HC Deb 12 April 1889 vol 335 cc436-45
LORD HENRY BRUCE (Chippenham)

Mr. Speaker, Sir, I beg to call attention to the subject on which, if the forms of the House had permitted, I intended to submit the following Motion— That the laws regulating the levying and collecting the Inhabited House Duty as at present applied to banks, warehouses, institutions, professional, business, scholastic, lodging, private, tenement, and other houses, be amended, and, where necessary, repealed, in order to remedy the unjust and anomalous conditions relating thereto. Sir, I refer to this subject under a full sense of the old saying, that threatened, perhaps, I might say doomed, men live long. There can be no question of the antiquity of the Inhabited House Duty, though we may not quite say that it is "as old as the hills." It was first imposed in 1696, in the reign of William and Mary, and it was continued under various titles until 1834, when it was repealed. But I think I may safely say that previous to that time, in 1803 and in 1808, in the 43rd of George III., Schedule B, was passed, and under its provisions the Inhabited House Duty was re-imposed and is still levied with few exeptions. By the Act of 14 and 15 Victoria, cap. 36, private and professional houses, institutions, schools, banks, fire and life insurance offices, and lodging houses are charged 9d. in the £, but I would call attention to this fact, all places of business—hotels, restaurants, and shops of every description, public houses and market gardens—are charged 6d. in the £. It was on the 30th June, 1857, that the tax was re-imposed—the year in which the window light duty was repealed—and the right hon. Gentleman the Member for Mid Lothian then spoke of the impost as "irrational," reminding the House that it was only the old tax of 1834 reinstituted with all its injustices. The right hon. Gentleman on that occasion said that "He, for one, could not regard the house tax as resting on a secure foundation, seeing that it re-introduced the very objectionable features which had once before been the cause of the abolition of the tax." I observe that in the list of those who took part in the division at the time were the names of Lord Beaconsfield (then Mr. Disraeli), Mr. Gladstone, Mr. Sidney Herbert, Lord Henry Bentinck, and the Right Hon. J. C. Herries. Well, from time to time, certain modifications have been made, and it may be said that the question has been "well tinkered." Nearly 20 years ago, the present Chancellor of the Exchequer moved that the tax should be devoted to local purposes, and not, as at present, to Imperial purposes. In 1871 the inhabitated house tax yielded £1,200,000, whereas now its amount is £1,933,000. The late Lord Iddesleigh, when Chancellor of the Exchequer, received a deputation on this subject in 1874, again in 1876, and in 1877. On each occasion the deputation pointed out to him the anomalies experienced in the operation of the tax, and the grievances it carried, and Lord Iddesleigh expressed sympathy with them in their object. The present Chancellor of the Exchequer (Mr. Goschen) has done much the same thing. A deputation waited upon the right hon. Gentleman in May, 1887, and, in reply to their representations, he admitted— That the anomalous position of the house tax justified a great deal of the murmurs and complaints which are made against it. He looked forward to a large measure abolishing exemptions, and placing the whole tax on a more satisfactory footing, and should look for the support of all the hon. Members of the House of Commons present to aid him. As regards the question of caretakers, that subject was brought before Lord Iddesleigh (then Sir Stafford Northcote) in the years 1874, 1876, and 1877, and a Bill was brought in by him and passed dealing with this particular branch of the subject. The Act received the Royal Assent in 1878. The measure was brought in under the Customs and Inland Revenue Bill. It was, unfortunately. supplemented by an Act promoted by Somerset House, which