MR. ALDERMAN W. LAWRENCE
, in rising to move the Resolution standing in his name, said, the subject was one of special interest at the present moment, when the question of overcrowding among the poor in our great towns was so prominently before the public. He had obtained at different times modifications of the restrictions connected with the House Tax, and he now proposed to show how to provide healthy homes for the mass of the people. Most of the suggestions put forth were in the direction of removing dilapidated and unhealthy buildings; but there were very few proposals for obtaining new ones. The Inhabited House Duty threw every obstacle in the way of attaining that object. If many dwellings were comprised in one large building the tax was levied on the whole, although every tenement might be of a less rental than £20. That was not fair, because a separate house of a similar rent would not be taxed. Sir Sydney Waterlow's Company had escaped the duty by building their model dwellings with open staircases and no front doors, the law being that a house with a front door and a common staircase was liable, even if occupied by several families paying separate rents and rates. The buildings erected by the Peabody Trustees, the Middlesex Association, and other Bodies were not free of the tax unless they obtained a certificate from the Treasury. It might be said—"If you can get that certificate, what more do you want?" But the fact was that if a private individual built houses for the poor the tax must be paid, however admirably adapted to the labouring classes the dwellings might be. For instance, Messrs. Ashby Horner and Mr. Hart erected such buildings in Stratford and in the South of London, expecting them to be free from the duty; but on applying in November last to the Treasury they received the following reply:—Treasury Chambers, 17th November, 1883.SIR,—I am directed by the Lords Commissioners of Her Majesty's Treasury to acquaint you in reply to your letter of this day's date that it is not in accordance with the usual practice to furnish applicants with copies of directions given by one Government Department to another. Their Lordships, however, wish me to add that in June, 1866, they directed that Inhabited House Duty should not be charged on 225 certain dwellings erected by the Metropolitan Association for improving the dwellings of the industrial classes, in cases where each distinct tenement was of a less annual value than £20. This exemption has not been extended to buildings erected by private individuals.I have the honour to be, Sir,Your obedient servant, J. H. COLE.Mr. HENRY HART, 16, Great Dover St., S.E.Instead of removing restrictions on the construction of houses for the working classes, the authorities had followed a contrary policy. There were three absolute necessaries of existence—food, clothing, and lodging; but while the taxes had been removed from food and clothing, additional taxation had been placed upon lodging. Whatever public improvements were wanted—whether bridges, or roads, or the removal of toll-bars—the expense had all been thrown on the dwellings of the people, and so, likewise, had the cost of education; local bodies having apparently no idea of any other source of income. Were these taxes placed on the owner of the building? No; they all fell on the occupier. He was called upon to pay for improvements which indirectly increased the letting value of his house, and then for having done so he was compelled to pay more rent. The result of the removal of the Window Tax had been that small houses were now provided with windows equal to what in former times were only to be found in houses of a superior class: but the House Tax prevented the addition of a room or an increase to the height of a small house, because the increase of the value to £20 would render it liable to the tax. The Inhabited House Duty, he contended, did a vast amount of mischief. There were many persons who held that a £20 limit of rateable value was a sufficient limit at which to fix the levying of this tax; but those persons could have but little idea of the class of dwellings which came within that limit in the Metropolis, as compared with the comfortable dwellings in country districts which were rated at the same amount. This showed the great inequality of the tax; in addition to which there were in the Metropolis restrictions as to occupancy, which made the impost still more harsh and galling—restrictions, he meant, such as that which compelled the occupier of a large block of warehouses and offices to pay Inhabited House Duty on the whole in the event of his allowing a junior clerk in 226 his employ to sleep on the premises in the capacity of caretaker. In Scotland, where the people had long been familiar with the flat system, each occupation was treated as a separate house; but it was not so in England. This tax was chiefly paid by the Metropolis, where the amount which it yielded was £982,676, the whole amount paid by England and Wales being £1,814,870; and by Scotland, £118,660. The half of the whole House Tax was £966,000, and London paid £982,000; and it was in London that the buildings occupied by the working classes were of the most wretched character—hot-beds of crime, vice, disease, and misery. The whole tax, he con-tended, was a tax upon health, morality, and decency, and ought to be repealed, in order that private individuals might be encouraged to invest their capital in the erection of dwellings suitable for the occupation of all classes in the community, with a reasonable hope of being able to secure a fair and remunerative return upon their outlay. He was satisfied that the full advantages of the abolition of this tax could only be ascertained after it was put an end to. It must be remembered that this was the only tax remaining on the Statute Book which interfered with the mode or manner of construction of the article taxed. The loss occasioned by the repeal of this antiquated and injurious tax might easily be made good out of the very handsome surplus which was certain to be realized at the end of the financial year. He trusted that the matter would receive the best consideration of the Government. The hon. Gentleman concluded by moving his Resolution.
