§ Order for Second Reading read.
§ Lieut.-Colonel Sir SAMUEL HOAREI beg to move, "That the Bill be now read a Second time."
4.0 P.M.
I regret that this Bill has come on so late in the afternoon for two reasons—first is the importance of the subject, and second that the next Order, Places of Worship (Enfranchisement) Bill, is a Bill which personally I should very much hope to see passed. I am optimistic enough to think that there will be time for its Second Reading to-day. The House may remember that during the last ten days the Government introduced and passed through Committee another Bill, also dealing with the rates on clerical tithes. It may be asked why, in view of that fact, another Bill should be introduced? The answer is very simple. The Government Bill is only a partial Bill, and only deals with the fringe of the main grievance; but none the less, I am very grateful to the Government for the concessions they have made in the Committee stage on their Bill, and particularly to the right hon. Gentleman the Parliamentary Secretary of the Board of Agriculture for the readiness with which he has met those of us who have pressed for amendment. Secondly, the Government Bill is only a temporary Bill. It is a Bill which, as the right hon. Gentleman said on the second reading, does little more than amend one part of the Tithe Act, 1918. It is a Bill which will only remain in operation seven years, the time during which the 1918 Act runs. My Bill, on the other hand, short though it is, is a comprehensive Bill that definitely excludes altogether tithe from the payment of rates. It is not restricted to seven years, but is to run for all time. The grievance I desire to meet is a simple one. The clergy have not only to pay Income Tax upon their income, but they have as well to pay what is virtually a second Income Tax in the shape of rate upon the tithe rentcharge, which is the main bulk of the income they receive. An incumbent with £600 tithe rentcharge is paying now, under the new proposals of the Chancellor of the Exchequer, £87 15s. in Income Tax; and, assuming that his rates are 5s. in the £, 2454 of which he pays half under the 1899 Act, he is also paying £75 in rates upon the tithe rent-charge. I am not now speaking of the rates that he has to pay as occupier upon his glebe and parsonage house. The tax he is paying on earned income amounts, therefore, to no less than £162 15s. on an income of £600 per year. In other words, he is paying 5s. in the £ upon his earned income of £600, a rate of tax upon earned income which in any other class of life would only be paid by a citizen in receipt of more than £2,500 per year.
I maintain that that grievance is a very peculiar one and it is unique. An impartial study of the history of this question would show that it was never the intention of the Legislature that this state of affairs should exist. The governing Act in rating matters of this kind is the Act of 1601 under which the ratepayers in the village are divided into two classes; First of all, the occupiers of certain property from which tithe is explicitly excluded; and, secondly, the inhabitants, amongst which the parson is specifically included. It was found that it was impossible to continue rating the inhabitants as distinct from the occupiers, because the rates on the inhabitants, as distinguished from the occupier, virtually amounted to a local Income Tax, and as long ago as the 18th Century it was found impossible to continue this local Income Tax. That state of affairs was stereotyped in the 1840 Poor Rate Exemption Act, when specifically the class of inhabitants was excluded from local rating, and it was restricted simply to occupiers. For some reason the parsons were not included amongst the inhabitants who, under the Poor Rate Exemption Act, were to receive exemption from rates. The result has been that whilst every other inhabitant in the village has been excluded from payment of rates the parson has remained liable to this impost.
Secondly, since 1840 the parson's lot has become much worse than it ever was in past centuries. If an inquiry is made and the old rate-books are examined, it will be found that in nine cases out of ten, up to the nineteenth century, the parson never was rated upon his tithe at all, and the rating in the nineteenth century came about as one of the many bad effects of the poor law scandals which disgraced our countryside a hundred years ago. The 2455 rates bounded up as a subsidy to low wages, and when people were looking about for new sources to find rates they fell upon the parson, and the common expression from records of that time which the overseers adopted was the practice of "working the parson." That meant that, for the first time in history, they began to impose rates in the majority of cases upon parsons' tithe. I say that, first of all, it is unjust that the parson should pay his rates upon his earnings, and I say further that it was never intended that he should pay these rates. The grievance still continues. Indeed, as rates tend to go up, it becomes more and more serious, and I am most anxious that the House to-day should give its support to the principle that earned income is not a fit subject for rates at all.
