HC Deb 25 June 1896 vol 42 cc81-110

Clause 2,—

  1. (1.) In respect of the deficiency which will arise from the provisions of this Act in the produce of rates made by the spending authorities in England, as hereinafter defined, there shall during the continuance of this Act—
    1. (a) be paid to the Local Taxation Account an annual sum (in this Act referred to as the annual grant) of such amount as is certified under the provisions hereinafter contained; and
    2. (b) be issued from the Local Taxation Account by half-yearly payments out of the annual grant to each such spending authority a share of that grant of such amount as is certified under the provisions hereinafter contained.
  2. (2.) The amount so certified as respects each spending authority shall be the share of that authority in the annual grant.
  3. (3.) The Commissioners of Inland Revenue, in such manner, by such payments, and under such regulations as the Treasury direct, shall pay to the Local Taxation Account, out of the proceeds of the Estate Duty derived in England from personal property, the annual sum required by this section to be paid to that account.
  4. (4.) The first of those payments 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 issues to spending authorities on account of the six ensuing months.

MR. REGINALD McKENNA (Monmouth, N.) moved to omit the words:—" In respect of the deficiency which will arise from the provisions of this Act in the produce of rates made by the standing authorities in England, as hereinafter defined." The hon. Member said he had three reasons why the words should be struck out. First, they were unnecessary; secondly, they were misleading; and, thirdly, they were contrary to the general purposes of the Act. If, in Essex, where agricultural depression was represented to be so great, there was only one tenant for 20 vacant farms, and 19 of the farms were in one Poor Law district, there would be no rates levied; and, consequently, where all the land was out of cultivation there could not arise a deficiency under the Act. If one part of the country more than another was entitled to relief under the Act, it was where not an acre of land was under cultivation; yet under the clause as it stood the poorest districts most worthy of relief would receive no relief at all. The occupier of land which went out of cultivation and became woodland or parkland would not be entitled to relief, while the whole burden of the rates would be placed on the other ratepayers in the district.


submitted that there was no necessity whatever for the Amendment. The words proposed to be left out showed the purpose of the grant given under the Act, and it was usual in a Bill of the kind to insert such words. The grant would not vary with the amount of the deficiency, which would be calculated on the estimates of one year. He did not think there would be any deficiency with regard to land going out of cultivation. He did not think it would be possible to find a case under the jurisdiction of a spending authority in which all the land would be out of cultivation.

*SIR CHARLES DILKE (Gloucester, Forest of Dean),

as one who had practical acquaintance with the subject of rating, contended that the words were absolutely unnecessary. They were, moreover, misleading and difficult to interpret.

Question put, "That the words 'in respect of the' stand part of the Bill."

The House divided:—Ayes, 199; Noes, 127.—(Division List, No. 269.)

MR. LLOYD-GEORGE (Carnarvon Boroughs) moved to omit the words— deficiency which will arise from the provisions of this Act in the produce of rates made by authorities in England, as hereinafter defined, in order to insert instead there of the words— difference between the amount which the rates to which this Act applies would, but for Section 1 of this Act, produce, and the amount which, after the passing of this Act, such rate actually produces. He said the Amendment was purely a drafting Amendment, and did not alter the policy of the Bill, but it would carry out the intent of the clause. It was proposed to make up, not a deficiency, but a difference.


said the Government had considered this Amendment, and he preferred to adhere to the language of the Bill, which was more acceptable than was the Amendment to his advisers. If he was to accept the Amendment, it would be necessary to make several consequential Amendments, and that was a necessity to be avoided, if possible.

MR. HERBERT LEWIS (Flint Boroughs)

said the right hon. Gentleman had not given any substantial reason why he declined to accept the Amendment. As a matter of fact, the matter had been carefully thought out, and the Amendment would vastly improve the Bill from a drafting point of view. The word "deficiency" was not at all a correct word to use, and this was so obvious that there ought to be some good reason given for not accepting the Amendment.


said that, if this was a mere drafting Amendment there was no occasion to accept it unless it could be shown to be of substantial importance. The deficiency referred to in the clause was the deficiency that would be arrived at by a calculation upon the rate of last year—the year fixed for the purpose by the Bill, whereas the words proposed to be introduced referred to the varying amounts and differences that would take place in the rates during the five years the Act would remain in operation.


pointed out that if the Amendment were not accepted particular spending authorities would be deprived of all benefit under the Act. Take the case of an urban authority that had got scarcely any agricultural land in its district, or perhaps only a single farm which might be unlet. In that case, the farm being unlet, there would be no rate from agricultural land, and of course there could be no deficiency. Consequently, no relief would be paid to that particular spending authority under the Act. That was the great objection to using the word deficiency. Unless there was a deficiency, spending authorities, which were not intended to be deprived of the benefits of the clause, would be deprived of those benefits if the words in the clause were allowed to stand.


replied that the objection raised by the hon. Member to the employment of the word "deficiency" would equally arise if the word used were "difference."

MR. J. H. DALZIEL (Kirkcaldy Burghs)

said the Amendment raised the difference in meaning between "difference" and "deficiency." Supposing that last year—which was the year taken for the purpose of the Act—£1,000 was produced in a particular district from rates on agricultural land, the deficiency payable under the Act would be £500. But supposing that in the following year the rates fell to £800, it was not half of that amount of £400 that would be payable, but £500, if the clause was allowed to remain as it stood. They contended that all that ought to be paid in the latter case was £400, and therefore they desired that the word "difference" and not the word "deficiency" should be used in the clause.


said that, under the clause as it stood, in the case mentioned by his hon. Friend the Member for Kirkcaldy—in which the rates fell from £1,000 to £800—£500 a year and not £400 a year would have to be paid for five years. Did the Solicitor General think in these circumstances that "deficiency" was a proper word?

Amendment negatived.

