HC Deb 23 April 1874 vol 218 cc1041-62

(In the Committee.)

Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, there shall he charged, collected, and paid for one year, commencing on the sixth day of April, one thousand eight hundred and seventy-four, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the sixteenth and seventeenth years of Her Majesty's reign, chapter thirty-four, for granting to Her Majesty Duties on Profits arising from Property. Professions. Trades, and Offices, the following Rates and Duties (that is to say): For every Twenty Shillings of the annual value or amount of all such Property, Profits, and Gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of Two Pence: And for and in respect of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act. For every Twenty Shillings of the annual value thereof: In England, the Rate or Duty of One Penny: In Scotland and Ireland respectively the Pate or Duty of Three Farthings: Subject to the provisions contained in section twelve of the Act of thirty-fifth and thirty-sixth Victoria, chapter twenty, for the exemption of Persons whose whole Income from every source is under One Hundred Pounds a-year, and relief of those whose Income is under Three Hundred Pounds a-year.


, in rising to move an Amendment substituting 3d. for 2d. in the pound as the rate of duty to be charged as Income Tax, said, that he had put this Motion on the Paper as the most convenient form of raising a discussion on the point which he wished to bring before the House. He was not at all opposed to the Budget. On the contrary, he approved its main features. The excrescence upon it was the sanguine estimate of an increase of £1,500,00, in round numbers, and the necessary corollary which alone justified the reduction of the income tax from 3d. to 2d. His main objection to that proposal was that he did not think it safe or prudent to adopt the estimate of the Chancellor of the Exchequer, and to reduce the income tax by a penny in the pound. The rose-coloured compliments which had passed that night between the Ministerial and front Opposition benches would not count for much outside that House. The right hon. Gentleman (Mr. Gladstone) was committed to these Estimates as the sole justification of the proposal he had made to the country in January; and the Chancellor of the Exchequer, having accepted them on the responsibility of the Heads of Departments, and based his financial proposals upon them, was also committed to the Estimates. If, however, hon. Members went outside the charmed circle of official life, and asked the opinion of those who examined the aspect of the financial barometer of this country, they might form a different opinion. He did not wish to discredit the ability of the permanent heads of the Revenue Departments, with some of whom he had worked: but he dissented from the doctrine that the House should accept their Estimates implicitly, for its duty—one which it was peculiarly fitted to discharge—was to exercise an independent judgment upon them. There was no mystery about them, for any man of business could judge whether revenue was likely to be in the ascendant or on the decline. If the rise and fall in revenue, the Board of Trade Returns, tin-railway traffic, and wages were indicated by curves on sheets of paper, they corresponded, as a rule, very closely; and if the barometric curve of commercial prosperity became stationary or declined, the Revenue would soon follow suit. Estimates of revenue had not always proved correct, and it was the duty of the House to correct these aberrations. The right hon. Gentleman (Mr. Lowe) offered Estimate, he presumed, with the advice of the Heads of Departments, which out-of-doors were deemed so absurdly low that nobody could understand his object, unless it was to punish the House for rejecting his match tax by imposing an additional penny income tax. The House not having the moral courage to correct them, the penny was imposed—and as the next year showed—unnecessarily. Sometimes, on the other hand, Estimates might he deficient, involving the re-imposition of taxes taken off the previous year, deranging trade and causing serious inconvenience, almost as bad as the paying too much for a single year. In point of fact, if they took the last 44 years, the Estimates had in 17 been deficient. The actual result of the revenue had shown a considerable deficit below the estimate. It might be said that they occurred a long way back. That was the argument used by the right hon. Member for Greenwich; but it would apply more nearly than was supposed to more recent periods. For example, in 1862, and again in 1868–9, there were deficits. In 1861, there was a deficit of no less than £1,761,000 below the Budget Estimates, and in the succeeding year there was another deficit of £618,000. Again, in 1868. there was a deficit of £369,000. and in 1869 a deficit of £058,000. Where should we have been had not the income tax furnished a ready means of meeting temporary deficiencies without serious impediment to trade? These deficits had happened with the late Prime Minister as Chancellor of the Exchequer and with the aid of the most distinguished heads of the Revenue Departments. As long as trade was prosperous and made sudden bounds, the Revenue would rise with it, but when it became stationary, the Revenue would become so also. No doubt there had been an increment of revenue if they took a certain number of years. If they took seven years or five years it was perfectly certain that the Revenue never stood higher than it did now. But if they took a single year no such result was shown. If trade declined, and wages diminished, it was impossible to believe that the Excise would keep up, and instead of a surplus they might find themselves with a deficit. That was the present state of things. The present state of things was that we had had three years of extraordinary prosperity. In 1870–1 the trade and commerce of the country took extraordinary strides, and the Revenue naturally followed in their steps. Latterly, the Returns had shown a heavy falling off. In the first place, the rate of progression had diminished, and at last we had reached a point when the Returns no longer showed an increase on the preceding year, but were as nearly as possible stationary. The exports were the best criterion, the imports being largely affected by accidental circumstances, and some of the cases referred to by the Chancellor of the Exchequer to show that the consumptive power of the country was keeping up proved nothing of the kind. If we had imported more articles of food, it was due to a succession of bad harvests, while the exports, which the imports must, in the long run, follow, had become stationary. In 1871, they amounted to £223,000,000; in 1872 to £256,000,000; and in 1873 to £27,3,000,000. In the last quarter of 1872, they were £65,646,000; while in the last quarter of 1873, they were £61,397,000, so that the exports were actually diminishing. If they looked at the railway traffic, which was a very good guide to the real