§ MR. ARTHUR ARNOLD, in rising to move the following Amendment:—
That the proposed exemption of lands held in mortmain from the charge to be imposed on corporate property in lieu of Death Duties is inexpedient and unjust,said, this had been a most unfortunate Budget, and the proposal he attacked had now no legitimate parents. Neither Party was under any obligation to support this part of the Bill, and from what had occurred he was inclined to doubt whether the Budget of the right hon. Member for Pontefract (Mr. Childers) had at any time the highest sanction of official authority other than his own. He could not suppose that the late Prime Minister, who had lately declared that indirect taxation still bore an unduly large proportion to the taxes on property, had any part in suggesting the proposal of the Budget; and. he gathered from what the late Chancellor of the Exchequer said on the second reading of the Bill that his proposals had not the concurrence of the Board of Inland Revenue. That the late Prime Minister desired the exemptions referred to in the Amendment seemed impossible, and he should rejoice if his action were successful in getting rid of the part of the Bill relating to corporate property, which was not worth having at the price of these exemptions. The exemptions granted by the Income Tax Act, so far 1680 as land was concerned, were nearly identical with the exemptions proposed in Clause 10 of the Bill now before the House. He had not to deal with the question of Income and Property Tax. But the exemption was as real as it was unreasonable. It co-operated powerfully with the exemption from Death Duties, or charge in lieu of those duties, which was the subject of the Amendment, in holding land in mortmain, and all these exemptions formed a grant or bounty upon retaining land in that condition. He objected to the exemption on fiscal grounds, but especially he objected to it on economic grounds, because it was a premium upon holding and upon placing land in a state the most opposed to freedom. The exemption for property held for religious, educational, charitable, or any public objects was not the question he was now raising. He was not proposing a tax upon the property of religious and educational Corporations. He was dealing with the Land Question, and was objecting to a new encouragement being given by law to the holding of land in mortmain. Indeed, as he should show, these absentee Corporations would be richer, not poorer, if he could have his way, because their incomes would be enlarged by conversion of their estates from real property into personal property. Therefore, let no hon. Gentleman suppose that the matter before the House was the taxation of charities. The question upon which he asked the House to vote was this—Ought the State to encourage, by such legislation as was now proposed in these exemptions, the holding of land by absentee and impersonal ownership? On many occasions he had endeavoured to call the attention of Parliament to that which was the most prominent and peculiar feature of land-holding in this country—the absence of responsible and unlimited proprietorship. In 1882, with much encouragement from the late Prime Minister, who said, "I am averse to this method of holding land," he was permitted to deal in that House with the land-holding operations of the greatest and richest Corporation—namely, the Ecclesiastical Commission, and the suggestion which he tendered was that such Corporations should be restrained from traffic in real property. In 1883 he dealt briefly with the landed interests of that Corporation, which was the most 1681 illustrious in dignity, but second in the extent of its possessions—the Crown, whose revenue-producing and saleable lands were placed in the charge of an inferior Corporation not directly represented in that House—a Department which, with advantage to public economy and to the public service, he contended might and should be speedily abolished. He alluded to the Office of the Commissioners of Woods and Forests. The Motion which he made that evening followed strictly in the same line of policy; but while the attacks which he had advanced against the comparatively irresponsible holding of land by limited owners and by Corporations had been of necessity more or less abstract and indirect, he had now the satisfaction of asking the House that evening to strike a powerful and direct blow against the baneful system of the impersonal ownership of land. In the case to which he invited the attention of the House, that system was sustained by a partial, a most unjust, and most inexpedient exemption from taxation. He believed the holding of land by Corporations beyond that which was necessary for their operations in works of public utility and sanitary improvement to be an evil. It led in the case of the two Corporations he had mentioned to very considerable waste of national resources; it was opposed to the public interests in the soil, and it established a proprietorship which was generally hostile to agricultural improvement. It was not reasonable to expect that under the most favourable conditions the soil of any country would or could be owned entirely by those who were its beneficial occupiers. But he asserted that the interests of all classes, and therefore of the commonwealth, lay in that direction; and he appealed to Parliament to remove every shred of law and every tissue of exemption which tended to uphold and to maintain ownership apart from occupation. In the larger cases, Corporations were absentee landlords, and he thought without exception they were bad neighbours. There were parts of that House in which the feeling against absentee landlords was very strong. To no Leader of the Tory Party had greater personal attachment been felt than to Lord George Bentinck, who proposed that a special poor rate should be levied in Ireland upon landlords of that class. But the 1682 matter, to which he would draw the attention of the House that night, was one of the exemption of absentee landlords from taxation to which resident landlords were subject. He could not suppose that any hon. Member would contend that an absentee landlord should be exempt from taxation which a resident landlord had to pay. A resident landlord had many obligations from which a Corporation or any other absentee was exempt. He had to sustain the duties of constant hospitality, the duties of charity, the duties of liberal and enlightened example; he had often to bear without a murmur the exactions of the village tradesmen. He had to meet the importunity of the clergyman, for, unlike a Corporation, he had a heart to feel for the poor, and he believed he had a soul to be saved. He could hardly imagine a more scandalous fiscal wrong than that such Corporations should be exempt from taxation to which resident landlords were liable. He was by no means content with the incidence of the Succession Duty as it affected landowners generally; but be did not enter upon that wider subject that night, partly because he looked upon the full and effective reform of the Succession Tax as a matter which must follow, and which could not precede, the reform of the general Land Laws of the country. The reason why they could not deal now completely with that greater part of the subject was the same reason which existed 32 years ago, when in his first Budget speech the late Prime Minister put the matter tersely in this way—"As a matter of fact, under the social arrangements of this country, our great estates are settled estates." It seemed to him that as long as the greater part of the United Kingdom remained in settlement, the injustice of the 21st section of the Succession Duty Act, 1853, providing that—The interest of every successor, except as here in provided, in real property shall be considered to be of the value of an annuity equal to the annual value of such property,must remain without any effective remedy. Whenever Parliament should decree the liberation of the land, then the tax might be levied upon the capital value of the real property; and such undoubtedly would be the increased value given to the soil by freedom from complication of title, and consequent 1683 simplicity of transfer, that a large taxation could be borne without any addition to the burdens upon land. The Amendment which he asked the House to accept was strictly confined to the exemption of lands held in mortmain. and he would endeavour to give the House an approximate estimate of the extent and value of those lands. Any hon. Member who had a wide knowledge of the Kingdom would agree that these lands were generally in the best position, and of the most fertile and marketable character. An abstract or skeleton of a Return presented to Parliament in 1882 showed the whole extent of these lands to be 1,995,046 acres, and the annual value chargeable under Schedule A of the Income Tax to be £10,370,828. But that was not a trustworthy statement. If the Chancellor of the Exchequer would agree to tax all lands held in mortmain upon that estimate, he would not fear to guarantee that he should have a surplus, and he would point out one direction in which this Return was very much below the facts of the case. The evils of a corporate ownership of land were, perhaps, peculiarly evident upon glebe lands. It was a fact, established upon the practical testimony of the highest authority, that glebe lands were, as a rule, the worst farmed. The reasons were patent. The rector or vicar, who was a Corporation sole, exempt under this Bill, had rarely either capital or competency for agriculture. He had the faintest possible interest in his successor, and he was, consequently, as a rule, a bad landlord and a bad farmer. He supposed that the glebe lands of England alone were not less in extent than 200,000 acres, and he felt confident that only a fraction of that land was included in this Return. The Return was compiled from the same sources as those which furnished the material for the Return of landowners, commonly known as the New Doomsday Book, which Parliament ordered upon the Motion of Lord Derby. It would probably not be wrong to say that wherever corporate lands were assessed in the name of an individual, that such lands had been excluded from this Return of lands held in mortmain. This error did not, of course, apply only to glebe lands; but he would give an illustration of the enormous extent to which it applied to those 1684 lands. There were probably more than 10,000 parcels of glebe land in the 15,000 parishes of England and Wales. He took the counties of Buckingham, Hertford, and Lancaster by way of illustration. In Bucks there were only five parcels of glebe described as corporate land; in Hertford there were only three; and in Lancaster there were but seven. Of course, there was a very large error in this statement, and this was part of the explanation. In the Return of landowners in Bucks there were 235 clergymen of the Church of England; in Hertford there were 159; and in Lancaster there were actually 286 "reverend landowners." It was certain that, with very few exceptions, these clergymen were Corporations whoso lands were to be exempt from charge in lieu of Succession Duty. "An exemption," it had been truly said by the late Prime Minister, "is a gift." The leading proposition which he put before the House that night was that the tenure of agricultural estates by absentee Corporations was a bad tenure, injurious to the interests of production, and that it ought not to be aided by the State. They ought to consider whence this grant in aid of the most wasteful ownership of land proceeds. It was levied upon the widow's frugal cup of tea, upon the poor man's breakfast coffee, and upon his tobacco, as well as upon the beer which refreshed the thirsty labourer. It was part of the high rent which was wrung from the poorest of the poor in those most wretched homes which were now attracting the sympathetic attention of illustrious Princes and of Royal Commissions. A body which represented the people ought not to extend the exemptions which were a grant in aid of putting land in mortmain. He did not attempt to impose himself upon the House as being in any way the proprietor or the discoverer of this question. For nearly 30 years it had been before Parliament, and so long ago as 1859 the Government of Lord Palmerston was moved by the late Prime Minister to announce its intention to ask Parliament to extend the Succession Duty to all Corporations. More than 20 years ago the late Prime Minister referred to that attempt in these words—We had not time to compass actual legislation—there was a change of Government in 1859—for the purpose in that Session; but the 1685 principle appeared to receive the decided approval of the House. It appeared to he felt that there was no reason in the world why corporate property should enjoy a benefit not enjoyed by the property of individuals, or, in other words, should receive a premium at the expense of the property of individuals.For himself he would only make this claim—that he was besieging this unjustifiable and most inexpedient privilege not so much upon fiscal interests as in those of agricultural production. He was acting as one who, if he could, would be a Land Law Reformer in beseeching the House not to encourage a tenure of land which was inimical to those interests, and which certainly ought not to command the sympathy of individual proprietors. If we encouraged control of land by absentee Corporations, then we should support nationalization of the land. If the Ecclesiastical Commission should be aided and supported in adding to the 300,000 acres in its possession, then there was no reason why a Department of State should not manage the 40,000,000 acres of cultivated land. He said that such management of landed estates from Whitehall or from Guildhall was detrimental to the interests of the community. If he was wrong, then we should repeal the Mortmain Act. That Act recited—That, whereas gifts, alienations of lands, tenements, or hereditaments in Mortmain, are prohibited or restrained by Magna Charta, and divers other wholesome laws, as prejudicial to and