HC Deb 04 August 1896 vol 43 cc1508-13

(1.) During the continuance of this Act, the Commissioners of Inland Revenue in such manner, by such payments, and under such regulations as the Treasury may direct, shall pay to the Local Taxation (Scotland) Account, out of the proceeds of the estate duty derived in Scotland from personal property, such sums as may be ascertained by the Treasury to be equal to eleven-eightieth parts of the sums payable under the Agricultural Rates Act, 1896, to the Local Taxation Account therein mentioned.

(2.) The first payment under this section shall be made during the six months ending on the thirty-first day of March next after the passing of this Act, so as to make up a half-yearly payment to meet the payments out of the Local Taxation (Scotland) Account which may be made during the six ensuing months.

MR. EDMUND ROBERTSON moved in Sub-section (1) to leave out the words "in such manner by such payments, and."


said those were the usual words and they could certainly do no harm.

Amendment negatived.


, on the provision specifying that the Commissioners of Inland Revenue should pay to the local taxation (Scotland) account, "out of proceeds of the Estate Duty derived in Scotland from personal property," such sums as equalled eleven-eightieths of the sums payable under the Agricultural Rates Act, 1896, moved an Amendment to omit the words referring to the Estate Duty. For what possible reason did they assign the proceeds of the Estate Duty as the fund out of which these payments were to be made? This matter was discussed on the Estate Rating Bill, and the Chancellor of the Exchequer appeared to have rather scored a victory on that occasion over the Leader of the Opposition by referring him to certain words of the same sort which that right hon. Gentleman had himself used in an earlier Act. All those Bills had their roots in the remarkable speech of the Chancellor of the Exchequer in introducing his Budget. The right hon. Gentleman said in that speech that he made the relief of agriculture a first charge, not upon the Estate Duty, but upon the realised surplus. The retention of the words in reference to the Estate Duty was, therefore, a Parliamentary fiction. Indeed, he might use a stronger phrase, for it was a fiction with a purpose, the purpose being to make the public believe that the money in aid of agricultural land in Scotland came out of a particular fund instead of coming out of the Imperial Revenue. As a matter affecting the honour and honesty of Parliament he moved the omission of the words. [Ministerial laughter.]


said the money was not provided by Estimates, nor out of the Consolidated Fund, but by the interception of taxes, and it was therefore necessary that the taxes intercepted should be named in the Bill.


supported the Amendment. To keep the words in the Bill was merely to maintain a misleading fiction which the Committee would do well to eliminate.

SIR JOHN BRUNNER (Cheshire, Northwich)

said that the Lord Advocate used the phrase "the tax was intercepted." What was the meaning of the word intercepted? Were the taxes not paid into the Treasury; and if they were paid in and then paid out, how were they intercepted?


supported the Amendment.

Question put.

The Committee divided:—Ayes, 140; Noes, 55.—(Division List, No. 380.)

MR. HEDDERWICK moved to leave cut the words "equal to eleven-eightieth parts of the sums payable," and to insert the words "equal in the aggregate to the whole of the annual value," etc. The principle of eleven-eightieths for Scotland ought not to be accepted without a protest. The proportion was derived from the Probate Duty, and had nothing to do with the rateable value of the agricultural land. Moreover, recent calculation had shown that the proportion was not fair. The equivalent Scotch grant in relief of agricultural rates was to the extent of five-sixteenths of the rates; but in England it was to the extent of one-half. That was unjust. The true basis on which the relief ought to be calculated was the rateable value of the land which was being dealt with. The effect of the Amendment, if carried, would, he calculated, raise Scotland's total grant from £214,000 to £308,000.


said that the Government could not possibly accept the Amendment, which was unworkable on the face of it. He had a glimmer of what the hon. Member intended to do; but it was certain that the Amendment did not do it. Certainly the proportion of eleven-eightieths had nothing to do with agricultural rating; but it was Scotland's proportion of grants from the Imperial funds.


said he had taken the words objected to by the Lord Advocate from the 1st and 2nd Subsections of the 1st Clause.


The hon. Member is confusing valuation and rating.


