HC Deb 14 May 1914 vol 62 cc1434-6

Resolution reported,

4. "That Income Tax, including Super-tax, shall be charged on the income arising from securities or possessions in any place out of the United Kingdom, whether that income is received in the United Kingdom or not;

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


We have had no explanation from the Chancellor of the Exchequer with regard to this Resolution. In his Budget Statement the right hon. Gentleman said he expected to receive £250,000 this year, £500,000 next year, and ultimately £1,000,000. But he did not tell us how much capital is invested abroad, the income of which does not come to this country, but which will become subject to this Resolution. The right hon. Gentleman told us he expected to enforce payment of this tax by means of a Declaration, which would be checked upon the ultimate proof of the estate of the person making the Declaration when death occurred. That is a means of checking the capital, but it is not necessarily a means of checking income, and when we come to discuss the Bill we may have to put in some further protection, if the tax is really to realise the anticipations of the right hon. Gentleman. I do not want to enter into that discussion to-night; it would be more appropriate to the Bill itself. I only ask the Chancellor of the Exchequer to tell us what are his estimates of capital as well as his estimate of tax. I make the suggestion to him, that if ultimately £1,000,000 of tax is going to arise, it will be on the assumption that something like £200,000,000 of capital is invested abroad and is escaping taxation now. Two-hundred million pounds invested at 5 per cent. would give an income of £10,000,000 a year, and, with a tax of 2s. in the £, would give the result the Chancellor of the Exchequer gave, of £1,000,000 a year in tax. That is one way of arriving at the figure of £1,000,000, but there are many other ways of arriving at it, and I want to know how the Chancellor of the Exchequer arrived at it. It would be interesting to the House if he would give that, more especially as a more detailed discussion will be necessary when the Bill comes before the House.


The hon. Gentleman is wrong in saying that this matter has not been discussed. It was discussed on the Committee stage, when the suggestion was made that I had considerably underestimated the amount which would be received from this particular form of taxation. That was the view of the right hon. Gentleman opposite (Mr. Chamberlain), and others made the same sort of criticism upon my Estimate. I cannot give the hon. Gentleman the actual figures now, but I will undertake to give them to him in the course of the next few days. If that will serve his purpose I shall be glad to do so.


This is the first time we have passed such a Resolution, and I would ask whether these words are not much too broad and should not be limited in some way. Income arising from securities or possessions might easily enough be the income of persons not capable of being protected in this country—


May I interrupt the hon. Gentleman? This is an enabling Resolution, and, as he knows very well, such Resolutions are always drafted in the widest possible terms. It will be a Section of an Act of Parliament that he will have to watch very carefully. As soon as these Resolutions are passed, and I am in a position to introduce the Finance Bill, the hon. Member will be able to scrutinise the actual terms of the Clause, and he will find that they are narrower than the Resolution.


That is a plausible explanation, but as the Resolution comes under the Provisional Collection of Taxes Act, is it not important that the Resolution should be drawn more narrowly, because under that Act the subject becomes liable to pay the tax as soon as the Resolution is passed by the House, if the Finance Bill is brought in within a given time. The Resolution ought to be so drawn as not to include in the net people who are not really liable, otherwise the Chancellor of the Exchequer might be landing himself in future difficulties.


I do not expect to be able to collect very much of this particular tax before Monday next. By that time the actual terms of the Clause will be in the possession of hon. Members.