Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-24T23:40:22.789Z Has data issue: false hasContentIssue false
  • English
  • Français

Taxation and the Working Class, 1915–24*

Published online by Cambridge University Press:  11 February 2009

R. C. Whiting
R. C. Whiting
Affiliation:
University of Leeds
Get access Rights & Permissions [Opens in a new window]

Extract

The working class's experience of the tax system is an important aspect of its relationship with the state. This article examines the nature of this connexion during the First World War and its aftermath when fiscal policy was subject to intense political pressure. Two themes are paramount, those of resistance and appropriation. From the point of view of governments the less tax collection encouraged class-based opposition the better. Because the level of tax payments depended on varied circumstances within social groups – caused by family size or patterns of consumption, for example – the lines of differentiation were more finely drawn than the contours of social class. Many tax payments affected the individual as a citizen within the political system rather than as a producer within the economy. The articulation of resentment about tax burdens with conflicts in the economy was not therefore automatic. However, when governments were closely involved in the running of the economy, as in the First World War, it was helpful to use the tax system as an instrument of social justice, so that efforts to generate a common purpose might not be impaired by resentment of the disproportionate gains of others. In these circumstances taxpayers might well be encouraged to see the tax system as a way of appropriating or limiting the wealth of other classes, in a way which did bring it into closer relationship with the economy.

Type
Articles
Information
The Historical Journal , Volume 33 , Issue 4 , December 1990 , pp. 895 - 916
Copyright
Copyright © Cambridge University Press 1990

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Board of inland revenue, ‘Note on possible methods of replacing part of the Revenue now drawn from the excess profits duty’, 17 Dec. 1920, Cabinet committee on taxation, London, Public Record Office (P.R.O.), Cabinet Papers, CAB 27/101, para. 52.

2 Royal commission on income tax, minutes of evidence (Parl. Papers, 1919, XXIII, pt I), Q, 6701.

3 Smith was at this time vice-president of the Miners' Federation of Great Britain (M.F.G.B.). Special conference proceedings of M.F.G.B., 22 Oct. 1919, p. 23.

4 Stamp, J. C., ‘The special taxation of business profits in relation to the present position of national finance’, Economic Journal, XXIX, 12 (1919), 409Google Scholar.

5 Stamp, , Taxation during the war (London, 1932), p. 49Google Scholar.

6 Hull branch of the chamber of trade to chancellor of the exchequer, in ‘Evasion of income tax’, P.R.O., Treasury Papers, T 172/973.

7 Finance Bill Papers, 1915, P.R.O., Inland Revenue Papers, IR 63/54. George, Lloyd, Parliamentary Debates (Part. Deb.), 17 11 1914, LXVIIIGoogle Scholar, col. 360.

8 In a ‘conference between the chancellor of the exchequer, the employers and the trade unions regarding Finance Bill No. 3’, 1915, P.R.O., Treasury Papers, T 172/222.

9 Finance Bill Papers, 1915, P.R.O., IR 63/54.

10 Papers of royal commission on income tax, P.R.O., IR 75/185, p. 348.

11 Deputation of Triple Alliance to chancellor, 4 July 1919, P.R.O., T 172/1000, p. 15.

12 Deputation of South Wales Miners' Federation (S.W.M.F.), to chancellor of exchequer, 20 Sept. 1917, in P.R.O., T 172/982, p. 13.

13 E. Nott-Bower and N. Warren Fisher, board of inland revenue, to chancellor, 20 Aug. 1917, P.R.O., T 172/982.

14 ‘The South Wales miners' income tax’, notes by Stenson, G. R., 3 12 1919Google Scholar, in P.R.O., T 172/982. The effect of allowances is also outlined in Waites, B., A class society at war, England 1914–1918 (Leamington Spa, 1987), pp. 107–8Google Scholar.

15 These are estimates from Bowley, A. L., Prices and wages in the United Kingdom 1914–20 (Oxford, 1921), tables LIII, LV, pp. 154, 156Google Scholar and assume 260 shifts per year. The figures for engineering workers come from Yates, M. L., Wages and labour conditions in British engineering (London, 1938), p. 151Google Scholar, where piecework earnings are assumed to be 225% above those of time rate workers.

