§ (1) The power of the Parliaments of Southern Ireland and Northern Ireland to make laws shall include power to make laws with respect to the imposing, charging, levying, and collection of taxes within their respective jurisdictions, other than Customs duties, Excise duties on articles manufactured and produced, and Excess Profits Duty, Corporation Profits Tax, and any other tax on profits, and (except to the extent herein after mentioned) Income Tax (including Super-tax), or any tax substantially the same in character as any of those duties or taxes, and the Governments of Southern Ireland and Northern Ireland shall have full control over the charging, levying, and collection of such taxes as their respective Parliaments have power to impose, and the proceeds of all such taxes shall be paid into the Consolidated Fund of Southern Ireland or Northern Ireland, as the case may be.
§ Sir J. BUTCHER
I beg to move, at the end of Sub-section (1) to insert the wordsProvided that it shall not be competent for the Parliament of Southern Ireland or the Parliament of Northern Ireland to impose any tax, whether recurrent or non-recurrent, of the nature of a general tax upon capital, not being a tax substantially the same in character as an existing tax.The object of this Amendment is to prevent the new Irish Parliament levying a tax on capital. May I commend the skill with which this Amendment is framed? I say that the more readily because it is not my own framing. The House will be interested to know that the most carefully and skilfully framed Amendment was framed by the Government draughtsmen and was put down on the Order Paper during the Committee stage of the Bill in the name of my right hon. Friend the Minister without Portfolio. I congratulate him and his advisers not only upon the merits of the Amendment but upon the skill with which it was framed. Having said so much, perhaps I ought to leave it to my right hon. Friend to deduce arguments which will convince the House that this Amendment which appeared in 1258 his name on the, Paper ought not now to be accepted. It is remarkable and really an unexplained thing that this Amendment, admirable as it is, having appeared in the name of my right hon. Friend, suddenly disappeared, vanished into smoke, at whose instigation or for what reason I cannot imagine. Doubtless the hon. and gallant Member for Hull (Lieut. Commander Kenworthy) would say it was coercion, and talk about the "crack of the whip" and other absurd methods and ridiculous nonsense of that sort about the right hon. and learned Gentleman the Member for Duncairn, that he puts into his own mind and tries to put into mine.
I propose in a few words to suggest to the House the reasons why I think this Amendment should be supported. The question of a capital levy has often been debated, and it has been pointed out by my right hon. Friend, or some of his other equally persuasive colleagues, that the objections in theory to this tax, and the difficulties in practice, would be so insuperable that it would be both unjust and inexpedient to apply it in this country. This levy on capital is a thing which we in this Parliament could not think of adopting, and, if that be so, if that tax is not only inexpedient, but is considered unjust for Great Britain, I should like to know why the Irish Parliament should have the power to impose it. This is all the more serious when you reflect upon the very great powers which this Bill gives to the Irish Parliaments. By Clause 24 they are given absolutely unlimited powers of imposing income tax and supertax upon the unfortunate people domiciled in Ireland, Mid this capital tax would not only be in addition to the income tax and super tax in this country, but it would be upon all their income, however arising.
My right hon. Friend leaves it open to the Irish Parliament to introduce the method of a levy on capital. He will probably say that if the Parliament of this country thinks this tax is inexpedient to apply to Great Britain, why not leave it to the new Irish Parliaments to decide what is expedient in Ireland? To that I reply that in this country you have trained and skilled Civil Servants, and the Treasury. You also have a Chancellor of the Exchequer who is presumably skilful, and you have a Parliament which will control any injustice, and yet you think it is inexpedient to propose such a 1259 tax here. In Ireland you will have wholly untrained and unskilled Civil Servants advising the Treasury, and you will probably have a Chancellor of the Exchequer of whom the best that can be said in the South of Ireland will be that he will be unskilled. You will have an Irish Parliament utterly untried in the arts of statesmanship, and it is to this Chancellor of the Exchequer and these Civil Servants and that Parliament that you are going to give the power of exercising this extreme expedient.
Let me make the most favourable hypothesis I can. Let me suppose that if this power is given it will be exercised by the Southern Parliament with no desire to injure political opponents. Even on that supposition it would be most unwise to give them this power. I do not think, however, that this supposition should be entirely ruled out, but if you contemplate the Southern Parliament coming into existence at a time like this, it may be influenced by other motives than fair and reasonable financial desires, and they may be inclined to inflict hardship and injustice, with some sinister object, and if they do, here you are putting into their hands by this Clause a weapon which will be used for the purpose of creating the gravest injustice. I ask the House to reject the possibility of giving the Irish Parliament power to make a levy on capital by accepting this Amendment, and not put into the hands of the new Irish Parliament a power which has not been shown to be necessary for their legitimate financial operations, and which must, if used, be an unwise operation, and which may, in circumstances we can readily imagine, prove to be an instrument of injustice and oppression.
§ Mr. PENNEFATHER
I desire to second this Amendment. When I saw the Government Amendment down on the paper a short time ago referring to this tax I thought the Government had put down an extremely good proposal, and I imagined that they must have had good reasons for putting it down. I ask the Minister without Portfolio what are the reasons which prompted the Government to put down this Amendment, and what are the reasons which prompted him to withdraw it. I think we are entitled to be told why at one time an Amendment was put down preventing such a tax as 1260 this in Ireland, and why it has been withdrawn. If power to inflict a capital tax would be injurious in this country, it would be doubly injurious and dangerous in a country like Ireland.
