FINANCE ACT (CHILDLESS WIDOWS). (Hansard, 27 July 1897)

* LORD STANLEY OF ALDERLEY

rose to ask Her Majesty's Government whether they will return the duties levied on childless willows On their own moneys during 1894 and 1895, seeing that, by the Amendment in this respect enacted in 1896, the Government have admitted that the levying of these duties in 1894 and 1895 was due to an unjust misinterpretation of Sir William Harcourt's Act, and that, therefore, such return becomes obligatory on Her Majesty's Government, and would form no precedent in the case of future remission of taxation, which might be excessive without being unjust; and to move for a return of the amount paid by childless widows in 1894 and 1895, and previous to the passing of the Finance Act of 1896, which would not have been levied if the Act of 1896 had been retrospective. The noble Lord said the grievance which he wished to bring under the notice of Her Majesty's Government and of the House might be best set forth and explained stating the cases with the details of which he was acquainted, though he had no personal knowledge of either of the victims. The first of these cases was that of the widow of a village doctor married in 1887, who had money in securities, giving her £120 per annum. She had inherited this money from her father in 1882, and had then paid succession duty on it. It was settled at her marriage on her children, with life interest to her husband. Her husband died in 1894 leaving her only a bad debt, but as she was held to have benefited by her husband's death, because her money reverted to her absolute use she had to pay £72 settlement or estate duty in addition to probate and estate duty. He brought this case under the notice of the public, in a letter addressed to the Trading Journal in Feb. 1895, and at that time he exonerated Sir William Harcourt from the intentional injustice of making a widow pay duty twice upon her own money, since 1210 in that letter he said that the Finance Act of 1894 should have been called the Bungling Act rather than the Burgling Act, the name by which it was commonly spoken of at that time. He knew of his own knowledge that many officials at Somerset House declared their inability to give a decided opinion as to the sums that might have to he levied under that Act; so complicated it was. Until 1894 what was popularly called the Budget, used to be called the Appropriation Bill, but in 1894 it was termed a Finance Bill, either in imitation of French Parliamentary procedure, or because of its revolutionary nature and extensive innovations on the old succession duties. In France, however, where these duties were heavy, no duty would he levied upon widows in circumstances similar to those now brought before the House, as he had been informed lately by an official of the Ministère des Finances. The second case was that of a lady who became a widow in 1895. She had had to pay £1,836 estate duty, and £650 for aggregation on a sum of £30, 600, most of which was her own money in settlement and which reverted to her absolutely on her husband' s death. The greater part of this money came to her from her mother, who died in 1866, when £230 8s. 4d. was sold out to pay succession duty and costs There was a special hardship in this case, that the widow was 78 when her husband died, an age at which more rather than less comforts are required, and in the course of nature her money must soon pay duty, when it passed to her relatives, many of whom were needy, and would suffer much by this diminution of her capital by nearly £2,500. This widow's husband was 86 when he died, and his brother who succeeded him is now 86, so that at his death, which cannot be far distant, the estate also will suffer seriously. He represented this case to the Chancellor of the Exchequer rather more fully than he had done now, giving him names and particulars; and urged that as he ha d amended the Act of 1894 in 1896 with respect to this class of widows, the amending Act ought to have been retrospective, as was expected by the authorities of Somerset House—for he knew that Somerset House had suspended some claims under this head, pending the passing of the Act of 1896. In his reply the 1211 Chancellor of the Exchequer informed him that the question of making the Amendment retrospective was fully considered, but that he could not find any precedent, and that he could not make one for the reason that although in this particular matter the amounts paid or due might not be large, and therefore the sum to be remitted under retrospective legislation would not be great, yet in most remissions of taxation the contrary would be the case, and a single precedent would be quoted so as to hamper any Chancellor of the Exchequer in any desire to relieve the taxpayer. He submitted to the Chancellor of the Exchequer, and he submitted to Her Majesty's Government, that this argument confused and confounded excessive taxation with unjust taxation; or, as he preferred to describe it, an unjust levying of a tax through misinterpretation of the Act of 1894. It was due to the Chancellor of the Exchequer to say that a few days ago he told him that his concession to ship-owners of a drawback on coffee taken on board for the consumption of the crew, was an instance of claims that might be made upon him if he admitted the precedent of a return of the widows' money. He submitted that this concession could not give any claim to a drawback on past shipping of coffee not intended for exportation. The cases were in no way similar. Shippers might have bought coffee in all the ports of Great Britain; the widows were few in number, and their payments easily ascertained in Somerset House; and they had a moral claim, which the shippers had not got. This concession of drawback might lead to a trade in coffee before a ship left port, entailing more trouble on the coastguard. The view that the levying of duty on widows was due to misinterpretation was borne out by the fact that Sir William Harcourt did not oppose the amending Act of his successor