INCOME TAX.

HC Deb 23 May 1895 vol 34 cc153-70

"(1.) There shall he charged, levied, and paid for the year which began on the sixth day of April, one thousand eight hundred and ninety-five, in respect of all property profits and gains respectively described or comprised in the several Schedules A., B., C., D. and E. in the Income Tax Act, 1853, the following duties of income tax (that is to say):—For every twenty shillings of the annual value or amount of property profits and gains chargeable under the said Schedules A., C., D., or E., the duty of eightpence; and for every twenty shillings of the annual value of the occupation of lands, tenements, hereditaments and heritages chargeable under the said Schedule B., the duty of threepence. (2.) All such enactments relating to income tax as were in force on the fifth day of April, one thousand eight hundred and ninety-five, shall have full force and effect with respect to the duties of income tax hereby granted, so far as those enactments are consistent with this Act."

CAPTAIN BETHELL moved—in Sub-Section (1), after "threepence" to insert— Provided that for the purposes of exemption from or abatement of the said duties, the income arising from the occupation of such lands, tenements, hereditaments, or heritages, shall be one-third of the full annual value thereof. The question dealt with by the Amendment was that of equalising the payment as between the English and the Scotch farmers. It would be remembered that last year the Chancellor of the Exchequer undertook that these persons should be charged in the same way. Hitherto Scotch farmers had been charged Income Tax on one-third of their rental, whilst English farmers had been charged one-half. He was aware that the matter was very technical, and although he had placed this Amendment on the Paper he recognised that owing to the difficulties in arranging the question he could hardly expect the right hon. Gentleman to accept it. It would, however, give the Chancellor of the Exchequer an opportunity of explaining the matter. The question of one-eighth in the Income Tax seemed a little obscure. He had consulted the speech of Sir Robert Peel, and from that speech and also from the Finance Act he made out that the English farmers got this abatement of one-eighth, but he was not clear that the Scotch farmers did, and with that abatement of one-eighth to the English farmer the difference in payments made by them and the Scotch farmers up to last year was no doubt not so great as one had previously thought it. Still it was the fact now that although under the Finance Act of last year the Income Tax was apparently charged in the same way upon all farmers, yet when they came to the question of exemptions and abatements the English farmers had, in the demand note of the Inland Revenue, to declare their incomes at half their rental, and the Scotch farmers at only one-third of their rentals. Englishmen were thus placed at a considerable disadvantage as compared with Scotchmen, except, curiously enough, in one limited area of their income. In incomes ranging from about £550 to something under £700 he believed the English farmers got a few shillings advantage as compared with the Scotch farmers; but, on the other hand, where they were at a disadvantage that disadvantage was very considerable. The point as he had said was of a highly technical character, and he should he glad if the right hon. Gentleman would take the opportunity of giving them a full explanation on the subject. He begged formally to move the Amendment.

