LAND VALUE DUTIES.

HC Deb 25 March 1913 vol 50 cc1527-99

Mr. PERKINS

From Persia to the affairs of the Inland Revenue Department seems a rather long cry, but I make no apology for raising the question, because I have reason to think that there are in this country a very considerable number of electors who are extremely perturbed by the proceedings of the Inland Revenue Department, and particularly by the proceedings of that sub-Department which deals with the valuation of land. In calling the attention of the House to the Land Valuation Office especially, A.A. (page 49 of the Estimates of the Revenue Departments), Vote 2, Class II., I desire particularly to direct attention to matters of administration which were briefly, and, as I think, quite inadequately, dealt with during the two Debates which have taken place—and which will be within the recollection of the House—on 29th January and on the 11th of this month. The House will remember that attention was concentrated in those Debates on what is now the notorious Lumsden case. I do not propose to trouble the House by traversing the whole history of that case and the morals which are deducible from it, but in view of the, to us, extremely unsatisfactory reply of the Financial Secretary of the Treasury to an explicit series of questions which were addressed to him by my hon. Friend the Member for the Sleaford Division, I think it desirable to refer again, not to the facts of that case, but to the reply which I venture to say was not an answer, for the purpose of emphasising the fact that it is of very great importance to the building community of this country that we should have a much more definite answer on the question than we have succeeded in obtaining from the Government. We have no quarrel on this occasion with either the Finance Act or with the judgment of the learned judge in the case. We assume, at any rate to-night, that the Finance Act is perfect, and that the judgment is perfect law. We are not questioning either; but we are questioning and challenging the action of the Government, and particularly of the Inland Revenue Department, in the series of events of which that action is the sequel.

What we were led to believe, those of us who were inside the House of Commons, and those of us—and I was one—who at the time of the passage of the People's Budget were outside the House of Commons, by a perusal of the debates and the speeches made outside the House, was that under no circumstances was Increment Duty to be raised on anything except the increment in the value of land. It was most expressly laid down by speaker after speaker, official and unofficial, that what the Government of the day were after with their Budget taxation was the taxation of what was then called the unearned increment. To deputations and to individuals the Chancellor of Exchequer by speech and in writing repeatedly and explicitly pledged himself that there should be no taxation of the brains and skill of individuals, but that the taxation should be directed to the increment of value which was unearned. Now, for the first time, the country is made aware of the fact that the Budget permits, what is was not anticipated it would permit, the taxation not only of the unearned increment of land, but of fortuitous windfalls and of monoply value. I would call the attention of the House to the fact that whereas the case as laid before the learned judge in the Lumsden case was that this was a peculiar case of windfall, the official defence put forward was that it was a case of monopoly value, and as such was subject to taxation—a rather curious commentary! But whether the defence be that this was a case of windfall or whether the defence be that this was a case of monopoly value, it is not for us on this occasion to discuss the broad general principles whether either monopoly value or windfalls are proper or improper subjects for taxation. This, however, I desire to point out to the House—because it has not been said, I think, here before—that under the present administration of the law both monopolies and windfalls are subject to taxation, quite apart, and outside, and beyond this new land taxation. As everybody knows, the biggest case of practical monopolies is the case of a monopoly or partial monopoly in the sale of alcohol, and this is subject to very severe taxation in the form of Licence Duties. The case of the taxation of windfalls is more remarkable, and less known. It is not, I think, generally known that astute collectors of taxes and departmental officials are always on the watch for cases of sales and resales of land and houses where profits are sometimes made, and whenever they can establish a case of a profit being made by the sale of land and houses, they treat it as in the nature of a windfall, and they try, and generally succeed, in obtaining from the person who makes that profit a contribution towards the National Exchequer in the form of Income Tax, Schedule D, I think. So that those particular forms of unearned increment, windfalls in particular, are already taxed, and taxed heavily.

I want to know, and I hope to-day that we shall have some information on the matter, whether it is the practice of the Inland Revenue Department to tax windfalls which arise, not out of the purchase and sale of land and houses, but windfalls which arise out of the sale of stocks and shares? I am particularly anxious to know that, and I hope we shall have a definite and clear answer to that question. My grievance against the administration of the Inland Revenue Department is not as regards the series of proceedings, for example, which led up to this Lumsden case, but I also want to emphasise the current series of grievances which are day by day brought to the notice of Members of Parliament in the administration of the Act, and particularly the recent cases of the rushing tactics of the Inland Revenue Department in attempting to gather in the Undeveloped Land Duty, without, in many cases, the valuation having been made or served, and without, in other cases, the valuations have been settled. It is a remarkable thing that in order to keep, or to get, within the four corners of the last Finance Act a frantic endeavour is being made to collect no less than four years' arrears of Undeveloped Land Duty. Unless apparently the notices are served by the end of this month the first of these four years will be lost to the nation. I do not blame the Department for doing their best to collect their taxes, but I do blame the Department for the methods, I think unconstitutional, which they are using in order to make that collection secure. In the rush and hurry of their proceedings they are most deliberately neglecting the features of the Act which refer to the rebates and allowances, which are explicity set out. They apparently are absolutely ignoring these, and leaving it to the unfortunate landowner himself either to suffer the loss or to put in a claim, if he has time to make it. There are a whole series of allowances which may be claimed if only the unfortunate landowner is alive for the claims to be made. In particular it is known to few, not to everybody, as to the claims which can be made in respect of land which was in agricultural occupation where the notice of termination of tenancy could not be given in a certain time.

6.0 P.M.

I would also refer to the very important provision which has been made, and advisedly made, in the Act as regards the development of such property, as the House will remember, that for each £100 spent in certain forms of development one acre of land is freed from Undeveloped Land Duty. But the House may not be aware, although some individuals in it are unfortunately aware, that it is apparently the practice of some of the officials of the Inland Revenue Department not to allow, first of all the area of land occupied by the roads which are necessary for development, and, secondly, not to allow for the value of land occupied by the roads. This is no trivial matter in the case of suburban land or land which is going to be covered very closely with houses. A simple calculation will show that no less than one-fifth of the area of the land may be taken up by roads. Accordingly, if one-fifth of the area is occupied by roads, it seems to me a very great hardship, in view of the Act, that one-fifth should not be allowed to the landowner who gives the roads, develops them, and leaves them as open spaces for the benefit of the public. Secondly—and this, I think, is a grosser case still—the Department is attempting to levy Undeveloped Land Duty on the area occupied by the roads as well as on the land which adjoins them. I have cases here which I shall be delighted to hand over to the officials if any of them doubt my statements. They happen to be cases in which I am personally interested, and therefore I know the matter at first hand. The gravest and worst feature of these rushing tactics of the Department is that in order to lodge these claims before the end of this month—of course many owners are very neglectful—they have deliberately omitted to call the owner's attention to the fact that these allowances are made, and can be claimed. Many owners will be, and are perhaps already, out of court because within the limit of time for making objections they have failed to lodge claims. Therefore, in the administration of the law, as regards Undeveloped Land Duties the Department is acting, I think, in a most griping and grasping manner, and without consideration of public morality and public fairness. I want to say a word or two with regard to the general position of the young gentlemen who are engaged as valuers by the Department. I am not going to say a word against their ability or politeness or integrity, but I do say a word, from intimate knowledge, against their employment as valuers to settle delicate and difficult questions of valuation in districts to which, in most cases, they are absolute strangers. These young men are sent down into districts which, until they came into them as the official valuers of the Government, they probably had never seen, and they are asked to make valuations which are retrospective for not less than four years. Let the House picture to itself a valuer sent down to a remote district, to which he is a total stranger, where he has to imagine the condition of things as regards a piece of land, not as it is now, but as it was four years ago. Of course, he must suppose a valuation, without any knowledge whatever of the local conditions, in order to make any valuation which is worth the paper it is written on. As an instance which came to my knowledge only this week, I might relate the case of a valuer who was sent down to the Isle of Wight to make a provisional valuation at a country place called Snowdon. He made the valuation, and brought out the site value of a certain piece of leasehold property at a provisional value of £62.

I ask the House to remember that he put the provisional value of the site, on which the house was, at £62. The owner objected, not to the £62, but to the total value, and other figures of the valuation, and then the valuer, with a very laudable desire to please, immediately altered that value from £62 to £152, without giving any reason at all or without any claim being made. Now a valuer who, just in order to please the gentleman with whom he has to settle the valuation, jumps from £62 to £152, is surely a valuer of whom one ought to be aware, rather than a valuer whom one ought to trust. In this instance, and it is only one of many that have come to my knowledge, you have the extraordinary discrepancies, between the first valuation and the amended valuation, when the valuer's errors have been brought to his knowledge. All I say is, that if the Government imagine that they are getting the true valuation of the land, as was over and over again promised, they are mistaken, and they will find that out to their cost. And I ought to say, and it is very important that it should be said that throughout the country, from my own experience, as a practical man, there is a growing feeling of dissatisfaction and unrest in the building trade with regard to this question of valuation. I do not hold any brief for the builders, but I am sure every practical man in this House and outside will bear me out in the very moderate statement of the case which I am going to make. What has happened, and is happening to-day all over the country in consequence of these valuations is this:

In the first instance, the speculative builder, who used to be willing to take up land and speculate in building in advance of the times, is no longer able or willing to do so. His particular business, as a speculative builder, has been brought practically to a standstill, and for two reasons: The first, as the Lumsden case shows, is that his profit may be taken away from him; and, secondly, because of the difficulties of obtaining borrowed money, which is absolutely essential to his business. People who have money to lend, and were formerly willing to lend it on mortgage for speculative building, have now, in many cases, withdrawn these loans, and are now refusing to lend builders money upon any terms whatever, and the result is the builder cannot borrow money except at a very extravagant rate of interest and with very great difficulty for the purposes of speculative building. Moreover, if he has got money of his own sufficient to enable him to launch out in a small way, and to buy land and develop it, he is afraid to trust his money in such risky speculation, because he does not know how legislation is going to affect him in the future. The House has the evidence of the Master Builders' Association, of the Chambers of Commerce, of the various societies and organisations, such as the Auctioneers' Institute and the Surveyors' Institute, who are non-political bodies, and who have all pronounced against the fear and the absolute danger that underlies this legislation in the mind of the builders, and I say the time has arrived when a much fairer administration of the Act should be the order of the day of this Government, or else that the Act itself—I am not allowed to go into that matter now—should be drastically amended, and a fair-measured justice should be meted out to all those directly or indirectly concerned in the management of land.

