Lords Sitting of 19 May 1851

MINUTES.
PUBLIC BILLS.—1a Small Tenements Rating Act Amendment.
2a Royal Naval School; Expenses of Prosecutions; Property Tax.

EXPENSES OF PROSECUTIONS BILL.
LORD CRANWORTH, in moving the Second Reading of this Bill, explained that amongst its provisions were one enabling the Secretary of State for the Home Department, upon the requisition of the magistrates at quarter-sessions, or of the town council of a municipal borough, to order that in future the clerks to magistrates and clerks of the peace should be remunerated by a fixed salary—not by fees, as at present; and another, for abolishing the expensive process by which prisoners committed in a town which was a county of itself were removed for trial into the adjacent county.
Bill read 2a.

PROPERTY TAX BILL.
The MARQUESS of LANSDOWNE The MARQUESS of LANSDOWNE moved

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the Second Reading of the Property Tax Bill. He said, that in proposing this measure, which was unquestionably, financially speaking, the most important measure which had been proposed this Session, he must, although all their Lordships were familiar with its details, offer a few observations to the House. In the first place, he would cursorily advert to a verbal objection to the Bill which had been pointed out. It related to an oversight which had taken place in the wording of the Bill, in relation to a very important Amendment that had been admitted into the Bill in opposition to the wishes of Her Majesty's Government. It was satisfactory to know that that oversight would not be productive of any injurious consequences in carrying the Bill into execution. He believed that the Bill, however imperfectly it might be worded, would not contain any obstacle, either to its construction or to its perfect operation; but, if it should be otherwise, it would only be necessary to pass an explanatory clause to remove the objection. As to the Bill itself, it was one to which the attention of their Lordships had been frequently called in the course of the last few years; and the only question for their Lordships to decide on this occasion was, how far they considered the present condition of the finances to call for its renewal, even for a limited period. If it were necessary, for the purpose of inducing their Lordships to agree to the Bill, or for the purpose of enabling him (the Marquess of Lansdowne) to recommend it to their Lordships' attention, that he should be, as some in this country were, the enthusiastic advocate of direct taxation—if it was necessary that he should be convinced that it was entitled, to a greater extent than at present obtained, to a preference over other modes of taxation, and that it was the foundation of a system to be introduced to a far greater extent, for the purpose of altering the balance of direct and indirect taxation in the country—he should be the most unfit person to recommend the Bill to their Lordships' attention, because, although he had on former occasions assented to the re-enactment of this measure, it had been with a deep sense of the imperfections that attended it, and of the objections to which it was liable—imperfections and objections which were never stated more strongly or more distinctly than by the right hon. Baronet (now no more) who first induced Parliament to have recourse to this measure in time of peace. That
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right hon. Baronet, however, for peculiar purposes, and for objects stated by him, and more than once acquiesced in by Parliament, was induced to overlook those objections, and to propose it in time of peace as a temporary tax suitable to be adopted by Parliament. He (the Marquess of Lansdowne) had always felt an objection to that tax, not only because it did to a certain degree (though this was balanced by other considerations) cripple the expenditure of those upon whom it fell—not only because it was liable, as all direct taxes were, to the imputation of great inequality in particular cases (inequality which he was convinced no ingenuity exercised by Parliament could effectually remove), but because that inequality was much the more apparent from not being concealed under the various forms which indirect taxation assumed, and, because it was more glaring, was therefore felt, or at least was imagined, to be more oppressive. Now, he was one of those who thought that it was the duty of Parliament, when imposing burdens to an immense amount upon the country, to endeavour at least to make them as palatable as possible, so that they should carry with them, as far as a great amount of taxation could carry with it, the feelings, the concurrence, and the approbation of the country. These objections to this species of taxation were, however, subject to two qualifications—the question being how far, by the continuance of this burden, Parliament could facilitate the importation of that produce which was material to the prosperity of the country and of its manufactures, and how far they could by this means take off those imposts, the effect of whose removal was to improve the revenue and to facilitate the means of getting rid of the income tax itself at a future period, consistently with the observance of faith to the public creditor, and with the general prosperity and interest of the country. He would ask their Lordships whether they thought that, in the present state of the country, this tax actually operated as an impost destructive to the development of the resources of the country, and whether, since its imposition in 1842, it had had the effect in any visible and tangible form of crippling and diminishing the commercial prosperity and revenue of the country. To this question an unanswerable reply was furnished by the state of the revenue, not in one particular portion, but in every portion since the imposition of this tax. Reminding their Lord-

