§ The amount of interest repayable to the estate under the provisions of Section fourteen of the Finance Act, 1914, shall be 1741 calculated at the rate of 3 per cent. per annum from the date when the Settlement Estate Duty referred to in Sub-section (b) of the said Section was paid or, in cases where such duty was payable by instalments, from the date when the first instalment was paid, instead of from the fifteenth day of August, nineteen hundred and fourteen, and the said Section shall be construed accordingly.
§ Clause brought up, and read the first time.
§ Sir F. BANBURYI beg to move "That the Clause be read a second time."
The point of the Amendment is this: the late Chancellor of the Exchequer said, in consideration of the abolition of the Settlement Duty, "I will make the concession to the person who has paid already a certain sum in respect of the Settlement Duty. He shall be entitled to receive back that sum with interest at the rate of 3 per cent."—I forget what it was—"upon that sum." And now, instead, it is found that the Inland Revenue claim that, instead of receiving back that sum with the rate of interest at the date from which it was paid, all that they will allow is interest at the date of the passing of the Act, which was, I think, 1914. I am perfectly certain that the Chancellor of the Exchequer will agree with me that that is a misapprehension of what the House of Commons intended to do. It is perfectly clear that if a concession was made that interest should be allowed upon the sum which was paid on a certain date, the interest must commence to accrue from the date at which the sum was paid and not the date of the passing of the Act. The result of that, of course, would be that where a duty was paid ten or fifteen years before the passing of the Act, all the interest that the person would obtain would be, perhaps, a year's interest, instead of fifteen or sixteen years. It is evident that could not have been intended, and, therefore, I move this Clause.
§ Mr. MONTAGUIf ever there was a controversial subject, the Settlement Estate Duty and its repeal, which some of us remember, is that subject. The proposal which the hon. Baronet makes would cost the revenue in the long run approximately, £3,000,000. Personally, I think that the date of the payment of interest which was decided by the House when the Finance Act of 1914 was under discussion is the right thing, and I do not think I could do better than read from the 1742 OFFICIAL REPORT of the speech I made on the Third Reading of that Bill:—
You do not deprive a man who has paid Settlement Estate Duty of any of the advantages which he got by means of that payment before the 15th August of this year. The 2 per cent. which a man paid may be regarded as an insurance against Death Duties. He has had that insurance, whether the estate was passed or not, up to the 15th August of this year; therefore what he is entitled to on the 15th August is the surrender value of the premium. We are paying him not merely the surrender value, but the whole 2 per cent., as though he had never had any advantage from it, and, in addition, because the payment cannot be made on the 15th August but is to be made at a subsequent date, we are allowing him interest on the 2 per cent. from the 15th August."—[OFFICIAL REPORT, 23rd July, 1914, col. 682, Vol. LXV.]That was the argument that was used by me on behalf of the Chancellor of the Exchequer when the Bill was under discussion, and I do hope the hon. Baronet will not raise so highly controversial a subject as the ethics of the abolition of the Settlement Duty.
§ Sir F. BANBURYI am not going to raise the question whether it was right or wrong to abolish the Settlement Estate Duty, although I have strong views on that question. What we are now dealing with is a question of fact, and it seems to me reasonable that interest should be paid from the date on which the Settlement Estate Duty was paid, instead of the date on which the Act was passed. That does not raise the controversial question as to whether it was wise to abolish the Settlement Estate Duty. With all due deference to the Financial Secretary, although he has made an extremely able defence, I am afraid he has not touched my point as to why it is just to take an arbitrary duty in this way. Of course I cannot do anything if the right hon. Gentleman insists upon taking up a hard and fast attitude, but I ask him to consider, not whether the Settlement Duty alteration is controversial or not, but whether in ordinary justice and equity he ought to concede the point I have asked for. May I ask him to give me now a short answer?
§ Mr. MONTAGUI have endeavoured to show the hon. Baronet where I thought he was wrong. The only reason that interest was paid upon the Settlement Estate Duty is because when we passed the Act we ought to have given it back. We could not give it back, but we say we will deduct it next time. The time to pay it back is when Parliament decides that he is entitled to repayment.
§ Sir F. BANBURYI will give an illustration. A certain person pays £1,000 in Settlement Estate Duty. The right hon. 1743 Gentleman says when the Act was passed last year it should have been paid back, and that as he could not do it he proposes to pay interest from the date of the passing of the Act. The person who has paid the £1,000 has lost all the interest after that time. If he had not paid the £1,000 he could have had interest, which he has been deprived of. Am I wrong in that contention?
§ Mr. MONTAGUYes.
§ Sir F. BANBURYHow?
§ Mr. MONTAGUAll the time up to the 15th of August, when he paid that £1,000, he had benefit from it. He knew by that payment that if his estate passed he would not be called upon to pay Death Duties because he had freed it up to the 15th of August, and he could not have got better value for his money.
§ Sir F. BANBURYI will not press my point.
§ Motion and Clause, by leave, withdrawn.