Mr. FITZROY

I want to pursue this subject a little further than my hon. Friend has taken it, and to address myself almost entirely to the agricultural land aspect of this question and to the methods which are now employed for making valuations upon agricultural land. The other night, on the Debate on the Address, we asked the Government if they would introduce fresh legislation, because we thought that the Budget legislation of 1909–10 was not being carried out according to the intention of the House when it was passed. We did not get very much satisfaction out of that, and so now I propose, as the only way in which we are in order in discussing this question to-night, to criticise the Government because of their administration of the Act and the methods they are adopting in valuing agricultural land. I should like to urge upon the Government, in the first place, to desist from the methods they are employing in administering this Act of Parliament by spending thousands of pounds of the taxpayers' money in an absolutely valueless and fruitless manner. They are not only spending this money uselessly, but they are inflicting upon the owners of certain classes of property thousands of pounds more expenditure in appeals against the way in which the valuation is being carried out. I know it is a very common practice for people to think that all the owners of agricultural land are not only owners of large quantities, but are very rich men into the bargain, and that consequently there is really no excuse whatever in asking Parliament to help them to defend their cause in any way whatever. Really that is not the case, and when we are discussing this question of the burdens upon agricultural land we must admit that there are small owners as well as large owners, and that there are an enormous number of people in this country, whose means are invested in, and derived from agricultural land. A Return which was given by the Commissioners of Inland Revenue for the year ending March, 1912, as to the ownership of land and houses shows this, that of the property of persons in the United Kingdom dying worth between £500 and £1,000, nearly 40 per cent. consisted of house property and land, whereas of persons dying worth between £50,000 and £70,000, only about 16 per cent. of their estates consisted of land or house property. If to the small estates were added the sums invested in provident, friendly, insurance, and building societies, it would probably be found to be up to 50 per cent., or one-half of their fortunes were directly or indirectly in land and houses, and all these are directly interested in the cost of the valuation of agricultural land, and the liability, which we now find, of Increment Duty being charged upon agricultural land.

There are really two points worth considering: First of all, the methods of valuation; and, secondly, that since the White Paper instruction, we find that agricultural land is now, though it was supposed not to be before, liable to charges of Increment Value Duty on the occasion of sale. The other night, when a short reference was made to the agricultural land part of this question, the Secretary to the Treasury made some rather extraordinary remarks. I am sorry, as I had also to say on that occasion, that we have not the Chancellor of the Exchequer with us this afternoon. Whenever this question is raised the Chancellor of the Exchequer is never here. I fully recognise that the Secretary to the Treasury is a very apt disciple of the Chancellor of the Exchequer, and sits at his feet, and very often follows the methods he employs in his utterances in this House. But still, I should like, for another reason, that the Chancellor of the Exchequer was here, because not only when he introduced the Budget, but in many statements he has made since, he over and over again declared that Increment Duty is only to be charged upon the bare value of the land, and he has never denied that. On the other hand, the Secretary to the Treasury speaks with a different voice, and has denied that that was ever the intention of the Act, when passed into law, or is the method by which Increment Duty is charged at the present time. When there was a discussion on the 20th June last year on the question of the appointment of an Expert Committee to inquire into the methods of valuation the Chancellor of the Exchequer, in answer to my hon. Friend the Member for Sleaford, who asked that the terms of reference should include an inquiry into all the methods of valuation and all the valuations that had taken place, the Chancellor of the Exchequer said:— I suggest as terms of reference to inquire into the working of the valuation prescribed by Section 26, Subsection (1), Part I. of the Finance Act, 1910, and report whether any modifications of machinery for carrying out the valuation are necessary, and if so, what modifications? In reply to my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) the right hon. Gentleman said:— I think the right hon. Gentleman will find that covers pretty well all the points he raised. I framed the reference with a view to meeting his demands and I think he will find it will do it. They can consider all cases such as those mentioned by the hon. Member and other cases which had been mentioned from time to time by the hon. Member and others. That implies that this Committee might inquire into all these methods of valuation. Later in the same debate the Secretary to the Treasury comes along and says:— I do not know how we can refer to such a Committee, the question whether deductions in agricultural land laid down in Clause 25 should continue to be different from the deductions in the case of urban land. That is a question of policy and a question which has been decided by the Act. That is directly contrary to the Chancellor of the Exchequer's statement when he promised the terms of reference of this Committee should include an investigation into all these methods of valuation. When we were discussing this question the other night I made some reference to the injustice that would be done to the agricultural interests by the methods which were being employed, and I said that we really had no notion as to what this valuation was taking place for or what was its object. I said that no doubt there were certain Members of this House who wished to use it for other purposes than those defined in the Finance Act of 1909, and the Secretary to the Treasury said if you want to do that it will be quite easy to alter the methods of valuation. The right hon. Gentleman said:— The Increment Tax does not tax agricultural land, and the Undeveloped Land Tax does not tax agricultural land. When my hon. Friend (Mr. Wedgwood) says we want the valuation for another purpose, there is no difficulty at all, so soon as the House has made up its mind what purpose it wants it for, in adjusting the valuation for that purpose.

Mr. WEDGWOOD

That requires legislation.

Mr. FITZROY

I do not deny that. I was only endeavouring to point out that the Secretary to the Treasury seems to think we can employ all sorts of methods for arriving at the valuation of land according to what purpose we want to use it for when we have arrived at it. The Chancellor of the Exchequer has always adhered, at least he has not contradicted it, to his original statement that Increment Duty should only be charged on the increased value, the bare value of land; therefore we were under the impression that in the valuation of agricultural land the thing to be arrived at was the bare value of the land, or, in other words, the site value of that agricultural land. The Secretary for the Treasury, in the Debate the other night, said:— We are finding the real site value. And then he went on to say:— We are making no deductions, Surely in order to arrive at the site value it must be necessary to make some deductions, and to take into consideration the improvements that have been made on that land, so as to arrive at the bare value of the land, or, in other words, what we understood when the Finance Act was passed the site value would be. Under the Instructions which have been issued by the Treasury you cannot any longer maintain that agricultural land is not liable to Increment Duty. Recently the Central Chamber of Agriculture, and I believe very nearly every chamber of agriculture throughout the country, has passed a resolution protesting not only against the methods which are being employed for the valuation of agricultural land, but also protesting that now Increment Duty can be charged on agricultural land. The Central Chamber of Agriculture, in their report on the method of ascertaining site value of agricultural land under the Finance Act, made the following statement:— An attempt has been made in the Act to exempt purely agricultural land from this duty, and Section 7 provides 'Increment Value Duty shall not be charged in respect of agricultural land while that land has no higher value than its market value at the time for agricultural purposes only.' These words to a layman appear to be quite definite, and to fully protect purely agricultural land from Increment Value Duty; but under the White Paper instructions issued by the Inland Revenue Commissioners, and laid before the House of Commons, the plain meaning has been nullified, because these instructions state that if the land is sold for more than it is worth, Increment Value Duly is payable, and, further, such Increment Value Duty is charged, having regard to the datum line of the assessable site value as on the 30th April, 1909, and as fixed by the provisional valuation made under Section 25. If the White Paper instructions are upheld by the Courts the effect on purely agricultural land will be that if it is sold for more than its worth Increment Value Duty will be payable on the rise in purely agricultural value, and thus the plain words of Section 7 will not have the effect they appear to have to the lay mind. That is not understood generally in this country, but it is the direct effect of the instructions on the White Papers which have been issued by the Treasury, and which are in direct conflict with the intention of the Act of Parliament when it passed through this House. I quite agree with what the Secretary to the Treasury said the other day, namely, that agricultural land as agricultural land at this moment is not liable to Increment Duty being charged upon it, but the moment it exceeds its agricultural value as agricultural land it is liable to Increment Duty, and there at once comes in the question of the methods employed in valuing that agricultural land, because you arrive at an absolutely untrue site value of that agricultural land, and when Increment Duty does become payable, if it arrives at a value above its agricultural value then, of course, the value put on it under these methods comes into operation. This really is a very serious question. Agricultural land has suffered under a long period of depression from which in recent years only has it emerged. It is at the present time an improving industry and is doing fairly well. People are being attracted to it, and therefore this is the worst time of all to hinder that progress by legislation, administration, or any other methods which would create any want of confidence in that industry. Naturally, I shall be told by hon. Gentlemen opposite and by others that there is no lack of demand for land, and that it is very readily sold. It is quite true that since the Finance Act was passed a large amount of agricultural land has come into the market, and large estates have been split up, and the tenants on those estates have readily purchased their farms. That is quite true, but the tenants have not purchased those farms because they wanted to buy the land, but they have done so to safeguard themselves for fear the land might be disturbed by anybody else purchasing that land, so that it is not really a ready purchase on the part of the tenants. In criticising the methods of valuation, which are now being adopted by the Treasury, I should like to quote one case to show the absurdity of the amount of money which is being wasted on this process. There was a case the other day of a farm in Lincolnshire at a place called Wrangle. The valuation of this farm was brought before the Referee. In the course of cross-examination the gentleman who had been sent to value this farm for the Government made this statement. He was asked:— Did you not make a valuation when going round the farm? and he replied:— I was in possession of the rent as a whole. I knew the rent was £280, and with that knowledge I applied twenty-six years' purchase to the net rental. The method employed by this valuer according to his own admission before the inquiry held by the Referee was that in arriving at the site value of this farm in Lincolnshire, all he had to do was just to ask the rent of the farm, and knowing what the rent was he put twenty-six years' purchase upon that, and that constituted the total value of this farm. I shall probably be told that the Referee agreed to this system of valuation. It is quite true that he did, but if that is a satisfactory arrangement to arrive either at the total or the site value of a farm, what is the good of appointing hundreds of valuers at enormous salaries and spending £600,000 a year of the taxpayers' money when you could get the same result by going to the rate-book to obtain the assessable value of the farm, and, after obtaining the rent, put twenty-six years' purchase upon it, and there you have all you want. Yet the agricultural industry is put to this enormous expense in appealing against these valuations, and the taxpayers are put to the enormous expense of supplying the salaries of these paid officials to go up and down the country. I do think we ought to have some much more definite statement with regard to the methods which are now being employed for the valuation of agricultural land and as to whether under this White Paper instruction agricultural land is not now liable to Increment Value Duty which it was not considered to be before. If we can get some definite statement on those points from the Financial Secretary to the Treasury, in the absence of the Chancellor of the Exchequer which we so much deplore, we shall have done something at any rate to convince agriculturists who are getting very uneasy with regard to these questions that things are not so bad as they thought.

