§ SIR MASSEY LOPES
said, it was with no little diffidence that he rose to move the Resolution that stood in his name. The subject to which it referred created no inconsiderable interest at the present time. The principle which it involved was grave and important; and should it be necessary for him to make any apology to the House for introducing so difficult a question, his excuse must be that for many years he had interested himself in the administration of local burdens; that he had always felt strongly the injustice of the present mode of assessing them; and in the western counties, in which he resided, this subject had been very ably and very anxiously discussed. He advocated this proposal on the broad principles of right and justice. He was neither animated by any party or political spirit. He was happy to think that this question was quite remote from the arena of party politics. Neither was he influenced by class interests, for no man in that House felt more than he did that the prosperity of the community at large depended on that of every class; and he would be the last man to say or do anything which should be detrimental to any class whatever. The Resolution which 137 he had the honour to introduce affirmed three distinct propositions—namely, that the local burdens upon real property had of late years much increased, that they were annually increasing, and that it was neither just nor politic that those burdens should be laid exclusively on one description of property. Those local charges were now levied under the name of poor rates, and though the greater proportion were expended for the relief of the poor, yet a considerable amount of them might be denominated county rates, and were used for a variety of purposes. Those poor rates, therefore, were a general charge on real property for a variety, he might almost say an infinity, of purposes. Local taxation provided for police, militia, gaols and prisoners, lunatics, highways, bridges, coroners, weights and measures, vaccination, &c.; indeed, he might almost describe it as de omnibus rebus et quibusdam aliis. To show how local burdens had increased, he would give the statistics for every tenth year from 1837 to 1867. In 1837 the total amount expended was £5,412,000; in 1847£7,094.000; in 1857 £8,339,000; and in 1867 £10,905,000; so that in thirty years the amount had doubled. To go into particulars, the relief of the poor required in 1837 £4.044,000; in 1847 £5,298,000; in 1857 £5,898,000; and last year, £6,959,000; the total expenditure for local taxation having thus increased by more than n. half. The county rates amounted in 1837 to £1,168,000; in 1847 to £1.660,000; in 1857 to £2,241,000; and last year to £3,343,000; so that in thirty years they: had nearly trebled. These figures showed that local taxation had increased since 1837 by 100 per cent, the increase in the poor rate being 70, and in the county rate 200 per cent. One-third of the poor rate, it must be remembered, was now levied for purposes wholly unconnected with the relief of the poor. It might be thought that the increase was owing to the increased population; but he believed the poor were in every respect much better off, than they were thirty years ago. Nor could the increase be attributed to the higher price of the necessaries of life, for the price of wheat was in 1837 within 6d. per quarter the same price as it was last year. Of the £6,959,000 expended in the relief of the poor, the National Exchequer contributed £163,000, £110,000 being half the expense of medical officers, schoolmasters £35,000, and auditors £18,000. 138 The sum was small, but the principle was large; and the thin end of the wedge having been inserted, he thought the application of the principle might be extended. Now, in 1776, the first year for which any authentic Returns existed, local taxation amounted to only £1,720,000; the poor rate being £1,550,000. and the county rate £164,000. Besides the £11,000,000 to which he had referred, between £5,000,000 and £6,000,000 were levied in the shape of poor rates, highway rates, and local board or improvement rates; so that upwards of £16,000,000 was levied in 1865 on real property, the annual value of that property being £90,000,000, and this was the latest date that all these official Returns were made up. It was bad enough to pay one income tax for Imperial purposes; but this direct, tax of £11,000,000, levied for poor rate and county rate alone upon an annual value of £90,000,000, was equivalent to a second income tax on real property of 2s. 6d. in the pound. To show that the burden was still increasing, he would compare the Returns for 1866 and 1867. In 1866 the poor and county rates amounted together to £9.989,000; while in 1867 they were £10,905.000, being an increase of nearly £1,000,000. The poor rate rose from £6,439,000, to £6,959,000, or 8.8 per cent; and the county rate from £3,549,000 to £3,945,000, or 11.2 per cent. Of the forty-six union counties or divisions of counties in England and Wales, there was only one—the East Riding of Yorkshire—which did not show a large increase in expenditure last year. In Middlesex there was an increase of 21 per cent, in Kent of 20 per cent, while in other counties the increase was considerable. There were, moreover, contingencies which threatened a further increase. He cordially agreed in the remark made by the Home Secretary a few nights ago, that any attempt to throw turnpike roads on rates would lead to a great outcry, especially at a time when so strong a feeling prevailed against any increase of local taxation. Amendments in the Poor Law were likewise likely to involve increased expenditure, Now, with regard to the relief of the poor, if we study the history of the Poor Laws from the earliest times to the reign of Elizabeth, we shall find contributions were voluntary, and were levied from counties rather than parishes, every inhabitant being exhorted and expected to contribute "according to his means and ability." That phrase was repeated in all Acts from 139 the reign of Henry VIII. until the 43rd of Elizabeth, and he contended that it was the language of reason, of justice, and of policy. By the Act of 43rd Elizabeth, passed in 1601, however, overseers and churchwardens were empowered to assess all property particularized therein, the contributions being made compulsory and parochial, and every parish, instead of every inhabitant, being expected to assist according to ability. That basis had undergone no alteration for nearly 300 years, and personal property not being mentioned in that Act, it had been exempted from taxation. Judges had held that all property to be assessable must be local, visible, and productive, and money and securities for money, not being local, had escaped taxation. There had been many appeals for the purpose of rating personal property. In 1775 the Judges gave it as their opinion that stock-in-trade was assessable; but it had never been practically or only partially carried out. In 1840 an Act of exemption was passed, and stock-in-trade had been exempt ever since. He gave no opinion whether it was right or desirable to assess stock-in-trade; there were many difficulties in the way which were perhaps insuperable. But was it creditable to a British House of Commons for thirty years to pass an annual Act of exemption rather than seriously consider the matter? The law was either good or bad: if good, it should be enforced; if bad, it should be modified. The Act of Elizabeth might be said to have dealt with the then existing state of things, both as regards property and society. Land and houses were at that time the chief, if not the only source of wealth. It was therefore not unreasonable that personal property should not be particularized. How different was the state of things now ! Real property was not more than one-third of the annual income of the country. In 1865 the annual rateable value of property was only £90,000,000, while the property assessed to the income tax in the same year was valued at £290,000,000, and the aggregate annual income of the country was upwards of £650,000,000; for it must be borne in mind that incomes under £100 per annum were not assessed. But the local taxation was assessed on this £90,000,000 