§ Order for Third Reading read.
* LORD ADDINGTONMy Lords, I desire to make a few observations upon this measure. I regard the Probate Duty as indefensible and unstatesman- 1243 like. The rule laid down by Adam Smith was that taxation should be levied according to a man's means and in the mode that is most convenient to him; but what can be more inconvenient than to tax the children of a deceased father with 4 per cent, which is to be provided out of the corpus? When the Probate Duty was introduced it was considered in its right character as simply giving to the person in charge of the probate the right to administer the property. But successive Ministers have turned it into a method of extortion, and the original 10s. stamp for probates of any value has grown up to its present proportions of 4 per cent ad valorem. I earnestly refer your Lordships to the practice of that great authority upon taxation. Mr. Pitt? The probate then charged was simply the stamps upon certificates granting to the person making probate the right to administer the property. Pitt carefully abstained from taxing wives or -children, because a wife is entitled to provision and the children are the natural heirs who have a right to their father's patrimony. The national income ought to be derived from individual incomes, according to the means of the individuals. Through the probate you tax at the most inconvenient time, and in the most inconvenient manner. This increase in the Death Duties is open to many objections. The Death Duties have been described as a charge upon accumulation; they act also upon property depressed by low rents and diminished prices. This increased taxation will fall upon landed property at a time, when, owing to agricultural depression its real value has been very greatly depreciated. There are hundreds of properties throughout the country which, owing to the extreme depression, have been so diminished in their productive value; that they hardly yield enough to pay the interest on mortgages, and yet those properties are to be still further diminished by this tar, Is not that a cruelty? With his property probably mortgaged up to the hilt what is a man to do? I Say that it is difficult to conceive any thing more monstrous in the present state of the agricultural interest, than the imposition of this tax in the case of properties which have either come down in value by inherited burthens or grown 1244 up by accumulation. I hold that this is a tax which is wholly indefensible, and I enter my most solemn protest against this kind of legislation, which is entirely antagonistic to the best teachings of political economy. Those who are responsible for it do not follow the principles of Adam Smith, and their legislation is at variance with the views alike of the greatest writers on political economy, and of the ablest financiers.
§ THE EARL OF FEVERSHAMMy Lords, I hope the time will never come when this House will give merely a formal assent to measures of this description. In the financial arrangements of the Government the Chancellor of the Exchequer has, on the whole, been very successful in his general policy; but at the same time, I cannot but regret that he has not been more successful in relation to those taxes which press more or less upon the agricultural interest. I agree with much that has fallen from the noble Lord who has just spoken. I think this tax will fall with undue heaviness on the agricultural interest, and will practically result in an increase of taxation on land. The landed interest is, on the contrary, entitled to relief from taxation, as the Chancellor of the Exchequer admitted last year by his proposed van and horse tax. I hope the van and horse tax will be re-introduced, or that Her Majesty's Government will find some other substitute to relieve the taxation falling on land. I also regret the proposed increase in the duty on beer. The increase is not great, but small matters of this kind are very irritating. The right hon. Gentleman has invited the County Councils throughout the country to express their opinions upon the matter. Some of them have expressed their opinions, and others have not. At the same time, I think they all more or less unite in the hope that some substitute may be found for the taxation falling on land. It is always with reluctance that I differ from proposals put forward by the head of Her Majesty's Government; but I cannot help asserting that, instead of increasing the taxation on the landed interest, as is now proposed, what is wanted is some scheme that will carry out the promise of the Government made last year with regard to relieving that taxation.
§ THE MARQUESS OF SALISBURYMy Lords, I fully agree with my noble Friends that the Death Duties are a bad tax, but every tax may be so described. Money has, however to be got, and the question that has to be solved by Her Majesty's Government is not as to finding an ideal tax, but as to what tax is the least undesirable under the circumstances which surround us. My noble Friend, Lord Addington, referred to high authorities, but I am afraid he must admit that the current of authority is against any large increase of indirect taxation. I cannot agree with the noble Lord's views as to income tax. It is not wise on every exigency to resort to an increase of the income tax. The foundation of that tax was that its imposition was to be a great financial resource in cases of national emergency. If any great trouble was to come upon us, as long as the income tax is kept low in ordinary times, we shall have in it enormous resources at our command. On the general ground of policy, therefore, I think it would be unwise to force that tax too high. It has been urged that this Budget will press very heavily on land. But it is difficult to see why Death Duties should press unduly on the agricultural interest. The accumulations to be dealt with at death far oftener take the form of personalty than of land, and it is calculated that this tax will bring in far more from personalty than from land. With regard to the horse and van tax of last year, to which reference has been made, it is to be regretted that that tax did not commend itself to public opinion, but it must be borne in mind that it met with severe criticism from many of those who represented the agricultural interest. If the County Councils express themselves in favour of these taxes, they will not find the Chancellor of the Exchequer disinclined to push them forward; but if both the County Councils and the agricultural interest are opposed to them, I am afraid they would not have friends enough to secure their acceptance by the Legislature. My Lords, my only apology for this tax is that money was required for a great purpose, and there was no other way of obtaining it without causing greater inconvenience than this Budget will create by the imposition of this temporary tax; and, without in the least denying the objectionable 1246 character of this tax in several particulars, Her Majesty's Government feel that they had no other choice before them but to make the proposal or to forego the expenditure required by the necessities of the country.
Bill read 3a (according to order), and passed.