Mr. J. M. HENDERSON

All taxation should be certain, and I know nothing more uncertain than the result of this Increment Value Duty. There are any number of lessees who have received valuations, and I defy them to say what is really the value of their interest in their lease. Nor can they say at what price they would be able to sell. I do not think the freehold agricultural holders have had much to complain of. This tax was introduced on the dictum of John Stuart Mill, but he never suggested or thought that agricultural land should be left out. I never suggested that a man who had bought an estate at a larger price than the value worked out in 1909, nor would it be right that he should pay Increment Duty if hereafter he sold it at a less price; but during the last ten years or so there are many men throughout the country who bought land, say at £10,000 and have been able to sell it at £20,000. [HON. MEMBERS: "Not agricultural land."] Yes, agricultural land; I know one estate which was bought by a man who sold it for double the price he paid for it. If agricultural land rises in value and it is sold hereafter at double the price a man has paid for it, or at double the value he put upon it when he inherited it, I see no reason why it should not pay Increment Value Duty. There is one case in which agricultural land is injured. We will assume a man in 1909 had 100 acres which were valued as agricultural land at £30 an acre, or £3,000 altogether. He sells it for agricultural purposes to B at £50 an acre, or £5,000 altogether. Hereafter B sells it to C, for building purposes, for £100,000. What happens? B has to pay increment, not from £50 an acre, but from £30 an acre; but when A sold it to B he paid no Increment Duty, because it was for agricultural purposes. When B sells it to C for £100,000 he has to pay Increment Duty from the datum line. If that be so—and I contend it is so according to the Act—I say it is wrong and cannot be justified.

With regard to urban land, when the Valuation Bill was brought in for Scotland by Lord Shaw he said that all it required was another column in the return; and before the Select Committee in 1906 Mr. Harper, who is always cited to us as a very great authority, undertook to value the whole of London for £25,000. Instead of that we have got an extraordinary system of valuation, going into all sorts of questions. I have seen surveyors' returns with about forty columns reaching about a yard, and all sorts of things valued, such as trees and shrubs, goodwill, and things quite unnecessary to have been valued at all. It comes simply to this: A valuer makes a number of calculations, and he sends in a value. I am speaking from personal experience. I have gone to the valuer in every case and have got him practically to admit that his figures are wrong, and he has accepted my figures. The other day a man wrote to me from the North of London. He said, "I am not known to you, but I see you have taken some interest in this question, and I would like to tell you what the valuer said to me about some property which I bought. I bought twelve cottages and paid £225 each for them, subject to a mortgage of £150. I sold one last year for £235. The valuer valued them at £170. I wrote to him protesting, and said they ought to be £225. He said no, but he would not mind stretching it to £190, and he put them at £190." I referred this owner to the Act, under which he could go back as having bought within three years. Three months afterwards he wrote to me that it was all right. This valuer did not seem to inquire. Why did he not know when the man bought? The moment the mortgagees saw the valuation they said, "£170! That is no security for our £150; we will call in our mortgage." That happens constantly.

This valuation, as a matter of fact, is based on a fetish, and the fetish is a site value. What does it mean? It means, so far as I can make out, that it is introduced as a sort of sop to the single taxers. They have a notion that somehow or other you ought to relieve buildings from all taxation and only tax the land on which the house is built. Therefore, the whole of this Section is put forward with these very intricate calculations. It is, as I described it before, an algebraical equation. The site value, so far as urban property is concerned, has really no existence apart from the building. What is a site value? It is the value of a piece of land which can be acquired for a building, and the governing factor is the rent which the building put upon that site will produce. A man wants to buy a site in a city for a speculation or investment. His valuer would say, "Here is a piece of land, what sort of building can I put upon it? I can put a building so many storeys. There is a local demand for rents at so much a room. How much rent will the whole fetch? So much. What would it cost to build? So much. Interest on that? So much. I can therefore afford to give so much for the site." The building which is capable of being put upon a particular site dominates the site value, and you cannot get away from it.

In urban property the building, whatever it may possibly be, dominates the site value, and therefore this attempt to eliminate the buildings altogether and to get at this extraordinary thing which is called an original assessable site value is costing the country millions. Mr. Harper said it would only cost a few thousands, and it need not have cost more than a few thousands. Why should you not have said to every man, "Send us particulars of your property and tell us at what you value it? We will not undertake to accept it; we will check it, just as we do the valuations sent for probate purposes, and we will reserve to ourselves the right to challenge it." It has come to that now; that is what they are doing. After all their calculations a man, if he knows what he is about, simply goes and says, "That is wrong," and he shows why it is wrong. There are not many appeals because they have practically given in to the demands of these people who understand it to have them put at a proper valuation. The Scotch valuers have gone strictly and literally on Sections 25 and 26; they have worked out that problem algebraically and have come to a great number of minus quantities. The Scotch Courts, however, have decided that a minus quantity is a figment and that you cannot have anything to work less than nothing. What has my right hon. Friend done in England? There are no minus quantities in England. What they do is this: Take the case of a ninety-nine years' leasehold with a ground rent of £15. The ground landlord could sell that at say twenty-two and a half years' purchase = £337 10s. To the lessee however the valuers may value the ground rent in the return as only £250, so that if the lessee sells the lease for anything larger than the gross value in the valuation, they assume at once that it is the ground value that has risen. Although it has risen, it may not have risen up to the point of the real value which they have assessed against the ground landlord. Still you have to pay on the rise because the value of the site has risen in the meantime, only it has not risen to the amount which he is annually paying. I say that is wrong.

Mr. AUSTEN CHAMBERLAIN

Would the hon. Gentleman mind trying to make his point a little clearer to us? I am sure he will recognise that I do not intend anything discourteous. What he was saying interested me very much, but I do not think I have grasped the particular case he has made, and I would ask him to be good enough to explain it a little more.

Mr. HENDERSON

I admit it is a little technical.

Mr. PRETYMAN

I have always understood that the valuation is not made separately upon the leaseholder or freeholder, but must be made under the Act as the value of the fee simple in possession of the owner. That is one difference. Will the hon. Gentleman tell us how a separate valuation can be served upon the leaseholder and another upon the owner? That seems to me to be extraordinary.

Mr. HENDERSON

What I do say is this. Say you have got a man paying £10 ground rent. They assume in the valuation that the man ought not to be paying £10 ground rent, because the adjacent property, if he now took it, could be got for £5; therefore, that the value of that ground is £5 per annum instead of £10. That man is paying £10. It is worth £10 to him for ninety years, and surely if a man has got to pay £10 for a piece of ground for ninety years, it is impossible to say that that piece of ground is not worth £10 a year. Instead of that, they say it is only worth £5. That is exactly what has happened in Scotland. They said, therefore, that there was a minus £5. The Scotch Courts said "No; if it is not worth more than £10 to the lessee, you must take that at £10 and nothing less." Instead of that the valuers say £5, and they bring out a minus quantity. They say that the ground rent is worth so much less. Therefore if a man sells a leasehold for a little more money than they value the whole at now, they say, "That is an increase on the ground value," although the ground value has not come up to the price winch the man has paid, and has been paying for it up to that time. That is the position. With regard to these minus quantities, one can only hope that the Treasury will see their way to instruct their valuers to treat all ground values on leases at the value which the man pays, and has to pay, especially if the period goes for thirty or forty years. Everyone knows that a reversion at the end of seventy years is worthless.

Another thing which I wish to mention relates to Undeveloped Land Duty. Section 16 of the Act provides that where a man has expended so much on a road or sewers—say, £100 per acre—that that land to that extent is free from Undeveloped Land Duty. There is a case which I have in my mind. Under a scheme of a local authority a man, instead of building on a 30 ft. road, agrees with the council to give up so much more land to them, and to widen the road by 20 ft. to 50 ft. One would naturally think that that would be treated as expenditure on the road. A man makes a road or gives the land which is of that value to widen the road. So far as he is concerned, it need not necessarily be widened, but there is that expenditure of £100 per acre. They say, "It is not the same thing at all, and therefore we do not relieve you from Undeveloped Land Duty, notwithstanding the fact that you give £240 on two acres, which is £120 per acre." They allow you nothing for that. I think that is against the spirit of the Act. What I object to is that, whatever the Inland Revenue people may say, they are deliberately trying to value the land so that it shall be certain to attract duty. I have been forced to that conviction that they are deliberately trying to attract duty by undervaluing. I will give the House another case dealing with the element of cost, the absurd cost that this valuation is implying. It was a case, in which I was acting myself, of an improved ground rent. They were certain clients of mine. They had about fifteen houses, and each one of them had an improved value. That is to say, the ground rent was £25, and their improved ground rent was £25. The tenant had bought the house for several thousand pounds subject to a ground rent of £50. My client had to fill up the forms or I had to do it for him and charge him. What earthly increment can there be on an improved ground rent? He receives £25 extra every year until the lease is out, and when the lease is out he has nothing more to do with it. I can understand the value of that going down, but in no conceivable circumstances can there possibly be an increment.

