§ Order for Committee read.
§ Motion made, and Question proposed, "That Mr. Deputy Speaker do now leave the Chair." —(Mr. Chancellor of the Exchequer.)
§ MR. J. G. HUBBARD
said, he rose to call attention to a subject which he thought had been somewhat neglected, and to obtain from the House an expression of opinion as to the inconvenience under which the country laboured with regard to the existing systems of assessment for both Local and Imperial purposes. He would first briefly lay before the House an history of the course of legislation with regard to Local Assessment. So far back as 1836, a Bill was passed, of which the object was to establish a uniform mode of rating for the relief of the poor and other cognate purposes, and the principle therein laid down was one which lay at the base of all similar legislation—namely, that the annual value of the hereditament was to constitute the rating, a reduction being made for the cost of maintenance. In 1862 a Bill was introduced in order to establish a Union Assessment, "which would very greatly facilitate the introduction of a uniform system. That Bill was passed, and in the year 1867 a Valuation of Property Bill was introduced, which was meant to apply to the whole country. It did not, however, pass that year, but was referred to a Committee. In 1869 a Valuation of Property Bill was again introduced as a general measure for the whole country. It did not pass; but in the same year the Valuation Bill for the Metropolis was introduced and became law. He wished to call the attention of the House to the fact that since the year 1869 a perfect system of valuation and assessment for local purposes had existed in the Metropolis, but had existed nowhere else in the country. General Valuation Bills were again introduced in 1873, 1876, 1877, 1878, and lastly in 1879; and in every one of these Bills the object was to establish one uniform system of assessment, and to bring property under 1381 one valuation both for Local and Imperial purposes. He called attention to the fact that the degree of uniformity which prevailed in the Provinces, owing to the introduction of the Bill of 1867, had been absolutely dissipated, in consequence of the Bill itself never having become law. The result of this was that more confusion and discrepancy in the system of rating throughout the country existed now than there was before the Valuation Bills were introduced. The amount of the discrepancy would be perceived when the House was aware of the difference between the value for assessment for Local purposes and the value for assessment for Imperial purposes. In the Metropolis, where the Valuation Act of 1869 had been in force, the amount charged with Income Tax under Schedule A was (in 1880–81) £29,194,442; and for Local Rates under the gross valuation the amount was £29,173,569. But there was a great difference with I regard to the other parts of the country. In all the rest of England the amount assessed to Income Tax was £124,453,737; whereas the gross amount assessed to the relief of the poor was only £113,060,820. That was a discrepancy highly unsatisfactory in its aggregate, but, when examined in detail, really monstrous. For instance, under the assessment of; the Local Valuation Board, in the county of Anglesea the difference of the gross valuation for Local Rates was no less than 26 per cent under the amount; charged with Income Tax under Schedule A; whereas in the county of Cumberland there was only a difference of 3 per cent. That was a monstrous discrepancy to exist in what ought to be a uniform system of valuation for Local and Imperial purposes. Having shown, he hoped, to the satisfaction of the House, the discrepancy which existed with regard to Local purposes, he would mention very briefly the inequalities which existed with regard to the Income Tax. It was perfectly well known that in assessing land for Local purposes a reduction was made of 10 per cent; but the Income Tax was levied on the full amount. In the assessment of houses for Local purposes, a reduction was made of 20 per cent, and mills and factories were entitled to an abatement of about 30 per cent; but the Income Tax was levied upon the gross annual value of each. All these 1382 were inequalities which pressed severely upon the people. There was, however, one kind of property which suffered more than all the rest, and that was land. Land, as everybody knew, was at this time unfortunately very heavily embarrassed; in fact, he believed he was within the mark in saying that one-half of the rental of England did not now go into the hands of the nominal owner, but into the hands of the encumbrancer. No allowance was made for this state of things by the Income Tax Commissioners. Suppose a man had an estate worth £2,000 nominally, but worth, after paying deductions, £1,800. Suppose, further, that the owner had given a mortgage on the property, the interest of which was £1,600, having £200 a-year himself; he had, nevertheless, to pay Income Tax upon £400. The landlord in this way paid a double Income Tax. This was a monstrous hardship, a hardship which pressed upon land very severely indeed at the present time. He believed there were many properties of which the rents could not even pay the mortgage interest, and of which the owners had still to pay Income Tax upon their outgoings. He did not think he need say more to prove to the House how exceedingly unjust