*THE CHANCELLOR OF THE EXCHEQUER

remarked that the hon. and gallant Gentlemen was perfectly right in saying this was a technical matter. It was extremely complicated and confusing, and he questioned whether any other Member except the hon. and gallant Member himself, who had gone into the point, would understand the explanation he was about to give. As the hon. Member was aware there was a difference in the actual figure that was charged up to last year. With an 8d. Income Tax, the charge would have been, under the old system, 4d. in the case of England and 3d. in the case of Scotland and Ireland. In the Bill of last year the Government equalised the matter in that respect, but made no alteration with regard to another peculiarity in the calculation, namely, that in the case of Scotland and Ireland the income is taken at one-third of the rent, and in the case of England at one-half. That would appear to create a disadvantage in the case of the English farmer by reason of his income being calculated at one-half instead of one-third of his rental. The hon. and gallant Gentleman had referred also to an advantage which England had in respect of the mysterious one-eighth. As far as he could learn it was founded upon this notion: (Of course, they were dealing here solely with the occupiers and not with the owners.) The one-eighth was given in England to the occupiers of tithe free land at a time when the tithe was collected in kind, and consequently fell on the occupier, and it was supposed that an allowance ought to be made to the occupier of the tithe free land. In Scotland and Ireland, as he understood it, the tithe rent-charge fell upon the owner, and there the occupier did not get the one-eighth. The hon. and gallant Gentleman had correctly said that this was a question only of the exemptions or abatements. If they took the one-eighth and set it against the difference between the one-half or one-third, they would find that they compensated one another so exactly up to the rental of £480 a year that there was no difference. If they took the three things into consideration—namely, the one-third in Scotland and Ireland, and the one-half in England, and the allowance of one-eighth in the case of England, the abatements would work out exactly the same in the three countries. When they got above a rental of £500, there would be a very small number of cases where there was, perhaps, a little inequality. In the case of farms of not more than £480 a year rent, there would practically be no Income Tax at all. There was no doubt the matter might be brought to an actual equality if they applied the one-third limit to all the three countries, and took away from England the one-eighth abatement which was now allowed. Probably that would be the most correct way of doing the thing. If that were thought a desirable way of dealing with it, he would see if it could be effected in the Finance Bill of another year by him, or by his successor. That would bring about a theoretical equality. The Amendment of the hon. and gallant Gentleman would never do, because it would give to England the same figure as to Ireland and Scotland, and yet not give that one-eighth to them. If they were to make the cases equal, then they would, if they fixed the calculation at one-third in the case of England, have to take away the one-eighth. He hoped he had satisfied the hon. and gallant Gentleman there was no practical injustice in the present state of things, but that on an average justice was done. At all events no great injustice arose from the apparent inequality, and the matter might, perhaps, hereafter be put on a more perfect footing.

CAPTAIN BETHELL

observed that he had looked into the matter more closely than he had done when he first raised the point. He had worked out the illustrations, and he had come to the conclusion that the difference was not very serious. That difference was mainly in the case of the higher rentals up to £700 and £800 a year, and although it was no consolation for a person who paid too much to know that others paid, perhaps, too little, he did not think, after the explanation that had been given, the matter was so important as to put the Chancellor of the Exchequer to the inconvenience of setting it right in the present Budget. He would, therefore, ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

MR. BARTLEY rose to move: Page 6, line 15, after "Act," add— Except that, in addition to the relief afforded to the joint incomes of married persons under £500 a year, under Section 34, Sub-section 2, of the Finance Act, 1894, similar relief shall he afforded when the wife's income is classified under and the Income Tax would be payable under any section of Schedules D and E of The Income Tax Act, 1842. He remarked that last year, in the alterations the Chancellor of the Exchequer made in the Finance Act, he included one concerning certain changes in the Income Tax, and not only made the remissions on small incomes higher than they had been before, but he also made what was thought to be a great concession at the time in the case of the joint incomes of husband and wife There were at that time several Amendments on the Paper on the subject, including one which he had placed there with the view of bringing the question before the House. The Chancellor of the Exchequer had also an Amendment which they all thought—as he believed did the right hon. Gentleman himself—would meet their entire wishes It met with his (Mr. Hartley's) wishes inasmuch as it made the exemptions in the case of such joint incomes entirely depend on the incomes being made by industry. The effect of the right hon. Gentleman's Amendment was that in the case of a husband and wife whose joint income was less than £500, that income was not be considered as one, but as two, and therefore each was to get an abatement up to £160 a year. The only criticism on the Amendment was that it did not include the income of a wife derived from investments, with which he, personally, did not agree, for he held the views that it would not be reasonable to extend the concession to a wife's income when derived from such a source. But the feeling of the House undoubtedly was that the joint income of the husband and wife, when the income of the wife was derived from any other source but investments, would be treated separately. The authorities of the Inland Revenue, however, took a different view. The words of the great Income Tax Act of 1842 were "incomes derived from any profession, trade, employment, or avocation." In the Act of last year the word "trade" was left out; and that, it seemed, made all the difference. Most people would have thought that "employment or avocation" included "trade." In ordinary conversation it certainly would, but, then, an Act of Parliament did not take an ordinary view of things. Anyway, the authorities of Somerset House held that "employment or avocation" did not include "trade"; and, therefore, they had this extraordinary anomaly, that while a wife who worked as a typist got the benefit of the concession, her sister who kept a bonnet-shop was excluded. A great deal might have been said for resisting the concession altogether, but when it was made in the case of "any profession, employment, or avocation," the case of "trade" ought not to be excluded from the benefit. As the public could hardly realise that "employment or avocation" did not include "trade," the difference had given rise to a good deal of ill-feeling and hardship. The Chancellor of the Exchequer would probably say that to include "trade" in the concession would make a great difference to the Revenue. He did not know anything about that; but on the abstract question of principle, if they allowed the concession to a married woman who earned her separate income as a typist, he could not see how they could deny it to another married woman who earned her separate income in a bonnet-shop. If it was a reasonable concession in the case of one married woman who earned her living, it was reasonable in all cases of married women who earned their livings, and the accident that one line of business was called a "trade," another "an employment," and another "an avocation," should not make a difference. He hoped the Chancellor of the Exchequer would agree that this was a reasonable proposal. The right hon. Gentleman spoke the previous night about the flourishing condition of the Revenue. If the concession did mean a slight loss, the virtue of the right hon. Gentleman in granting it would be rewarded by a continuance of the flourishing condition of the Revenue, and he would also have the blessings of those deserving people.