Mr. CASSEL

They charge it upon the buildings.

Mr. HENDERSON

No, he gets £25, and under no conceivable circumstances can he ever get any more.

Mr. CASSEL

Increment has been charged upon the value of the building, and that would cover it.

Mr. HENDERSON

There cannot be an increase upon it. The building has nothing whatever to do with it. It is the assessable ground value. All these intermediary lessees throughout the country; there are thousands of them; if you take Regent Street you will find three or four sub-lessees to many of the houses; all these men have gone to a surveyor and agent and have been put to the expense of being joined in the valuation. I myself communicated with the surveyor and I said to him, "Can you see any circumstances in which there can possibly be an increment to my client?" He said, "I admit I do not see it at all." I said to him, "What on earth is the use of putting us to all this trouble in the filling up of this form?" As a matter of fact the whole thing was perfectly simple. We could have had the valuation, and it would not have cost one-tenth of the money. It could have been done by now, and we would have known what was going to take place. I think that the Government ought to set about remedying this irksomeness, which has been felt throughout the country, on this particular subject. It is quite true there is more building going on just now, but that is in the heart of towns. There is no more building, there is ever so much less building, of small property. No man will be such a fool as to put down a penny-piece upon houses and land in the suburbs. When you remember that there are 80 per cent. of the people living in hired houses, you have got to find people who will put forward money for building houses. That is the difficulty. There is more building going on in London, but it is among the big banks; it is not workmen's dwellings or the poor class of property at £30, £40, or £50 a year rental. There is very little building of that kind, and you cannot blame a man for not doing it. If you are going to say to a speculative builder, "You are not going to make a sufficient profit on the land at all; you will have to look for your profit on the building," he will say, "Then I will have nothing to do with it." Fancy a man relying upon a wasting subject for his profit! He would be a foolish man to do it. He would not do it. He must rely upon making some profit upon the land by buying it wholesale and selling it by retail. If you do not allow that, if you worry him with this Undeveloped Land Duty, so that he does not know whether he is or is not likely to make a profit, there will be no investment in that security. That is the kind of security which is very necessary for extension of building operations, not only for the working classes, but for people above the working classes, who never have yet, and never will I believe to any large extent, invest any money in the houses they occupy. There are 80 per cent. of them now. If the houses that men occupy were their own, it would be a simple matter. The whole of this Act has gone upon the principle that the houses are their own. They have forgotten the man who buys wholesale and sells by retail, and until it can be shown that this business means a profit no more of it will go on.

7.0 P.M.

Mr. BOYTON

The great increase and the alarming proportions of this Vote require that we should examine it in this House. The expenditure last year was something like £530,000, and the Estimate for the coming year is in round figures £620,000, about £100,000 more than last year. It will be interesting to see how this increase is made up. I find that in respect to salaries, wages, and allowances £553,000 are estimated to be expended this year, and last year the expenditure was £477,000. This year £76,000 more will be spent on salaries, wages, and allowances. With regard to travelling and subsistence allowances, last year £30,000 was paid and this year £47,000 is estimated, an increase of £17,000. In such a detail as the cleaning and taking care of offices the expenditure is to be £1,870 more. In miscellaneous expenses £3,500 more will be expended. The Estimate for the coming year is £630,086, or a total increase of £99,000. I do not find any item for rent or office expenses, other than the cleaning and taking care of offices, and an allowance for use of private rooms for official purposes. I should like the Financial Secretary to tell us the amount likely to be expended in rent and offices, and on what Vote that is provided for. If it is to cost the State £630,000 in one year for officials to make these valuations, it is costing individuals at least double that amount. I estimate that at least £1,250,000 to £1,500,000 must be expended by private individuals in private costs. I believe the House was told on the passing of the celebrated Budget that as objection was raised to the expense the Government would make the valuation. The Government are making the valuation, and I anticipate that the expenses are very much more than its promoters anticipated. It is interesting to notice the number of extra clerks that are to be taken on. I find that some 200 junior clerks and 120 other clerks are estimated for as being necessary in the coming year. I do not know whether that is with regard to the speeding up which hon. Members below the Gangway opposite advocate, but it is a considerable accession of strength for speeding-up purposes. I should imagine that for the 320 young gentlemen who are to be engaged it is a little god-send, because in the ordinary offices their services were not required, owing to the effect of this Act on dealings in property. If it had not been for this gratuitous windfall, these 320 young gentlemen might have had to go to Canada.

From business connections I take a warm interest in these young gentlemen, and I wish them well. I have nothing derogatory to say as to their capacity for undertaking these duties, neither have I anything derogatory to say about the staff generally, but the last speaker referred to the chief valuer, Mr. Harper. He also referred to the evidence Mr. Harper gave before the Royal Commission on Local Taxation in 1901. The Commissioners stated in their Report that when he was examined on the first occasion he stated, on an estimate made on the spur of the moment, that he expected the ascertainment of site value in the given quinquennial epoch, once taken and started, would cost less than £25,000, but he subsequently wrote to the Commission saying that he thought an assessment of each separate site value in the county of London, if carried out by expert valuers, not necessarily of the most eminent rank, would probably cost £40,000, if it had to be done under conditions similar to those governing the present quinquennial assessment. He added that that was exclusive of any cost of litigation which might arise out of the valuation. On the occasion of his second examination, he stated that he had no hesitation whatever in saying that it would be possible to get valuations of the 590,000 hereditaments in London at rather less than 1s. a piece. Perhaps in his reply the Financial Secretary will be able to tell us the number of hereditaments in London now, because it has materially increased since 1901. Whatever the figures are, from an administrative point of view they must be very careful in assuming that Mr. Harper, eminent as he is, is entirely to be relied upon. In another part of the evidence Mr. Harper gave before the Royal Commission, he said it was very easy to arrive at site value; that he had walked over the area of the intended Strand improvement in one day, and had arrived at the general idea of what the value of the land to be taken was, and in a few hours on another occasion he was able to confirm his figures. Most Members will know how very slow the progress of the Strand improvement has been. One wonders what would be the Bill against the London County Council for Undeveloped Land Duty.

To show the difficulties which Mr. Harper might have foreseen, and which have actually happened in that area, I will cite the ease of the Gaiety Restaurant. It is a handsome pile of buildings of monumental character. It was originally leased to the Gaiety Restaurant Company, it is understood, at the very low ground rent of £6,500, in consideration of their being removed from another site. The building was put up at a cost of £120,000, and the Gaiety Restaurant having failed, the London County Council, as ground landlords, found themselves a short time ago with this beautiful building on their hands. They put it into the market, and it was put up for sale. The Official Receiver gave it back without qualification or condition to the London County Council as ground landlords, and now all they have been able to do is to let that beautiful site and that beautiful building to the Marconi Company for £6,500 a year. That is an indication of the difficulty of arriving at site value. In view of the very optimistic evidence which Mr. Harper, the chief valuer, has given on so many occasions, I would warn the Government not to be led away altogether by his suggestions, and not to place too great dependence upon his administrative ability, great though his experience of these valuations may be. I am not attacking Mr. Harper in his official capacity, but I am citing these cases as an indication of the practical impossibility of valuing site value as defined by the Act. The valuers are merely arriving at hypothetical opinions as to what is the value of land.

Mr. RENDALL

I am desirous that there should be at least one Member from this side of the House, who, having some experience of the administration of the Land Taxes in this country, is able to speak favourably of that administration. One understands hon. Gentlemen opposite, after spending long months in opposing the Budget, and then losing one or two elections upon it, feeling very sore about it. They say they do not like the administration because it has failed. If the administration had succeeded, and if their clients—for a large number of hon. Gentlemen who speak from the other side are land agents or agents for property owners—were satisfied, they would probably find a far stronger case for criticism. Therefore, I do not think we need worry very much because they say it is bad. [HON. MEMBERS: "Hear, hear."] You want to find some reason for abusing it, and that rather detracts from the value of your criticism. We know the underlying reasons for it. The hon. Member for the Now Forest Division (Mr. Perkins) spoke of the administration of the Act, and complained bitterly of what he called the "young valuers"—young men who are going to strange parts of the country and trying to value land. I suppose he meant to imply that all the information, not to say prejudice, was possessed by the old land agent, who had lived fifty or sixty years in the district and who knew all the local landowners, for whom he has acted and by whom he has been paid. I should like to know why a valuer is a worse valuer because he is young?

Sir GEORGE YOUNGER

What about experience?

Mr. RENDALL

Do you call a man who is forty-two young? The last speaker referred to "young gentlemen." As a rule we use that phrase of schoolboys. It is hardly usual to apply the term to responsible men who have passed excellent examinations, been employed in most responsible posts, and been selected by the Government for these particular posts, which they are filling most efficiently. I have had in a small way connection with a firm which does a certain amount of land speculation, and I happen to have had the opportunity of meeting a great many of the land valuation officials during the last year or two in the South of England. I have not found them the sort of persons who would alter their valuations, as was suggested from the other side, from £50 to £150, or who would urge upon the owners of land that they should value very low, as was suggested by my hon. Friend (Mr. J. M. Henderson).

