not abandon the idea of in some way taxing such property for Imperial purposes. Under 1807 these circumstances, he hoped the House would not agree to the Resolution of his hon. Friend.

MR. ALDERMAN W. LAWRENCE
said, it would be difficult to convince the people of the metropolis, and the other large towns of the kingdom, that the rate fell upon the owners, and not upon the occupiers, and it must not be forgotten that there was a large increase of population, which, by requiring more house accommodation, prevented the lowering of the rents in the manner suggested by the right hon. Gentleman. With regard to the high authorities quoted in favour of a house tax, they had most carefully guarded their approval by a proviso that the tax must be fairly, equitably, and justly assessed. The present house tax was unfairly, unequally, and unjustly levied, and it fell upon a class of people upon whom it was never intended to fall. As to the suggestion that something better should be pointed out to the Chancellor of the Exchequer in place of the house tax, he begged to remind the right hon. Gentleman that the country was looking forward to a large surplus next year, and the abolition of this tax would be regarded as a fair appropriation of a portion of that surplus.