condition of the country, they would find the same thing. They would find the railway traffic taking an extraordinary start in 1871–2; but in the latter part of 1873 it began rapidly to decline. It had been going down rapidly ever since, and had now reached a point where scarcely any of the railways of the kingdom showed any increase at all. Take such a line as the Brighton, with which he was connected. It was a very good barometer to test the actual condition of the Metropolis. When the working men were earning high wages, they would run down to Brighton, and there would be an increase of traffic; but when there was a falling off in earnings, there would be a corresponding falling off in the traffic. At this time it was practically stationary. No one could fail to observe that the extraordinary increase of Revenue in the last three or four years had arisen mainly in the Excise through the consumption of the working classes. That remarkable speech which they heard with so much pleasure from the hon. Member for Cardigan (Mr. D. Davies), so worthy a representative of working men, and one whom they were glad to sec in that House, showed that one result of high wages was that the men, having more money did less work—that there was more idleness, more drinking, and the money they earned went to swell the public Excise Returns; and, further, that instead of observing St. Monday, they frequently observed St. Tuesday, and sometimes the half of St. Wednesday. Their doing so, of course, led to an increase in the consumption of excisable liquors. There was, however, a certainty that the wages in those departments of labour were coming down, and largely. He had seen it stated that in one of the principal mining districts of the North of Scotland a question had been raised of a reduction of wages to the extent of 40 per cent. Now, whether the reduction was 40 per cent or 10, 15, or 20, to be followed some time hence by a like reduction, the result would be a declining' Revenue. Anyone acquainted with the state of the iron trade must have known that a reduction of wages was necessary, or the iron trade, which was being worked at a loss, would be lost to us and go into the hands of foreigners. The same observation was applicable to Northumberland, Durham, and Wales. Workmen would receive 20, 30, or 40 per cent less money, and work 20, 30, or 10 per cent more time, and would have little time or money to spend in the public-houses. Was, this, then a time to calculate not only on an equal amount of Revenue being received for the ensuing year as was received last year, but even to count upon an increase of £918,000? Well, wonders, of course, might come to pass. The elasticity of the country was wonderful. The expectation might be realized; but among men of business out of doors, who were not pledged by any political antecedent, the general opinion—he thought the general opinion—would be found to be that it was rather a bold course to take the Revenue of last year, without addition, as an Estimate for the Revenue of the coming year. If he were responsible for the finances of the country, he, for one, would not have done so. As to making any addition, he should never for a moment, under present circumstances, have thought of it. So much for the question of fact. It was also a question of principle. Even if, by a piece of good luck, the right hon. Gentleman got out of the scrape he would be in if there were a deficiency, and supposing his hopes were realized, was it a prudent thing to run the Estimates so fine that it was a matter of doubt whether there would be a deficiency or a surplus? Should they depart from the old principle of not including the annual increment of Revenue in the Estimates, but of keeping on the safe side, so that in bad years they would not be lauded in a deficiency, and in good years they would have a surplus? That was the old-fashioned principle, and was it, in the first year of a Conservative Government, to be departed from, and the new principle introduced of living up to the last penny? That opened up a large question, in which many Members of high financial authority took a deep interest—namely, the reduction of the National Debt. He was himself a very disinterested witness in the ease, for he had always opposed the extreme course of keeping up taxation for the purpose of paying off Debt. He recollected when the right hon. Gentleman the Member for Greenwich (Mr. Gladstone) told them that their coal-fields were being exhausted; that it was a duty they owed to posterity to reduce the Debt; and that it was a disgrace to this country not to follow the example in that respect of our cousins in America; and the upshot would have been the imposition of probably not less than £5,000,000 of taxation, for the purpose of reducing the National Debt. He (Mr. Laing) thought it his duty thus to comment on the proposal made, as he was in favour of creating a moderate amount of Terminable Annuities rather than maintaining burdens on the people and pressing upon the springs of industry, for the purpose of paying off the National Debt. Now, however, a step was about to be taken in the opposite direction. The result, according to the Chancellor of the Exchequer, of adopting the old Conservative principle of finance, had been that we had reduced the National Debt since 1842 by the very respectable figure of nearly £70,000,000 capital, with a certainty that £50,000,000 more would go in 1885. That was, he thought, a very creditable and satisfactory result. He did not want to see the rate of reduction accelerated; on the other hand, he did not wish to see it retarded, and still less was he in favour of its being abolished. Within 10 years the reduction had amounted to £19,400,000, or nearly £2,000,000 a-year, independently of the reduction that would be effected by Terminable Annuities. He called that a fairly satisfactory result, and wanted to know why they were to depart from that Conservative policy, and inaugurate a system of estimating up to the last penny? The Chancellor of the Exchequer had on this subject uttered some very excellent sentiments in his Budget speech, but his practice had not been in accordance with his precept, for, instead of making provision for a moderate reduction of the Debt, he had taken off a penny of the income tax, on which tax they must rely for making any serious impression on the Debt. The question now involved was whether the principle of making any attempt to pay off the National Debt by direct payment was to be renounced. The manner in which the £500,000 was to be applied to the extinction of a portion of the Debt by means of Terminable Annuities was a mere matter of book-keeping. Under the old system it went to capital account; under the new system it went to revenue account. The main point was that for the sake of obtaining a little temporary popularity, the Government were about to give up a penny of the income tax and to run the risk of having a deficit at the end of the year, which was equivalent to saying that no further attempt was to be made in the