*THE CHANCELLOR OF THE EXCHEQUER

said, that when he made the concession referred to last year, he pointed out the danger which beset the question from the revenue point of view. Nobody knew better than the hon. Gentleman who moved the Amendment—for he had often called attention to the fact—the large amount of Revenue which was derived from lower incomes, and, therefore, anything that touched lower incomes seriously affected the fiscal result of the Income Tax. He was bound to acknowledge that the concession he made last year was due in a great degree to what he had learned from the hon. Member in regard to those joint incomes. But it was the fact that when they touched those incomes they touched one of the most productive strata of Revenue. That was not an altogether unsatisfactory circumstance. In the time of Peel the Income Tax yielded only £770,000 a year for every penny; today it yielded £2,000,000 for every penny, and that great growth of the Tax was mainly due to the fact that the non-paying Income Tax classes of society—men who earned less than £160 a year—had risen up into the Income Tax paying level, which, socially, was a very important and satisfactory circumstance. But the fact also showed how careful they must be, from the point of view of the Revenue, in dealing with matters affecting this class of the community. In the Income Tax Act of 1842 there was one category of rules which referred to all employments, and another category of rules which referred to trade; and when he made the concession last year he intentionally confined it to the first category—that of employments. If that were not so, in the case of a man who had little of his own but who married a woman with a separate income of £350 a year from Consols, that couple would have to pay less than a man who had an income of £500 a year as clerk and married a woman who had no separate income, and who, consequently would not be entitled to the concession. Therefore, they would be giving to the woman with a permanent income, and, therefore, under no necessity of saving for the children, a greater benefit than they would give to the man with a precarious income and the responsibilities of the family. It was quite obvious it could not be applied to the income of a woman derived from investment. [Mr. BARTLEY: "I never suggested that."] Then hon. Member then said, "Why not apply it to trade?" From the Inland Revenue point of view it was impossible to apply it to trade. The case of a schoolmistress, for instance, was that of pure earnings, the result of the mere exertion and occupation of the wife herself. But when they came to trade they entered upon different considerations, because trade must involve some degree of capital. The woman might be a lodging-house keeper, and yet the purchase of the house might be made by the man. Under the Act of 1842 vocation really meant something corresponding to what was called salary—salary as distinguished from the earnings of trade founded upon capital. That was really the distinction between the two cases. He did not think it would be according to the principle, on which they proceeded if they made an exemption in the case of husband and wife making £500 between them. The hon. Member anticipated he would speak of the large loss which would accrue. He hoped the Committee would not think he spoke lightly. On the contrary, he realised the responsibility of his position, and he made his statements upon the information of those whom he could thoroughly trust. He asserted that if they opened the door in respect to trade, evasion would be very easy, and the loss to the Revenue would be very great. He had asked for information, and was satisfied that the adoption of this Amendment would result in a loss of Income Tax which could not be valued at less than three quarters of a million sterling. [Mr. BARTLEY: "With the Income Tax at 8d. in the pound?"] Yes. [Mr. GERALD LODER: "And without the £500 limit?"] Under the £500 limit. He could not possibly say how many people would attempt to evade the tax, but the temptation would be very great. He could not accept the responsibility of opening the door to such a leakage in the tax. To open such a door would be to make too great a breach in the system of the Income Tax, and he must press on the Committee the absolute necessity of preserving the integrity of the framework of the Income Tax Act. They must take extreme care they did not undermine the foundations of that Act. Holding to views he had expressed, he could not recommend the acceptance of the Amendment.