MR. LLOYD-GEORGE moved to omit the words "of such amount," in order to insert instead thereof the words "not exceeding £1,300,000." He thought the House of Commons should place some limit beyond which the Exchequer should not go in making the yearly advances under the Act, and he thought he would satisfy the House that £1,300,000 was really a very high limit. He would take £33,600,000 as the rateable value of the agricultural land of England and Wales. Out of that sum tithe had to be deducted, which left £30,000,000. Out of that, again, there was to be a deduction for buildings and farmhouses. He thought a deduction of one-eighth for buildings was too small. In the case of the average farm, let at £100 a year, one quarter would be the proper reduction to make in respect of buildings. Taking the rateable value of agricultural land in England and Wales to be £33,600,000, they would have to deduct in the first place £3,600,000 in respect of tithe, which would leave a balance of £30,000,000. From that sum they must further deduct one-eighth as representing the value of buildings. The rates upon the remainder, at 2s. in the pound, would amount to about £2,500,000, and half of that amount would be £1,250,000. He, however, thought that it would be as well to take the limit of £1,300,000 as the amount to be paid out of the Imperial Exchequer in relief of the local rates. The Bill as it stood gave a blank cheque to the Local Government Board. He should like to ask the President of the Local Government Board, who was going to make the valuation upon which the rate was to be based? There ought to be some guarantee that the Imperial Exchequer should not be called upon to pay more than its fair half of the rates. The President of the Local Government Board said that a fresh valuation would have to be made, but that the matter would be dealt with in a liberal and generous spirit. What did that mean? The new valuation would be made by the Assessment Committee, but he did not think that that body was a reliable one. For instance, the assessment upon land for the Income Tax was £40,000,000, but the valuation of the Assessment Committee amounted to £33,000,000 only, being a difference of £7,000,000. That discrepancy was due to the fact that the Assessment Committee was in the hands of the owners, and did not value the land at its real value. Could they trust the Assessment Committee in these circumstances to put a fair value upon land? The result would be that they were going to spend money out of the Imperial Exchequer on the valuation of the Assessment Committee, upon which body the Imperial Exchequer had no representative. In these circumstances he thought that the limit of the relief to be given out of the Imperial Exchequer under this Bill ought to be fixed, and he had fixed the amount of such relief at £1,300,000.


said that he readily admitted that the hon. Member who had just sat down had made a speech to which he was fully entitled to receive a complete answer, and he thought to give such an answer before he sat down. He could not accept the Amendment because it proposed to put a fixed limit upon the relief to be given by the Bill, for a reason that might commend itself even to hon. Members opposite. The House had already laid down in Clause I. of the Bill that agricultural land was to be relieved from one half of the burden of the local rates. The Government had made the best estimate they could of the sum that the Imperial Exchequer would have to contribute to carry out that object, but if they accepted the Amendment, in the event of their having made a mistake in their calculation, the deficit would have to be made good by an increase in the rates which were paid by other property, which in his view would be most unjust. The hon. Gentleman suggested that people would be interested in making low valuations; but there was a provision in the Bill by which the Local Government Board were empowered to make regulations, and among them a regulation for fixing, with the concurrence of the Treasury, the minimum gross estimated rental and rateable value of the buildings and other hereditaments. He also proposed to insert a provision that "the rateable value of the house, whether with or without buildings, should not be less than one-eighth of the gross estimated rental of the hereditaments—that is, land, houses, and buildings, if any." There were further precautions in the Bill. When these valuations had been made they were to be sent to the Surveyor of Taxes, and were subject to his revision and to a right of appeal by him. As to the estimate which he had made, he would explain how it was arrived at. Taking the rateable value at£33,364,000, deductions were made for buildings (one-eighth) and for tithe, etc. An allowance was also made for a fall in values of the same proportion as the fall for the last few years, and those deductions brought the estimated value to £26,250,000. He had taken a rate of 2s. 4½d. in the pound, and that would produce £3,100,000. Half of that would be £1,550,000, which was the deficiency he anticipated. It was a rough estimate, of course, but he would not consent to put a fixed sum in the Bill, because the burden might then fall in an unfair proportion on houses and buildings.


said that in the right hon. Gentleman's calculation, the deduction in respect of buildings was far too small; it ought to be at least 100 per cent. higher. But the right hon. Gentleman had brought in a factor which would disturb all previous calculations, and that was the allowance for a fall in values in the future. There was no allowance for a possible rise in values, and the House of Commons had no right to speculate in future values. It ought to take the depression as it now existed. As to the regulations referred to by the right hon. Gentleman, the Surveyor of Taxes had no concern whatever in a valuation of this kind. It was more necessary than ever that Parliament should fix a definite limit, as it had been shown that the Bill could be stretched in all directions in favour of the landlord.

MR. ARTHUR JEFFREYS (Hampshire, Basingstoke)

said that he hoped his right hon. Friend was mistaken when he said that in future buildings were not to be assessed at less than one-eighth. He surely meant "not more than one-eighth," for that was now the general method of rating them throughout the country. It would be bad if these buildings were to be put up in valuation, because, where they were valued and rated separately from the land, they were not rated at anything like the high figure which the hon. Member had put them at. That was so, because it was recognised that the buildings without the land were useless. He had taken some copies of the valuations of Assessment Committees in different parts of Lincolnshire. In one Union, on one farm, the house and buildings were taken at one-fourth, on another at one-thirteenth, on a third at one-seventeenth, on a fourth at one-thirtieth, and on a fifth at one-twelfth. The first farm was 59 acres, and the second was 732 acres. Although one-eighth might be a fair average sum all round, it would be too little in the case of small farms, and too much in the case of large farms.