16 Census report for Wales, 1921, Rhondda U.D., table 14, p. 29. Census report of dependency, orphanhood and fertility, table 3, p. 184 (Glamorgan).

17 G.T. 2266, in P.R.O., CAB 24/28.

18 Committee on tax liability at £130 by quarterly assessment, in P.R.O., IR 63/57.

19 P.R.O., T 172/222.

20 ‘The starting of the manual wage earners' income tax in South Wales’, P.R.O., IR 75/182.

21 Lancashire delegate to M.F.G.B. conference proceedings, 22 Oct. 1919, pp. 21–8.

22 M.F.G.B. special conference, 26 Sept. 1917, pp. 57–62.

23 Lewis Merthyr Lodge minutes, 15 Aug. 1916; Clydach Merthyr Lodge minutes, 19 July 1916; Rhondda No. 1 district monthly report, 20 July 1916. These records are held in the South Wales Coalfield Archive, University College Library, Swansea.

24 For Barnes, see Parl. Deb., 24 11 1915, LXIV, col. 118Google Scholar; for the reactions to income tax see P.R.O., IR 75/182.

25 For the position outside South Wales see the ministry of labour reports to cabinet, 26 Nov. 1919 (CP 258), 21 Jan. 1920 (CP 486), in P.R.O., CAB 24/94 and 96, respectively. For South Wales see Lewis Merthyr Lodge minutes, 14 Nov. 1919 and S.W.M.F. special conference proceedings, 8 Nov. 1919, held in the South Wales Coalfield Archive, University College, Swansea.

26 Notes by Stenson, superintending inspector for Cardiff, 7 Sept. 1917, P.R.O., T 172/982.

27 Fisher, N. Warren to chancellor, of exchequer, ‘Limit of exemption from income tax’, 7 09 1917Google Scholar, in P.R.O., T 172/982.

28 S.W.M.F. special conference proceedings, 8 Oct. 1917; M.F.G.B. special conference proceedings, 28 Feb. 1918, pp. 53–7.

29 M.F.G.B. special conference proceedings, 28 Feb. 1918, pp. 53–7, speeches of Lancashire, Nottinghamshire and Scottish delegates.

30 M.F.G.B. executive committee minutes, 8 Ma y 1918, p. 8, and 16 May 1918, p. 17; S.W.M.F. conference proceedings, 1 June 1918.

31 M.F.G.B. special conference, 22 Oct. 1919, pp. 21–8.

32 Rhondda No. 1 district monthly report, 19 Nov. 1917; Stenson, 3 Dec. 1919, in P.R.O., T 172/982.

33 S.W.M.F. executive council minutes, 11 Dec. 1919 for voting figures; Rhondda No. 1 district pt. monthly report for decisive vote against taking any further action, 20 Dec. 1919, and arranging for repayment with the tax authorities.

34 S.W.M.F. conference, 26 Aug. 1919.

35 The campaign began in 1916. See Lewis Merthyr joint committee minutes, 6 Sept., 4 Oct., 16 Nov., 1916, 20 Nov. 1917.

36 Brace and Richards withdrew the S.W.M.F. resolution to refuse to pay tax, in place of one of the M.F.G.B. executive council to await the report of the royal commission on income tax. M.F.G.B. special conference, 22 Oct. 1919, pp. 4–6, 21–8.

37 Stenson to R. V. N. Hopkins, 16 June 1919, in P.R.O., IR 75/185. Cook was heavily defeated for the office of vice-president in June 1919, when younger candidates of the left did badly. See Woodhouse, M. G., ‘Rank and file movements among South Wales Miners 1910–1926’ (unpublished D.Phil, dissertation, University of Oxford, 1969), p. 178Google Scholar.

38 Houghton, H. W. and Carter, G. R., ‘Income tax on wages by quarterly assessment’, Economic Journal, XXVIII (1918), 33Google Scholar.

39 Stenson to deputy chairman, board of inland revenue, 7 Sept. 1917, in P.R.O., T 172/982.

40 Stenson to chairman of inland revenue, 19 Aug. 1917, P.R.O., T 172/982.

41 R.C. on income tax, minutes of evidence (P.P. 1919, XXIII, pt 1), QQ,. 9302, 9330; Barnes, in Parl. Deb., 23 09 1915, LXXIV, col. 649Google Scholar.

