§ Notwithstanding anything contained in Section twenty-two of the Finance (No. 2) Act, 1915, no occupier of land shall be assessed for Income Tax, except as an owner under Schedule A in respect of any land which shall hereafter be wholly planted or replanted with timber for a period of fifteen years after such plantation or replantation.—[Captain C. Bathurst.]
§ Clause brought up, and read the first time.
§ Captain C. BATHURST
I beg to move, "That the Clause be read a second time."
I want, at the outset, to make it perfectly clear that I do not move this Clause in the interest of the landowner or the land occupier, or, in fact, any Income Tax payer whatever. I move this Clause because, as a matter of fact, our woodland is being depleted of its timber all over the country. Timber was never more valuable as a national asset than it is to-day, and no new planting whatever is being carried on, simply because there is no inducement to any occupying owner of suitable land to make such plantations. I do not know whether the Government themselves intend to take over the whole onerous task of afforestation in the United Kingdom, but if they do, I am inclined to think it will involve an enormous outlay of public money, and that it will not be so efficiently done as it would be if they shared their task with the owners of property in the country. Of course, in prewar days, although there was no great inducement to owners of land to plant fresh timber, at any rate the tax burden upon them was not such as to deter those who were sufficiently enterprising from adding to their existing woodland. But the cumulative effect of the present taxation is such that no one but an extremely rich man is the least likely, even out of public spirit, to plant woodland at the present time, and henceforth, and for this reason the persons who are in a position to plant fresh woodland, or replant existing woodland where the timber has been cut, are those who are taxed at the present time under Schedule A, and are now trebly assessed under Schedule B as occupiers—that is the important point—and also pay Income Tax at a high rate, in addition to Super-tax.
I incidentally referred on the Committee stage of this Bill to the fact that 406 a large owner of land in Northamptonshire—and I have found many similar cases since—was able to present a case to the Board of Agriculture in which he was being taxed to-day at the rate of 17s. 9d. per £ of assessable value of woodland. That does not take into account in the smallest degree the cost of making a new plantation, which is at least £5 an acre, apart from fencing, or the annual value represented in rent or otherwise, which must be taken into account and computed at compound interest for a long period of years. I suggest seventy as not too long, representing two generations, during which also Estate Duty possibly would have to be paid twice over before there is any complete return from the timber on felling. As I say, it is not in the interest of the landowner that I submit this Clause to the House, but I do suggest to the right hon. Gentleman that, if he does expect owners of land to share the task of afforestation with him, he is bound to admit that some sort of inducement must be presented to them to enable them to do so. I should just like to point out the difference between the present burden upon that land when it is not planted and the burden that will fall upon that land after plantation has taken place. If left in poor grass—and most of these lands which are most suitable, particuarly in Scotland and parts of Wales, for plantation for woodlands is poor grass—it remains in the hands of the tenant and not the occupying owner, and it yields annually some return which bears some relation to the taxation imposed upon it. If this land is put under woodland it yields no return for a long period of years, it pays a lower rate of Income Tax, it pays no Super-tax, and under the Agricultural Rating Act it pays half rates instead of full rates, which the owner would have to pay. I think I am right in saying that it is estimated that there are 2,000,000 acres of land in Scotland alone at the present timefit for immediate afforestation. There must be something like 1,000,000 acres in various parts of Wales fit for similar treatment, and there must be a large area in. various parts of England. Is the House going to impose any deterrent whatever upon public-spirited men who are prepared, at no profit to themselves, to plant their land in the public interest? I suggest that that would be unfair, and it would not be encouraging the one class of landowner for which this House has always endeavoured to show some sympathy.
407 I am asking in this Amendment that no taxation, save only under Schedule A as owner, shall be imposed upon a person desiring to plant new woodlands or replant old woodlands for a period of fifteen years. I have made some inquiry as to the earliest periods within which some small return can be made from a new plantation, and in no part of the country can I hear of any woodland—even in the shape of thin poles and sticks suitable for estate purposes—producing any commercial return under a period of less than fifteen years. In many cases where the land is poor the earliest tillings come very much later than that. I think my new Clause is expressed in very modest terms. I do not ask, as I might ask on the merits of the case, to have even Schedule A in respect of such new plantations remitted. I ask that Schedule A shall be maintained, but I ask that there shall not be added under Schedule B or the Super-tax any other financial burden.
§ Mr. LAURENCE HARDY
I beg to second the Clause which has just been moved by my hon. Friend. This is a question which was raised at a previous stage of the Bill, and it received a sympathetic answer from the right hon. Gentleman who has now gone to another position in the Government. It has arisen a good deal from the fact that the new Clause which was introduced into the last Finance Bill has not really proved of any great assistance to the industry for which we pleaded. Owing to the wording of the Clause and the shape it took during the passage of the Bill through the House, there has been undoubtedly a very large reluctance on the part of owners of woodland to commit ourselves to the transference from Schedule B to Schedule D, because, when once accomplished, that is a step which cannot be retraced, and therefore they are now feeling the serious burden which is thrown upon them by an increase of Schedule B. Since we met last year the whole question of woodland has become very much more serious. The Government have had to put on very great exertions to fell large quantities of timber in this country, and we see a possibility of our timber being so seriously depleted that it is in my opinion absolutely necessary that we should do nothing in any way to hinder the encouragement of more planting or of keeping up our woodland in this country.