§ Mr. NEWBOULD
We have listened to two very remarkable speeches from the Proposer and Seconder of this Amendment. We have been told that it has been found inexpedient to levy a tax of this nature in this country. We have also been told that the Chancellor of Exchequer is opposed to a tax of this nature, not only now but in the future. The Proposer and Seconder seem to forget that at one time the Leader of this House was in favour of a capital levy. [HON. MEMBERS: "No."] At any rate, a tax on war wealth was suggested, which is a tax on capital. We are told that such a tax would be dangerous here, and, therefore, it must be equally dangerous in Ireland. Many of us in this House think that this country will have to resort to this form of taxation, and I feel sure that in the present condition of the finances of this country, even those who are opposed to this tax now would not be prepared to pledge themselves that if the position altered and got worse they would not have under certain conditions to resort to this form of taxation. To propose an Amendment of this sort, in view of the fact that this House is in no sense committed to oppose this tax, is to declare that Ireland should not have the same power that we have in this House, and that seems to me to be absurd.
Sir J. D. REES
I do not think many words are required to condemn a capital tax. This House has never proposed anything of the sort, and the country has never been prepared for it. Therefore I think it is wasting time to use any arguments against a capital tax. I realise, however, that the Minister without Portfolio is in a very difficult position in regard to this matter. This is a Bill which professes to grant financial independence to the Irish Parliament. It is no use giving powers like this if you have not got the money to do it. In spite of the right hon. Gentleman's difficulties, and he is a good man struggling with adversity to-day, I hope he will accept this Amendment, because if the Irish Parliament has the power to impose a capital tax, that tax, like the 1261 Income Tax and the Super-tax, concerning which the next Amendment deals, will be levied upon the most worthy and the most deserving of the Irish landlords. It is those who are resident in Ireland, who live upon their own properties, and have not forsaken and turned their back upon their own country, who will be severely penalised if the Irish Parliament is given this power.
It is all very well to say that this Parliament has power to levy a capital tax, and that it would not be fair to put this disability upon the Irish Parliament. It is too much to suppose that this House is blind to the action which an Irish Parliament is likely to take towards the resident landlords. The richest, the most important, and the most independent of the Irish landlords are not domiciled in Ireland, and it is those who, in spite of great difficulties, live in Ireland and spend their money on their property who will be exposed to the full fury of the resentment of the new Parliament. I know it is a difficult thing to impose a disability of this character, but so exceptional are the circumstances, and so certain is it that those who will be penalised will be the most deserving, that I lift up my voice and beg the right hon. Gentleman to do what he can to limit the powers and mitigate the severity of the action which is likely to be taken against those, who, I repeat, are the most deserving of all residents in Ireland. The Minister without Portfolio has shown himself to be a statesman of moderation during his career in this House, and I have listened to him with admiration and approval. I hope he will discover some means of doing justice to those for whom I feel no little apprehension.
§ 7.0 P.M.
§ Sir E. CARSON
The proposal in this Amendment is very far from being unimportant. As has been already pointed out, the Government themselves certainly, at one stage of' the Bill, thought it was of extreme importance, because they put on the Paper a Clause in exactly these words, and then, without explanation, took it off. There must have been two Cabinets on the subject, one of which came to the conclusion that the Clause was an absolute necessity, and the other of which, after further meditation, decided that it was not necessary. Under these circumstances, one should examine the nature 1262 of the proposal. I am not going to argue the question of a capital levy in this country, and whether it is a good thing or a bad thing, whether it is feasible or whether it is not. I have my own view on that; it may be right or it may be wrong, but I will venture to assert to the House that no capital levy can be justified except for extreme Imperial purposes, such as the payment off of war debt to the payment of any debt incurred with the general consent of the Realm for the maintenance of the Kingdom. No one would propose a capital levy for local purposes. Would anyone think of giving the London County Council power to make a capital levy for the purpose of laying down new drains? It would be absolutely absurd. That being so, I would like to point out to my right hon. Friend that Imperial taxation which applies to Great Britain will apply to Ireland. You retain full power of taxation. What would be the effect of allowing the Irish Parliament to make a capital levy? It would take away from the Imperial Parliament assets which are taxable for Imperial and other purposes. Is not that an absurdity? Would it not be an absurdity that a subordinate Parliament should be able to deprive the Imperial Parliament of necessary assets for taxation?
It does not stop there. On what capital is this subordinate Parliament, whether in the North or in the South, to levy? Take a man like Lord Pirrie. He lives sometimes in Belfast, sometimes here. He has a great business in Belfast, he is probably the greatest shipbuilder in the world. He has businesses on the Clyde and on the Mersey. He is interested in various other matters in this country. Take his case. Take the cases of other men similarly situated. What would the Irish Parliament be able to do as regards Lord Pirrie? Would he be required to pay on all his capital wealth, on the whole of his property, if a demand is made? He might reply: "A great deal of my property is in England and Scotland and elsewhere, and you have no right to make a levy on it." But the Irish Parliament would answer to that, "It does not matter where the property is situated, you must pay on it." Could anything be more disastrous? It might be that in certain cases the property owner, for the purpose of paying the taxation to the Irish Parliament, would have to close his English or Scotch 1263 businesses. I hope the Government will return to the same moment in which they put down this Amendment. After all, in Ireland there are not many who have money, but they ought to be encouraged as far as possible to live and spend it in that country. Yet you are going to drive them out. I know myself of two or three who are already preparing, in consequence of what you are saying in regard to imposing additional Income Tax and Supertax, to leave residences where they have for many years spent a considerable part of the 12 months—their old family places. You are driving them out, and now you are leaving them open not merely to this, but to a capital levy.