said that the calculations of the President of the Local Government Board were incorrect. The estimate of the total rates at 2s. 4½d. in the pound did not allow for the provision in Sub-section 2 of Clause 1, by which certain rates were excepted from relief. There was another item the right hon. Gentleman had forgotten. In Committee on the Bill the right hon. Gentleman was good enough in the early hours of the morning to accept an Amendment to Clause 6, specifying that the amount to be taken under Clause 2 should be the actual amount raised during the year preceding the passing of the Bill. That affected a sum of no less than £60,000 a year. That Amendment altered the amount to be paid to the Local Taxation Account, from the amount the rate nomally produced to the amount it actually produced. The right hon. Gentleman's figures were based on the terms of the Bill as it was originally introduced. The estimate of his hon. Friend the Member for Carnarvon was far more correct, and therefore he should have pleasure in voting for the Amendment.


said he quite recognised the spirit in which the right hon. Gentleman had tried to meet the objections of his hon. Friend; but of course the right hon. Gentleman had not answered the point that in the estimate he had laid before the House; he had taken no notice of the fact that the district rate was not included. He hoped the right hon. Gentleman would stick to one-eighth, but he would like to ask whether the eighth was to apply to individual farms or to unions. If it was to apply to individual farms, it would make a very great difference to the estimate the right hon. Gentleman had made. The most important point in connection with this Amendment was the question of a limitation being fixed in the Bill. The Government had not, up to the present, got to the point when they could tell the House exactly how much they were to be asked to vote. The right hon. Gentleman said that if the estimate was made too low there would be a difficulty; but the estimate need not be made too low. Let the right hon. Gentleman make it too high, if he liked, but let there be a limitation in the Bill. Unless the right hon. Gentleman would consent to insert a maximum in the Bill, he hoped his hon. Friend would divide the House.

*MR. JOSEPH A. PEASE (Northumberland, Tyneside)

contended that the right hon. Gentleman's figures would not stand any investigation whatever. The right hon. Gentleman took the rural rate at 2s 4d., but he ignored the deductions that ought to be made from that amount. He would have much pleasure in supporting his hon. Friend's Amendment.


said that as the right hon. Gentleman had told the House that he was going to put the minimum value at one-eighth, that would afford a basis for the calculation that was asked for. The right hon. Gentleman might, with the staff at his disposal, easily find out what the amount would be at one-eighth. He thought that before the discussion was closed the House had a right to ask also whether the one-eighth would apply to Unions generally or to individual farms.

Question put, "That the words 'of such amount' stand part of the Bill."

The House divided:—Ayes, 229; Noes, 131.—(Division List, No. 270.)

*MR. ELLIS GRIFFITH moved after the word "conceded" to insert as a new Sub-section the words:— Provided that the spending authority shall not be entitled to receive from the local taxation account in respect of any one year a sum exceeding the amount derived in that year by such spending authority from the local rates in respect of agricultural land. The Amendment, he claimed, raised a substantial point. The principle of the Bill, as the Government explained it, was that the rates payable on agricultural land should be reduced by one-half, and to that principle the Government ought to adhere. There would be violations of it, however, unless some Amendment of this kind were agreed to. Let the House consider the following concrete example. In the year before this Bill would come into operation the produce of the rates in a particular parish amounted to £300, £150 coming from land and £150 from buildings. The contribution of the Government for five years in that parish would be £75. Now, supposing that in the year after the passing of the Bill the produce of the rates should come down from £300 to £240, how would the sum be made up, the rateable value of the land being equal to the rateable value of the buildings? £75 would still be contributed by the Government, £55 would come from the land, and £110 from the buildings. Thus the buildings, instead of contributing £120 would contribute £110. The Bill laid down the principle that the buildings must pay twice as much as the land. This concrete example violated the two principles on which this Bill was presumably based—first, that it was only to aid a distressed industry; and, in the second place, that the Government was only going to pay half the agricultural rates. The best way out of the difficulty was the way he had suggested in the Amendment.


hoped that the hon. Member would forgive him if he did not go into the figures he had quoted; that was really not necessary. There were three reasons why he could not accept the Amendment. In the first place the grant was to be a fixed sum. It seemed to him to be very unfair that if, because for any reason there had been a larger expenditure in one year, which had led to smaller expenses in the following year, that therefore the ratepayers in the second year were to be deprived of the advantage which they would derive from the payment of the full grant. If it happened that the contribution from the State was larger than was required for the second year, and there was a surplus, then that surplus would go in relief of the rates generally; and to that extent the representatives of houses, buildings, and property other than land, whose interests hon. Members had particularly championed throughout these Debates, would derive an advantage of which it would be very unfair that they should be deprived. Another reason against the Amendment had reference to the question of practical difficulty. The payments from the grant were made at the beginning of each half-year, and until the end of the year the amount derived from rates on agricultural land in that year could not be ascertained, and thus it would be impracticable to give effect to the Amendment.

SIR ROBERT REID (Dumfries Boroughs)

said that the object of the Bill as stated in the first clause, was to give relief to agricultural land as opposed to buildings and other hereditaments. His hon. Friend had clearly established that in the event of the rates diminishing in any year and falling below the standard which was set forth in the Bill, there would be money paid out of the Exchequer by virtue of this Bill which would go, not to agricultural land, but to buildings and other hereditaments. The right hon. Gentleman said he saw no reason why they should not enjoy that benefit; but this seemed to him to be inverting the whole position of the Bill; and the right hon. Gentleman ought to adduce some reason to show why buildings and other hereditaments ought to benefit by this grant of public money. In his judgment the Amendment met the point in dispute.


cited the case of a district in which there were collieries and other industries. Assuming that in this district £800 was raised in rates—£400 on agricultural land, and £400 on buildings and the colliery interest. If the whole of the industrial population migrated in the course of the next two or three years owing to the closing of the colliery, the expenditure might go down to £150. Thus they would be receiving £200 from the Exchequer in order to help the local rates, while the total amount required to be expended in the locality might only be £150. In his opinion, therefore, the attitude of accepting a fixed amount was an untenable one.

