HC Deb 10 May 1883 vol 279 cc488-508

Clause 13 (Extension and construction of this part of Act. 43 & 44 Vict. c. 19.)


On this clause, as it is the first clause in Part III. of the Bill, the Committee will expect to hear from me some explanation of the change which it is proposed to make in the collection of the Income Tax under Schedules D and E. Under the present system in Scotland, in Ireland, and in about one-eighth of the towns of England, while the collection and assessment under Schedules A and B, and the assessment under Schedules D and E are made by the local officers, the collection under Schedules D and E are effected by the officers of the Inland Revenue. But in the other districts—in Ireland, Scotland, and about one-eighth of the English towns—the collections under Schedules D and E are effected by the officers appointed by the local Commissioners of Income Tax. We propose by this clause, as I have amended it, that as vacancies occur in those collectorships the collection shall be transferred to the officers of Inland Revenue, on the condition that the Treasury is satisfied in each case that the change will produce an economy. The Committee will observe that the provision is in Section 14. What is proposed is, that where it will be found advantageous to the Public Service, and an economy, that the collection under Schedules D and E should be transferred to officers of Inland Revenue; that transfer shall take place, not as against existing collectors, but on the voidance of office by them. I will state the reasons for the proposed change. The collection of Income Tax under Schedules D and E is a very delicate matter. The collection under Schedules A and B is similar to the receipt of rates. There is no secrecy as to the amount at which houses and property are assessed, and that collection may well go on in the hands to which it is now entrusted. But the Income Tax under Schedule D relates to the profits in trade. The system of employing locally-appointed collectors is open to the objection that by the process of collection a man gets to know the income of his neighbours. For these reasons the system of transfer from the local to the Imperial officer has been steadily going on. Whenever such a thing takes place as the failure of the local authorities to appoint an officer, or an officer's unwillingness to give security, from that day the collection of Income Tax under Schedule D is transferred to a responsible collector on salary, from an irresponsible official on poundage. Parliament has thus, in Scotland and Ireland altogether, and step by step in England, decided to transfer this collection from the irresponsible collector on poundage to a responsible collector on salary—that is, a public officer. In support of this view I may state that for three years the Associated Chambers of Commerce recommended us to make this change, and in each year I think unanimously; and in the last year not only was a recommendation arrived at by the Chambers of Commerce, who may be understood to represent in the main the trade of the country, but Mr. Sampson Lloyd, who used to sit in this House, and was then President of the Chamber, was requested to address a letter in August, 1876, on the subject to the then Chancellor of the Exchequer, in which, in describing the objections to the present practice, he, on behalf of the whole of the Chambers of Commerce, used these words— The system is, further, objectionable to the taxpayer, inasmuch as it reveals the amount of tax paid, and, consequently, of income enjoyed by him, to a neighbour who may possibly be his rival in trade. These words, I think, sum up very simply the objections which are felt by a very large proportion of traders to the continuance of the present system. But I have another reason which I think will have some weight with the Committee, and that is the extravagance of the present system, and the very decided economy which will result from the change. The present charge for the collection under Schedule D is £52,000; and, after very careful inquiry, we compute the charge under the system we propose, when the whole of England is brought under it, at £21,100; so that there will be in the end a saving of £30,900 a-year. I may take particular districts which we have carefully inquired into. I will take, for instance, the collection in London. The whole amount of poundage received at the present time by collectors in London is about £41,000 a-year. Of this amount, £26,000 is in connection with Schedules A and B, and therefore would not be affected by the change; but the poundage under Schedules D and E in London is £15,438. There is no doubt that the whole of the Tax could be collected through the Inland Revenue at a cost of £4,500, so that in London alone there would be a saving of nearly £11,000. I may say that I allow in that calculation for the possibility of having, in some cases, to increase the poundage on account of other Schedules. There have been two arguments set up as practical reasons why this change should not be made. The first is, that if we make it the collection of the Income Tax will be slower than it now is; and that in that way the Government would be the losers. We have carefully considered that argument, and I will give one or two facts as the result. I have taken the collection of last year. I find that in Birmingham, from which there has come a strong request on the part of certain persons that the collection should not be interfered with, the amount of tax under D and E collected before the end of March was 50 per cent, or one-half of the whole amount. In the same way, the amount collected in Southwark was 63 per cent; in Marylebone, 73 per cent; in Manchester, 64 per cent; but when we turn to the towns where the collection has been already transferred to the public officers we find a very different result. In Bristol the amount collected at the end of March, instead of being 50 and 60 per cent, is 96 per cent; in Bradford, 83 per cent; in Bolton, 91 per cent; and in Warrington, 92 per cent; and the fact is, that whereas, under the present system, the collection is extraordinarily unequal, and in many large towns extremely slow, where the collection has been transferred it is tolerably equal, and the collection is considerably more rapid. But there is one other argument which I have heard lately, and as to which I should like to give some facts to the Committee. It has been stated by hon. Gentlemen on the other side that the result of the present system is that, from the collectors knowing the habits and circumstances of those from whom they collect, they are able to apply to them at the right time; and that, therefore, the amount of bad debts is much less than it will be if the collection is transferred to Government officials. As to that, I have also made careful inquiry; and the result is that, so far from the amount of collection in respect to bad debts being larger under the old system than under the new system, the bad debts under the old system are about 2 per cent, whereas, under the new system, they are only about 1 per cent, so that on that point—which, when I first heard it, strongly impressed me—the result is exactly the opposite of that stated. The tax is more equably levied and better brought in under the new system than under the old; and from Liverpool downwards, where the new system is in force, I have not received a single complaint; whereas my box is full of complaints from taxpayers, under the old system, that their neighbours have not paid their tax, all of which points to the inexpediency of entrusting this collection to persons who are not responsible public officers; and the expediency of transferring it to those who are responsible to the Government. These are the main reasons why we propose the change. I hope the Committee will adopt this plan, which not only is proposed by me, but was proposed by the Chancellor of the Exchequer in 1879; and that, this done, we shall, at any rate, carry out steadily and slowly the principle which has been adopted by Parliament during the last few years—namely, wherever the opportunity occurs, gradually transfer the collection under Schedule D to salaried officers of the Government. Clause 13 is merely formal; the actual clause is the 14th. Clause 13 says that the Bill shall only apply to England; but, as a matter of fact, the system we propose already applies to Scotland and Ireland; and, therefore, we can only apply it to England. I hope the proposal will receive the approval of the Committee.