had the effect, I doubt not, of stultifying the effect of Sir Stafford Northcote's Act. This particular Act I allude to defines a caretaker as a person obedient to the employer or occupier of the premises, and enacts that if an officer or porter in such employ is kept as a caretaker of the premises, such a use of him renders the premises liable to the duty. Therefore you must employ a person entirely separate to look after your premises. I cannot understand how it is that the house duty is charged upon persons who only employ one servant, who is not employed otherwise than domestically. Not only does it affect business and professional men, but it affects thousands of others. But, Sir, there is another old-standing grievance, that no distinction is made between occupiers who let apartments for acknowledged business purposes, and those who occupy premises for dwelling purposes only. The entire abolition of the inhabited house duty is not only a popular measure, but a just one. Furthermore, this is a tax on the working man. There are fifty times as many houses rated below £50 as there are houses rated above that amount. I will give the House an illustration. A landlord holds part of a street where the rents are from £36 to £40, the tenant paying the taxes. The property tax of 6d. falls on the richer man, but the house duty falls upon the poorer man, the tenant, who has to let part of his house in single rooms, and has to charge proportionately. I maintain that houses which are building or may be built, and existing houses which have been or may be converted into tenement dwellings for the working classes—whether such tenements be self-contained or not—should be free from in- habited house duty, if let as provided by Section 12 of the Working Classes Act, 1885:— In any contract made for letting for habitation by persons of the working classes a house or part of a house, there shall be implied a condition that the house is at the commencement of the holding in all respects reasonably fit for human habitation. All persons of the working classes naturally thought that they would get some benefit for this provision. It is unnecessary, however, to enlarge on the roaring trade which the jerry builders have done through the anomalies of the Act. But the working classes surely should have some compensation in respect of the clause which I have quoted, and what I maintain is, if the tax were abolished, that one penny in the pound on the income tax would be sufficient to meet the deficiency, and the income tax is very often 6d. in the £, whereas the inhabited house duty is 9d. in the £. Another grievance is that the duty is assessed on the gross rental; and yet another grievance is that the collectors of this tax are not paid by salaries instead of by poundage. M. Turgot, a celebrated French financier, once said that the "art of taxation was to pluck the goose without making it cry." But in the present case they make it cry because of the imposition of the tax, and interference with many of those personal liberties which Englishmen think they ought to possess. But it is never too late to mend; and let me hope that the Chancellor of the Exchequer will take a new departure, and, if the duty cannot be abolished, let an attempt be made to investigate its anomalies, and also let it be a local tax, and not devoted to Imperial purposes. No tax is more universally condemned, and yet none is more tenaciously stuck to by the Chancellor of the Exchequer. Many trades and professions have appealed against this duty — warehousemen, manufacturers, officers of Her Majesty's Services, solicitors, auctioneers, mining, professional, and practising engineers, and scores of brewers, wine merchants, and hotel keepers. Really, the tax inflicts injury on to many trades and professions; and it brings in so very little money, that I feel quite sure that any Chancellor of the Exchequer who would either modify it or abolish it altogether would earn the gratitude of the vast majority of this country.

