HC Deb 08 June 1883 vol 280 cc90-100
MR. ALDERMAN W. LAWRENCE

, in rising, according to Notice, to call the attention of the House to the Inhabited House Duty; and to move— That the Inhabited House Duty ought to be repealed, because it limits the size of houses, and interferes injuriously with and restricts the mode of construction of houses and blocks of buildings specially adapted for the working classes; causes a large amount of available habitable accommodation to be unused; and is unfairly and unequally assessed, said, with regard to the subject there were the most fallacious notions prevalent throughout the country. about two-thirds of the houses in the Kingdom did not pay the house tax, and therefore it was presumed that the tax did not affect them, although it did so in reality, owing to the peculiar manner in which it was levied and the restrictions which appertained to it.

MR. SPEAKER

said, he did not know whether the hon. Member for the City of London was aware that, in consequence of the result of the Division which had just taken place, he was precluded from submitting to the House the Motion of which he had given Notice in reference to this subject.

MR. HEALY

said, he wished to ask whether the hon. Member for the City of London might not discuss the matter, although he could not submit his Motion?

MR. ALDERMAN W. LAWRENCE

said, lie was aware he had been deprived of the right of taking the sense of the House on his Motion; but he thought he might seize this opportunity of discussing the subject, and explaining various matters connected with it. The limit at which the inhabited house duty commenced was £20 per annum; and, consequently, there was a great desire throughout the country to build houses below that value for the working classes, in order that they might be exempt from the tax, which would amount to 9d. in the pound, or 15s. a-year. Therefore, many houses were built of smaller dimensions and with fewer conveniences than would otherwise be the case. No doubt, in many parts of the country, a very convenient house might be had for £20; but in London, Manchester, Liverpool, and other great cities, the limit of the tax restricted very much the accommodation for the working classes. Some dwellings, erected specially for the convenience of working men in London, were exempted from payment of the tax, because the whole building had an open staircase, with no front door; and consequently each tenement, which was in itself under the value of £20 a-year, was regarded as a separate house. In this manner the dwellings built by the Company presided over by his hon. Friend the Member for Maidstone (Sir Sydney Water-low) escaped payment of the tax. The Peabody and some other buildings escaped the tax, not on account of their being built on this particular plan, but because, being erected by public bodies, they obtained a certificate of exemption from the Treasury. If a private person were to erect buildings like those of the Peabody Trustees, ho would have to pay the inhabited house duty. Thus, that tax had a most detrimental effect on the houses built for the people. The old doctrine of supply and demand did not meet the case of the dwellings of the working classes. Unless special and disinterested exertions were made, those classes would find very unsatisfactory accommodation. That was the only tax which interfered injuriously with the article taxed. In the case of old houses which had formerly, like the houses about Drury Lane, been occupied by the wealthier classes, but were now inhabited by the working classes, the tax was still levied. Those houses were taxed at 9d. in the pound. The old house tax, which was heavier than the present tax, was repealed in 1834. But the window tax was continued longer and only repealed in 1851, when the present inhabited house duty was re-imposed; and the effects of the window duty were still occasionally visible in blocked-up windows and fan lights, which brought about a very unsanitary state of things. Similarly, the present house tax had an injurious effect in encouraging buildings of an inferior kind for the dwellings of the working class. There could be no doubt that the time had come to take the matter into serious consideration; but he knew it would be difficult to obtain its cessation, for he feared it was so easily collected, and too profitable, producing, as it did, about £1,700,000 a-year, for any Chancellor of the Exchequer to be willing to abolist it. But it bore very unequally on different classes and in different parts of the country. In cities it was severely felt; but in the country, where land was comparatively of little value, it was not much felt. More than half the tax was paid in the four Metropolitan counties of Middlesex, Surrey, Kent, and Essex, and the landlord paid his 5d. in the pound as property tax, and the tenant 9d. in the pound on the same assessment as house tax on every house which came within the range of the tax. But ducal palaces, and the residences of the higher classes, came off almost scot free. They were supposed to be rated at the sum at which they would let to a tenant from year to year who took the house with about three-quarters of an acre by way of cartilage. Of course, they would not really let at all, for who could afford to rent a ducal palace but a Duke? They were, however, rated at a nominal amount. Thus, magnificent mansions with large gardens and conservatories, and houses for stewards and coachmen and other dependents, and which cost, perhaps, £500,000, only paid tax on a few hundreds a-year. He was aware that it was a favourite argument of political economists that this tax was the most equitable that could be imposed, because it allowed persons indirectly to assess themselves by placing a tax upon the house they felt themselves justified by their incomes in inhabiting. But the fact was that the richer a man was, and the larger the house that he occupied, the less in proportion he paid under this tax. What was the use of reducing the taxation on a man's food and clothing, if his house was to be taxed unfairly? The country mansions built by successful traders, as well as those of the aristocracy, were taxed at too low a rate; and in many instances, where such persons had expended £20,000 or £30,000 on the construction of their mansions, they were only assessed to this tax on an assumed rental of £60 or £80 per annum. This house tax did not extend to Ireland, and, as a consequence, the members of the middle class in that country were better housed and lived more comfortably than those of the same class in this. Scotchmen, too, would doubtless be surprised to hear that Edinburgh, Lanarkshire, and Renfrewshire, between them, paid one-half of the house tax of Scotland. The county of Sutherland only paid £152 to the house tax, and the county of Cromarty £25. He had said enough, he thought, to prove, in the first place, that this tax interfered materially with the construction of houses for the working classes, as restricting the building of blocks of houses adapted for their use; and, in the next place, that the tax became lighter as the man had a greater income and larger means of paying it; and, therefore, that the tax constituted an evil which could not be defended, and that it should consequently be repealed.