only; in fact, £6 out of every £7 of the annual income of the kingdom escaped local taxation, and paid nothing to the relief of the poor. How had all these large incomes from personal property been acquired? From labour—from labour of 140 poor men—people make wealth. All capital was acquired by labour; why, then, should not wealth thus created contribute to the exigencies of the State and the relief of the poor, to the comfort of the afflicted, and maintenance of the aged, many of whom had worn themselves out, and spent the best part of their lives in acquiring for others wealth and affluence? The present state of things was most anomalous. The overseer called on every small cottage-holder for his poor rate, although he was little better off than those for whose benefit that rate was collected. They were, in fact, rating one pauper for the support of auother—robbing Peter to pay Paul; yet, hard by, in the same parish probably, there lived a man receiving £1,000 a year who did not pay a farthing towards the support of the poor. The present mode of assessment was most impolitic; it tended to discourage improvements in land, and to diminish produce, thus so far prejudicially affecting the community at large. A man purchasing a large estate, with the buildings dilapidated and the land undrained, invested a considerable sum in the necessary improvements, and was immediately assessed on those improvements. Why should he pay local taxation on the money thus invested more than if it had remained, perhaps, in the foreign funds? So again, a man who has taken a farm for fourteen years, he calculated the outgoings when he agreed for his rent. He found, unless he spent a large sum in manure and improvements, it would be a ruinous undertaking. He borrowed money for the purpose, and immediately the assessment committee came down upon him and made him pay local taxation on the personal property he had borrowed and invested in it. Surely these men, by investing additional capital in their estates, not only benefited themselves, but by increasing the produce of their land benefited the community at large. They were more patriotic and deserved more encouragement than the man who invested the same amount in foreign securities, buried, as it were, his talent in a napkin, sits down with folded arms, and is simply content to receive his own with usury. So long as land enjoyed exclusive privileges it was fair it should pay exclusive burdens; but, protection being removed, those exclusive burdens should cease. He was an advocate for Free Trade; but they had not got it. He considered all exceptional legislation was bad; and the principle of Free Trade having been adopted, he desired that 141 it should be carried out without favour and without partiality. All prohibitions and restrictions with regard to the produce and cultivation of the land ought to be removed Their efforts were paralyzed by the malt tax; yet they refused them a drop of good beer to cheer their drooping spirits. They were not allowed to grow tobacco; they were denied that solace, to render them oblivious to their grievances and their sense of injustice. What privileges were now attached to real property in compensation for the burdens to which they were exclusively subjected? He was willing to surrender the last rag of protection. Last Ssssion sheep dogs were taxed; and a few years since, because real property was exempt from probate duty, the right hon. Gentleman the Member for South Lancashire made real property amenable to a succession duty. The hon. Member for West Cumberland (Mr. Percy Wyndham) had brought in a Bill to rate mines, and he (Sir Massey Lopes) would assist in passing it. The possession of land was becoming a great luxury. No one who wanted an annual income from it would invest in land. So numerous were the outgoings, it could not pay more than 2 per cent. He remembered when in the West of England there was scarcely a parish which had not several small yeomen; their estates had; been handed down from generation to generation. They were the pride and boast of the county. They were the connecting link between the large landowner and the agricultural labourer. But year by year he regretted to find they were gradually being absorbed; and the same story was true of them all—the local taxation was too onerous for them; while at the same time their profits, through foreign competition, had diminished. Let the House compare the colossal fortunes accumulated by persons in trade with the small competency ever made in these days by agriculturists. In the one case wealth was acquired rapidly, and by the agency of others; in the other if a man, after a long life of labour and anxiety, could retire in his old age with a moderate competency, he deemed himself fortunate. Everyone, no doubt, admitted the injustice of the state of things to which he had directed attention, but declared that it was a difficult matter to deal with. It was therefore necessary, in his opinion, that the subject should be discussed, for without discussion a solution of the difficulties was not likely to be arrived at. He was an enemy to centralization; he 142 considered that local government was the essence of good government, and did not wish to see this system superseded by any other; but he asked whether it was not just that a larger proportion of the expenditure for such objects as police, the care of lunatics, and the administration of justice should be paid by the National Exchequer. If half the expense for those objects were defrayed out of the income tax, even then real property would pay more than half, because it would have to contribute its proportion to the Imperial taxation. By affording some such relief as this, the present mode of administration need not be interfered with—there would be the same local supervision, the same local responsibility, the same inducement to combine efficiency with economy. It was impossible for local taxation to go on increasing as it had done of late years, and he all borne by real property alone. The Militia was a national institution, and the owners and occupiers of land were no more interested in its maintenance than the owners of personal property. This impost ought therefore altogether to be paid out of the National Exchequer. He would not trouble the House by quoting the opinions of writers on political economy; but he would mention that the Report of the Lords' Committee on Parochial Assessments in 1850 set forth—That the relief of the poor is a national object, towards which every description of property ought justly to be called upon to contribute, and that the Act of 43 Elizabeth contemplated such contribution according to the ability of every inhabitant.Sir George Lewis said, in Ins evidence before the Committee—With regard to the general policy of imposing a local rate exclusively on one class of property, I am quite prepared to admit that unless it can be shown that there is some special reason in favour of a local tax, limited to real property, it is more fair and equitable to defray the expenditure out of a national tax, which should comprehend all species of property. The objections to a local tax upon real property exclusively have been so manifest upon the ground of the partiality of the incidence of the tax, that attempts have been made to devise local taxes which should be free from that defect.He would submit to the House that many of the objects for which local taxation was levied were objects in which the whole community were interested, and that, consequently, there was an equitable and moral and religious obligation on the whole community to contribute towards their ex- 143 pense; and that the present mode of assessment, which exclusively fell on real property, was not reconcilable with sound principles of political and financial economy, much less of justice. This was a question that must be fairly met and fairly considered. This was a difficulty which must be solved. This was a grievance which must be mitigated. He would now move his Resolution, feeling confidence in the principle of equity it embodied; in the sympathy of all classes of the community out-of-doors; and in the sense of justice which ever actuated their representatives in the British House of Commons.