Motion made, and Question proposed, "That the Clause stand part of the Bill."


said, he was most unwilling to stand in the way of what the Chancellor of the Exchequer had said would be a great public advantage; but he must ask for an assurance on one or two points before he could assent to this striking change, which really aimed at the alteration of what might be considered the Constitutional collection of the Income Tax, and which was a serious step in the direction of compulsory centralization. The Chancellor of the Exchequer based his plea for this alteration on three grounds—public demands, great economy, and celerity in the collection of taxes. He did not wish to stand in the way of progress; but he must represent to the Committee opinions which had reached him of such irresistible force that it would be a dereliction of duty not to place them before the Committee. The Chancellor of the Exchequer stated that there was a strong popular feeling in favour of this alteration, which was expressed by a number of letters in his possession. But since it became a matter of public notoriety that he (Mr. Slagg) was taking an interest in this matter, he had received a vast number of letters, and amongst them those in favour of the change were infinitesimally small in number; while those expressing a strong desire to adhere to the present system were exceedingly numerous. Of course, the system of Petitions was received with more or less cynicism by the House; but he thought Petitions might be weighed as well as counted. There were over 100 Petitions from influential ratepayers praying that the present state of things might be continued; and with regard to a Petition he had presented from Manchester, if he were to collect all the names to which he attached the greatest weight on any matter he could hardly collect a more influential list than those on that Petition. The same might be said in regard to a Petition from the City of London. The names of the leading merchants and bankers and Chairmen of great public Companies had been appended to Petitions to the same effect. What would this alteration do? It provided for the dismissal of one set of officials in order to appoint another set to do precisely the same thing. He gratefully acknowledged the concession made by the right hon. Gentleman with regard to the continuance of the present collectors, although he was not specially concerned in their class grievances. It was said that this change was proposed on the ground of economy, and the right hon. Gentleman stated that this plan had worked well in Ireland; but he should like to call attention to the expense of its operation in Ireland. The receipts in that country for Property and Income Tax last year were £462,930, while the poundage paid to Government officers amounted to £10,500, or 2½ per cent. In England the net receipts were £8,653,364, while the poundage amounted to £122,500, or 1½ per cent. Of course, he would be told that the circumstances of Ireland were somewhat different, and that the cost was proportionately greater; yet this disparity was very remarkable. But this plan had been tried in Liverpool, and he had strong reason to believe that there was no great economy under the new system in Liverpool; and the right hon. Gentleman had not stated, and probably could not state, what the cost had been. But other experiments had been made, and although they were on a small scale they would serve for illustration. At Enfield the officers' salaries last year amounted to £1,010, whereas the poundage under the old system was only £223. At Tooting the poundage was £40, whereas the now collector's salary came to £145. The cost of collecting the taxes under the old system, it should be remembered, included offices, furniture, stationery, and all other charges. As to the inefficiency of the present collectors, he should like more proof. The evidence in his possession was entirely in favour of the present collectors, and he had not met with any objections on the ground of a want of reticence on the part of the collectors with regard to their neighbours, which seemed to create so great an impression on the Chancellor of the Exchequer. There was, indeed, strong evidence of general satisfaction with the present state of affairs; and he would refer, in support of that statement, to the Petition from the City of London. There were on that Petition some names which must appeal in great force to the Committee—for instance, Mr. Thomson Hankey, the Eight Hon. J. G. Hubbard, Sir Thomas Chambers, the Chairman of the London and St. Catherine's Dock Company, Alderman Waterlow, Mr. W. H. Heath, and many others of great influence. In that Petition they said they were perfectly satisfied with the present state of things, and they further complimented the collectors in their speedy collection of the tax. But his strongest objection to the change was that it was not being done in a thorough manner. He should have no objection to discussing a complete change; but here, instead of the whole of the Schedules being transferred to the Excise officers, they were split up in a manner which would cause great public inconvenience and annoyance. He had read a letter from a collector in Hulme, in his own constituency, where this experiment had been tried, and he stated that in nearly all cases the taxpayers under Schedules A & B also paid under Schedules D and E, so that the whole of the taxes could be collected with the greatest convenience by the same persons. As to complaints with regard to disclosures by collectors, what was to prevent the Excise officers also making disclosures? Instead of one person able to make disclosures there would, in future, be two, because the present collectors would still act as assessors; and he knew of nothing in regard to ordinary Excise officers which would serve as a safeguard for reticence. The Committee must bear in mind that it was now open to any community to alter the present system, and adopt the one which the right hon. Gentleman had proposed. Taxpayers might also select a number of methods of paying Income Tax which would avoid the possibility of disclosures to their neighbours; but very few availed themselves of these opportunities. He ventured to bring these facts before the Committee, because they had been brought under his notice by influential authorities, and because he thought they were entitled to the consideration of the Committee.