MR. BARTLEY

thought the right hon. Gentleman must have made a mistake in estimating the loss at £750,000, because according to the return of Income Tax which was made upon his (Mr. Bartley's) Motion, the amount of Tax paid by persons with under £500 a year was only just over £1,000,000.

THE CHANCELLOR OF THE EXCHEQUER

asked the hon. Member to pardon him; he was addressing himself to the hon. Gentleman's Amendment. The argument he used was mainly with reference to trade, but he overlooked a most important point. The Amendment covered a great number of things which were not merely connected with trade. Perhaps the hon. Gentleman's attention had not been called to the fact that his Amendment said, "Similar relief shall be afforded when the wife's income is classified under, and the income-tax would be payable under, any section of Schedules D and E of the Income tax Act, 1842." Section D of the income-tax would cover all investments in railways. All investments in foreign securities, in water companies, in industrial associations, would come within the Amendment, because the wife's income would be classified under Schedule D. The Amendment would, therefore, produce a result the hon. Gentleman did not desire. The Amendment would not give the woman relief if her money were in land, Consols, or Russian bonds; but it would give her relief if her money were in London and North-Western debentures, French Rentes, and Prussian bonds. The hon. Member would see the adoption of his Amendment would produce most extraordinary anomalies. The Amendment related very largely to investments of a most miscellaneous character, and its effect would be most unequal in regard to those investments. When he gave that figure, it included all those securities to which he had referred.

MR. BARTLEY

said, that if his clause had the interpretation ascribed to it by the right hon. Gentleman, it was imperfectly drafted. The object as set out in the preamble of his Bill, was that all married women who earned their incomes should be entitled to the allowance. The remarks of the right hon. Gentleman strengthened his view. The right hon. Gentleman said that if the extension to all earned incomes were made, the cost to the Exchequer would be three-quarters of a million. That could not be so, because the whole amount received from earned married women's incomes under Schedule D, in 1893, only a little exceeded a million. He wished all trade incomes of married women to be included. Since the 1893 figures were published the right hon. Gentleman had made fresh exemptions, so that of course, the cost of the concession for which he asked would be proportionately reduced. He did not think, however, that the cost was very important. He pressed the proposal as being right and just.

MR. GERALD LODER (Brighton)

said, that lie had put down an Amendment covering still wider ground than his hon. Friend's; for he proposed that the incomes of married women from whatever source, should be exempt from Income Tax if below the requisite amount. The remarks of the Chancellor of the Exchequer justified him in having put down that Amendment, and made him regret that he had not moved it. It would be much simpler and more just to act on the principle of that Amendment. As to what it would cost the taxpayer, the Chancellor of the Exchequer last year, in speaking of the Amendment of the hon. and learned Member for Deptford, which was wider even than the present proposal, or that which he had put on the paper, because it applied to all married women's income, whether the joint income of husband and wife amounted to £500 or not—in speaking to that Amendment the right hon. Gentleman said— The Amendment did not limit these concessions to people of small income. The Inland Revenue had made calculations, and they informed him that the concessions proposed in the Amendment would involve a loss of at leas £500,000, a year, and more probably of £750,000. If that were the case, it was impossible that the concession, if extended only to incomes below £500, should cost £500,000. That was not very important. But last year, in moving the exemption on the Report Stage, the Chancellor of the Exchequer made it perfectly clear that it was only to apply to incomes from "professions, employment, and vocation." But in discussion on the Committee Stage of the Finance Bill last year, the Chancellor of the Exchequer did not make that clear, at least to the Opposition. In response to an appeal from his supporters the right hon. Gentleman promised on that occasion to consider the subject and move an Amendment on Report; and it was distinctly understood by the Opposition that exemption was to apply to incomes from trade as well as to those from "employment, profession, or vocation." Why should trade incomes enjoy the privileges of incomes derived from a profession or vocation, seeing that they were precarious and fluctuating? The instances given by the Chancellor of the Exchequer had always referred to people already married. Take the case of a widow who had a small tobacconist shop or a lodging-house. If she married again, her income was clubbed together with that of her husband for Income Tax purposes. But in the case of her sister, who was, say, the manageress of a hotel or of a mercantile concern, the incomes of man and wife would not be clubbed together, and the income of the wife would come under the exemption. This was extremely unfair, as well as illogical. If a married woman's income was her own, it ought to be hers for all purposes, whether advantageous or disadvantageous to herself. He hoped that his hon. Friend would divide on the question, as there were many people who felt strongly about it. He knew the difficulty which the Chancellor of the Exchequer might have in making up the deficit; but private Members could not move any Amendment except by way of reduction. It was not for them to point out how the deficit could be met, but only to voice the grievances which were felt by those whom they represented.