Mr. J. M. HENDERSON

I did not say that they were asking the owners to value low. I said they did value low.

Mr. RENDALL

I understood the hon. Member to say the great object of the land valuers at present was to so value that there should be duty payable, and he went on to say their great object was to value low. That is all I intended to say. If I said anything else, I withdraw it. In regard to that statement, we can all only speak from our personal experience. I have had some hundreds of transactions in the last two or three years with land valuation officials in various parts of the South of England, and I have never noticed the slightest desire on the part of the officials to make the valuation low. I have noticed on all occasions that they have most carefully gone into the precise situation, frontages, and so on, in great detail, and as the result of perfectly friendly conversation, as a rule we have in nearly every case, been able to agree on a valuation. I most strongly insist that in all the transactions I have had with them, their conduct has not only been fair on the part of a person acting for the Government, but it has been fair in regard to the transaction with which they have been dealing. They have not been trying to push me or the person for whom I might be acting, and they have not been anxious to try to rush a decision, but have been perfectly willing to listen to all the facts which were put before them, and when they have heard the facts, they have all been willing to come to a perfectly fair decision. I am at a loss to understand where hon. Members who have criticised these gentlemen so harshly have got the information on which they base these extraordinary attacks on Government officials. They ought to communicate it to those who are responsible for them. We ought to have the names of persons who will put on a valuation of £50 and raise it, at the request of the owner, to £150. If these persons are so incapable the information ought not to be used by hon. Gentleman blowing off steam here or some where else in the country, but the actual facts ought to be put in black and white, and they ought to communicate with those who can call these officials to order or put others in their place. There is no reason to run the administration down for purely party purposes. I do not suggest that hon. Members opposite are doing so, though it is difficult to resist that feeling after listening to them.

Then an hon. Member opposite complained of a White Paper instruction, which, he said, was practically striking out the law of the land in regard to the agricultural value of land. He quoted the Act, and said that in regard to agricultural value land is not to pay Increment Duty, but that under the White Paper instruction which has been given to valuers duty is payable on agricultural land. He entirely failed to prove that contention. If agricultural land is sold at a price greater than its value for agricultural purposes, and the land is used for other purposes, of course Increment Duty is payable. It is not payable on the land as agricultural land, but it is payable on the land for the industrial purpose to which it is going to be put. That is in accordance with the Act, and I am quite unable to understand how the hon. Member found in that White Paper instruction anything to alter the law as contained in the Finance Act. Then, having shed the orthodox tear about agricultural land, and said that everyone has been suffering for years, he went on, far more honestly than most hon. Gentlemen opposite do, to admit that agricultural land had been going up in value and that landowners were doing much better. We must be thankful for his informing us of that, but, of course, we all know it to be a fact, that it cannot be proved that the Budget has reduced the value of agricultural land. No such contention could be upheld by any evidence which can be obtained in any quarter. In regard to other land, I am bound to say, as one who has bought and sold a large number of plots of land in the last two or three years in various towns in the South of England, I have not been able to find any evidence of this tax having affected the price of land, but I admit that there are among owners of land an extraordinary number of very stupid people who are fond of listening to speakers sent out by the Land Union and bodies of that kind, who frighten them out of their wits. No person is more easy to frighten than one who has a little land or a little money, who does not know a great deal of politics, and who suddenly comes rather late in life to have a little leisure. During the last three years he has been foolish enough to spend some of that leisure in listening to these Gentlemen who have been telling us about the wickedness of the Land Taxes, how awful the administration is, and what dreadful things will happen to all the people who own land. That sort of person is a little nervous to start with, and by the time he has heard a Land Union speaker for half an hour he does not know whether he will find his house or garden at home when he gets there.

I have listened to the hon. Gentleman (Mr. Pretyman), and have often been unable to conceal the tears which have been gathering in my eyes as I have heard him discussing the position of the landowner in this country, the awful condition to which he has come, the stagnation of the building trade, and all the rest of it. This crabbing of the Land Taxes—the same sort of thing that we have had in regard to the Territorial Force—this continual abuse of all those who are administering it and are responsible for it, is bound to have an effect with a certain number of owners of property and has had a very real effect, and to a large extent it has had an effect on those who have lent money in the past, some of them to builders, and a certain proportion of them have been frightened. When I am told there is no building going on in the country I must ask hon. Members to turn to the Board of Trade Returns in regard to employment in the building trade. If they do they will find there is less unemployment in the building trade than there has been for many years past, and it seems extraordinary that there can be no building and no unemployment in the building trade. That is one of the extraordinary statements which we wish to have explained to us by those who say the Land Taxes have ruined the building trade. I know a large number of speculative builders who are building houses, and I know of persons who are lending money to build houses with, and I have no reason to suppose at all that these builders are ruined or are about to be ruined, and I have no reason to suppose that the persons who lend money to those builders are not going to get their money back. It is true that in certain parts of the country building has not gone forward in the way it was going a few years ago, but that is not owing to the administration of the Land Taxes. It is owing to the fact that we have fashions in regard to towns. We have an immense going to and fro of the working-class population. Whereas you have an immense amount of building in one town for a few years, fashion or business or some other cause turns the population in some other direction, and we have the building going on there, and it is quite possible, if an hon. Member happens to know one part of the country only, to remember large building going on there a few years ago while now there is very little. If he can find such a place I would find him another town where building had been going on for five years, and was still going on, and towns where the people are still marking out plots and making roads and acting in every way as persons who had no belief at all in the administration of the Land Taxes injuring the property owner. I could show a town in this country at any moment where building is going on, large numbers of estates are being cut up and developed and the builders building on them, though I do not think the speculative builder is yet born who will say he is making more than he wants or that he is unduly prosperous. When hon. Members see builders steadily building year after year, and when they die or disappear others building on the same place, it is a little strong to say that the speculative building trade is dead, that no man would think of entering into it, and that no lender will lend money in regard to it. I know lenders who do lend and I know builders who build, and I think the hon. Member was speaking for localities which I know nothing about, but he certainly was not speaking for the localities which I do know something about.

An HON. MEMBER

What about the London suburbs?

Mr. RENDALL

London suburbs are by no means fair examples. An extraordinary change has come over London in the way of locomotion in recent years—tube railways and so forth—and these changes have made an enormous difference to building in various parts of London. It is far fairer to take ordinary towns which have not been affected in that way, and where the communication between the centre of the town and outside has not been altered, and if the hon. Member takes such towns, taking England as a whole, there is no ground for the contention which has been made that building has ceased and that no one will lend money for it.

Mr. DEPUTY-SPEAKER

Before the Debate goes any further I must really point out that it is getting rather off the proper lines. It is not competent in this discussion to discuss the effect of the Land Taxes. The Act has been passed and is the law of the land, and the only question really open is whether the Government, through their officials, are properly administering the Act.

Sir A. GRIFFITH-BOSCAWEN

I cannot congratulate the Government on the defence we have just heard of their administration. The hon. Member seems to think we are crabbing and criticising the Land Taxes and their administration purely for party purposes, and that we are animated by that motive alone in saying the administration is bad. Does that apply to the hon. Member (Mr. J. M. Henderson)? Is he acting for party purposes? The hon. Baronet (Sir A. Markham), time after time, has taken precisely the same line. I am sure he is not acting for party purposes. He has been trying to do what we are trying to do, to show where the administration is bad and is having bad effects. The hon. Member opposite, following the example of the Chancellor of the Exchequer, tried to prove that the building trade had not suffered by this legislation, because, he said, the number of men unemployed in the unions was less now than a few years ago. Is he not aware that there has been an enormous decrease in the membership of the unions? The Chancellor of the Exchequer used precisely the same argument in introducing the Budget in 1911, but he forgot that in 1908 twelve of the principal unions had a membership of 154,000, while in 1910 the same unions had only a membership of 135,000. That shows that the actual percentage of employed in the unions was less, and that the number of men unemployed was infinitely greater, and, of course, it shows that the building trade had suffered, and that they employed far fewer people. You cannot get away from that argument. The hon. Member opposite spoke about the valuation, and seemed to think that it was very competently done. Whether it was done by old or young valuers I could not make out from his statement. I have had some experience in this matter, and let me say that I have heard nothing but condemnation of the general manner in which the valuation has been done. I cannot think what earthly use the valuation will be when you get it. We were told that it was to be a sort of Doomsday Book, and that every local authority—

Mr. WEDGWOOD

Is this in order, and shall we be allowed to reply?

Mr. DEPUTY-SPEAKER

I think that in so far as the hon. Member is referring to an Act which was passed some years ago he is not in order. I would say that it is not enough merely to mention the word "administration" in order to bring oneself within the limits of order.

Sir A. GRIFFITH-BOSCAWEN

I will not merely mention the word administration, but I will point out how the Act has been administered. We were told that this valuation was to be a sort of Doomsday Book, or register, so that local authorities and others might know precisely the value of houses and buildings, and that they might use that value. If it had been properly done, that might have been the case, but is it properly done? Let me give an example. The London County Council has been acquiring some slum property. It was understood that this Government valuation, which might have been properly arrived at, would have been of the greatest use in ascertaining the value of slum property. So much was that the case that hon. Members opposite when discussing the Bill upstairs proposed that the Government valuation should be taken as the value which should be paid in all cases where slum property was compulsorily acquired. What is the use of the Government valuation? As a matter of fact, in the particular slum property I am referring to the London County Council has been able to buy large parcels of land at considerably less than the Government valuation time after time. That shows that if the Government valuation had been used for the purpose for which hon. Members opposite wished to have it used, the London County Council would have been very largely mulcted. [An HON. MEMBER: "It was valued too low."] The hon Member says it was valued too low. Bare land is valued low, but where there are buildings upon it it is put high. Bare land is put high, and the buildings put low—in this case it is land and buildings. I wish to point out that the Government valuation has been so badly done that it is perfectly useless for the purpose for which we were told it was intended.