MR. ARTHUR ARNOLD

said, he was of opinion that the injustice to which the hon. Gentleman the Member for the City of London (Mr. Alderman Lawrence) called attention had its origin largely in the obsequious attention which the various assessment committees throughout the country were disposed to pay to the upper classes in regard to the assessment of mansions. In many cases, these committees were under a delusion as to the state of the law in regard to this important question. Something might be done to remedy the pressure of local taxes on the tenant farmers throughout England, if the mansions of the great were rated equitably for the relief of the poor. The words of the Parochial Assessment Act in regard to this matter were—"That such a house shall be rated at what it may reasonably be expected to let for from year to year." The late Lord Chief Justice, however, in a case not well known, declared that it was absurd to suppose that a large mansion could be regarded as a house lettable from year to year, and he laid it down that it should be rated at what it would let for under lease. It was thus quite within the discretion of the assessment committees to make a much more equitable assessment of what were called by the hon. Alderman "the mansions of the great." Not along ago this subject engaged the attention of the Duke of Richmond's Commission on Agriculture; and in giving evidence before the Commission, Mr. Hedley, a most experienced land valuer, gave it as his opinion that mansions were at present rated on no basis at all, that they were generally rated far below their actual value, and that they ought to be rated on the occupation value of the occupier—on the same principle, for instance, that a railway station was rated. No benefit could be greater than that they should have an equal and impartial assessment throughout the whole country.

MR. HEALY

said, that, in his opinion, the speech of the hon. Gentleman the Member for the City of London (Mr. Alderman Lawrence) did credit alike to his head and heart, because he had taken up a grievance of a class of persons who could not be said to be at all adequately represented in this House. He could not, however, agree with the proposition that the grievance did not apply to Ireland, as regarded the domestic comforts of the people. They required in Ireland a system of valuation quite as badly as they required it in this country. He had known the mansion of a Duke escape with a valuation of £50 a-year; whereas a farmer's house, almost next door, was rated relatively to a much larger amount. These assessments were made under the direction of the tax collector. He consulted the owner of the mansion as to the rate-able value of the property, and he certainly would not like to offend the local magnate by putting a high valuation upon his house. It was characteristic of that House that a grievance so long admitted, both in England and Ireland, should only at that late hour have found an exponent; and ho thought it due to the hon. Member that someone on the Treasury Bench should give the views of the Government on the matter. He hoped that an ultimate effect of the discussion would be that the upper classes would not be allowed to escape from their fair share of taxation.