I am quite aware that there are other rating grievances besides the parson's grievance, but I have said enough to show that of these grievances the parson's grievance is the most serious. If that be the case, I do not think it is necessary to wait till all these local rating grievances can be comprehensively remedied. I think it is within the power of the House, and it would be in accordance with its practice, to deal with the most serious case—the parson's case—at once, and not to wait for some indefinite inquiry into local taxation. I should like to see the amount that the local rates would lose by the exemption of parsons made up by the Treasury. I think that would be the proper way to meet the case. As a private Member I cannot obviously make that proposal in any Bill, but even if the difference is made up by the local rates, the amount that the ratepayers will be called upon to pay is infinitesimal. Supposing the parsons were exempted, there would be an extra charge, taking the 1918 figures, thrown upon the other ratepayers of, roughly speaking, £200,000 a year. The total rates imposed upon agricultural districts amount to no less than £16,000,000 a year. With the concessions that the Government have already made in their Bill in this connection, the ratepayers would only be called upon to pay an extra one-eightieth of the existing rates, and that, in the majority of cases, would come to something like a farthing or a halfpenny in thé£ at the most.
In view of those facts, I very much hope the House will give a Second Reading to 2456 this measure. It seems to me we are under a particular obligation to the clergy. First of all, alone of any class of the community they are excluded from stating their own case in this House. Secondly, alone of the professional classes, they are paying a double income tax upon their earned income; and, thirdly—and this should appeal particularly to the House—by the Tithe Act of 1918 we have deprived them of the enjoyment of the normal rise in the value of tithe, and that means in the course of the next seven years we shall have taken from them £6,300,000 a year, which, in the ordinary course of events, they would have received to meet the increasing cost of living. I hope I have said enough to ensure, at any rate, the Second Reading of this Bill to-day.
§ Mr. E. WOODI beg to second the Motion.
I am very glad to have the opportunity to support this Bill, and I will be brief, because I wish to see the Second Reading carried. I should like to criticise one point to which my hon. Friend has drawn the attention of the House. I believe he is quite correct in stating that all the historical research goes to show that it was not very long ago that the State brought the tithe rentcharge within the purview of the rating system. In the 17th Century there was a gentleman named Dalton—who compiled books to assist county justices in their work, and who first gave currency to the false theory that exists on the matter. A hundred and fifty years later we find it adopted and in general currency. But I would further direct attention to the fact that, of the anomalies in our rating system, this is by far the worst. If you had a sound principle of rating, namely, a local income tax, by that standard this is the greatest anomaly of all. There is a good deal to be said for a local income tax as being the basis of your rating system. I feel, perhaps, more strongly than does my hon. Friend, this grievance of the rural ratepayer, in that we all know real property is the only form of property that bears the local rate. So long as you do not proceed on a basis of local income tax for your rating system the present system is unfairest in the case of one class, and that class the poorest of the lot. There is no defence of that. I am very well aware that the Government Bill has now passed through the 2457 Committee Stage with Amendments that represent—I would be the first to admit—very valuable concessions to tithe-owners, but I think that this matter should be considered on the ground of principle rather than on the ground of doing a little bit here and a little bit there. We to-day act, and have for many years past acted, on the wrong principle. I would suggest that it would be more satisfactory that if for that wrong principle we substituted the right one. I will say the Government has gone some way to meet the general principle. Could they not find it possible to act in this matter generously and go the whole way to meet the case? I am not going to develop the point, because of the shortness of time, but I would include the case of cathedrals. The case of cathedrals is one very often overlooked. They are regarded as rich, and by many people as not very valuable bodies. The fact is that, in so far as these corporate chapters depend on tithe for their income, they are first responsible for the maintenance of the fabric and the services, and after these have been attended to, there is only the residue available for what is really professional incomes of the canons and others who carry on the work of the cathedral chapter. Therefore, I would put in a very earnest plea for the cathedrals. Speaking in this House as one of those affected, in the capacity of a landowner, I