the Income Tax was in its incidence. In his opinion, no better tax could be devised than the Income Tax, providing only that it operated equably and justly. As an Income Tax, it should take from everybody's income a certain percentage. Nothing could be more equitable than that principle. If the tax gave extreme dissatisfaction the reason was not to be found in the fact that it was a tax on income, but in the unscientific way in which it was administered. The purpose of his remarks up to this point had been to show that real property was grossly overcharged in respect to Income Tax. He now came to another grievance—namely, that of the trading and professional classes. These classes were charged upon their full receipts, just as if they were so much money in the funds. Was that reasonable? Everybody knew that a trader or a professional man did not spend every farthing he earned. It might be the man had a wife and family, and that to make provision for them in case of his death he put away one-third of his income. Upon that one-third he ought 1383 to be exempt from payment of Income Tax. There was only one point more upon which he had to comment, and that was that if the improvements in administration which he so very greatly desired were carried out, they would arrive at this most satisfactory result—that the taxes for all Local and Imperial purposes would be assessed upon the same amount. The taxes, in fact, might be combined in the same demand note, and collected by the same collector. The expense of collection would be decreased, and the new arrangement would be a relief and a convenience to the taxpayer; he would have far fewer payments to make. Every one of the changes connected with the improved administration would be an advantage to the community, to the Exchequer, and to the administration of the tax itself. They would have, in fact, if the system were carried out, economical administration, simplicity of statement, equity in the whole construction of the tax, and contentment in the taxpayer. Why did he make this Motion? His right hon. Friend the Chancellor of the Exchequer know well that nothing could be further from his desire than to annoy or embarrass the Government, He had felt it his duty to offer the result of an experience of many years on a subject of this kind, and to tender in a most friendly and earnest spirit to the approval of the House a Motion which, if it were adopted, might assist the Chancellor of the Exchequer in the construction of some scheme which would satisfy all equitable and scientific principles, might put an end to the evils of the present administration, and might place the taxation of the country upon a reasonable and satisfactory footing. The right hon. Gentleman concluded by moving the Resolution of which he had given Notice.
To leave out from the word "That" to the end of the Question, in order to add the words "this House earnestly commends to Her Majesty's Government the provision of a general Valuation Bill (in extension of 'The Metropolis Valuation Act, 1869'), and the adjustment of the Income Tax, so as to bring Local and Imperial Taxes under the same principle of assessment, a more effective administration, and under a simpler and more acceptable system of collection,"—(Mr, J. G. Hubbard,)
§ —instead thereof.1384
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS'),
said, his right hon. Friend had, in very few and very appropriate words, made two suggestions to the House. The first suggestion was that the principles of the Metropolis Valuation Act should be extended to the whole country; and the second suggestion was that the Income Tax should be levied on the not, and not on the gross. As to the first suggestion, he entirely agreed with the right hon. Gentleman. It would be most desirable, and it would be one of the most useful works that the Government could set themselves to do, to extend the principles of the Metropolis Valuation Act to the whole of the country. No doubt, there was nothing more inconvenient than that property should be differently valued for the purposes of Imperial and Local Taxation, as was the case at the present time. In that respect, therefore, he was at one with the right hon. Gentleman; and he hoped that before many years were over the principles of the Metropolis Valuation Act would be extended to the whole country. They were, he believed, extended to Scotland; but he was not sure whether they were extended to Ireland. The second proposal of his right hon. Friend was of a very different character to the first. It was that, whereas at present, Income Tax was levied on the gross, and local rates on the net, in future both Income Tax and local rates should be levied on the net. That was a question which had been discussed in past years. It was a subject which was inquired into by a Committee. After a very long inquiry, and a very careful consideration of the proposal of the right hon. Gentleman, the Committee rejected the proposal, and left matters as they were. Having only been in his present Office three months, he could not hold out any encouragement as to the adoption of the latter part of his right hon. Friend's Resolution. He would promise, however, that he would consider the question. He could certainly not adopt the Resolution now; and he hoped, therefore, that the right hon. Gentleman would not think it necessary to put the House to the trouble of dividing.
