§ (1.) The amount assessed in any year in any land tax parish on account of the unredeemed quota of land tax charged against that parish shall not after the passing of this Act exceed the amount which would be produced by a rate of one shilling in the pound on the annual value of the land in the parish subject to land tax, and any excess above the said amount shall be remitted for that year.
§ (2.) Sections one hundred and eighty and one hundred and eighty-one of the Land Tax Act, 1802, shall be construed as if the rate of one shilling in the pound on the annual value of the land were substituted for the rate of four shillings therein mentioned.
§ *MR. EDWARD STRACHEY (Somerset, S.) moved to omit Subsection (1). His object, he said, was to raise the whole question of the proposed remission of the Land Tax where it was above 1s. in the pound. The tax was not applied equally throughout the length and breadth of the country, and sometimes parishes were actually split up, and a different quota raised in one part to what was raised in another.
§ *THE CHANCELLOR OF THE EXCHEQUER
Any difference as between one part of a parish and another is illegal.
§ *THE CHANCELLOR OF THE EXCHEQUER
said that for Land Tax purposes each tithing, if it had a separate quota, was a separate parish.
§ *MR. STRACHEY
maintained that he was right in saying that the Land Tax was levied at different rates in the same parish. The next question was in regard to the redeemed and unredeemed Land Tax. The Government proposed to deal only with the unredeemed Land Tax. He could not see why if this gift to the landlords was made it should not be given to those who had redeemed the tax. He had always understood that the Crown did not absolutely sell the tax, but that the Consols in respect of the tax were earmarked in the name of the owner, the object being to leave the Government open at any time to reconsider the matter. It seemed to him that there was a great deal of unfairness in the proposal of the Government. Take the case of a parish where the quota was £100, and say that half that quota had been redeemed, and that it was necessary for the remaining quota to raise 2s. in the pound. Under the proposal of the Government the man who had not redeemed his Land Tax would receive 1s. in the pound, and his Land Tax contribution would be greatly reduced, while the man who had redeemed would get no benefit. There was no difficulty in tracing the owner of the redeemed Land Tax. Every year when the Land Tax valuation was made the redeemed Land Tax would have to be taken into consideration, so that there would be no difficulty in dealing with the matter from that point of view. He could not see any strong arguments in favour of the Treasury giving up all the Land Tax above the amount of 1s. in the pound. It could not be on the ground that it was a heavy or oppressive tax, because the Chancellor of the Exchequer had told them that the amount that would be remitted would not be more than £100,000 altogether, if it amounted to so much. Of course, it might be argued that it was a burden which pressed unfairly on a certain number of landowners, and was an hereditary burden which ought to be relieved. While he had no sympathy with those persons who said that hereditary burdens ought not to be taken off, or with those people 1130 who said that hereditary exceptions ought not to be interfered with. Yet this Land Tax could not be called an hereditary burden in any sense, as it was not a tax really, but a rent charge.
*THE CHAIRMAN OF WAYS AND MEANS
I gather from the hon. Member's remarks that he takes exception to the whole clause, and not Sub-section (1) only. Of course, if the hon. Member was successful in striking out Sub-section (1), Sub-section (2) could not stand alone. If that is so, obviously the remarks of the hon. Member ought to be made when I put the question that Clause 25 stand part of the Bill. That would be the proper place to raise his objection to the whole clause.
§ *THE CHANCELLOR OF THE EXCHEQUER
No, Sir; I rise to order. It is quite impossible that Sub-section (2) should be enacted if Sub-section (1) were struck out, because Sub-section (2) merely applied existing provisions of the law in the event of Sub-section (1) being made the law.
§ *MR. STRACHEY
On the point of order, I submit, if the Chancellor of the Exchequer's argument was right, it would apply to every sub-section in any clause, and it might be always argued. I wish to omit the remission of any amount of Land Tax over 1s. in the pound. I do not wish to strike out the whole of the Land Tax, but the actual remission of any amount over 1s. in the pound.
*THE CHAIRMAN OF WAYS AND MEANS
The objection which the hon. Member takes is vital to the whole clause. If the hon. Member is successful in carrying his Amendment, the natural effect would be to strike out Sub-section (2) as well as Sub-section (1). His objection, in other words, is to the root of the whole clause, and therefore the proper time to take it is when the clause is put as a whole. Then the hon. Member would be entitled to urge his objection.
§ *MR. CHARLES HARRISON (Plymouth) moved an Amendment providing that in lieu of the present proposal of remitting all the Land Tax over 1s. in the pound, there should be a remittance 1131 of 10 per cent. of the Land Tax. The object of his Amendment was not to increase the amount of remission in any way. The proposal of the Bill was to allow £100,000 out of the net tax which produced £1,000,000. It was to the manner in which this rebate was to be made that objection was taken. The figures would remain exactly the same. In the year 1798 the Act fixed the amount on particular units which might be raised. For the purposes of illustration, he would take it that a parish or unit, under the Act of 1798, would be required to raise £2,000. Whatever the amount of the rateable value had been or was was immaterial, except for the apportionment of that £2,000 amongst the inhabitants or rateable property which went to make up the area. In those cases where the parishes had remained at, or near, the rateable value on the date of the assessment the same amount, the £2,000, had to be raised; but in other cases in the parishes or units so required to raise that fixed amount, the rateable value had increased by reason of buildings or from other causes. The practical operation of that was, that where the rateable value had largely increased, the amount in the pound was so much the less. In fact the Land Tax in 1893 ranged from one-seventeenth of a penny to 4s. in England and Wales. For instance, in Rochdale, the particular quota charged upon that area, by reason of the assessable values having increased from the date when the tax was imposed, had run down to ½d. in the pound. In other places, where the rateable value had decreased, it remained at 3s. 8d. in the pound, and in some places at 4s. in the pound. The consequence would be that under this clause, as at present framed, there would be a remittance of 3s. in the pound where the tax remained at 4s. in the pound, while in other cases persons in those areas where the tax was only 1s. 4d. in the pound would only get the difference between the 1s. and the excess which might be required to be raised for the purposes of the fixed amount. That was a totally inequitable system. Instead of remitting the tax out of the total sum, the Bill remitted it according to the unit or parish, and the result worked out unjustly to certain parishes. The net amount of the Land Tax still levied was 1132 £1,000,000. The remittance which it was proposed to make was £100,000. Therefore the fair and equitable way of adjusting and giving the remission was to give the 10 per cent. to everyone who was paying the tax, whether the standard allowance to those paying more than 1s. in the pound were preserved or not. It was not a fair way to give one man 3s. in the pound simply because he happened to live in a parish which had not increased in rateable value since the original assessment in the Act of 1798, and to another man only the difference between the 1s. and the actual assessment.