way of paying the National Debt. The system introduced by the right hon. Member for the London University (Mr. Lowe), under which the income tax had to be paid in one sum at the beginning of the year, instead of by four quarterly payments, was most inconvenient, not only to the tax-payer but also to the commercial community, inasmuch as it occasioned the balances at the Bank of England to be unnecessarily large at the commencement of the year, when there was but little demand for money, and depleted them in the autumn, when there was generally a great drain upon our resources. Home time or another the result of this course would be to create a panic, which would do much more harm to our Revenue than we should derive good from following it for half a century. But, besides those general arguments, there were some special arguments which, in his opinion, ought to induce the Government to pause before they parted with so much revenue as was represented by a penny of the income tax. In the first place, there was the great question of local taxation before them. The Chancellor of the Exchequer had told them that this would be the greatest financial question of the future, and that a number of the most important social and sanitary questions depended upon our system of local taxation being placed upon a satisfactory footing. What had been done this year in reference to this subject was undoubtedly a step in the right direction, but it had only touched the fringe of the matter, and next year a very large question would have to be dealt with. The annual sum raised by direct local taxation amounted to £20,000,000, and in adjusting taxation to that amount it might be necessary to call upon the Imperial Exchequer for a consisiderable sum in order to do what justice and expediency might require. But how was this question to be dealt with next year if the sanguine estimates of the Government were not realized, and if, instead of there being a surplus, there was a deficit? Even supposing there were an equilibrium between the Revenue and the Expenditure, new Imperial taxation to meet the demands occasioned by the re-adjustment of the burdens of local taxation could not be imposed without considerable difficulty. Whereas, if the penny on the income tax were retained, such re-adjustment might be met without difficulty. But if the penny were given up, it could not be re-imposed without setting class against class and interest against interest. Therefore, by giving up the penny on the income tax the Government were precluding themselves from dealing with this great question with a free hand backed by a full Treasury. The Government would also have to face next year another question of equal importance—that of the state of our Navy. It produced a very uncomfortable feeling in his mind when he heard the new First Lord of the Admiralty state that our Navy was in such a condition that it was scarcely better than a paper fleet, and that out of our 37 ironclads only 14 were fit to go to sea. And he felt still more uneasy when all the late First Lord could say was that things, after all, were not quite so bad as they had been represented, and that if the late Government had left the country with a deficient fleet they had left it a surplus in its Treasury. Under these circumstances, while advising the Government not to take any spasmodic action in the matter, he should recommend them to take such action next year as would put our fleet in an efficient condition. It would be better to have ten efficient iron-dads, than to rest contented with the false security of a paper fleet which could not be sent to sea in case of danger. He did not think the Government were at all likely to set aside on the Monday the Budget they had brought forward on the Thursday; but, at the same time., this question of the efficiency of the Navy would have to be met next year, probably by an increased charge, as well as that relating to local taxation. If the income tax was to be repealed, let it be done openly, and let the country be made aware what taxes were to be substituted for it. But where was a tax to be found equally elastic, and with which, without disturbing trade, a deficiency, should it occur next year, could be so easily remedied? Was its repeal to be followed by an increase in the assessed taxes, as the right hon. Member for Greenwich (Mr. Gladstone) had foreshadowed? If so, he should like to know what was to be the amount and what the nature of those assessed taxes which were to be the equivalent of £5,000,000 or £6,000,000 of income tax. If, again, the income tax were done away with, how was taxation to be equalized among the different classes of society? It had been laid down as a first principle of taxation by the right hon. Member for Greenwich, that trade, real property, and labour, must be taken into account, and the burdens of taxation fairly apportioned between them. How was that to be done if the income tax were abolished? Every statistical writer who had studied the question would say that the income tax was the great equalizer of taxation among the various classes of the community; and if it were done away with, would not our system of taxation press unduly on the great mass of the people, and furnish agitators with the argument that the higher classes shirked their fair share of the national burdens? He wished the House, he might add, to take a warning from what had occurred in the case of sugar. He did not mean to blame the Chancellor of the Exchequer for abolishing the duty on that great article of consumption; but it was the policy of the right hon. Gentleman the Member for the University of London (Mr. Lowe), who reduced the duty ½d., and, saying that it was never to be reduced again, diminished it another ½d., which had led to that result. When the sugar duties were reduced ½d. for the second time, everybody felt that they had been killed, and that it was not worth while continuing the annoyance connected with them for the sake of the revenue which they yielded. So it would be with the income tax; and what, he should like to know, would be the answer of the Government to persons who argued with respect to it in that way? For these reasons he wished it had been open to him to take the opinion of the House on the proposal of the Government to reduce the tax. Of course he could have no great hopes of success if he were to take the opinion of the House. When a Government proposed to remit a tax, and more especially when there was a consent between the Leaders of the two benches as to that course, there was little chance for a private Member—["Divide," "Order."] Notwithstanding that, he had felt it to be his duty to bring the matter forward. He should not trouble the Committee to go to a division; but he trusted that the Government would take the question duly into consideration; and if they did so and acted upon it, they would find next year that he had been their best friend. At any rate, the first thing the country would naturally look for from a Conservative Government was Conservative finance.


