§ LORD ORANMORE AND BROWNE rose to ask His Majesty's Government whether Mineral Rights Duty is properly assessed and levied upon the gross amount of rent or royalties paid in respect of the right to work minerals without any deduction for necessary expenditure by the proprietor for computing and checking the 921 amount of rent due in relation to the minerals worked; whether for the purposes of Super-Tax and Income Tax the like gross return is the proper basis of assessment; and, if so, whether it is the fact that in assessment of Income Tax a deduction is made in respect of the cost of maintenance, repairs, insurance, and management of land or houses; and further, whether in assessing the rateable value of property deduction is made in respect of the cost of repairs and insurance; and whether His Majesty's Government will explain why in the case of mineral rights taxation is levied upon the gross return both for Mineral Rights Duty, Super-Tax, and Income Tax; and whether it is their intention to provide for the allowance of a reasonable deduction from the gross return.
§ The noble Lord said: My Lords, were this not the last day of the session I should have again postponed the Question which stands in my name, as I did last week, in order to enable your Lordships at once to proceed with the consideration of the Resolutions proposed by the noble Marquess. As it is I propose to be as brief as possible in putting the Question. The object of it is to ask His Majesty's Government whether Income Tax, Super-Tax, and Mineral Rights Duty, amounting in all to 2s. 8d. in the £, are rightly assessed and collected on the gross income received by a mine-owner. Your Lordships are aware that this is not the case with regard to land or buildings. Up till last year an abatement of one-eighth and one-sixth respectively was given in regard to these, and last year the Chancellor of the Exchequer increased that abatement if the land-owner could show that more was spent on his property. Those of your Lordships who have mineral property are aware that there are also heavy charges in connection with it, and that the gross income does not go into the pocket of the mine-owner. It is as necessary to have a mining agent for mineral property as it is to have a land agent in respect of land. Most leases with which I am acquainted contain a special provision that the owner may have checking clerks at each pit mouth, and. if he exercises this right it is, of course, a further charge upon him. In addition, the legal expenses in connection with mineral property are very great. There is constant friction between mineral and agricultural tenants, the settling of which, of course, involves expenditure. I may mention the case of a colliery 922 company that went bankrupt. There was a. provision in the lease by which the partners in the colliery were responsible for the rent, and though the mineral owner was able eventually to recover it, it was only after incurring very heavy legal expenses—twenty per cent. of the amount due—and the Receiver in Bankruptcy before paying it to him deducted the whole amount due for Income Tax on the gross amount. The tax on minerals is really a tax upon capital. I hope His Majesty's Government will be able to offer an assurance that if they are returned to office they will do something to remedy what I think I have substantiated is a real grievance. I hope we shall not hear that they cannot give any decision at present. They have been able to give-assurances as to what they will do in future with regard to your Lordships'. House, the Osborne Judgment, Women's. Suffrage, and payment of members, and I hope they will also acknowledge that this is a grievance which calls for redress.
LORD DENMANMy Lords, in view of the important debate which awaits us, I trust I may be permitted to follow the example of my noble friend and be very brief in my reply. I think it will simplify matters if I divide the noble Lord's Questions into different parts. The answer to the first two Questions is in the affirmative. As to the third Question, whether-it is the fact that in assessment of Income Tax a deduction is made in respect of the cost of maintenance, repairs, insurance, and management of land or houses, the answer is also in the affirmative; but I must guard myself by saying that it is within the limits of Section 35 of the Finance Act, 1894, and Section 69 of the Finance Act, 1909–10. Next the noble Lord asks whether, in assessing the rateable value of property, deduction is made in respect of the cost of repairs and insurance. That is a matter which concerns the local authorities, and which I will not go into further at present.
The next Question—whether His Majesty's Government will explain why in the case of mineral rights taxation is levied upon the gross return for Mineral Rights Duty, Super-Tax, and Income Tax —brings me, I think, to the point of my noble friend's argument. It is this. That we allow deductions to be made for maintenance, repairs, insurance and other matters with regard to land, but do not do 923 so in the case of mining royalties. I put it to the House that the two things are not exactly on all fours, for the taxes in the two cases are collected in entirely different ways, and, as a rule, the proportion of cost in the case of mining royalties is not nearly so great as in the case of the management of estates and in the case of land generally. What the noble Lord is endeavouring to do is to take advantage of the concessions which the Government made in the Finance Act of last year. Your Lordships will, perhaps, recall the generosity—I must say, taking Chancellors of the Exchequer as a class, the really extraordinary generosity—shown by my right hon. friend the present Chancellor of the Exchequer to agricultural landlords in the Budget of last year. Your Lordships will recollect that he gave an abatement of one-eighth of the total duty in the case of land, and one-twelfth in the case of house property for the cost of maintenance, repairs, and similar matters. Now my noble friend on the Cross Benches endeavours to take advantage of the well-known generosity of my right hon. friend Mr. Lloyd George. Noble Lords laugh, but I do not think any Tory Government has ever given such a rebate to agricultural landlords as was given by my right hon. friend. The noble Lord now asks that it should also be given in the case of mining royalties.
LORD ORANMORE AND BROWNEI did not ask only for that. I asked also why the abatement which is given in respect of land under the Act of 1894 should not also be given in respect of minerals. That is not asking for generosity.
LORD DENMANMy noble friend is asking for more than I first understood him to ask for. My answer must be that it is necessary for the present Government, and, indeed, for any Government, to draw the line somewhere. The two cases are not, in our opinion, of exactly the same nature, and my answer, therefore, to the question whether it is our intention to provide for the allowance of a deduction from the gross return is also in the negative. I am bound to add, though it may be cold comfort to my noble friend, that supposing in the dim and distant future noble Lords opposite cross the floor of the House and occupy the benches which we now adorn, it is very unlikely that the noble Lord will obtain the deduction for which he now asks.