§ *THE CHANCELLOR OF THE EXCHEQUER
was afraid the effect of the hon. Gentleman's Amendment would be to make the proposal contained in the clause absolutely useless. It would give relief in many cases where relief was not at all required. The idea of the clause was to give relief as regarded a certain proportion of the Land Tax, where it was really a heavy burden. There were more than a hundred parishes in Great Britain where the Land Tax was, perhaps, a mere fraction of a penny in the pound. It would be, in such circumstances, really throwing away money for no purpose whatever to relieve the Land Tax payers in parishes of that kind. They did not feel the burden, which was decreasing every year. What he had endeavoured to do by the clause was to give relief where the Land Tax had become year by year a more serious burden on the land. The hon. Member seemed to think there were many cases where as much as 3s. in the pound would be given by the adoption of the proposal in the Bill. He could assure the hon. Gentleman he was quite wrong. He believed there were only two or three places where the limit of 4s. in the pound had been reached.
§ *THE CHANCELLOR OF THE EXCHEQUER
said there were, however, many places where it exceeded 1s. in the pound, and in those cases the proposal of the clause was to give relief where relief was required.
§ SIR MARK STEWART (Kirkcudbright)
asked the right hon. Gentleman to consider whether it had not been a fixed burden before the 1133 decrease began in the value of agricultural land, but where year by year, owing to the decrease in the value of agricultural land and the redemption of the Land Tax on houses and the better class of land, in some parishes the Land Tax remaining unredeemed was not possible where boroughs had paid nearly all the Land Tax by annual quotas, to give some compensation to them for having done what they considered to be their duty. Practically they would get no benefit under the 1s., inasmuch as they had paid up under the present scale.
§ DR. CLARK (Caithness)
observed that the Amendment was to make a reduction of 10 per cent. all round. This theory might be right if the Land Tax payers were paying on the present valuation, but instead of that they were paying on a valuation fixed about a couple of centuries ago. He saw no reason at all for the Amendment.
§ Amendment negatived.
§ On the question "That Clause 25 stand part of the Bill,"
§ MR. HENRY LABOUCHERE (Northampton)
thought it as well they should understand what the Land Tax really was. It was based upon the law of 1798. At that time the tax was made perpetual, and it was estimated it would produce about £2,000,000 per annum. But there were powers to redeem the Land Tax, which had been exercised in many cases. The tax was divided between different parishes, each of which paid a certain quota to bring together the £2,000,000. It was not dependent upon the amount of property in the parish, one parish paying proportionally more and another less in regard to its property. There was a limit fixed of 4s. in the pound, and if the quota of a parish did not come up to the amount by levying 4s. in the pound, it was reduced. As a matter of fact, he believed there was only one single parish in the country in which the quota of 4s. had been reached. The object of the clause was to reduce the maximum of 4s. to 1s., so that in no case should any 1134 parish be obliged to pay more than would be produced by levying 1s. in the pound. The estimate was that the Chancellor of the Exchequer would lose by this £90,000. He confessed he was surprised that the right hon. Gentleman should consent to this loss for the benefit of the landed class, considering that they had already made a very large concession to that class. As far as he had understod it, the plea for doing away with the Land Tax was that the incidence was unfair. But it was a new system to say that because the incidence was unfair, therefore they should sweep away the tax. The proper method of procedure in such a case would be to alter the incidence. But he denied entirely that the incidence was unfair. The Land Tax was really a species of rent paid for the land. In some cases the rent might be higher and in others lower, but it was a first charge upon the land, and to say, because he had to pay what amounted to 2s. in the pound, whereas his neighbour had to pay only 1s., that therefore he was unfairly treated, had nothing to do with it, if they regarded the matter as rent instead of a tax. It certainly did appear to him unfair that considering a large number of persons had redeemed the tax on the old basis, the money should be taken from them on the old basis, and that then those who had redeemed the tax should be let off a portion of the money. Many hon. Members on his side of the House held that the Land Tax on the old basis of 4s. in the pound only represented what the landowners ought to pay in consideration of being let off the feudal duties, ship money, and many other things. Far from redeeming the tax, they were desirous of increasing it. They wanted to go back to the 4s. in the pound which would produce about £11,500,000 sterling. The tendency of all mankind if money were wanted was to get it from his neighbour. [Laughter.] It was a somewhat legitimate principle of self-defence, because taxation affected the individual, and individuals collectively protested against the excessive expenditure which involved excessive taxation. But taxation should be levied in the fairest way. Was it legitimate to reduce this hereditary rent levied on the land, which Radicals said, and always would say, 1135 had been reduced far below what it should be. The landowner, and the landowner only, managed to shirk his feudal burdens. Every lawyer knew that his land did not belong to him. It belonged to the State, and he was the tenant; of the State, and now wanted to evade his rent. He could pay it very well, but he tried not to, and he had induced hon. Members opposite to play this game for the landlord's benefit. If the tax were reduced, the entire community, which was composed mainly of poor men, would be fined £90,000 to make up for the remission made to the landlords. He read that morning an interesting account in the The Times of the Convention going on at Chicago. He would not go into the subject of that Convention, because it would not be in order. [Laughter.] But there was one phrase in the account referred to which struck him as applying to the finance of the present Government. The able correspondent of The Times said the finance proposed by the Convention was not finance in the proper sense of the word, but "financial freebooting." This proposal to remit the greater part of the Land Tax was freebooting of the most objectionable kind, designed to benefit the rich at the expense of the poor. ["Hear, hear!"]