hoped that to whatever other determination the Committee or the House itself eventually might come, the proposal now made by the hon. Member for Orkney (Mr. Laing) would find no favour whatever. He (Mr. Wheelhouse) did not hesitate to say, that for years he had been most anxiously desirous of seeing the income tax—more especially so much of it as was involved in Schedule—totally abolished. For the first time, since the days of Sir Robert Peel, we had now a Revenue, unaided by income tax, amply sufficient for the estimated Expenditure of 1874–5, as the nucleus of our present year's financial operations. That Expenditure, as estimated, amounted in the aggregate to £72,503,000, and the Chancellor of the Exchequer, as he (Mr. Wheelhouse) understood the right hon. Gentleman, anticipated that there would be savings from his proposed Army Purchase Vote, sufficing to cover any probable Supplementary Estimates. Now the various items of ordinary revenue, including income tax, taking the whole in a sort of tabulated form, from Customs down to Miscellaneous Estimates, as he (Mr. Wheelhouse) made out, amounted to £72,495,000, beyond which the Chancellor of the Exchequer calculated upon receiving £500,000 for interest and the due repayment of advances, to which, again, must be appended a further sum of £900,000 of uncollected income tax to be carried to the account of the current year, thus producing altogether an estimated Revenue of £73,895,000, or in other words, leaving a financial surplus of £1,392,000 above the Expenditure, and that without any new income tax being at present imposed or even asked for. Let it be remembered that these were the calculations and figures of the Department itself, and he (Mr. Wheelhouse) must confess that it seemed to him, the Chancellor of the Exchequer had provided—though, no doubt, with great foresight—a much larger "sinking fund" to meet possible contingencies than our prospective requirements were at all likely to demand. If it were really impossible at present to abolish the impost entirely, he trusted he might be permitted to observe that he, for one, believed the unconditional repeal of this tax—one imposed for a temporary exigency only, originally—would be looked upon by all classes of society as an inestimable boon. To keep it up at ½d. only was in his opinion to render it scarcely worth the cost of collecting, and it had far better go "at once and for ever." But, be that as it might, he earnestly hoped that if not now, at all events before long, they would recur to the doctrine which he would venture to remind the House had been laid down by nearly every Chancellor of the Exchequer, and, indeed, by the vast majority of English statesmen for many years past—namely, the plain, sensible, obvious, and straightforward principle, that while the income tax should be held in the armoury of reserve for special exigency, it should never be used as an instrument by means of which the fair, legitimate burden of general taxation should be removed from the shoulders of one portion of the community, in order to place it on those of another, often far less able, really, to bear the onus of it. Again he repeated that he, for one, earnestly trusted that the day was close at hand when this tax, at once so burdensome, so inquisitorial, so oppressive, and so obnoxious in every way, would be totally and unconditionally repealed. He would only make one single further remark. He desired to repeat in that House what he had taken occasion more than once to say elsewhere—and he was sorry not to see the right hon. Gentleman the Member for the University of London (Mr. Lowe) in his place, on the front bench opposite, that he might hear the statement. He (Mr. Wheelhouse) was one of those who believed that any such accumulation in the shape of a single years' surplus, as three or four millions of money, notwithstanding, even, that it might be attributable in some measure, to a period of unexpected and unexampled financial prosperity, practically demonstrated, in the plain and homely language of Yorkshire, something savouring very strongly of "extremely bad finance," because to have procured anything like that amount, it was abundantly clear that a sum of money, unusually and needlessly large, had been extracted from the pockets of the already overburdened taxpayer.