I wish to bring before the House one of the worst effects of the present administration of the law. It is making the housing difficulty, whether in town or country, infinitely greater than it was before. You have practically destroyed the speculative building trade as regards workmen's houses. Of course, it is quite true that if you go to this town or that town, it can be shown that building is going on, but it is not the building of workmen's houses. One of the reasons why we have this terrible house famine in many country districts—we have a house famine also in many large towns now, and we are going to have a house famine in London—is on account of the administration of the Act, and because of the way in which the Government in the Lumsden case and others are taxing the profits of builders. Let me show how that is operating. I have here an extract from a statement by Mr. Bernard Alderson, a well-known land agent in Birmingham, where there is at present a house famine. He says:— I am an estate agent, whose business it is—in normal times—to build modern houses for artisans. … In Birmingham we are faced with a house famine. The people have nowhere to live. … I have 400 small houses on my books, rents from 4s. 6d. to 8s. 6d., but not one to let. … The ordinary man cannot understand this state of affairs. He is perplexed, because when there is a good demand an adequate supply usually follows The housing question, however, has been so heavily dealt with by our politicians that builders and investors have lost confidence, and now no one has the courage to build … and those who own property or build houses are living in daily dread of further penalties. The Government, having studied Henry George, have taxed land, and what has been the result? They have spent many thousands of the taxpayers' money on officials, but the revenue has been most disappointing and must have destroyed their cherished hopes. They have depreciated property so that by some means they may claim increment front their victims—usually small owners and builders. So frightened have thrifty people become that they will not buy property, and if investors will not buy builders cannot build.

Mr. DEPUTY-SPEAKER

That seems to me to deal with a matter for legislation. It arises out of the Budget of four years ago.

Sir A. GRIFFITH-BOSCAWEN

It arises out of the Budget in the first instance, but it is a matter relating to the administration of the law whereby builders' profits have been taxed instead of the bare value of the land. I do not know whether I can go into the case which was dealt with by the House a few days ago. The fact is, as has been stated in this House over and over again by the Chancellor of the Exchequer, that the Government only intended to levy Increment Duty where there had been an increase in the bare value of the land. But what the Government are doing is what they did in the Lumsden case, which was lately decided in the Courts. They are levying Increment Duty where there has been no increase in the value of sites, and where adjoining sites can be brought for—

The FINANCIAL SECRETARY to the TREASURY (Mr. Masterman)

On a point of Order. May I ask whether the hon. Gentleman suggests that in the administration of the law the officials are doing something which is not legal under the Act? If so, I should say that that is a legitimate subject for controversy. But if they are carrying out what is the legal interpretation of the Act, I say that is not a legitimate subject for discussion.

Mr. PRETYMAN

The question of the actual legality does not arise. What we are complaining of is that the administration of the Act, whatever the law may turn out to be, is in direct contrast with the pledges which were given to the House of Commons as to what the administration would be. Ministers gave direct statements as to how they intended to administer the Act, and as to what the meaning of Increment. Duty was. We are not now discussing what will be the interpretation put on the Statute by the Courts of Law. Our complaint is that the administration is contrary to the pledges which were given as to how the law was to be administered. I submit that that is absolutely germane to the question.

Mr. DEPUTY-SPEAKER

It seems to me that this is what was debated on the Address. It was in order then, no doubt, because it was merely a claim for an amendment of the law. What was said by Ministers previous to the passing of the Act has no necessary connection with the administration of the Act. It must be pointed out or claimed that some administration under the Act is contrary to the interpretation given by the Courts in order that it may be made the basis of a complaint now. On the Consolidated Fund Bill the same rule applies that applies in Committee of Supply.

Mr. PRETYMAN

May I submit that that is the exact point, namely, whether there has been a direct act of administration which is now held by the Law Courts to be right, although contrary to the pledges given by the Government? A White Paper of instructions was issued in which it was definitely claimed that Increment Value Duty shall be payable when property is sold for more than it is worth. By the judgment of Mr. Justice Horridge that act of administration has been upheld, and his judgment stands that it is now law. We are now discussing the administration and the White Paper instructions, which have been held to be legal.

Mr. DEPUTY-SPEAKER

Then the hon. Gentleman is not claiming that there is any departure from the law of the land?

Mr. PRETYMAN

Yes, Sir, we are.

Mr. DEPUTY-SPEAKER

The Court has at present held that it is law. It is that act that you are complaining of. It is purely a case for an alteration of the law, and not one for complaining of the wrong administration of the law.

Mr. JAMES HOPE

May we not discuss the interpretation which, in virtue of the discretionary power which for the moment is admittedly legal, the Commissioners of Inland Revenue have placed on their powers under the Act, and in pursuance of which they have placed on their subordinates certain instructions.

Mr. DEPUTY-SPEAKER

I think hon. Members must show some wrongdoing on the part of the Government or their officials to bring themselves in order in Committee of Supply.

Sir A. GRIFFITH-BOSCAWEN

What I was trying to point out was that all this had been in consequence of the instructions issued by the Government. The Government need not have issued these instructions. If they had not issued the instructions, the officials would not have proceeded to endeavour to levy Increment Duty in those cases, and if they had not done this, the matter could nevr have arisen in the Courts or elsewhere.

Mr. DEPUTY-SPEAKER

Perhaps the hon. Member will show in what way these instructions were inconsistent with the law.

Sir A. GRIFFITH-BOSCAWEN

I do not say that they are. I think that the matter is really sub judice. One case has been tried, and I believe other cases will come forward, but what I object to is that the Government has issued instructions which have greatly prejudiced the building trade and done a great deal of harm in the country. If I am not in order in pursuing that topic, I do think that we are entitled to bring before the House the effect of the administration of the law by the Government. I claim that in this matter in particular they have made many of us on this side, and some on the other side, feel that the question of the housing of the working classes has been made infinitely more difficult in town and country. What I wish to ask is that the administration of the law, which undoubtedly is capable of a great deal of latitude, may be carried out in such a way that those evil effects will not follow. The matter is one of supreme importance in connection with the housing question. We are constantly told that it is a question of land. It is a question of land to a very small degree. It is a question of building. [An HON. MEMBER: "Capital."] My hon. Friend says "Capital"—that is the same thing. If you cannot get capital into the building trade there will not be building. The result of the law is that capital has been withdrawn from building. The administration of the law as regards building makes all the difference in the supply of houses for the working classes. The London County Council has been developing certain estates in the neighbourhood of London for the working classes. I need hardly say that land in the neighbourhood of London is much more expensive than in country districts. In the case of one of these estates the average rent per room per week is 2s. 6d., and of that only 1¾d. represents the cost of the land. All the rest is the building. The great difficulty in providing the working class with dwellings is not the matter of the land, which is a very small item. It is the question of buildings.

Mr. WEDGWOOD

Surely the hon. Member will admit that rents are much dearer in London than elsewhere, for the reason that the value of land in London is much higher than elsewhere.

Sir A. GRIFFITH-BOSCAWEN

The cost of building is a great deal higher in London, and it has been infinitely increased by the administration of the Government under this Act. I quite agree that laud enters into the cost of the house, but my point is that the amount of rent represented by the cost of land is infinitely small compared with the amount of rent represented by the cost of building and other expenses. The Government, by the action taken under the Finance Act, have enormously increased the cost of buildings, and therefore the rents which the working classes have to pay. By starving the building trade, by taxing builders' profits, by creating general insecurity by their administraton, they have greatly aggravated this evil. But inasmuch as if I wander further into this question I shall be out of order, I merely conclude by saying that whatever the hon. Member who spoke last may say, I, for my part, do not criticise this administration in any party spirit, but because I believe that it has done a vast amount of harm to the question of housing.

Mr. M'CURDY

I find it a little difficult to accept the statement of the hon. Member who has just sat down, desirous as I should be of accepting literally anything which he tells the House, when he says that these criticisms on the part of the Opposition are entirely free from any party spirit. From the time I entered Parliament I have been very much interested in the operations of the Land Taxes and particularly the Increment Value Tax as they have worked out in practice. Some years ago I expressed from these benches a feeling of apprehension as to what would result from the administration of these Increment Taxes in affecting the operation of the building trades of this country. My own Constituency in Northampton enjoys the distinction, I believe, of having a larger percentage of its population individual freehold owners of their own houses than can be claimed by any other town in the country. Certainly, one of the operations of the Land Taxes and the increment Value Tax, as to which I myself felt considerable apprehension as to how it would work out in practice, was its effect upon the sale or transfer of a small freehold property which represents the investment, say, of one of my own electors. We have in Northampton two very large and flourishing building societies. I believe, though I am not sure on the point as I have not inquired, that one of them in name allies itself with the party which sits upon those benches, and the other society in name allies itself with the party which sits on these benches. But beyond the fact that one building society uses the word Conservative as part of its title and the other makes a similar use of the word Liberal, I imagine that politics very properly have had nothing to do with the operations of those building societies.

Each society, year by year, creates a considerable number of fresh freehold owners of house and land property in the borough of Northampton. Some years ago I seized the opportunity extended to me by those two building societies to go down to Northampton and attend a conference of the societies to discuss the operation of the Increment Tax and the Undeveloped Land Tax imposed by the Chancellor's Budget. My apprehension as to what might happen in the actual administration of these taxes were well known to my Constituents. I went down and asked the secretary, who is a very respected leader of the political party which sits opposite, to furnish me as soon as possible with any instance of hardship arising under the Act in its actual administration. That gentleman is a member of the legal profession, and allied in politics with the party sitting on the opposite benches, and I must say candidly that I have been surprised that from that date to this no such actual instance has yet been forthcoming, although my request received the fullest publicity in the Press. That is one reason why I somewhat doubt the genuineness of these complaints that are made about the operation of the Increment Tax and the Undeveloped Land Duty—it is so extremely difficult to find a concrete and tangible case of injustice which we can consider. There is another reason why I cannot now attach so much importance to these criticisms as I did at one time.