§ MR. WARNER
pointed out that the remission proposed was not intended to benefit agriculture generally, but to relieve the landlords of a portion of a tax. From its origin the Land Tax had always been a landlord's tax. It was in ancient times the landlord's duty to keep up the Army of the country, and the Land Tax was imposed in lieu of the duties they had to carry out in fighting for the defence of the country. Now the tax had grown old it was proposed not to give everybody who originally had to pay this tax equal relief, and not even to give it to poor landlords, because there was an enormous number of poor landlords who were not able to pay their taxes at all well, and who could hardly keep the land cultivated. These would not get a penny of this remission. The man who spent a large sum on his property to make it good and redeem the Land Tax, because it was a charge that might be dangerous in the future, would not get a penny for the good he had done; but his neighbour who had better 1136 land, but who had not been a good landlord in the sense of taking care of his property, and had not redeemed the charge, would get relief from the Government. It was iniquitous to give this dole out of the taxes to a particular section of a class.
§ *ME. STRACHEY
said the Land Tax might be looked upon much in the same light as tithe for all practical purposes. Landlords looked upon them both much from the same point of view. All the arguments that could be used in favour of remitting the Land Tax could be used equally as regarded tithe. Land Tax had been paid from very ancient times, and because the landowners had inherited it from their ancestors was no argument for relieving them. He was totally opposed to the Crown remitting to the landowners for their own benefit so large a proportion of the rent it had hitherto received from them. He had always been willing to relieve land from unjust burdens, but he would not be a party to making an absolute gift to the landlords of what was not taxation in the true sense of the word. It might be a good plan to hand over the whole of the Land Tax to the parish councils of the parishes where it was raised for parish purposes. Thus the country at large would get the benefit, and it would be applied for the benefit of the people in the districts where the quota was raised, and where, in some oases, it might seem a heavy tax. Let the tax he remitted, not as a free gift to the landlords, but to the parish, to be used for the benefit of the whole of its inhabitants.
§ MR. EDMUND ROBERTSON (Dundee)
said the proposal embodied in this clause was one of the means adopted by the Chancellor of the Exchequer for getting rid of his surplus, the other two being the Rating Bill and the Education Bill; and the three items amounted to something like £2,500,000, which were to be devoted to the benefit of certain classes of the community. Had he anticipated the means which would be resorted to for getting rid of the surplus he would have adopted a different attitude towards the Naval Works Bill, under which money was to be borrowed for the necessary defence of the nation.
§ MR. EDMUND ROBERTSON
continued that since 1797 the Land Tax had been a charge upon the land of England fixed in perpetuity and subject to redemption and purchase. In the application of the Act to particular areas there was the limit of the quota and also the limit of 4s. in the pound, and what was proposed was to reduce the limit of 4s. to 1s., and thereby remit one-tenth of the tax, and put that proportion into the pockets of those who otherwise would pay it. In his Budget speech the Chancellor of the Exchequer referred to observations that had been made by the late Chancellor of the Exchequer condemnatory of the tax; but the late Chancellor of the Exchequer never went so far as to propose to remit any portion of the tax. Where the tax was more than 1s. in the pound, it was to be assumed that this excess was a hardship on those who had to pay it; but how was this made out? To his mind the Land Tax was nothing but a fixed interest payable annually. The value of the land on which a mortgage was charged might fall, and in proportion to the fall in the mortgage interest, the value of the land would rise; but the mortgage would not rise. What would be thought of a mortgagee who demanded an addition to his interest because the residue had fallen in value, and therefore the proportion he took was smaller in value than it used to be? The share of the State in the land had not increased; it remained a fixed amount; and if the land had fallen in value that was the misfortune of the landlord, whose reversionary interest was depreciated, because the margin available for him was smaller than before. How this was made a case of hardship he could not see. The present First Lord of the Admiralty (Mr. Goschen) in his work on local taxation, published 25 years ago, quoted with approval and concurrence a passage from John Stuart Mill, in which he wrote:—That a person owns, a part of the rent does not make the rest of it his just right injuriously withheld from him. The landlords originally held their estates subject to feudal burdens, for which the present Land Tax is an exceedingly small equivalent and for their relief from which they should have boon required to pay a much higher price. There is 1138 not the slightest pretence for looking upon it as a payment exacted from the existing race of landlords. It is as if the State had retained, not a portion of the rent, but a portion of the land. The landlords are entitled to no compensation for it, nor have they any claim to its being allowed for as part of their taxes.[Cheers.] It would be interesting to know whether the First Lord had changed his opinions on this point, and, if he had not, how it came about that he was a party to this proposal. ["Hear, hear!"] Another Member of the Government, whose absence from these Debates they so often had to deplore, was the Secretary for the Colonies (Mr. Chamberlain) who, speaking at Hull in 1885, and describing the burdens of the rich, said:—In the first place I think I ought to have included the Land Tax. It is not a tax in the in the proper sense of the word, but it is a State rent, and a very inadequate one.Then the right hon. Gentleman gave his name to a book which was known as "The Radical Programme," which contained this passage:—The Land Tax where it still exists is collected on a valuation made in the reign of William III. It now yields a little over a million, but if it were based on present value it would produce nearly 20 millions.Yet the right hon. Gentleman was a Member of a Government which came forward with this proposal. In a speech made at Birmingham in 1885, the right hon. Gentleman said:—If you go back to the early history of our social system you will find that when our social arrangements first began to shape themselves, every man was born into the world with national rights, with a right to a share in the great inheritance of the community, with a right to a part of the land of his birth. But all those rights have passed away. The common rights of ownership have disappeared. Some of them have been sold; some of them have been given away by people who had no right to dispose of them; some of them have been lost through apathy and ignorance; some have been destroyed by fraud; and some have been acquired by violence. Private ownership has taken the place of these communal rights.And then, upon that foundation, the right hon. Gentleman put the question which startled the country ten years ago—"What ransom are the private owners of land going to pay for the property in the land which they have taken from the 1139 State?" [Opposition cheers.] Why was not the right hon. Gentleman present to defend this proposal, which was ten times more iniquitous than anything that had been complained of either in the Eating Bill or in the Education Bill. [Opposition cheers.] For all that remained to the State of its ancient interest in this land was this Land Tax, and one-tenth of that tax it is now proposed by this Bill to take away. The Chancellor of the Exchequer, perhaps, might rely upon the Report of the Royal Commission on Agriculture. It was undoubtedly true that the majority report and the minority report agreed in the statement that the Land Tax was a hardship and that it ought to be relieved, but the Reports gave no reasons in support of such a contention. The Commissioners committed themselves to the extraordinary proposition—which destroyed any value their Report might have—that not only was the Land Tax a hardship to those who had to pay it, but that the redeemed Land Tax was equally a burden upon those who did not pay it—or, in other words, that the fact that some unknown person, 100 years ago, wiped out the Land Tax on his estate—was an "intolerable burden" upon the man who might have bought the estate in the market last week. [Opposition laughter and Ministerial cries of "He paid more for the estate."] Surely the fact that a man paid more for an estate without the Land Tax than for an estate with the Land Tax could not be seriously said to constitute an intolerable burden. [Opposition cheers.] He would vote against the proposals of the Government with the fullest confidence that his vote was founded upon justice and reason.