called the attention of the Chancellor of the Exchequer to the inconvenience of the present system, under which the Income Tax Act was passed for only a year ending on the 5th of April. As the financial year closed on the 31st March, and the Budget, therefore, could not be taken before that date, there was almost always an interregnum during which no income tax could legally be levied, and, though the Act rendered any dividends which might be paid during that period liable to such an income tax as the House might subsequently impose, the system was very inconvenient, and must involve a loss to the Exchequer. On the present occasion the dividends on the Public Funds themselves were paid on the 8th of April; but he did not quite understand, if they were due on or before the 5th, under what authority the payment was deferred until the 8th; or, if they were not due till the 8th, on what authority any income tax was deducted. But, however this might be, the dividends on several stocks—for instance, the Turkish Six per Cent of 1854, the Turkish of 1871, the Egyptian Seven per Cent of 1873, one of the Russian loans, and others had been paid without any deduction of income tax, and though, no doubt, the Act would give the Government a legal right to recover the amount, still, as a matter of fact, it would be difficult, if not impossible, to do so, and there must consequently be a loss to the Exchequer. In other cases 3d. in the pound had been paid: whereas the Resolution was only for 2d. in the pound. He would therefore ask the right hon. Gentleman to consider whether it might not be desirable to continue the tax for a year and a month, instead of a year, so that it should expire, not on the 5th of April next, but on the 5th of May, by which time, in all probability, the financial arrangements would have been concluded. In this manner he believed some uncertainty and inconvenience would be spared, and considerable loss to the Exchequer would be avoided.