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ships that they had at this moment to provide for the continuance of fifty millions of revenue, and for a burden of 787 millions of debt, he would ask them to observe what had been the progress of the revenue since 1842, when the tax was imposed. The net revenue was then 48,084,000 l.; from that year to 1850 taxes to the amount of 10,250,000 l. were repealed by the two Administrations that held office during that period; yet in 1850 the net revenue was 52,810,000 l., showing an increase of income of 4,726,000 l. The actual increase in the net revenue between 1842 and 1850 was less by only 777,000 l. than the whole amount of the income tax. So that the entire amount of the taxes surrendered was, in the course of ten years, nearly restored and replaced by the development of the commercial prosperity of the country, which development took place under the imposition of the income tax. They had therefore established a great power of reproduction, without which they would not have been in their present proud position of having to dispute, not so much as to how they should raise an amount of revenue, as how they should dispose of the amount of the surplus they bad obtained. The next question was, how should that surplus be applied? If they were to absorb the whole of it, it would not enable them to get rid of the income tax altogether, but only of a portion of it; and in remitting that portion they would still be obliged to sacrifice the great and important objects of further liberating from fiscal burdens other articles of consumption, which, by being so relieved, would again reach the former amount of revenue, and at the same time promote the comfort and the commerce of the country. Feeling, then, that if they had the income tax at all, they must have it in its present form, he thought that we could not do better than employ it for the purposes which had been explained in the other House—on which the duties at present levied pressed heavily—he meant the reduction of the duties on coffee and timber. The adoption of this course also would attain an object which he was sure every one of their Lordships desired to see attained, namely, the leaving of a sufficient margin for the security of the public credit—a security which, the moment it ceased to be provided for, would threaten destruction of our financial system, and, by necessary consequence, the ultimate destruction of the power of this great empire. But besides providing this
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margin for the security of this debt, which the nation was bound in honour and good faith to discharge, the surplus would also afford them the means, if they maintained the income tax unreduced in amount, of removing another important direct tax which sometimes exercised an indirect pressure, and materially affected the sanitary comforts and condition of the people—he meant the window tax. By removing that obnoxious impost, and substituting for it a house tax of less amount, and thereby sacrificing upwards of a million of revenue, they would give a stimulus to the building of houses and the improvement of dwellings in a manner which would at once afford greater comforts to their inmates, and promote the health of the public at large. He, therefore, thought that their Lordships would make a wise choice in assenting to the repeal of the window tax, which had been selected for repeal by the other House of Parliament. With regard to the reduction of the duties on coffee and timber, coffee gave a remarkable instance of the power in which taxation remitted could be replaced by the increased consumption consequent on that remission. When the duty on coffee was formerly reduced, the effect was that in five or six years the revenue sacrificed by the reduction was not only replaced, but there was an actual increase of revenue from the increased consumption of the article. The further reduction of the duty on coffee would therefore be a judicious measure. The same thing, he thought, would hold good with regard to the proposed reduction of the duty on timber. It would be a boon to the shipping interest as well as to the community generally; and, as a proof of this, he might mention that, from the day on which the resolution was agreed to in the other House of Parliament, the price of timber had diminished, and the importation of it had increased. There could, therefore, be no doubt as to the propriety of that reduction. For these objects, then—the repeal of the window tax, the relaxation of the duties on coffee and timber, and the reservation of some margin, at least, for the interest duo to the public creditor—he recommended their Lordships to apply so much of our surplus revenue. At the same time, for the sake of continuing this great commercial and manufacturing prosperity, it was necessary that this Bill, for a period—he wished that it was not for so limited a period—should be continued. The present Bill was nearly

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an exact transcript of the existing Act which their Lordships had already discussed, and approved of on former occasions; the only deviation from it being an alteration by which tenants occupying land who conceived that their profits were overcharged by what was originally considered an advantageous arrangement in their favour, namely, assessing them upon half the amount of their rent, would have the option, admitting the possibility of altered circumstances having made their profits fall short of that half, of their rent, of putting themselves under the schedules of trades and professions, and of proving to the Commissioners that their profits had fallen short of the assumed amount. The distressed farmer by this, means would have the opportunity of making the case of his distress good; and the amount of relief which he would derive would be proportionate to that distress. He was not aware that it would be practicable, by any adjustment, to render the operation of the tax more equable. Undoubtedly, the tax did press somewhat more heavily on persons exercising trades and professions than on any other class; but it was fair, at the same time, to remember that, if they were in this respect more heavily burdened, they were precisely that class of persons who, from the remission of general taxation which the income tax alone had enabled the Government to effect, were now able to get their provisions cheaper, and to make their incomes go farther as to the amount of comforts and luxuries which they could purchase. The income tax was therefore now proposed by this Bill to be renewed for one year, with the view of having the whole subject reconsidered; and he could hardly doubt that in the present state of the finances, and having due regard to the safety of the public credit, as well as to the development of the commerce and manufactures of the country, which were now in a rapid state of development, and which might be carried further still by persevering in the same course of policy— he could not doubt, he repeated, that on both of these great and important considerations their Lordships would assent to the second reading of the Bill which had come up from the other House of Parliament, proposing that the income tax should be continued for one year. The noble Marquess concluded by moving, that the Bill be now read a Second Time.
LORD STANLEYsaid: The noble Marques who has just sat down has rested the
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vindication of his Bill on two very distinct grounds. He has rested it first on the necessity, in which I cordially concur with him, of maintaining the public credit, and on the consequent impossibility of dispensing with the whole amount of the income tax in the present state of the revenue, at least in the course of the present year. He has also rested it on another consideration, with respect to which I must take leave altogether to dissent from the noble Marquess, namely, the expediency of what he calls developing and further extending your present commercial system, and still further facilitating the importation of those articles of foreign produce, the extensive, exorbitant, and unchecked importation of which has already brought so much ruin on this country. But I am not desirous of taking this opportunity of entering into a general discussion of the commercial policy of the noble Marques and of Her Majesty's Government, because we are now, in point of fact, in a position in which we have no option as to the course we should pursue. We have brought up to us a Bill, the passing of which in some shape is, I am ready to admit, necessary for the maintenance of the credit of the country. Apart from all other considerations, I am not the person to contend, nor ever contended, nor shall I now contend, that in the course of this year—nor can I honestly say that in the course of the next year—will it be possible, in my belief, to dispense with the continuance of a certain portion of the income tax. And I hope I need not say for myself, and for those with whom I act, that no consideration would induce us to sanction that rash and reckless reduction of taxation which would leave the Government in a position not to meet the engagements of the State. I say that under no circumstances do I believe we could in the course of the present year repeal' the whole of the existing income tax. Your Lordships are placed in discussing this subject in a position differing from that of the other House of Parliament; because when a Bill of this kind is brought before you, you are not in a position, with a regard to the privileges of the other House, to amend, or alter, or modify it in the slightest degree. The single question which is submitted to your Lordships' consideration is this—whether you will adopt the modified income tax now proposed to you for the term of a single year, after the other House of Par-