Under the Bill an Irishman domiciled in Ireland has to pay on your taxation; he has to pay Income Tax, he has to pay Customs and Excise, he has to pay Excess Profits Duty and he has to pay Supertax. What chance will a man of that kind have in Ireland if there is put on him an additional Income Tax, an additional Super-tax, and a capital levy? Just see the absurdity. It is to be put on not merely his Irish property but the additional Income Tax and Super-tax can be charged on property which he has in England, Scotland or Wales, or on the Continent, or in the Colonies, or anywhere else. All I can say is that any man who under these circumstances and with these risks would continue to live in Ireland for the pleasure of being a target for Sinn Fein assassinators, to my mind deserves not only the Victoria Cross but even burial in the Abbey as an unknown hero. The Bill ought to go in an entirely different direction. I can assure the House and I can assure my right hon. Friend that what you really want is to encourage people to bring money into Ireland. You will never do that as long as you claim the right to tax them to the fullest extent for your own purposes—for Imperial purposes and to tax them whether they like it or not. This is one of the most vicious parts of the Bill. You are taxing them here without any reference to their wants or needs or to what they are able to pay, and in addition to that you are telling them that after you have taken your bite out of the loaf the subordinate Parliament can take anything else that is left. Is that a hopeful outlook for inducing people with money to stay in Ireland, or to go there to start business? Yet that is 1264 wanted very badly. Instead of allowing general powers of this kind you ought to have taken care that Irishmen living in Ireland, when you have taken charge of their purses so far as required, shall be protected as regards the balance. If my hon. and learned Friend goes to a Division I shall vote with him, not at all on the question of the principle whether a capital levy is a good thing or a bad thing, but because I feel perfectly certain that the power to impose any such levy upon my own country will divert capital which is very badly needed in that country, and will prevent the progress and expansion of trade and industry.
§ Lieut.-Commander KENWORTHY
I suppose this Amendment will now be accepted by the Government, but I am not quite sure whether, after all, it is not a scheme for getting the rich men in England to settle in Ireland—to draw wealthy capitalists to that country. Is it desired to make it a home for frightened millionaires? I have a certain amount of sympathy for them. I can see reasons why this Amendment should be accepted by the Government, or by that illustrious docile Gentleman the Minister without Portfolio. I have attempted before now to point out how extraordinarily unworkable is the fiscal system laid down in this Bill. You have given power to the Irish Assembly to impose Death Duties, but you keep the power of levying Income Tax in this country. The scheme will not work. It will be a great incitement to the authorities in Ireland to levy a very high Death Duty. Why indeed should they not make that Death Duty as much as 19s. in the pound? The speech to which we have just listened goes still further to show the House the unworkability of the fiscal proposals of the Bill. When the question of a capital levy is whispered, and apparently some good fairy whispered it into the ear of the Government a few weeks ago, they begin to see how unworkable their scheme is and try to legislate against it. We know the history of this Amendment, we know why the Government put it in. I have a strong suspicion where they got their orders from to take it out. There were probably rumblings in Belfast on the Trades and Labour Council. This capital levy is not likely to be made in the South and West of Ireland, at any rate, for generations. It will only be in the North East, and the hon. and learned Member for York (Sir 1265 J. Butcher) therefore comes forward as a crusader in order to save the Irishmen in the North from the results of a capital levy. It shows the utter insanity of the fiscal proposals of the Bill.
The right hon. Member for Duncairn suggested that a capital levy should only be imposed for some great Imperial purpose. I quite agree; and the sort of capital levy I had in my mind, if Ireland was given fiscal autonomy, was one which would enable them to get rid of the indemnity they are to pay to this country. They might, by means of it, capitalise the £18,000,000 which they are to hand over to the Imperial Exchequer every year, and they would then be in a position to offer a lump sum down. Why we should put a hampering Amendment of this sort into the Bill I cannot for the life of me understand.
May I ask the hon. and learned Member for York (Sir J. Butcher) what is really the difference between a very heavy death duty and a capital levy? I am talking of a death duty of 15s. or 18s. in the £. Under the provisions of this Bill that can be imposed. Why have not the Government put in some limiting Clause as to the amount of the death duty? They have put in safeguards with regard to Income Tax and other things. I raised this matter in Committee, but I got no reply from the Government. The Minister without Portfolio did not choose to reply to my observations. As I had no one to help me, it did not matter what I said. I hope on this occasion a few people will support me—the few people who have some idea of the unfitness of putting a hampering regulation of this sort into a Bill which is supposed to propitiate Irish moderate opinion.