corroborated the statements of his hon. Friend, and hoped the right hon. Gentleman would accede to the suggestion.


recognized the disadvantage and inconvenience to which attention had just been drawn, and promised to consult with the officers of the Revenue in regard to it. An hon. Friend of his, who was very acute in such matters, had suggested a difficulty by asking at what rate the tax would be levied for one month—whether at a twelfth part of 2d., or how? Perhaps the hon. Baronet would allow him to consult him privately on the subject.


acknowledged that although the Chancellor of the Exchequer had begun his speech in the earlier part of the evening with something like an apology for the undue prominence he had given to the Departmental officers who had assisted in the preparation of the Estimates, he had nevertheless followed it up with an explanation which seemed entirely satisfactory. The House ought not to be called upon to accept the opinions of the Revenue officers as to the Estimates with which Parliament had to deal. It was wrong, indeed, to apply the word "estimate" to what they laid before the Chancellor of the Exchequer. They gave him facts which he, as a statesman, had to scrutinize and to judge. He was supposed to have a higher financial knowledge, a stronger grasp of financial questions, than they, and when he submitted their facts and figures to Parliament, they became the Estimates of the Government. After the explanation of the right hon. Gentleman, they might regard the course which had been followed this year as exceptional, and might hope that in future the officers of Departments would not be brought forward in the same prominent manner. With reference to the income tax he would remark that there had been no disposition on the Opposition benches to criticize unfavourably the proposals of the Chancellor of the Exchequer. The circumstances of his position were such as to entitle him to great forbearance and indulgence, on one condition—namely, that the Budget contained no reactionary finance. In point of fact, the Budget was marked by great simplicity and common sense, and these qualities had made it generally acceptable to the House and to the country. He protested against the doctrine of the hon. Member for Orkney (Mr. Laing), that there should always be a respectable surplus to be applied to the reduction of the National Debt. The hon. Member said that the income tax was the basis of our whole financial system—the thing to which we owed surpluses, remission of taxation, and reduction of Debt. Everybody acknowledged the income tax to be a most objectionable tax—it was inquisitorial, it was immoral—["Oh, oh!"]—yes, it was, because the assessment was placed on a declaration made by the taxpayer, and it did not matter whether the taxpayer was a man of high character or of no character at all; and it was an unequal tax, because it taxed the clergyman as much as it did the capitalist. It was true that Sir Robert Peel had introduced it for another purpose than as a war tax. The object was to relieve the finances of the country under exceptional circumstances and to re-adjust taxation Either on account of war or as a means of re-adjusting taxation the income tax had been asked by Government and given by the country, and if it was not required for one or the other of these purposes, it ought in good faith to be repealed. He agreed with the hon. Member that it was good finance to have a safe and moderate surplus. If asked whether he would prefer a deficit of £500,000 or a surplus of £3,000,000 or £4,000,000, he would say that it was sounder and better to have the small deficit and to make up for it by taxation than to have a surplus of several millions applied to purposes which the country had never sanctioned or intended. His hon. Friend said they ought to have a safe surplus for the purpose of reducing the National Debt. If the country was to be taxed with a view to the reduction of Debt, let that fact be distinctly recognized and understood, and let it not be said that a surplus was applied to that object in a sort of surreptitious manner.


expressed regret that the Chancellor of the Exchequer had come to a resolution to give up a penny of the income tax, and wished that the right hon. Gentleman had made up his mind to retain it. He (Lord Eslington) denied that the surplus was attributable to the income tax. He was not aware that any particular tax was appropriated to any particular purpose and it was the general prosperity of the country rather than any special source of revenue that gave us the surplus. The right hon. Gentleman (Mr. Horsman) said the income tax was an immoral tax. It might lead to cases of fraud in some few instances; but that was no reason for thus describing a tax which was an enormous engine of power in the hands of a wealthy country like this, which the right hon. Gentleman himself admitted to be the basis of our financial prosperity, and which he (Lord Eslington) should be exceedingly loth to part with. He thought the Chancellor of the Exchequer would have acted more prudently if, before proposing a reduction of the income tax, he had taken stock of the great spending Departments; and, after informing the House what that stock was, have left it to them to say whether it was such as to justify the parting with this revenue.


My noble Friend takes exception to my statement that the surplus was owing to the income tax. May I ask him how he made his calculation, and where the surplus would be without the income tax?

SIR JAMES LAWRENCE moved as an Amendment to the Resolutions of Mr. Chancellor of the Exchequer in regard to the Income Tax:— That the exemptions provided for in the twelfth section of the Act 35 and 36 Victoria be extended to persons whose incomes do not exceed £200 a-year: and that from all incomes above £200 a-year, and not exceeding £500 a-year £100 be deducted before the Tax is charged. The hon. Baronet strongly objected to the inhabited house duty, and maintained that it fell upon the occupier instead of on the landlord. It might not be known to the Members of the House of Commons now assembled that the main reason why the dwellings of the working classes were not improved was owing to the maintenance of the inhabited house duty. It was evaded in many instances by leaving out the front door leading to many dwellings. With respect to the Peabody Trustees, all their exertions in behalf of the working classes were; small as compared with the benefits that would result in the improvement of dwellings if the inhabited house duty was done away with. He had been asked what has the inhabited house duty to do with the income tax? He maintained that it was an income tax in another form. It was a property tax paid by the occupier and not by the owner; and it was desirable, for sanitary purposes, to repeal it. He would remind the Committee that when Sir Robert Peel originally imposed the tax, incomes of £150 a-year were exempted. It could not be denied that the income tax pressed most severely upon clergymen, clerks, and others having means not exceeding £200 or £250 a-year. Even the prosperity of which so much had been spoken was of no advantage to persons with small fixed incomes, inasmuch as, without any increased means, they had to pay higher prices for all the necessaries of life. He believed that outside the House three men out of every four would regard the Amendment of which he had given Notice as an attempt in the right direction to effect an equitable adjustment of a tax which pressed harshly and unequally on different classes of the people.