§ *THE CHANCELLOR OF THE EXCHEQUER
said that the hon. Gentleman, during his carefully prepared speech, must have noticed the significant absence of his colleagues from the Front Opposition Bench. [Ministerial laughter.] The hon. Gentleman was good enough to point out that two of his colleagues—who entirely agreed with him in this proposal—were also absent; but if the colleagues of the hon. Gentleman—particularly the right hon. Member for Monmouthshire—really believed with him that the proposal was ten times more iniquitous than either the Education Bill or Rating Bill, they would surely 1140 have been present to support him at least with their presence. The hon. Gentleman appeared to think that the Land Tax might well be raised.
§ MR. EDMUND ROBERTSON
No, I expressly disavowed the contention of the right hon. Gentleman the Colonial Secretary ten years ago. I stand by the 1798 settlement.
§ *THE CHANCELLOR OF THE EXCHEQUER
said he should like to stand by that settlement too. The settlement of 1798 was based upon an old Act of William & Mary, under which not only was land subject to this tax, but ready money, goods, merchandise, and personal property of every kind also. [Ministerial cheers.] Why, under that Act the profits which the hon. Gentleman the Member for Northampton enjoyed by his personal exertions would be taxed—[laughter]—and, further, as the Act, included offices and pensions, the humble salary which the hon. Gentleman the Member for Dundee so well earned as Civil Lord of the Admiralty in the late Government would also be subject to the tax. [Laughter.]
§ *THE CHANCELLOR OF THE EXCHEQUER
said it would. It was a curious fact that the law to which he referred remained in force in regard to personal property until 1833, and in respect to offices and pensions until 1876. It had been found by long experience that personalty, being of a very fugitive character, contrived to escape the operation of the Act of William & Mary, and therefore in 1833 personalty was relieved of the tax—a relief which was extended to offices and pensions in 1876. The total loss to the State by these two exonerations from the tax was £132,000 a year. In other words, owners of personalty and holders of certain offices and pensions got a present from Parliament of £132,000 by being relieved of the Land Tax, and yet, when it was now suggested that land, upon which the tax fell heavily, should get some relief, the hon. Gentleman said it was more iniquitous than the Rating Bill or Education Bill. [Cheers.] He regarded it as a very important fact that the Royal Commission on Agriculture, consisting of gentlemen selected for their ability and knowledge of the subject by the late Government—of which the hon. 1141 Gentleman the Member for Dundee was a member—unanimously reported in favour of the proposal contained in the Bill. Would the hon. Gentleman suggest that such men as Mr. Shaw Lefevre, Lord Rendel, and Sir Robert Giffen, who signed the report, were unduly favourable to the landed interest.
§ *THE CHANCELLOR OF THE EXCHEQUER
said the hon. Member for Dundee also contended that the proposed relief would extend only to large landed estates. There were as many as 1,400,000 assessments for the Land Tax in England. Of course, there were a great number of these assessments in towns which would receive no relief under the clause, but the figures showed how widely distributed was the tax amongst the owners of the land. The hon. Member could not see any hardship in the fact that though the property which had to bear the tax decreased in value the tax, being a fixed payment, remained the same. He wondered whether, if the hon. Gentleman paid a tax of £100 a year on an income of £1,000 a year, he would think it a hardship if his income fell to £500 and he had to pay the tax of £100 all the same. [Ministerial cheers.] The Royal Commission on Agriculture alluded to the curious inequality of this tax in different parts of the country. The assessment of the Land Tax was indeed, a very old assessment. It dated from many hundred years ago; and, as it was attempted at that time to assess the land faithfully according to its value, naturally the corn-growing land was by far the most heavily assessed. The result, as quoted by the Commission, was that, while in 1797 Hertfordshire's quota was fixed at £41,500, that of Lancashire was fixed at £21,900. Now, of course, the valuation of Lancashire was at least 14 times as great as that of Hertfordshire. As the value of the corn-growing land had diminished, the burden of the Land Tax had increased; and, further, where the Land Tax had been redeemed in the case of building land or land used for railways, an increased burden had been thrown on the neighbouring agricultural land. The Royal Commission declared that nearly one-fourth of the quotas of the Land Tax remaining unredeemed fell upon Norfolk, Suffolk, Essex, Wilt- 1142 shire, and Lincolnshire—and those were the counties where the depression was most felt. The Commission quoted the following cases where the Land Tax had increased within the last 15 years: In Essex, in one parish from 1s. 4½d. to 4s., in another from 1s. 2d. to 2s. 6d., in another from 1s. 1d. to 2s. 3d.; in Norfolk, in one parish from 1s. to 2s., in another from 6¼d. to 1s. 2½d.; in Suffolk, in one parish from 1s. 9¼d. to 3s. 0¼d., in another from 1s. 0¾d. to 2s. 6d.; in Lincolnshire, in one parish from 9¼d. to 3s. 2d.; and in Wiltshire, in one parish from 1s. 1d. to 2s. 2d., and in another from 1s. 1d. to 3s. ["Hear, hear!"] The Commission recommended that steps should be taken to reduce the terms of redemption as proposed in this Bill, and also that the maximum rate of the Land Tax should be reduced. That was the root of the proposals in the Bill. The hon. Member for Somerset asked why the proposals should not be extended to the Land Tax which had already been redeemed. Only in a very few cases had any redemption been effected at a rate above that fixed in the clause. He would remind the Committee that what was proposed was not a permanent but a temporary remission. The quota in any parish was not to exceed 1s. in the pound on the assessment of the parish under Schedule A of the Income Tax. But if, owing to increase of value, the increased assessment should take the parish outside the operation of the clause, then the original quota would have to be paid again. He believed that the remission was well deserved, and that there was no part of the proposals of the Government with regard to agriculture which would be more welcome or which were more necessary and fair. [Cheers.]