am bound to say that I think my hon. and gallant Friend was quite on right lines when he said that this was, in fact, a debt under which the House placed itself when it passed the Tithe Act, 1918, limiting the income of the clergy. At the time the clergy agreed to it. Indeed, in 1918, it was generally accepted as being a very fair bargain, but it is recognised that it has not worked out quite so fairly for the clergy as was at that time thought, owing to nothing but the unexpected and abnormal increase in the rates, and it is, of course, for that reason that the Government have felt compelled to give temporary relief. Speaking on behalf of the farming community in this House, I believe I should be sure of general support in saying this, that farmers during the War have had a sufficient and not very pleasant experience of what may be the meaning of control, and yet no farmer has had anything like the experience of control that the tithe-owning clergy have had, and no control that I have ever met 2458 operated with such unfairness of incidence as has the control of tithe in the case of the clergy affected. Therefore, while I agree whole-heartedly with my hon. and gallant Friend in saying that this relief is due, and that it should be given by the National Exchequer, yet, for my own part, I feel so strongly that it is due that even if it were not possible to obtain it from the National Exchequer, I would appeal that the ratepayers as a body would not be unwilling to meet what I believe is a debt that is due to the clergy by relieving them of an obligation under which, except for historical accident, I do not think they would ever have fallen.
§ Mr. CAUTLEYI desire to support this Bill on the general ground that it is quite an anomaly that tithe rentcharge should be rateable at all. I do not quite agree with the historical view put forward by the hon. and gallant Gentleman who moved the Second Reading of the Bill. My view of the history of tithe is this. The first Rating Act at all, in the days of Queen Elizabeth, rated stock-in-trade as well as realty; in other words, it rated personalty as well as realty. It was very soon found by those who had to administer the Act that it was quite impossible to rate anything but physical stock-in-trade and personalty. At that time the wealth of the country was mainly real property and farming stock, which resolved itself into the rating only of farming stock and things that could be seized. The parson was entitled to his tithe, which was one-tenth of everything that grew on the land or everything that was born on the land from horses, cattle, sheep, and so on. It is true that the parson was entitled to the tenth part, but he was not entitled to it until the crop had been cut, and then it became personalty. The rating authority could then charge the parson when he took his ten sheaves into the tithe barns. The parson, therefore, was always rateable upon his tithes. There arose considerable trouble and disputes, which led to the Tithe Commutation Act, and the parson's rates were commutated into a tithe rentcharge which had to follow the price of corn. In 1840 all personalty ceased to be rated, and the tithe was converted into a tithe rentcharge. This took the place of a personalty, which was appropriated to the parson, and it is the only instance we have now where personal property is 2459 rateable among all the kinds of property that have since grown up.
I agree with what was said by the hon. Member for Ripon (Mr. E. Wood), and I think we will ultimately have to come to the rating of personalty to provide for the enormous burdens which fall upon the rural districts. But that is a very wide matter. It is desirable that we should put the rating system upon a logical basis, and that the rating of personalty should be abolished, at any rate, until we get some better and more complete system. The Mover of the Bill made out a good case, but I do not think it is quite so small a matter in the way of expenses as might be suggested. I do not consider this altogether as the rating of a man upon his earned income. The parson is rated because he receives the tithes. The holder of a fellowship at a college has to pay because he is entitled to a charge upon certain lands. The effect at present is that there is gross injustice imposed upon the parson. Prior to the Act of 1919, the tithe increased only when the price of corn did, and the parson's expenses and his revenue increased in the same proportion, and that met any increase in the cost of living. It is impossible, I think, to get a better test of the cost of living than the price of corn, but the change that was made in the law prevented the parson from getting the natural increase of his revenue which would have enabled him to meet the increase in the cost of living. I was not here when the last tithe Bill was brought in, but I read in the Debates that it was suggested that that was coming out of the benefits which the farmer or the landlord would receive. That, however, was quite inaccurate. If the ordinary law had been in operation—and I think there is much to be said for its being kept in operation—as the tithe went up, the occupier of the land, who was the person liable to pay the tithes, would