HC Deb 28 February 1879 vol 243 cc2036-47

Order for Second Reading read.

MR. SOLATER-BOOTH,

in moving that the Bill be now read a second time, said, he thought he would best consult the wishes of the House by not repeating his arguments of last year in favour of the measure. It was substantially the same measure which had been read a second time last year, and some of the most important portions of which, up to the 17th or 18th clauses, had gone through Committee. The Government had, within the last few years, given more in aid of local expenditure; a local Budget was now brought before the House annually; increasing interest was being taken in local taxation and expenditure; and for those, as well as for many other reasons, it was extremely desirable that an uniform system of valuation should be established not only in every Union, but also throughout every county—especially seeing that in the course of a short time the county rate would have to contribute towards certain local charges. The Bill had year after year been criticized by some of the most experienced assessment committees in the Kingdom, who had given him the benefit of their advice and assistance, and by the greater number of whom it was not only understood and appreciated, but earnestly desired that it should become law. Since the measure had been under the notice of Parliament, indeed, the rules which it laid down for the guidance of future committees had been more and more acted upon under the law as it stood. The Bill though, to some extent one of consolidation, contained a great deal of new matter, and, it having now passed through a fresh edition, he felt confidence in recommending it to the House. With respect to the alterations in the Bill, he might state that, in accordance with what had been decided in Committee last year, he had eliminated the appeal to Petty Sessions. In future the appeals would lie to the Quarter Sessions, while a new tribunal would secure the interests of the county rate. The appeal to Quarter Sessions had also been disembarrassed from objections which formerly applied to it. The gross rental column in the valuation list would be deemed to be the value. As to the functions of the surveyors of taxes, he had adopted a suggestion made by the representatives of an influential Poor Law Conference, which coincided with the language of the 38th clause. No one could now scruple to accept the language of that clause. The general effect of the alterations would be that actual rent would more and more determine the value of property, both for Imperial and local purposes. They were now looking to some measure of value for the whole Kingdom, and nothing so well as rent could be adopted as a measure of value. He could, therefore, assure the hon. Member for Falkirk Burgh (Mr. Ramsay), who took so much interest in the Valuation Law in Scotland, and wished to refer this Bill to a Select Committee, that, so far as his object was to make rent a criterion of value, he entirely agreed with him. He would, however, point out to the hon. Member, that the value of the hereditaments of this country was not always a matter of rent as between landlord and tenant, for a vast amount of house property was not held on rack rent at all, and in other cases houses were occupied by their owners. And there was, therefore, some difficulty in applying the principle. With regard to the Amendment of which his right hon. Friend the Member for the City of London (Mr. Hubbard) had given Notice, he thought it was extremely hard that a proposal which had exclusive reference to the incidence of the property tax should be brought forward, he would not say as an obstruction, but as a dilatory plea to the progress of this Bill. His right hon. Friend desired that the property tax should be assessed on the rateable value. But until this Bill had been in operation for a considerable period, it was impossibls that there could be a rateable value column which could be relied upon for the assessment of the property tax, or, indeed, any other Imperial tax. The Amendment would, therefore, defer the Bill for a long time, and he put it to his right hon. Friend whether he would not do better for his own object to depend on the Bill which he had already introduced on his own responsibility, with the view of re-adjusting the incidence of the property tax as to Schedules A and B, and rather to make common cause with him in passing the present Bill as an essential preliminary to the carrying out of his own proposal?

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Sclater-Booth.)