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liament has avowed its intention of inquiring into the irregularities and imperfections of the measure, or whether you will reject the Bill altogether, and therewith reject the means of producing a revenue of between 5,000,000 l. and 6,000,000 l., and so convert a surplus of about 2,500,000 l. into a deficiency of a similar amount? Now, between these two propositions I conceive that there cannot be a moment's hesitation. In my mind there is none, and I believe there can be none in the mind of any of your Lordships. When I say we are debarred from considering any modification of this Bill, your Lordships have a striking proof of that statement in the fact that you are actually compelled to pass the measure in a shape which reflects no credit on the "blundering" legislation of Parliament. The noble Earl (Earl Grey) says that a "blunder" has been committed in the Bill, which, while it is proposed that it should be passed for a single year, contains an enactment applicable to the last year of that term of one single year; and the noble Marquess (the Marquess of Lans-downe) says that that is a blunder introduced by the Amendment of an individual Member of the other House. Now I must take leave to differ from the noble Marquess upon that point. The blunder is consequent on the introduction of the Amendment; but the blunder was not in the Amendment itself. It is a blunder made by the Government, who, having acceded to the Amendment, or having had it forced upon them, did not look to the context of the Bill, and did not take care that the remaining clauses of the Bill were in accordance with the Amendment. But we must pass this Bill, blundering and nonsensical as it is, or we must pass no Bill at all. We must pass this Bill, or leave the country without a revenue sufficient for the public service. Now I do not hesitate to say that I, for one, do not feel justified in opposing the passing of the Bill; And between the two alternatives before me, I feel it my duty to assent to the adoption of the measure. I must also concur, to a certain extent, in the opinion expressed by the noble Marquess, that do what you will, and whatever may be the ingenuity of Committees of this or of the other House of Parliament, it will be impossible, in any manner, so to modify or amend this tax as to do away with all the irregularities and imperfections that must be found in an income tax. However modified or arranged it may be, there must be
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real or apparent injustice to individuals; there must be anomalies in theory, and inequalities in practice. I do not mean that the anomalies of the present law may not be modified or diminished; but I agree with the noble Marquess, that by no alteration of the Bill can you impose a perfectly just, or even a reasonably just, measure. It is for this reason I rather agree with the theoretical objections of the noble Marquess to the tax, than I concur in the practical adoption of the course which he recommends. I find that Her Majesty's Government seem disposed to continue this anomalous and unjust measure—not as originally proposed by the late Sir Robert Peel—not as a temporary measure to meet a temporary deficiency in the revenue—but as a real, permanent, and substantial incorporation on the taxation of this country for the purpose of effecting what the noble Marquess calls a development of our existing commercial system. That which I take the House of Commons to have decided is this—not that the income tax shall not be renewed in any case at the expiration of a year—not even that if it be found impracticable to amend or remove the anomalies of the present tax, that tax, or at least a portion of it, shall not be continued; but I take the House of Commons to have decided, and as I think decided wisely, that they will compel a reconsideration of this question at the expiration of one year, and that they will not leave the Government in such a state of security with respect to this large portion of the revenue as to induce them to proceed in that reckless course of disposing of every petty surplus in such a way as indefinitely to postpone the period at which the tax might be altogether done away with. They have decided also, and as I think decided wisely, that during the year for which the tax is granted, they will inquire whether they can mitigate or reduce the many pressing grievances and inequalities of the tax as it now exists. I confess I very much regret the course adopted by the House of Commons in one respect. I confess I very much regret that they did not adopt the proposal made by a right hon. Friend of mine (Mr. Herries), namely, to begin at once with getting rid of a portion of this unjust and oppressive tax, either by an alteration of those schedules which act most oppressively, or by a reduction pro tanto in the whole of the tax. I regret that they did not begin by diminishing the pressure and amount of the tax, by apply-