§ MR. R. WALLACE (Edinburgh, E.)
said that the Chancellor of the Exchequer had properly remarked on the condition of the front Opposition Bench, but he had drawn the wrong inference. It was not that the Leaders of the Opposition thought this question was a financial bagatelle which did not require their attention. They must be well aware that no more serious question for a large number of persons had been raised during the present Session. It seemed to him that the Gentlemen who usually occupied the front Opposition Bench were 1143 unworthily afraid to face the question. [Ironical cheers and laughter, which were renewed as Sir W. Harcourt entered the House and took his seat.] He had seen dramatic demonstrations, conscious and unconscious, by the right hon. Gentleman before this, but never one more successful. [Laughter.] But how could the right hon. Gentleman deal with a discussion which he had not heard? It was a task which would be difficult for himself, but not impossible for the right hon. Gentleman. He could not agree with his hon. and learned Friend the Member for Dundee when he described the observations on this subject made by the present Colonial Secretary some years ago as "bogus history and claptrap philosophy." That was a smart phrase which led one to overstate the case. In those days the Colonial Secretary was sounder on history, social philosophy, and everything else on which he required to be sound, than at the present day. There were hundreds and thousands in the country who sympathised with the lead given to them in those days by the Colonial Secretary. He was surprised that these proposals had not received more attention. They were not to be measured simply by an arithmetical standard, but by the significance of the broad principle involved, and that was the abolition of the Land Tax as far as the Government dare attempt it. [Cheers and laughter.] The tax was at present 4s. in the pound—[crien of "No!"]—and the proposal of the Government was to reduce it to 1s. in the pound. [Cries of "No!"] He was not looking at the question from the arithmetical point of view only. [Laughter.] That was the tendency of the proposal. He would say "ditto" to Mr. Mill in asserting that 4s. in the pound was a very inadequate Land Tax, and there were many people who held the same opinion. Would they be as contented with these proposals as were the occupants of the Front Opposition Bench? [Laughter.] He had not had the time to prepare an informed speech; his information on this subject was mainly of a general character. [Ironical cheers and laughter.] He rose, however, for the purpose of assisting his hon. Friends in doing what they could to emphasise the alarming importance of this proposal, and he trusted that the effect of the discussion would be 1144 to call popular attention more significantly and more emphatically to the proposal of the Government.
§ SIR W. HARCOURT
, whose rising was received with Ministerial laughter and cheers, said that if the hon. Member had given him notice that he was going to make an ill-informed speech de omnibus rebus—[Ministerial laughter and cheers]—he would have been in attendance. But by some misfortune whenever he was in the House he never saw the hon. Member—[laughter]—and therefore he was deprived of the opportunities of meeting him which he should desire. [Laughter.] Unfortunately he had, owing to the position he had occupied in the Government, to inform himself on the subject of the Land Tax, and he had to descend from the empyrean heights lately occupied by the hon. Member, and had to regard this as an arithmetical question. [Laughter.] When the hon. Member had descended from those heights and was able to inform himself of the fact that the Land Tax bore very hardly on poor and distressed districts, when in short he had mastered the elements of the question, he would then be able to address the House not less eloquently, but probably with better information. [Laughter and cheers.] Having had to consider the question of distressed agriculture and the incidence of the Land Tax, he did last year say that he thought the Land Tax was a tax which was oppressive in its character, especially in the distressed districts of the country, and that on counties like Essex, which had suffered very much from agricultural distress, it operated in a most unfair and unequal manner. He said on that occasion that, if it remained for him to deal with the matter, he thought the Land Tax in its present form was a bad tax; if it was to exist it ought to be by equalising it and remedying its heavy incidence on the parts of the country which were least able to bear it. He had always held that they ought to adjust their system of finance so that it should fall most lightly on the parts least able to bear it, and the absurdity of the condition of the Land Tax in Essex as compared with Lancashire was one of the greatest blots on our financial system. Personally he had no opportunity of bringing forward a specific proposal for relief, and though he could not say that 1145 this was exactly the scheme he would have proposed, yet, inasmuch as it would give relief from a burden which he could scarcely regard in many parts of the country as in the nature of a differential tax, he did not feel in a position to oppose the proposal of the Government. [Ministerial cheers.]