To leave out from the word "That" to the end of the Question, in order to add the words "in order to afford facilities for adapting buildings and parts of buildings for the occupation of the labouring poor, and in order to offer inducements for the erection of houses and blocks of buildings specially suitable for artizans and labourers, it is absolutely essential that the restrictions as to size and mode of contruction at present entailed by the Inhabited House Duty Acts should be removed, and the tax repealed,"—(Mr. Alderman W. Lawrence,)
§ —instead thereof.
§ Question proposed, "That the words proposed to be left out stand part of the Question."227
§ MR. W. H. SMITH
said, he wished to call attention especially to that portion of the hon. Member's speech which was an allegation that a distinction was made by the Treasury and the Inland Revenue between blocks of buildings erected by Associations and buildings of precisely the same character and object erected by individuals. If this were the case, he ventured to say it never was intended that the Treasury or the Inland Revenue Department should have the power of imposing or remitting taxation; but it was intended that they should intelligently apply the law to the public at large. It was clearly for the benefit of the community not to tax the smaller houses; and he thought it was a mistake to compel all who wished to improve the condition of the working classes by the erection of dwellings to form costly Companies. There were many persons who desired to improve the dwellings of the working classes, and where the conditions were alike the treatment ought to be alike also.
§ MR. COURTNEY
congratulated his hon. Friend the Member for the City upon having on various occasions pointed out defects in the law. Some of the defects of which he had now complained had been remedied. With respect to buildings for the working classes, a distinction was at one time directed to be drawn between the case of buildings like those erected by the Peabody Trustees, in which no pecuniary benefit was derived by those who constructed them, and the case of other buildings. In the former case the buildings were exempted from the tax. But of late the only distinction drawn with respect to working-class buildings turned upon the form in which they were built, whoever might build them; and blocks were exempted from duty provided they fulfilled the condition that each particular part of the building should be a separate house of less than £20 a-year. The matter was brought before the Treasury in August last by a gentleman who had built a block of dwellings in the East End for the accommodation of the working classes. The officers of the Inland Revenue reported that, although all the conditions were not fulfilled, it was certainly true that the block was built for the accommodation of the labouring classes, and that it would be let out in tenements, each of which would be under £20 a-year; and they submitted 228 to the Treasury the question whether it was necessary to insist on the condition that the staircase should be open to the outer air. The Treasury took this matter into consideration. They felt that the position was untenable, and that the intention of the law was fulfilled, whether the houses stood side by side or were placed one over the other, or whether they were to have a staircase open to the street or closed, provided only that the conditions were satisfied that the block consisted of tenements each of which was under £20 value. The Treasury had issued an Order on the point, and so far, therefore, his hon. Friend's object had been attained, subject to this condition—that if some parts of such building were let at more than £20 a-year, and other parts were let at less than £20, the tax would be confined to the former premises, and the latter would be exempt. His hon. Friend's objection that the House Duty tended to prevent the construction of dwellings for the poor would for the future, therefore, be entirely removed. Having thus dealt with the incidence of the tax as it affected the poorer classes, he hoped that his hon. Friend would feel that his object had been entirely attained. The unequal assessment of the houses of the rich was a subject which the Treasury had under their consideration; but the principle was regulated by the Act of Parliament, and the assessment was conducted by District Commissioners, who were out of the control of the Central Department. He admitted the entire force of the objection as to the unfair exemption in the levying of this tax on the houses of the rich, and it was a matter which he hoped to see rectified.
§ MR. GRANTHAM
remarked, that one of his own constituents had quite recently been threatened with a prosecution unless he paid the tax, although the houses concerned had been built by him for the express purpose of providing wholesome accommodation for the working classes. Yet it seemed that the same class of houses were exempt, under the Order of 1866, when they were built by Companies.