MR. H. H. ASQUITH (Fife, E.)

thought that the Government would be well advised to give a more adequate answer to the Amendment. The point was a clear one. Here was a Bill which proposed to relieve the rates on agricultural land to the extent of a half. A quite possible case—nay, a probable one—had been quoted where, if the Bill remained as at present, the contribution paid out of the Exchequer must necessarily not relieve agricultural land, but the rating on other subjects. No one had attempted to make out a case showing that this class of property was in need of relief from the Exchequer. It was true that the Opposition throughout these Debates had constantly emphasised what they conceived to be the injustice done to the occupiers of buildings and other property as compared with agricultural land; but there was another interest which they equally represented—namely, the general taxpayers; and in the interests of the taxpayers they were bound to make this protest, and to ask the Government how they could justify this application of public money.


pointed out, as one of the objections to the Amendment, that if it was provided that the grant should go down as the rates go down, then it ought also to provide that the grant should go up as the rates go up. The arguments used in support of the Amendment had involved that proposition, that the grant should vary according to the necessities of the year. The answer to the proposition was that, practically speaking, for the purposes of working such a Measure as this, it was impossible. How could they provide the machinery for ascertaining year by year what should be the grant from the Exchequer? The only practical way, and that adopted in the Bill, was to take a fixed grant which would meet the justice of the case. If the rates go down they would not get less; if they go up they would not get more. Suppose that in the year 1898 there happened to have been a considerable expenditure out of the rates. The result of that would be that the rates would be higher in 1898, but the further consequence followed that less expenditure would be needed in 1899. In 1898 they would get, according to the Bill, the fixed grant; in 1899 they would also get the fixed grant. Thus, on an average of years justice would be done by the machinery of the Bill without an attempt at working a system which in practice would break down. His hon. and learned Friend said that the wrong people would get the benefit. But the benefit would not go, as was supposed, only to the owners of buildings; it would go to the ratepayers of the district. His hon. and learned Friend actually objected to distressed agriculture being relieved, because at the same time and incidentally, some benefit would go to the owners of houses.


said what he objected to was that, whereas the design was to relieve agricultural land, they could not do it without squandering money on people who were not entitled to it.


submitted that he had accurately represented the argument. In his opinion, it would be very unreasonable to do injustice to agriculture in order to prevent some little benefit going to the owners of houses.


offered an undertaking that if the Amendment were accepted, the omission referred to by the Solicitor General would at once be supplied. It was true the Amendment only provided for the rates going down, but the Government neither provided for their going up nor down; it was a go-as-you-please affair altogether. To take the case which had already been referred to in the Debate, the result, according to the Bill, would be that they would be paying three-fourths of the rate on agricultural land instead of one-half. That was unanswerable, and it showed how difficult it was to carry out the wishes of the Government. Nevertheless, it was the duty of the Government to insert such provisions as would bring the money in excess of half back into the general taxpayers' pockets.

SIR WALTER FOSTER (Derbyshire, Ilkeston)

said that under the provisions of the Bill as now explained by the President of the Local Government Board, in some cases more than half the rate would be paid. That was not consistent with the framework of the Bill, and it was a gross injustice to the general taxpayer. It was quite conceivable that instances might occur whereby an industry moving from one place or failing in one district, the local rates might be materially altered; they might, by giving a fixed sum, be paying nearly all the rates of the district. That was contrary to the most rudimentary notions of justice. Yet the matter could be considered very easily by the distributing authorities. If every year the spending authority sent in its estimate it would receive a sum on that estimate, and if in one year it exceeded the estimate, it would in the next year be able to make it up, but in the meantime the money would be saved to the general taxpayer.

MR. BRYN ROBERTS (Carnarvonshire, Eifion)

thought a fallacy underlay the argument of the Solicitor General in assuming that both the cases he put would occur in the same parish. That would not be the case at all.


I did not say that the rates might rise and fall in the same parish in the same year, but they might in successive years, and commonly do.


thought only to a slight extent, because, roughly, the amount of rates depended upon population, and change in population was usually gradual. The argument of the Solicitor General was no defence whatever for giving State money to people who were not entitled to it.

Question put, "That those words be there inserted."

The House divided:—Ayes, 148; Noes, 251.—(Division List, No. 271.)

MR. LLOYD-GEORGE moved to leave out Sub-section (2).


accepted the Amendment.

Subsection (2) accordingly struck out.

*MR. J. A. PEASE moved to omit Sub-section (3). He was aware that there was small prospect of the Government accepting the Amendment, but he desired to draw the attention of the House and the country to the financial proposals of the Bill whereby £7,000,000 would be—under the figures given by the Chancellor of the Exchequer in his Budget statement—withdrawn from the control of the people's representatives during the next five years, no matter which Party happened to be in power. The effect of the sub-section, if it remained in the Bill, would be to withdraw from the control of the House of Commons during each of the next five years the sum of.£2,000,000 a year, and during the current year the sum of £775,000. There were certainly precedents, but they had proved most unfortunate and they were undesirable ones to repeat. The whole policy of Imperial subventions was wrong and had led to extravagance among local authorities. The bodies who spent the money were not responsible to the taxpayers, nor even to Parliament. When dealing with the expenditure of their own rates the local authorities were compelled to carefully examine their own wants, and measure their wants by their resources, and meet their wants in the most efficient and economical way, but that was not the case with subventions by the State. The tendency of all spending authorities was to bring up the rates obtained in the locality to the amount raised in the locality prior to the grant of a subvention from the Imperial Exchequer. In his own county the rates had not gone down although the amount gradually received from the Imperial Exchequer had amounted since 1888 to £100,000 per annum. ["Hear, hear!"]