§ *MR. W. S. ROBSON (South Shields)
said that the inequality of the so-called tax did not meet the point raised by those who objected to the proposed remission. He admitted everything that could be said about the inequality of this so-called burden, but he should like to ask whether this was a tax or whether in substance it was not a national property. [Cheers.] If it was purely a tax it might be properly remitted; if it was a national property, no matter how unequal in its incidence, it ought not to be remitted unless compensation be given for it. He was astonished to find that the Chancellor of the Exchequer had not ventured to repeat what he said when the Budget was introduced. The right hon. Gentleman put into most explicit terms the point for which he and his hon. Friends were now contending. The Chancellor of the Exchequer then said that since 1798 this tax had not been an ordinary tax at all, but that it was in truth a rent charge allowed for by all those who had been purchasers or vendors of land since that date. The right hon. Gentleman had thus made clear the character of this sub-section, and had shown that the Committee were not dealing with the case of the remission of a tax, but were making a gift of national property. The right hon. Gentleman might even have gone further back than 1798; for this Land Tax had been perhaps the only compensation for the abolition of feudal burdens, which had been exacted from the landowners of the country, and it would never have been made perpetual if its character as a national property rather than a national tax had not been recognised. It was now proposed to give away a handsome slice of this property. It was within the competence of the Committee to do so, but let hon. Members understand what they were doing. Do not let them understand that they were remitting a tax like the Tea Duty. This clause proposed to put into the pockets of a particular class money 1146 which had never been theirs since 1798. It was, therefore, somewhat fallacious for hon. Members to refer to a Measure of this kind as a Measure of landlord relief. It might be far more correctly described as a Measure of landlord endowment. The Chancellor of the Exchequer had spoken of the clause as if it merely remitted about £100,000 of Land Tax. In form it did, but he pointed out that the remission under Clause 25 was but a small part of the ultimate remission which the landowners would secure. Two reasons were alleged for remission or redemption. In some parts of the country the tax was so small that it was not worth collecting; in other parts of the country it was large, and well worth collecting. On both of those not consistent grounds it was attacked. Then there were the intermediate cases, with regard to which landowners were invited to redeem on terms which gave them substantial profit in the present state of the money market, so as to secure the ultimate extinction of the tax. And the Chancellor of the Exchequer was doing this at a time when he himself had warned the Committee that they had reached the limits of direct taxation. This clause raised a question of far wider Imperial importance—namely, whether they ought to restrict the sphere of direct taxation. That had already become one of the most pressing and acute modern political questions. The Chancellor of the Exchequer in his Budget speech told the House that they had reached the limits of direct taxation. That meant that they were within measurable distance of the taxation of imports. In these circumstances they certainly could not afford to throw away any source of direct revenue; if they did, they would be a step nearer the time predicted by the right hon. Gentleman himself, when they would have to lay a tax on the trade of the people—the bread of the people. Perhaps the right hon. Gentleman would say whether that prospect gave him pleasure, and whether the remission of the Land Tax was intended to bring them nearer to this retrograde policy in finance. Those who desired to keep the commerce of the country unfettered and its bread cheap would not willingly part with any source of direct revenue. The arguments used against giving up the Tea Duty 1147 applied with greater force against the surrender of a source of revenue which put a burden on no man's trade and raised the price of no man's food.
§ *MR. T. P. WHITTAKER (Yorks, W.R., Spen Valley)
thanked the hon. Member for Edinburgh for drawing from the Leader of the Opposition a statement in support of the Government on this point. He was one of those who regarded the Leader of the Opposition as one of the first financial authorities in the country, and he should have hesitated to express his own view on this question had it not been in accord with that of the right hon. Gentleman. He did not recognise that this proposal did away with an element of direct taxation. It would still be quite within the House to tax land in this country higher than it did if it was thought equitable or desirable to do so. He believed that when the people understood this question, they would not oppose the proposal of the Government. A great deal that was misleading and inaccurate had been spoken and written about it. No one would accuse him of being unduly favourable to the landed interest, and he had strongly opposed the Agricultural Rating Bill; but that touched an altogether different question. The last speaker had given away the argument on the ground of inequality, and now the basis of the opposition was that this was a hereditary charge and a national property. But when the tax was instituted it was imposed equally on personal property and on land. The Act of 1692, which was an Act for raising a war tax, provided that every person or corporation—having any estate in ready moneys or in any debts owing to them, or having any estate in goods, wares, merchandise, or other chattels or personal estate whatsoever, within this realm or without, shall yield and pay unto their Majesties four shilling's in the pound according to the true yearly value thereof.The clause taxing land was a subsequent one. Personal property came first. The Acts of 1692 and 1697 were on the same lines in that respect, and so was the Act of 1797. The Report of the Inland Revenue of 1870, which gave the history of this tax says:—It is a remarkable circumstance that these Acts of 1697 and 1797 appear to mark, more strongly than before, the taxation of personal estate as the primary object of the law.1148 That portion of the law which affected personal property was allowed to fall into abeyance, and only the portion relating to land was kept in force. But it was no more a feudal burden in the one case than in the other. In the old days there was very little property capable of taxation except land, and therefore land gave the bulk of the revenue of the country, but to suggest that they should tax land specially for that portion of the revenue that was derived purely from the capital expended on it was not a fair thing. A system of taxing what were commonly spoken of as "land values" would be more equitable. They ought to tax very fully the increased value given to land by its surroundings, by the growth of population, and by the improvements in towns. It was not a sufficient ground for maintaining an unjust tax that it was old. If they were going back to the old law, would they enforce it against personalty as well as against land? The taxation of land was a question for the towns more than for the country, and if the landlords and farmers would only join in seeing that sufficient taxation was placed on the owners of unearned increment on land in the towns, they would open up a source of revenue which would give relief to all. He referred to the sale of a small plot of land in Cornhill at the rate of £2,500,000 an acre, maintaining that it would not have been unjust if practically the whole of the increase value given to that land by its surroundings had been taxed for the benefit of the people. The present he admitted was an unfortunate time for relieving the landed interest, but he was not disposed to refuse to do an act of justice because Parliament was doing an act of justice in another direction.