408 I do not know whether this is the most satisfactory way of dealing with the question. At any rate, it is one which encourages new planting, and in that way it is an advantage. In seconding this Clause I do so with a perfectly open mind in case the Government can make any other suggestion which will enable us to give that relief to woodlands which is really what we desire to obtain. It may be said that this has already been met in the case of new plantations by the transference from day to day. That is not really quite the case. The question of taxation does arise in rather a peculiar way, as was alluded to by my hon. Friend in connection with large areas of woodland. Almost all the large areas of woodland in this country are necessarily held by persons who come under the highest grades of taxation, including the Supertax, and the very highest grades of the various forms of the Income Tax. Therefore taxation does fall extremely heavily upon those persons who are endeavouring to cultivate woodland and timber in this country. The aggregation of taxation is large, and therefore we feel that our only chance is to endeavour to mitigate it, and it is on these grounds that we recommend this Clause to the consideration of the Government. Our desire is that replanting should take place at the earliest possible time, and if we can get this Clause it will be proof that the Government have the matter in hand. I hope the Government will not put us off with any suggestions that the whole matter has to be dealt with, and that they will wait until they can bring forward a complete scheme. I hope they will give us this small encouragement which the Clause suggests at the present moment.
Mr. MacCALLUM SCOTT
I desire to support this Amendment, and I do so in the same spirit as the Mover and Seconder, with a perfectly open mind as to any other suggestions which the Government may make. I think it may be said of this proposal, unlike many proposals made here, that there is no private interest that stands to gain by the granting of this concession It may also be said that the Treasury itself stands to lose nothing from it, and it is not giving away any revenue in the shape of taxes, because if this concession is not granted that particular land affected is not going to produce any taxable revenue and will not be planted, and many of the lands on which timber has now been felled on a large scale will simply 409 become derelict and waste land. There is an urgent need, not merely on behalf of the timber industry, but on behalf of the general welfare of the country, for something to be done to encourage the planting of timber, and the prevention of land become in derelict, and to secure that this land will produce the valuable crops which will add to the wealth of the country and which it might produce. It is the sole aim of this Amendment to endeavour to give the Government an opportunity either of accepting this proposal or making some suggestion of their own to achieve that purpose.
§ Sir G. YOUNGER
This is a very serious question, and this was present to the mind of the present Minister of Munitions when he dealt with the subject, for he promised to deal with the question in a fair and reasonable way. The Chancellor of the Exchequer was not here on that occasion, but I do not doubt that he entertains the same view. This is really a very serious matter, because the amount of wood which is now being cut down is so great that if this War were to last for another two or three years there would be no timber left in the place at all. No private interest is concerned except an estate here and there; but as to profit or anything of that sort it is impossible to expect that for another generation, and therefore it is really essential in the public interests that the Treasury should do something to meet the proposal of my hon. Friend. I know quite well that we cannot expect very much planting to be done at the present time, because it is impossible to get the labour, and so long as the War lasts that difficulty will remain. To a certain extent it would be possible to put prisoners to cutting wood, as they are now doing in certain parts of Scotland, but that it a very limited matter. I only rose to express the hope that the Chancellor of the Exchequer, or the new Financial Secretary to the Treasury, whom I am delighted to congratulate upon his new position, although I am sorry that he has left his old position, will be able to make some suggestion to meet the case.
Mr. McKINNON WOOD
I am much obliged to hon. Members for their very kind words, and to all who have spoken on this Amendment for the very leasonable way in which they have put their case. For some time past in my late office I have been looking from another point of view at this question of the woodlands of the 410 country. The demand of ourselves and our Allies for timber has been enormous, and it was perfectly evident that whether you looked at it from the point of view of transport or exchange, or finance generally, it was greatly to the advantage of this country to use the timber which had been grown here as far as possible. It also follows that our Allies should use their own timber rather than import it, because, as everybody knows, the amount of tonnage required to transport timber is very extravagant as compared with other classes of goods. Under these circumstances, a very large quantity of timber is. being cut down in this country, and it is not merely in the interests of the landlords, but in the interests of the country, that the land should be replanted. Therefore I approach this question with the greatest sympathy, and I may tell the House that I have been looking at this question, and the Government is looking at it, from the point of view of securing the replanting of the depleted land. The question arises: What can we do from the point of view of finance and taxation in this matter? There are some very obvious objections to the Amendment. In the first place, it applies to all classes of woodland and would include woodland planted for the purpose of sport, but we want to deal with woodland planted for commercial purposes.
§ 7.0 P.M.
Mr. McKINNON WOOD
Plenty of woodland is planted for sport. I also think the term of years is unsatisfactory. We have been accustomed to think that it would take a very long time to get any return from planting. But my advisers in my last office advised me that by planting certain selected species returns could be obtained in a less period than that which is mentioned in the Clause. The period, therefore, is unsatisfactory, and it is also unsatisfactory that there should be a period during which there is no Income Tax paid, and after which, when the timber is sold, perhaps for an extra price, the owner may prefer to place himself under Schedule B, and thus escape from an adequate contribution. We have considered this matter, and what we propose is this: Of course it can be discussed in detail tomorrow. We propose to allow an option to the taxpayer to prove that 411 the woodland is used for commercial purposes either to the General Commissioner or to the Special Commissioner. In the next place, to allow any woodlands planted or to be planted after this date to be treated as woodlands on a separate estate. In the third place, to allow woodlands used for commercial purposes to be in the same position as trades and businesses for the purpose of relief which is given in respect of losses under Section 23 of the Customs and Inland Revenue Act of 1890. I do not want the House to discuss this now. We will have an opportunity of discussing it tomorrow. I hope that in these circumstances, and in view of the very reasonable way in which the proposals were put forward, and the fact that we have all the same object in view, we may be allowed an opportunity of discussing the matter on the new Clause proposed by the Government.
§ Captain BATHURST
In view of the satisfactory nature of the reply given by the right hon. Gentleman, I ask leave to withdraw the Motion for the new Clause.
§ Motion and Clause, by leave, withdrawn.