[BILL 190.] COMMITTEE. (Hansard, 10 May 1886)

§ MR. BARTLEY (Islington, N.)
I beg to move, in page 3, line 32, to leave 684 out the words "poundage of three-halfpence," and insert the word "salary." The two Amendments which I have put upon the Paper on this subject, Sir, simply apply to the abolition of the system of payment by poundage to Income Tax collectors. I think there is a general sentiment throughout the country on this matter which is favourable to this proposal; but in order that there shall be no hardship on the existing collectors, I propose, in my second Amendment, that the salaries paid to them in the future shall be equal to the poundage which they received last year when the Income Tax was as high as it is ever likely to be in ordinary times. It is felt that those who have to make the assessments should not receive payment by results; and I therefore urge that instead of poundage the Government will consent to allow salaries to be paid equal to the poundage paid in the year ending the 6th of April, 1886. Then, in the last line, I wish to insert these words— Provided, That no person be required to pay on a larger sum than he actually receives as rent or otherwise. I wish to add this Proviso, because, as the Committee is no doubt aware, there are a great number of houses which are assessed at a figure far beyond their letting value. In some cases, warehouses and other premises which are only partially let are assessed, and the rates are demanded upon their total rating. I think there are very strong arguments indeed in favour of the Amendments which I have suggested; and, therefore, I beg to move the alterations to Clause 7 which are down in my name.

§ THE CHANCELLOR OF THE EXCHEQUER (Sir WILLIAM HARCOURT) (Derby)
The hon. Member's Amendments apply to two entirely different matters—one is the question of the payment of collectors by poundage, and the other refers to the basis on which the Income Tax should be levied. With regard to the question of poundage, certainly the Government are not enamoured of the system of paying collectors by poundage; but 685 I would point out that the late Chancellor of the Exchequer (Mr. Childers) on one occasion made a proposal by which the Income Tax was to be collected by Government officials, who should be paid by salaries; and what was the result? Well, the result of it was that an hon. Gentleman sitting on this side of the House (Mr. Slagg), who at that time represented Manchester, attacked that proposition on behalf of Manchester, and he was joined by the whole forces of the borough Members acting on behalf of the local collectors, and they succeeded in defeating the Government. Since that time a great number of the larger towns of England, including the largest town in England, then represented by Mr. Slagg, have adopted the system of paying the collectors by salary. In point of fact, in most of the principal places in the country the payment of the collectors is at present by salary; and, therefore, we have not thought it necessary to renew the proposal to make the system compulsory; because by experience of the system it is found to be approved of, and is practically coming into operation in a natural way. They are discovering, in all the principal districts, that it is an advantageous system, and it is being generally adopted. Therefore we do not think it is necessary to make it compulsory. At any rate, however, the proposal of the hon. Member would not work satisfactorily, because he proposes to retain the services of the local collectors, and pay them a salary. You might have a local officer and pay him a salary from the locality, or you can have a public officer paid by the State; but I do not see how the Government could keep the local collectors and pay them by salary. No doubt, the system of payment by salary is the better of the two, and I hope that it will soon become the universal system in England; and, although I am not at issue with the hon. Member as to the general principle, I cannot accept his proposal for the reasons which I have given. I do not think that we shall gain anything by trying to force this matter too much, and I trust, therefore, that the hon. Member will not press his Amendment. As to the second Amendment of the hon. Member, I am sorry to say that I cannot accept it, because it is altogether contrary to the principle on 686 which the Income Tax is assessed. The Income Tax is assessed on the value, not on the actual rental, of a building, which may or may not represent the true value. Let me give the Committee an instance. Suppose I have a house which is worth £200 a-year, and I have a friend who is not rich, and I say to him—"You shall have this house for £100." Well, it would obviously not be fair to lower the assessment to £100 a-year. I will give the Committee another illustration. Suppose a house was let on lease for £50 a-year, and in consequence of the increase of trade or of any other reason it became worth £100 a-year, then, surely, it is fair that the tax should be paid at the true annual value. If the true annual value is less than is actually being paid, then the taxpayer will get the benefit; but the only plan on which we can assess property is by finding out what is the true annual letting value of the house. We cannot adopt any other principle than the true annual value, and therefore I cannot accept the Proviso which the hon. Member proposes to move. I hope the hon. Member will think these explanations are satisfactory, and will not press his Amendment to a division.

§ MR. HICKMAN (Wolverhampton, W.)
I am glad to hear from the right hon. Gentleman the Chancellor of the Exchequer that he does not approve of the principle of poundage in regard to the collection of the Income Tax. I think, however, that the objection applies more to the assessors than to the collectors; because I take it that the collector is furnished with a statement showing the amount to be collected, and has no option whatever as to the amount which he is to collect. But it is very important indeed that the persons who have the assessment of the Income Tax under their control should do it with perfect impartiality; and it is felt to be a very great grievance indeed that such persons should be paid by poundage. I shall be glad to have an assurance from the right hon. Gentleman that such persons shall be paid by salary and not by poundage.

§ THE SECRETARY TO THE TREASURY (Mr. HENRY H. FOWLER) (Wolverhampton, E.)
I quite agree with the remarks of the hon. Member who has just sat down; but I would point out that the case which he puts is met by the remarks 687 which fell from my right hon. Friend the Chancellor of the Exchequer, but with this difference—that my right hon. Friend's observations apply with greater force in regard to assessors, because there are a great many more of them who are at the present time paid by poundage. I should like to explain to the Committee, in reference to poundage, that the collectors do not gain anything by the increase or decrease of the rate of Income Tax, because the poundage varies according to the way in which the Income Tax goes up or goes down. I will give the Committee an illustration in regard to last year. A little time ago, when the Income Tax was low, the poundage was 3½d.; whereas last year, in consequence of the increase which had taken place in the tax, the poundage was only 1¾d., so that the amount of poundage received by the collectors is practically uniform. The whole matter has been placed in the hands of the Inland Revenue Department to consider, and I hope the hon. Member will not think it necessary to press his Amendment.

§ MR. BRUNNER (Cheshire, Northwich)
hoped that the principle of levying Income Tax on the letting value of a house would be given up before long, and for this reason—that some houses had no letting value at all, by reason of their being too large and too expensive.

THE CHAIRMAN
The next Amendment is also in the name of the hon. Member for North Islington (Mr. Bartley); but as it is dependent upon the Amendment which has just been rejected it cannot be put. Does the hon. Member propose to move the third Amendment?

§ MR. BARTLEY
No, Sir; I do not propose to press it.