LAND TAX COMMISSIONERS BILL. (Hansard, 8 November 1937)

§ Lieut.-Colonel Colville
I beg to move, "That the Bill be now read a Second time.''
1489 The object of the Bill, as the House will realise, is to allow of the replenishment of the list of Land Tax Commissioners in cases where such replenishment is required. It is represented to us that in certain of the Land Tax Commission areas there is need for further appointments. In the past it used to be the practice to bring a Measure of this kind before Parliament about every four or five years, but in point of fact the last two Bills of this nature were in 1927 and in 1906. The Land Tax Commissioners are appointed in the first place by name by Act of Parliament, as in the present case. Justices of the peace for a county or borough are ex officio Land Tax Commissioners for that area.

§ Mr. Kirkwood
Does that apply to Scotland?

§ Lieut.-Colonel Colville
It does not apply to Scotland. This Bill does not affect Scotland. The functions of the Land Tax Commissioners in connection with the old Land Tax which has been perpetual since 1798 are not very important, because the amount of money which comes from that tax, as the House knows, is not great, and their functions are rather stereotyped. There is, however, another function they discharge. Their importance at the present day lies to a great extent in the fact that they provide a source of recruitment for the local commissioners of Income Tax, who possess important and necessary functions in connection with the administration of the Income Tax.
Now the machinery in connection with the Bill is known to the House, but as it is some little time since a Measure of this kind was brought forward, perhaps it would be as well if I refreshed hon. Members' memory. The Parliamentary machinery consists of a one Clause Bill followed by three Resolutions. Departmental machinery arranges for notification to be sent to all bodies of local Land Tax Commissioners as soon as possible after the Second Reading of the Bill, so that wherever there is need for replenishment they can approach their members and suggest names for appointment as Land Tax Commissioners. The commissioners take the initiative, and the normal practice has been for the clerk to send to the Member for the division a list of the suggested names for these 1490 appointments. The Member may accept that list or he may not. He has full discretion to alter it in any way in which he thinks wise. Names may be struck out or additional names inserted; but he must deal with the list in one way or another, and then it is delivered to the Public Bill Office. It is not necessary for the date when this should be done to be specified in the Resolutions. It is necessary only that a reasonable period should be allowed between the Second Reading and Committee stage of the Bill by which time the list should be deposited. The time normally allowed is about four or five weeks from the time of the Second Reading of the Bill to the Committee stage. When the Act is finally passed the names contained in the list are published in the London Gazette, and further steps are taken by the Department to secure further publicity for the list and notification of the new commissioners appointed.
The hon. Member for Dumbarton Burghs (Mr. Kirkwood) asked me whether this Bill affects Scotland. It does not. The Bill refers to England and Wales only; there is no necessity for a Bill of this nature, a "Names Bill," as it is called, in Scotland. Historically the reason is that prior to the enactment of the Local Government (Scotland) Act, 1929, the duties of Land Tax Commissioners were performed in that country by the Commissioners of Supply, who were not required to be appointed by a Names Act. But the Commissioners of Supply were abolished in 1930 and their functions were vested in the county councils, and the Finance Act of 1930 made provision for county councils to choose new general commissioners of Income Tax. That holds good in Scotland, except in the case of Edinburgh and Glasgow, where the appointing authorities are the burgh magistrates.
I notice that the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) is moving an Amendment to this Bill, and perhaps it would save time if I said a word or two about it now. I wonder whether there is not some misapprehension in his mind. The Bill does not, as his Amendment suggests, continue the obsolete machinery for the administration of Income Tax. What it does is to appoint additional commissioners for executing the Acts granting a Land Tax. The right hon. Gentleman 1491 may say—as I myself said—that one of the most important functions of the Land Tax Commissioners is to provide a field of recruitment for Commissioners of Income Tax, and that is true, but the machinery for the administration of the Income Tax would go on in precisely the same way even if this Bill were not introduced, although here and there a growing paucity of the available commissioners might cause inconvenience. The recommendation of the Royal Commission to which he calls attention was that one-third of the General Commissioners of Income Tax should be appointed by the Crown, through the Lords Lieutenant of the counties, one-third by the Land Tax Commissioners as at present, and one-third by county or borough councils. The Codification Committee Report to which he also makes reference did not make any recommendation on the general method of appointment. Therefore it is clear that even if legislative effect had been given to the Royal Commission's recommendation a "Names Bill" would still be necessary from time to time for Income Tax purposes, since one-third of the Income Tax Commissioners would continue to be appointed from the Land Tax Commissioners. It is only a question of degree. If the recommendations had been accepted we should still have required this "Names Bill" as regards one-third.
In short, under the law as it stands, the occasional introduction of a Bill of this nature cannot be avoided. Finally, there does not seem to me any cause for apprehension in the right hon. Gentleman's mind in the fact that Members popularly elected, as all Members of Parliament are, should be entrusted with the task of scrutinising these lists and either accepting them or making what alterations they conceive to be necessary.