said he was not at all surprised that his hon. Friend should have moved this Amendment, whether it was open to the technical objections the Lord Advocate had taken to it or not. Those Members who had been in the House for some weary years had become accustomed to hear the proportion of eleven-eightieths talked about so long that they had come to regard it as the proper and natural proportion for Scotland, but coming fresh from the outside, with none of these predispositions, his hon. Friend was not struck with the fairness of it. The truth was, the whole of these proceedings arose from the ludicrous practice observed for some half-a-dozen years past of making the one country follow the other in respect of these doles. What occurred was this. Some necessity arose or was supposed to have arisen in England, and it was considered that England must have a certain sum for a certain purpose, and then it was considered necessary that Scotland should have a similar sum, although the purpose might not exist in Scotland at all, although the people of Scotland might not want the money for any such purpose, and it was sometimes devoted to a similar purpose in Scotland, sometimes to another. For convenience, this proportion of eleven-eightieths had been designed by some ingenious financial authority. In this case, what had happened was this. Money was to be given to England in relief of agriculture, and therefore it was assumed that for a like purpose, a similar sum must be given to Scotland, and one would naturally think that the same degree of relief would be given, and this his hon. Friend, in the innocence of his heart, supposed. Not at all, it was to be given for the same purpose, but not to the same extent, because of this old factor of eleven-eightieths. He could slot imagine there could be anything to throw a more glaring light on the ridiculous failure of the whole of this proceeding. If there was the necessity for the same relief in Scotland as in England, why should not Scotland get the same degree of relief? No; Scotland was to get eleven-eightieths as her proportion. Now, this was such a huge matter that one did not see clearly what line to take about it. He possessed some of the qualities of his countrymen, and one thing he discerned was this, that by taking the rule his hon. Friend recommended, they would obtain more, but on another occasion, for they had not done with these doles, there would be more when the Government wanted to acquire popularity in other directions——


said the Education Bill of this year was a case in point.


said the Education Bill was gone. De mortuis nihil nisi bonum. Let it be dismissed with a blessing. But on another occasion this might tell against instead of for Scotland, and he thought they had better stand by the eleven-eightieths though it told against Scotland in this case. Without knowing more than he now knew, he was not quite sure whether he could support his hon. Friend's proposal.


said that both Scotland and Ireland had now become alive to the unjustness of the proportions that had been fixed, and he thought they would be able to prevent the robbery going any further. This kind of finance first made its appearance with the passing of the Local Government Act. The Chancellor of the Exchequer proposed to finance the new county authorities by giving them one-half the Probate Duty, and one-half the Licence Duty, and the proportion of the Probate Duty contributed by each country was taken as the basis of distribution. The first equivalent grant given to Scotland was as compensation for the money granted from the Imperial Exchequer to pay school fees in England, and then it was proposed to give Scotland eleven-eightieths because it was her proportion of the Probate Duty. Scotland and Ireland paid a much larger proportion of Customs and Excise Duties, and the result was that in the first year Scotland lost £15,000 and Ireland £70,000; while the total sums of which each country had been defrauded in consequence of the adoption of eleven-eightieths and nine-eightieths had been, Scotland £40,000 and Ireland £130,000. It was now proposed still further to stereotype this proportion of eleven-eightieths in this new grant. There were, fortunately, returns giving the figures for England, Scotland, and Ireland, so that they knew exactly how much was collected in each country. In 1894, £65,160,000 was collected in Customs and Excise in England, and £11,414,000 in Scotland. The year before the figures were £56,306,000 for England, and £10,022,000 for Scotland. These figures showed that Scotland was paying not eleven-eightieths, but in some years thirteen-eightieths and twelve-eightieths on the average. The Treasury said:— Yes, but although that money was collected in Scotland, a portion of it was for whiskey some of which was drunk in England. He was very much amused at the Returns obtained from the Treasury. They were Returns for four or five years, and every Return published by the Treasury showed their utter incompetence. Each Return started with an apology for some error in the previous one. A Committee had been appointed to inquire into the financial arrangements that existed as between England and Ireland, but no such Committee had been appointed to inquire into the financial arrangements that existed as between England and Scotland. The consequence was that Scotland was continued to be robbed of a large share of revenue.


said that the object of the Amendment was to insure that Scotland should be placed upon a fail-footing with England as regarded taxation. There was no comparison between the amount of agriculture in Ireland and in Scotland, and yet Ireland, which had a larger agricultural area and presumably more distress, had only nine-eightieths, whereas Scotland had eleven-eightieths. He had always condemned the breaking up of the United Kingdom into nationalities, and the first step towards the division of the Imperial purse was taken by the Unionist Government. This Amendment proposed to treat Scotland as an integral part of the United Kingdom, and to give them the same relief as was given to England. The Scotch people were never consulted as to what the proportion should be, and he thought the Government should tell them whether they were prepared to appoint a Committee to ascertain how far the proportion of eleven-eightieths was equitable.


asked leave to withdraw his Amendment in favour of that of the hon. Member for Caithness.

Amendment, by leave, withdrawn.

DR. CLARK moved to omit the words "eleven-eightieths," and to insert instead thereof the words "twelve-eightieths" as the part to be payable under the Agricultural Rates Rill 1896.

Question put, "That the word 'eleven' stand part of the clause."

The Committee divided:—Ayes, 129; Noes, 54.—(Division List, No. 381.)

Clause agreed to.

Clause 4,—

Committee report Progress; to sit again To-morrow.