against the common utility.He admitted that the views which led to the Mortmain Act were not altogether those which had most force in the present day. But as our knowledge of, and regard for, the sources of national wealth had increased, so had we become confirmed in our belief that such ownership was opposed to the interests of production. The revenue of these Corporations would be increased by ceasing from landowning. The Admiralty was a landlord, and was formerly, until part of the Greenwich estate was sold, a greater landlord. The hon. Baronet the Member for South Devon (Sir Massey Lopes) gave evidence before the Commission on Agriculture in his capacity of Civil Lord of the Admiralty, and he said—In 1874 we sold land for £319,000, and we realized £8,000 per annum over what we received in property from the ready money.1686 If there were any Corporations disposed to complain of his desire to cancel the exemption of lands from taxation, he might refer them to this incident. Here was an increase of £8,000 a-year obtained by sale of land, worth only £319,000; that was by abolition of the necessarily extravagant expenses of management. From such sale other benefits would flow. "How do you fulfil the social duties of a landlord?" was asked of the official representative of a great landed Corporation. "The only answer I can give," said the official, "is that we give half-yearly audit dinners to the tenants." That was the nice attention of a Government Department. Let them look a little further. There was St. Bartholomew's Hospital, with 8,000 acres, to which this Bill gave exemption. They had it in evidence that the farms were visited only once in four years by the surveyor, and that the leases were for 12 years. The official manager of that estate was, ho believed, the hon. Baronet the Member for Gravesend (Sir Sydney Waterlow), who was also at the same time for many years governor of the estates of the Irish Society. In 1883 the late Prime Minister said that St. Bartholomew's Hospital obtained a "gift" by exemption from Income Tax, amounting to £1,050 a-year. There were the 14,000 acres of Christ's Hospital, which wore controlled by the late Member for Worcester (Mr. Allcroft), who was also controller of the estates of the Sons of the Clergy Corporation. There was Guy's Hospital, with nearly 24,000 acres, and, in a somewhat different category, the Woods and Forest Commission held upwards of 70,000 acres of farmlands; the Duchy of Cornwall estates included more than 50,000 acres; the Duchy of Lancaster 35,000 acres. All were to be exempted. These Royal Corporations stood, by law, in a peculiar position; but he was not in favour of according to them any privilege or exemption. He believed that, without exception, these Corporations, each and all, denied to their tenants the benefits of the Agricultural Holdings Act of 1875. He thought he had shown the House that it was not desirable that this exemption should be given; that it was not desirable that the labouring population should be charged with a grant in support of the holding of land by Corporations, which was directly opposed to 1687 their interest in what was called the Wages Fund, and which, by diminishing production, tended to increase the cost of food. He had further quoted evidence to show that it was for the advantage of the Corporations that they should make investments in securities not involving such multiform charges for management. He begged leave to repeat that upon the present occasion he was not opening the general question of the taxation of charities. He was rather confining himself to one of the by-ways of Land Law Reform. He well remembered the speech of the late Prime Minister in 1863 upon the taxation of charities. He recalled how, in 1881, in the possession of still larger power, he said —"I myself have had the honour of once failing in an attempt to deal with it;" and he did not presume to take his stand where the right hon. Gentleman had not succeeded. He confined himself to the economic objections to the exemption from taxation of lands held in mortmain. Instead of exemption he was inclined to think the taxation of lands in mortmain should be heavier than upon land of individual proprietors. Lord George Bentinck said—I think if there were two poor rates introduced into Ireland, the one applying to all occupiers of land and the other to all those who did not spend a certain portion of the year upon some portion of their estates in Ireland, it would prove useful.These Corporations were absentee landlords in perpetuity. He was proposing to get rid of the exemption from taxation of land which had no personal owner. More than that, he should be glad to facilitate the escape of these Corporations from this particular charge upon land by assisting to build a golden bridge for their retreat from the position of landholders. It was upon this narrow ground that he asked the House to assent to this Amendment. He entreated hon. Members to have regard to the struggles and the penury of the poorest class of taxpayers in their several constituencies, and in doing so they could not fail in their duty to join in refusing to make a grant from the pockets of the poor for the benefit of those wealthy land-owning and absentee Corporations. Nor was it, to his mind, one of the smallest recommendations of this very moderate proposal that it would tend to bring us by one indirect step nearer to that time 1688 when the divorce of the British people from the soil of their country should be annulled, when there should be no more decline of British agriculture, when the fertile fields of England should be made to yield a far greater produce, and when the voices of a happier and more healthy people should resound in all parts of our beloved Motherland. The hon. Member concluded by moving the Amendment which stood in his name.
§
Amendment proposed,
To leave out from the word "That," to the end of the Question, in order to add the words "the proposed exemption of lands held in mortmain from the charge to be imposed on corporate property in lieu of Death Duties is inexpedient and unjust,"—(Mr. Arthur Arnold,)
—instead thereof.
§ Question proposed, "That the words proposed to be left out stand part of the Question."
§ MR. CHILDERSsaid, his hon. Friend had given some excellent reasons why the amount of land held in mortmain should be reduced as much as possible; and he quite agreed with his contention that it was highly desirable that land should be held by private and responsible persons rather than by Corporations. If they could get rid of the tenure of land by Colleges, hospitals, or other Corporations, and for ecclesiastical purposes, except the mere occupation of palaces, Canons' houses, or parsonages, by the dignitaries of the Church and parochial clergy, a very great advantage would be gained. Therefore, he had no objection to the terms of the hon. Member's Motion, and, indeed, supported its object. But the hon. Gentleman in his speech argued that this Bill would encourage the holding of land in mortmain, and that was an entire misapprehension. The clause of the Bill to which the hon. Member objected merely provided that in respect of all real and personal property Corporations, since they did not pay Succession Duty, should pay an equivalent duty of 5 per cent, but that Corporations founded for charitable, religious, or educational purposes should be exempted. That was in no way encouraging the holding of land in mortmain.
§ MR. ARTHUR ARNOLDDoes my right hon. Friend mean to contend that it does not exempt the real property held by Corporations?
§ MR. CHILDERSsaid, that it did not exempt real property one whit more than personal property. The exemption was not of certain classes of property, hut of certain classes of Corporations. The Motion of his hon. Friend was, therefore, not really an Amendment to the Bill, and it might almost be a question whether it could he put. If the hon. Member had raised the question as to whether these classes of Corporations should be exempted then there would have been some case for argument. As the clause now stood exactly as when introduced by him when Chancellor of the Exchequer, he should have risen to justify those exemptions; but the hon. Gentleman did not raise that question. He contented himself with enunciating a principle which was generally accepted on that side of the House, and moving an Amendment which was really not an Amendment to the Bill at all.
§ MR. J. G. HUBBARDsaid, he was of opinion that there should be perfect equality of taxation, whether the property was real or personal; and he thought the proposal to tax corporate property at the rate of 5 per cent upon its net annual value was very fair. The State extracted Legacy and Succession Duty on the principle that it was joint heir to every one of its subjects who died; but Corporations did not die, and thus escaped Succession Duty. The late Chancellor of the Exchequer had very wisely and equitably proposed an Income Tax of 5 per cent, which might be considered as equivalent to a Succession Duty of about 9 per cent upon the capital value. With regard to taxing such Corporations as were mentioned by the hon. Member for Salford (Mr. Arthur Arnold), he came to an entirely different conclusion from that hon. Gentleman. Such Corporations as were to be found in the City of London, which enjoyed the profits of the property which they administered, ought to be taxed; but other institutions did not enjoy the profits at all. They were simply trustees of the property. The trustees of Greenwich Hospital or the Ecclesiastical Commissioners did not enjoy the property which they administered. The property was possessed, not for the benefit of the Commissioners, but of the whole country; and it would be acknowledged by those 1690 who knew the estates of the Ecclesiastical Commissioners that there were very few estates in England so well managed and which possessed more respectable or prosperous tenants. The system must be judged by its fruits, and if it was found that those large estates were the best managed in the country, and did a very great amount of good to the country and to their tenants, there was no reason why a dead set should be made on them. He believed the present system had been found entirely conducive to the general well-being of the country, and he held also that the different Corporations now exempt were properly exempt even under the rules laid down by the hon. Member himself. They were all either charitable, or religious, or patriotic in their object. He must protest against the statement that the present system was injurious to the labourers of the country. The labourers could not become possessors of the soil unless it were purchased from its present owners; and if the labourers were supplied with the necessary funds, they would find a more profitable way of employing it than by becoming pauperized landholders. He accepted entirely the sound maxim of political economy laid down by the hon. Member for Sal-ford; but he could not find within the Bill a single item which affected the principle the hon. Member had laid down. They could not charge charities and national institutions with taxes of this kind without defeating the purposes for which they were devised. If they taxed those institutions they would incapacitate them from carrying out the objects for which they were established. The Prime Minister, in 1863, made a great speech in favour of taxing those institutions; but he found out afterwards that he had made a great mistake, and that mistake would never again be repeated in that House. It was simply suicidal to discourage and destroy by taxation the charitable and patriotic work of the country. He had great pleasure in supporting the measure.
§ MR. SHIELDsaid, that the second part of the Bill was certainly very important, and it was much to be regretted that it came to be dealt with by the House in circumstances not the most favourable for careful legislation on a difficult subject. His hon. Friend had said that this Bill had no legitimate 1691 parent. It had at its birth; hut, considering the position of the Bill now, no one was really responsible for it. The right hon. Gentleman opposite had taken it over from his right hon. Friend below him; but, occupied as he was with so many pressing matters, it was not possible that he could have given it that full amount of thought that might make him responsible for it. His right hon. Friend, on the contrary, seeing that this part of the Bill was separated from the other proposals with which he had connected it, could not be held properly responsible. Everybody thought that the Budget of the late Government had dropped with them, and he verily believed that very few corporate bodies which were affected were really aware that they were affected. The improvements which he would wish to effect in the Bill were of a twofold character—first, an enlargement of its scope by removing some of its exceptions; and, secondly, a reduction of the rate of taxation. He had put down for Committee an Amendment asking the House to reduce the tax from 5 per cent to 3 per cent, believing that the tax as now proposed was inequitable. He held that it would be impossible for the Chancellor of the Exchequer to justify this 5 per cent. This tax of 5 per cent for corporate bodies was first presented to the House as part of a large scheme. Exemptions that were allowed to prevent double taxation must be maintained; but he should certainly deal freely with the others. These included landowning Departments of the Government and the Ecclesiastical Commissioners; and he could not help feeling that the susceptibilities of the officials connected with these Corporations and their objection to taxation counted for a good deal. There was confusion of thought as between Death Duties and Property and Income Tax. This Bill professed to be a Death Duty Bill; but, to all intents and purposes, it was an Income Tax Bill. An important Petition presented to the House said that it was nothing but a new Income Tax of 1s. in the pound, and it put three times more Income Tax on the Corporations affected by the Bill.
