HC Deb 30 June 1931 vol 254 cc1096-103

Where for any year of assessment rights to work minerals in the United Kingdom are let, the lessor shall be entitled on making a claim for the purpose to be repaid so much of the Income Tax paid by him by deduction or otherwise in respect of the rent or royalties for that year as is equal to the amount of the tax on any sums proved to the satisfaction of the special commissioners to have been disbursed by him in payment of mineral rights duty or miners' welfare levy in that year. In the computation of the lessor's income for the purposes of Sur-tax a deduction shall be allowed on any sum on which Income Tax shall have been repaid as aforesaid.—[Colonel Ruggles-Brise.]

Brought up, and read the First time.


I beg to move, "That the Clause be read a Second time."

The object of this new Clause is to enable Income Tax payers and Sur-tax payers who have to pay the Mineral Rights Duty and the Miners' welfare levy to claim deductions from Income Tax and Sur-tax in respect of these statutory payments. We propose that they should be able to deduct from their assessment the amount of the Mineral Rights Duty and the Miners' welfare levy already paid. I am informed that when the original legislation was passed, it was a pure oversight that this concession was not made to the taxpayer in respect of these statutory burdens imposed upon them. My suggestion, contained in this new Clause, covers both the Income Tax and the Sur-tax. It is true that, owing to a decision in the courts, the position in regard to Income Tax has been somewhat mitigated. My proposal now is that this new Clause should relate both to Income Tax and to Surtax, which are put in the same category together. I hope the Chancellor of the Exchequer will see his way to accept the new Clause, for two reasons. In the first place, as recently as Wednesday last, the right hon. Gentleman himself alluded to the number of times that the owners of mineral rights are taxed. Speaking in Committee of the House on the Finance Bill last Wednesday, the Chancellor of the Exchequer said: Arising out of the right hon. Gentleman's legislation in 1909,"— he was referring to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George)— take the case of mine-owners, who are taxed three times over. They are taxed on profits, taxed on royalties and taxed for the Miners' Welfare Fund."—OFFICIAL REPORT, 24th June, 1931, col. 538, Vol. 254.] The right hon. Gentleman might have added to that list the burden of which I am now speaking, that the mine-owners also have to pay Sur-tax on the amount previously deducted from their income both in respect of Mineral Rights Duty and in respect of the Miners' Welfare Fund Levy.

The real ground of my request lies in simple equity and justice. I feel sure that the right hon. Gentleman, when he considers the matter from that point of view, will see no obstacle to acceptance of the new Clause.


I beg to second the Motion.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

I am afraid it is not possible for the Chancellor of the Exchequer to accept this new Clause. The position is that there are certain imposts upon, the owner of scheduled royalties. The Mineral Rights Duty is an impost for the benefit of the Exchequer. The Miners Welfare Fund Levy is an impost for the benefit of the miner. These two imposts have been imposed by Parliament in the form in which they are at present. It has been decided in the courts, as the right hon. and gallant Gentleman who moved this new Clause himself stated, that the amount paid in Income Tax should be taken into account for the purpose of deciding the amount to be paid on both the imposts. It would obviously be wrong that, at the same time, the amount paid for these two imposts should be deducted for the purpose of both Income Tax and Sur-tax. The owners would then have it both ways. They would have a deduction of one tax for the purposes of the other and would have a deduction of the other tax for the purposes of the first. Quite apart from that, it is impossible for the Chancellor of the Exchequer to forego the revenue, which he would lose if the proposal of the hon. and gallant Gentleman were adopted. Further than that, it would not be possible to alter the figures that have been obtained for the various yields. In those circumstances, I am sorry that my right hon. Friend is unable to accept the Amendment.