have had the increased receipts from the produce which he grew to pay the increased tithe, and the landowner would possibly have been able to get more rent. By fixing the price of corn, and preventing the natural law of supply and demand from operating to increase the price of corn, you deprive the occupier of the land of the natural increase that he would get from what he was growing, leaving him with all the increased cost 2460 of living, and the increased cost of producing his material. The farmer, therefore, does not benefit in any way. The landlord remains in exactly the same position as he was before. He cannot get any more rent, and is not liable to pay anything further. Therefore, Parliament, in its wisdom, has gone to almost the very poorest class of our community, the parsons of the Church of England, and, just when their expenses were increasing owing to the increased cost of living, you have deprived them, for no consideration in return, of the natural increase to which they would have been entitled. It does seem to me that it is for Parliament to remedy this grievance of the parson. The grievance is increased and rendered more hard to bear owing to the continual services that are being put upon local authorities by Parliament, mainly for the national benefit. The rates are continually increasing, and in our rural districts they are going to be more than it will be really possible for the rural districts to provide. In my opinion, before many years are over, the rates, instead of the 3s. or 4s. in the pound to which we have been accustomed before the War, are likely to be 15s. or even 20s. Yet, having deprived the parson of his natural increase in tithe, you are leaving him with this enormous increase which it is likely that he will have to bear. Where has the money gone to that the parson would have had if he had been left as he was entitled to be left under the Tithe Commutation Act and under the old law? It has gone really into the pockets of the Government. They have compelled the farmer to take less for his wheat than he otherwise would have obtained, to the extent of some £10,000,000 or £12,000,000 in the year, and all of that has gone to reduce the subsidy which otherwise would have had to be paid to keep the price of bread at its present figure. In other words, the State has had the benefit of this money which has been taken out of the poor parson's pocket. In all justice, and in all equity, although this Bill is a most deserving Bill and ought to pass, the actual cost of it ought not to fall on the ratepayers in a particular parish where the tithe is collected, but on the National Exchequer.
§ Mr. MOUNTI want to bring to the notice of the House a point which has not 2461 been properly put before it in regard to the legal position as to tithe. The liability of tithe to rates depends on two Acts, one of which is the Poor Rate Exemption Act. This Act is an annual Act, and is continued from year to year. When the question was asked in the Commission held a year or two after the Poor Rates Exemption Act was passed, what was the reason it was made an annual Act, the Assistant Poor Law Commissioner said:
Because there were then various matters in question, especially the rates of the clergy and tithe owners in respect of their tithes, and in order not to prejudice these pending questions the Bill was made annual. The Government at that time contemplated, I believe, a final dealing with the subject.The Government has been contemplating since then a final dealing with the subject of tithes, and for the reason given by previous speakers I cannot help feeling the time has come when the Government might deal with it.
The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Sir A. Boscawen)It is somewhat inconvenient that, after the Government has carried a Bill of their own through Second Reading and Committee, a private Member's Bill dealing with the same subject should be brought forward. I am not making any complaint of the action of my hon. and gallant Friend, because I think he introduced his Bill before the Government introduced theirs. I have no objection whatever to the broad principle which underlies this Bill being discussed to-day. The Government Bill is a temporary measure. It takes note of the fact that by the Act of 1918 the normal rise in tithe rent-charge was stopped. Tithe rentcharge is based upon the average price of cereals and falls or rises practically in accordance with the cost of living. For many years before the War tithe rentcharge has been a very long way below par. It has been down below 70. Then, with the increase in the cost of cereals due to the War, it rose rapidly to 109 in 1918, and had it not been that the War then stopped the rise and stereotyped it for seven years at the figure of 109, I think to-day it would be somewhere in the neighbourhood of 140, and very likely in the next few years it might rise still higher. The idea of tithe rentcharge was, that as the cost of living went up the parson got more income, and as it went down he got less. 2462 That theory was knocked on the head by the Act of 1918. Rates are a big element in the cost of living, especially when they are shaped on what is really the parson's professional