said, he was anxious to say a few words, because his name, and that of the late Chancellor of the Exchequer, had been brought before the Committee in consequence of a clause having been introduced into the Customs and Inland Revenue Bill when he had the honour of being Secretary to the Treasury, under the late Government. When they introduced that clause they believed—as he had no doubt the present Chancellor of the Exchequer now believed—that there were a vast number of complaints throughout the country as to the present mode of collecting the Income Tax; and the facts the right hon. Gentleman had stated to-night as to the disclosures, and the delicate nature of the matter to be dealt with by the collectors, as reasons for an alteration of the system, were so pressed upon the late Government by the Inland Revenue authorities that a clause similar to that now proposed was introduced into the Bill. But what did they find? They found almost immediately the same storm as had arisen round the right hon. Gentleman now; and they were so satisfied by the evidence produced that the proposal would not be beneficial that they withdrew the clause, and substituted for it a clause giving the option which was now law. They introduced a clause making it optional for a locality to go to the Inland Revenue and place themselves in the hands of the Government collectors if they thought the existing mode of collection was objectionable. Since that time there had not been such a large number of people who had availed themselves of that option as to show that the grievance was of such force as to necessitate a reversion to what was at first proposed. He would remind the Committee that besides the option being in the Bill, every taxpayer had the option called to his mind every time the papers were sent out. He was asked under which head he would be taxed, and he had only to notify that he desired to be taxed by the Excise officers to be freed from all inconvenience, such as was suggested. As to the advantages of this scheme, the right hon. Gentleman stated, in the first place, that all objections would be got rid of; but he thought he had shown that the complaints had not been of such a character as to render the alteration necessary. In the next place, the right hon. Gentleman told them they were to have a saving effected by this proposal. Well, he (Sir Henry Selwin-Ibbetson) would not set up his knowledge against the power of acquiring knowledge which the right hon. Gentleman possessed in regard to such a subject; but the cases which had been submitted to him showed that in consequence of the change a larger amount would have to be paid for collection than was now paid to the local collectors. The hon. Member who last addressed the House (Mr. Slagg) had mentioned one or two cases—one, no doubt, dated some time back; but there were several others in which it appeared that the amount paid to the Inland Revenue collectors since the transfer took place was in excess of the amount paid to the local collectors. And they ought not to lose sight of this fact—which formed one of the most important features of the case—that if they handed over the collection of these taxes to the officers of the Inland Revenue, there would not be the same guarantee which existed at present that the feelings of the people would be respected as far as possible, and a knowledge of their circumstances considered in the manner in which it ought to be considered. A hard-and-fast line would have to be drawn, and the demands of the collectors would be made without any consideration for the feelings or the means of the people, all of which circumstances were taken into consideration by the local collectors, who knew the people's circumstances under the present system, and that was a fact which now made the Income Tax more popular than it otherwise would be. By the change of system now proposed, much would be done to increase the unpopularity of a tax which was certainly not very popular in this country. These were reasons which convinced the late Government, in 1879, that they made a mistake in proposing this very system, and which obliged them to withdraw the proposal, and substitute for it one which left it optional with the taxpayers themselves to say whether the tax should be collected by the Inland Revenue officials or by the local collectors. He believed that that would be found now, as the late Government found it in 1879, the better course to adopt; and he trusted that the Government would see their way not to insist on the proposal they had made. He felt convinced that if they did insist on it it would result in a great deal of harm to the collection of the tax; and not only would that be the case, but it would never realize the sanguine expectations of the Chancellor of the Exchequer as to a saving in the collection.