The Financial Secretary will perhaps forgive me for saying that he has failed to make the matter clear to hon. Members whose knowledge of this matter may be less than his own. I was myself a member of the Government which established the Miners' Welfare Fund. I should be surprised to learn that, when the Measure was framed, it was intentionally framed in such a way that, on the sum which the mineowner was compelled to pay to the Miners' Welfare Fund he was to be charged Income Tax as if it were profit that went into his own pocket. The justification for that Fund was in the special circumstances of the miners, in relation to whom conditions had arisen which were really a scandal in some cases. Mineowners had not conceived, at any rate in some cases, their obligations in a sufficiently wide and generous sense, and it was thought proper that the welfare of those engaged in the industry should, to the extent then stated in the Bill, be a charge upon the industry. If it is to be a charge upon the industry, surely it ought to be treated like any other such charge, as one of the working expenses, which should be deducted before assessing the profits for Income Tax. One of my right hon. Friends suggests what, I think, is a very good analogy. He says that the charge should be treated in exactly the same way as premiums for workmen's compensation. This is a charged imposed upon the industry by Parliament. If it had been a charge voluntarily undertaken by the mine-owners, they could, in a large number of cases, have secured exemption from Income Tax by treating it as part of their expenses in the exploitation of the mine. To that case the right hon. Gentleman has given no answer whatever. Or if he has, I have to confess that I have failed to understand it. The nearest I came to it was that I understood that the payment of Income Tax was taken into account. If that be true, that is the wrong way to do it. The right way is to treat this as a charge upon the business, and therefore, to take it out of the profits on which Income Tax is assessed.


May I, by leave of the House, make one observation? In almost the last words used by the Financial Secretary in his reply, he seemed to be arguing as if I were proposing that the owners of mineral rights should be exempted from paying the miners' welfare levy, if I understood his words aright. I was not proposing anything of the kind. I was saying that once the tax had been deducted, and the miners' welfare levy had been paid, that that should be treated as deducted in the Income Tax assessment.


I tried to follow the explanation of the Financial Secretary, but I am afraid I failed to see to what his explanation led. It seemed to me, first, that Income Tax is deducted before arriving at the amount on which this tax is paid, which is simply in accordance with the well-known principle that you are not asked to pay the welfare levy on an amount which you have not received. Why is a royalty owner to be asked to pay Income Tax on an amount which he has not received? The royalty owner has to pay the welfare duty. As the law stands, he is assessed for Income Tax on an amount which he cannot possibly

receive, because it is taken from him. It is wrong that a man should have to pay tax on an amount which, in no circumstances, he can receive. I am not a royalty owner, but the position does seem unfair, and some attention ought to be given to it.


The right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) said that he was a Member of the Government which instituted the Miners' Welfare Fund. May I say this: the idea of the payment by the royalty owners into the fund was that it was a contribution out of income that might be made to any institution which they thought was worthy. The amount of the contribution to the Welfare Fund was fixed, on the basis that Income Tax should be paid upon all royalty. I have no doubt that under the Conservative Government the amount had not been deducted for Income Tax purposes). The real reason why the Conservative Government at that time decided that the tax must be paid was, that the payment was regarded as a contribution out of income by the owners, who had to pay Income Tax upon it. If they had not done so, their Income Tax assessment would have been proportionately higher.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 162; Noes, 260.