Hon. Members who know Ireland—I know it very slightly, but I do know it a little—will, I think, bear me out when I say that a capital levy in the agricultural districts of Ireland, of South and West Ireland in particular, is extremely unlikely. The only possible proposal seriously put forward now, as things are at present, is that Belfast is the place for a capital levy. May I appeal to hon. Members opposite on the back Bench below the Gangway, who have tried to bring about union between the two parts of Ireland, to support me here in resisting this Amendment? If there is the 1266 shadow of a capital levy hanging over the heads of Lord Pirrie and his like, they will be drawn politically towards the Conservative, Royalist, and Catholic parties. This Amendment is insulting to North-East Ireland and it is ludicrous as applied to South-West Ireland. I am surprised that a distinguished Irishman like my hon. and learned Friend the Member for York should have the effrontery to rush in where the Government feared to tread.
§ Sir F. BANBURY
The hon. and gallant Member who has just spoken asked: What is the difference between a death duty of 15s. or 18s. in the £ and a capital levy? The answer is a very simple one: People do not all die at once. Therefore, a death duty of 15s. or 18s. in the £—though I think it would have an extremely adverse effect upon the interests of Ireland—is a totally different thing from imposing a capital levy upon every single person who happens to be resident in Ireland. I do not know what action the Government are going to take, but I am going to make the suggestion that if they do not feel it is possible for them to accept my hon. and learned Friend's Amendment, they should allow the House to divide without the Government Whips being put on. I think that is a reasonable suggestion. Personally, I hope the Government will accept the Amendment, but if they do not I trust that they will allow us to divide on this occasion without the Government Whips being put on.
An hon. Gentleman opposite stated that a capital levy had not been turned down in this country. That is quite a mistake. The hon. Gentleman appears to have forgotten that the Committee considered whether or not a capital levy was practicable in this country, and the Committee came to the decision that it was not practicable. We had a long Debate in this House upon it, and it was rejected because it was thought it was not practicable. If it is not practicable for this country, how is it possible that it can be practicable for Ireland? I would point out that if Ireland was to impose a capital levy, and this country did not do it, the result would be that before the Act was passed imposing a capital levy all the capital which had wings—and a good portion of capital has wings—would fly from the country to some other country. Therefore the result would be disaster to 1267 the Irish nation. On the other hand, if it should turn out—personally I hope it never will turn out—that the opinion of this House alters with regard to capital levy, and we decide to impose a capital levy on this country, what would prevent a Bill being introduced to permit the Irish Parliament also to impose a capital levy upon Ireland? That seems to me to be the proper way of carrying out a suggestion of this sort.
I do not want to develop the argument, as to whether or not a capital levy is advisable. I think I am right in saying that every financial authority who has ever expressed an opinion upon this question has held the view that the ultimate result of a capital levy would be to ruin the country which imposed it. I do not count Mr. Sidney Webb as a financial authority, but every recognised financial authority has come to that conclusion. If that is so, why should we saddle a poor country, such as Ireland is, with such a proposal? I hope the Government will consider the suggestion I have made, namely, that in the event of their being unable to accept the Amendment, they will allow a Division to be taken without putting on the Government Whips.
I think m this matter the second thoughts of the right hon. Gentleman the Minister without Portfolio are much wiser and better. The right hon. and learned Member for Duncairn (Sir E. Carson) advanced one powerful argument, no doubt on a sound economic basis, that a capital levy should be employed only for the big purposes of redeeming debt, and so on. True, at the inception of the autonomous Government, of Ireland no such purposes would exist: but, on the other hand, we are legislating not only for the immediate future. In course of time, no doubt, under borrowing powers which they will possess under the Act, the Irish Government will accumulate debts. They may accumulate floating debts, and so on, and eventualities might arise under which special financial measures might be necessary, and, as far as that argument goes, the employment of the method of a capital levy would be legitimate.
I do not think it is in the least useful, or even relevant in this Debate, to discuss the merits of a capital levy as a method of finance. The question is really totally 1268 otherwise. The very powerful arguments that were advanced by the hon. and learned Member for Duncairn should not be addressed to this House. They should be addressed to the future Parliament in Northern Ireland, and we hope some day that he will have an opportunity of employing them there. The power to discuss, and to come to a resolution on, whether a capital levy is suitable either in the North or the South of Ireland, if these Parliaments are to be of any value at all, is one that can only be rightly considered and truly judged upon by those Parliaments. It is wholly relevant, it is an intrinsic part, it is natural, to the general powers of taxation and financial control which we are giving to those Parliaments. In many respects some of us think that these powers are unduly and arbitrarily restricted. To impose this further limitation would be to impose a further arbitrary limitation. What purpose can it serve? Either it is a good thing or it is a bad thing. If the Parliaments are responsible tribunals they, and they alone, can come to a decision on the matter. I do venture to urge upon the right hon. Gentleman that to add this further limitation and restriction to the Bill can only have the effect, without serving any useful purpose, of creating irritation and dislike for the Bill in the minds of Irishmen.
This question is not separated from 150 other questions which we might discuss and debate here. If you are going to restrict the question of a capital levy, you might as well restrict the powers of the Irish Parliament as regards capital punishment.