§ SIR STAFFORD NORTHCOTE
said, he entirely agreed with the view the right hon. Gentleman the Chancellor of the Exchequer took with regard to the question of valuation. The extension of the principles of the Metropolis Valuation Act to the whole country had been long desired; and if it could be accomplished a great improvement would be effected. It was just one of these matters which took some time to settle, and one of these useful and practical measures which did not, in the midst of other Business, receive that attention which they deserved. He hoped the time would shortly come when the question could be seriously taken in hand, for it was unquestionably a matter which, demanded settlement upon a sound basis. It would be an enormous convenience, and a great step towards any improvement in the system of Local Taxation and Imperial Taxation as well, if they could accept the right hon. Gentleman's (Mr. Hubbard's) suggestion as a foundation for all measures of reform. It was always in the contemplation of the late Government, and more than one Bill was drawn on the subject. It was, however, one of these unfortunate Bills which were crushed out by the competition of other Business. With regard to the second branch of his right hon. Friend's (Mr. Hubbard's) observations, which did not find a place in the Motion printed on the Paper, he (Sir Stafford Northcote) agreed that it was a question of very much importance, and one to which the right hon. Gentleman had given so much study, that whatever fell from him in regard to it deserved respect and attention. He (Sir Stafford Northcote) had never been able to see a way out of the difficulty with which the proposal was surrounded. He remembered quite well the conclusion to which the Committee were forced to come in the matter. He did not say that the subject might not be, from time to time, renewed and discussed; but he had never yet heard or seen any proposal which would have the result the right hon. Gentleman so much desired.
§ MR. RAMSAY
said, he hoped that the promise of sympathy with the right hon. Gentleman (Mr. Hubbard) in his anxiety to secure a uniformity of valuation of all property, which the right hon. Gentleman the Chancellor of the 1386 Exchequer had made, would not expire without bearing fruit, and that on an early day the Government would take the question in hand, and devise a means by which a uniform valuation could be obtained. He (Mr. Ramsay) took an interest, during the last Parliament, in assisting the Bills which were introduced by the late Government for the purpose of securing a just valuation of all property in the country, and in aiding the right hon. Baronet (Sir Stafford Northcote), who had gone the length of accepting the principle of a uniform valuation which was provided for in the law relating to Scotland. Since 1854 the valuation of all property in Scotland had been uniform; whereas in every parish in England the valuation of property differed, and the discrepancy was getting worse every year. Nothing could be more detrimental than a variation in the system of valuation; and an equitable incidence of Imperial or Local Taxation could never be secured until there was a uniform system of valuation applicable to all parts of the country. The law and practice of England ought to be assimilated to that of Scotland. The present state of things worked great hardship to the people of Scotland. For instance, while all real estates in Scotland paid one uniform sum, in England the taxation varied to the extent of many millions; there was a difference, he believed, of about £103,000,000 in England, as against £136,000,000 in Scotland. In other words, in England they paid 5d. in the pound, while what was paid in Scotland was equal to 6d. in the pound. It was not a creditable thing that the poorer country should be called upon to bear the heavier burden, simply because various Governments would not take the trouble to do the justice of securing a uniform system of valuation. He saw nothing in the state of England and Scotland which required that the system of taxation should be different. He trusted that on an early day steps would be taken to secure the result desired.