said, his hon. Friend who had just sat down had reminded them of the fact that the late Government made a proposal of this kind which was afterwards withdrawn; and no doubt his hon. Friend, who was then Secretary to the Treasury, had given the correct reason for that withdrawal. Of course, it was impossible to make any change, however much ultimate benefit it might promise, without giving to the class who might be interfered with by the change a very strong motive to use whatever power they possessed in stimulating opposition to it, even though it might be a public improvement. No doubt, the opposition, as his hon. Friend the Member for Manchester (Mr. Slagg) had said, came from all parts of the Kingdom. It came from those who, when they found that under this Bill they would suddenly be removed from Office, naturally felt very much aggrieved, and they could make their voices heard, and applied to all their friends and neighbours to assist them in preventing the carrying out of such proposals. He thought the Chancellor of the Exchequer had met his hon. Friend the Member for Manchester in a perfectly fair manner, and had recognized the feelings of that class whose mouthpiece the hon. Member for Manchester had been that night, because the right hon. Gentleman had now put the matter in this position—that no existing Income Tax collector would be displaced, and that only as vacancies occurred in the existing body of collectors would the collection be placed in the hands of the officials of the Government. This was a matter which would commend itself to the Committee, not only on the ground of economy, but also because it would, he was satisfied, bring about a great improvement in the efficiency of the collection of the tax. When hon. Gentlemen talked of centralization, he knew that centralization had been increasing, and he was as much opposed to it as any hon. Member could be; but it certainly did appear to him that the Government taxation ought to be collected by the Government officers, and that was a kind of centralization which he could not object to. As the Chancellor of the Exchequer had stated, the new method of collection had been tried in the borough which he (Mr. Rylands) did not now represent, but with which he was connected—the borough of Warrington. In that borough they had now had an experience of both systems; and the result was that the old system had proved to be a most unsatisfactory system, while, so far as he could learn, the new system, under which the tax was collected by the Excise officers, had given perfect satisfaction. As the Chancellor of the Exchequer had stated, the money was collected promptly under the new system; and, so far as could be ascertained, there were no complaints. He (Mr. Rylands) wished to remind the Committee that in all their towns they had these Excise officers, who were paid by the Government, and engaged in the duty of collecting the taxes; and they could certainly be charged with the duty of receiving the Income Tax without the necessity of adding very largely to the number of officers. In fact, in many cases, he had no doubt, there would be no necessity for the appointment of additional officers at all—those who received the assessed taxes now could easily receive the Income Tax as well. As the Chancellor of the Exchequer had offered a compromise, he (Mr. Rylands) hoped his hon. Friend the Member for Manchester would be satisfied, and that the result would he to effect a considerable economy in the Public Service.