MR. J. G. HUBBARD

assured his right hon. Friend that it was with no pleasure to himself that he rose to offer what might seem to be obstruction to this Bill. It was a Bill for which lie had been labouring since 1867, and lie hailed the Bill with great satisfaction, with one very grave exception. His right hon. Friend might lead them to suppose that the subject of his Amendment had no necessary connection with the Bill; but his Amendment was— That no Valuation Bill, providing; in a Valuation List a common authority for the assessment of rates and taxes, can be satisfactory unless it provides a common measure of value for such assessment by levying Imperial taxes as well as local rates upon the rateable value. The Bill touched Imperial taxes. The 31st clause made the valuation list the authority for all local rates, income tax, and house tax. But it did more; it decreed that, while rates were to be levied on the rateable value, taxes were to be levied on the gross value. Had his right hon. Friend left out the last part of that clause, he would have a right to complain of his Amendment. That clause maintained the present vicious system, and it legalized in an unprecedented manner injustice and extortion in the name of the Queen. In the Bill now before the House there was a Schedule which provided a certain scale of deductions from the gross value of property through which the rateable value was to be ascertained; but while local rates and payments were to be levied upon the rateable value, the Queen's taxes were to be collected upon the gross value, which was from 10 to 33 per cent more. The real property of this country was greatly encumbered. It had been computed that landed property was in the aggregate mortgaged to the extent of one-half; but, while some properties were free, others were heavily mortgaged, and thus it occurred that a property of £2,000 nominal, but of £1,800 effective rental, was assessed to income tax on £2,000, and being liable to a mortgagee for £1,600 interest, left but £200 to the owner. Yet he was charged income tax on £2,000, and recouping himself to the extent of £1,600, was practically paying on his residue twice as heavily as the capitalist mortgagee. While commending a remedy for this grievance to the attention of the House, he could not but remark that this unfair proposal in the 31st clause was thrust into the Bill by the Inland Revenue Department. The President of the Local Government Board was the victim of that Department. He did not want to take away from the receipts of the Chancellor of the Exchequer; he wished to see the tax levied equitably. He charged Somerset House with being over-zealous in an ungodly attempt to lay burdens on the backs of landowners and house owners. When this House passed the Inhabited House Duty, it gave to the Revenue officers the privilege of assessing an annual value, and when they voted an income tax it was to be assessed on the profits of lands and houses. He wanted to know whether a man with £2,000 a-year in house property, who only got £1,500 a-year from it, should be dealt with as if he had £2,000 a-year profits? If he did not get the £2,000, they had no right to tax him on that amount. In 1860 the population was 19,900,000; now it was 24,800,000—an increase of 25 per cent. The house duty in 1860 was £23,000,000 odd; it was now £47,000,000 odd. The houses chargeable with income tax in 1860 amounted to £48,780,000, and in 1878 to £90,451,000 in value. What did that mean? It did not mean that houses had increased in that proportion or numbers, for that increase could not exceed the growth of the population; but it meant that the assessable value had been forced up 75 per cent in 18 years by the combined efforts of assessment committees and tax surveyors. He would close his appeal to the House by a warning. Many years since this country, in the Great War, had to struggle for existence, and in order to pay our way we issued paper money so lavishly that it greatly depreciated in value, and the issues of the Bank of England fell to a discount of 25 per cent. Attempts were made by Lord King and others to protect themselves against this depreciation in the currency, but the attempts were disapproved by the Government; and Mr. Vansittart introduced a Bill into the House of Com- mons, which was passed into law, enacting that the bank note was equal in value to the coin it represented, and that any persons giving or taking it at any but its nominal value should be guilty of a misdemeanor. This clause, despite the earnestness of Horner and the eloquence of Canning, became law, under the influence of the Government and its followers. The proposal in the Valuation Bill was not less mischievous and absurd, and he asked the House whether they would tolerate such another anomaly in legislation? The proposal in the 31st clause was as absurd and intolerable as that of Mr. Vansittart, and it was infinitely more injurious? It would inflict on the people a grievance which stirred them up against the Government they ought to respect and the laws they ought to obey, and made taxpaying a nuisance, instead of what it ought to be—a pleasure. He begged to move the Amendment which stood in his name.