§ MR. CORRANCE,
in rising to second the Resolution of his hon. Friend, said, he was conscious of doing so under certain disadvantages in this respect—first, that when he entered the House that night he had no intention of entering upon that debate and second, that he had his doubts as to the expediency of discussing it in so general a form as that. But when he heard the able statement of his hon. Friend, not only did those doubts cease, but he felt that there was no danger that the cause would suffer from any shortcomings on his part. But, if that was a personal disadvantage, it might not be so considered by the House; for it was at least a guarantee for this—he should not go into statistics, and his remarks would be brief. Now, he had said that he agreed with the hon. Member as to the fact, and he thought, also, that by the Lords' Committee of 1846 these were fully borne out. Those facts rested upon grounds absolutely irrefragable, as he thought. Nevertheless, that inquiry laid over a wide ground and took in a great range of both general and local taxation, each one of which, in detail, would require close investigation and patient proof. It included the incidence of income tax, land tax, tithes, and of local rates, and no less so the actual economic effect of such burdens upon the industry itself—and the effect of such deduction from the gross produce of such an industry of any reproductive class. Those perhaps were scarcely suspected, for use and custom reconciled them to much. They knew that they paid income tax upon the gross sum, without any deduction for agency or collection, or incidental expenses, which amounted to about 25 per cent. It reached the last farthing they possessed. Of the land tax they knew that it fell upon agriculture in a larger proportion than aught else; that it could only be re-adjusted within parochial limits, and that under the 144 power of redemption all expensive improvements could evade the tax; that in Liverpool and most large towns it was nominal at most, and that upon railways, canals, docks, &c, it was at once freed by redemption from the proportionate increase. All that was within demonstration and proof. They also learnt that under a system of local taxation, founded upon old and obsolete legislation, and perplexed by omission and doubts, the proportion of such charges upon land were immense—that one-sixth of the property of England alone contributed to such charges as that. But of each of such things the House would no doubt require proof beyond that which in that general discussion they were able to give. They must raise those questions in detail, and view in detail their rights. They must show not only the burden, but its effects; not only its pressure upon a class, but, its effects upon industry itself. Nor did he think that that would be a difficult task, if to the plain and accepted axiom of political economy, they might hope to have the consent of that House. To that they could claim the concurrence of Ricardo, who spoke thus—It must be acknowledged that in the actual state of the poor rate, a usual larger amount falls upon the produce of the farmer, than on other classes in proportion to their respective profits. The farmers will, therefore, have less motive to devote his capital to land than to some other trade, unless the price of his produce is raised.Again—Any tax, whether in the shape of land tax, or rate on producd when obtained, will increase the cost of produce, and will, unless under direct competition with other untaxed produce, raise its price to the consumer; but if, under any circumstances, the price of produce did not so rise as to compensate the cultivator for the tax, he would naturally quit a trade where his profits were reduced below the general level.Now these are axiomatic facts. Of all political economy they lie at the very root—no new reading could disturb or shake them, not even the authority of the hon. Member for Westminster himself. And if such be the case—if such, on inquiry fairly raised and fully carried out, they could prove—not that landlords were unfairly used, not that tenants were unjustly taxed, but that through a misunderstanding of the true economic position, a neglect of the plainest laws, capital was alienated and the industry depressed—he could, he thought with some confidence, seek in that House their redress.
Motion made, and Question proposed,
That, inasmuch as the Local Charges on Real Property have of late years much increased and are annually increasing, it is neither just nor politic that all these burdens should be levied exclusively from this description of property."—(Sir Massey Lopes.)