The hon. Member is not in order in going into the general question of subventions or even into this particular subvention. The House has already decided in favour of the subvention by voting that there shall be paid money to the local taxation account, and this is only machinery for carrying out what the House has already voted.


Well then, Sir, as you rule the principle of giving Imperial subventions is not to be discussed, I would ask the House to support the Amendment, because the section hands from the Estate Duty certain sums, in a way which is opposed to sound finance, and is a mere device opposed to all sound bookkeeping principles. It is not possible to earmark revenue as items for expenditure. The revenue is derived from the taxpayers, and the whole of it applied to the items of expenditure. I oppose the sub-section because the proposal is injurious to urban populations, demoralising to those who are intended to benefit by it, and detrimental to the interests of the whole nation.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

said he did not desire to repeat the arguments he used in Committee against this sub-section, but he wished to take this opportunity of entering his protest against what he could only call the false pretence that this money was to be paid out of a particular fund of the taxation of the country. It was not the fact that the money was to be paid out of one fund rather than another. The principle of the interception of taxes had been admitted to be a false principle of finance, and to prevent the repetition of it the House was going to amend the Standing Order. This money was being voted by the House contrary to all the rules relating to the finances of the country. ["Hear, hear"] The real point to which he desired to draw attention was that the pretence that this money came out of the Estate Duty was altogether a misrepresentation of the fact. It came out of the general taxation of the country. [Cheers.] It was quite obvious that this was the case, and the money to be applied under the Bill might have been devoted to the reduction of the Tea Duty, to the diminution of the Income Tax by a penny, or to the general relief of the taxation of the country. [Cheers.] Therefore, to say that all that was being done was that the Government were taking so much money out of the Estate Duty was really to place the financial part of the Bill disingenuously before the House and the public. [Cheers.] He desired it to be perfectly understood, in spite of this ingenious manœuvre, that the fact could not be concealed that this money was being taken out of the pocket of the general taxpayer. [Cheers.] It was a contribution from the pockets of the taxpayers of the country without distinction for the purposes of this Bill. ["Hear, hear!"]


said he agreed with the right hon. Gentleman that it was useless to argue this question over again, because it had been fully discussed in Committee and on the Second Reading. He would not quarrel with the somewhat violent language of the right hon. Gentleman, who had been good enough to say that this sub-section was a disingenuous manœuvre, that it was a farce, and a misrepresentation of the fact. [Opposition cries of "Hear, hear!"] He consoled himself, however, with the reflection that he was a humble imitator of the right hon. Gentleman himself in this matter. [Cheers.] In the year 1888 Parliament deliberately chose to give up a certain proportion of the Probate Duty on personalty to the relief of local taxation. When the right hon. Gentleman in the year 1894 abolished the Probate Duty, what did he do? He made himself guilty of the very proposal he attributed to the Government now. [Cheers.]


In Committee I explained that I continued this offence—[Ministerial laughter]—because I had not at that time means or the opportunity of redressing it. [Ministerial laughter.]


said that what the right hon. Gentleman did was this. He abolished the grant out of the Probate Duty because he abolished that duty. He made a substitution for that grant, and provided that the money should be taken "out of the proceeds of the Estate Duty derived from personal property." [Cheers.] Therefore the right hon. Gentleman adopted precisely the same words as appeared in this Bill. [Cheers.] He accepted the epithets of the right hon. Gentleman, and returned them. [Cheers.]

Question put, "That the words of the sub-section to the word 'pay,' in line 9, stand part of the Bill."

The House divided:—Ayes, 268; Noes, 138.—(Division List, No. 272.)

MR. GIBSON BOWLES (Lynn Regis) moved in Sub-section (3), after the word "shall," to insert the words "notwithstanding the provisions contained in Section 10 of the Exchequer and Audit Act 1866." The Amendment, he said, did not touch the substance of the Bill, but it was one which he thought was almost necessary in the interests of the decencies of drafting. Section 10 of the Exchequer and Audit Act 1866, was the result of Committees, the following out of solemn Resolutions of that House, and the affirmation of what, he undertook to say, was a most essential principle. That was that they should not allow any part of their gross revenue to be deducted there from before it was paid to the Exchequer—that they should pay the whole of that revenue into the Exchequer and should only allow it to go out by votes subject to the annual revision of that House. That was, he ventured to say, the only sound principle upon which finance could be conducted in this country or upon which the control of that House could be maintained over the revenue and expenditure of the country. ["Hear, hear!"] He regretted that already that principle had been impaired and Section 10 had been——


Order, order! I do not think the hon. Member is in order on this Amendment in going into the general financial question. The only question before the House on this Amendment is whether it is necessary, having regard to the provisions of the Act of 1866, to insert these words. That is a mere drafting question.


did not argue that it was necessary, but it was certainly advisable in the interests of the decency of drafting that these words should be inserted. It was not proper to repeal a very serious section of a very serious Act embodying a most important financial principle by mere implication and inference. [" Hear, hear!"] They had had enactments by implication and inference alone, and other Acts repealed by implication and inference alone. He admitted that enactments had been repealed in this very Bill by implication and inference, but it was a practice which should not be allowed to continue, and when they proposed to repeal so important a section as this to the extent of £2,000,000 a year, they ought not to do it by mere implication and inference, but ought to indicate clearly what they were doing. In a matter of this kind it was proper that reference should be made to the nature of the act that was being committed, so that the student of the statutes when he came to this particular Act should be enabled to see on the face of it that to a large extent it repealed a most important section of the Exchequer and Audit Act of 1866.


observed that his hon. Friend had admitted that this Amendment was not necessary, and he thought he should be able to show him that not only was it not necessary but that it might be mischievous. In drafting it was requisite to make Acts of Parliament which proposed to do the same thing identical in their terms. The Act of 1888, which was the first Act establishing the local taxation account, directed that certain taxes should be paid to it, but made no reference whatever to the Exchequer and Audit Act. That again was repeated in 1890, when the additional duties on spirits and part of the duty on beer were directed to be paid to the local taxation accounts, and no words of the kind now proposed by the hon. Member were inserted in that Act. ["Hear, hear!"] Again, in 1894, when the proceeds of the Estate Duty, derived from personal property, were directed to be paid to the local taxation account in substitution for the old Probate Duties, no similar words to these were inserted in the Act. He thought it would be extremely inconvenient in the interpretation of these Acts to have a phrase of this kind inserted in the present Bill, which did not occur in any previous Act, authorising precisely the same thing being done. This Bill, when it became law, would authorise the duties to be intercepted in spite of the Exchequer and Audit Act, exactly as other Acts had done; therefore he was afraid the Government could not accept the Amendment. ["Hear, hear!"]