SIR JOSEPH M'KENNA,

in seconing the Amendment, said, he opposed the Bill for the reasons so clearly stated by the right hon. Gentleman (Mr. Hubbard) who had proposed the Amendment, and also on the ground that if such a measure were applied to Ireland, it would work still greater injustice, and therefore, lest he might be accused hereafter when a Bill was introduced for Ireland, that he had allowed the principle to pass unchallenged on the present occasion. He considered the principle of charging income and rates on the scale adopted hitherto and continued by this Bill unjust; and, therefore, he felt called upon to oppose its application, to England.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "no Valuation Bill, providing in a Valuation List a common authority for the assessment of rates and taxes, can be satisfactory unless it provide a common measure of value for such assessment by levying Imperial taxes as well as local rates upon the rateable value,"—(Mr. Hubbard), —instead thereof,

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

MR. KNOWLES

regretted that the right hon. Gentleman had made no provision in the Bill for a uniform method of assessing mineral property. He was unable to understand why that description of property was excluded from the Bill, unless it was that the President of the Local Government Board sympathized with land valuers and that class of persons. The present system was very unsatisfactory and unjust. He would vote against the second reading of the Bill, unless his right hon. Friend promised to introduce a clause dealing with the matter he had mentioned.

MR. RYLANDS

said, that the changes introduced in the Bill removed, to a considerable extent, the objections which had been taken to the Bill of last year. The subject to which the hon. Member for Wigan (Mr. Knowles) had referred might be considered in Committee, and he would second his hon. Friend in the matter. He objected to the Amendment, because it raised the question of the incidence of the Income and Property Tax by a side wind. He hoped the House would be disposed some day to deal with that subject in a serious spirit; but he was not prepared to raise that question at the present moment. He would vote for the second reading of the Bill, trusting that certain changes might be made in its clauses in Committee.

MR. STORES

pointed out that there was an unjust incident of taxation as between the urban and the rural occupier which ought to be remedied. As an illustration of the grievance, he might mention that a farmer in the neighbourhood of a town with which he was acquainted occupied a farm at a rent of £400 a-year, and derived an income from it of £200 per annum, yet he contributed exactly the same sum to the local rates as certain large works in the town, which were let at £400 a-year but returned many thousands annually.

MR. STANSFELD

said, the only fault he had to find with the right hon. Gentleman the Member for the City of London (Mr. J. G. Hubbard) was for introducing his Motion on the second reading of this Bill. The subject was a remanet of the late Government's questions, and had been introduced in successive Sessions, and always been postponed. It was essentially a Bill of clauses, and he thought the House would be of opinion that it was not desirable to spend any great length of time in discussing it at that stage. The lion, Member for South Nottinghamshire (Mr. Storer), who had just sat down, seemed to him to be labouring under a delusion as to the objects of the Bill. The question of rating did not arise in the debate on a matter of valuation. The question for the House, at that moment, was solely the Amendment of the right hon. Gentleman, and he would forgive him (Mr. Stansfeld), he trusted, when he suggested that that Amendment was really irrelevant to the Question then before the House, because the right hon. Gentleman had fallen into precisely the same error as the hon. Member who had preceded him. The right hon. Gentleman the Member for the City of London was of opinion that the taxes ought to be made upon the same value as the rates. Whether that value should be the gross value or the rateable value was another question. But the Bill did not affect that question in the slightest degree. It was a Bill to fix upon an uniform system for assessing the gross and rateable value of property, and it left the question raised by the right hon. Gentleman entirely intact as to whether income tax should be levied upon rateable value or upon the gross, as was the case at the present moment. According to the present law, the income tax was levied upon the gross value of property. He did not deny that that mode frequently pressed unduly, but he did deny that that was the proper occasion to discuss the justice of that principle. The right hon. Gentleman ought to regard this stage of the Bill as a preliminary to the occasion when he would have every opportunity of bringing forward his views. This Bill would ascertain the gross value and the rateable value of property, and the right hon. Gentleman could not object to the proposal of the Government that those gross and rateable values should be arrived at in some uniform manner. It appeared to him that the sole objection to the second reading of the Bill was a matter which did not properly arise in the debate on that question, and, therefore, he hoped the House would accord the Bill a second reading.