I have now been a Member of this House for some three years, and certainly on three occasions, and I am not sure if it was not on four occasions; when the Finance Act for the year was being brought up, and any injustice in administration or interpretation of any kind could be made the subject of remedy by an appropriate Amendment being put on the Paper and discussed in Committee. This has not been done. It is some two years ago since we heard the hon. Gentleman opposite refer in very eloquent terms to what was alleged to be a gross example of maladministration, the Richmond case in Yorkshire. If there could be a striking example, I should have thought that that was one, because that is the case in which there was every element to touch the compassion of the sympathetic heart, and it was useful as a platform case in the country. It was the case of two orphan ladies whose sole means of support was a piece of property which their father purchased for £500, and on which he spent another £100. He then sold it for £500, showing a loss of £100 on the transaction, and then the valuers, whether properly or not, put in a claim for £20 or £25 duty. That, on the face of it, seems to be entirely indefensible. What the defence was I do not know from that day to this, but this I do know, that for three years the hon. Gentleman opposite, in the House and out of the House, has been telling the people of the country—the investing classes, the financial classes, the builders—that by reason of these land taxes and their cruelly oppressive administration, the building trade has been hampered and small property owners were being oppressed, and yet during the whole of these three years we have not put on the Paper of this House a single proposal for the Amendment—

Mr. PRETYMAN

It is usual to be allowed to contradict a definite statement of this kind. With all respect to the hon. Member—

Mr. M'CURDY

It is not completed yet. They have not, to the best of my recollection—and I have just been into the Library to refresh my memory—put down a single Amendment destined to alleviate the lot of the speculative builder whose profits were alleged to be threatened by the administrative injustice of the valuers, when they come in the first place to value the property, and when they come in the second place to assess the increment. I would suggest to the hon. Gentleman, because neither of us would willingly say what is incorrect, that before he contradicts that statement he should verify his authority. Let me tell him what did happen. I have every reason for remembering it. Two years ago, after many speeches had been made by him and others on those benches as to the iniquity of the increment and its administration in the country, I put down some half-dozen Amendments upon the Paper designed for the purpose, from my point of view, of preventing any possible injustice either to the builder or to the small owner. I say without serious contradiction that no Gentleman upon those benches, either front or back, had any Amendment that was designed in any way to meet that evil.

Mr. PRETYMAN

We have got the statement complete now, and I may be allowed to point out to the hon. Member that the Amendment which was moved for the last two years deals with what was being done in all these cases. It urges in simple terms that the time for objecting to the entire site value should be extended from sixty days from the service of the original valuation to sixty days from the date of the first occasion. That Amendment would have avoided a great part of the hardship both to builders of small houses, and it has been pressed on both sides and has been refused.

Mr. DEPUTY-SPEAKER

Hon. Members should confine themselves to matters of administration and not refer to questions which would require legislation to deal with them. I would again ask hon. Members to apply their minds to administration.

8.0 P.M

Mr. M'CURDY

Perhaps I may be permitted to say in one word that I have not overlooked that Amendment, but it seems to me very far from anything of the nature of an Amendment going to the root of these injustices of which we hear so much in the House of Commons and on the platform. When the opportunity arose, then by one of those agreements between the Leader of the Opposition and the Members of this Front Bench, we were informed that two nights would be sufficient to discuss the whole question of these Land Taxes, involving all these grave injustices to the building trade, and any proper or sober discussion of the sixty pages of Amendments, mostly dealing with agricultural land became impossible, and any reasonable opportunity passed away. Although we continually have had vague charges as to the valuation being too high, and as to improper administration of the Act, on the other hand we never seem to be able to get, either on the floor of the House or elsewhere, any really definite cases of supposed hardship or injustice which we can consider and go into, and in my private inquiries I have not been more fortunate. A much more suitable opportunity for redressing any real grievance is by legislation, because it is not by discussing administration that we can remove injustices as they exist. It is because that opportunity has never been taken by the other side, that I venture to submit to this House that this depreciation of the Land Taxes which has undoubtedly had a very injurious effect both upon the building trade and the estates business of this country, is one which rests upon no very solid or satisfactory basis, and which seems to be mixed up with purely party purposes to a greater extent than the hon. Member who has just sat down is prepared to concede.

Mr. CASSEL

The hon. Gentleman, in the latter part of his speech, negatived what he said in the former portion. He not only said in one part that there were no Amendments, but in the other part he spoke of some sixty Amendments.

Mr. M'CURDY

Not on this matter, but on agricultural land and on liquor licences.

Mr. CASSEL

I can assure the hon. Member I put down any number of amendments, and the reason they were not proceeded with was partly that the Finance Bill of the year was brought in by the Government so late that there was not adequate time for proper discussion. It is to be hoped that the result of the recent case in the Courts will be that we shall have adequate opportunity of discussing these matters on the Finance Bill of the year. The hon. Member also told us that he had experienced no difficulty so far as concerned building societies in Northampton. His experience is not that of the Building Federation of the country, who have entered the most vigorous and strongest protest against the way in which these taxes have been administered, and I prefer the experience of the whole Building Federation of the country to the experience of the hon. Member. The hon. Gentleman asked us for cases of hardship. I will give him a new one to-night, and I hope that the Secretary for the Treasury will deal with it. It is the case of Mrs. Catherine Walker. Mr. John Walker, the owner of the small property, died on the 10th January, 1911. The property was in Dalry, in Scotland. It had a frontage of 154 feet on New Street; the lower storey was used as a draper's shop, and the upper part was occupied by Mr. James Brown Walker, the brother of the deceased. The rent was only £38; it was quite a small property, valued at £400, that is to say, the land and building were valued at £400; the land alone, the site value, was £20; that would leave the buildings at £380. That property was sold in June, 1911, for £650. Everybody in the case, the referee and the judges and everybody else, assumed that there had been absolutely no change in the value of the buildings or land, and the whole case proceeded on that assumption. What did the Crown do? They tried to make this woman liable for Increment Duty in respect of the difference between £270 (that is, £650, less £380) and the original site value of £20; that is to say, the difference between the original site value of £20 and £270–a difference of £250, and it was sought to make her liable for the duty on that. The amount of the duty would have been £50 on what had originally been valued at £20, though there had been no change whatever in the value of this small property.

Let me mention this, to show the way in which the Act is being administered. The referee gave it as his opinion that the original valuation was an under-valuation to the extent that he put the original value of the land at £70 instead of £20. So that you have to start with this, that the woman has got to pay Increment Duty to begin with on that mistake, notwithstanding that the property had been valued at less than a third of what the referee found it was worth. The case came to be tried. I do not know whether the hon. Member considers that a case of hardship or not; I submit that it is a case in which there has been a gross miscarriage of all that is to be considered fair and equitable. Moreover, that was not sufficient for the Crown. They tried to make this woman pay duty on the assumption—though everybody admitted that there was no change in the value—that the property was worth eleven and a half times as much as it was in April—April, 1909, to June, 1911. They proceeded on the assumption that in April, 1909, to June, 1911, though the property had not changed in value, it was worth eleven and a half times as much as it was before.

An HON. MEMBER

Who made the valuation?

Mr. CASSEL

The valuation was made by the district valuer in 1911, as from the date of the 30th April, 1909. The district valuer put the valuation at £20, and the referee put it at £70, though there was no change whatever in the value of the property. The Government claimed Increment Duty—it is true they did not succeed in the case—on the assumption that the land was worth £250. The facts are contained in the judgment. The Crown tried to get their Increment Duty, but so far as their assumption was concerned, the Court decided that £180 would have to be deducted from the £250, because the purchaser had paid more for the property than it was really worth by reason of the fact that he did not wish to be turned out of it. It was worth more to him to remain there. For that reason, according to the finding of two of the judges, £180 too much was paid for this property, and it may have been purely sentimentality which caused the purchaser to be willing to pay more. The judges decided to deduct the £180 from the £250 in respect of which the Crown sought the payment of Increment Duties. How is that case going to be reconciled with the Lumsden case? It seems to me an extraordinary case. In the Lumsden case it was a question of the windfall which increased the value of the property, but in the case which I have cited the Court decided that £180 too much had been paid—it had been paid either on the ground of sentimentality or because the purchaser wished to remain in possession of the property—and they deducted £180 from the £250.