income, and therefore, there was a great injustice in the fact that we had stopped the increase of tithe and at the same time we have not stopped the rise in rates, and rates were rising very rapidly. The Government, in view of this situation, brought in a Bill to the effect that up to the year 1926, when the Act of 1918 ceases, the tithe rents which were attached to benefices should be stereotyped at the poundage of 1918. Tithe rentcharge was fixed at 109, and the rates to be paid upon it in respect to ecclesiastical tithe rentcharge were to be at the poundage at which they stood in 1918. That is the Bill to which the House gave a Second Reading about a fortnight or three weeks ago. It is a temporary Bill. It deals with the matter merely as long as there is a stoppage in the rise of tithes, namely, till 1926, and in Committee, in order to meet the case of the very poorest of the clergy who suffer very severely under present circumstances, I accepted certain Amendments on behalf of the Government. The principle of one was that where the total income of the clergyman was less than £300 he should be exempted altogether from rates on his tithe, and where his income was less than £500 he should get partial exemption. The Bill stands in that stage to-day, and, of course, its whole position would be really wrecked if the present Bill were passed, because this Bill remits all rates upon ecclesiastical tithe rentcharge, not only for the period during which the rise in tithe has been stopped, but for all time to come. Under these circumstances, the Government cannot support this Bill, or, at all events, if the House chooses to give it a Second Reading, it cannot permit it to go any further. At the same time, if the House likes to give it a Second Reading, I certainly shall not put any pressure upon Members to vote against it. I have no objection to the House asserting the principle that it is inequitable on general grounds that a man should be rated on his professional income, and, as far as I know, the parson is the only person who is so rated. You may say, "If that be so, why not accept the Bill and press it through?" My answer is that, though the parson has, I think, the greatest grievance, other ratepayers, too, 2463 have big grievances, and the whole question of the incidence of local taxation will have to be overhauled and considered.
§ Mr. W. THORNEWhat will be the total amount of the relief, assuming that this Bill becomes an Act of Parliament?
Sir A. BOSCAWENI cannot tell what the total amount of relief would be under this Bill, because I have no figures with me, but I calculated that under the Bill which the Government have in hand the relief in respect of the Poor Bate—there are other rates, but the Poor Rate is the biggest—will be about £150,000 per year.
Sir A. BOSCAWENNo, that is by stereotyping the rate at the poundage at which it stood in 1918. There has been a very considerable rise in the £ since 1918. I cannot say how much the concession I made in Committee will cost; because we have no means of ascertaining the private incomes of the clergy, but I do not think that it will be very much. At any rate, it is a small matter. The relief under the Government Bill as originally brought in will be about £150,000. Sixteen millions are raised annually in Poor Bates in the rural parishes, and, when you remember how many thousand rural parishes there are, you will realise that the actual additional burden thrown upon the other ratepayers will be really infinitesimal in amount. I was saying that, although we hold that the parson has a special grievance, we cannot accept this Bill in lieu of our Bill, because other ratepayers have grievances, and the whole matter must be dealt with comprehensively. I agree with several speakers, the hon. Member for Ripon (Mr. E. Wood) amongst them, that the question is whether we are really raising our rates to-day upon a fair basis in rating only real property: ought there not to be some local income tax which would mean that the rich man who occupies only a house and a small bit of land should pay rates according to his ability, whereas now he pays a great deal less than a much poorer man who occupies a larger amount of land. Therefore, the whole question of rating will have to be dealt with. When I was tackled on this matter in Committee I said, and I repeat it now, that the Government fully intend to deal with this question; I hope before the General Election, at all events, before 1926.
Sir A. BOSCAWENI do not know; but I take it that it will be before 1926, unless we alter the Parliament Act. The Government cannot allow the Bill to go any further stage if it is read a second time. Of course, if the House likes to assert the principle that the rating of a man's professional income is in itself an injustice, and that when we came to deal comprehensively with the whole question, the parson has a special grievance which is to be fully considered. I shall not oppose the Second Reading. In view of the fact that the Government have their own Bill, I am strongly of the opinion that the House should keep control of the procedure of this Bill, and if it is read a Second time I shall move that it be referred to a Committee of the whole House.