MR. PELL

said, he could not support the Amendment—one reason being that he thought the Bill had been sufficiently discussed. He entirely agreed with the right hon. Gentleman opposite (Mr. Stansfeld) that they would do better to defer further discussion until the proper time—namely, when the Bill went into Committee. He must say also that he regarded the Amendment with some suspicion; for, in his own mind, he did not see that it was one which would recommend itself to the owners of real property. The effect of the right hon. Gentleman's Amendment would be to entirely disorganize and unsettle the existing arrangements for the assessment of real property. There was one point upon which he felt some regret, because the subject was rather a "hobby" of his. He was sorry to see that the right hon. Gentleman (Mr. Sclater-Booth) had not done anything for the better assessment of railways. There was a clause in the Bill, truly, which authorized the calling in of a professional man in those cases; but it was very obvious that railway property had now become so enormous and important that it could hardly be assessed in the same way as ordinary property. He could not help thinking, therefore, that opportunities should be given to call in a professional valuer who would make a professional survey of all railway property in his county, and thus afford substantial data on that subject, which, under present conditions, must be only a matter of conjecture.

SIR WALTER B. BARTTELOT

thought that they must congratulate the right hon. Gentleman the President of the Local Government Board for having introduced this measure, framed as it was very much in accordance with the principles laid down last year in Committee. He sympathized with the right hon. Member for the City of London (Mr. J. G. Hubbard), and he thought the House generally sympathized with him in the Motion he had made; but he could not agree with his hon. Friend the Member for South Leicestershire (Mr. Pell), who suggested that there was no necessity for bringing forward this question. The hon. Member knew perfectly well—probably no other lion. Member in the House knew so well—the difference between the assessment for the income tax, the county rate, and that for the poor rate. They were three distinct and different modes of assessment. Therefore, when the President of the Local Government Board brought in his Bill, which was to assimilate and place exactly on the same footing these different assessments, naturally his right hon. Friend the Member for the City of London thought that was a fair opportunity for discussing that grievance of which he thought he had a right to complain. Though his right hon. Friend had a perfect right to bring forward this question, yet the second reading of this Bill was not the proper time to do so. ["No, no!"] He saw his right hon. Friend did not agree to that; but this question was essentially one for the Committee. He (Sir Walter B. Barttelot) was not going to argue that question; but he thought the suggestion thrown out by the hon. Member for South Leicestershire did deserve some consideration—namely, that whereas the income tax was levied upon the gross value, ought not the whole of the taxes to be levied upon the gross also? He believed it was so in Scotland, except as regarded the poor rate. But one thing he thought no one would deny—all these taxes ought for the future to be placed on the same footing. The right hon. Gentleman the President of the Local Government Board had made an important statement on the question of rent. He believed that subject to be at the bottom of the Bill; for if rent was to be a criterion, they might depend upon getting very much nearer to the value of property than had ever been done before. What was wanted was to strengthen the hands of the county authorities so that the whole of these modes of assessment might be looked into, and thus enable them to place all the rates of the different Unions in the county on the same footing. What people objected to was the difference in the mode of assessment in the various Unions which now existed. He hoped his right hon. Friend the President of the Local Government Board might have fair treatment in the consideration of the Bill. He certainly did not think these Bills—which were of very great interest to the counties and of very large importance—obtained a fair share of the time and attention of the House, and he also was of opinion that his right hon. Friend the President of the Local Government Board did not obtain from the Government the opportunities accorded to other Departments, which the great and varied interest intrusted to his charge demanded.

MR. HIBBERT

said, he did not agree that the right hon. Gentleman opposite (Mr. J. G. Hubbard) was wrong in bringing forward his Amendment at the present time. He (Mr. Hibbert) was of opinion that it would have been entirely out of place in Committee, though he sympathized with the views of his right hon. Friend. He was sure no tax could be levied more unfairly and unjustly than a house and land tax upon the gross value. The question was one of great difficulty, for if the Amendment were carried, the Chancellor of the Exchequer would be placed in a very awkward position in making an income tax upon England, Scotland, and Ireland, there being a different system of assessment in each Kingdom. He should like to see the whole matter as affecting the three Kingdoms considered by the Chancellor of the Exchequer, with a view of placing the tax upon a much more fair and reasonable footing. The Amendment would only apply to England. He hoped the right hon. Gentleman (Mr. J. G. Hubbard) would be satisfied with the discussion which had taken place, and not press the Amendment to a Division. There were some alterations which would make the Bill much more acceptable in Lancashire—namely, greater assessment boards were proposed to be left out. In Lancashire, which was thickly populated, the difficulty was not so much felt, but there were counties in which there were five or six greater assessment boards with five or six different authorities outside the county authorities, and it was impossible under those circumstances to have anything approaching uniformity. He had put down a Question the previous evening on the subject of the valuation of mines. Though he did not say it was a perfectly simple matter, he thought it would prove not so difficult as it was supposed to be. He trusted that when the Bill was in Committee his hon. Friend the Member for Wigan (Mr. Knowles) would introduce a plan on some definite system for valuing mines. At present in some counties there were three or four systems for valuing mines, which naturally gave rise to great difficulties in the assessment of that kind of property.