SIR HENRY FOWLER (Wolverhampton, E.)

thought the right hon. Gentleman's answer to the hon. Member for King's Lynn was simply an attempt to show that two blacks made a white. There was no doubt that what was done in 1888 was indefensible and wrong.


Why did you not object to it? ["Hear, hear!"]


replied that they had so much to object to in the whole scheme of 1888, so far as finance was concerned, but that, of course, was bygone history. He considered no answer had been given to the Amendment, and tacitly the Chancellor of the Exchequer admitted that this was indirectly a violation of the Exchequer and Audit Act of 1866, but that it was inadvisable to say so on the face of the statute. His hope was that this was the last time the blunder would be committed, and he thought that the discussion that had taken place with reference to this clause would prevent any future Chancellor of the Exchequer—and he was sure it would prevent the existing one—from repeating the mistake that had been made here. He rose, however, for another purpose of a personal character. He argued this question at length the previous day, and submitted it to the Speaker, and he was not going to raise the question again. But he found himself charged in the Press with having sprung a mine on the Government, with having stated something for the first time without giving notice, and thus been guilty of something rather in the nature of a trick. He had a great dislike to accusations of that sort, and he wished, as a matter of personal explanation, to call the attention of the House to the fact that on May 21, when the Bill was in Committee, and this clause under discussion, he then stated that of course it was not a question on which they could take the ruling of the Chairman of Committee, but that it was a question for the Speaker to decide. He gave notice at that time that when the Report stage was reached they should publicly ask the Speaker for his ruling on the clause. He made this statement in order to discharge himself from any appearance of having been guilty of the conduct which had been imputed to him. [Cheers.]

MR. T. LOUGH (Islington, W.)

said the answer of the Chancellor of the Exchequer to the hon. Member for King's Lynn might be good enough, but it amounted to this: The Front Bench of the Opposition must not find fault with the refusal of the Government to insert this Amendment, because they had done as badly themselves. He would point out, however, that the Amendment did not come from the front Opposition Bench, but from an independent Member. When a mistake had been discovered that mistake should be corrected as soon as possible. While it was right for them to follow a good precedent, it was also right for them to cease to follow a bad one as soon as they possibly could. He was disappointed that the Chancellor of the Exchequer could not accept this Amendment after the concession he had made to the right hon. Member for Wolverhampton, to whom, at the commencement of the Report stage, he had made a promise, on behalf of the Government, that steps would shortly be taken to put an end to these financial operations.


remarked that the hon. Member was now going into the general financial portion of the section, but it was not open for him to do so on this Amendment.


desired to point out that the Amendment had not been moved in a hostile spirit, and all that was asked was that as they had come to regard this plan with suspicion these harmless words should be inserted in order to inaugurate a better state of things.


said the only word he should have to say on this Amendment would be out of order, because Mr. Speaker had ruled the general financial consideration to be precluded from discussion in the Debate on this Amendment. Although it was out of order he was afraid they should have regard to it in the votes they should give, and he should support the hon. Member on the grounds he had so well put forward.


said that Section 10 of the Act of 1866 laid down a salutary rule as to the payment of revenues into the Imperial Exchequer. It provided that the Commissioners of Customs and Inland Revenue, the Postmaster General, etc., should cause the gross revenues of their respective Departments to be paid at such times and under such regulations as the Treasury might from time to time prescribe, to the account of the Imperial Exchequer at the Bank of England, Scotland, and Ireland, and all other public moneys payable to the Exchequer should be paid to the same accounts. It was most important that this rule should not be departed from.

Question put, "That those words be there inserted."

The House divided:—Ayes, 129; Noes, 238.—(Division List, No. 273.)

MR. HERBERT ROBERTS (Denbighshire, W.) moved to omit the words "out of the proceeds of the Estate Duty derived in England from personal property." He said those words were inaccurate, because it was practically impossible to ascertain in the Department the proportion of Estate Duty derived from personalty and the proportion derived from realty. That was the opinion expressed before the Royal Commission by Sir Alfred Milner. The form of the clause was unconstitutional and contrary to sound finance. The Chancellor of the Exchequer had sheltered himself in defending the clause behind the Finance Act of 1894; and the Chancellor of the Exchequer said because these grants from Probate Duty were made to the local taxation account by the Local Government Act of 1888, and because the precedent was followed in the Finance Act of 1894, therefore it was necessary to follow these precedents in this case. But there was a clear distinction between the precedent of 1888 and the present case. The transfer of the contribution from the proceeds of the Probate Duty in 1888 to the local taxation account was a transfer of a certain proportion to the credit of the general local taxation account. In this case it was proposed to take a portion of the death duty, not for the general I benefit of the local taxation account, but for the benefit of a particular class of taxpayers. The Chancellor of the Exchequer said, because these words applied in the Act it was not wrong they should appear in the Bill; but the fact that a mistake had been made once was no reason for making it again. It was the duty of the House to take the matter seriously into consideration, and no injustice or inconvenience would result from the omission of the words.