§ SIR WALTER B. BARTTELOT
said, this was an Amendment which deserved the very careful consideration of the House. They were told, upon the responsibility of the Government, that if they passed the new Procedure Rules, and established Grand Committees, they would be allowed to go to 1387 bed at a reasonable hour; and yet they were now asked at 1 o'clock in the morning, many hon. Members having sat on Grand Committees, and others on Select Committees, since 12 o'clock yesterday, to consider one of the most important Bills of the Session. He protested most strongly against the proceedings which were now going on, because he felt certain it was utterly impossible that proper attention could be paid to any of the subjects they were called on to discuss. He did not know what course his right hon. Friend intended to pursue; but if he persisted in his Amendment, be (Sir Walter B. Barttelot), unless he got an assurance from the Chancellor of the Exchequer that all he intended that night was that they should go into Committee pro formâ, should certainly vote for that Resolution.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)
said, he had no right to speak again except with the leave of the House. If they would grant him their indulgence, however, he wished to state that what, at half-past 4 that day, he undertook to do was not to take any opposed clauses—he did not say he would not dispose of the unopposed clauses. The first part of the Bill was unopposed, the clauses being merely formal; and after they were agreed to he should not proceed further with the Bill that night.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)
Clause 7 is one of the opposed clauses, which it is not proposed to take to-night.
§ MR. HICKS
said, that, under the circumstances, then he would confine his remarks to the Motion or Amendment of the right hon. Gentleman below him; to that part of it which referred to one assessment for Parochial and Imperial purposes. This was a question which bad been before the country for a very considerable time, and which had been introduced into the House on several occasions. Every time the proposal that Government officials should interfere in these matters bad been brought before the county he represented (Cambridge- 1388 shire), the feeling of the taxpayers had been almost unanimously against the introduction of these gentlemen into Local Boards and Local Assessment Committees. He, therefore, felt it to be his duty to oppose this Resolution as regarded the establishment of anything like a joint valuation for Parochial and Imperial purposes.
§ MR. RYLANDS
said, that when the Conservatives were in Office no one would have protested against the course now proposed more loudly than Members of the present Government. He entirely agreed with the hon. and gallant Baronet (Sir Walter B. Barttelot) that it was a most unfortunate tiling that they should be called on, after half-past 12 o'clock at night, to discuss the Resolution of his right hon. Friend (Mr. Hubbard), which was of an extremely interesting character, deserving the serious consideration of the House. The right hon. Gentleman had proposed, no doubt, an important change in the assessment of land, asking that it should be assessed for Income Tax on its net instead of its gross value; and the Chancellor of the Exchequer, without giving his right hon. Friend much encouragement, had intimated that he might at some future time carefully reconsider the matter. To his (Mr. Rylands's) mind, whenever the Income Tax was dealt with it would be absolutely necessary that the different classes of incomes should be dealt with, in order to give the relief that was required. the question which should be gone into was a much wider one than that raised by his right hon. Friend; and what he desired was this—that if the Income Tax was to be a permanent tax the House should set itself the task of seeing whether they could not put it in a more satisfactory position. There was, no doubt, a great amount of dissatisfaction in the country amongst people who were paying the tax. He would not attempt at that time of night to go into the matter, and he should not oppose the Motion for the Deputy Speaker to leave the Chair if the Chancellor of the Exchequer insisted on it; but he regretted that they should be called upon to go into this matter at so late an hour.
§ MR. J. G. HUBBARD
said he would appeal to the Chancellor of the Exchequer to know whether he should withdraw the Amendment.
§ MR. J. G. HUBBARD
said he would do so; but the Resolution was no Order or Instruction to the Government. It was only an expression of a desire on the part of the House that this very important subject should be considered. Surely it was not an unreasonable thing to ask that the question should be considered in all its bearings. However, if the Chancellor of the Exchequer would promise that the recommendation on the Paper should be considered by the authorities of the Local Government Board and of the Inland Revenue he should be satisfied. He knew what he was saying in that recommendation; the scheme was practical and just; and if the Chancellor of the Exchequer would say that he would loyally give consideration to it he would withdraw the Amendment.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)
I have said more than that. I have said that as to one part I agree with it; and that, as to the other, before this time next year I will look most carefully into it.
§ Amendment, by leave, withdrawn.
§ Main Question, "That Mr. Deputy Speaker do now leave the Chair," put, and agreed to.
§ Bill considered in Committee.
§ (In the Committee.)