§ MR. TOMLINSONrose to Order, and asked whether the remarks of the hon. Member were relevant to the Amendment before the House?
§ MR. SPEAKERsaid, the hon. Member was out of Order in anticipating an Amendment he had put upon the Paper.
§ MR. SHIELDsaid, it was not his intention to do so. The Amendment sought to get rid of exemptions; he desired to do so too, and, therefore, he supported it. If the Amendment succeeded, it would get rid of the second part of the Bill; and he, for one, should not regret that. We were only going to raise by it £130,000 of Revenue, and a considerable portion of that would be absorbed in the cost of obtaining it.
§ SIR JOHN R. MOWBRAYsaid, the Amendment had been entirely disposed of by the speech of the right hon. Member for Pontefract (Mr. Childers). Speaking as a Representative of the Ecclesiastical Commission, he doubted whether the hon. Member for Salford was aware of the facts as regarded that Corporation. Up to October, 1881, the Commissioners had sold 416,117 acres of land. He was surprised to hear that the Commissioners were hostile to agricultural improvement. He would leave that point to be settled by independent testimony; but certainly they had had a smaller proportion of land thrown on their hands than any other landowner in the Kingdom. They knew their interests would be promoted by the sale of land, and they had offered it to tenants on advantageous terms—15 per cent down, and the residue in instalments spead over 30 years. Income Tax was paid by the Ecclesiastical Commissioners on all their income, whether derived from lands, tithe-rent charge, ground-rents, royalties, manorial rights, or any other source of income. The Commissioners deducted Income Tax from the payments made by them to the clergy; and the amount of Income Tax shown in the common fund account was only the balance chargeable to that account after deducting the amount of Income Tax retained by the Commissioners out of the annual grants paid by them. During the year ending October, 1884, the Commissioners paid, in respect of Income Tax, £28,717 7s. 10d, and they deducted out of payments made by them a sum of £22,395 3s. 2d., leaving the balance £6,322 4s. 8d., shown in accounts as chargeable to the common fund.
§ SIR SYDNEY WATERLOWsaid, that the hon. Member for Salford ob- 1693 jected to land being held in mortmain to a great extent, on the ground that Corporations escaped the payment of the Death Rate. A large Corporation with which he was connected, in their Report to the Royal Commission, said they ought to pay something in lien of the Death Rate. He believed that a tax of 5 per cent on the income would amount to loss than 10 per cent on the value of the property, that calculation being based on the assumption which was generally accepted that land in individual ownership paid the Death Duty once every 20 years. With regard to property applied exclusively to the public benefit, it would be ridiculous to impose any tax upon it, for it was only taking out of one pocket to put it in another. Nor did he think that any good would be effected by the taxation of property held for charitable purposes, as the amount paid in taxation would only reduce the sum available for the relief of the sick poor, and thereby render it necessary for the ratepayers to spend more on hospitals and infirmaries. He trusted that the House would not agree with the Resolution.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that, however interesting the subject they had been discussing might be, he failed entirely to see its relevancy to the Bill before the House. He was inclined to agree with a great deal that had been said as to the advantage of resident landlords; but he thought that the argument might be pushed too far. It was the case that residents were to be found who did not do their duty as landlords, while he would venture to say that there were many tenants of Corporations who were infinitely better off than if the property had belonged to individual landlords who did not do their duty. He would not follow the right hon. Member for Pontefract in his very sweeping objections to property being held by Corporations. He certainly could not concur with the right hon. Gentleman to the full extent. No doubt, it would be undesirable that property held by Corporations should increase, or be-come as great as that held by individuals; but it would be equally undesirable that there should be no property held by Corporations. The particular Corporations which the right hon. Gentleman wished to be excluded from 1694 the inability of Corporations to hold property were Corporations sole—namely, clergymen of the Church of England holding glebes. Ho thought that there could be no question that the position of clergymen rendered them less qualified to perform the duties of landlords than other Corporations. The hon. Member for Salford, in his zeal to got rid of property held in mortmain, proposed to put an extra tax on that kind of property. He was surprised that the hon. Member, holding the views he did, should have moved an Amendment to the Bill, as he should have thought that, from his point of view, he would have supported the Bill and tried to extend its operation by removing some of the exemptions from taxation. In his opinion, it would not be possible with advantage to remove any of those exemptions; but, from the point of view of the hon. Member, he should have thought he would endeavour to remove some of them. He would not deal with the questions raised by the hon. Member for Cambridge (Mr. Shield), as those points would be better dealt with in Committee. He would not attempt to go at any further length into the subject discussed by the hon. Member for Salford, as he thought this was not the proper time to do so; but if the subject was fairly brought before the House as a separate Motion he should be prepared to deal with it.
§ Question put.
§ The House divided:—Ayes 94; Noes 38: Majority 56.—(Div. List, No. 243.)
§ Main Question again proposed.
§ MR. LABOUCHERE, who had the following Motion on the Paper:—
That taxation, as now levied, presses too heavily on those who cannot well hear the burden, and this state of things ought to be remedied by increased imposts upon land, particularly upon such as is not in the actual occupation of those entitled to its rents, and upon such land as is capable of being devoted to increasing the wealth of the community, but which is not, by assimilating the Death Duties on real estate with those on personal estate; and by a progressive Income Tax and progressive Succession Duties,said, it was admitted by all persons that this Budget was not a proper one. The Conservatives threw the blame upon the Liberals by saying that they had not had time to bring forward a proper Budget. But ho maintained they should 1695 not have made the attack on the Liberal Budget without having a Budget of their own to bring forward, and it was in consequence of their not having such a Budget that they found themselves in the present unsatisfactory position. The fact was they were paying the price of a Conservative Government, and that price was to borrow money in order that it might be spent, instead of money being raised by taxes for the current year, as had been proposed by the late Government. The first proposition which he ventured to lay down was that the poor were unjustly taxed, and the rich not sufficiently taxed. Mr. Leone Levi said that "the families which have the smallest incomes pay the highest contributions." This contribution was put as high as 15 per cent on the means of the poor man and 5 per cent on those of the rich; and he thought everyone would admit that the poor man with a large family paid at least 10 per cent on his income, and the rich man did not pay more than 5 per cent. What was the reason of this? The reason was that although poor men were the majority of the electors in this country, practically almost all persons in the House were more or less rich men. [Cries of "No!"] He said "Yes." This was due to the fact of a candidate being obliged to pay his own election expenses, and in consequence of Members of the House of Commons not being paid for sitting as Representatives. He was afraid that this state of things would continue until the two excellent reforms in our representation which he had indicated were accepted. What was the consequence? The House of Commons, composed as it was of rich men, did not dare directly to tell poor men that they were paying more than their proportion as compared with the rich men. The result had been that the system of indirect taxation was invented, and he considered it to be nothing but an organized form of trickery. It was bad enough that they should make men pay irrespective of their means as they did by indirect taxation; but it was more absurd that of £3 collected by indirect taxation, only £2 went into the Treasury. The object of every Chancellor of the Exchequer in imposing indirect taxation was to levy that taxation on primary articles of consumption, and the consequence was he had to select articles 1696 which were considered as food for the people. For instance, they taxed tea, and tea was to a large extent the food of the poor. Again, there was tobacco, which was an article of almost universal use. [Cries of "No, no!"] Well, every reasonable person who wished to go through the world calmly and quietly and who did not wish to get excited used tobacco; but look at the immense amount of taxation levied on this article of consumption! They made the poor man pay 400 per cent on his tobacco, while the rich man paid 50 per cent on his cigars. He contended, therefore, that indirect taxes, in order to be fair, ought in reality to be ad valorem duties; but all Chancellors of the Exchequer knew of the difficulty of raising ad valorem duties. They were not prepared to incur the trouble and the expense of imposing them. Take, again, the case of alcohol. By their not having an ad valorem system of duties, the poor man paid 200 per cent on his spirits, while the rich man paid 25 per cent on his wine. He asked hon. Members to say whether they considered this to be a fair system of taxation? He acknowledged that expenditure must be met; so far he agreed with all Chancellors of the Exchequer. But he was not one of those who thought the Budget could be materially reduced. Something, no doubt, might be done to avoid useless wars, to reduce pensions or salaries; but all that could be done in this direction would be very little. He thought it was a financial and political heresy to complain of the Budget being so excessively high. What they should complain of was the mode in which the money was raised, and the manner in which it was often spent. He would suggest that they should at once increase the burden on land. The community had been robbed year after year and generation after generation by the landlords. A bargain was made long ago that the landlords should pay 4s. in the pound on the annual value of the land; but they had managed to escape from their proper contribution under that arrangement. The result was that the landlords at present paid about £1,000,000 as Land Tax, whereas they ought in reality to pay at least £20,000,000. Thus the country was robbed of £19,000,000 through their having a landlord Parliament composed of one House, consisting entirely of landlords, and another House 1697 in which the landlords were still almost the masters. He desired to see adopted a graduated Land Tax, dependent on the number of acres that each individual had. Again, if the landlords did not make a proper use of the land—if they devoted it to shooting purposes, or let it lie waste, they ought to be called upon to pay a considerable amount of taxation upon it. The late Chancellor of the Exchequer had proposed to equalize Death Duties upon real estate and personal property; and the House knew what had been the fate of that proposal. It was said that land bore many local burdens; and so, he held, it ought to do. That was always intended. He thought that land should bear not only all local burdens, but also a greater amount than it now bore of Imperial taxation. There was, however, one way in which they might obtain relief as regarded the education rate. The Established Church had a very large amount of property. After providing for all existing rights they might take, he thought, about £50,000,000 from' the Established Church and devote it to educational purposes. It was in that way alone that in a Radical Parliament the landlords could get any relief from what they called their heavy burdens. A progressive Income Tax and progressive Succession Duties ought to be imposed so as to make rich people pay, as they ought to do, towards the necessities of the State. There was no reason why they should allow a man to have a largo income. It was no benefit to the State. They allowed it as a concession, and it should be paid for by a graduated Income Tax, increasing in proportion as the income increased above a man's fair requirements. Again, it was a concession to permit men to leave large sums to particular individuals, and if £50,000 or £100,000 were left to an individual the State ought to have one-third of the £50,000, and one-half of the £100,000, or some such proportions. They had heard a good deal about "ransoming" property lately, and he himself valued that phrase because it seemed to indicate something in the nature of what he was suggesting. He knew he was in a minority in that House, but there were several millions outside who entirely agreed with him. There should also be a distinction made between incomes derived from realized property and incomes 1698 derived from trade and manufactures. The income from the latter was not all spending income, because the possessor had to lay by something against a rainy day for his family. His was, perhaps, the extreme Radical idea of finance, but it was not in the least a Socialist doctrine. He would put the burden on the shoulders best able to bear it. He would have the poor pay some small quota when they could afford it. [Laughter.] Hon. Gentlemen laughed; it was the habit of the House to laugh at the poor ["No!"]; but how could a person who was struggling for the bare necessaries of existence pay taxes? Taxation ought to commence after the mere struggle for existence had ceased, and those who had incomes admittedly in excess of their requirements should pay a ransom to prevent those who were in want from taking those incomes from them. He would not trouble the House further; but he had thought it right to point out the grand lines upon which financial democracy should run in future.