§ MR. R. B. HALDANE (Haddington)
believed that this question of the Land Tax attracted in a very extraordinary degree the attention of a large section of the public, and he thought they would make a great mistake if they left that out of account. He agreed that it was a great misfortune that the land laws of this country were in the condition they were. It would have been well if the State could have kept a much larger control over the land and taken a much larger share of its profits; but the evils which existed were evils which were 1149 created a very long time ago by the laxity and intention, it might be, of Parliament, and they could not redress them. Therefore, he put that out of account, and it seemed to him that the question on which they had to vote was a very narrow one indeed. The defence of this proposition by the Chancellor of the Exchequer was plausible enough, and he was not one of those who took the view that there was not a case of great hardship in these localities, and one well worth the attention of Parliament. The question was whether the proposal for the remedy was a justifiable one. To his mind the particular form of relief recommended by the Commission, and adopted by the Government, was a very bad form indeed. The Chancellor of the Exchequer made his argument turn upon a word which, he thought, was wholly fallacious in this connection—the word "burden." They had a burden when they had a tax or an imposition upon something that a person had got, but if a person had not got the thing they could not put a burden upon it. The land had been, for nearly a century, subject to this imposition, and it had been bought and sold as though the subject matter of the imposition were not the subject matter of the sale. That brought him to what seemed to him to be the first defect in connection with the Chancellor of the Exchequer's proposal—namely, that it was really unfair to the people who had redeemed the Land Tax. ["Hear, hear!"] On the assurance of the State that it had imposed a permanent burden, taking the view that this was not the subject of property at all, but a slice out of this property which, as it were, belonged to the State, and that there was only one set of terms—those enacted by the State—on which they could redeem it, these people had spent their money in redeeming the Land Tax. They had redeemed it for nothing, and for something worse than nothing, because they were now going to be indirectly taxed to make up the deficiency and to pay for the relief of the burden on those who were not thrifty enough, or in a position to redeem their own Land Tax. There was another thing in connection with the proposal which he did not like. What they were really doing was, under cover of one proposition, making quite a different proposition. If 1150 they had wished to make a remission which would reach the localities in this way, why did they not take the School Board rate or something that had come into existence much more recently, say in better times? Instead of that they were taking as the object of the remission a burden which was selected in times when land yielded far less than it did 20 or 30 years ago, and probably less than it yielded now—they were taking something out of the slice which was the State's, which had been the State's for a very long time, and which was never the owner's of the land, and they were giving it back to him. ["Hear, hear!"] Another objection which he had to this proposal was that it was not really a candid and straightforward way of legislating. He for one would have regarded with very great sympathy a candid proposition to give direct relief to the people of those localities where agriculture was peculiarly distressed. The proposal of the Government was put, he would not say in an uncandid form, but in an awkward form—a form which seemed to be economically objectionable and objectionable from the point of view of policy. He could not help feeling that, when he went into the Lobby, which would not be the Lobby in which the right hon. Gentleman the Leader of the Opposition would be, he should at least have his sympathy, because he had gathered from the closing words of his speech that if he had been dealing with this problem it would not have been in this bad and objectionable form he would have brought forward his proposition for this local and partial relief.
§ DR. CLARK
said the reason why personalty had been finally excluded in England was because from 1798 to 1883 it diminished from £133,000 to £5,000. The abolition in England was the result of the advice of the Chancellor of the Exchequer, because of the great burden that had been placed on the annual value of personal property which had not then affected and had only lately affected land as well as property. He was astonished at the speech of the right hon. Member for West Monmouth, because he remembered the very strong opposition he led to the Agricultural Rating Bill. It did seem to him that if they had agriculture depressed and that if this Land Tax rent charge was a 1151 burden upon agriculture, surely local rates were a much greater burden, and every argument that applied to the relief of this old hereditary burden would be much more powerfully applied to the relief of the new burdens which the right hon. Gentleman himself so strongly opposed. But were the Government willing to go on relieving agriculture, because if so there was one burden which pressed still more than either the one that had been relieved under the Rating Bill or the one proposed to be relieved under this clause. This was the tithe rent charge, which was the heaviest burden. If they were going to take off the State's charge, were they going to take off the parson's charge as well? It had been urged that the present Land Tax was unequal and unjust, but if the right hon. Gentleman would read the Debates at the time this tax was made perpetual in 1798 he would find that the then Member for Caithness, Sir John Sinclair, very strongly opposed the making of the tax perpetual because of its inequality and injustice. Sir John pointed out how the tax amounted to 6d. in the pound in Lancashire and Yorkshire, while in other districts it was as much as 2s., 3s., 3s. 6d. and 4s., so that it was unequal then, and its incidence unjust precisely as it was at the present time. Mr. Pitt realised that, and showed that the reason why it had been unequal was that under the 4th William & Mary each one of these districts, counties, and parishes had to make an annual return, and every year the Land Tax, both from land and personal property, was becoming less and less, although the land was increasing in value. Then by the 11th of William & Mary it was made perpetual as to the amount on the valuation of seven years before, which very much increased it. They were now paying upon a valuation made two hundred years ago. The tax was made perpetual by Mr. Pitt in 1789, for the purpose of redemption, at 4s. in the pound, and one half had now been redeemed. The Chancellor of the Exchequer argued that this was a tax upon agricultural land. But the very Act itself set forth that it was also a tax upon mills, mines, ironworks, and other industries. They were told that in various parishes the tax was becoming more and more unequal. That was an argument for making a change in the 1152 present method of levying it so that the burden should be equal upon all. If the present clause were carried the inequality would not be remedied. The Chancellor of the Exchequer suggested that in small districts where quotas were paid, and where, in consequence of changes in the valuation, the taxes had been increased beyond 1s. in the pound. What might be done was that which was attempted to be done sixty years ago, but which was prevented by the Courts of Law, namely, that instead of having the small areas which were now making the quotas, they should group such areas together and let the burden be alike on all the people. At present in one part of a parish the tax might be one shilling in the pound whilst in another part of the same parish it might only be a penny or even less. When the tax was freed two hundred years ago, some districts were then prosperous which had since become depressed, and in these the burden was heavy. Other districts were at that time poor, which, in consequence of the discovery of coal or iron and their subsequent industrial development, were now prosperous, and here the people were paying practically nothing. The first thing to do was to see that the tax was imposed fairly upon all classes who had not redeemed. If the Chancellor of the Exchequer had levelled up where the tax was too low, and brought it down to the same level where it was too high, instead of reducing the amount, he should have been glad to have supported him. But instead of levelling up in those districts where the burden was now trifling, the right hon. Gentleman allowed them to remain as they were, and that class of property did not, consequently, bear its fair share. The right hon. Gentleman was making a change as to the valuation which was fixed two hundred years ago, and why not make it all round? Why should one class have a light burden in one district whilst the same class in another district had to bear a very heavy burden, simply because two hundred years ago one was a poor district which had now become rich, whilst the other was a rich district which had now become poor.