§ MR. M'LAREN
said, he thought they were all indebted to the hon. Baronet the Member for Westbury (Sir Massey Lopes) for having brought this subject under their notice, and for the able speech in which he introduced it. In reference to one remark the hon. Member made, he (Mr. M'Laren) agreed with him, and at once said that, in his opinion, nothing could be more absurd than to argue that questions of this kind should not be discussed in that House. If that were so, they need not assemble there at all. He thought they were obliged to the hon. Baronet also for the temperate and able way in which he stated his case. He (Mr. M'Laren) had however to say that there was another side to the question, mid he wished to say a few words upon it lest it might be supposed there was nothing to state. The hon. Gentleman had referred to the Act of 43 Elizabeth as settling the Poor Law system; but he had not gone into all the questions affecting the land at the time, and their different relations and circumstances. If he had done so, it would have been quite obvious that the landlords had nothing to complain of. In the time of Queen Elizabeth there were no landowners; they were all landholders only. They held their lands from the Crown almost as leaseholders or tenants of the Crown. They received grants of their lands on condition that they performed certain duties to the Crown and the State. For example, they were to do all the fighting; they were to turn out with their retainers for the defence of the realm, there being then no standing army. They received the grants of their land on this further implied condition, that out of its produce they were to support the poor, who, they were told, on the highest authority, would never cease to exist in the land. Long afterwards, when the landholders had great power in both Houses of Parliament, they got a law passed—a most unrighteous law, he thought—by which they got rid of nil those burdens on the land, for a most inadequate consideration; and they afterwards agreed to pay, partly in lieu of them, a composition of 20 per cent on the rent of the land for ever, or 4s. in the pound on the real rent. In 1692, Commissioners 146 were directed to to take a complete survey of all the lands in the different counties of England, and it was enacted that the laud should pay 4s. in the pound on the rental, in consideration of the burdens which were formerly removed. The survey was made, and the bargain carried out—the landowners thus agreeing to pay one fifth of their whole rental from year to year as land tax. But no valuation was ever made after that year, and the land tax was levied today on the same valuation on which it was levied in the reign of William III, and the amount at which the land tax was then assessed, was the amount still payable, though it had risen ten-fold in value. If such a thing had occurred among the commercial classes, it would have been called a swindle instead of a grievance; and if the landholders were to act according to the moral obligation of the law passed in 1692 they would pay 4s. per pound on the whole value of the land at present time. And not only that, but they were also bound to support the poor. The hon. Gentleman who spoke last (Mr. Corrance) said that Liverpool and Manchester paid only 1d. in the pound of land tax once in twelve years, as though those communities derived a great benefit from that law; but the benefit had really been derived by the former landholders, who were converted into landowners. They told persons who wished to purchase land from them for building purposes that they would have only a small land tax to pay in lieu of the heavy burden to which it had been subjected, and they were thus enabled to sell the land for building purposes at a price which they never would otherwise have obtained. It had been said that the income tax pressed heavily on the land; but that was one of the greatest fallacies imaginable. Take the case of a landowner possessed of an estate worth £30,000. and deriving from it an income of £1,000 a year, on which he paid income tax, and compare it with the case of a physician who made £1,000 a year by hard work, which would shorten his life—he paid the tax in the very same way and to the same amount as the landowner. But suppose the physician lived up to his income, as probably he was obliged to do; when he died, his income died with him, and nothing remained for his family; but when the landowner died, his property, worth £30,000, remained and descended to his heirs. He (Mr. M'Laren) took the liberty of stating his conviction that this class of questions must come up for future 147 consideration, and for the purpose of increasing the burdens on land, and thus placing the taxation on a more equitable system than now prevailed. He might refer to the example of America. There, a man's property was calculated and assessed as on a capital sum. A merchant would have to pay on the amount of his capital assessed at a certain rate. A professional man would be assessed in the same way on any capital he had, and for a sum which was merely nominal as compared with the assessment on the merchant or landowner. That he held to be a far more just plan than the income tax in this country. He did hope that a change would take place, but that it would increase the burdens on land and relieve others who were unjustly assessed from the undue proportion they now paid. As to the charges on land for the support of the Militia, they were mere fragments of the far more onerous and important burdens formerly laid on the landholders, who, as he had said, were once bound to furnish all the fighting men of the country at their own expense. The trifle they had now to pay for the Militia was a mere remembrance of the time when more righteous laws prevailed, and a sign of hope that a return might be hereafter made to a more equitable system of legislation.
§ MR. LIDDELL
said, he had listened with pleasure—he thought he might say in common with the House at large—to the speech of his hon. Friend (Sir Massey Lopes), which had dealt so fully with the facts and figures of the question as materially to smooth the way of speakers later in the debate. He would not attempt to deal with the very important question before the House in the off-hand and abstract manner in which it had been dealt with by the hon. Member who spoke last (Mr. M'Laren), nor would he enter into a contention with the hon. Member as to the distinction without difference between landowners and landholders; but would merely observe upon that point that, with regard to liability to the payment of rates, he had always understood that they were upon precisely the same footing. His hon. Friend who brought forward the Motion dwelt much upon those burdens that affected the land from which other species of property was exempt. Now, it was to one class of exempted property which he wished in the first place to refer—namely, mines other than coal mines, and he wished to point out the position which the Courts of Law 148 had taken up with regard to it, and how it had been regarded by eminent authorities in this House. With regard to the Courts of Law, it had been laid down as early as the time of Lord Mansfield that all kinds of property which were not specially named in the statute of Elizabeth as rateable for the relief of the poor were exempt from that burden; and the law was therefore held to exempt all mines other than coal mines. The efforts of the Courts of late years had been to extricate themselves from the difficulties they had by their own decisions created for themselves; and when a case was heard in the Court of Exchequer Chambers as to the rating of a metallic mine, the Judges held that, were the question not incumbered by previous decisions, they would have decided in favour of the rating of these mines. The Courts, therefore, were in this position—they had given an interpretation to the law which they did not now agree in; but because this had been once given they lacked courage to reverse it. Decided opinions had been frequently expressed upon this question, both by Committees of the House and also by influential Members in debate. The right hon. Gentleman the Member for Wolverhampton (Mr. C. P. Villiers), then the President of the Poor Law Board, speaking in the House, a couple of years ago, with reference to the important decision given in the Mersey Dock case, and its probable result upon property hitherto exempted from taxation, said the House should understand, not that the law was unjust or that fresh legislation was requisite, but that there had been a misconstruction of the law, and that all exemptions were mere questions of privilege and favour. As soon as the area of changeability was extended by the recent Act, from the Parish to the Union, it became evident that the exemption of personal property would be questioned, and that the House would be forced to consider the policy of that exemption. It was promised, indeed, at the time, that the matter should engage the serious attention of the Poor Law Board; but from that day to this nothing further had been heard upon the subject. The law as it stood recognized a liability upon two grounds; but only the first of these—that arising in respect of the occupation of land—appeared to have been borne in mind; but the House must remember the second subject—namely, the liability of inhabitants to the rate in respect of the enjoyment of per- 149 sonal property. This question, however, was a growing question, and the House and the country were both becoming more competent to understand its important bearings. This result was in large measure attributable to the action of those valuable institutions, the Chambers of Agriculture, to which the House had only done justice the other day in sanctioning, by inference at least, their claim to some share in the administration of local affairs. This question of liability to taxation and the increase of local burdens was one constantly occupying the attention of those Chambers, and at no distant day the House would likewise be compelled to face the difficulties which appeared to stand in the way of the removal of exemptions. He trusted that this question would receive the attention of the Poor Law Board, and that the House would be furnished with information in the shape of a Report from that Department which would guide them in arriving at a solution of this matter.