42 Stenson to deputy chairman, inland revenue, 7 Sept. 1917, in P.R.O., T 172/982.

43 R.C. on income tax, minutes of evidence (P.P. 1919, XXIII, pt I), Q. 2576.

44 Report of R.C. on income tax (P.P. 1920, XVIII), para. 245, emphasis added.

45 For an indication of this see the list of letters and resolutions sent to the chancellor of the exchequer in Aug. 1917, in which those from the A.S.E. are prominent, in P.R.O., T 172/982.

46 The Lancashire delegate to the M.F.G.B. special conference of 22 Oct. 1919 referred to the fact that engineering workers appearing before the courts for non-payment received no help from the A.S.E. For examples of assistance to miners in tax cases see Lady Windsor Lodge minutes, 9, 11, 24 July 1918. For evidence of the grievances of engineers about income tax see , A.S.E., Monthly Journal and Report, 09 1917, 54Google Scholar; Jan. 1918, 58–59; May 1919, 31, 73.

47 Special conference proceedings, M.F.G.B., 22 Oct. 1919, p. 23.

48 For example, Bonar Law, chancellor of the exchequer: ‘We are not to tax manual workers indirectly. We cannot tax them on their amusements; we are not to tax them on their articles of consumption, food, clothing, or anything of that sort: and then you say not by direct taxation, although direct taxation is the form which you favour.’ Deputation of Triple Alliance, P.R.O., T 172/1000, p. 12. Philip Snowden also felt that the trade unions' claim for relief from direct taxation was indefensible when allied to pressure for the removal of indirect taxation; workers, he felt, had to make some contribution through taxes. Labour and National Finance (London, 1920), pp. 102–3Google Scholar.

49 For Arnold's views see Parl. Deb., 23 Sept. 1915, LXXIV, cols. 610 ff. S.W.M.F. executive committee minutes, 14 Dec. 1917, 3 May 1919.

50 R.C. on income tax, minutes of evidence (P.P. 1919, XXIII, pt I), QQ. 9173–94.

51 See Askwith, G. R., Industrial problems and disputes (London, 1920), p. 414Google Scholar for trade unionists. ignoring the more modest figures for cost of living increases provided by Lord Sumner's committee. For the committee's report see Working classes cost of living committee (P.P. 1918, II), 821.

52 Hartshorn: ‘All these people who have that pay increase and are brought under the tax are amply being taxed on the extra cost of living; they have simply to pay the tax with money that has been allowed them on account of the extra cost of living…’.

Bonar Law: ‘I admit the strength of what you say just now; I had not seen the point.’

S.W.M.F. deputation to chancellor, in P.R.O., T 172/982, pp. 17–18.

53 R.C. on income tax, minutes of evidence (P.P. 1919, XXIII, pt I), Q. 9124. (William Clark): ‘You are aware of the fact that more than 10s in the £ is taken from large incomes now by the state ln income tax alone?

Shirkie (T.U.C.): No, I am not aware of that.

Q. 9125: Well, you should be.’

54 See Snowden, P., Parl. Deb., 14 10 1915, LXXIV, cols 1323–4: Smillie, Triple Alliance deputation, P.R.O., T 172/1000, pp. 18–19Google Scholar.

55 Report of ministry of labour to cabinet, 17 Sept. 1917, G.T. 8184, P.R.O., CAB 24/88.

56 Smillie at M.F.G.B. special conference proceedings, 26 Sept. 1917, p. 62: Hartshorn at M.F.G.B. special conference, 28 Feb. 1918, p. 54.

57 ‘The taxation of the various classes of the people’, Journal of the Royal Statistical Society, LXXXII, pt II (1919), 176–7Google Scholar.

58 Committee on the national debt and taxation, minutes of evidence (non-parl., 1927), II 598, para. 22.

59 Samuel, , ‘Taxation of the people’, p. 149Google Scholar.

60 ‘National finance and taxation’, in the earl of Cromer and others, After-war problems (London, 1917), p. 326Google Scholar.

61 Committee on national debt and taxation, minutes of evidence, para. 10, pp. 176–7.

62 Ibid. Q. 9097. W. H. Coates was at this time director of the intelligence and statistics division of the Inland Revenue. He later became a director of I.C.I.