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ing to that reduction such an amount of income as might be fairly spared from the surplus revenue of the country, without endangering in the slightest degree the public faith, or the maintenance of the credit of the country. I believe that would have been the sound policy to have pursued. I believe the best course the House of Commons could have taken would have been to have declared that at the earliest possible period the pledge given by Parliament should be redeemed, and that this tax should not be continued for the purpose of enabling Her Majesty's Government to propose an indefinite remission of indirect taxation, and thereby to incorporate direct taxation as a part of the permanent financial system of this country; but that, on the other hand, no reduction should be made more rapidly than was consistent with the maintenance of the public credit. The House of Commons, however, have not taken that course; they have taken the course of recommending that the existing tax should he continued for a period of one year. They have not yet passed any opinion upon the other financial measures proposed by Her Majesty's Government. For my part, if it could lead to any practical result in your Lordships' House, I should he more willing than I am at present to enter into a discussion of the policy which the noble Marquess and his Colleagues seem disposed to pursue of wasting and sacrificing every surplus as it arises, and thereby, while they profess the utmost abhorrence of this tax, ensuring its continuance. The noble Marquess left it to be understood that there was to be an indefinite development, as he called it, of our existing commercial system—an indefinite removal of indirect taxation, and a substitution of direct taxation in its place—an indefinite extension and encouragement of the freest possible importation of foreign produce. Now, I say that financially and politically I think you have already carried that free importation of foreign produce to a dangerous and mischievous extent. You are sacrificing a large amount of revenue annually, the possession of which might enable you to deal with the most oppressive description of taxes; and while you are injuring a large body of your own producers in this country and your colonies, you are at the same time sacrificing your revenue, and you are not gaining in the shape of reduction in the price of commodities the whole advantage which could compensate for the loss of re-
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venue you sustain, I apply this principle to the two cases to which the noble Marquess has referred—to the proposed reductions in the duties on coffee and on timber. My firm conviction is that by this reduction of the differential duty on coffee you will materially injure your colonial producer, and give an undue encouragement to his foreign rival; while you will not secure to the consumer of coffee the advantage of a reduction in price commensurate with the loss of revenue you will sustain. I know the noble Marquess will tell me of the great extent to which the consumption of coffee was increased by the former redeuction of the duty—an increase which I do not deny—I know he will tell me that the present diminution in the consumption of coffee is not to be attributed to the operation of the duty, but is to be ascribed to the large amount of adulteration which prevails in respect of coffee. But that would be only raising another question, upon which I confess the policy of Her Majesty's Government appears to me to be absolutely incomprehensible. They refuse to take the slightest precautions against that adulteration which does not materially affect the higher and richer classes, but which practically enables the retail dealer to impose on the poorer classes of the community an adulterated and frequently a noxious article, while he charges for it the amount which might be fairly charged for the genuine article. I do not understand the policy of Her Majesty's Government in refusing to remedy this great abuse and this fraud on the humbler classes of consumers; nor do I understand how that evil is in the slightest degree to be remedied; while, at the same time that you continue the present charge on the importation of colonial coffee, and reduce the duty on foreign coffee, thereby sacrificing a considerable amount of revenue, you lower the duty on the very article which is mainly, though not exclusively, used for the purposes of that adulteration. I do not believe that the consuming classes in this country will derive the advantage which you anticipate from the proposed reductions of the duties on coffee and timber; while, on the contrary, it is perfectly clear, with regard to the duty on timber especially, that you will sustain a j very considerable loss of revenue. I do j not know how far the latest information which the noble Marquess may have received could justify the statement which he made upon that subject; but from the in-