§ MR. NEATE
said, that though the pro sent discussion was not likely to lead to any practical result immediately, the question was one to which it was light to draw the attention of the House and the public. There could be no doubt, in his opinion, that landed property did enjoy comparative exemption from taxation. He was not now speaking of local taxes, nor was he omitting, as was too often done, to draw the proper distinction between landed property and real property. Some persons spoke as if real property and lauded property were in all cases the same thing; but real property in towns was a thing of a totally different character from real property in land. The owners of houses in towns did not represent landed, but personal property. The capital value of land had risen enormously, in many instances, he admitted, by an application of the capital of the landlord; but while the income of land had risen perhaps 10 per cent, the capital value of the land had risen 30 or 40 per cent. Great attention had been challenged for the income tax. Now, he held that, in reality, the land enjoyed a considerable exemption from that tax. The farmer paid on an income measured at half the rent of his holding. Let them take the case of a fanner holding 300 acres and paying a rent of £450 a year. That man paid income tax on an income of £225 a year. Now, would anyone acquainted with land, tell him that a farmer holding 300 acres, and having, say, £3,000 to work his 150 farm, did not make much more than £225 a year income? [Dissent.] He could understand that Gentlemen might dissent from his proposition if they calculated income in the way the farmers themselves did. The farmers only calculated in that category what they had over and above all farming expenses and the maintenance of themselves and families. But that was not the way in which the people of towns were allowed to calculate their income for the purposes of income tax. With the farmer his income was his net profit after everything was paid. As to enclosures, he admitted that the old enclosures paid heavily, but lands recently enclosed paid very differently. The redemption process had nothing to do with relieving lands from future taxation. The intention was that by that process a man bought up the taxes he had to pay at the time. The houses of country gentlemen in agricultural districts were taxed very much lower than similar houses in towns. He denied that what they paid in poor rates gave the owners and occupiers of land any claim for the comparative exemption from income tax which they now enjoyed. If they had no poor rates to pay, wages must increase, or the landlords and the tenants between them must make some other provision for their poor. As to rating stock-in-trade, he contended that it could not be done without rating agricultural stock also. He admitted that when an agricultural district was brought into the same area of taxation as a town district, the former suffered considerable injustice: because, assuming that the landlord had nothing but his property, he would have to pay on the whole of that, while the owner of the town house would only pay on a tithe of his property. Much stress had been laid on the fact of county rate being paid in she agricultural districts, as if that charge was one in itself incident on the land; but it must be remembered that a great deal of the county rate was paid by houses. Agricultural districts, no doubt, paid more towards the police rate and the maintenance of gaols; but his own opinion was, that taking into consideration the present adjustment of local and Imperial taxation, it would be found that the owners of real and landed property did not pay anything more than they ought to pay. The whole subject was one deserving of careful consideration, and he trusted that it would be again brought under the notice of the House next Session.
§ MR. READ
said, he regretted to have to differ from so high an historical authority as the hon. Member for Edinburgh (Mr. M'Laren); but his reading of history was that, previous to the Reformation, it was the monasteries and other religious institutions, and not the land, which maintained the poor. The arguments with reference to the income tax applied with equal force to the moneyed interest and other holders of property as to the land. And he could not agree with the hon. and learned Member for Oxford (Mr. Neate) that the tenant-farmers were unduly exempted from the payment of income tax, because they were assessed on only half the amount of their rent. On the contrary, he was of opinion that they were assessed very fully and amply. The hon. Gentleman had argued that the stock-in-trade of farmers ought to be assessed if the stock-in-trade of other persons were to contribute to the rates; but on this point he begged to inform the hon. Gentleman that stock-in-trade in agriculture was supposed in the eye of the law to be assessed in order to produce the rent paid to the landlord. In addition to the two exemptions of real property already named—mines and woodlands—from rating, there was a third exemption. The owner of real property by overstocking his land with game so deteriorated the rent as to allow that land to escape its fair assessment and contribute its fair share to the maintenance of the poor. In America the assessment was not on the annual rent, but on the annual profit. The hon. Baronet (Sir Massey Lopes) had proved by statistics that the rates gradually and constantly increased. Several items of new local taxation had been introduced, and more were expected if turnpikes and education were to be paid out of the rates. The farmers were twitted with this—What a bother you make when you pay anything in the shape of rates ! Why, what a bother and fuss was made when an additional income tax of a 1d. was imposed ! But every 1d. rate which the farmer paid was equal to 2d. of the income tax. It was said that if the farmers were relieved from the charges they now had to bear the landlords would reap all the benefits; but he, on the contrary, felt assured that all small savings would go into the pockets of the tenants. The Chancellor of the Exchequer had said the other day in reply to a deputation that the tax on shepherds' dogs was not on the shepherd, but on the farmer, and therefore 152 he supposed that those who argued that all rates fell on the owner would say if the farmer paid 10s. for a tax on two dogs it was a burden on the landlord. With regard to a national rate, he thought it ought to be particularly guarded against. It was impossible to restrict extravagance or to prevent centralization. If they could possibly localize the income tax it would have a good effect, and a certain portion might be applied to local expenditure. The assistance given to local taxation from the Consolidated Fund in 1866 amounted to £1,398,000, and out of that sum only £211,000 went to the country for police purposes, while the metropolis received £176,000 for the same object. Then with respect to lunatics. What had the land particularly to do with them? In the country, it was said, the management rested with the county authorities. But the moment any saving was proposed, down came a Government officer in the shape of a Commissioner, and ordered what must be done. The result was that as soon as a poor patient was cured by luxuries and comfort, he was sent away, and when he returned to the rough usage of the cottage he speedily relapsed. The lunatic was cured for a time, but very seldom permanently. He thought that many of these fixed charges ought to be borne by the nation, but that all relief to the casual poor should be paid by the district. This was no question of country against town; but he thought the towns ought to take up the case even more readily than the country. It was essentially the case of the poor man, and was more likely to receive in a Parliament elected by household suffrage a fair and generous consideration than in the present.