MR. STAVELEY HILL

said, the hon. Member for Salford (Mr. Arthur Arnold) was altogether wrong in the position he had taken up on this subject. Having seen a good deal of the working of Union assessment committees, he (Mr. Staveley Hill) said that position was altogether a mistaken one. These committees—at least in country districts—were formed mostly of farmers, whose endeavour would naturally be to extend the area of the rate, as far as possible, so as to include persons not of the same class as themselves; and, so far from their being favourable to the interests of owners of large houses, they always attempted to place all possible share of the burden on them. The hon. Member was altogether mistaken in the interpretation ho had put upon the words used in the judgment of the Lord Chief Justice, in the case referred to, in the interpretation of the words "from year to year;" it had always been held that while you must not look to the value in any one year, but to its value comminibus auries, the principle of a lease was altogether excluded. He (Mr. Staveley Hill) felt confident that Mr. Hedley, with whose opinions he was, perhaps, as well acquainted as the hon. Member, never could have proposed anything so silly as to rate mansion houses in the same way as railway stations.

MR. ARTHUR ARNOLD

repeated that Mr. Hedley had made a statement to that effect.

MR. STAVELEY HILL

said, in that case, he thought the hon. Member must have misunderstood Mr. Hedley, for the difference between the one and the other was obvious. The mansion house was often rather an incumbrance to the property, while the station was where all the traffic was received and collected. The assessment committees, who knew better how to deal with this question than most persons, had proceeded on the principle of assessing property according to the rent at which it would let; and he thought the hon. Gentleman had done great injustice to those Committees by the manner in which ho had spoken of and interpreted their work.

MR. COURTNEY

said, the question before the House was that of the inhabited house duty, and to that he should strictly confine himself in the few words he had to address to the House. Now, he must protest against the illustrations with which the hon. Member for the City of London (Mr. Alderman Lawrence) had endeavoured to support his argument. It was an example of a mode of reasoning which was not unknown in that House, and which some hon. Members had illustrated that night. Nothing was more common, there and elsewhere, to find a particular tax selected, and great declarations made about the supposed injustice and inequalities of that tax. For example, he might mention the income tax. There was not a Member in that House, perhaps, who could not speak, for a considerable time and with much power, in reference to the inequalities of the income tax. It was complained that the same rate was charged upon an income derived from labour as upon fixed incomes, and that no regard was paid to the duration of life in life incomes. In a similar manner, nothing was more common than to point out the inequality or injustice of some indirect tax, such as that on tea, beer, or spirits, in its application. But he (Mr. Courtney) protested altogether against this mode of argument. If they were going to examine into the justice or injustice of any system of taxation that existed in this Kingdom, they must take the taxation as a whole, combine its several elements, and ascertain what was the total paid on the average by the rich man, by the middle-class man, and the poor man, and find out what was the proportion to the means in the several classes of society. Now, if there was any single tax on the system upon which our financial organization was founded, which would bear examination, by itself as a tax inherently just, it was the inhabited house duty. If that tax stood alone, as indeed it was intended to do, it would be, in his opinion, of so fair a character that they might look for an increase of it, rather than for its abolition. ["No, no!"] Could there be a better measure of the means of a man, taken roughly, than would be found in the valuation of the "house and appurtenances" which he selected for himself in which to live? Could they find any better test of the way in which a man's wealth increased or decreased than the style of house he occupied or indulged in? The next point raised was, that the actual assessment of great houses in the country did not correspond with the principle he had enunciated. He was quite willing to admit that it did not follow that principle, and that the tax was unequal now, owing to the working of the Parochial Assessment Act, just as it was 30 years ago, when his right hon. Friend the Prime Minister denounced its inequality. At the same time, though the principle contained in the present law, of valuing a house by a calculation of its letting value from year to year, could not apply to houses in the country, it was difficult to see in what way a satisfactory change could be effected. He admitted then, at once, that as it was a question of what a house would let for from year to year, the letting value of such great houses as Chatsworth or Longleat would not represent anything like their real value. The hon. Member for the City of London could not test the opinion of the House on this subject, as regarded any practical steps being taken with regard to it; but the action of the Legislature had always been gradually to redress inequalities that were found to exist, and he would at least have had the satisfaction of obtaining from the Government an expression of their desire in this case to remove inequalities, the existence of which, in some few cases, they fully recognized. He (Mr. Courtney) therefore hoped the hon. Member would not regard the discussion as fruitless.