63 ‘Industry and the weight of taxation’, in P.R.O., T 172/1230, paras. 46–53. There is useful discussion in Rowe, J. W. F., Wages in practice and theory (London, 1928), ch. 10Google Scholar.

64 Clegg, H. A., A history of British trade unions, vol. 2, 1911–1933 (Oxford, 1985), pp. 319–21Google Scholar.

65 Clegg, , Trade unions, p. 336Google Scholar.

66 Minute by Mr John Hilton regarding the industrial court award for theengineering trade. P.R.O., Ministry of Labour Papers, Lab 2/758/2, reproduced in Conflict and consensus in British industrial relations, Microform, Harvester (Brighton, 1985)Google Scholar. Hilton was director of statistics, ministry of labour, and later professor of industrial relations at Cambridge. See also Lowe, R., Adjusting to democracy. The role of the ministry of labour in British politics 1916–39 (Oxford, 1986), p. 101Google Scholar.

67 ‘Industry and the weight of taxation’, P.R.O., T 172/1230, para. 53.

68 ‘Note on possible methods of replacing part of the revenue now drawn from the excess profits duty’, P.R.O., CAB 27/101, p. 169.

69 ‘Industry and the weight of taxation’, P.R.O., T 172/1230, para. 62.

70 Haig, R. M., ‘The taxation of excess profits in Great Britain’, American Economic Review Supplement, X (1920), 3Google Scholar.

71 Parl. Deb., 19 May 1919, CXVI, cols. 334 ff.

72 Committee on national debt and taxation, minutes of evidence, Q. 1649.

73 27 Aug. 1919, G.T. 8059, P.R.O., CAB 24/87.

74 N. Warren Fisher to chancellor of the exchequer, 30 Nov. 1918, in P.R.O., Budget Papers, T 171/162.

75 A. H. Kilner, of Courtaulds, deputation of F.B.I, to chancellor of exchequer, 7 Feb. 1919, P.R.O., T 172/1004. The proposal was eventually shelved at least in part because Lloyd George was concerned about the effects upon newspaper proprietors, and therefore upon the standing of the government. See note of 14 Apr. 1919 bound in correspondence between N. Warren Fisher and Austen Chamberlain, 21 Mar. 1919, in P.R.O., T 171/162.

76 In Parl. Deb., 21 Apr. 1920, CXXVIII, cols. 477–8. During his speech Graham was keen to insist upon the immunity of the Co-operative Society from the corporation tax, and anxiety about the Co-op's assets had steered the Labour party away from a capital levy which might have touched of is every reason to suppose that it exerted a restraining influence on Labour's aggressive tax strategies, because of its own potential vulnerability to them.

77 Deputation of F.B.I, to chancellor of the exchequer, 5 July 1919, P.R.O., T 172/1004. For the place of the profits duty in relations between Lloyd George and Labour see the note by Piercy, Lord, ‘note of conversation with J. C. Stamp about excess profits’, 17 05 1917Google Scholar, Piercy papers, British Library of Political and Economic Science, 1/40.

78 28 Mar. 1918.

79 Report on trusts (P.P. 1918, XIII), p. 13.

80 Myers, Tom, during the Spen Valley by-election campaign Yorkshire Factory Times, 27 11 1919Google Scholar.

81 Committee on the national debt and taxation, minutes of evidence, Q. 5020.

82 Pethick-Lawrence's, views were given in evidence before the Select committee on the increase of wealth (war) P.P. 1920, VII)Google Scholar, Q. 3504. For Dalton, see his Principles of public finance (London, 1923), p. 99Google Scholar.

83 See Dalton, H., Some aspects of the inequality of incomes in modern communities (London, 1920)Google Scholar, and Pimlott, B., Hugh Dalton (London, 1985), esp. pp. 138–44Google Scholar.

84 Stamp, J. C., ‘Inheritance as an economic factor’, Economic Journal, XXXVI (1926), 363Google Scholar.

85 Clegg, , Trade unions, p. 233Google Scholar.

86 This point, and the Labour party's interest in the capital levy, is dealt with in more detail in my essay ‘The Labour party, capitalism and the national debt, 1918–24’, in Waller, P. J. (ed.), Politics and social change in modem Britain. Essays presented to A. F. Thompson (Brighton, 1987), pp. 140–60Google Scholar.