§ MR. J. STUART MILL
said, the hon. Baronet who had introduced the Motion (Sir Massey Lopes) had rendered a real service to the House and the country, for no one who had considered the subject could doubt that it required a much more systematic and deliberate consideration than it had yet received, not only on account of its great importance and the amount of taxation it involved, but because its importance was constantly increasing. In the natural progress of things more and more duties were continually being imposed on the Government, which duties would be almost always best performed by the localities, and at the same time, as the taxation of localities must constantly increase in order to meet increasing expenses, if there 153 was any injustice in this taxation it must be an increasing injustice. The hon. Baronet, and those who took his view, thought that the local taxation was entirely borne by real property; but he (Mr. Stuart Mill) conceived that although real property bore an extra proportion of that taxation, it by no means bore the whole. The local charges consisted of two parts, one of which was proportional to the rent of land, and was therefore equivalent to a tax on land, the other was proportional to the rent of houses, and equivalent to a house tax. Now, a house tax did not fall on the owner, but on the occupier, and within moderate bounds was one of the fairest of all possible taxes, and one of those that came nearest to a perfectly fair income tax. Indeed, the house rent a person was able to pay was probably a better measure of what he could afford to spend, than could be afforded by the mere numerical amount in pounds sterling of his income. So far as the house tax fell on the ground rent it was a charge on property; but the ground rent bore only a small proportion to the whole rent of a house, except in cases of peculiar eligibility of situation, which favourable situations were a kind of wealth having a constant tendency to increase without any labour or outlay on the part of the owner, and therefore a fair subject for some degree of special taxation. He admitted that in most of the rural districts the burden was mainly on the rent of land; but he did not think the grievance so great as had been represented, because the prescriptive, and what might almost be called the constitutional mode of levying local taxation was to levy it on rental, and property had generally been acquired by in heritance or purchase, subject to that peculiar burden. If the burdens on land had a tendency to increase by the progress of society, so had the income from land, and income derived from real property was nearly the only one which increased by the effects of the industry, outlay, privation, and frugality of other persons than the owners; and inasmuch as the value of land did constantly increase from generation to generation, and the income from it increased independently of exertion or outlay on the part of the owners, this made it fair to regard it as in some degree a proper subject for increasing taxation. No one could doubt that the time had come when the whole subject of local taxation must be more fully considered. If they considered that portion of taxation which he thought 154 fair in principle—namely, the house tax—they would find that this had become so heavy in many localities that the difficulty of increasing it had become a serious obstacle to any new outlay for general improvements. How it was possible to raise the additional sums that might be required in a manner less burdensome, because more equal and just, would have to be more and more seriously considered, and the different modes by which this could be accomplished would have to be well meditated. One mode, which had been partially adopted I in this country, deserved consideration as one of the possible modes—namely, that of placing a certain proportion of some of these burdens on the general taxation of the country; for when this was done in the way of a fixed proportion it did not destroy, although it might weaken, those motives to economical legislation which so strongly recommended making these expenses local rather than general. There were great difficulties in adjusting the amounts of taxation on the various descriptions of property, and these questions would probably occupy their minds for a long time to come. He was glad that the hon. Baronet had introduced this subject to the House, and no doubt it would be seriously considered by the new Parliament. In the excellent speech of the hon. Member for Edinburgh (Mr. M'Laren) there was one principle which, if adopted, would involve an injustice—it was that of taxing terminable incomes, he did not mean at a lower rate than permanent ones, for that he entirely approved of, but of taxing them only according to their capitalized value. That would be a great injustice; but this was not the time for further discussing that principle.