said, he thought the hon. Gentleman who had just sat down had furnished some arguments against the proposal of the Government, for if the question of economy ought to be chiefly considered, surely the present system ought to be adhered to. He (Mr. Smith) did not stand there as the advocate, in the least degree, of the interests of a class. He thought it most undesirable that Members of Parliament should at any time appear there to represent individuals or classes. His objection to the proposals of the Government was an objection founded upon principle; for he thought it most enexpedient, and most undesirable, that what seemed to him to be a fundamental alteration should be made in the law relating to the Income Tax, and that the functions of the Government should be unnecessarily extended. He had for some time watched the course of events with regard to the functions of Government, and he had come to the conclusion that they were discharged in a manner which was more costly and less efficient on the I whole than work done for the Government by private means, and by means independent of the Government, when that work could be accomplished without the aid of public servants. In saying that, he made no aspersion whatever upon the officers, or upon the Commissioners of the Inland Revenue. He believed his right hon. Friend the Chancellor of the Exchequer had been convinced by the arguments addressed to him that the change which was now proposed was for the public advantage; and, on the other hand, he had not the least doubt that the Commissioners of Inland Revenue, in urging this matter on the Government, were perfectly convinced that it would be accompanied by all the advantages which they so strongly urged; but it certainty was opposed to the principle on which the Income Tax was originally established. ["No, no!"] Well, he would quote some words which would, he thought, show that he was right. He maintained that the principle on which the Income Tax was originally established was this—that there should be Commissioners representing the people who should appoint their own clerk, their own assessors, and their own collectors; and that, on the other hand, the Crown, the Chancellor of the Exchequer, and the Com- missioners of Inland Revenue should have their surveyor and their inspector, to see that the Crown received no damage, and that the duties, as charged, were realized. That was the principle of the Act originally, and it remained the principle of the Act still. Now, what was it that was proposed by the change now before the Committee? It was proposed that one of the ancient safeguards which were thought to be necessary in raising the tax originally should be done away with. The right hon. Gentleman the Chancellor of the Exchequer had properly designated the tax as a very delicate tax, which required to be dealt with with very great care and consideration. It was proposed to withdraw one of the original safeguards; and, undoubtedly, the officers of the Inland Revenue, in the discharge of their duty, would show zeal and activity, and would press for the recovery and realization of the tax, probably at an earlier period in some cases than the ordinary collector would do, when acting under the directions of the Commissioners. He was not sure that that would be an advantage. The right hon. Gentleman had said that in the result there would be a considerable saving. He (Mr. Smith) had never heard any change proposed in the way of an extension of public duties which was not recommended as an economy. That was always the case; and the Inland Revenue, no doubt, believed that an economy would result from the adoption of the present proposal. But what was their experience at that moment? Why, that the cost of the collection of the Revenue was far greater now than it was only five, six, or seven years ago, when there were similar duties to collect. The charge for the collection of the Revenue by the Inland Revenue was greater now by some £100,000 or more than it was seven years ago, and the amount collected, £1,000,000 a-year less. That, he was sure, was a fact known to the right hon. Gentleman; and, if that was the case, they had better leave things as they were with those who were responsible for the collection of the Income Tax. If, as the right hon. Gentleman said was the case, there were people who complained bitterly of the present system, and who preferred to have the officer of the Excise, they could, under the law made in 1879, have him at once. The door was open for them. There was no difficulty whatever in their way. But he (Mr. Smith) did object—and he objected on principle to a change which he believed to be fraught with mischief, and which, he maintained, would endanger the tax itself. The right hon. Gentleman the Chancellor of the Exchequer shook his head when he (Mr. Smith) said that the change was opposed in principle to the doctrine laid down by Sir Robert Peel. He (Mr. Smith) went into the Library that evening to look at the speech made by Sir Robert Peel in introducing the Income Tax in the year 1842, and he found that Sir Robert Peel used these words— I hope that I shall he able to retain that provision, because the policy of the law hitherto has been with respect to the assessed taxes, and it was the principle with respect to the property tax, not to make the collection depend upon the will of the Government, because it was thought more consistent with Constitutional Law to entrust the amount to local parties, and that those who may have the confidence of their neighbours shall be employed for this purpose."—(3 Hansard, [61] 912.) There was a sound principle of human nature embodied in the views thus expressed by Sir Robert Peel. That great statesman said it was necessary that the collection of the tax should be left to the people themselves; and he (Mr. Smith) believed it to be essential that the tax should be so collected, so long as the people were willing to collect it; and he, therefore, trusted that the Committee would accept the Amendment of the hon. Member for Manchester (Mr. Slagg), and that the right hon. Gentleman the Chancellor of the Exchequer himself would give way upon the subject, when the matter had been so strongly urged upon his attention. The right hon. Gentleman had said that a great advantage would be gained by getting rid of certain individuals—the neighbour, the tradesman in the same street, who became acquainted with the affairs of his fellow-tradesman, and was cognizant of the amount that he paid; but he (Mr. Smith) could see no provision in the Bill which would relieve that tradesman, that neighbour, in the same street, from the duty of making the assessment. He understood that the assessment was to remain with the officers appointed by the Commissioners; and they would, therefore, have the tradesman, the neighbour resident in the same street, making the assessment, while there would be the addition of a good many Excise officers to make the collection. That, he thought, was clear as the Bill now stood; and if it were intended that Excise officers, or other persons not appointed by the Commissioners, were to make the assessment, then new provisions of a very grave and serious character would have to be introduced into the Bill in order to effect that object, and he believed they would make the raising of this tax at all a very difficult and a very serious work.