§ MR. COURTNEY
replied, that the exception in the case of individuals was removed just before the end of the Recess, so that Companies and individuals were now on the same footing.
§ MR. J. G. HUBBARD
said, he was extremely glad his hon. Friend and Colleague 229 had brought this subject before the House, because it was one of many instances which exhibited the imperfection and chaotic condition of our fiscal legislation. When be first entered the House of Parliament there were no less than three taxes on houses—the Inhabited House Duty, the Income Tax, and the Fire Insurance Duty. Against the latter he immediately set on foot an opposition, and after moving again and again for its abolition was at last successful. Some day or other there would be, perhaps, only one House Tax. There were some good features in the Inhabited House Duty, apart from its being a secondary tax upon the same material; and it had this primary recommendation—that people generally spent something like a fixed proportion of their income upon house rent. That, after all, was but an imperfect test; and he believed that in a revised, and improved, and well-adjusted Income Tax would be found a substitute for the present most imperfect and unequal charges on the revenue of individuals. Since the tax was first imposed successive exemptions had been made in favour of warehouses, premises wholly used for purposes of business, and premises inhabited only by a caretaker and his wife and family; but if the Inland Revenue Department found in one of the palatial buildings in the City of London, which were let off in flats for offices, that a person slept on the premises who could not be considered as a caretaker in the distinct terms of the enactment, they held that the exemption was absolutely cancelled. He considered that this was a great grievance. It was a monstrous misapprehension of their duty by the officials of Somerset House, and it was a subject to which the Chancellor of the Exchequer should direct his attention. The duty of these officials was frankly and fairly to carry out the provisions of the Legislature with regard to the exemption of all buildings occupied industrially for the purposes of trade. If that rule were followed, it would save the officials and the taxpayers of the City of London a vast deal of trouble and complication. He asked that the Chancellor of the Exchequer would be good enough to use his influence, in order that this question might be fairly considered and fairly treated. With regard to the future of this tax, he was not so sanguine as his hon. Friend in 230 looking for its immediate repeal. It would not, of course, live for ever; but it could only be dealt with in connection with the other great taxes which were in affinity with it, especially the Income Tax. A good Valuation Bill was also much needed. Complaints had frequently been made of the inadequate valuation put upon buildings in the country, and he considered these complaints were perfectly justifiable. He saw the other day a paper which professed to be a statement of the valuation put upon buildings in different parts of the country. In looking over that statement he observed that in a place with which he was familiar, buildings that were quite palaces, and which were worth thousands of pounds, appeared as having been valued at £500 a-year. He regretted that the country bad been allowed to run back during the last 12 years on the important questions of assessing and raising Imperial and local taxation. It was a scandal that while we were spending thousands and millions on wars here, there, and everywhere, we had not yet settled how to raise our Revenue, or the system of assessment which ought to be carried out. He urged the Government, in conclusion, to consider this matter, with a view to introduce a complete system of valuation throughout the country.