§ MR. FLOYER
said, one of the characteristics of this debate was, that the question had been discussed without any party feeling, and therefore it had received much fairer and more impartial consideration than many other subjects of late. In the speech of the hon. Member for Westminster (Mr. Stuart Mill), which was marked by the hon. Gentleman's usual ability, were some remarks with which he (Mr, Floyer) could not agree. He could not concur in the inference drawn by the hon. Member from the increased value of the land in certain districts. There might be some fortunate proprietors whose land had increased much in value in consequence of the improved condition of the country at large; but if an inquiry were instituted into the outlay 155 and large expenditure upon different properties, it would be found that the return for those outlays was by no means beyond the limits of a fair and moderate return; but it was rather a smaller return than was generally received by those who invested their capital in trade and commerce. He doubted whether any hon. Member who had not really turned his attention to that point could form a conception of the enormous outlay that was being constantly made in this country by those who were in the occupation of land. The hon. and learned Member for Oxford (Mr. Neate), in his remarks, had made a frank and liberal admission. That hon. Gentleman said he thought that the land was charged with burdens, in the shape of local taxation, beyond those which it deserved to bear. He (Mr. Floyer) thanked the hon. Gentleman for that admission; but there were some points of his speech with which he could not agree. The hon. Member drew a comparison between the position of householders and the occupiers of land in respect to the income tax; and he said that in the one case the occupier of land only paid on half the value of his holding, whereas the householder paid upon the whole value; but the hon. Gentleman seemed to have forgotten the landlords' income tax, which was paid upon the full value of the land. So that in effect it might be said that there were one-and-a-half payments of income tax from the land, whilst there was but one payment from the house. The hon. Member for Oxford also observed that he considered that the payment of poor rates ought to be looked upon by the landowners and occupiers as a provision for the old and infirm people who had outlived their strength for work, but who passed their best days in labouring for the improvement of their farms. He (Mr. Floyer) trusted so long as the poor existed upon the land—and they had the highest authority for knowing that they would never cease out of it—that they would be looked upon, by both landowners and occupiers, in the kindest spirit, and with the feeling that it was through the labours of the poor they had derived their incomes and the land had been made profitable to them. The question, however, was very much open to doubt, whether a larger proportion of the labeuring classes were not employed by the manufacturing and commercial population than by the occupiers of land. He believed that the statistics would show such 156 to be the fact. Therefore, as the land round towns was assessed it had to contribute, under recent legislation, largely to the support of those who had once been employed in commercial and trading operations, but who had now become old and helpless. The hon. Member for Edinburgh (Mr. M'Laren) drew a historical parallel between the liabilities to charges thrown upon landowners and landholders as compared with the other portions of the population who were engaged in manufacturing and commercial operations; and, in referring to very early times he mentioned, amongst other things, the liability of landholders and their retainers to serve in the wars under the Crown. It was true that a certain portion of the land of the country had been held upon what was called knight service—that was, that the owners and occupiers were obliged to serve their Sovereign in the event of war at home or abroad; but the hon. Gentleman had forgotten to tell them that a large portion of the land was held by persons on free socage, and who were not liable to knight service. Besides, it should be also recollected that those who were actually employed in knight service received for such service from the Crown ample payment for the services they had so rendered. It was, therefore, a mistake to suppose that such service was gratuitously rendered. He (Mr. Floyer) denied that the payment of the land tax was a commutation for the services to which the hon. Member for Edinburgh referred. The fact was, those feudal tenures had been done away with at an early period of the reign of Charles II. Therefore, the land tax, which was imposed at the time of William III., could not be considered as a commutation or substitute for those liabilities and charges previously imposed on them. Then the hon. Member had made an error in his comparison of the charges imposed on the different classes. He had chosen to estimate the impost on landed proprietors at something like 20 per cent of their incomes; but history would show him that merchants and manufacturers paid more; for they had to pay fifteenths not only upon their incomes, but on their whole personal property. The hon. Member had, therefore, failed to make out that in olden times merchants and manufacturers were taxed less heavily than those who had to do with the land. As a matter of fact, the very reverse was the case. There was no doubt that a strong feeling existed in this country that the limits of 157 local taxation had been exceeded. The increase in the local rates had far outstripped the advance in the income tax. Occupiers of land felt they had now nothing to depend upon but their own skill and industry; but, however much it was desired to relieve the tillers of the soil from unnecessary pressure, it must be admitted that if grants from the Imperial Treasury were made to supplement local funds, it would be difficult to insist on local management. He heartily endorsed what had been said by the hon. Member for East Norfolk (Mr. Read) and others as to the immense importance of maintaining our system of local management. It was absolutely necessary that local attention should be paid to the several cases which demanded Poor Law relief. If they had not the advantage of local knowledge in the administration of this relief, the only resource would be to come back to the severe test applied by the workhouse principle, which was that intended originally by the first promoters of this system; and that was one to which he believed the country would never return. He believed the direction in which they should look for relief was that of the Imperial Treasury, to obtain from it a larger contribution towards some of those expenses in which the local action of the country or the local occupiers had no personal or particular interest—he alluded to the lunatic asylums, the police, and other matters of Imperial and general interest. In those respects he thought that assistance fairly given from the Imperial funds was absolutely essential, without infringing on any of those great and important principles of local management.
thanked the hon. Member (Sir Massey Lopes) for bringing forward the subject, which it was quite true excited great interest, and was very much debated in the whole of the West of England. He desired to assure the hon. Member for Westminster (Mr. Stuart Mill) that those who had given any consideration to this subject had never denied that houses and lands were in the same position as regarded this question, and he was glad that the owners and occupiers of houses had at length began to speak out upon it. As Sir Robert Walpole had once said, the country gentlemen were like their own sheep, because they would submit without speaking to any amount of shearing, whereas the commercial interests of the country more 158 resembled the hog, which would not permit one of its bristles to be touched without loudly calling upon you to desist. In that remark there was sonic truth, even at the present day. The late Lord: Brougham truly observed that the income raised for the relief of the poor was paid entirely by the land, people in trade only paying to the poor in so far us they were owners of real property, and thus a manufacturer deriving £10,000 or £12,000 a year from trade was rated as if he only had a large building worth £400 or £500 a year. The farmer, on the other hand, paid largely to the rates; and yet, while the farmer employed few hands, the manufacturer employed a whole colony; and while the farmer caused no material augmentation to the number of paupers, the manufacturer multiplied them by wholesale. On the part of the agricultural interest he did not demand relief from any payment which they were equitably bound to make. All he contended for was that equal justice ought to be meted out to all taxpayers of the country alike.