§ Mr. NEVILLE CHAMBERLAIN
My hon. and gallant Friend who has just sat down described this Amendment as a further vexatious limitations upon the powers of the Irish Parliaments. I want to submit that it is a logical, and, indeed, an inevitable accompaniment of the limitations which are already imposed. If powers to levy Income Tax were vested in the Parliaments of Northern and Southern Ireland, I should be able to find some substance in the arguments of my hon. and gallant Friend, but you cannot separate the effect of a capital levy from its effect upon the produce of Income Tax. In the discussion in this House on the effect of a capital levy, it was said by Members of the Government, if a scheme for a capital levy were practical at all, 1269 it made very little difference to the Exchequer whether they got their money in meal or in malt. You might have a capital levy and a consequent reduction in Income Tax, or you might have no capital levy and keep the Income Tax at a high figure. In the present case, however, the Income Tax is to come to the British Exchequer, whereas a capital levy would go to the Northern or the Southern Parliament. Therefore, the very fact of allowing these Parliaments to make a capital levy would mean that the contribution to the reserved taxes which Ireland is to make, and from which we are to take the Irish contribution to Imperial expenditure, would be thereby diminished, and therefore this power to make a capital levy might actually be used, if it were so desired, by either of these Parliaments, in order to evade their obligation in regard to that contribution to Imperial expenditure. I can only think of one argument which can be used by my right hon. Friend against this Amendment, and that would be if he could say it was unnecessary because there are already words in the Bill which cover the point. Failing that, this matter is not, it appears to me, by any means one merely for Irishmen living in Ireland, but one which is of serious importance to the British taxpayer.
§ Major HAYWARD
I think that the hon. Member for Ladywood (Mr. N. Chamberlain) has rather lost sight of the fact that, although it is true to say that the power of levying Income Tax is retained by the Imperial Parliament, yet the Irish Parliament would have the power of levying Surtax, and also of granting relief from Income Tax and Super Tax. He says that it does not touch the point, but I think it does, because the Irish Parliaments will have the power to impose additional Income Tax to the extent, if they think well, of 20s. in the pound. If that power is in the Bill, then the question whether or not you are to give the power to impose a capital levy is really not of much importance, and from that point of view it seems to me that there is not much merit in the Amendment one way or the other. I think, however, that the fact that it has boon urged by hon. Members from Ulster is very interesting, because it reveals once again the altogether new shadows which are darkening their outlook. In the old days, they were very much afraid of the Nationalists in the 1270 South, but now, as I have pointed out in another instance, their fears are in an altogether different direction; they are now afraid of their own people in Ulster. I pointed out just now that they were afraid lest the Ulster people, through their representatives in the Ulster Parliament, should pass a Bill which would enable them to amalgamate with the South. Now they are afraid that this same Ulster Parliament may impose a capital levy. Seeing that you are giving them the power to increase the Income Tax to any extent, I do not attach very much importance to that. I hope, however, that the Government will not accept this Amendment because, as has been pointed out, by so doing they will show once more what has been shown again and again through the course of these Debates, through the Bill itself, through the Amendments which have been accepted, and, above all, through Irish administration at present, namely, that you are not trusting, and never will trust, the Irish people. I believe that that is the profound cause of the great trouble which at present exists, and I hope that the Government will not, by accepting this Amendment, do one other act in the same direction.
After the speech that we have just heard, we can quite realise why the hon. and gallant Member sits on that side of the Gangway, where finance is as weak as any of the other accomplishments which the present Opposition have to their credit. I am certain that it is not their fault, but perhaps they will be lucky and learn something some day. The whole point, as I understand it, of the objection to allowing the Irish local Parliaments at the present time to impose a capital levy is that you will be limiting the amount of capital which is producing income, and that the Imperial Parliament has the first call on that income, for the payment of taxation. If there is anything left over beyond that, the Irish Parliament can step in and take it. They have, so to speak, the second mortgage on the income. This Parliament has the first, and the reason why I am absolutely against giving to the Irish Parliaments the power to raise any form of capital levy is that to do so would be to reduce the amount which produces income, and so to reduce the amount from which the Imperial Parliament can take their money.
§ Sir L. WORTHINGTON-EVANS
A good deal of curiosity has been shown as to the history of this Amendment. It has been pointed out that at one time it was on the Paper in my name, that it was taken off, and that now it is down in the names of my hon. and learned Friend the. Member for York and other hon. Members. It got on to the Paper because it happened to get into the wrong batch of papers that went to be put down. That is the whole of the mystery: It was an Amendment which was being considered by me—
§ Sir L. WORTHINGTON-EVANS
It was an Amendment which was being considered by me at the time, and it was not then intended that it should go down on the Paper at all. That is the whole of the mystery. As soon as I found that it was on the Paper I withdrew it. Having given that explanation, I come to the more interesting question as to what is to be done with the Amendment now that it has been presented to the House. I am not going to deal with it from the point of view of the merits of a capital levy, but rather to ask which Parliament, if there is to be at any time a capital levy, ought to bring it in? Ought it to be the Imperial Parliament, or the Central Parliament of a series of Parliaments, or ought it to be brought in by a local or subordinate Parliament? Clearly, if there is to be any capital levy at all, it could only be justified on the ground that the capital raised by it was being employed for capital purposes and not for income purposes, and so long as we are bearing the whole of the War debt, it would clearly be for the United Kingdom Parliament, and not for the local Parliament, to make such a levy. Moreover, in the actual working of the capital levy you would require to use the Income Tax machinery. I do not think it will be possible without the officials who ordinarily deal with Income Tax, without the returns which ordinarily come in in regard to Income Tax and without the whole of the Income Tax machinery. All of those officials and all of that machinery are reserved to the United Kingdom Parliament, because the Income Tax itself is one of the reserved taxes. It has been pointed out that the 1272 engine of a capital levy might be maliciously used in such a way as to destroy the Income Tax, which is reserved.