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formation we have received up to a very recent period, there does not appear to be any indication of a fall in the price of foreign timber in the slightest degree commensurate with the reduction of the duty. In this as in other cases, the price of the article is rising in the place of its production, and that which you sacrifice in the shape of revenue here, goes to a very considerable extent to increase the profits of the foreign producer. But, as I said before, I do not mean to enter at present into a general discussion of our commercial policy, as I am aware that such a discussion could lead to no practical conclusion. There is one question, however, to which the noble Marquess has referred, on which I wish to say a word. The noble Marquess took great credit to the Government for the reduction of one denomination of direct taxation, by which he considers that a great boon in a sanitary sense, as well as in a financial sense, will be bestowed on a large portion of the community. Now, I am not going here to say that I believe the mode in which the window tax operates is advantageous, or that it is not fraught with very serious evil; but I do say that when the noble Marquess takes credit to himself, and to Her Majesty's Government, for doing away with the window tax, I must remind him that to a great extent they propose to charge a similar tax on the same portion of the community, by the substitution of a house tax for the window tax, that portion of the community being but a small portion of the whole population of the country. I believe the window tax was chargeable on something like 500,000 houses; while the proposed house tax will be chargeable on 400,000 only; and therefore, although there is to be a reduction in point of amount by the conversion of the tax, there is still to be a direct tax charged, not upon windows, but upon houses with windows in them, exempting a small portion of the former number. I do not know why that exemption is made. I know not why you should sacrifice the revenue for the purpose of exempting just that class who claim to exercise the elective franchise, which has always been supposed to be correlative to taxation. I know not why you sacrifice gratuitously the amount of taxation you might obtain by extending the tax to all the houses which were subject to the window tax. That exemption may be very convenient to the constituents of some of the metropolitan Members, and that influence may not have been without its
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weight: otherwise I know not why the man who resides in a 20 l. house should be subject to the tax, while a man who resides in a 10 l. house, and as such is entitled to a vote, should be exempted from it, or how the Government can justify saddling so large an amount of taxation upon so small a body, and exempt from it 100,000 out of the 500,000 at present paying it. I think that, without sacrificing the revenue, you might have obtained to a great degree the sanitary objects you have in view. I believe that by the conversion of the window tax into a house tax, pressing on the same amount of property, and the same number of houses, you might have effected the change without any loss to the revenue, and without any injustice to individuals; or you might even retain for the present the window tax, and enable parties who are now liable to that tax to compound for the present amount, and permit them to open hereafter any number of windows they might think proper without being subject to the inquisitorial visit of the tax-gatherer. I do regret that Her Majesty's Government should be proceeding on what I think a vicious principle, namely, that while they profess that the income tax is but a temporary measure only, they should year by year continue disposing of every small surplus as it arises; taking off taxes the relief from which will not be felt; taking off taxes which will be attended with a loss to the revenue, and conferring a boon principally on the foreign producer, and so continually bringing down the revenue to balance expenditure, that it is hopeless that in any one year you can have a surplus sufficient to enable you to remove the income tax. Her Majesty's Government may make what professions they may think fit—they may make what declarations against the income tax they may please—the country will judge of their sincerity not by their professions but by their practice; and however strongly they may condemn the tax in theory, if the people of this country see that year by year they are taking steps, by their mode of disposing of every surplus, which will render it impossible for them to remove that tax, they will come to the not unnatural conclusion that, however theoretically Her Majesty's Government may object to it, practically they mean to continue it as a permanent tax, and to incorporate to a greater extent than has ever yet been done a system of direct taxation as the basis of our financial policy. These are

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the objections which I entertain to the course which is being pursued by Her Majesty's Ministers. I think you ought to have taken steps gradually but certainly to get rid of this tax at the earliest possible moment; but in the position in which your Lordships stand I should be very sorry to take upon myself the responsibility of advising or suggesting to your Lordships that you should reject a Bill which you are not able to amend, and the continuance of which is absolutely necessary for the maintenance of the public credit.
THE EARL OF MALMESBURYrose for the purpose of asking on what principle of assessment it was intended that the house tax should be collected? If it was proposed that it should be taken on the poor-law assessment, that would be very unequal, for the assessment varied in different parts of the country; and if the assessment to the income tax was taken as the basis of the tax, the inference would be drawn that it was intended to make the income tax perpetual, because no one would expect to see Commissioners appointed for the sole purpose of assessing the house tax.
THE MARQUESS OF LANSDOWNEwas understood to say that the subject of the noble Earl's question was one which was rather for the consideration of the other House of Parliament; but he was induced to think that the system of parochial assessment now in force would be acted upon in assessing the new tax.
THE EARL OF MALMESBURYremarked, that if that was to be the system of assessment, a more unjust or tyrannical tax could not be imagined. The local assessments varied greatly in different parts of the country, and sometimes as much as 30, or even 50 per cent.
LORD BEAUMONTthought that the noble Earl had fallen into a little mistake, as in all parochial assessments the gross valuation of the property, or rack rent, appeared in the first column. In the second column the rateable value of the property was set down, which was generally a diminution of that put down in the first column. Under the second column an allowance was generally made on the different kinds of real property, and different principles were acted upon in different parishes. He quite agreed with the noble Earl in thinking that if the valuation in the second column were adopted, great injustice would be done, because one portion of the country would pay more than another. But the gross value of the
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property would afford materials for a complete and fair valuation, and that was the basis upon which he supposed it was the intention of the Government to proceed.
LORD BERNERSwould have felt great reluctance in addressing their Lordships, but that he wished to make a few observations in consequence of the remark which he had heard with much pleasure fall from the noble Marquess who had introduced that measure, and which he had no doubt the country would hear of with equal satisfaction—namely, the admission which he had made that the present Bill had its imperfections, and that it was most desirable it should he made as palatable as possible. It was the bounden duty of the Legislature to enact as good laws as possible, and then to see them properly carried out. There was one point to which he was anxious particularly to call their Lordships' attention. He wanted to know whether there was any mode of preventing or meeting frivolous and vexatious surcharges other than that now provided? The manner in which the present tax was enforced was such as to incur the general disapprobation of every one who was more or less affected by it. It was most necessary that the tax should be rendered more equal and less unjust in its operation.
LORD MONTEAGLEagreed that it was desirable to diminish any oppressive incidence of the tax. He could not concur in the complaints of the noble Lord (Lord Berners) respecting the mode in which it had been collected. On the contrary, he must say that, considering the circumstances of its introduction, and the small experience possessed upon the matter, there not being one Gentleman remaining in office who had been acquainted with the previous tax, nothing could be more praiseworthy than the caution, the moderation, and good sense with which this law had been generally administered. There might be cases such as those to which the noble Lord had referred; but this was one of the incidents to any administration of a property tax; and if it was to exist at all, it would hardly be politic to diminish the powers for guarding against fraud, and for enforcing a tax so easily evaded. He should be sorry, in making this statement, to be considered as one approving of such a tax as this, except upon the ground of necessity. In great exigencies it was to be regarded as our great resource; and when the safety and