MR. SCLATER-BOOTH

said, he would not trespass long on the patience of the House, but he thought there were two or three questions to which he might refer. He did not at all deny that he sympathized with the remarks of the hon. Member who had last spoken, but they must bear in mind that this Bill was not a final measure, but only a preliminary to one dealing with County Boards. The hon. Member for South Leicestershire (Mr. Pell) raised a very serious question. If the hon. Gentleman thought he (Mr. Sclater-Booth) could settle this question of the rating of railways by a clause in a Valuation Bill, then the hon. Gentleman was a much more sanguine man than he. If every hon. Member representing a particular class of property were to bring forward a clause to provide for the special valuation of that property, he asked when was this Bill to pass? It would be extremely unfair towards the Bill. Let the Bill pass, however, and he should be most happy to produce a Rating Bill which would deal with all the questions not contained in this Bill. He trusted that after the debate on this question referring to England, the hon. Member (Mr. Ramsay) would not attempt to delay the progress of the measure.

MR. BIGGAR

said, he was not informed whether the right hon. Member the Mover of the first Amendment would proceed with it or not. With regard to the Bill, he thought the right hon. Gentleman the President of the Local Government Board had tried to bring it forward on a former occasion, when he was counted out. That, of course, was very unpleasant; but now the right hon. Gentleman had placed hon. Members in that position that he was bound to get a hearing for the Motion. He could not imagine that any person could depend upon the principle that a ratepayer was bound to pay taxes on the actual value of that which he occupied or received rent for. As regarded rateable property, a fair and honest principle was that of a certain reduction from the gross value on account of the many different deductions which had to come off in proportion to the amount for waste. The result was under the former system, that in the case of the income tax an unfortunate occupier really paid from 20 to 50 per cent more than he actually put in his pocket. He could not believe that such a principle could be upheld, and he thought this was the opportunity for deciding the question as to whether the income tax should be paid on the gross value or on what the income really was. For that reason he thought the House would do well to support the Amendment.

MR. RAMSAY

said, he should be very sorry to do anything in the way of obstruction; but he would state in a few words his objections to the Bill in its present form. He found that in this Bill there was no alteration of the existing law, under which it was admitted on all hands that the diversity of the rating was very great indeed. He thought that any plan which would make the principle the same in England as in Scotland would be an improvement. It was said that the circumstances were somewhat different in England; but he was not aware of any one principle of difference between the relations of property in England and those in Scotland. If a tenant took a farm, the rent payable was accepted as the sole criterion of value, and he was glad to hear the right hon. Gentleman say that he was prepared to accept rent as the real criterion. If an owner be the occupier in Scotland, then the rent was taken to be the letting value to a tenant. The Valuation Act of 1854 provided that occupiers and proprietors should be bound to give an account of the rent paid to the owner, and in that way each parish in Scotland was provided with a uniform system of valuation; but the result of the present law in England was that in every parish there was a different mode of assessment. The result of the passing of the Valuation Act for Scotland was that whereas in the 12 years preceding the passing of that Act the valuation of the county in which he resided had only increased £11,000, in the first valuation under the Act the increase was £34,000 in the one year. And it had continued to increase every year since, having advanced from £291,236 in 1855–6 to £449,082 in the year 1878–9. He had statistics on the subject, which, if time permitted, he should have wished to have brought before the attention of the House; but, under the circumstances, he would briefly state that he did not believe the Bill as it then stood would secure that uniform valuation which it was expected to do.

Amendment, by leave, withdrawn.

Main Question put, and agreed to.

Bill read a second time, and committed for Thursday next.