§ Sir L. WORTHINGTON-EVANS
As my right hon. Friend the Member for the City of London has pointed out, Death Duties do not occur all together. Deaths occur one after the other. They do not cause a large realisation of capital at any one time, and so the duties do not tend to defeat themselves. I do not want to pursue that, because it is part of the question of the merits of a capital levy as such. The other point, however, which my hon. and gallant Friend mentioned, is a point of importance, namely, whether the Death Duties tend to destroy the Income Tax. Of course, to a certain extent they do, but they only fall once upon the subject, and not more than once, whereas a capital levy might quite easily fall year after year, or at short intervals, and might, in fact, take the place of an Income Tax. At this very moment there is a capital tax in Italy which is almost indistinguishable from our Income Tax, because, although it is called a capital tax, it is payable by instalments year after year. Should an imitation of the Italian capital tax be imposed by either of these subordinate Parliaments, it would, in effect and in fact, tend to destroy the Income Tax, which is reserved here.
That is my view of the Amendment on its merits. I did not, however, put it down myself, because, although I have held that view all the time, I do not really think that it is necessary. I do not believe that either of the subordinate Parliaments would be so ill-advised as to introduce and put into force a capital levy. If, however, the House thinks that it is wise to protect the revenue of this country against the possibility of such a tax, I should be the last to oppose it, because I myself have strong views about a capital levy in these circumstances. Therefore, if the view of the House is that this Amendment should be accepted, I shall not oppose it.
I beg to move, as an Amendment to the proposed Amendment, at the end to add the wordsuntil such time as a tax of this nature is imposed by the Imperial Parliament.1273 I think the House is very much indebted to the Minister without Portfolio for the frank explanation which he gave at the commencement of his speech. There was this difficulty, however, that, although he explained how the Amendment got on to the Paper, he did not explain how it came off. I am not going to stand against the Government in accepting this Amendment, because I think that the argument of the right hon. Gentleman the Member for Duncairn was a very powerful one indeed. A tax of this kind should only be imposed for really Imperial purposes, and should not be lightly imposed by a subordinate Parliament. As has been pointed out by several hon. Members, and has been admitted by the Minister without Portfolio, it does not appear to be very necessary one way or the other. The Amendment to it which I propose would, perhaps, prevent any Division upon it, and would put it in a form which, I think, would remove the only real objection that has been urged against its acceptance, namely, that it imposes another restriction and limitation on the Bill. My Amendment would prevent the imposition of a tax of this kind by the Irish Parliament, quite regardless of the action of this Parliament, and it removes the appearance of further restrictions upon the financial powers of the Irish Parliament.
I beg to second the Amendment to the proposed Amendment.
I observe that the Government always accepts any Amendment that is supported by the right hon. Gentleman (Sir E. Carson) though he accepts no Amendment from those who represent the people in the South and North of Ireland on these benches. On this occasion I am sorry I did not hear the whole of the right hon. Gentleman's speech, but I heard enough to make me understand what it was. It was an appeal to the House to save them from their friends in the North of Ireland. I regret the distrust which representatives of Ulster in this House show in those who elected them and sent them to this House, and the fear they have of what they would do if power were given to them in the North of Ireland. The Government as usual has accepted this Amendment, which is supported by the right hon. Gentleman (Sir E. Carson), and I think the Amendment proposed by by hon. and gallant Friend (Major 1274 Barnes) is desirable, and I hope the Government will accept it. I think it would be another injustice to Ireland, if and when a capital levy is ever imposed in this country, that the people of Ireland, and especially the people of Ulster, should not have the privilege of putting a similar tax into operation there, and I support the Amendment, because I think the people of Ireland should have the same power in these matters as the people of Great Britain.
§ Sir J. BUTCHER
I hope the House will not accept this Amendment, out of no-hostility to the views expressed by the hon. Gentlemen who have proposed and seconded it, but it would be much fairer to leave things open for future consideration by Parliament so that if, and when, a capital levy is adopted by this House for the Imperial Parliament it would be perfectly open to them to remove this restriction on a subordinate Parliament if they should think fit. But I hope we are not going to pre-judge the question now. I can quite well understand that while it may be desirable to impose a capital levy in some form some day or other with certain restrictions, it might still be undesirable to have a capital levy raised by subordinate Parliaments, and therefore I would ask my right hon. Friend not to accept this Amendment, but to leave the thing open so that in the future, if the question ever comes up in this House of imposing a capital levy here, we may, if we think fit, relax the prohibition which is imposed by the Amendment.
I think really the Amendment to the Amendment makes the whole thing nonsense because it would mean that Ireland is not to be allowed to have a separate capital levy until it is already paying a capital levy imposed by this Parliament.
Lieut. Colonel GUINNESS
May I remind the hon. and gallant Gentleman that under this Bill the subordinate Parliaments in Ireland are not to be given fiscal autonomy. That is retained over here, and when under this wonderful arrangement the Imperial Parliament imposes a capital levy on Great Britain and Ireland—because presumably we are to go on with this indiscriminate 1275 taxation—then on top of that Ireland is to be allowed to impose an additional capital levy. That is obviously absurd.