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independence of the country were concerned, objections vanished. In fact, it was almost analogous to the impressment of seamen. But both of these extreme methods of providing for public safety or public credit ought to be reserved for a great occasion, and should be limited to the exigency which called them forth; more especially we ought not to involve ourselves blindfold in a system of perpetuation under cover of a periodical renewal, without some attempt at a revision to see how a tax like this could be made just and equitable. The system of a property tax was even more dangerous when renewed for only a short period, because at every renewal, the Government, in order to induce Parliament to assent to its demand, must make sacrifices of other taxes, not because they disapproved of them, but because they were unpopular. This sacrifice was the more galling, because if these taxes had not been reduced, the country might have expected to have obtained, if not the remission of the whole burden of the income tax, at least the reconsideration of the most oppressive portions of it. How has this tax been already dealt with since its introduction by Sir Robert Peel? It was proposed for three years, and we had it for nine; it was estimated to produce less than 4,000,000 l. a year, and it had produced above 5,000,000 l.; the Government asked for 11,000,000 l., and had got 49,000,000 l.; and yet it was now to be again renewed. And why? Because we had been in the meanwhile busy in repealing various indirect taxes. No doubt, 1842 presented a case of financial emergency; but, saying nothing of 1842 or 1845, it was impossible to deny that if we persevered after the fashion of 1848 no one could ever see any end to the continuance of the income tax. He thought that as a surplus arose, it would have been wiser to have mitigated the oppressive parts of the property tax, instead of taking off taxes which were hardly felt. Government proposed now to commute the window tax for a house tax; as long as the house tax was less than the window tax, people might perhaps be pretty well satisfied with the exchange; but the noble Lord and his friends knew very well that the repeal of the former house tax was forced upon a most reluctant Government; and when the new house tax got fully into play, we should have the same agency brought again into action, and probably with the same success, as in the case of the agitation
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against the former house tax. The small assessment of great houses would once more be produced as a grievance. Great mansions paid heavily to the window tax; but, taking the only just test, the test of value, and not of cost, the King's Arms or the White Hart in the county town would seem to pay in a greater proportion of house tax than the nobleman's castle or the country gentleman's house. It was quite right to give relief from the window tax with a view to purposes of health; but in this commutation the new tax would be placed in a position of greater financial danger than the old, and we should have a larger amount of the public revenue in a position of jeopardy. He was satisfied that if they wished to maintain the public credit, and the means of supporting the public establishments, they could not let the property tax remain on its present footing, at the risk of an adverse vote of the other House, or of an adverse pressure out of doors. Last year the Government, with the prospect of the discontinuance of the property tax before them, gave up 1,100,000 l. of public revenue, including some 500,000 l. or 600,000 l. of stamp duties, for which repeal he had never heard any one out of doors express the least thankfulness. The step was indeed forced upon them; but other reductions were made which they were not compelled to make. In all, last year 1,100,000 l. of the public revenue was given up; and he could not help thinking that the Treasury would have felt more at their ease if they had reserved the question of repealing this large sum till the present year, when the renewal of the property tax was before Parliament. He considered that it would be most dangerous to place the credit of the country to a great or an increasing extent upon the insecure foundation of direct taxation. In 1842 his noble Friend the Secretary for the Colonies (Earl Grey) expressed his sense of this danger, and called upon Parliament to consider what would be their situation if the oppressive nature of the income tax should make the country refuse to submit to its continuance, and how much embarrassment and how much danger to the national credit such a state of things would occasion. He thought, when they found the proposition by Government of an income tax for three years met by a Resolution of the other House that it should be continued for only one, that the results contemplated by his