said, the House was indebted to the hon. Member who introduced this subject for his continued efforts in directing attention to the injustice of the Inhabited House Duty. He was glad to have heard the statement of the Financial Secretary (Mr. Courtney). It showed that one very important point had been gained—that, namely, of removing a restriction on the erection of houses for the working classes. He was sure this was a worthy object of attention, and all who took an interest in the improvement of the dwellings of the working classes in London should endeavour to come to some arrangement by which the benefits of diminished taxation might be conferred upon houses of that kind as well as upon others. What the working classes required was that the advantage of the modification that had been mentioned by the Financial Secretary should be extended not only to new buildings erected for the accommodation of the working classes, but to old buildings which, though now occupied by them, 231 had originally been built for the accommodation of single families. The old houses were constructed in a different manner from the new tenements that were being erected. The new tenements were provided with separate outside stairs, and this provision could not be made in the old houses. Working men, however, must live in them, and they were, in consequence of the construction of these houses, prevented, not only now, but in all time coming, from having the benefit of the exemption from the tax. He hoped some endeavour would be made to come to an arrangement by which the benefit of diminished taxation could be secured by these persons. He understood, from the statement that had been made on the part of the Government, that they were fully alive to the question. This was an old story; but it was in the nature of all these things that they had to be reiterated year after year before the Government would take them up. The hon. Gentleman, in introducing the Resolution, referred to the inequalities of the tax. He had no intention to go into the details of the subject, because the Financial Secretary had shown that he was ready to make improvements; but he believed the attention of the country could not be too frequently called to the gross injustice inflicted on all the lower and middle classes by the almost total exemption from this tax of the great houses in the country. The tax was instituted in 1851 in lieu of the old Window Tax, which, however objectionable in other respects, was an equitable tax, as it increased in accordance with the size of the house, and not according to value; but the result now was that the large houses paid much less in proportion than the houses of the poor. For example, upon a large country mansion, say with 180 windows, under the Window Tax the duty would have been £93 2s.; but now they found that on all the valuation rolls there was hardly an instance of a country house being valued at more than £500, and the duty upon a valuation of £500 was only £19, so that these large houses had benefited to the extent of three-fourths, and in some cases even four-fifths, by the reduction of the tax, while the houses of the working classes had derived no benefit whatever. As they came down the scale, the sums paid by large houses became less; whereas the tax pressed more heavily on the poor. He thought the 232 House should bring the subject under the notice of the Government year by year until the Government took some steps to remedy the existing inequalities. The House Tax, if it were equitably adjusted, would not be a bad tax, it being a rough but tolerably fair mode of determining a man's situation and means to ascertain the kind of house in which he lived.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)
said, he had been appealed to by several Members, and he wished now to answer that appeal. It had been asked whether the exemption from the payment of this tax which had been granted in 1866 to houses built by Corporations for housing the working classes applied now to houses built for the same purpose by private persons; and whether that exemption, so extended under the Order issued during the Recess, applied not only to future houses, but to houses that might have been built in the past? His hon. Friend (Mr. Dick Peddie) had specially referred to some houses constructed at a former date. He thought he could give a satisfactory answer to his question. The Order was retrospective as well as prospective. If the tenements were really separate, and under the value of £20, the exemption would apply. If they were not separate tenements, then, of course, it would be impossible for the Order to apply. The reason why, in 1866, the exemption was only granted to houses built by a Corporation or institution for the erection of improved dwellings for the working classes was because at that time no houses of this character had been built by other than Corporations. Since that time, however, a custom had arisen in certain cases of private persons building houses of this character, those persons not being Corporations or public Companies. The question of the duty on mansions had been introduced into the debate, and it had been supposed that they were differently treated in the Metropolis and in the country; but that was not so. All houses were assessed according to their letting value by the year, whether in London or elsewhere. That was the law as to the Inhabited House Duty and as to local rates, and he doubted whether anybody would find it a very easy task to alter it. Something had been said as to the hardship of persons paying duty who lived in a part of a counting-house on the scale of a partner 233 or manager. But it certainly did not seem reasonable to exonerate them on that account from the payment of Inhabited House Duty. He would, however, look into the matter. As to the proposal generally, he should ask his hon. Friend to allow the Resolution to be negatived. Whatever he might feel with reference to some details of the tax, it would be absurd on that account to throw away £1,800,000 a-year. Some day, probably, whether in connection with Imperial taxation or in some other way, the duty might be amended in some details. But beyond that he could not go. Objection might be taken to almost every tax, and he could not agree to that Resolution.
§ MR. SCLATER-BOOTH
said, that if the Chancellor of the Exchequer revised the tax in regard to counting-houses, warehouses, and banks, and other buildings of great value, he would find it necessary to put on imposts which had been taken off; for at present the assessment of such buildings was not in a satisfactory condition. Houses in the Metropolis were fairly assessed one with the other; but in the country great discrepancies occurred with regard to the Inhabited House Duty, and the City establishments seemed to him to get rid of a fair share of their legitimate burden.
MR. ALDERMAN W. LAWRENCE
asked leave to withdraw the Amendment, and thanked the Government for what had been conceded with respect to the House Tax, although the top and bottom of the scale were left in the same state as before—namely, the very poor, living in old houses, were not affected by the concession.
§ Question put, and agreed to.
§ Main Question proposed, "That Mr. Speaker do now leave the Chair."