in 1896. If he was wrong in denying that Sir William Harcourt had foreseen and did not intend this injustice, he could be contradicted by any of the noble Lords, his former colleagues. He maintained that Sir W. Harcourt was up to the last moment unconscious of the effects of his Act, for when the Chancellor of the Exchequer moved his Amendment in regard to this matter, Sir W. Harcourt asked for an explanation of the clause; and 1212 Mr. Gibson Bowles replied that the object of it was the reparation of an oversight in the right hon. Gentleman's own Act. Sir W. Harcourt followed Mr. Bowles, and he did not contradict him, neither did he oppose the amending clause, but he said that Mr. Bowles could not understand the difference between Succession Duty on what a man got, and Estate Duty on what a man left. This is the Radical view of the Finance Act of 1894, of punishing a man after his death for being rich. If Sir W. Harcourt's political friends wished to exonerate him completely, they ought to support his request to Her Majesty's Government, for Sir W. Harcourt had passed away into political purgatory, and it was for them to take him out of it. It made little difference to the widows who had suffered or to the public at large whether they suffered through the injustice of the Act of 1894, or through its misinterpretation. The present Chancellor of the Exchequer stated that the action of the law in 1894 and 1893 was unjust, and he had proved this belief by his amending Act. Those Members of Her Majesty's Government who held the doctrine of continuity of government, were thereby bound to admit the solidarity of their Government with that of their predecessors, and whilst maintaining. an Act of their predecessors, were bound to repair the damages mid pay for the breakage occasioned by it; especially so when the Act was only passed two years before, CP d the amount to be remitted was admitted to be small. At any rate the Government was responsible for the acts of the permanent officials. The recent language of the Chancellor of the Exchequer at the Mansion House favoured this view. He there stated that,— generally speaking, our revenue was easily raised, because our system was based on sound economical principles. The credit of this, if it were due to anyone, was due to a long succession of distinguished predecessors of his, who had pursued a consistent financial policy. This statement of his obligation to his predecessor for filling his coffers, was not quite in accordance with his statement to him that the widows of 1894 and 1895 must blame his predecessor. His predecessor could not rectify the error or the oversight in the Act of 1894, or the misinterpretation of that Act; the power to 1213 do so was in the hands of the present Chancellor of the Exchequer; and his praise of the consistent financial policy on sound economical principles of his predecessor should bind him to rectify a departure by his predecessor from sound economical principles which must include just ice. It was due to the Chancellor of the Exchequer to mention that he told him that when speaking at the Mansion House he was not thinking of Sir William Harcourt's Death Duties, but of the Free Trade policy of the country; hut his spoken words at the Mansion House covered both sources of revenue, and Sir William Harcourt's Act had had the greater effect in filling the coffers of the Exchequer. Whilst the Chancellor of the Exchequer was heedless of the fearful denunciations in Exodus of those who harassed and oppressed widows, he was equally indifferent to the effect which his refusal to do justice must have upon the elections. It was not his particular business to think of them, that was the gene-nil concern of Her Majesty's Government. The Chancellor of the Exchequer's words at the Mansion House showed how little he was acquainted with public feeling—for he said there that there was no grudging of sums spent on education. Since that the Budget of the London School Board had been presented, and nothing but grudging was to be found in the Press, from the leading journal to the halfpenny papers. A few weeks ago the noble Earl who moved a Resolution with respect to duties on works of Art, called the Chancellor of the Exchequer a grasping Chancellor. From this speech at the Mansion House he should call him a spendthrift Chancellor. The Latin grammar showed that the two characters might be united in the same person, and the sentence in the grammar might be translated: "Greedy of Death Duties—lavish of Education Grants." The Chancellor of the Exchequer lend given him a good reason for not, pressing for the Return mentioned in the Notice. He wrote to him that all the accounts between 1894 and 1896 would have to be examined, probably 60,000 in all. This number of total accounts would cause no difficulty if Her Majesty's Government consented to indemnify the widows, who could then put in their claims. The Chancellor went on to say, "You may safely infer that the duty in question 1214 would amount only to a small sum, but it is the principle and not the cost to which I object." Principle was a word which had lately been rather discredited. It could hardly apply to a refund of money levied on widows, whilst the whole. of the clause was not made retrospective, and nothing was done for widowers, whilst the Income Tax Department was continually returning taxes levied under Schedules B and D. This principle of not refunding seemed to have had its origin in the popular saying "that it was easier to get butter out a dog's mouth than money out of the Treasury "—from which Chancellors of the Exchequer had arrived at an elementary belief that their first duty was never to let go any money that had once entered their coffers. He concluded by asking Her Majesty's Government whether they were determined to retain money levied in 1894 and 1895, the levying of which they declared to be unjust in 18961 It was his private belief that Sir Michael Hicks Beach would be glad if the Government were to put pressure upon the Chancellor of the Exchequer.