said he really thought they had decided the question on the proposal to omit the earlier words of the subsection. The clause directed the Commissioners of Inland Revenue to make a cash payment to the local taxation account; they could only make such a payment out of some tax which must be named, and it had not been proposed that any other tax should be substituted for the Estate Duty or personalty. The proposal in the Bill was that the payment should be made in exactly the same manner that it was made under the Act of 1894. That might be right or it might be wrong; the question had been argued already, and it was hardly necessary to argue it again. The omission of the words proposed to be struck out would make the sub-section meaningless.


said that if the words objected to were omitted, it would be proposed to insert other words which would make the clause much better. The House could hardly be called upon to decide an unimportant question. It was proposed to add £2,000,000 to the £7,000,000, which by various surreptitious methods was intercepted and given away without being voted by the House; there was therefore an extension of an unsound system of finance. The defence of the clause on the ground of precedent had been sufficiently met by the answer that the creating of a bad precedent was no reason why it should be followed. We had now a chance of retracing our steps, of leaving the downward path, of getting off the slippery slope that would precipitate us into national bankruptcy, of departing from a thoroughly unsound system of finance, which deprived the House of Commons of complete control over the expenditure. As to the £2,000,000 being a tax on personal property, it could not be so; it would be simply taken from the Imperial Exchequer, and no one could know how much came from personalty and how much from realty and from taxes on coffee and beer. The words of the clause were unnecessary and meaningless, and therefore ought to be struck out.


said he supported the Amendment on the ground that the words of the clause were entirely misleading, because there was no such thing as "Estate Duty" derived from personal property in England. There was up till 1894 a Probate Duty, and an Estate Duty levied on what was in law called personalty. Out of that Probate Duty there was a proportion carried over to grants in aid. Up till the Finance Act 1894, Probate Duty was levied on personalty only, and by the term personalty was meant property which in law was so defined, that is to say, leaseholds of 99 years as in London, and the leaseholds of 999 years which form the tenure system in Lancashire. But all those duties were abolished by the Finance Act of 1894, and Estate Duty on personalty ceased to exist. That Act established and created an "Estate Duty" so designated by the Act; and this Bill referred to the "Estate Duty" so defined. By the First Section the duty granted and therein call Estate Duty was a duty to be "levied and paid upon the principal value (ascertained as thereafter provided) of all property real or personal, settled or unsettled, and which passed on the death of such person, and this duty the Act called "Estate Duty." The Act proceeded to define the property and conditions on which the duty should be paid, and by Section 22 the definition clause of the Act defined property as meaning "real and personal property." The Estate Duty was levied out of a mixed fund of realty and leasehold, or personalty in England as defined in law. This included all sorts of property, and was not pure personalty or moveable as they knew it. ["Hear, hear!"] In Scotland personalty meant moveable property, and the Finance Act so defines, so that whilst Estate Duty derived from personal property exists in Scotland, it did not exist in England, and the Estate Duty of the Finance Act of 1894 was not as described in this Bill, and the words improperly described the fund. It had been attempted to justify the use of the words by the 20th Section of the Act which relates to the grants in aid clause out of the Estate Duty; but those words did not describe the Estate Duty, but laid down administrative directions subject to Treasury resolutions, for ascertaining what on certain calculations would be a sum to represent that amount which was under the Probate Acts levied formerly as Probate and Estate Duty on personalty, the personalty of legal and not of economic conditions. This was recognised in Sir A. Milner's memorandum appendix to Volume 4 of Royal Commission, who said that no materials existed for ascertaining the difference of taxation levied on moveable and immoveable property. For these reasons he supported the Amendment.


said if these words were struck out the clause would still provide that the money should be paid by the Commissioners of the Inland Revenue. What they objected to was the earmarking of the fund which occurred in these particular words. He agreed with the description given of it by his hon. Friend who had just sat down. All this Estate Duty had gone into a common purse for two years. It had not been separated before. A great many persons on the opposite side of the House seemed to think that this was a new imposition on personal property. They were doing nothing of the kind. They were dipping their hands in a fund which had existed for two years, and they were taking it as they would take it out of any other cash of the country. A great many people were induced to take a more lenient view of the Bill owing to these words, and it was highly judicious indeed to move that they be struck out of the Bill.


said as regarded this Amendment, he was in a little difficulty because if they were to pay a certain sum they must determine out of what they were to pay it. The words used here should be struck out, leaving it to the Member for King's Lynn to move his Amendment by and by. He supposed it was necessary to have definition or they would have no money out of which to pay it; but why on earth the Chancellor of the Exchequer should desire to keep in the words "derived in England from personal property," he could not understand. They were going to pay half, and whether the money came from the Estate Duty or from the Inland Revenue, was a matter of no importance whatever. If the Estate Duty was not sufficient, they might have to bring in a Bill; but why they should restrict the payment to one class of property and one mode of assessment, he could not imagine. It was laying down a very ambiguous phrase to be paid out of Estate Duty in England. He hoped they would have some reason why the time of the House was wasted in discussing this point. [Ironical Cheers.] There had not been a single argument urged from the Treasury Bench in favour of it.


said if they passed this Amendment, they would be ordering the Inland Revenue to do that which would be physically and morally impossible for it to do. A portion of the revenue had been already intercepted by a previous Act, and unless in this case you marked the particular part of the revenue they were going to intercept, they would get no money at all. There was another Amendment later on, and he urged that this Amendment should be withdrawn.


could not agree that the Amendment should be withdrawn. If reliance was placed solely on the Estate Duty it might happen that some year the Chancellor of the Exchequer in his Budget would introduce a new system of taxation, and there would be no funds out of the Estate Duty to meet the purposes of the Act. He thought the grants under the Act ought to come from the whole Exchequer of the country.