MR. HANBURY

asked whether the women who worked in mills would be regarded as within the definition "employment or vocation."

*THE CHANCELLOR OF THE EXCHEQUER

said, that he would inquire. [The right hon. Gentleman then walked down the floor of the House and held a brief consultation with one of the occupants of the seats under the Peers' Gallery devoted to the use of Strangers.]

MR. HANBURY

said, that he was astonished that neither the Chancellor of the Exchequer nor the Secretary to the Treasury—the latter being the representative of a Lancashire manufacturing town—could answer such an important question without reference to the Inland Revenue officials. Even the Attorney General did not know what to say.

*THE CHANCELLOR OF THE EXCHEQUER,

who meanwhile had resumed his seat: I do not administer personally the details of the Inland Revenue. I do not pretend to know them, and it is impossible that I should. But I speak with the authority of the men who do know, and when I am asked a question which does not come within my personal cognisance I refer to them. I was asked whether in particular instances the allowance was made—a thing I could not know and could have no means of knowing. But I have inquired, and my answer to the question now is that, in respect of the persons referred to by the hon. Member, the allowance is made under the head of "Employment." That is probably a more satisfactory answer to his question than I could otherwise have given.

MR. BARTLEY

said, that the action of the Chancellor of the Exchequer showed that this was a very difficult question. If the right hon. Gentleman could not say at once whether a mill hand came within the definition of "employment or vocation," surely the public had cause to complain? That the should have to go to the Inland Revenue Office to find out whether they were within the exemption or not was a great grievance. It would not matter, of course, if it did not affect them so seriously financially. On the Report Stage some words ought to be brought up which would make the question quits clear, so that "he that runs may read." A smaller allowance to all married women who earned their incomes would be better than a larger allowance to a few.

*THE CHANCELLOR OF THE EXCHEQUER

If I can make the words clearer I shall be extremely glad to see what can be done. But the hon. Gentle man, with his long experience of Customs and Inland Revenue Bills, surely never expects them to be in a form where "he that runs may read.'' I have found them very far from that. If there is a subject which can exercise the human intellect more than high analytical mathematics it is the Bills of the Inland Revenue. They are like the secrets of an ancient order, which were kept by those who had to administer them.

MR. T. GIBSON BOWLES (King's Lynn)

said, he rose in order to come to the rescue of the Chancellor of the Exchequer. He sympathised with the Chancellor of the Exchequer when he said that the secure method of levying taxation was to levy a considerable portion of it at the larger end of the pyramid and not at the smaller. He did not see, however, how a mill hand could come under the designation of being employed externally to trade. His view was that none of those exemptions should exist, and if the exemption was not to exist in the case of trade, it should be taken away in the other cases as well. Therefore, when the Chancellor of the Exchequer promised to reconsider this point, he thought the right hon. Gentleman was entering upon a dangerous course. It was right in his view that two persons earning £500 between them should pay towards the expenses of the State.

SIR RICHARD TEMPLE

thought that this question would be made painfully clear to tens of thousands of working men and women all over the country. If certain allowances were made in the incomes of wives who earned their living by typewriting, literature and other means, why should not that exemption be extended to the earnings of women engaged in trade or business? In each case the money was earned by ingenuity, skill, eyes and brains. It would be impossible to persuade women that one class of earnings should be favoured by an allowance arid not the other. If the limitation suggested was adopted, it was clear that the loss to the revenue would be very slight.