§ Main Question put, and agreed to.
§ Bill considered in Committee.
§ (In the Committee.)
§ Clauses 1 to 5, inclusive, agreed to.
§ Clause 6 (Sugar store to be entered by brewer for sale and accounts of sugar to be kept).
§ MR. HICKSmoved an Amendment to provide that Returns should also be made of raw grain or rice. He said, that after the promise made on behalf of the Government when the Bill was read a second time he did not think it necessary or desirable to enter at length into the question which this clause appeared to him to open out. He would merely explain why he thought the Returns which the Government called for under this clause should be extended to raw grain and rice. No doubt, it would be within the knowledge of many Members of the Committee that, prior to 1847, a brewer of beer for sale was not allowed to use any other material whatever in the manufacture of beer than malt and hops. In that year, for the first time, the brewer was allowed to use sugar, on the condition that the sugar he used had paid duty. But not only was he not allowed to use any 1699 other material than sugar that had paid duty, but he rendered himself liable to a heavy penalty if he had any other material on his premises. That regulation went on down to 1880, when the right hon. Gentleman the Member for Mid Lothian (Mr. Gladstone), in his great desire to benefit the agricultural interest, brought in a Bill substituting a Beer Duty for a Malt Duty, and giving the brewer the right to use anything he thought fit in the manufacture of beer. He was sorry that the right hon. Gentleman was not present. It appeared to him that the right hon. Gentleman absented himself from all participation in the Business of the House in order to imitate the conduct of that great Minister, Charles James Fox. The right hon. Gentleman was evidently trying to give a faint imitation of that great Minister.
THE CHAIRMANpointed out to the hon. Member that his remarks were not applicable to the Amendment he was moving.
§ MR. HICKSwould only say that he was sorry the Committee had not the advantage of the presence of the right hon. Gentleman the Member for Mid Lothian, in order that he might take part in a discussion of the Act which he had himself passed in 1880. But as the right hon. Gentleman was not there they must do the best they could without him. He (Mr. Hicks) had pointed out what was the state of the law in 1847, 1880, and at the present time. They had now a fresh clause brought in by the Government requiring certain Returns and entries to be made by brewers of beer for sale, but those Returns were confined entirely to the substitution of sugar; but he (Mr. Hicks) maintained that the consumer had a right to know—perhaps not what every particular thing was which was used in the manufacture of beer by every brewer—but to know broadly what materials were employed, and especially whether raw grain and rice were used. He thought it was right that the consumer should know that as well as know whether "cane sugar, saccharum, glucose, or other saccharine substance or extract or syrup" was used. He, therefore, begged to move the Amendment which stood in his name—that, after the word "syrup," the words "or raw grain or rice" be inserted.
§
Amendment proposed,
In page 2, line 39, after the word "syrup," to insert the words "or raw grain or rice."—(Mr. Hicks.)
§ Question proposed, "That those words be there inserted."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, his hon. Friend had entirely mistaken the object and meaning of the clause. It was not in any way to dictate what the brewer should use in the manufacture of the article called beer, but merely to provide security against frauds on the Revenue. Of course, raw grain and rice and other materials might be used to make beer, although a good many people would agree with the hon. Member in preferring malt and hops.
§ MR. HICKSsaid, the right hon. Gentleman had rather misunderstood his meaning. He had no wish in the Amendment he had proposed to dictate to the brewer what materials he should use. He was already at liberty to use what he pleased under the famous Act of 1880. All he desired was that a Return should be made to the Government in the case of raw grain and rice just as much as in sugar, and that if the Chancellor of the Exchequer chose to call for a Return of the sugar and syrup used, he should also call for a Return of raw grain and rice. His Amendment had nothing whatever to do with the making of the beer by the brewer.
§ Amendment negatived.
§ Clause agreed to.
§ Clauses 7 to 9, inclusive, agreed to.
§ Clause 10 (Grant of duty on property of corporate and unincorporate bodies).
§ MR. SHIELDmoved to reduce the duty from 5 to 3 per cent. He said, the proposition which he had to make good was that in levying a tax of 5 per cent upon the annual value or income or profits of Corporate property the Government were proposing a tax which was inequitable and higher than that which was received from the death rates from the owners of individual property who succeeded in consequence of death. Perhaps he might be allowed to explain the circumstances under which this 5 per cent had been proposed. It formed part of the scheme of his right hon. 1701 Friend the late Chancellor of the Exchequer in 1883. Under that scheme the Death Duties, to which this 5 per cent was made equivalent, were calculated at 13 per cent; but the Chancellor of the Exchequer, having abandoned the complementary measure with which this Bill was associated, had to provide an equivalent for Death Duties at 10 per cent. His first proposition was one which he thought was a self-evident one. If the tax sought to be imposed by the Bill were equivalent to Death Duties calculated at 13 per cent, it must be more than an equivalent for the same Death Duties calculated at 10 per cent. Ho awaited with some curiosity to know how the Chancellor of the Exchequer would deal with that argument. The tax now proposed was to be imposed as an equivalent to Death Duties at 13 per cent, and the Chancellor of the Exchequer now sought to make out that it was no more than equivalent to Death Duties at 10 per cent; and he was curious to discover the actuarial basis of the right hon. Gentleman's calculation. In 1853, when the Succession Duties were first imposed, the Government of that day contemplated a measure to levy a tax upon the property of Corporate bodies equivalent to the Succession Duty. He had before him the volume of Hansard in which the Chancellor of the Exchequer explained the provisions of his scheme. The right hon. Gentleman estimated that the Succession Duties would yield £2,000,000 a-year; but, as they all knew, that amount had proved to be greatly overestimated, and the actual amount obtained was not much more than one-third of the estimate. But the tax now proposed by the Chancellor of the Exchequer was one of 5 per cent, which he proposed as an equivalent for the Succession Duties which had been so much over-estimated. He (Mr. Shield) thought that a 3 per cent tax would provide a much nearer equivalent to the Death Duties than one of 5 per cent; and he maintained that the Death Duties paid upon succession to real property by individuals were not much more than one-half of the tax sought to be imposed by the present Bill. The Committee must bear in mind that if the Chancellor of the Exchequer who imposed the Succession Duties was approximately right, the proposal of the present Bill must be 1702 considerably over the mark. The real property upon which Succession Duty was paid was not subjected to Probate Duty; and if the Chancellor of the Exchequer of 30 years ago was approximately right in imposing a tax of 3d. in the pound for seven years, and then of 6d., as equivalent to a Succession Duty, it afforded a very strong argument, indeed, to show that the present proposal was more than equivalent to the Succession Duty. Ho thought this point was capable of illustration in another way by a pure arithmetical calculation. This Bill said that 5 per cent on the yearly income was no more than equivalent to the Death Duties on the same property if owned by an individual at the time of death. Now, what was 5 per cent? Five per cent upon a yearly income was equivalent to 10 per cent upon the capital value every 40th year. But the Death Duties wore calculated every 30 years; so that the question was, what tax calculated every 30 years would this 5 per cent levied every year be equivalent to? He contended that ordinary property, much less Corporate property, would not yield, upon an ordinary actuarial calculation, the tax which the Bill sought to impose. Seeing that 5 per cent was much more than equivalent to the Death Duties which the State could collect from Corporate property, ho asked the Committee to reduce the rate to 3 per cent. He was not prepared with any actuarial computation as to what the exact rate ought to be; but he thought that a tax of 3 per cent would much more nearly provide an equivalent for the Death Duties than 5 per cent.
§ Amendment proposed, in page 5, line 4, to leave out the word "five," and insert the word "three."—(Mr. Shield.)
§ Question proposed, "That the word 'five' stand part of the Clause."
§ SIR GABRIEL GOLDNEYsaid, that this was a matter which had been discussed in the House a great many times; and the object now was to endeavour to assimilate Corporate property, as far as they could, with individual property, by imposing a percentage every year of equal amount. He understood that the hon. Member for Cambridge (Mr. Shield) did not object to that proposition, but simply to the amount of 1703 the percentage which the Government proposed.
§ MR. SHIELDsaid, he did object, as a matter of fact, to the proposal altogether.
§ SIR GABRIEL GOLDNEYsaid, he had understood the hon. Gentleman to object to 5 per cent, as being; too high a figure. Leaving Probate Duty out of the question, personal property paid in the shape of Death Duties once, at least, in a very 16 years. Take £100 invested in Consols. That gave £3 a-year, upon which a Corporation would pay 5 per cent, or 3s. Spreading the payments over 16 years they would amount to 48s.; whereas, if the amount were capitalized, and 5 per cent paid every 16 years, the sum paid would be £5. Therefore, upon an actuarial calculation a Corporation, under the scheme of the Government, would not in reality pay more than 3 per cent, but somewhat less, compared with the sum they would pay if the value of the property were capitalized.
§ MR. GREGORYsaid, he did not agree with the hon. Baronet the Member for Chippenham (Sir Gabriel Goldney) that the 5 per cent upon the income or profit would practically amount to little more than 3 per cent upon the capitalized value; he thought that 16 years was too short a term on which to base the calculation. It must also be remembered that they were bringing in property which had never been subjected to this taxation before, and in all probability they would bring in a much larger amount of property than originally contemplated. He, for one, was of opinion that exemptions could not be maintained; and, taking the whole of the Corporate property, he thought that the tax imposed by the Bill would really amount practically to a tax of 10 per cent upon it. He looked upon that as a very large percentage; but he would not say that 3 per cent on the annual income would not be too small, and therefore he would suggest something between 3 per cent and 5—say 4 per cent, which he thought would be a reasonable amount. He hoped that his right hon. Friend the Chancellor of the Exchequer would see his way to make some concession.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, it was a very difficult calculation to arrive at the precise figure 1704 which should represent the fair annual payment which should fall upon Corporate property instead of the Probate Duty. He confessed that when he first looked into the matter he was of opinion that 5 per cent was too high; but after becoming more thoroughly acquainted with it, he came to the conclusion arrived at by his hon. Friend the Member for Chippenham (Sir Gabriel Goldney) that, on the whole, Corporate property would really have nothing to complain of in having to pay a 5 per cent duty. There was one point which had not been alluded to—namely, that this duty was only paid after deducting from the profits all the necessary outgoings. It must be remembered that, in regard to Corporate property, the deductions under the head of necessary outgoings would most likely be much greater than in the case of the property of private individuals. Therefore, under the circumstances, he hoped the Committee would adhere to the 5 per cent.