*SIR GUYER HUNTER (Hackney, Central)

I rise with much pleasure to support the noble Lord in his protest against this duty. The inhabited house duty has been protested against by almost every class of Her Majesty's subjects. It falls particularly heavily on certain members of the medical profession, because, wherever a medical man has a surgery in connection with his house, he has to pay at the rate of 9d. in the £, instead of 6d. On May 3, 1887, a deputation waited on the Chancellor of the Exchequer, who admitted that the anomalous position of the house tax justified a great deal of the complaint made, and promised to put the tax on a more satisfactory footing. The protest against the inhabited house duty has been supported by 60 or 70 Members on both sides of the House, and I trust the Chancellor of the Exchequer will soon be able to fulfil the expectations he held out in May, 1887, to which I have just alluded.

MR. W. H. JAMES (Gateshead)

I do not want to enter into the varied topics which have been referred to in the speech delivered by the noble Lord, but there is one matter in connection with this tax with regard to which I introduced to the Chancellor of the Exchequer a deputation from the North of England. It is a matter which, no doubt, very largely affects the general domiciliary condition of the poor in those industrial communities which have sprung up somewhat rapidly in recent years. There is nothing of greater importance to the general welfare of the community than a tax—be it local or Imperial—which affects the dwellings of the people. Fully aware, as I am, of the very great difficulty arising in connection with this matter, still I hope the subject will not be overlooked, and that the Secretary to the Treasury will be able to give us some indication of the course likely to be taken by the Inland Revenue Authorities in regard to the specific point which, in November last, we had the honour of laying before the Treasury. There are two classes, speaking broadly, of property owners. There are a large number of old houses and dwellings which have been let out in rooms, and the condition of the inhabitants of which is, no doubt, very far from satisfactory. They have been designated as rookeries. Now I have no wish to claim any exemption whatever for these rookeries from the payment of this duty. These places are often in an insanitary condition; families often occupy one room, high rents are extracted, and it is the worst possible condition of rack renting that can be imagined. But there are other property owners who have devoted themselves to improving the condition of the poor, and who have erected houses which are let out in what are known as flats. The Inland Revenue Authorities have laid down a regulation that the inhabited house duty shall be imposed in all cases where there is not a separate entrance. It is very difficult to elucidate this matter fully without the aid of a plan, but as plans have been frequently submitted to the Treasury the Secretary to the Treasury will no doubt understand. In April or May, 1884, a debate was raised in this House by Mr. Lawrence in which the question was discussed of the position of private individuals and large societies owning industrial dwellings. At that time the First Lord of the Treasury, referring to smaller tenements, said that an invidious distinction existed. Since that time large companies who have erected these dwellings have been exempted from this duty in cases where the separate tenements were below £20 annual value. I think private individuals who have made exertions quite equal to, if not greater than, those put forward by the managers of these large societies, should not be put in a less favourable position than the public companies. I am quite aware of the difficulty that if some distinction were not drawn, old, insanitary houses, the "rookeries" which exist in London and some other great towns, would be exempted; but I cannot believe that the ingenuity of the Inland Revenue Authorities and the Government is unequal to the task of drawing some line of demarcation which would be adequate to the equity of the case. I should like to know from the Secretary to the Treasury whether he is able to hold out any hopes that this will be done. I trust that the Government will do their best to extend the exemption given to public companies to private individuals, who have done much to- wards improving the domiciliary condition of the poor.

*COLONEL LAURIE (Bath)

I should like to say a word in favour of the claims of lodging-house keepers in large watering places. They carry on a business perfectly well defined, and pay 9d. in the inhabited house duty. In regard to this duty the shopkeepers are placed on far more favourable terms. They pay 6d. only, and compete with the lodging house keepers in letting apartments. I am perfectly aware that the question of exempting lodging-house keepers is surrounded by great difficulties, but it was suggested by a deputation in which I took part last year that these difficulties might be obviated by a system of registration. I hope that the Secretary to the Treasury, when he replies, will allude to the somewhat unfair treatment of lodging-house keepers in these places.

*MR. KELLY (Camberwell, N.)

The inhabited house duty has been long universally condemned, and, if it be continued at all, this should only be done on a graduated scale. When in 1877 it was first imposed by Lord North, it was on a graduated scale; and when re-cast in 1778 by him, it was further graduated, the scale being 6d., 9d., and 1s., and it therefore bore less heavily on the poor than it now does. I am quite aware that a house under £20 annual value does not pay the tax at all, but representing, as I do, a Metropolitan constituency I know how impossible it is, either in London or in any large town, to put up a house of so low a value, so high is the price of land. I think exemption should be given to those who furnish excellent dwellings for the poor in the shape of industrial blocks. We know that, thanks to the advocacy of the First Lord of the Treasury, some five years ago, companies industrial blocks were (as had previously only been the case with the Peabody buildings before) exempted from the duty. Sir, in recent years there has been a great movement for providing the poor with dwellings in what are called tenement houses. A great many people have strong objections to living in industrial blocks; some of the rooms are very high up, while there are others where light can never penetrate, and which are consequently most unhealthy for sick persons and children. Therefore, in the interests of the poor, those who have built streets of houses in tenements have done, as I believe, a great work, and have accomplished not a little to solve the problem of the proper housing of the working classes. The difficulty as to these houses practically resolves itself into this—that they are not so constructed as to come within the Treasury Minute as to having only one door opening on to the passage. There is also the difficulty that they have front doors opening directly on to the street. I agree with the hon. Member for Gateshead that the last thing to be done is to encourage rookeries. I should deplore the grant of any concession which should in any way benefit owners of rookeries; but, if these rookeries are to be done away with, it is only by an extension of tenemented houses for the poorer classes. We do not want the concession to extend to any houses which have been altered for the habitation of the poor. The concession may be safeguarded by requiring from the landlord a declaration that the tenements were built for and are bona fide occupied by one family—and one family only. In conclusion I should like to say it seems to me that if this great question of the proper housing of the working classes in our great industrial centres is to be solved it can only be by making it worth people's while to build proper houses in tenements, and the greatest inducement that you can offer to those persons is to reduce their rates and taxes as far as possible.