Division No. 358.] AYES. [4.45 p.m.
Acland-Troyte, Lieut.-Colonel. Cautley, Sir Henry S. Everard, W. Lindsay
Albery, Irving James Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Falle, Sir Bertram G.
Allen, Sir J. Sandeman (Liverp'l. W.) Chamberlain, Rt. Hon. N. (Edgbaston) Fermoy, Lord
Amery. Rt. Hon. Leopold C. M. S. Chapman, Sir S. Flson, F. G. Clavering
Ashley, Lt.-Col. Rt. Hon. Wilfrid w. Christle, J. A. Ford, Sir P. J.
Astor, Maj. Hn. John J. (Kent, Dover) Clydesdale, Marquess of Forestler-Walker, Sir L.
Astor, Viscountess Cobb, Sir Cyril Fremantle, Lieut.-Colonel Francis E.
Baillie-Hamilton, Hon. Charles W. Colfox, Major William Philip Galbraith, J. F. W.
Baldwin, Rt. Hon. Stanley (Bewdley) Colville, Major D. J. Gault, Lieut.-Col. A. Hamilton
Balfour, Captain H. H. (I. of Thanet) Conway, Sir W. Martin Gilmour, Lt.-Col. Rt. Hon. Sir John
Balniel, Lord Cooper, A. Duff Gower, Sir Robert
Beamish, Rear-Admiral T. P. H. Courthope, Colonel Sir G. L. Grattan-Doyle, Sir N.
Bellairs, Commander Carlyon Cowan, D. M. Greene, W. P. Crawford
Bevan, S. J. (Holborn) Cranborne, Viscount Gretton, Colonel Rt. Hon. John
Birchall, Major Sir John Dearman Crichton-Stuart, Lord C. Hall, Lieut.-Col. Sir F. (Dulwich)
Bourne, Captain Robert Croft Croft, Brigadier-General Sir H. Hammersley, S. S.
Bowyer, Captain Sir George E. W. Crookshank, Cpt. H. (Lindsey, Galnsbro) Hannon, Patrick Joseph Henry
Boyce, Leslie Culverwell, C. T. (Bristol, West) Harvey, Major S. E. (Devon, Totnes)
Brass, Captain Sir William Cunllffe-Lister, Rt. Hon. Sir Philip Haslam, Henry C.
Briscoe, Richard George Dalkeith, Earl of Henderson, Capt. R. R.(Oxf'd, Henley)
Broadbent, Colonel J. Dairymple-White, Lt.-Col. Sir Godfrey Hennessy, Major Sir G. R. J.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Davies, Maj. Geo. F. (Somerset, Yeovil) Hills, Major Rt. Hon. John Waller
Buchan, John Davison, Sir W. H. (Kensington, S.) Hope, Sir Harry (Forfar)
Buchan-Hepburn, P. G. T. Dawson, Sir Philip Howard-Bury, Colonel C. K.
Bullock, Captain Malcolm Dixon. Captain Rt. Hon. Herbert Hudson, Capt. A. U. M. (Hackney, N.)
Burton, Colonel H. W. Dugdale. Capt. T. L. Hurd, Percy A.
Butler, R. A. Eden, Captain Anthony Inskip, Sir Thomas
Cadogan, Major Hon. Edward Elliot, Major Walter E. Jones, Henry Haydn (Merioneth)
Castle Stewart, Earl of Erskine, Lord (Somerset, Weston-s-M.) Kindersley, Major G. M.
Knox, Sir Alfred Newton, Sir D. G. C. (Cambridge) Southby, Commander A. R. J.
Lamb, Sir J. Q. Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld) Spender-Clay, Colonel H.
Lambert, Rt. Hon. George (S. Molton) O'Neill, Sir H. Stanley, Hon. O. (Westmorland)
Latham, H. P. (Scarboro' & Whitby) Peake, Capt. Osbert Stewart, W. J. (Belfast, South)
Law, Sir Alfred (Derby, High Peak) Percy, Lord Eustace (Hastings) Sueter, Rear-Admiral M. F.
Leigh, Sir John (Clapham) Perkins, W. R. D. Thomas, Major L. B. (King's Norton)
Leighton, Major B. E. P. Peto Sir Basil E. (Devon, Barnstaple) Thompson, Luke
Lewis, Oswald (Colchester) Pybus, Percy John Thomson, Sir F.
Llewellin, Major J. J. Ramsbotham, H. Thomson, Mitchell-, Rt. Hon. Sir W.
Locker-Lampson, Rt. Hon. Godfrey Rawson, Sir Cooper Todd, Capt. A. J.
Locker-Lampion, Com. O.(Handsw'th) Reid, David D. (County Down) Tryon, Rt. Hon. George Clement
Lockwood, Captain J. H. Remer, John R. Turton, Robert Hugh
Long, Major Hon. Eric Reynolds, Col. Sir James Wallace, Capt. D. E. (Hornsey)