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noble Friend were rapidly approaching, and that next year Parliament might determine that this tax should be altogether discontinued. He wished before he sat down to call their Lordships' attention to a singular fact. They had heard in the Speech from the Throne, and it was not denied on either side of the House, that the agricultural interest was at present suffering the greatest depression; while they had been told to-night that the interests of productive industry, as represented by trade and manufactures, were, on the contrary, flourishing. Now, it was in some measure a demonstration of the evils incident to the property tax, that that tax upon agricultural property, even in a time of distress, had gone on augmenting, while the amount of the same tax derived from other descriptions of property—trades, professions, and commercial profits, had diminished, although they were told those interests were most prosperous. He would take the comparison of two years. In 1843 the amount of property assessed to the income tax under Schedule A, which, however, he admitted, comprehended mills, buildings, and other things besides land, was 85,000,000 l., and in 1850 it had risen to 94,000,000 l. He found that the property assessed under Schedule D, which included all the interests admitted, to be most prosperous, had fallen off from 63,000,000 l. in 1843, to 54,000,000 l. in 1850. This had taken place concurrently with an increase in the official value of exports from 131,000,000 l. in 1843, to 190,000,000 l. in 1849, and an increase in the value of imports from 70,000,000 l. in 1843, to 105,000,000 l. in 1849. How was this to be accounted for, unless by an unjust assessment or levy of the tax? He considered that the general financial condition of the country was satisfactory; but he thought they ought carefully to consider whether a tax of the nature of the property tax should be continued upon light grounds, and especially upon a principle which extended to its perpetuation, or whether they should not reserve these extraordinary resources for great and important exigencies.
EARL GREYsaid, he merely rose for the purpose of alluding to the remarks which had been made by the noble Lord opposite with regard to the alleged grievance in the mode of assessing the income tax. The noble Lord complained of surcharges on the part of the surveyors, and he said that there ought to be some remedy in cases of these surcharges, as there was
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under the land and assessed taxes, and that the general body of the Commissioners should be allowed a voice in the matter. Now the difficulty in the case of the income tax arose from the fact that it had been considered, and in his opinion justly considered, necessary that a strict secrecy should be preserved with regard to the incomes of individuals, so that they should not be exposed to the disadvantage of having the exact amount which they paid as income tax exposed to the public; and in order to preserve that secrecy the Act of Parliament nominated seven Commissioners out of the general body of Commissioners of Land and Assessed Taxes, to whom appeals should be made in the first instance, with the opportunity of a further appeal to a Special Commission. He was afraid that, consistently with the object of having the income tax at all, more could not be done without the risk of interfering with that secrecy which it was agreed, on all hands, ought to be maintained. With regard to the observations of his noble Friend who had last addressed their Lordships, he (Earl Grey) certainly was not going to express any great difference of opinion from him in regard to his objections to the income tax as a peace tax. He had expressed his views upon that subject very strongly in 1842, and he still continued to entertain them; but he was bound to say at the same time that experience had convinced him that the immense advantage which had been gained to the country by means of this income tax was well worth the sacrifice which had been undergone for it. His noble Friend said that the income tax had been calculated to produce 3,700,000 l. for three years, and that instead of that it had actually produced 5,500,000 l. for a period of nine years. Now, he (Earl Grey) confessed it was the very productiveness of the tax which was one of the great reasons for reconciling him to it. When the imposition of this tax was first proposed, he thought it hardly worth while to submit to a scheme for increasing the revenue of the country so objectionable in its character, and so offensive in its mode of operation for the sake of 3,700,000 l. of revenue; but when they came to consider the very much larger revenue derived by means of the income tax, and that they had been enabled by its aid to make reforms in our general financial system, these were results which were calculated to alter his original opinions on the subject. He had heard with extreme surprise from the noble Lord op-

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posite, that the imposition of the income tax had only enabled them to get rid of taxes, the relief from which was felt by no one—
LORD STANLEYexplained, that his remarks had reference only to the reduction of the duties on the two articles of coffee and timber during the present Session of Parliament.
EARL GREYwould afterwards allude to the case of the duties on coffee and timber, but with regard to the past, he must remind the House of the statements already made by the noble Marquess near him, which seemed to him the most conclusive proof of the advantage which had been derived from the change in our commercial policy. The noble Marquess told the House that taxes had been removed since 1842 to no less an amount than 10,000,000 l., and, putting the income tax out of the question, we had only lost in revenue by that large remission of taxation, about 7,000,000 l. While the public had suffered this diminution of revenue, they had gained, not 10,000,000 l. but as he (Earl Grey) believed, very nearly 20,000,000 l., by the reduction of taxation; because, if they took into consideration the incidental disadvantages connected with those taxes which had been repealed—their pressure upon industry, their unequal distribution, and various other matters, he believed they would not be overstating that relief at 20,000,000 l., instead of 10,000,000 l.; this enormous relief having been purchased at the trifling amount of 7,000,000 l. His noble Friend who spoke last had gone into the question of the taxes which had the best claims to be abolished, and he had mentioned various taxes which he thought had been injudiciously remitted. He (Earl Grey) would not follow him into the general subject, but he must allude to one of those taxes which had been referred to, he meant the stamp tax. He owned he was surprised to hear his noble Friend, with his great experience, say that the alteration in the stamp duty was not worth the sacrifice of income which it entailed, he was afraid it was the fate of all Governments, and of all Chancellors of the Exchequer, to receive little more than censure in return for their exertions in the public service; but it was not thanks that they must look to as a reward. What they looked to was to be of use to the public; and considering the matter in that light, he would say that the remission of the stamp tax was well worth the sacrifice which it involved. For the schedule
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of the stamp duties was full of injustice and inequality; it pressed upon small transactions in a manner which rendered them very frequently impossible, and it presented obstructions in the way of a ready transfer of property, which was the life-blood of a commercial country. Now by the sacrifice of a small amount, they had put the stamp duties on a footing of fairness and equality; and at the same time it appeared, from reports received from solicitors and others throughout the country acquainted with the subject, that the effect had been to relieve transactions, and especially those of persons in the humbler ranks, to an extent of which it was difficult to estimate the importance. They might not perceive at once the full benefit of the change, but they might depend upon it every obstruction that they took away from the free career of enterprise and industry would be paid for at no distant period; and he believed that among the measures which had been passed with that object, few had been more beneficial than that which effected a change in the stamp duties. The noble Lord opposite must have misunderstood the remarks of his noble Friend when he represented the proposals of Her Majesty's Government as implying a determination gradually to get rid of duties on Customs, and to trust entirely to direct taxation. His noble Friend had expressly guarded himself against that interpretation, and he (Earl Grey) was at a loss to know where the noble Lord could have found any ground for it. But he might be allowed to point out the real principle of those measures. He considered that the object had been not to get rid of Customs duties, as distinguished from direct taxes, but to get rid of those taxes, whether Customs or Excise, which were obstructions to the industry of the country; and a very large portion of the revenue which the income tax had enabled them to sacrifice, had been derived, not from the Customs, but from the Excise, as for instance the duties on glass and bricks. There never were two taxes more wisely and judiciously repealed; and he would venture to say, there never were two taxes the removal of which had proved more beneficial in giving an impulse to industry. Their Lordships knew what a brilliant display the glass manufacturers were now making in this metropolis. The improvement in glass manufacture in this very city had been something almost inconceivable, and it dated from the time when the exciseman