§ MR. SCLATER-BOOTH
said, that when he held Office at the Poor Law Board, his attention was called to the subject of exemptions from rates, and but for the pressure of business on the Department it was hoped last winter that something might have been done to remedy some of the anomalies which still existed. The subject was a great and growing one, which would doubtless form the subject of future debates in this House. At the same tune he thought there were certain objections to the form of the Motion which had been made, and he thought that the hon. Gentleman who had introduced it would do well to rest satisfied with the cordiality and unanimity of opinion which it had called forth from the Gentlemen on both sides of the House. He was glad to find that there was such general recognition of the burdens borne by the rateable property of the country, and that there was at the same time a general unwillingness to diminish local control and management of local concerns. That was a matter of material importance, and he was glad that hon. Gentlemen were unwilling to sacrifice it for the theoretical advantages of a system of national rating. That was a state of things from which they were, he trusted, far removed, and it would he hoped be long before they looked for a remedy in that direction. The Union Chargeability Act was a step in that direction it was 159 true, but it was only a very little step, and it was a great part of the policy of the promoters of that Act that the area of charge would still remain coterminous with the area of management. He was glad to be able to admit, and his admission was all the more unprejudiced, as he originally viewed that Act with little favour, that in many cases the effect of that measure had been the reverse of what had been anticipated, and that extravagance of management had not resulted from its adoption. Much as he agreed with what had fallen from the hon. Member for Westbury (Sir Massey Lopes), he was far from wishing to see local burdens levied upon anything but locally rateable property. There were certain exemptions from rating which he agreed should be got rid of; but those exemptions might be counted on the fingers. He did not think that the plausible suggestion which had been thrown out—that stock-in-trade should be rated—was practicable. The system had been tried in Scotland, and he believed to a certain extent still existed in that country. But it was found impracticable to rate stock-in-trade, and it was, he believed, exempted by Act of Parliament. The evidence of Sir George Lewis, given before a Committee of the House of Lords fifteen or sixteen years ago, showed that such a plan would weigh very severely upon the farmer, while in the towns it would not have such an effect in equalizing burdens as was commonly supposed. In this as in many other matters the circumstances of the town and of the country were very different. In the towns the poor rate assessment was in fact equivalent to a house tax, and that, of a very severe and oppressive character. He did not, indeed, see how taxation could weigh more heavily than it did even now in many parts of the metropolis. The charge for relief of the poor had existed from the time of Elizabeth as a charge upon the visible property of a town, and he believed the maintenance of the pauper was a charge from which the owners of visible property would never shrink. There were other charges, however, which he thought were most unfair on the poor rates, and Parliament would act wisely in preventing the addition of more of such charges. With regard to the question of lunatic asylums, it was obvious that, so far as those asylums were places for the maintenance of the indigent poor, the charge was one which could be fairly home by the real property of the district in which the asylum was situated. But, 160 so far as the asylum was a place provided by the humanity of the age, with special appliances and skilled superintendence for the treatment of the unfortunate class placed within its walls, he thought the charge should be made upon the general taxation of the country. It was a matter not of local, but of general necessity and convenience. It was proper, too, that there should be a contribution from the Imperial funds in aid of the maintenance of constabulary forces. An important question, that of the education rate, was looming in the distance. He had a strong objection to an education rate levied as such upon the owners of rateable property; but he did not wish to enter into that discussion now, He merely quoted it as an instance in which Parliament might interfere to prevent what he thought would be a great injustice. It was not easy to see whether householders in towns or landholders and others in counties were subjected to the moat oppressive burdens. The whole subject was one of great interest and importance, but, while he thanked his hon. Friend for bringing it forward, he thought that, looking to the words of the Motion, it would not be well to press it. The exemptions from rateability were few. His right hon. Friend the Chancellor of the Exchequer had hoped to have introduced a Bill respecting the exemption of Government property—a subject which had been already reported upon by a Select Committee. With a few exceptions of palaces and great public Offices, he believed that that exemption might be got rid of. Then it had been said that in cases where much game existed the land was under-rated, and a partial exemption was thereby created; but he did not see any reason why that point could not be dealt with by the Assessment Committees. As to the exemptions of mineral property his hon. Friend the Member for Cumberland (Mr. Percy Wyndham) had prepared a measure which might perhaps pass the House this Session; and the exemptions in the case of timber might also be dealt with. But these exemptions, if abolished, would not amount to anything like the relief sought for by his hon. Friend (Sir Massey Lopes), and those who thought that personal property might be the subject of rating.
said, very great objection was felt by many people to the constitution of the boards which were intrusted with the management of lunatic asylums. They were not responsible either 161 to the House or to the Government, and he would strongly recommend that they should be brought more under the control of the Home Office, or the Poor Law Board.
§ SIR MASSEY LOPES
said, in reply, that his object in introducing this subject was not to gain a barren victory, but to promote a discussion which might bear fruit hereafter, and he thought there was every probability that this expectation would be realized. With regard to the Act of Elizabeth, he reminded the House that it only referred to the poor rate, not to the county rate, police rate, and highway rate; and he thought that if new charges, unknown to the framers of the Act of Elizabeth, were now levied without its sanction, new forms of productive property, which had sprung into existence since that time ought to bear their share of these new burdens. He could not agree with what had fallen from the hon. and learned Member for Oxford (Mr. Neate)—namely, that land enjoyed a considerable exemption from the income tax, because the farmer paid only one-half the amount of his rent. On the contrary, he was of opinion that this tax fell more heavily on land than on personal property. The owner of a farm or house was assessed on his gross rental. No allowance was made for repairs, insurance, agency, or arrears, and therefore he invariably paid a larger percentage to the income tax than his net receipts. The assessment on the occupier was an arbitrary one, whether he made any profits or not; whereas, on the contrary, incomes from trades and professions were were ascertained by the voluntary declaration of the recipients—they were allowed to make their own returns. Thanking both sides of the House for the manner in which this subject had been treated, with an entire absence of party feeling, he begged to withdraw the Motion.
§ Motion, by leave, withdrawn.