Macdonald, Sir M. (Inverness) Rodd, Rt. Hon. Sir James Rennell Ward, Lieut.-Col. Sir A. Lambert
Macdonald, Capt. P. D. (I. of W.) Ross, Ronald D. Waterhouse, Captain Charles
Maitland, A. (Kent, Faversham) Ruggles-Brise, Colonel E. Wells, Sydney R.
Makins, Brigadier-General E. Russell, Alexander West (Tynemouth) Williams, Charles (Devon, Torquay)
Margesson, Captain H. D. Samael, A. M. (Surrey, Farnham) Wilson, G. H. A. (Cambridge U.)
Mason, Colonel Glyn K. Sandeman, Sir N. Stewart Windsor-Clive, Lieut.-Colonel George
Merriman, Sir F. Boyd Sassoon, Rt. Hon. Sir Philip A. G. D. Winterton, Rt. Hon. Earl
Milne, Wardlaw-, J. S. Savery, S. S. Womersley, W. J.
Monsell, Eyres, Com. Rt. Hon. Sir B Shepperson, Sir Ernest Whittome Wood, Rt. Hon. Sir Kingsley
Moore, Sir Newton J. (Richmond) Skelton, A. N. Wright, Brig.-Gen. W. D. (Tavlst'k)
Moore, Lieut.-Colonel T. C. R. (Ayr) Smith, Louis W. (Sheffield, Hallam)
Muirhead, A. J. Smith, R. W.(Aberd'n & Kinc'dine, C.) TELLERS FOR THE AYES.—
Nall-Cain, A. R. N. Smithers, Waldron Sir George Penny and Major the
Marquess of Titchfield.
Adamson, Rt. Hon. W. (Flfe, West) Dukes, C. Jones, Morgan (Caerphilly)
Adamson, W. M. (Staff., Cannock) Duncan, Charles Jowett, Rt. Hon. F. W.
Addison, Rt. Hon. Dr. Christopher Ede, James Chuter Jowitt, Rt. Hon. Sir W. A. (Preston)
Altchison, Rt. Hon. Craigle M. Edmunds, J. E. Kelly, W. T.
Alexander, Rt. Hon. A. V. (Hillsbro') Edwards, E. (Morpeth) Kennedy, Rt. Hon. Thomas
Ammon. Charles George Egan, W. H. Kenworthy, Lt.-Com. Hon. Joseph M.
Angeli, Sir Norman Elmley, Viscount Kirkwood, D.
Arnott, John Foot, Isaac Lang, Gordon
Attlee, Clement Richard Gardner, B. W. (West Ham, Upton) Lathan, G. (Sheffield, Park)
Ayles, Walter Gardner, J. P. (Hammersmith, N.) Law, Albert (Bolton)
Baker, John (Wolverhampton, Bilston) George, Rt. Hon. D. Lloyd (Car'vn) Law, A. (Rosendale)
Baldwin, Oliver (Dudley) George, Major G. Lloyd (Pembroke) Lawrence, Susan
Barnes, Alfred John George, Megan Lloyd (Anglesea) Lawson, John James
Barr, James Gibbins, Joseph Lawther, W. (Barnard Castle)
Batey, Joseph Gibson, H. M. (Lanes. Mossley) Leach, W.
Beckett, John (Camberwell, Peckham) Gill, T. H. Lee, Frank (Derby, N. E.)
Benn, Rt. Hon. Wedgwood Gillett, George M. Lee. Jennie (Lanark, Northern)
Bennett, Sir E. N. (Cardiff, Central) Glassey, A. E. Lees, J.
Bennett, William (Battersea, South) Gossling, A. G. Leonard, W.
Benson, G. Gould, F. Lewis. T. (Southampton)
Bevan, Aneurin (Ebbw Vale) Graham, Rt. Hon. Wm. (Edin., Cent.) Lindley, Fred W.
Bowen, J. W. Greenwood, Rt. Hon. A. (Colne) Lloyd, C. Ellis
Broad, Francis Alfred Grenfell, D. R. (Glamorgan) Logan. David Gilbert
Brockway, A. Fenner Griffiths, T. (Monmouth, Pontypool) Longbottom, A. W.
Bromfield, William Groves, Thomas E. Longden, F.
Bromley, J. Grundy, Thomas W. Lunn, William
Brooke, W. Hall, F. (York, W. R., Normanton) Macdonald, Gordon (Ince)
Brothers, M. Hall, G. H. (Merthyr Tydvll) MacDonald, Rt. Hon. J. R. (Seaham)
Brown, C. W. E. (Notts, Mansfield) Hall, J. H. (Whitechapel) MacDonald, Malcolm (Bassetlaw)
Brown, Ernest (Leith) Hall, Capt. W. P. (Portsmouth, C.) McElwee, A.
Brown, Rt. Hon. J. (South Ayrshire) Hamilton, Mary Agnes (Blackburn) McEntee, V. L.
Brown, W. J. (Wolverhampton, West) Hamilton, Sir R. (Orkney & Zetland) McKinlay, A.
Burgess, F. G. Hardie, David (Rutherglen) Maclean, Nell (Glasgow, Govan)
Buxton, C. R. (Yorks. W. R. Elland) Hardie, G. D. (Springburn) MacNeill-Weir, L.