said, he did not desire to trouble the Committee at any length; but, as an Income Tax Commissioner in the City of London for 10 years, he felt bound to say a few words. He could say, without hesitation, that there would be no economy in the change now proposed; and he was sure that any prediction to the contrary would not be fulfilled. He thought the Chancellor of the Exchequer should, in addition to giving them his own opinion—which they were all bound to listen to with the greatest respect—have favoured them with some substantial statistics showing that where the change had been in operation there had been a considerable saving of expenditure. What was the principle followed in the present law of collection? The collectors now received 1½d. in the pound, or 1–160th per cent, on the amount collected; and what he wished to ask was, whether it was not the fact that in numerous districts where the tax was not collected by collectors appointed by the Commissioners the Government were paying 6d., 8d., 10d., and even 1s. in the pound? But the whole thing, according to the Chancellor of the Exchequer, ought to depend upon the celerity with which the tax could be collected. Well, the right hon. Gentleman had taken the most favourable case he could—because if he did not take the most favourable case he was not doing justice to himself or to his own proposal—and what was the result? The right hon. Gentleman quoted the case of Warrington, where, he stated, 92 per cent of the tax was collected before the end of March—that was to say, that of the duties due in January 92 per cent was collected before the end of March. But he (Sir Sydney Waterlow) would ask the right hon. Gentleman to take the case of London, where the largest collection had to be made under great difficulties, and where they had had to ascertain the profits on all kinds of trades and all sorts of processes of manufacture. In that great City, up to the 31st of March in the present year, 86 per cent was collected, amounting to £933,421; and the whole of the collection closed a very short time afterwards. It was now proposed to appoint as collectors a number of persons who had no knowledge of the taxpayers, and no knowledge of the circumstances under which they were able to pay the tax in the easiest manner; and these men were to be appointed in the place of persons who had had long experience. It was said—"We do not propose to make the change until vacancies occur in the existing body of collectors; and when that happens you yourselves would have to appoint new men." But who were the new men appointed to fill vacancies under the present system? Why, they were men who had had experience in the collection of local taxes, who knew the taxpayers familiarly, and the taxpayers were more than satisfied with the manner in which the collection was conducted. His hon. Friend the Member for Manchester (Mr. Slagg) had referred to one Petition; he (Sir Sydney Waterlow) would refer to another. It was a Petition presented in favour of the present system, and it was signed by C. J. Morgan and Co., Frühling, Goschen and Co., and a number of firms of that character holding the very highest standing before that House and the country. He would ask the Chancellor of the Exchequer to give the Committee the relative cost of collecting the Income Tax in Liverpool under the old system and under the new. That would be a fair comparison. Liverpool was a large town—not so large as London; but large enough to afford a fair test in comparing the two systems. He would venture to put this to the House—was it likely that where two persons were to be employed in future instead of one it could be done for less money than was paid now? Was it likely that, under such circumstances, a cost which now amounted to £52,000 a-year would be reduced to £21,000, and that £30,000 a-year would be saved? He would ask those hon. Gentlemen who had any business experience to remember this—that it was proposed to give up paying for piece work, and to pay for day work instead. Did anybody ever know a man to earn as much when on day work as when on piece work? No. The work was to be done by the ordinary officers of the Excise, and he understood that about 500 of these officers were to take the places of the several thousands now employed by the Commissioners. Those who were now employed gave six weeks of their time at the beginning of the year to the collection of the tax, and they went to other employments afterwards; but what would have to be done with the extra number of Excise officers who would have to be employed under the new system? They could not be employed for anything else; there would be no need for thorn; but they would have to be paid all the year through, and that would increase the cost to a very much larger sum of money than it amounted to now. He asked the Committee to hesitate before making a change which was a breach of the original condition under which the Income Tax was originally imposed. The right hon. Gentleman the Member for Westminster (Mr. Smith) had quoted the words of Sir Robert Peel in putting forward the conditions arranged for the imposition of the tax; and one of those conditions was that the tax was to be collected by people who were known to the taxpayers, and who could collect it with the least amount of irritation, and with the least amount of disclosure of the private affairs of those who had to pay the tax. But what was now proposed was to double the extent of the disclosure, for the Chancellor of the Exchequer did not propose to take away the duties of the present assessors; and, therefore, there would be one class of men to assess, and another class of men going round afterwards to collect the tax, and this other class must learn all that the assessors knew. He would ask whether the man who made the assessment, and who knew all the circumstances under which it was made, could not collect it better, and be in a more favourable position to answer questions which the taxpayer might wish to put, than a man who knew nothing whatever about the business? It should be remembered that a large number of people made no Returns at all, and the assessor went on putting up the amount until they did make Re- turns. When the collector was the assessor, he knew all about it; but what was the collector to do under the new system? He could only act on the principle—"Your money or your life! I know nothing whatever about it; but pay this money, or I will put in a bailiff!" The new collector, it must be remembered, would have no experience at all to go upon. The present Government ought to do what they could to lessen the irritation of the tax, for it was a tax which had always been unpopular, and they should not take a course which would only increase its unpopularity.


said, in his opinion the concession made by the Government in this matter was a proof that they were aware that the collection of the Income Tax was an affair of confidence. The question was, whether the taxpayer would have more confidence in the local collector whom he knew, than in the Government collector who was a stranger to him? He (Mr. Newdegate) had been in communication with the Mayor of Birmingham, and on this subject Birmingham needed an independent Representative, owing to the close connection of her Members with the Government. He represented Birmingham, and those whom he represented preferred local collectors. He did not believe that the concession made by the Government would, in the least degree, remove the objection to the change proposed, which existed amongst the taxpayers. He was assured by the best authorities on the subject that the traders of Birmingham much preferred the present system of collecting the Income Tax to that proposed by the Government, by means of a system of central police.


said, he should be extremely sorry to disturb the existing arrangements with regard to the Income Tax Commissioners; but the matter was quite different as to the persons who actually received the money. Those persons, although they were called assessors, were not so in reality, because, as was well known, the assessment, in the true sense of the word, was made by the Commissioners. He was able to say that a considerable economy had resulted from the changes that had been already effected. The entire expense of the arrangement, at the highest calculation, was put down at £20,000, although he did not believe it would amount to as much as that. At any rate, there would be a distinct saving of the cost of collection to the extent of £30,000 a-year.