§ MR. R. BIDDULPH MARTINasked the Chancellor of the Exchequer if he could give the exact definition of the words "annual value," because there were plenty of Clubs, such as the Atheneum and the Carlton Clubs, in which the library and other property were of very great value? He therefore wished the right hon. Gentleman to state exactly what was meant by the term "annual value." If property of the kind to which he referred had existed for more than 30 years, would the whole of it have to pay the tax?
§ SIR SYDNEY WATERLOWsaid, that before the Chancellor of the Exchequer answered the question he wished to say that, when they came to that part of the clause, he intended to move that the word "value" be omitted. There could be no doubt as to why the tax should be imposed on income or profits; but the annual value of the property might form no part of the annual income. He would ask the Chancellor of the Exchequer to consider that point before they came to the word "value."
§ MR. DIXON-HARTLANDwas of opinion that the present proposal would amount to very nearly 4½ per cent upon the capitalized value of Corporate property, instead of 3 per cent only.
§ MR. W. FOWLERsaid, he could understand that if they were to impose the whole of the Death Duties that 5 per 1705 cent would not be far from the mark; but as Corporate property did not pay Probate Duty, and was very largely composed of real estate, he could not help thinking that this was rather a severe measure. He certainly could have no sympathy with the Bill so long as absurd exemptions were retained in it, and he would feel inclined to vote for a reduction of the charge on Corporate property until the whole of it was included. Instead of attempting to insert the thin edge of the wedge only, they ought to deal with the whole question boldly; and if they were only going to introduce a half-measure such as this they ought to be careful not to make it too severe. He was afraid that in the exemptions they were leaving out some of the largest and most profitable property. For instance, Ecclesiastical property, although it certainly paid Income Tax, was left out of the Bill. That being so, he was inclined to agree to a more moderate measure, and he should prefer 4 per cent instead of 5. He thought a reduction to 3 per cent would be going too far; but he agreed with the hon. Gentleman the Member for East Sussex (Mr. Gregory) that the figure ought to be 4.
MR. LYULPH STANLEYsaid, he hoped that the Government would stand by the 5 per cent. It ought to be regarded as deferred payment, and not anticipated payment, seeing that these Corporations had been largely increasing their property for centuries without paying for it. Instead of being asked, like other inheritors of property, to pay a lump sum on succession at once, all they were called upon to do was to pay an annual percentage upon the interest of their capital.
§ MR. GREGORYsaid, he did not know whether the hon. Member for Cambridge (Mr. Shield) was inclined to accept his suggestion. If the hon. Member was, he would move that 4 per cent be substituted for 5.
§ MR. SHIELDsaid, he would ask leave to withdraw his Amendment.
§ Amendment, by leave, withdrawn.
§ MR. GREGORYmoved to substitute 4 per cent for 5.
§ Amendment proposed, in page 5, line 4, to leave out the word "five," and insert the word "four."—(Mr. Gregory.)
1706§ Question proposed, "That the word 'five' stand part of the Clause."
§ SIR GABRIEL GOLDNEYsaid, the matter was one which must be dealt with on principle so as to determine exactly the amount of duty which a Corporation ought to pay. If they went into the question of compound interest, he was prepared to maintain that 5 per cent paid annually was not really more than 3 per cent paid at long intervals on the direct descent of property.
§ Amendment negatived.
§ SIR SYDNEY WATERLOWmoved, in page 5, line 4, to omit the word "value." The effect of the Amendment would be to limit the tax to the annual income or profits of property accruing to any corporate or unincorporate body. He thought it was quite sufficient to tax the income or profit, and that only. If the property was intended to be taxed upon its value, it would have to be valued every year. He was satisfied that the Chancellor of the Exchequer did not intend to tax the value of the property, hut only the income or profit arising from the value of it.
§ Amendment proposed, in page 5, line 4, to leave out the word "value."—(Sir Sydney Waterlow.)
§ Question proposed, "That the word 'value' stand part of the Clause."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that this was rather a technical matter, and he certainly preferred the clause as it stood to the Amendment. He should, however, have liked to consult the authorities on the subject. It occurred to him that if the Amendment were carried, the result would be that no Corporate body would pay the tax except where some income or profit was derived from its property. But a Corporation might occupy a freehold of great value, and yet derive no income from it. Surely, such property ought not to be exempt from taxation. He hoped the hon. Gentleman would not press the Amendment.
§ SIR SYDNEY WATERLOWsaid, he would instance the case of the Fishmongers' Hall. That was very valuable property; but surely the Fishmongers' Company ought not to be taxed upon the annual value of the premises in order to replace the Property Tax?
§ MR. CHILDERSasked upon what Death. Duties paid by individuals were imposed? They were imposed not on the income, but upon the corpus of the estate; and if they, in the present case, abandoned that principle, and only levied a duty upon the income or profit derived by the Corporation, they would exclude a large amount of property upon which Death Duties would undoubtedly be paid if it were held by a private individual. Upon that matter there could be no question. The object of this clause was to place the property of Corporations as nearly as possible on the same footing as the property of individuals, and they would run counter to that principle if they were to accept the Amendment.
§ SIR SYDNEY WATERLOWintimated that he would not press the Amendment.
§ Amendment, by leave, withdrawn.
§ MR. GREGORYmoved, in line 7, after the word "outgoings," to insert—
Including the receiver's remuneration, and costs, charges, and expenses properly incurred in the management of such property.The object of the Amendment was to make it perfectly clear what the "necessary outgoings" were to comprise.
§
Amendment proposed,
In page 5, line 7, after the word "outgoings," to insert the words "including the receiver's remuneration, and costs, charges, and expenses properly incurred in the management of such property."—(Mr. Gregory.)
§ Question, "That those words be there inserted," put, and agreed to.
§ MR. HORACE DAVEYmoved, in line 16, to leave out the words "and applied exclusively." The sub-section proposed to exempt property which, or the income or profits whereof, should be legally appropriated and applied exclusively for the benefit of the public at large in any county, shire, borough, or place, or in any manner expressly prescribed by Act of Parliament. He ventured to submit to the Chancellor of the Exchequer that the true test of whether property ought to be exempted or not was not whether it was actually applied, but whether it was legally appropriated, and, if legally appropriated, it ought to be exempted whether the Trustees who had the distribution of the income did their duty or not. If they failed to to their duty they could be called to ac- 1708 count and made to do it. The property liable to taxation ought not to depend upon the extent or manner in which the Trustees fulfilled their duty. The test should be whether the property was legally appropriated and devoted to public purposes or not. He therefore proposed to omit from the sub-section the words "and applied exclusively." If the right hon. Gentleman the Chancellor of the Exchequer thought that those words ought to be retained, he (Mr. Davey) would venture to submit that the words were misleading and that they did not carry out the intentions of the Government. He would give an illustration. Did the words "applied exclusively" mean that the whole of the income was to be applied in a particular manner? If so, what would happen if 19–20ths were so applied, and the other 20th was not? What would be the effect? The clause in such a case might be construed to mean, not that the l–20th was to lose the benefit of the exemption, but that the whole of the income was to be deprived of the advantage of this clause. He therefore trusted that the right hon. Gentleman would accept the Amendment, at any rate, to the extent of leaving out the word "exclusively."
§ MR. HORACE DAVEYsaid, he proposed to leave out the words "and applied exclusively."
§ Amendment proposed, in page 5, line 16, to leave out the words "and applied exclusively."—(Mr. Horace Davey.)
§ Question proposed, "That the words proposed to be left out stand part of the Clause."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he was afraid that he could not agree to the Amendment proposed by the hon. and learned Gentleman. He thought that the words "and applied" ought to be in the clause. When property was legally appropriated to a certain purpose it surely ought to be applied to that purpose, and if the Trustees did not apply it to that purpose they would fail to carry out their legal duty, and would certainly have no right to claim an exemption. Therefore, he hoped the hon. and learned Member would not press the Amendment. He 1709 had consulted the Attorney General upon the subject, and his hon. and learned Friend entirely agreed with him that it would be a mistake to omit those words. If the Amendment was to have any effect at all it would have the effect mentioned by the hon. and learned Gentleman, and that was not the effect which he (the Chancellor of the Exchequer) desired that it should have.
§ MR. HORACE DAVEYsaid, he would withdraw the Amendment and substitute another, to leave out the word "exclusively" only.
§ Amendment, by leave, withdrawn.
§ MR. HORACE DAVEYmoved to omit the word "exclusively."
§ Amendment proposed, in page 5, line 16, to leave out the word "exclusively."—(Mr. Horace Davey.)
§ Question, "That the word 'exclusively' stand part of the Clause," put, and negatived.
§ MR. THOMAS RUSSELLmoved, in line 19 of the same sub-section, to insert the words "Royal Charter," in order to provide that the exemption should be extended to property applied for the benefit of the public, or the ratepayers or inhabitants of any county, shire, borough, or place expressly prescribed by Royal Charter or Act of Parliament. The hon. Member stated that his object was to make it perfectly clear that such institutions as hospitals, and institutions in which the income or profit was devoted to the promotion of health, would be exempt from the operation of the tax. The position of such institutions was this. They were built by public subscription, and were carried on wholly and solely for the benefit of the public; but there might be a difficulty in bringing them under the word "charitable" which appeared in the 3rd sub-section, arising from the fact that a charge was made for some of the patients. Therefore, the charity was not direct, and it might be called in question if the clause was to be governed by the word "charitable" which followed, in the 3rd sub-section, in the phrase "or for any charitable purpose." He would, therefore, suggest that the words "or incorporated by Royal Charter" might, with advantage, be added in line 19 of the 2nd sub-section, in order to secure that these insti- 1710 tutions should be exempted from the tax; and he would move the insertion of those words.
§ Amendment proposed, in page 5, line 19, to add at the end of the clause the words "or incorporated by Royal Charter."—(Mr. Thomas Russell.)
§ Question proposed, "That those words be there added."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, the effect of the addition of those words would be really to limit the application of the clause, because the words "legally appropriated" governed the whole matter, whether by Act of Parliament or by Royal Charter. He could not, therefore, accept the Amendment.
MR. LYULPH STANLEYasked whether, under those circumstances, the last words of the sub-section were not also surplusage? Was there any necessity for retaining the words "by Act of Parliament?"
§ Question put, and negatived.