MR. G. J. GOSCHEN

thought that the Chancellor of the Exchequer would expect him to aid him with what might be called his "professional co-operation." He had still ringing in his ears the denunciations of the Chancellor of the Exchequer with regard to the exemptions of last year. He foresaw the dangerous course on which the right hon. Gentleman was embarking then. He gave the right hon. Gentleman not only his own views, but the views of the right hon. Member for Midlothian (Mr. Gladstone) with regard to exemptions, and he showed the Chancellor of the Exchequer the danger and the injustice involved in many of the proposed exemptions. He agreed with the Chancellor of the Exchequer that it was a matter of the greatest importance when they came to touch that portion of the income tax which lay below incomes of £500. It had not been realised by the country to what extent the financial strength of the income tax rested on the lower strata of incomes as well as upon the higher; and this was a matter which must not be lost sight of. The anomalies, injustices and difficulties of those exemptions had been illustrated by what the Chancellor of the Exchequer and others had said. He thought that in this case the argument was against the Chancellor of the Exchequer, for a great deal of the income from trade was less certain and more exposed to every kind of fluctuation than the income enjoyed by the receiver of dividends; and therefore, from the just point of view, trade ought to be exempted. On the other hand, the argument was in the right hon. Gentleman's favour, inasmuch as every kind of evasion might be practised. But they could not argue the question entirely on the principle of justice; they must argue it on the ground of expediency and general policy. If therefore the right hon. Gentleman the Chancellor of the Exchequer were to embark on a policy such as had been indicated by some of his hon. Friends, and admitted this class of exemption, they would be driven from point to point until there would be a danger of seeing the whole revenue from the tax whittled away. On that ground he should vote against the Amendment of his hon Friend.

The Committee divided:—Ayes, 56; Noes, 144.—(Division List, No. 101.)

MR. TOMLINSON

said that, though he was in the Lobby, he had been unable to record his vote. He intended to vote for the Amendment.

Clause agreed to.

MR. HANBURY,

in rising to move the following new clause regarding the assessment of Land Tax— The cost of the assessment and collection of Land Tax shall be defrayed out of the net quota or sum from time to time remaining in charge against any parish tithing or place in respect of such tax, and the amount, if any, collected over and beyond such net quota or sum shall be used for the purpose of redemption of the Land Tax chargeable upon such parish tithing or place in accordance with the provisions of the Act of the 43rd and 44th years of Victoria, chapter 19, —explained that his object was to remove a great injustice adding largely to the incidence of the Land Tax in small country parishes. The Land Tax, as they knew, was a fixed quota upon every parish, or was supposed to be so. It varied a little from year to year in consequence of re-assessments, and, therefore, it was not possible for the assessor to always collect the exact amount of the quota. But then, in such cases, the ordinary provision of the law was, that the surplus of the tax so raised should be paid into the Bank of England, and be held in the names of the Commissioners of Inland Revenue, and there be allowed to accumulate until a sufficient amount had accumulated to redeem the tax. If that were carried out it would be fair, and the parishes would have nothing to complain of, because, although more might be raised than the actual quota in any given year, the money would accumulate for the benefit of the parish and the redemption of the quota. So far the law was just and fair, and it was only when they came to deal with other provisions disposing of the surplus Land Tax that injustice arose. It applied more especially to the poorer parishes, because, for instance, in places where the Land Tax was only £50 or £60, it was a great hardship that it should be increased by 9 and 10 per cent., and sometimes even by 20 per cent. There were two provisions in the Act called the Tax Management Act 1888–89, dealing with the payment of the collector, who was often also the assessor, out of the Land Tax. One of those provisions was swept away in 1891, and the collector, who was often the assessor, was removed, but the other still remained, and it was to the injustice of that particular proviso that he wished to call the attention of the Chancellor of the Exchequer. It was to the effect that the Board of Inland Revenue could give their permission to the Commissioners of the Land Tax to pay to the two assessors any amount of the surplus tax that they might assess. The amount was an uncertain sum; but it was evident that if the assessors were to be paid out of the surplus Land Tax, and to receive, as they almost invariably did receive, with the assent of the Inland Revenue, the whole of that surplus Land Tax, it was clearly to the interest of the assessors to increase that tax in a parish as much as they could. He, therefore, had these two objections to the existing mode of paying the assessors—in the first place, that the amount paid was an uncertain sum; and secondly, that the assessor had every temptation put in his way to levy an additional amount of taxation, because he received the whole of the surplus. That was a bad system, and it had also the effect on many small parishes that rather than pay this surplus amount to the assessors they practically had no re-assessment at all. They went on year after year without making any re-assessment. An hon. Member for Bristol had told him that he knew of several parishes where there had been no re-assessments for many years for this reason, and that the Land Tax in those parishes had practically remained the same every year. There was this further point. He had also been informed that the men referred to collected both the Income Tax and the Land Tax, and also the assessment in many cases, and that the payment made to them for collectors of the Income and Land Taxes was so inadequate that unless they filled at the same time the office of assessor they would not get sufficient remuneration for their work, He proposed to meet the difficulty by a very simple remedy, which he thought was a fair one, and which he did not think would affect the Budget to any considerable extent. It was this—that to avoid placing temptation in the way of assessors, and to avoid raising these large amounts of surplus Land Tax, which was very hard on the country parishes arid on the land, he proposed to pay the assessor a fixed sum out of the ordinary Land Tax, and so avoid any surplus being raised at all.

