HC Deb 26 June 1936 vol 313 cc2132-7

11.50 a.m.


I beg to move, in page 13, line 12, to leave out "five-sixths," and to insert "seven-eighths."

In the Bill originally the fraction was two-thirds. For Income Tax purposes the farmer could claim only two-thirds of his tithe, and one-third represented the Sinking Fund. In connection with this Bill, I have always felt that the Sinking Fund swallowed up far too big a proportion of the tithe payment, and I was very glad when the Minister changed the two-thirds to five-sixths. But when my hon. and gallant Friend the Member for Tiverton (Lieut.-Colonel Acland-Troyte) put forward an Amendment upstairs that it should be seven-eighths, the Minister, with the skill which he has, snubbed him so gently that he did not pursue the Amendment. Since then we have been reconsidering the matter. I am certain that what the Minister wants to do is to be absolutely fair. He has told us all along that the Treasury do not intend to make any money out of this Bill, and that the object of the fraction in Clause 13 is to represent the actual amount of the annuity that is Sinking Fund. It is not very easy to find out with mathematical accuracy the finances on which this Tithe Bill is based, but I have made an attempt to do so, taking two figures. I have taken the figure in the Government's White Paper on policy, which shows how much of the total expenditure goes to the Sinking Fund. Hon. Members will see on page 6 of the White Paper that the total expenditure which goes to sinking fund is £422,040. The total expenditure is £3,323,426. I suggest that if that is worked out, it comes to about one-ninth. One-eighth is a very fair bargain for the Minister to make, and it allows the Treasury to make a few pounds profit which we tithe-payers would be quite ready to give them on this occasion.

In case that should not be sufficiently accurate, I have tried another way and have taken the Commission's report, on page 40 of which they show how the gross annual value is split up. The figure is £91 11s. 2d., which is brought down to £76 12s. 6d., and the deduction there which would not be liable for Income Tax purposes represents £9 11s. 6d., again making a figure of between one-ninth and one-tenth. It will be noticed that there is no fraction of one-third, which the Ministry had in the Bill as drafted, or even one-sixth, as it is now. I am certain that when the Minister speaks he will be able to challenge the mathematical accuracy on my figures, because to try to elucidate exactly the fraction is like going through a labyrinth, but even allowing a margin for error, I think the seven-eighths which we suggest is reasonable. I think it will be considered all the more reasonable when hon. Members realise what is the allowance at the present time under the 1925 Act. It is £4 10s. out of £109 12s., and in that case I find no difficulty in getting the fraction, which is 23–24ths. We are asking something which represents only 21–24ths. Therefore, I urge the Minister to reconsider this matter, and while I appreciate that he has been generous not only with regard to my last Amendment, but with regard to this very point in Committee, I would remind him that our object is not merely to get generosity, but to achieve mathematical accuracy, so that the Treasury do not make a profit which they do not wish to make.

11.55 a.m.

Lieut.-Colonel ACLAND-TROYTE

I beg to second the Amendment.

I have already spoken on this subject at an earlier stage and thanked the Minister for the concession which he made previously, but we find that that concession does not go far enough. I need not follow my hon. Friend the Mover in what he said as to the actual amounts involved, but I wish to point out that the Treasury will, under the operation of this Measure, get increased Income Tax amounting to something like £160,000. It is true that from the total amount certain deductions will be made, but those deductions will be met I think, by the extra amounts received in Supertax and Death Duties and I think we may take it that the Treasury will receive, in increased Income Tax, something in the neighbourhood of the amount I have mentioned. I suggest that a portion of that money might be used for the purpose of altering this fraction from five-sixths to seven-eighths.

11.57 a.m.


I think it would be a mistake to accept the Amendment put forward by my hon. Friend the Member for Thirsk and Malton (Mr. Turton). The mathematics of this question are not difficult to appreciate. The fraction of two-thirds which appeared originally in the Bill was correct in that it represented the proportion of a sixty-year annuity at the rate of interest which existed, if the annuity were one comprising principal and interest. But as it appears that the sinking fund would be accumulated free of Income Tax the Government were prepared to regard what was required for sinking fund purposes as reduced and the interest proportion as correspondingly increased. That is the way in which we came to the figure of five-sixths instead of the two-thirds originally proposed. We got from the Treasury recognition of the fact that, as the sinking fund was accumulating free of tax, the previous calculation did not apply. My hon. Friends however are now returning to the charge. They expressed their gratitude on the Committee stage and did not press the matter any further then, but having talked it over since they have reached the conclusion that it would be a very good thing to seek for a further concession on the Report stage. That is an argument which appeals to us all, but I am afraid I cannot yield to it on this occasion.


If the Minister took the original figure of two-thirds as being on a strictly actuarial basis, why did he surrender to the hon. Member and concede the five-sixths?


The case is as I have stated it. Further consideration of the matter revealed a factor which had not been taken into account in the first instance and on that factor being brought to the notice of the Treasury, the matter was readjusted accordingly. I did not give way in Committee merely to the arguments of my hon. Friend but to the rules of arithmetic and I suggest that he has not those rules in his support on the present occasion.

Lieut.-Colonel ACLAND-TROYTE

Is it not the case that actuarially the figure of two-thirds would represent a 40-year redemption, and that a 60-year redemption would be fairly accurate in relation to the present figure?

12 n.


Having regard to what has been said, there are one or two points on which we would like information. It is contended that the Government are likely to make some profit with regard to Income Tax, and I understand that questions of Supertax and Death Duties have also been introduced in that connection, but we have had no reply from the Minister on that point. That suggestion opens up an interesting question. We have shown to the House on earlier stages that the Government have not adopted what are, in our view, the best recommendations of the Commission, but have drawn the Bill in such a way as to escape any charge at all upon the Treasury. We now understand that the Treasury are actually going to make a profit out of the Bill on some other accounts. If that be so, I feel it is all the harder that those who are trying to represent the views and grievances of tithepayers should have been precluded at other stages, from moving for the redress of those grievances, because of the terms of the Financial Resolution. The Minister ought to make it clear whether the statements we have heard are correct or not. Are the Treasury going to make a profit? If so, I do not see how the Minister can reasonably resist the suggestion of a further concession.

12.2 p.m.


It is a little difficult to go back on these matters which have already been explained fully to the House and the Committee. As I have said, the unprecedented step was taken by the Treasury of allowing in the contribution which it is making under the Bill, for any improvements of the revenue which might accrue under other heads. That was made clear in the Second Reading debate, in Committee and in the White Paper. Is there any further point which the right hon. Gentleman would like to have made clear? I did not understand what his further argument was.


All I want is a plain "Yes" or "No" to the question: When these adjustments have been made, are the Treasury going to make a profit on Income Tax, Super-tax and Death Duties?


My right hon. Friend has held high office, and he knows that to forecast what may happen 10, 20 or 30 years hence about Income Tax, Supertax or Death Duties—especially if he and his right hon. Friends come into power—is quite beyond my power. An allowance has been made in respect of any surplus which will accrue to the Treasury as a result of these schemes. An estimate has been made, and we have taken care in Amendments and new Clauses which I have myself moved, to ensure that any improvement in the finances of the scheme, as a result of the changes made, should inure to the benefit of the tithe-payers. I think I have dealt with the specific point raised in the Amendment and as to the general point raised by the right hon. Gentleman opposite we have, as I say, made allowance under the Bill for any improved receipts by the Treasury, but the question which he asks involves a calculation which would be beyond my power and would indeed be out of order for any Minister to try to make at, this Box.


In view of the mathematical explanation, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.