§ THE CHANCELLOR OF THE EXCHEQUERmoved, in the 3rd sub-section, to omit the word "exclusively," the effect of which was to limit the exemption to property which, or the income or profits whereof, should be legally appropriated and applied for any purpose connected with any religious persuasion, or for any charitable purpose, or for the promotion of education, literature, science, or the fine arts.
§ Amendment proposed, in page 5, line 21, to leave out the word "exclusively."—{The Chancellor of the Exchequer.)
§ Amendment agreed to.
MR. LYULPH STANLEYsaid, that at the end of the sub-section some words ought to be added to indicate that the institutions referred to were carried on without profit to the promoters and managers, because it might be the case that some institutions for the promotion of education, literature, science, or the' fine arts, were institutions for private profit.
§ MR. THOMAS RUSSELLmoved to add, in line 23, after the words "promotion of," the word "health." His object was to serve the purpose he had explained before, and he hoped the Government would assent to the Amendment.
§ Amendment proposed, in page 5, line 23, after the words "promotion of," to insert the word "health."—(Mr. Thomas Russell.)
§ Question proposed, "That the word 'health' be there inserted."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that he had consulted the Attorney General in reference to this point, and as to the wording of the 3rd sub-section generally, and his hon. and learned Friend informed him that, in his opinion, hospitals, or other similar institutions in which no profit was divided, were exempted from duty, notwithstanding that the income of the hospital might be partly derived from payments made to it.
§ MR. THOMAS RUSSELLsaid, the statement of the right hon. Gentleman was quite sufficient, and he would not press the Amendment.
MR. LYULPH STANLEYwished to point out, before the Amendment was withdrawn, the extreme danger, at a moment's notice, of putting in words of this sort.
§ MR. THOMAS RUSSELLNo.
§ MR. THOMAS RUSSELLNo; it is still on the Paper.
MR. LYULPH STANLEYsaid, he wished to point out the great danger of introducing words of this kind, because a gymnasium or a hydropathic establishment, carried on exclusively for private profit, would come under the words "promotion of health."
§ MR. J. W. BARCLAYsaid, there were several asylums and institutions in Scotland which had been originally built by subscription, and were partly carried on for charitable purposes. But, although there was no profit to anyone from them, they could hardly be called exclusively charitable, because it so happened that persons in the higher ranks of life paid for some of the patients. The words of the clause left a case of that kind in doubt; and he thought it was desirable to make it perfectly clear that such institutions, asylums, places of retreat for the restoration of health, and places for the treatment of disease, should 1712 be included in the exemption. They were certainly in the nature of public institutions, and had been erected at the public expense. The only doubt was whether they could be called exclusively charitable, although, at the same time, no profit was gained by those who had the management of them.
§ Amendment, by leave, withdrawn.
§ MR. GREGORYsaid, there were various institutions in the country that were doing good work in the regulation of professions, and the governance of the members of such professions. He hoped the right hon. Gentleman the Chancellor of the Exchequer would be able to exempt those from the operation of the clause, inasmuch as their operations were for the public benefit.
§
Amendment proposed,
In page 5, line 24, after the words "fine arts," to insert the words "or for the advancement or regulation of any profession, or the governance of any members thereof."—(Mr. Gregory.)
§ Question proposed, "That those words be there inserted."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that so much of the property of the institutions referred to by the hon. Member for East Sussex (Mr. Gregory) as was devoted to the promotion of education was already exempt under the sub-section, and he could not consent to extend the exemption further.
§ MR. HORACE DAVEYsaid, he should have some difficulty in supporting the Amendment of the hon. Member for East Sussex, although he was a member of one of the societies which the hon. Gentleman had in his mind in moving the insertion of those words. He rose for the purpose of pointing out the peculiar way in which the wording of the latter part of the sub-section was drawn. Sub-section (3) provided for the exemption of property which, or the income or profits whereof, should be legally appropriated and applied exclusively for any purpose connected with any religious persuasion—
Or for any charitable purpose, or for the promotion of education, literature, science, or the fine arts.From that wording one would suppose that the draughtsman did not understand the expression "charitable purpose," and was not aware that the promotion 1713 of education, literature, science, or the fine arts, was a charitable purpose. He suggested that it would be worth while for the right hon. Gentleman the Chancellor of the Exchequer to consider whether this wording should not be amended on Report by striking out everything after the words "charitable purpose," as the effect of the subsequent words might be to cut down the meaning of the former.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he was obliged to the hon. and learned Member for Christchurch (Mr. Horace Davey) for his suggestion, and he would certainly consider the point before the Report, and any suggestions that other hon. Gentlemen might make on the subject.
MR. LYULPH STANLEYsaid, he had an Amendment which he thought would make clear what it was intended to tax and what not. He proposed to add "without profit to the managers or governors." There were institutions which might be connected with the promotion of education and yet be undertaken for profit. The Royal Academy, for instance, was for the promotion of the Fine Arts; but it was really conducted with a view to profit. If the Royal Academy Exhibition was strictly for the promotion of Fine Art, and if the Managers and Governors were proved to be Trustees of the 1s. charged for admission, then it might come in under the words "charitable purpose;" but, unless they restricted the clause in the manner he proposed, he thought they would be giving an undue advantage to societies of the kind ho had alluded to.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he thought the point of the hon. Member for Oldham (Mr. Lyulph Stanley) was covered by the clause as it stood; but he would inquire into the matter, and, in the meantime, would ask the hon. Gentleman not to press it at that moment.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clauses 11 and 12 agreed to.
§ Clause 13 (Duty to be a first charge on property; what parties accountable for the duty).
§ MR. GREGORYsaid, he had three Amendments to this clause on the Paper, but he only proposed to press one of 1714 them upon the Committee. By the clause as it stood the duty imposed was to be
A first charge on all the property in respect whereof the same shall be payable while such property shall remain in the possession or under the control of the body corporate or unincorporate chargeable with such duty.And it further provided that—Every accountable officer shall, to the full extent thereof, be answerable to Her Majesty for the payment of the duty charged thereon.The accountable officer would, therefore, incur personal liability. Now, if hon. Members would refer to the Interpretation Clause they would find that the term "accountable officer" included in its scope a large number of personages —that was to say—Every chamberlain, treasurer, bursar, receiver, secretary, or other officer, trustee, or member of a body corporate or unincorporate by whom the annual income or profits of property, in respect whereof duty is chargeable under this Act, shall be received, or in whose possession, or under whose control, the same shall be.It followed that all those officers would be personally liable for the duty under the Act; and every person exercising control over the funds of charities would be liable. Now, when they remembered that "no time runs against the Crown," and that the duty might be claimed even after the lapse of 50 years, it really became a matter for serious consideration whether they ought to bind all those officers to a responsibility of the kind. If they had the property of the Corporation liable, he thought that was as much as they ought to expect. Let the Corporation have the entire responsibility, and let the claim be against the Corporation generally to whom the property belonged; but he urged on the Committee not to cast this serious personal liability on everybody engaged in the administration of those charities.
§ Amendment proposed, in page 6, line 25, to leave out the words "and every accountable officer."—(Mr. Gregory.)
§ Question proposed, "That the words proposed to be left out stand part of the Clause."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he thought the Committee would agree that there must be in these matters some person accountable for the 1715 payment of the duty. In inserting those words in the Bill they had simply followed the precedent in the case of the Income Tax. The hon. Member for East Sussex (Mr. Gregory) had indicated a number of persons who, he said, would be personally liable for this duty under the clause as it stood; but he (the Chancellor of the Exchequer) thought that the case was governed by the phrase—
By whom the annual income or profits of property, in respect whereof duty is chargeable under this Act, shall be received, or in whose posession. or under whose control, the same shall be.
§ MR. GREGORYwished to draw attention to the force of the words "or under whose control." They knew that Trustees controlled more or less. Under the clause they would be liable, as would also be any one of those persons to whom the money was paid.
§ SIR WILLIAM HARCOURTsaid, that Trustees were accountable, and their families after them, for the money under their control.
§ Amendment negatived.
§ Clause agreed to.
§ Clauses 14 to 19, inclusive, agreed to.
§ Clause 20 (Stamp duty on securities to bearer).
§ MR. ARTHUR ARNOLDsaid, the right hon. Gentleman the Member for Bradford (Mr. W. E. Forster) had an Amendment on the Paper, the object of which was that Colonial securities payable to bearer should not be charged with this Stamp Duty; in other words, that they should not be treated as foreign securities. In order to elicit the opinion of the right hon. Gentleman the Chancellor of the Exchequer on that point, he would, in the absence of the right hon. Gentleman the Member for Bradford, move the Amendment referred to.
§ Amendment proposed, in page 8, line 37, to leave out from "shall" to "and," in line 39.—(Mr. Arthur Arnold.)
§ Question proposed, "That the words proposed to be left out stand part of the Clause."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, this applied to a comparatively small matter, but the hon. Gentleman had given no reasons in favour of the Amendment.
§ Amendment negatived.
§ Clause, as amended, agreed to.
§ Clause 21 (Grant of duties of income tax).
§ MR. CLARE READsaid, he desired to call the attention of the right hon. Gentleman and the Committee to the unsatisfactory and misleading way in which Schedule B was assessed. He did not now wish to find any fault with the principle on which the tax was charged, but with the way, as he had stated, in which Schedule B was assessed. The assessment of that Schedule was not based on income or profits. All the other Schedules were based on income and profits, while Schedule B was based on the full annual value of the land which the tenant occupied. The consequence was that some of the most accomplished statisticians had been led into a fatal error. The right hon. Gentleman the Member for Ripon (Mr. Goschen) had stated the other day at a meeting of a Chamber of Commerce that the profits upon land still amounted to £140,000,000, and even now that statement continued to be made. The mistake was an extraordinary one for a clever man to make; but there had been a mistake still more extraordinary made by Mr. Giffen, who, at a meeting of the Statistical Society on the 24th of June, said that the incomes of farmers as capitalists and workers amounted to £70,000,000. He (Mr. Read) wished it were so. The hon. Member for Cambridge and Major Craigie had written to The Times, exposing the error into which those two high authorities had fallen. For England, according to the Returns, the amount of Schedule B was £48,000,000; income charged, £24,000,000. For Scotland, £7,500,000; income, £4,000,000. For Ireland the amount was £10,000,000, and the real income was £3,350,000. Then it would be seen that, whereas it was supposed that the assessment of Schedule B was £65,500,000, it was something under £30,000,000; so that, instead of the £70,000,000 which Mr. Giffen put down as the profits of tenant farmers, the Returns of the Inland Revenue Department showed that the amount was £30,000,000. If such mistakes as those were made by the remarkably clever men he had named, and who ought to 1717 know the truth with regard to the statistics of the country, in what position were Members of Parliament placed who, like himself, had to go by those Returns? Again, Schedule A was assessed at nearly the same amount as Schedule B; and if they deducted from the £65,000,000, 15 per cent for repairs, insurance, and the necessary outlay on farm buildings and land, the amount would be reduced to about £56,000,000, which amount would be further reduced to £50,000,000, or to a rental of about £1 per acre, by taking into account the Land Tax and tithes. In the assessment of Schedule B which was based upon the farmer's supposed profits, no such mistake could possibly arise as had been made by these distinguished persons. Although it might be a little trouble some to the Inland Revenue to make the Returns what they ought to be, he trusted that in the future such misleading assessments as these would not be allowed to appear in the statistics.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that if there was anything he could do to make the statistics on the subject more accurate he would be very glad to do it. But, although he had every reason to feel great personal sympathy with much his hon. Friend (Mr. Clare Read) had said, he hoped the Committee would not be disposed to go into this large question now, but would proceed with the consideration of the Bill. He might remind his hon. Friend that the basis of the assessment of the Income Tax was in no way changed by the clause.