said the point at issue was whether the money to be applied to relieving the rates on agricultural land was to come out of a particular fund, and if so, whether that fund should be the proceeds from taxes on personal property. He thought the money ought not to come from personal property. Take the case of two houses in the same street of the town—one held under lease for 99 years and the other a freehold. The first was personal pro perty; the other was real property. Why should the house which was personal property be called upon by the words they were now discussing to con tribute to the relief of agriculture while the house that was a freehold was exempted? Again, there were cases of houses held under leases for 999 years. Such a lease was practically, but not legally, a freehold. Yet while the house which was technically a freehold was exonerated by the clause, the house that was practically a freehold had to bear the burden of relieving agriculture. Take another case. The owner of a villa in the country, which would be real property, was exonerated—though he might be deriving his income from land—from any charge for the relief of agriculture, while the tradesman in a town who had a lease for 21 or 100 years—though he had no direct connection with agriculture—was to be taxed, or the duty derivable from his estate was to be ear marked, for the relief of agriculture. He asked upon what ground such a distinction could be defended? There was no distinction made in the Estate Duty Act between real property and personal property——


rose in his place, and claimed that the question be now put.


I do not think it is necessary to accept the Motion, but I hope the hon. Gentleman will not prolong his remarks. I would remind him that he is about to read an Act which has been read already in the course of the discussion. I think this point has been fully debated, and that a decision might speedily be taken upon it.


said he was merely about to call attention to the first section of the Estate Duty Act in order to press for an answer to the point raised by the hon. Member for Plymouth.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided:—Ayes, 165; Noes, 74.—(Division List, No. 274.)


said he had an Amendment to move which he had some hopes that the right hon. Gentleman in charge of the Bill would accept. According to the Bill, relief was to be given to agricultural land after the 31st day of March next, so that no occasion for relief arose until that date. But by this sub-section it was proposed to pay during the six months ending the 31st March from the Local Taxation Account, that was, to pay a sum of money which was not due. It would be impossible, moreover, from a practical point of view, for the right hon. Gentleman to get his machinery into order to ascertain the amount which was to be paid. In the first place, he would have to get a separate valuation throughout every rural district in the whole kingdom. [Cries of "Oh!"]


said that point was dealt with on the first clause.


said he was not discussing that point, but was pointing out that it was a question of time. The first thing that would have to be done was to get a separate valuation of farms, land, buildings, and farmhouses.


Order, order! I think this was discussed on the First Section, and if the hon. Member wished to raise the question of the date he ought to have done so then.


said that the first Section dealt with the date when relief ought to come into operation.


said he was quite aware of that, but if the hon. Member was going into details which were used in a previous argument as to whether the 31st of March should be the date fixed for the Act, that was ground which had been gone over.


said it was a physical impossibility for the Commissioners of Inland Revenue to ascertain the amount before the 31st of March.


said he rose to a point of order. He wished to ask whether this question as to what had to be done before the 31st of March was not discussed upon the first clause of the Bill.


said that on the point of order he would ask whether it was not the case that the point discussed on Clause 1 was the question of the moment that the occupier of agricultural land would commence to pay a half of the rate, and whether the point now raised, namely, whether or not the payment should be made in the six months preceding the 31st of March, was not an altogether different question.


on the point of order, submitted that the sub-section which they were now considering was a piece of machinery absolutely necessary for working purposes, as the money must be paid in before the first half-year in order that payment might be made.


said that did not appear to be a point of order, although it might be a very good reason for not accepting the Amendment. He thought the hon. Member was entitled to raise the question, but he hoped he would do so with more brevity.


submitted, as a point of order, that these words were absolutely inconsistent with those in the first clause.


said that was not a point of order, although it might be a reason why the hon. Member's Amendment should be accepted.


said he would then argue the question simply on its merits. As a point of drafting, the words were wrong. He submitted, in the first place, that they could not ascertain the amount by the date fixed in this sub-section, owing to difficulties to which he had referred; in the second place, that they would be paying in money before it was due; and in the third place, that these words were absolutely inconsistent with the words they had already enacted in the first subsection of the first clause. He therefore begged to move to omit the words "thirty-first day of March" and to insert the words "thirtieth day of September."


said if they were going to pay money when it became due it was necessary that they should have it ready, and this subsection provided that money should be paid into the local taxation account during the six months before the 31st of March next. There was nothing in the contention that these words were inconsistent with the earlier words in the Bill. It might as well be contended that the fourth clause, which provided for certain certificates being made by the Local Government Board "as soon as may be," was inconsistent with the provision that relief should be given during the five years from the 31st March. The provision in this sub-section and the other provisions in the Bill were in preparation of the relief which was to be given during the five years.


said the relief to be given started on the 31st March next. The money which the Committee was voting was to meet a deficiency, but there could be no deficiency on the 31st March. It could only occur six months later.


said that the deficiency would occur in the half-year ensuing after the 31st March, and the money must have been paid into the local taxation account so that it might be paid out during that half-year.


said that that was his argument. There would be six months in which to pay the money and before the deficiency occurred.


said that the words "as soon as may be" in Clause 4, to which the Solicitor General had referred, were followed by the words "after the passing of this Act," and hence an express exception was made. For this cause it was necessary to know the exact amount of the deficiency, and every operation must be finished before the 31st March next. That meant the re-rating of all agricultural land to discriminate between land and buildings, and it could not be done in the time available.


said it was impossible for any deficiency to arise before the 31st March next. Time was always given to the ratepayers by the authorities to pay their contributions, and it was quite evident that whatever was the right date to put in the Bill it could not be the 31st March.


said that the spending authorities did not do their business on credit to the end of the year. They made disbursements as they were due, and the money must therefore be lodged in the local taxation account.

Question proposed, "That the words proposed to be left out stand part of the Bill."

The House divided:—Ayes, 155; Noes, 74.—(Division List, No. 275.)

On the return of Mr. SPEAKER, after the usual interval,

Clause 3,—