§ Lieut.-Commander KENWORTHY
I am sorry if I misled the hon. and gallant Gentleman. We apologise to the House for this Amendment. It does not appear in the Paper and possibly it may have given rise to misapprehension. Obviously it was never suggested for a moment that the right should be given to levy two capital taxes. One by the Imperial Parliament and one by the Irish Assembly. What guided us in the matter was that after all conditions in Ireland are rather different from conditions in this country, over a great part of Ireland, at any rate, and it might be very desirable for the Irish Parliaments to arrange their own capital levy. So long as we get our money one way or the other I do not see why there should be any objection from us. However, the same right already exists of putting on a surtax in the case of Income Tax. I know my hon. and gallant Friend has objected to that, as I object to it. I object to the whole fiscal arrangements of the Bill, but the same right of imposing a surtax on Income Tax exists, and even if that were the effect it would only bring it on all-fours with the fiscal arrangements for Income Tax which exists already, and I am very disappointed that the right hon. Baronet cannot accept our very reasonable and simple Amendment.
§ Sir L. WORTHINGTON-EVANS
I cannot accept this Amendment. It is all very well for the hon. and gallant Gentleman to say he did not mean two taxes but that is what the Amendment does. Under this there is reserved to the Imperial Parliament, and taken away from any of the local Parliaments, the power to make a capital levy, but if a capital levy was made at all it would in all probability only be justified on the ground that it was paying off a capital debt of some sort. A capital debt is owned as much by Ireland, Scotland and Wales as by England, and if there were a capital levy here at all it would be a capital levy including Ireland. Then the hon. and gallant Gentleman suggests on top of that that Ireland should proceed to scramble for what is left, or would scramble to try to get her capital levy ahead of the Imperial capital levy. I cannot accept the Amendment and I am not in the least influenced by the taunt of the hon. Member (Dr. Murray). I assure him that a taunt like that leaves me quite cold. I do right whenever I think I ought to.
§ Amendment to proposed Amendment negatived.
Question put, "That the words
Provided that it shall not be competent for the Parliament of Southern Ireland or the Parliament of Northern Ireland to impose any tax, whether recurrent or non-recurrent, of the nature of a general tax upon capital, not being a tax substantially the same in character as an existing tax, be there inserted in the Bill.
§ The House divided: Ayes, 170; Noes. 17.1277
|Division No. 359.]||AYES.||[7.55 p.m.|
|Adair, Rear-Admiral Thomas B. S.||Brown, T. W. (Down, North)||Fildes, Henry|
|Addison, Rt. Hon. Dr. C.||Bruton, Sir James||FitzRoy, Captain Hon. E. A.|
|Allen, Lieut.-Colonel William James||Bull, Rt. Hon. Sir William James||Ford, Patrick Johnston|
|Archdale, Edward Mervyn||Burn, T. H. (Belfast, St. Anne's)||Foreman, Henry|
|Astbury, Lieut.-Commander F. W.||Butcher, Sir John George||Forestier-Walker, L.|
|Atkey, A. R.||Carew, Charles Robert S.||Forrest, Walter|
|Baird, Sir John Lawrence||Carr, W. Theodore||Fraser, Major Sir Keith|
|Baldwin, Rt. Hon. Stanley||Carson, Rt. Hon. Sir Edward H.||Fremantle, Lieut.-Colonel Francis E.|
|Balfour, George (Hampstead)||Casey, T. W.||Gibbs, Colonel George Abraham|
|Banbury, Rt. Hon. Sir Frederick G.||Cecil, Rt. Hon. Evelyn (Birm., Aston)||Gilbert, James Daniel|
|Banner, Sir John S. Harmood||Chamberlain, N. (Birm., Ladywood)||Gilmour, Lieut.-Colonel John|
|Barlow, Sir Montague||Churchman, Sir Arthur||Glanville, Harold James|
|Barnett, Major R. W.||Clough, Robert||Goff, Sir R. Park|
|Barrie, Rt. Hon. H. T. (Lon'derry, N.)||Coats, Sir Stuart||Greene, Lt.-Col. Sir W. (Hack'y, N.)|
|Bell, Lieut.-Col. W. C. H. (Devizes)||Colvin, Brig.-General Richard Beale||Greenwood, Colonel Sir Hamar|