Question put.

The Committee divided:—Ayes 161; Noes 168: Majority 7.

Acland, Sir T. D. Edwards, H.
Acland, C. T. D. Egerton, Adm. hon. F.
Amory, Sir J. H. Farquharson, Dr. R.
Anderson, G. Fitzmaurice, Lord E.
Armitage, B. Fitzwilliam, hon. C. W. W.
Armitstead, G.
Arnold, A. Fitzwilliam, hon. W. J.
Balfour, Sir G. Flower, C.
Balfour, rt. hon. J. B. Fort, R.
Barclay, J. W. Fowler, H. H.
Barran, J. Fowler, W.
Biddell, W. Gabbett, D. F.
Biddulph, M. Gladstone, rt. hn. W. E.
Blennerhassett, R. P. Gladstone, H. J.
Bolton, J. C. Gladstone, W. H.
Borlase, W. C. Goschen, rt. hon. G. J.
Brand, H. R. Grafton, F. W.
Brassey, Sir T. Grant, A.
Briggs, W. E. Grey, A. H. G.
Brinton, J. Gurdon, R. T.
Broadhurst, H. Hamilton, J. G. C.
Brodrick, hon. W. St. J. F. Harcourt, rt. hon. Sir W. G. V. V.
Bruce, rt. hon. Lord C. Hartington, Marq. of
Bruce, hon. R. P. Hayter, Sir A. D.
Buchanan, T. R. Henderson, F.
Buszard, M. C. Heneage, E.
Buxton, F. W. Herschell, Sir F.
Campbell, Sir G. Hibbert, J. T.
Campbell, R. E. F. Holden, I.
Campbell-Bannerman, H. Hollond, J. R.
Holms, J.
Carington, hon. R. Hopwood, C. H.
Causton, R. K. Howard, E. S.
Cavendish, Lord E. Howard, G. J.
Chamberlain, rt. hn. J. Howard, J.
Cheetham, J. F. Inderwick, E. A.
Childers, rt. hn. H. C. E. James, Sir H.
Clarke, J. C. James, C.
Clifford, C. C. Jenkins, D. J.
Cohen, A. Jerningham, H. E. H.
Colebrooke, Sir T. E. Kingscote, Col. R. N. F.
Cotes, C. C. Lea, T.
Courtney, L. H. Leake, R.
Creyke, R. Leatham, W. H.
Cropper, J. Leeman, J. J.
Cross, J. K. Lefevre, rt. hn. G. J. S.
Crum, A. Lloyd, M.
Currie, Sir D. Lymington, Viscount
Davey, H. M'Clure, Sir T.
Davies, R. M'Intyre, Æneas J.
Dilke, rt. hn. Sir C. W. Mackie, R. B.
Dillwyn, L. L. M'Laren, C. B. B.
Dodds, J. Mappin, F. T.
Dodson, rt. hon. J. G. Marjoribanks, E.
Duckham, T. Martin, R. B.
Duff, R. W. Maskelyne, M. H. Story-
Dundas, hon. J. C. Maxwell-Heron, Capt. J.
Ebrington, Viscount
Mellor, J. W. Smith, S.
Monk, C. J. Stanley, hon. E. L.
Moore, A. Talbot, C. R. M.
Moreton, Lord Tavistock, Marquess of
Morgan, rt. hn. G. O. Thomasson, J. P.
Nicholson, W. Thompson, T. C.
Noel, E. Tracy, hon. F. S. A. Hanbury-
O'Shaughnessy, R.
Paget, T. T. Trevelyan, rt. hn. G. O.
Parker, C. S. Vivian, Sir H. H.
Pease, A. Walter, J.
Peel, A. W. Waugh, E.
Pennington, F. Whitbread, S.
Powell, W. R. H. Whitworth, B.
Power, J. O'C. Wiggin, H.
Reed, Sir E. J. Williams, S. C. E.
Reid, R. T. Williamson, S.
Richardson, J. N. Willis, W.
Richardson, T. Wilson, C. H.
Robertson, H. Wilson, I.
Rogers, J. E. T. Woodall, W.
Rylands, P. Woolf, S.
St. Aubyn, Sir J. TELLERS.
Shaw, T. Grosvenor, right hon. Lord R.
Sinclair, Sir J. G. T.
Smith, E. Kensington, right hon. Lord
Smith, Lt.-Col. G.
Alexander, Colonel C. Elcho, Lord
Amherst, W. A. T. Elliot, G. W.
Ashmead-Bartlett, E. Ennis, Sir J.
Aylmer, J. E. F. Fellowes, W. H.
Bailey, Sir J. R. Filmer, Sir E.
Balfour, A. J. Floyer, J.