MR. MACARTNEY

said, with regard to what had been said by the hon. Member opposite (Mr. Alderman Lawrence) as regarded Ireland, in that country the houses of labouring men who paid, perhaps, 1s. per week for rent, were assessed at about 5s.; while those of tenant farmers paid about £1 or £1 10s. Of course, the valuation of Ireland was very low in all cases; but it was altogether incorrect to say that the lower classes paid almost as much as the higher.

MR. DAWSON

said, the interest which Irishmen took in this question was only that which they always took in matters affecting the rights and privileges of the English people, with a view to securing a similar sympathy from Englishmen in Irish affairs. It was refreshing to find that the subject was brought forward, not with a view to the imposition of new restrictions on the working classes, but in their interests, and in order to improve their material surroundings. It would be well if the Government, instead of devoting itself to repressive measures, would try to devise means of making the incidence of taxation less heavy on the poorer portions of the population. It was said that this matter did not apply to Ireland; but he contended that anything relating to the incidence of taxation was interesting to Ireland, because taxation fell more heavily upon small occupiers in towns than it did upon the inhabitants of large mansions. He cordially endorsed the observations of the hon. Member for the City of London.

MR. O'CONNOR POWER

said, he had listened with very great interest to the speech of his hon. Friend the Secretary to the Treasury (Mr. Courtney); but he was not quite satisfied with the conclusion to which his hon. Friend had arrived. His hon. Friend told the hon. Gentleman the Member for the City of London (Mr. Alderman Lawrence) that he ought to be satisfied with the debate, because the Prime Minister had been good enough to re-affirm an expression of opinion he had given some years ago in the same direction as the Motion of the hon. Member for the City of London. He (Mr. O'Connor Power) was much impressed with the force of the observations of the Secretary to the Treasury, when he said that our system of taxation, as it bore on different individuals and different classes of the community, should be taken as a whole. He entirely endorsed that proposition; but he asked, at what point were they to begin the necessary reforms? Under what circumstances were private Members in that House able to combine, so as to make their representations of subjects of that kind effective in the counsels of the Treasury, and in the counsels of Her Majesty's Government? Now, upon that point, his hon. Friend the Secretary to the Treasury did not offer them any suggestion whatever. He believed it had been more than once suggested by experienced financiers that one of the best means of inquiring into the Estimates annually placed before the House would be to have a Committee specially charged with the duty of investigating them. But he thought there ought to be a second Committee of the House, to watch the money as it was paid in. There ought to be a Committee, to inquire and report to the House the methods by which the money was got in for the purposes of the expenditure; because, at present, the House had no opportunity afforded it of making the inquiry, seeing that the Public Business of the country was extending in every direction, while that of private Members was being curtailed. He would venture to offer one practical suggestion to the hon. Member for the City of London and others who took an interest in the question, and it was that they should not be content with debates of this description, where everybody agreed in what seemed to be a useless unanimity, because it led to no practical reform, but that the Government should be pressed to appoint a Committee to deal with questions of this nature. He hoped the hon. Member would give his suggestion the best consideration, and that when the subject was brought on at another time they might really be able to take some steps forward which would render them stronger and better able to cope with anomalies of this kind. No doubt, it was impossible to devise any tax, the incidence of which would not be at times unequal and unjust. He could not conceive any tax that would fall with perfectly just incidence on everybody who was bound to contribute towards the support of the State according to his means. It was inevitable that there should be anomalies in taxation, however able a Chancellor of the Exchequer or a Government there might be; but it should be their object to make these anomalies as few as possible, and from time to time to revise the principles upon which taxation was levied, in order that the burden might fall, as far as possible, justly and equally upon all classes of the community.