|Bellairs, Commander Carlyon W.||Courthope, Major George L.||Greenwood, William (Stockport)|
|Betterton, Henry B.||Craig, Captain C. C. (Antrim, South)||Greqory, Holman|
|Bigland, Alfred||Craik, Rt. Hon. Sir Henry||Gritten, W. G. Howard|
|Blair, Reginald||Davidson, J. C.||Guest, Major O. (Leic., Loughboro')|
|Blake, Sir Francis Douglas||Davies, Alfred Thomas (Lincoln)||Guinness, Lieut.-Col. Hon. W. E.|
|Boscawen, Rt. Hon. Sir A. Griffith-||Davies, Sir David Sanders (Denbigh)||Hacking, Captain Douglas H.|
|Bowyer, Captain G. E. W.||Davies, Thomas (Cirencester)||Hailwood, Augustine|
|Boyd-Carpenter, Major A.||Dean, Lieut.-Commander P. T.||Harmsworth, C. B. (Bedford, Luton)|
|Breese, Major Charles E.||Denniss, Edmund R. B. (Oldham)||Henry, Denis S. (Londonderry, S.)|
|Briggs, Harold||Dixon, Captain Herbert||Herbert, Dennis (Hertford, Watford)|
|Brittain, Sir Harry||Edwards, John H. (Glam., Neath)||Hilder, Lieut.-Colonel Frank|
|Broad, Thomas Tucker||Eyres-Monsell, Commander B. M.||Hinds, John|
|Brown, Captain D. C.||Fell, Sir Arthur||Hope, James F. (Sheffield, Central)|
|Hope, Lt.-Col. Sir J. A. (Midlothian)]||Murray, Major William (Dumfries)||Stephenson, Colonel H. K.|
|Hopkins, John W. W. I||Neal, Arthur||Strauss, Edward Anthony|
|Hopkinson, A. (Lancaster, Mossley)||Newman, Colonel J. R. P. (Finchley)||Sturrock, J. Leng|
|Hume-Williams, Sir W. Ellis||Newman, Sir R. H. S. D. L. (Exeter)||Sugden, W. H.|
|Hurst, Lieut.-Colonel Gerald B.||Oman, sir Charles William C.||Sutherland, Sir William|
|Talbot, Rt. Hon. Lord E. (Chich'st'r)|
|Jones, Sir Edgar R. (Merthyr Tydvil)||O'Neill, Major Hon. Robert W. H.||Taylor, J.|
|Jones, G. W. H. (Stoke Newington)||Parker, James||Thomas, Sir Robert J. (Wrexham)|
|Jones, J, T. (Carmarthen, Llanelly)||parry, Lieut.-Colonel Thomas Henry||Thomson, F. C. (Aberdeen, South)|
|Kerr-Smiley, Major Peter Kerr||Pease, Rt. Hon. Herbert Pike||Thomson, Sir W. Mitchell- (Maryhill)|
|Kidd, James||Pennefather, De Fonblanque||Tryon, Major George Clement|
|King, Captain Henry Douglas||Perkins, Walter Frank||Waddington, R.|
|Law, Alfred J. (Rochdale)||Pinkham, Lieut. Colonel Charles||Ward, William Dudley (Southampton)|
|Lewis, Rt. Hon. J. H. (Univ., Wales)||Pownall, Lieut.-Colonel Assheton||Warren, Lieut.-Col, Sir Alfred H.|
|Lorden, John William||Pratt, John William||White, Lieut.-Col. G. D. (Southport)|
|Lort-Williams, J.||Prescott, Major W. H.||Whitla, Sir William|
|Loseby, Captain C. E.||Purchase, H. G.||Wigan, Brig.-Gen. John Tyson|
|Lyle-Samuel, Alexander||Rae, H. Norman||Williams, Lt.-Com. C. (Tavistock)|
|Lynn, R. J.||Randles, Sir John S.||Wilson-Fox, Henry|
|Macdonald, Rt. Hon. John Murray||Rees, Capt. J. Tudor- (Barnstaple)||Winterton, Major Earl|
|McNeill, Ronald (Kent, Canterbury)||Remnant, Sir James||Wise, Frederick|
|Macquisten, F. A.||Roberts, Rt. Hon. G. H. (Norwich)||Worsfold, Dr. T. Cato|
|Marks Sir George Croydon||Robinson, S. (Brecon and Radnor)||Worthington-Evans, Rt. Hon. Sir L.|
|Martin, Captain A. E.||Robinson, Sir T. (Lanes., Stretford)||Yale, Colonel Charles Edward|
|Mason, Robert||Samuel, Rt. Hon. Sir H. (Norwood)||Yeo, Sir Alfred William|
|Middlebrook, Sir William||Samuel, Samuel (W'dsworth, Putney)||Younger, Sir George|
|Moles, Thomas||Seager, Sir William||TELLERS FOR THE AYES —|
|Molson, Major John Elsdale||Seddon, J. A.||Captain Guest and Colonel Sir R.|
|Mond, Rt. Hon. Sir Alfred M.||Shaw, William T. (Forfar)||Sanders.|
|Moreing, Captain Algernon H.||Simm, M. T.|
|Morison, Rt. Hon. Thomas Brash||Steel, Major S. Strang|
|Barnes, Major H. (Newcastle, E.)||Maclean, Rt. Hon. Sir D. (Midlothian)||Wintringham, T.|
|Birchall, Major J. Dearman||Murray, John (Leeds, West)||Wood, Major M. M. (Aberdeen, C.)|
|Coote, Colin Reith (Isle of Ely)||Nowbould, Alfred Ernest||Young, Lieut.-Com E. H. (Norwich)|
|Galbraith, Samuel||Thomson, T. (Middlesbrough, West)||TELLERS FOR THE NOES.—|
|Hay ward, Major Evan||Thorne, G. R. (Wolverhampton, E)||Lieut.-Commander Ken worthy and|
|Hogge, James Myles||Walsh, Stephen (Lancaster, Ince)||Dr. Murray.|
|Johnstone, Joseph||Williams, Aneurin (Durham, Consett)|