Amendment proposed, To leave out from the words "Subject to the provisions," to the words "Three Hundred Pounds a-year," in order to insert the words "That the exemptions provided for in the twelfth section of the Act of thirty-fifth and thirty-sixth Victoria he extended to persons whose Incomes do not exceed Two Hundred Pounds a-year; and that from all Incomes above Two Hundred Pounds a-year, and not exceeding Five Hundred Pounds a-year, One Hundred Pounds be deducted before the Tax is charged."—(Sir James Lawrence.)

Question proposed. "That the words proposed to be left out stand part of the Question."


explained that one reason why he did not persevere with the Motion of which he had given Notice was that a Chancellor of the Exchequer who had been only six weeks in office could not be fairly called upon to consider the whole question. If, however, the hon. Baronet pressed his Motion to a division he should vote with him, although he must not be held responsible for the result of the division.


The few words which have fallen from the hon. Member for Maldon (Mr. Sandford) go far to explain the position in which we stand with regard to the Amendment—namely, that it is opening a very large question, which it would be difficult, if not impossible, to settle at the present moment. I do not say much of the effect of the proposal of the hon. Baronet opposite (Sir James Lawrence). I believe its effect financially would be measured by about the sum of £240,000; and that would, of course, very materially diminish the surplus which I have left. On that ground alone I should feel a difficulty in assenting to it; but the real ground on which I advise the Committee not to assent to the Amendment is as follows—namely, that it is opening a very delicate and important question with which we are hardly at the present moment in a position effectually to deal. The hon. Baronet has reminded the Committee that when Sir Robert Peel originally imposed the income tax he exempted incomes below £150; but he did not also remind the Committee of the fact that some years afterwards the late Prime Minister, when Chancellor of the Exchequer, carried the tax to a lower stratum—namely, to the sum of £100 a-year, and that he did so on the ground that it was right to make a proper balance between the wage-receiving classes and the salary-receiving classes. Now, when you come to so delicate a question as that—as to where the wage-receiving class ends and the fixed income class commences—it is obvious you had better not touch the subject without full consideration; because it would be a grave question how to adjust the tax so as not to press unfairly upon any class. The Government have decided on adjourning the whole question of the maintenance of the income tax and its incidence till they can consider it more at leisure and more in connection with the rest of the financial system. Therefore, I deprecate any attempt to alter its incidence at this moment. I do not, however, wish to express any opinions adverse to the sentiments of the hon. Baronet opposite, for I grant that there is a great deal to be said in favour of his proposal, though I am not prepared to accept the exact figures he names, or even the principle that exemption ought to be carried any further. I hope we shall not be asked to go to a division on this question; because I think it would be an embarrassing and inconvenient vote which would rather prejudice the fair consideration of the question at the proper time. With regard to the other question which has been mooted by my hon. Friend the Member for Orkney (Mr. Laing), it is one into which I need not now enter. I accept with great respect the opinions of so high an authority as I freely acknowledge the hon. Gentleman to be; but I do not altogether share the views he expressed, and I am bound to say that, after consulting the best authorities on the subject, and having formed my opinion upon the best information I can obtain, I arrive at the conclusion that we may fairly put the Estimates at the amounts which we have taken. If the House likes to devote a larger proportion of the surplus we believe we shall have, openly, to the payment of Debt, I shall have nothing to say against it. But, having arrived at the conclusion that our Revenue will reach such and such a sum, it would not be right to underestimate that Revenue in order to cheat the House into allowing us a larger surplus.


said, he was gratified at the large concession which had been made to the ratepayers in the reduction of local burdens; but he asked the Chancellor of the Exchequer to do the same with respect to persons of small income who had to pay this tax.

Question put.

The Committee divided:—Ayes 255: Noes 139: Majority 116.

Original Question put, and agreed to.

Motion made, and Question proposed, That, on the first day of January one thousand eight hundred and seventy-five, the following Duties of Excise shall cease to he payable (that is to say):— On Licences to keep Horses or Mules: On Race Horses: On Licences for exercising or carrying on the trade of a Horse Dealer.


suggested that it would be a great convenience, unattended by corresponding disadvantage, if the date were changed to the 1st of July next.

MR. PELL moved to report Progress, as he wished to have an opportunity of raising a discussion on Imperial and local taxation.

Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—(Mr. Pell.)


hoped the Motion would not be pressed, as the Report of the Resolutions would afford a fitting opportunity for the desired discussion.

Motion, by leave, withdrawn.