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was taken out of the glasshouse. The duty on bricks had been repealed still more recently, and in one single year improvements and modifications had taken place in their manufacture, on the extent of which it would be difficult to speculate. As a landowner himself, and one therefore who felt the pressure of the times, he would state his belief that no tax could have been removed from the owner and occupier of land more beneficially than the tax on bricks; even living, as he did, in a county where stone was very plentiful, the advantage had been great, for it was obvious that where what the owners and occupiers of land had to trust to was improvement, facilities for building were of the greatest possible importance. With regard to the taxes which it was proposed should be altered in the present year, the noble Lord found great fault with the repeal of the duties upon coffee and upon timber. In the first place, he had stated that no advantage had been derived from the reduction of the duty upon timber. Now, on Saturday last, he (Earl Grey) had been reading a circular of one of the most eminent houses on the state of the wood trade, in reference to the reduction which had been practically in operation for some weeks. And, first, with regard to colonial timber, the circular stated that no reduction had taken place in its price. That result he fully anticipated, because for some years our imports of colonial timber had been confined to timber of peculiar qualities, with which Baltic timber came very slightly in competition, so that the alteration had not affected colonial timber at all, and therefore had done no mischief to the Colonies. But the reduction in the price of Baltic timber in some kinds of wood had been two-thirds, in others one-half, of the duty taken off, while, in some other kinds of wood, the falling price was equivalent to the whole of the duty remitted. He believed that that was a result even more satisfactory than the Chancellor of the Exchequer had ventured to expect. Then, with regard to coffee, the noble Lord stated that the reduction of duty would be injurious to the Colonies. He (Earl Grey) had had some communications with gentlemen who were interested in the colonial produce of coffee, and though he knew it was not common for persons engaged in any particular trade to recognise the advantages of a reduction of protection, he might say that he had not heard from any
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of those gentlemen that any disadvantage could result to them from this measure. And the reason was plain. Ceylon alone produced a larger quantity of coffee than this country consumed; and, in such a state of things, it was evident that protection must be valueless, for there must be always a surplus. But, on the other hand, the reduction of the duty would be of infinite value to the Ceylon planter, because it would extend the consumption, and increase the total amount produced. Then the noble Lord complained that the Government refused to do what was really wanting for the interests of the planter by checking the adulteration of coffee, and he seemed to imply that the adulteration was rather favoured than otherwise by Her Majesty's Government. He (Earl Grey) thought, if the noble Lord had looked more closely, he would have found the real fact to be, that the Government did not favour the adulteration of coffee, but that both the present Administration and the two which had preceded it, felt that practically it was totally impossible by legislative restriction or interference by excisemen to prevent that adulteration. He was afraid that adulteration was not confined to the article of coffee alone, but was too common in many other things. He had been shown a certain kind of chalk or limestone, the other day, at the Museum of Economic Geology, and upon asking what it was used for, he was informed that it was principally employed to adulterate the best Durham mustard. He thought the truth was, that with regard to adulteration, the only remedy lay in the hands of the consumer, who, if he took care to deal only with respectable tradesmen, would not be given an adulterated article. But as far as the present measure went, it was calculated to check the system of adulteration, for every thing which diminished the price of real coffee would make it less profitable to adulterate that which was sold to the public, and in that way he thought the reduction of duty would be attended with very great advantage, and he thought that was in every way a better system for the advantage of the poor consumer than a system which would require the constant visits of the exciseman to every grocer's shop throughout the country. He would only add, in reference to the observations of his noble Friend who spoke last (Lord Monteagle), on the wisdom of establishing so important a tax as the income tax for the space of a single year, that he entirely

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concurred in those observations He certainly thought that it was a most dangerous restriction, but their Lordships were aware that it was one for which Her Majesty's Government were not responsible.
On Question, agreed to: Bill read 2a accordingly, and committed to a Committee of the whole House To-morrow.
House adjourned till To-morrow.