§ Mr. Pethick-Lawrence
I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof: this House declines to give a Second Reading to a Bill which continues the obsolete machinery providing for the administration of the Income Tax, and fails to adopt the recommendations of the Royal Commission of 1920 or the Codification Report of 1936. My object in moving this Amendment is really to make a two-fold protest. The 1492 first protest is against the continuance of this very obsolete machinery. It must be perfectly clear, even from the speech of the Financial Secretary, that it is very archaic, that it rather creaks. Looking up our Debate 10 years ago, when the previous Land Tax Commissioners Bill was introduced, I find there were a good many queries on the Committee stage as to whether Members of Parliament had in fact been consulted and there seems to have been some doubt on the matter. The whole system is something in the nature of a Gilbert and Sullivan farce. First we are told that the Land Tax Commissioners have very little work to do in regard to Land Tax, that their principal work consists in forming the matrix from which the local Commissioners of Income Tax are formed, that some of them are formed from the justices of the peace and some are recommended to Members of Parliament who have an absolutely free hand to choose anybody they like inside their districts. In this House we are fond, and rightly fond, of some of our ancient customs when they are harmless and unimportant, but for what is one of the major taxes, the Income Tax, to depend upon this very archaic procedure seems a little absurd. That is one reason why I think it is time to protest against the continuance for 10 years or so of this old method of dealing with an up-to-date problem.
But I had another object in view, and in order that the right hon. Gentleman may understand exactly what it is I will recall to his attention what the late Mr. William Graham—whose death after the election of 1931 we all regret—said when this matter was introduced by the Financial Secretary of the day, I think Mr. Ronald McNeill. He said there were in this structure old-world elements which were very interesting: but are hardly appropriate in existing conditions, and the time must come very soon when this House will require as a matter of efficiency …. to look at the administrative side."—[OFFICIAL REPORT, 1st March, 1927; col. 267,Vol. 203.] Though he supported giving the Measure a Second Reading, he said the House ought to be reminded of the underlying administrative reforms which were recommended by the Royal Commission on Income Tax in 1920, and had not been put into operation. It was all right for Mr. William Graham to say in 1927: "Here 1493 are these administrative reforms which were recommended in 1920. I think you ought to have put them into effect, no doubt you are going to do so, and in the meanwhile we are prepared to renew this procedure." Ten years have elapsed since then, and I think it is necessary for us to take a somewhat stronger line.
I want the right hon. Gentleman to be quite clear about what I am urging. I am not merely concerned, as he seems to think, with the particular administrative change regarding the Land Tax Commissioners. I am concerned about the whole question of the reform of the administration of the Income Tax which was dealt with by the Royal Commission in 1920. They recommended a large number of reforms. They recommended reforms of the Board of Inland Revenue; they recommended an administrative reform with regard to the General Commissioners of Income Tax; with regard to the additional Commissioners; with regard to the Special Commissioners; the abolition of the Assessors; that the collectors should he appointed by the Board of Inland Revenue; and that the area of Income Tax districts should be divorced from those of the old Land Tax, and should be decided anew by the Board of Inland Revenue. Finally, they recommended that committees should be set up to draft a new Bill to take the place of the existing Act. So far as the last recommendation is concerned the Government did make a move in that direction, and we had what was known as the Consolidating Committee, which reported at the beginning of last year; but so far as the bulk of the administrative changes recommended by the Commission are concerned the Government have, I think, done little or nothing. I have not read meticulously through all the Finance Acts to make sure whether or not any of the recommendations have been put into effect, but I do not think it is incorrect to say that on its administrative side the law stands practically as it stood before the Commission reported, and there has been no suggestion that the Government are going to implement the recommendations of the Codification Committee.
We are prepared to allow the Government to go slowly, because we know they are engaged with matters of importance, and that the recommendations cannot be put into operation on the spur of the 1494 moment, but we want to draw attention to a practice which is far too common with Governments—Governments of all parties—of appointing a Royal Commission or a Departmental Committee, occupying much of the time of a number of busy people, and then calmly pigeonholing the results of their labours. Unless the Financial Secretary can tell me that I am wrong in my statement, or unless he can assure me that drastic steps are to be taken to implement during the present Session the recommendations of the commission and the committee, I shall be disposed to ask my hon. Friends to go into the Lobby to make a protest, not against this Bill, but against the failure of the Government to reform the administration of the Income Tax and against the fact that they have brought in this very minute Bill at a time when a much larger Measure was really desirable.

§ Lieut.-Colonel Colville
If I may say a word or two on this Amendment it would be to remind the right hon. Gentleman that this is not an occasion for proposing wide and comprehensive Amendments to Income Tax law. The Bill is very limited in scope, but the statement of the right hon. Gentleman has been rather in the nature of a protest that the Bill is not something quite different. Speaking generally, I could not, within the Rules of Order and on the subject-matter of this Bill, go fully into the matters into which the right hon. Gentleman seeks to go. It would not be wise to say that any one Government could be held to blame for not taking action. The right hon. Gentleman will remember that the commission's report was many years ago, since when there have been Governments of various complexions. I can assure him that we are alive to the valuable considerations in that report. Whether he was alive to them when he was Financial Secretary I do not know, but no action seems to have resulted. Beyond saying that we are bearing in mind the commission's recommendations I do not think it would be proper for me to go. I hope I have made it clear to the House that the Measure which is before them now is a necessary one in order to secure the replenishment of the lists of land tax commissioners where there are not enough to perform the necessary functions. I cannot hope that the right hon. Gentleman will now withdraw his protest, but I 1495 feel that such a protest is a little misplaced when it takes the form of voting against a Measure for the replenishment of Land Tax Commissioners.