§ The CHANCELLOR of the EXCHEQUER
observed that the hon. Gentleman in his somewhat discursive speech had suggested to him for about the 1153 sixth time—(laughter)—that he should attempt to level the Land Tax upwards. He could not conceive any more difficult or impracticable task for a Chancellor of the Exchequer to try and carry through Parliament. They had had a general discussion of the clause on both sides of the Committee, and he hoped they would now be allowed to go to a division. ("Hear, hear!")
§ Mr. J. H. DALZIEL (Kirkcaldy Burghs)
desired to emphasise the fact that by the votes that were given in favour of this clause they were going to present £100,000 a year, according to the estimate of the Chancellor of the Exchequer himself, to the landlords of this country. They were giving this £100,000 a year to the landlords, not in indirect relief, but practically in cash. This free gift was made at a time when the Government had appointed an Inquiry into the whole question of local burdens. They were making this present on their own responsibility to the landlords, while they had pledged themselves to an Inquiry into the whole system of local taxation. It was a curious time to give this further dole to the landlords. They might have waited until the Inquiry was concluded. The right hon. Gentleman knew that whatever the result of the Inquiry, this dole would remain. He could not understand the position of those who objected to voting £2,000,000 a year under the Agricultural Rating Bill, but now said that was not enough, others would give the landlords £100,000 a year more. He objected to every proposal of the Government this Session for the benefit of the landlords. Almost every Bill had had that object. Whether the Finance Bill, the Agricultural Rating Bill, the Diseases of Animals Bill or the relief from taxation in regard to pictures, all came to one thing, "Let us give money to the landlords and make hay while the sun shines." He, as a Radical, objected to this relief of the landlords from taxation and he would be no party to giving them £100,000 a year more.
THE CHAIRMAN OF WAYS AND MEANS
If the discussion is much more protracted I shall be obliged to 1154 accept the Motion though I do not do so now.
§ *MR. F. S. STEVENSON (Suffolk, Eye)
said he desired to see land taxation levied on a uniform basis throughout the country. But the greatest obstacle to this was the continued existence of the Land Tax, which bristled with anomalies and abuses, and made difficult and well nigh impossible the imposition of a proper system of land taxation. Therefore, it was desirable either by facilitating the mode of redemption or other means to get rid of the Land Tax before imposing a new Land Tax which should be on an equitable system. It had been argued as if this tax were a permanent and fixed amount. It was as far as parishes were concerned, but it was no longer fixed as regarded individuals. It had been raised with regard to them, but a fixed quota was imposed upon each parish. Owing to the depression in agriculture, large properties had had their valuation lowered, and it had been necessary to get more from smaller properties to make up the amount. Seeing our inequitable system of land taxation, he did not protest against the proposed remission of the Land Tax. To revise the present Land Tax would be a fruitless task. The only way in which our system of land taxation could be reformed, would be to abolish the present Land Tax and substitute an entirely new one.
§ MR. J. W. LOGAN (Leicestershire, Harborough)
objected strongly to the proposed grant of £100,000 in the shape of reduced Land Tax. The gross value of the land in his own county of Leicester was 2½ millions, and the Land Tax upon it amounted to £20,000, but if he looked to Durham he found that the gross value of the land was 5 millions, and the Land Tax was only £3,500. Why was this? In Leicestershire they paid at the rate of 8¾d., and in Westmorland they paid little more than 1d. an acre. These were inequalities that required adjustment by the Chancellor of the Exchequer, but for the present he would content himself by making his most solemn and emphatic protest against any further dole being made to the landlords. ["Hear, hear!"] He held with Sir Robert Giffen that this so-called Land Tax was not a Land Tax at all. It was 1155 simply an interest reserved by the State when it handed over to individuals the rest of the land of this country. It was in the nature of a rent charge, which had been reserved, and the Government had no more right to hand over the Land Tax to any set of individuals than they had to hand over Hyde Park to them. [Cheers.] The land of this country was originally purchased with the full knowledge of the Land Tax which was upon it, and the successors of those who bought the land ought to think themselves fortunate that they got it on such easy terms. ["Hear, hear!"] This was the last protest he would make. [Cheers.] He had been in that House long enough to clearly understand the objections which hon. Members opposite had to hearing a word said on behalf of the poor men of this country. [Cheers.] He was looking, as he had a right to look, to the days of depression which had come on this country, and he asked himself when those days arrived how were the many poor men who were now only just able to keep their heads above water—how were they to meet the additional taxation which this Government was placing on their shoulders for the most exclusive benefit of a certain class. Land at present only paid 26 pence, as against 42 pence paid by other kinds of property, and this Government had already shifted half of the burden of the rates on land on to the shoulders of the men in the towns, who already paid the heavier portion of the taxation. The Government were strong, and he asked them to be merciful, and have more consideration for those men who to-day were paying a much greater share of their small incomes in taxation than the richest men in the country. [Cheers.]
§ Question put, "That the Question be now put."
§ The Committee divided:—Ayes, 181; Noes, 70.—(Division List, No. 323).
§ Question put accordingly, "That Clause 25 stand part of the Bill."
§ The Committee divided:—Ayes, 188; Noes, 67.—(Division List, No. 324.)1156
§ Clause 26,—