Lieut.-Colonel J. WARDAfter listening to the legal definition of tithe, one would suppose that this is merely a change in the method of deciding its collection. The hon. and learned Member who spoke last said that when demonstration was given of the income of the parson by setting aside one-tenth of the sheaves, or one-tenth of the shock or load, as the case might be, he was actually rated upon what he took from the produce of the land. No doubt there are legal points on the other side. That is really the situation to-day; but for convenience of collection the system has been altered, and we have adopted another means. It is only because of the ancient right of the church that we pay any tithe at all. It is still the same thing. It is the same as the joint occupation of a farm. The right of someone to take something that they have not contributed, and only because of some ancient custom and understanding. I do not think it is really originally due to an Act of Parliament. It goes back to custom which has existed ever since England was England.
§ Mr. W. THORNEWho made the laws then?
Lieut.-Colonel WARDThere was no law then. It is a case where custom is stronger than law, therefore, I suggest that the whole of the legal part of the argument we have listened to justifying the parson escaping taxation is 2465 quite unsound. He shares in the produce of the land and he should take his share of the burden and pay his share of the burden on the land. That is the exact situation of the farmer who takes the other nine parts. [HON. MEMBERS: "NO!"] We have heard about the injustice of the levy of this tax upon the parson. It is not always a question of produce from the land. Tithe is levied now upon land that does not produce anything. That is a gross injustice to the man who has to pay even though he gets no income whatever from the land. It is a much more real injustice than that which is suggested as the reason for bringing forward this Bill. I know of my own personal knowledge of a man who purchased some land in 1914, a few days before the outbreak of the War. That land was capable of cultivation. Knowing that the circumstances in which he was placed would render it impossible for him to till the soil he let the land to another man who could do it, but his tenant had scracely begun his work when he was laid hold of under the Conscription Act. For six years that land has been absolutely idle, but the tithe has been coming in. It has been paid regularly during the whole of the War and has been paid up to the present. In addition, the owner, who had to pay tithe during the whole of that time, has taken legal advice upon it and has had to pay even though there has not been a penny produced from that land. Is it not peculiar that the people who stand upon this legal right to take tithe even when there is no income coming from the land should come squealing to this House because they are rated the same as other people?
Sir A. BOSCAWENIf the hon. Gentleman will tell me where this land is, I would like to ascertain the circumstances.
Lieut.-Colonel WARDYou shall have it all, chapter and verse, and you shall have the correspondence with the legal Gentlemen who have advised that the tithe is a first charge, and that the owner must pay it. I am stating only what I know to be a fact, and if this is one case that is brought to my notice there must be hundreds of other cases, possibly thousands of them, up and down the country. The Government have a Bill under which it is proposed to relieve the parson of a very considerable responsibility, but, not satisfied with the proposals of the Gov- 2466 ernment, the promoters of this measure wish to push their burden on to some other members of the community, and this wish is so great that private Members' time is used in the discussion of a measure of this description. I think that the right hon. Gentleman would have been better advised to have suggested to the promoters of this measure that in the circumstances it should be withdrawn. It is a certainty, also, that whatever the sum involved, whether it is the £200,000 of relief given by this Bill, or the £150,000 given by the Government Bill, the money will have to be found. Distributed all over the rating authorities of the country £350,000 may seem an extremely small sum, but unless the public service is to suffer to that extent, the money must be forthcoming from the ratepayers, included among whom are not merely the farmers but the cottagers.
§ Sir S. HOARErose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.
Lieut.-Colonel WARDPerhaps the condition of the farmer is such at the moment that he can afford to pay, but in many cases—
§ Sir S. HOARErose in his place, and claimed to move, "That the Question be now put," but Mr. SPEAKER withheld his assent, and declined then to put that Question.
Lieut.-Colonel WARDIn many cases the farmer, if rates are increased, will put the increase on to the rent of the labourer. So that it is not only the farmer who will have to pay this £350,000, but—
It being Five of the Clock, the Debate stood adjourned.
Debate to be resumed upon Wednesday next (12th May).