*THE SECRETARY TO THE TREASURY (Mr. W. L. JACKSON,) Leeds

I hope my noble Friend will not be disappointed if I do not go at any length into the very important question which he has raised. I am bound to point out at the outset that the light and airy way in which my noble Friend spoke of £1,900,000 revenue will hardly commend itself to the Chancellor of the Exchequer. He appears to think it would be easy to raise this revenue by putting an extra penny on the income tax, but I am not sure that that would be more popular than the present tax. There is, of course, one very strong objection to the abolition of this tax. We have, in the first place, a very limited area of taxation, and I think any Chancellor of the Exchequer would hesitate a good deal in the present day before he entered upon any scheme which would tend to limit the area of taxation, and I do not deny for a moment—and the Chancellor of the Exchequer would, if he were here, he prepared to admit—that there are anomalies in connection with this tax which he would be very glad to remedy, and which, I hope, he will in some future year have the opportunity of remedying. The hon. Member for Gateshead, I know, has taken considerable interest in this question, but I am not quite sure that he would entirely agree with the hon. Member for Camberwell, who apparently is willing that any concession which may be made should not apply to any dwellings which have been altered, but should apply only to dwellings built for a special purpose. As far as I remember his previous application to the Treasury, it went rather in the direction of some concession to dwellings which have been altered, and which certainly would not come within the category advocated by the hon. Member for Camberwell. I hope that my noble Friend who has brought forward the Motion will be satisfied to obtain the expression of opinion which he has elicited. I can assure him that it has been several times under the consideration of my right hon. Friend the Chancellor of the Exchequer, and, although I am not in a position to say that he will immediately deal with it, I am quite sure that he will not lose sight of it, but if it is possible for him to remedy some of the anomalies which do exist, he will be glad indeed to have an opportunity of doing so. I cannot admit that this is a tax which presses very heavily on the poor, as the House is aware the tax is not assessable to any separate property of a less value than £20 a year. I think the House will cordially endorse the sentiment of my hon. Friend that it is not desirable to extend or give any facilities for the extension of buildings which are known as rookeries. There is a great difficulty in defining what is a lodging house, and I admit possibly that there may be something in the claim put forward by my hon. and gallant Friend the Member for Bath, on behalf of the very deserving class of lodging house keepers at watering places. But I fear that an exemption of lodging houses—without some very strict definition—would mean the exemption of every rookery in Drury Lane, because they would all come under the definition of lodging houses. I am quite SW e the House would not desire to encourage that kind of dwelling, nor would its sympathy be in the direction of granting additional facilities for them. However, I can promise my hon. Friends that my right hon. Friend the Chancellor of the Exchequer will give the matter careful consideration. It is not for me to anticipate what he will say on Monday, but I hope he will be able, if not now, at any rate on some future occasion to at least rectify some of the anomalies which exist.

Motion by leave withdraw.