§ MR. M'LARENcalled attention to the change in the incidence of the Income Tax in the case of Insurance Companies in which there were participating policy holders, in the case of Co-operative Societies in which there were shareholders, and in the case of workmen who took a share of the profits of the business in which they were engaged as part of their wages. The Inland Revenue Commissioners had now decided to charge the shareholders in Insurance Companies in respect of the profits, so-called, upon participating policies, and Lord Bramwell had characterized the decision as disastrous and unjust. The change, of course, applied equally to Cooperative Societies and workmen receiving a share of profits. The right hon. Gentleman the Chancellor of the Exche- 1718 quer appeared to be at variance with him. He could not believe that the right hon. Gentleman desired that the law should take that shape; but having regard to Lord Bramwell's opinion, something ought to be said to prevent that consequence accruing. If the Chancellor of the Exchequer would assure the Committee that the Inland Revenue Commissioners would not direct the tax to be assessed on that principle, he (Mr. M'Laren) would have nothing more to say.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he had consulted the Inland Revenue authorities on this matter. Although he did not wish to set himself against a legal authority like Lord Bramwell, he could assure the hon. Member (Mr. M'Laren) that the practice which had hitherto been pursued with respect to the Income Tax on Cooperative Societies and workmen admitted to a share of the profits would not be in any way changed.
§ MR. GREGORYsuggested to the right hon. Gentleman the Chancellor of the Exchequer the propriety of relieving the public from many of the harassing Returns they were called upon to make in regard to the Income Tax.
§ Clause agreed to.
§ Clause 22 agreed to.
§ Clause 23 (Provisions as to duty on dividends, &c, paid prior to passing of this Act).
§ MR. DIXON-HARTLANDmoved the omission of all the words after "thirty-five," in page 9, line 37, to the end of the sentence. He did not see the object of the words. If the amount was paid it could not be any object to the Treasury to know on whose account it was paid.
§ Amendment proposed, in page 9, line 37, to leave out from the words "thirty-five" to end of sentence.—(Mr. Dixon-Hartland.)
§ Question proposed, "That the words proposed to be left out stand part of the Clause."
§ THE CHANCELLOR OF THE EXCHEQUERwas not quite prepared to explain the reason of the words; but he hoped the hon. Member would not press his Amendment. The words were in the 1719 Act of last year, and he bad no doubt there was a good reason for them.
§ MR. R. BIDDULPH MARTINthought the avowed reason why those words appeared in the clause was to meet such a case as happened this year. The practice of the Government was to apply to the agents who collected the Income Tax, and to ask them to pay the extra tax put on for the previous half-year. It would be much more satisfactory and economical of the Treasury to put the Income Tax on at a double rate for the half-year, instead of at a single rate for the whole year.
§ Amendment, by leave, withdrawn.
§ Clause agreed to.
§ Clause 24 agreed to.
§ Clause 25 (Provision for further so-curing income tax on foreign and colonial dividends).
§ MR. W. FOWLERcalled the attention of the Chancellor of the Exchequer to the words "bills of exchange" in line 9. It was very true that a coupon expressed on the face of it what it was for, and so did a warrant. Bills of exchange constantly bore no indication what they were for. Supposing a bill of exchange relating to an American undertaking was sent to a banker. The banker had no idea what it was for, and could not possibly charge Income Tax upon it. It would be very hard indeed to make him liable for what he could not possibly discover. It might be perfectly fair, from the point of view of this clause, to make a banker liable when the document showed it was for a dividend. As a rule, a bill of exchange did not show whether it was for a dividend or not; it was merely somebody abroad drawing on a merchant in London payable to order or to somebody else. Even supposing the clause was right, he thought the words he had called attention to were wrong. If necessary, he would move to omit them; but he would prefer the right hon. Gentleman the Chancellor of the Exchequer to promise to consider the point by Report.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he had listened attentively to the hon. Member, and it seemed to him there was much force in what the hon. Gentleman had said. He (the Chancellor of the Exchequer) would be glad to consider the matter before Report.
§ SIR SYDNEY WATERLOWproposed to add, in page 11, after line 19—
Such banker or person receiving as remuneration for the expense of collecting the Tax such poundage as may ho agreed upon not being less than the sum payable by the Commissioners of Income Tax to the collectors of the district in which the Tax is deducted.By this clause the Government were trying, and he thought very justly so, to obtain Income Tax upon sources of income which hitherto had evaded the tax to a large extent; but in order to do it they were obliged to call to their aid not only bankers, but money dealers or changers, who were constantly buying foreign coupons. Now, those people would have to keep an account of transactions they never kept before; and, therefore, he was afraid that unless they were remunerated many of them would still evade the tax. He understood it was now the practice to allow some bankers so much in the pound on the Income Tax they collected. There was. however, no statutory obligation to do that. He thought it would be better to make it a statutory obligation that the person collecting the tax for the Government should be entitled to a certain poundage. Take the case of foreign coupons. In places like Liverpool, where foreign ships were constantly arriving, there were many persons who bought foreign coupons. The buyers kept no record, and therefore they could not be called upon to give any account. If the Bill passed with this clause in it they would be required to keep an account. Ho believed a much more faithful account would be kept if some remuneration were given. In the interest of the collection of the Revenue, in the interest of the public, and also in fairness to those who had to take some trouble to collect the tax, ho hoped those words would be accepted.
§
Amendment proposed,
In page 11,after line 10,toadd—"Such hanker or person receiving as remuneration for the expense of collecting the Tax such poundage as may be agreed upon not being less than the sum payable by the Commissioners of Income Tax to the collectors of the district in which the Tax is deducted."—(Sir Sydney Waterlow.)
§ Question proposed, "That those words be there inserted."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he did not see the necessity of the words; but if the hon. Gentleman 1721 was willing, he would deal with the question on Report.
§ Amendment, by leave, withdrawn.
§ SIR JOHN LUBBOCKproposed to add to the clause—
But this clause shall not impose on any hanker the obligation of disclosing any particulars relating to the affairs of any person on whose behalf he may he acting.There was a difference of opinion amongst bankers as to the exact meaning of this clause They were not quite clear what the obligation imposed upon them was. Ho understood from his hon. Friend the Member for Tewkesbury (Mr. R. Biddulph Martin) that he had been in communication with the Government, and had been led to believe that they would not require details, but only a statement as to the stock or loan on which the coupons were paid. Of course, if lists of the coupons were required much more labour and expense would be involved without any corresponding advantage. The public were always jealous of any information being given by bankers with reference to the concerns of their customers. Of course, the matter was in the hands of the House; at the same time, he was anxious that if bankers allowed officials of the Government to require information from bankers as to the accounts of their customers, it should be distinctly enacted that bankers had no option in the matter.
§
Amendment proposed,
At end of Clause, to add—"But this clause shall not impose on any hanker the obligation of disclosing any particulars relating to the affairs of any person on whose behalf he may be acting."—(Sir John Lubbock.)
§ Question proposed. "That those words be there added."
§ THE CHANCELLOR OF THE EXCHEQUERsaid, there was much in what the hon. Baronet had said. Although he could not accept the words now, he would undertake to consider them before Report.
§ SIR JOHN LUBBOCKasked leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ MR. R. BIDDULPH MARTINproposed to leave out the clause, on the ground that it introduced a totally novel feature into legislation. The whole gist of the clause was contained in the first lines— 1722
Whereas the enactments herein-after mentioned have been found inadequate to secure the charging and payment of income tax upon dividends payable out of the revenues of foreign and colonial states and dividends of foreign and colonial companies.That was to say, the Government considered they ought to employ a new set of collectors. He could not help thinking it would be very unwise to pass this clause. He was quite willing to believe, in fact he knew, that most bankers would give every facility to assist the Government as far as they could in the collection of the Income Tax; but any interference between the banker and his customers, in order to ascertain what transactions passed through a man's account, would be very inconvenient, and capable of mischief. Of course, it was well known that a great deal of Income Tax was evaded by people holding coupons which were not paid in this country, and he quite admitted it would save the Government much trouble if the bankers holding such coupons had to collect the tax. There was no indisposition on the part of the bankers to act as far as they could as agents for the collection of the tax; but to make them do so was quite a different thing. It was the thin edge of the wedge of interference between the banker and his customer. He held that Parliament had no right to impose a duty upon a set of men unless it was distinctly within their legitimate province to undertake that duty. To act as collector of Income Tax was not the legitimate duty of a banker, and therefore he moved the omission of the clause.
§ Amendment proposed, to leave out the Clause.—(Mr. R. Biddulph Martin.)
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ THE CHANCELLOR OF THE EXCHEQUERthought the Committee generally would sympathize with the Preamble of the clause—namely,
Whereas the enactments herein-after mentioned have been found inadequate to secure the charging and payment of income tax upon dividends payable out of the revenues of foreign and colonial states and dividends of foreign and colonial companies.There was no question, he believed, that large incomes were derived from these sources by persons in England—incomes 1723 which, escaped Income Tax, and which ought to pay it. The question was whether anything could be done to prevent that evasion. The present proposal had been embodied in the Bill of the right hon. Gentleman the Member for Pontefract (Mr. Childers), and he (the Chancellor of the Exchequer) had thought it right to introduce it into the present measure in view of the large evasion which existed at the present moment. In reply to an hon. Member opposite, he had promised that he would consider the question as to whether bills of exchange should be included in the clause, and he had also declared that the suggestion made by the hon. Baronet the Member for the University of London (Sir John Lubbock) was one that they should endeavour to carry out. These two points appeared to him to remove what were really the principal objections to the clause; for what had the hon. Gentleman opposite argued? He had argued that it was a terrible thing to interefere between the banker and his customers, and make the banker the collector of Income Tax. But it was not proposed to interfere between bankers and their customers one whit more than was necessary to insure the payment of Income Tax. The Government were willing to limit that interference, so that no wrong would be done; but the banker could not complain if he was made technically what he practically was at the present time-namely, the agent for his customers in this matter. As agent of his customers, the banker was asked to do that for which the State proposed to remunerate him—that was to say, to deduct the Income Tax from the coupons he paid. The requirement was no very formidable one—in fact, it was one which at the present moment was carried into effect by several houses of importance in the City. That being so, there could be no earthly reason why the system should not be carried out by all bankers, as proposed. He would be glad to take the decision of the Committee on the matter, and hoped they would agree to the proposal of the Bill.