Barne, Col. F. St. J. N. Foster, W. H.
Barttelot, Sir W. B. Fremantle, hon. T. F.
Bateson, Sir T. French-Brewster, R. A. B.
Beach, rt. hn. Sir M. H.
Beach, W. W. B. Garnier, J. C.
Bective, Earl of Gibson, rt. hon. E.
Bellingham, A. H. Giles, A.
Bentinck, rt. hn. G. C. Goldney, Sir G.
Biggar, J. G. Gore-Langton, W. S.
Bourke, rt. hon. R. Gorst, J. E.
Brise, Colonel R. Grant, D.
Brogden, A. Grantham, W.
Bruce, Sir H. H. Greene, E.
Bulwer, J. R. Greer, T.
Callan, P. Gregory, G. B.
Castlereagh, Viscount Hamilton, Lord C. J.
Chambers, Sir T. Hamilton, right hon. Lord G.
Chaplin, H.
Christie, W. L. Hamilton, I. T.
Clarke, E. Harrington, T.
Cole, Viscount Hay, rt. hon. Admiral Sir J. C. D.
Coope, O. E.
Cotton, W. J. R. Herbert, hon. S.
Crichton, Viscount Hicks, E.
Cross, rt. hon. Sir R. A. Hill, Lord A. W.
Dalrymple, C. Hill, A. S.
Davenport, H. T. Holland, Sir H. T.
Davenport, W. B. Home, Lt.-Col. D. M.
Dawnay, Col. hn. L. P. Hope, rt. hn. A. J. B. B.
De Worms, Baron H. Hubbard, rt. hon. J. G.
Dickson, Major A. G. Jackson, W. L.
Digby, Col. hon. E. Kennard, Col. E. H.
Dixon-Hartland, F. D. Kennard, C. J.
Dyke, rt. hn. Sir W. H. Kenny, M. J.
Ecroyd, W. F. King-Harman, Colonel E. R.
Egerton, hon. A. de T.
Egerton, hon. A. F. Knightley, Sir R.
Lawrance, J. C. Rankin, J.
Lawrence, Sir T. Rendlesham, Lord
Lechmere, Sir E. A. H. Ridley, Sir M. W.
Leighton, Sir B. Ritchie, C. T.
Leighton, S. Rolls, J. A.
Lennox, rt. hon. Lord H. G. C. G. Ross, A. H.
Ross, C. C.
Lever, J. O. Round, J.
Levett, T. J. St. Aubyn, W. M.
Lewisham, Viscount Salt, T.
Lopes, Sir M. Sclater-Booth, rt. hn. G.
Lowther, rt. hon. J. Scott, Lord H.
M'Arthur, Sir W. Scott, M. D.
M'Carthy, J. Selwin-Ibbetson, Sir H. J.
M'Garel-Hogg, Sir J.
Mac Iver, D. Severne, J. E.
Macliver, P. S. Sexton, T.
Makins, Colonel W. T. Sheil, E.
March, Earl of Slagg, J.
Marriott, W. T. Smith, rt. hon. W. H.
Master, T. W. C. Stanley, rt. hn. Col. F.
Maxwell, Sir H. E. Stanley, E. J.
Mayne, T. Sykes, C.
Mills, Sir C. H. Talbot, J. G.
Molloy, B. C. Thornhill, T.
Monckton, F. Tollemache, hn. W. F.
Moss, R. Tollemache, H. J.
Murray, C. J. Tomlinson, W. E. M.
Newdegate, C. N. Torrens, W. T. M'C.
Newport, Viscount Tottenham, A. L.
Nicholson, W. N. Walrond, Col. W. H.
Northcote, rt. hon. Sir S. H. Warburton, P. E.
Warton, C. N.
Northcote, H. S. Whitley, E.
O'Brien, W. Williams, Gen. O.
O'Connor, A. Wills, W. H.
O'Connor, T. P. Wilmot, Sir H.
O'Kelly, J. Winn, R.
Onslow, D. R. Wolff, Sir H. D.
Pell, A. Wortley, C. B. Stuart-
Pemberton, E. L. Wroughton, P.
Percy, Lord A. Wyndham, hon. P.
Plunket, rt. hon. D. R. Yorke, J. R.
Price, Captain G. E. TELLERS.
Pugh, L. P. Fowler, R. N.
Puleston, J. H. Waterlow, Sir S. H.

said, he should not proceed with Clauses 14 and 15.

Clauses 14 and 15 negatived.

Bill reported; as amended, to be considered To-morrow, at Two of the clock.

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