Original Question again proposed.


undertook to consider the suggestion of the hon. Member for Lincolnshire (Mr. Chaplin), and, if it could be acceded to, the Resolution could be amended on the Report.


said, if this course were adopted it followed that he must move the Amendments which stood on the Paper in his name—namely—After "that on" insert '-'and after;" after "Excise shall," leave out "cease to;" after "be payable," insert to local funds of counties or boroughs, and shall he applied by local authorities in aid of the expenses of maintaining turnpike roads of which the trusts have become, or may hereafter become, extinct. The hon. Baronet said, that the argument, that the revenue could not be spared, formerly used against the transference of these licences to the local authorities, could not now be used, because the Government were proposing to do away with the licence altogether. He asked that they should be continued, at all events for the present year, with the view of further consideration as to the maintenance of turnpike roads. By the expiration of the turnpike trusts an additional sum of nearly £1,000,000 would fall upon real property, and as this sum of £480,000 was derivable from a tax mainly on personal property which was already insufficiently taxed, he asked whether it was reasonable that so large a sum, which nobody had asked for or wanted, should be thrown away when it might be retained for the purpose of being used in the re-adjustment of one very considerable item of local taxation.

Amendment proposed, to insert after the words "That on," the words "and after."—(Sir George Jenkinson.)


said, he thought the two grounds on which his hon. Friend had urged this Amendment were not very consistent with each other. His hon. Friend thought the Government were rather rash in throwing away this large sum of £480,000, which he said nobody had asked for, and which the revenue could hardly spare: but, at the same time, he did not propose to husband the sum for Imperial purposes, but to give it away to the counties for the benefit of turnpike trusts.

Question, "That those words be there inserted," put, and negatived.

Original Question put, and agreed to. Resolved, "That, on the first day of January one thousand eight hundred and seventy-five, the following Duties of Excise shall cease to be payable (that is to say):— On Licences to keep Horses or Mules: On Race Horses: On Licences for exercising or carrying on the trade of a Horse Dealer.

THE CHANCELLOR OF THE EXCHEQUER moved— That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and seventy-lour, until the first day of August, one thousand eight hundred and seventy-five, on importation into Great Britain or Ireland (that is to say): on Tea the lb.0s. 6d.

Resolution agreed to.

THE CHANCELLOR OF THE EXCHEQUER moved—"That it is expedient to amend the Laws relating to the Inland Revenue."

Resolution agreed to.

MR. J. W. BARCLAY moved—"That it is expedient that the Gun Licence Act, 1870 be repealed." The hon. Member observed, that if the Motion were carried, it would not materially affect the financial arrangements of the Chancellor of the Exchequer, for the amount of revenue received from this tax exceeded by very little £60,000 per annum. The tax which they had now under their consideration was introduced by the late Chancellor of the Exchequer, and it was imposed not so much for fiscal purposes as a matter of police regulation. It was surely absurd that the farmers should have to take out this licence for the protection of their crops. It might be said that there was an exception in favour of the farmer, but that exception was so couched as to be practically useless. Of late years the rooks had increased to such a large extent that in many parts of Scotland it was necessary to employ a lad for protection of the crops. These birds would attack the crops at various seasons of the year, so that it was necessary to have a lad maintained all the year round, and it was very easy to understand that the farmers, when they saw the damage sustained from the rooks, should naturally associate that damage with the late Chancellor of the Exchequer. Speaking from his own knowledge of many country districts in Scotland, he could say that this tax had had no small effect in bringing about the change of parties in that House. He also objected to this tax upon a national ground. He thought it was extremely desirable that all the inhabitants of this country should be accustomed to the use of firearms. If they felt themselves stronger in the use of firearms, they should have less fear of invasion, and consequently they would not, as now, be subjected sometimes to invasion panic.

Motion made, and Question proposed, "That it is expedient that the Gun Licence Act, 1870, be repealed."—(Mr. James Barclay.)


maintained that to repeal the Act would occasion great loss of life, as many guns would be used which would be far more fatal to the shooter than to the object aimed at. Tax collectors and other unpopular persons would not be safe, and many Members who now had seats would never have enjoyed the confidence of the constituencies they represented had the Act not been in force. There was one Member at least in that House who would not long represent a constituency if the tax were repealed.


suggested that, as there was a certain similarity between the tax on dogs and the gun tax, it would be well that the two imposts should be considered together.


said, the question had been raised in a manner which took the House by surprise. It had not been brought under his—the right hon. Gentleman's—notice very much before this evening. Under the circumstances, he should like to have more time to consider the matter. He did not look upon it as a fixed question.


contended that the question was a fixed one. There was a great amount of damage done to crops through the want of firearms in the agricultural districts.

Question put.

The Committee divided:— Ayes 48; Noes 256: Majority 208.

Resolutions to be reported upon Monday next;

Committee to sit again To-morrow.