§ MR. DIXON-HARTLANDregarded the question as one of principle, and objected to making a large portion of the community tax collectors against their will. He protested strongly against the principle, as an entirely new one in 1724 the country, and wished to point out to the Committee that a large quantity of coupons were collected by solicitors as well as by bankers. If this clause were passed, a large quantity of coupons would be collected by solicitors, and the tax would be evaded as it had been evaded before. Take only one case that would strikingly show the objectionable character of the principle. During the summer months very many Americans came over to this country and remained here for some time, on the way to and from the Continent. They did not bring money with them, but brought coupons of Stocks they had in America, and paid them to the bankers they were introduced to. Those people should not be made liable to the payment of Income Tax in this country; but under this clause every American who came over and cashed coupons with English bankers would have to have his Income Tax deducted. Such a charge would be by no means fair. If the principle were to be insisted on, the clause should not be limited to bankers, but solicitors and agents of all sorts should be introduced. There was no reason why bankers as a class should be picked out and, because they happened to have a large amount of money, be made collectors of taxes. No doubt, voluntarily, the bankers would help the Government as much as they could. They would have no objection to lending their assistance; but they decidedly objected to being made tax collectors by law, and to having a penalty inflicted upon them for neglecting to act in that capacity.
§ Question put.
§ The Committee divided:—Ayes 135; Noes 20: Majority 115.—(Div. List, No. 244.)
§ THE CHANCELLOR OF THE EXCHEQUERI beg to move the following new clause by way of alteration in the present licences for brewing: —
On and after the first day of October, one thousand eight hundred and eighty-five, the Duty of Excise payable under 'The Inland Revenue Act, 1880,' on a licence to be taken out by a brewer of beer (not being a brewer of beer for sale) shall be four shillings in lieu of six shillings.The Committee will remember that in introducing the Budget this year the right hon. Gentleman the Member for Pontefract (Mr. Childers) proposed to 1725 alter the present system of brewing licences. These licences, as they at present stand, are, I think, a duty of 6s. on houses over £15 valuation, which are also chargeable with Beer Duty; of 9s. on houses of between £15 and £i0 valuation; and 6s. on houses of below£10 valuation. The right hon. Gentleman proposed to allow private brewers to take out half-yearly licences at the rate of 4s. for the six months for houses under £10 valuation, and 6s. for houses between £10 and £15, so that there would have been five or six kinds of brewing licences. I am quite aware of the strong desire that exists to facilitate brewing by the labouring, classes in cottages and houses of small valuation. I believe it conduces to temperance as well as cheapness to allow these classes to provide themselves with beer. On the other hand, it is evident that nothing could be worse for purposes of administration than having so many different classes of licences varying in amount for so simple a matter as brewing. Therefore, the clause I propose is one which reduces the 6s. licences altogether to 4s. The Committee will desire to know what loss we anticipate to the Revenue. The loss will, I think, be very little more than was anticipated by the right hon. Gentleman the Member for Pontefract in the proposal he submitted to the House. A large number of these licences now taken out are taken out by persons living in houses of below £10 value. I find that under the existing regulations 73,000 are taken out by persons living in houses of under £10 value, and 8,222 by persons living in houses of above £15 value. There is no particular ground for exempting houses above that value from paying this new tax; but it must be remembered that with them the licence is little more than a registration fee, the payment they really make for brewing being the large duty they pay for the beer they brew. The main loss, therefore, will be the loss of 2s. on these 73,000 licences for houses of under £10 valuation; but I think there is good reason to anticipate that the 4s. licences will be taken out by a larger number of people than the 6s. licences have been; therefore, the Revenue will be recouped, to some extent, in that way; and the labourers who desire to brow will have a yearly licence for 4s. in place of a half-yearly 1726 licence for the same amount that the right hon. Gentleman opposite proposed. I do not think that, on the whole, any material loss to the Revenue will occur. I see that my hon. Friend behind me (Mr. Birkbeck) intends to propose a system of half-yearly licences; but it seems to me that the yearly licence is much more suited to the circumstances of the labourer. If he wants to brew at all, he will want to brew frequently all the year round. If he once gets into the habit of brewing, he will wish to take out a yearly licence. My proposal, I think, is an easier one to work than that of my Predecessor, and I think it will be found, practically, quite as great a boon.New Clause (Reduction of duty on licences to be taken out by certain brewers not being browsers for sale,)—(Mr. Chancellor of the Exchequer.)—brought up, and read the first time.
§ Motion made, and Question proposed, "That the Clause be now read a second time."
§ MR. BIRKBECKI would propose to move an Amendment to the clause relative to the question of half-yearly licences.
§ Question put, and agreed to.
§ MR. BIRKBECKsaid, he proposed to move an Amendment relative to the question of half-yearly licences. The principle of half-yearly licences, at his own and others' request, had been adopted by the late Chancellor of the Exchequer, and it had been very favourably received by the country. What the present Chancellor of the Exchequer had also done was certainly a move in the right direction; but the right hon. Gentleman had not gone far enough, and what he (Mr. Birkbeck) would, therefore, propose would be that he should arrange to grant half-yearly licences at 2s. 6d. The Amendment he had intended to move was on the Notice Paper, but he only now proposed to move a portion of it. It dealt with half-yearly licences from the 1st of April to the 30th of September and from the 1st of October to the 31st March. He was sure that in adopting this proposal the right hon. Gentleman the Chan- 1727 cellor of the Exchequer would find that the Exchequer would not only sustain no loss, but would experience a considerable increase. He (Mr. Birkbeck) knew from having spoken in many cases to agricultural labourers on the subject, and had been informed, that they had left off brewing at home since 1880, but that, if they could get six months' licences, they would be very glad to avail themselves of them. The right hon. Gentleman the Chancellor of the Exchequer, so far as the Eastern Counties were concerned, was wrong in saying that the agricultural labourers would desire to brew their own beer all the year round. They would only desire to do so from April to Michaelmas—during hay time and harvest. He would, therefore, move the following new clause:—
(1.) There shall he charged and paid on licences taken out for a half year by brewers of beer not being brewers of beer for sale the duties following (that is to say):—On a licence when taken out on and after the first day of April in any year to expire on the thirtieth day of September following, and on a licence when taken out on and after the first day of October in any year to expire on the thirty-first day of March following—
Duty. £ s. d. By any such brewer who is the occupier of a house of an annual value not exceeding ten pounds 0 2 6 (2.) Every such licence shall be in such form as the Commissioners of Inland Revenue shall direct.To charge 4s. for a licence to an agricultural labourer who, perhaps, only earned 11s. or 12 s. a-week wages, and most likely had a large family to keep upon it, would still be an injustice. The granting of these cheap brewing licences was, he thought, one way of preventing agricultural labourers from going to public-houses, because they would know when they brewed that their beer was made of malt and hops; whilst in the public-house they had no idea what their drink was composed of. He earnestly trusted that in time 1s. only would be charged for a six months' licence simply as a register.New Clause (Duties on half yearly licences to brewers other than brewers for sale)—(Mr. Birkbeck).
§ Motion made, and Question proposed, "That the Clause be there added."
1728§ THE CHANCELLOR OF THE EXCHEQUERI must say I think my hon. Friend has hardly given me sufficient credit for the reduction I propose to make, for it is really a considerable difference that licences which have been 6s. should be in future reduced to 4.s. If the hon. Member insists upon this Amendment and carries his point, the result will be a still further diminution of the Revenue from this source—the diminution which I have already proposed being in excess, I admit to no large extent, but still in excess, of that estimated by my Predecessor. I hope the Committee will sustain me in this matter and will not assent to a further reduction, which would be really going beyond what we can be reasonably expected to do.
§ Amendment, by leave, withdrawn.
§ MR. HICKSsaid, he was fully sensible of, and grateful to the right hon. Gentleman the Chancellor of the Exchequer for, the concession he had made to the agricultural labourer in proposing this change. Ho and others had, on behalf of the agricultural labourers, objected to the tax when it was put on in 1880, and had protested against it ever since. Therefore, he, for one, begged to return the right hon. Gentleman thanks for the concession he had made. He, however, would venture to ask the right hon. Gentleman still further to consider the Amendment of the hon. Gentleman the Member for North Norfolk (Mr. Birkbeck), and accept it in a modified form. He said a modified form, because he thought the Amendment should be so altered as to limit the licences to a specific half-year—namely, from the 1st of April to the 30th of September. He begged to put this before the right hon. Gentleman in the hope that he would be able to see his way to the adoption of the proposal, and thereby give great relief to the agricultural labourers, whom he knew, from his own experience, only wanted to brew during the summer half of the year.
§ MR. STORERsaid, he did not know whether or not the Amendment was seconded; but, for his own part, he did not agree with it. He thought the labouring classes were very much indebted to the right hon. Gentleman the Chancellor of the Exchequer for his proposal—not only the agricultural labourers, but labourers engaged in 1729 manufactures, and mechanics in all parts of the country who were very much disposed to brew at home if they had the opportunity of doing so; but who had hitherto been deprived of the possibility, owing partly to the heavy licence, which, in many cases, nearly equalled the old Malt Tax. If the question were to be viewed from a temperance point of view, no doubt the brewing licence was conducive to the cause of temperance, because both in the rural districts and in the towns it had the effect of keeping many men out of the public-house. If they granted a half-yearly licence, it was as much as to say that a man might go to the public house during one-half of the year, and not during the other half. He thought there was a strong objection to granting the licence for half a year.
§ MR. BIDDELLthought that a half-yearly licence would be for the benefit of the poorer section of the working classes who lived in cottages. If the right hon. Gentleman would accept the Amendment, he thought that he would be making a concession to that class which they deserved; but, at the same time, if the right hon. Gentleman did not see his way in the matter, he hoped his hon. Friend (Mr. Hicks) would not press the Amendment.
§ Amendment negatived.
§ Clause agreed to, and added to the Bill.
§ Schedule agreed to.
§ Bill reported; as amended, to be considered upon Monday next.