THE CHANCELLOR OF THE EXCHEQUER

agreed that the present mode of remunerating the assessors was not a good one, and ought to be amended. The hon. Member was quite right in correcting his Amendment or his clause by omitting the word "collection,'' because the collection was already provided for under the Inland Revenue Vote, and did not come out of the Land Tax at all. Therefore no complaint arose under the head of collection. There was a sum of £18,000 now paid to clerks and collectors, and it came out of the Vote. Now, as to the assessment, the amount of the surplus Land Tax raised was not so large as the hon. Member supposed, for the aim unit going to the assessors all over the country did not much exceed 1 per cent. What he was informed was this: if the net quota of a parish were £200, the Commissioners might make an assessment of £205, allowing £5 as remuneration to the assessor; if the amount fell short of the assessment to £202 or £203, the assessor took the £2 or £3. He did not think the particular form of the Amendment the best way of dealing with a bad system, but perhaps the hon. Member would be satisfied with the assurance given, not on the part of the Chancellor of the Exchequer, but the Inland Revenue, and the matter would be dealt with next year in the Inland Revenue Bill. There were other reasons why he could not accept the particular form of Amendment. The matter was one really almost de minimis, but if the hon. Member would take his assurance, he on his part would take care to have it considered.

MR. HANBURY

said, it was not a case of de minimis in relation to the small parishes. In two parishes with which he was intimately acquainted, where the quota was about £65 each, £5 or £6 of surplus Land Tax had been levied for some years. The grievance did not apply to the large parishes. Nor did he quite understand what the Chancellor of the Exchequer proposed to do with the assessment during next year; for instance, before it could be dealt with in the Budget Bill.

THE CHANCELLOR OF THE EXCHEQUER

My suggestion was, that it must be endured for this and next year. I do not understand on what principle it is that people raise, in the parishes of which the hon. Member speaks, this extravagant amount of surplus Land Tax; but, of course, his local knowledge is of more value than my personal opinion on the matter. What I suggest is, that he will allow the matter to stand over for this year, on the understanding that the matter will be dealt with in the next Inland Revenue Bill.

MR. HANBURY

said, the practice was adopted, and could only be adopted, by consent of the Inland Revenue Department, and therefore he submitted the grievance could be remedied by an Act of Administration.

THE CHANCELLOR OF THE EXCHEQUER

said, the question whether it could be done by an Act of Administration was one he would inquire into, but for the future the matter would be put on a proper basis.

MR. EVERETT (Suffolk, Woodbridge)

hoped the right hon Gentleman would remember, in devising a new system, that the collectors of Land Tax were not overpaid at present.

Amendment, by leave, withdrawn.

Progress reported.