Calne, Hall-, Derwent Hastings, Dr. Somerville Macpherson, Rt. Hon. James I.
Cameron, A. G. Haycock, A. W. McShane, John James
Cape, Thomas Hayday, Arthur Malone, C. L'Estrange (N'thampton)
Carter, W. (St. Pancras, S. W.) Hayes, John Henry Manning, E. L.
Charleton, H. C. Henderson, Right Hon. A. (Burnley) Mansfield, W.
Chater, Daniel Henderson, Arthur, Junr. (Cardiff, s.) March, S.
Church, Major A. G. Henderson, Joseph (Ardwick) Marcus, M.
Clarke, J. S. Henderson, Thomas (Glasgow) Markham, S. F.
Cluse, W. S. Henderson, W. W. (Middx., Enfield) Marley, J.
Clynes, Rt. Hon. John R. Herrlotts, J. Marshall, Fred
Cocks, Frederick Seymour Hicks, Ernest George Mathers, George
Compton, Joseph Hirst, G. H. (York W. R. Wentworth) Matters, L. W.
Cove, William G. Hoffman, P. C. Messer, Fred
Cripps, Sir Stafford Hollins, A. Mills, J. E.
Daggar, George Hopkin, Daniel Milner, Major J.
Dallas, George Hudson, James H. (Huddersfield) Montague, Frederick
Dalton, Hugh Isaacs, George Morgan, Dr. H. B.
Davies, E. C. (Montgomery) John, William (Rhondda, West) Morley, Ralph
Davies, D. L. (Pontypridd) Johnston, Rt. Hon. Thomas Morrison, Rt. Hon. H. (Hackney, S.)
Day, Harry Jones, Llewellyn-, F. Morrison, Robert C. (Tottenham, N.)
Denman, Hon. R. D. Jones, Rt. Hon. Leif (Camborne) Mort, D. L.
Muff, G. Salter, Dr. Alfred Thorne, W. (West Ham, Plaistow)
Muggeridge, H. T. Samuel, Rt. Hon. Sir H. (Darwen) Toole, Joseph
Murnin, Hugh Sanders, W. S. Tout, W. J.
Noel Baker, P. J. Sandham E. Townend, A. E.
Noel-Buxton, Baroness (Norfolk, N.) Sawyer, G. F. Vaughan, David
Oldfield, J. R. Scott, James Viant, S. P.
Oliver, George Harold (likeston) Scurr, John Walkden, A. G.
Oliver, P. M. (Man., Blackley) Shakespeare, Geoffrey H. Walker, J.
Owen, Major G. (Carnarvon) Shaw, Rt. Hon. Thomas (Preston) Wallace, H. W.
Palln, John Henry. Sherwood, G. H. Watkins, F. C.
Paling, Wilfrid Shield, George William Watson, W. M. (Dunfermline)
Palmer, E. T. Shiels, Dr. Drummond Wellock, Wilfred
Parkinson, John Allen (Wigan) Shillaker, J. F. Welsh, James (Paisley)
Pethick-Lawrence, F. W. Shinwell, E. Welsh, James C. (Coatbridge)
Phillips, Dr. Marlon Short, Alfred (Wednesbury) West, F. R.
Pole, Major D. G. Simmons, C. J. Westwood, Joseph
Potts, John S. Simon, E. D. (Manch'ter, Withington) Whiteley, Wilfrid (Birm., Ladywood)
Price, M. P. Sinkinson, George Whiteley, William (Blaydon)
Quibell, D. J. K. Smith, Ben (Bermondsey, Rotherhlthe) Wilkinson, Ellen C.
Ramsay, T. B. Wilson Smith, Frank (Nuneaton) Williams, David (Swansea, East)
Rathbone, Eleanor Smith, Lees-, Rt. Hon. H. B. (Keighley) Williams, E. J. (Ogmore)
Raynes, W. R. Smith, Rennle (Penistone) Williams, Dr. J. H. (Lianelly)
Richards, R. Smith, Tom (Pontefract) Williams, T. (York, Don Valley)
Richardson, R. (Houghton-le-Spring) Smith, W. R. (Norwich) Wilson, C. H. (Sheffield, Attercliffe)
Riley, Ben (Dewsbury) Snowden, Rt. Hon. Philip Wilson, J. (Oldham)
Ritson, J. Snowden, Thomas (Accrington) Wilson, R. J. (Jarrow)
Roberts, Rt. Hon. F. O. (W. Bromwich) Sorensen, R. Winterton, G. E.(Lelcester,Loughb'gh)
Robinson, Sir T. (Lancs, Stretford) Stamford, Thomas W. Wise. E. F.
Romerll, H. G. Stephen, Campbell Young, R. S. (Islington, North)
Rosbotham, D. S. T. Strauss, G. R.
Rothschild, J. de Sutton, J. E. TELLERS FOR THE NOES.—
Rowson, Guy Taylor, W. B. (Norfolk, S. W.) Mr. Charles Edwards and Mr.
Russell, Richard John (Eddisbury) Thomas, Rt. Hon. J. H. (Derby) Thurtle.