I submit, in the first place, that the fact that the property was originally valued at £20, and was found by the Referee to be worth £70, though everybody admitted that there had been no change in the value, discloses a gross discrepancy which requires some explanation. I say that the action of the Government, in taking this woman to a Court and trying to exact duty on the basis that the property was worth 11½ times what it was originally valued at, is absolutely unintelligible. I should like to recite one passage from the judgment by one of the judges—Lord Johnston:— The declared object of the Act was to tax what was popularly described as the unearned increment of land, the increase in the value of bare land, occasioned by circumstances beyond the owner's control and to which he had not contributed. The conception of that object imports the taxation of the difference between real value at two different times. In construing and applying a Statute, we cannot rely upon the declared object of its promoters, however much it may be common knowledge. But it is a consideration that cannot be ignored, that the general scope of this Act is in accordance with its declared object. And I do not think that there is much doubt that the intention and expectation of the legislature was so also. On the other hand the Crown maintain that whatever the object of the Act, the result of provisions are to tax the difference between a real value, and a more Statutory conception or fictitious value. It may be so, fur the provisions of the Act are wrapped up in such a cloud of words, that it is quite possible that they may, if literally read, achieve a result not dreamed of by those who framed the Statute. I should like a reply to this case, and I should like an explanation, first of all, as to how this property came to be so increased in value when no change whatever, as everybody admitted, had taken place in its value? In the second place, I should like to ask the right hon. Gentleman how the Crown, notwithstanding the valuation had been fixed at £20, came to put forward a claim for duty on the basis that it was worth £250? I submit that is a matter which does require, from the point of view of the Administration, the fullest answer. I should also like an explanation, suppose in future you find out that a man has given, owing to sentimental motives because he desires to live in a place, too much for a property, and, as no duty is payable in a case of that kind, will the Government issue instructions to valuers that they are to make those distinctions and separate the part of the value which is due to sentiment and that part which is due to some consideration personal to the purchases, in the sense that he desires to remain in the place? If it is right to charge a windfall under other circumstances, why should it not be equally right in this case? It seems to me that we are led into an absolutely hopeless morass in the way in which these duties are being administered owing to the instructions which are given. I used to think this Act capable of amendment and that the policy was to amend it, but I can only say, from the way in which it is being administered, and owing to the difficulties which that administration has led to, the hopes of being able to amend it seem to me to be vanishing away. What we are entitled to do, I think, when the opportunity comes when we can suggest amendments, is that the Act should be administered in a way not to give rise to such gross cases of hardship such as that which I have cited on the invitation of the hon. Member for Northampton.

Mr. PRETYMAN

I am sorry to have to speak on a subject like this at a time, the dinner hour, when there is no one in the House, but there appears to be no alternative, and the same applies to the right hon. Gentleman opposite who kindly gave way to me a few nights ago, and I am returning the compliment to-night. I should like to say a word, in the first place, in reply to the only defence which has hitherto been made on the other side. May I say, in passing, I think it is pretty notable, so far as the criticism of the administration of the Act is concerned, which has been pretty frequent and severe, both in the Press and in this House latterly, so far as the question of taxing profits is concerned, and treating profits as increment, that there has been no defence attempted either by hon. Gentlemen opposite or by the Liberal Press, or, so far as I am aware, by any single individual other than the right hon. Gentleman sitting opposite, who, of course, so long as the Act continues to exist, is bound to find some defence for it. Although we realise that his defence was very difficult to make, and that he made the best of a very hopeless case, yet he must admit that he is standing on very weak ground indeed when that defence is confined to the official whose duty it is to defend, and when it receives no support either in the Press or from any Member of Parliament behind him, but that on the contrary some hon. Members like the hon. Member for Mansfield (Sir A. Markham) spoke most strongly against the administration of the Act, and that even such a vehement supporter of the land taxation principle as the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) gets up and attacks the administration of the Act. I desire to refer to the only part of the speech of the Member for Thornbury (Mr. Rendall) which requires to be answered. The hon. Member said that it was the Land Union which had frightened people, and that it was not the Act itself. I do not know whether the Land Union was responsible for the facts of the Richmond case. It is not what the Land Union have said that has frightened the people, but the actual facts which have come before them as to the administration of the Act. The Richmond case is pretty familiar, and I do not propose to repeat the details to-night. It was the facts of that case which had a great effect on public opinion and on the building trade, and the facts of the Lumsden case have had a similar effect.

Many cases have been brought forward, and I will now bring forward another which has recently occurred, the Linsell case. The hon. Member for Northampton (Mr. M'Curdy) said that we did not bring forward instances enough. I am sure he will bear in mind that these cases do not arise on the valuation; they arise on the occasion. There may be tens of thousands of undervaluations of house property, and the owners of that property are wholly unaware of the dangers which they run. What occurs at present is that the owner receives a yellow paper which puts down a certain mystical figure which he does not understand or profess to understand, and which he probably loses, and to which he pays no more attention. It is only when he sells his house that his attention is called to the fact that he is liable for Increment Value Duty. I have no doubt there are tens of thousands of Linsells who will suffer some day a rude awakening if the Act is not altered. The Linsell case was that of a man who put his whole savings into the purchase of a house, and he paid for that house on a piece of land, £290. Mr. Linsell is a working man, and he purchased the house through a building society six years' ago, putting into it his life savings. Two years ago he fell out of work through no fault of his own, and he sold the house at a loss of £40. He is now a road sweeper, I believe, with the London County Council. The house was let on lease, he being the leaseholder, and he lived in the house. The Commissioners assessed the site value at £80 on the provisional valuation, and on the occasion they estimated that it had increased to £115. They sent a demand note to Mr. Linsell, whose life savings had been lost on the sale of the house, and who was working for 24s. per week, and bad not a golden sovereign to pay it with, for a sum of £4 15s. 1d. Increment Value Duty. Mr. Linsell was unable to pay the duty. He did not understand how he could be charged £4 15s. 1d. for Increment Value Duty when he had made a loss on the house. He protested, and the answer he received was:— I am directed by the Commissioners of Inland Revenue to refer to their letter of the 28th ultimo, and to state that unless the duty charged in the above-mentioned letter is paid to the Accountant Controller-General (cashier) at this office within seven days, the Commissioners will have no alternative but to instruct their solicitors to take measures for the recovery of the amount outstanding. So that all he gets for his protest is an intimation that proceedings will be taken against him unless the duty is immediately paid. Was that on the instigation of the Land Union? It was not until he got that letter that Mr. Linsell came to the Land Union. The Land Union went into the case, and found that Mr. Linsell had returned Form IV., on which he stated that he was actually residing in the house. The Commissioners were aware of this fact, and they ought to have known perfectly well that this poor man, having resided in the house for twelve months prior to the date of the occasion, would be exempted from the payment of Increment Value Duty. The Land Union, on this man's behalf, has demanded from the Valuation Department that this wholly illegal claim shall be at once withdrawn. All the reply that they have so far received is an acknowledgment of their letter. Surely the hon. Member for Northampton will admit that that is a case, at any rate, of very unfortunate administration. I am most anxious that this question should not be confined to builders, because, as the hon. Member for the Mansfield Division pointed out, there are all over the country many thousands of small owners of house property, and the effect upon them is just the same as upon builders. In each ease the whole of their savings or investments is in the form of house property combining land and bricks and mortar. A value is put upon this property, and owing to certain juggling with figures under the Act they suddenly find themselves faced with a heavy claim for Increment Value Duty, which they do not understand, which they cannot anticipate, and which either puts them to heavy legal expense in fighting the claim or involves the payment of a duty which certainly, as far as I understand, was never intended by this House.

What would have been the position if, when this Budget was being introduced, the Chancellor of the Exchequer had told us that he intended so to administer the Act that a man who had sold his house at a loss of £40 could be charged £4 15s. 1d. for Increment Value Duty? I do not believe that the Budget would have succeeded in passing. It is cases of this kind which have aroused public opinion in regard to the administration of the Act—not statements of the Land Union. I referred the other day to Mr. Smithers, the President of the Builders' Association. He was a strong Liberal; he was not at all moved by the representations and anticipations of the Land Union; he was, on the contrary, very much persuaded by the statements of the Chancellor of the Exchequer, and on the character of those statements he issued a circular of a soothing syrup character to the builders of the country assuring them that they were not likely to suffer. It was not until the facts in the Lumsden case became public that Mr. Smithers found that the Land Union were right and that the Chancellor of the Exchequer was wrong. He is now throwing himself into the fight against the Land Taxes and their administration. We are told that these representations are made on political grounds. The hon. Member for the Mansfield Division has not attacked them on political grounds; he is not a Land Union speaker. Nor is the hon. Member for West Aberdeenshire a member of the Land Union. It is only a few days since a very strongly-worded memorandum was issued by the Auctioneers and Estate Agents' Institute. Are they a political body? Did they attack these Land Taxes on political grounds? A challenge across the floor of the House that a Government proposal is being attacked on party grounds has really no weight. It is the duty of the Opposition to oppose. The question is not whether we are politically opposed to the Government, but whether the charges which we make are sound and justifiable. I do not think that supporters of the Government will strengthen their case by attributing motives to us. Whatever our motives may be is our own affair. They have to disprove the charges that we make, and the best way of proving that our motives are wrong is to prove that our charges are wrong. So far no proof of that kind has been advanced. Here is a letter which has been sent to Members of Parliament, certainly not with any political motive. It is from a very strong Radical, a small agent of house property, with no connection of any kind with the Land Union, who has started an agitation of his own against the Land Taxes on account of his own personal experience in connection with small allotments, market gardens, and house property. This is what he says:— We can show that much harm is being done to the thrifty classes of the community, that developed land producing choice food for the people is being treated and taxed as undeveloped, that the so-called exemptions of the small owner are illusory, that Increment Duty is being claimed when no increase in site value is admitted, that improvements are taxed, and generally speaking that the Act in working is doing immense harm to the very class it was supposed to benefit. I do not think it is at all difficult to disprove the suggestion that the Land Union frightened the people and that these charges are only made with a political object. I should like to refer to the question of the administration of the Act as regards agricultural land, and particularly in reference to Undeveloped Land Duty. When I speak of agricultural land I mean land which is being used for agricultural purposes. One of the features of this Act is that words are so used that it is necessary to say what they mean. "Agricultural land" in two or three parts of the Act has totally different meanings; therefore when one uses the simple term it is necessary to explain what he means by it. Land which is being used for agricultural purposes includes a great deal of land which is being charged Undeveloped Land Duty, not because it is wanted for building to-day, but because it may have some prospective value for building purposes which may or may not some day be realised. A very large proportion, indeed, of this land has either not been valued at all or no value has been agreed upon. No valuation stands or exists for an immense area of this land; but before valuations are settled—I believe in some cases—I have statements made in writing by agents that these claims are being made where there has been no provisional valuation served. I have no proof of such actual case, and I do not want to put forward a case of which I have no actual proof. But there are certainly thousands of cases where demand notices for Undeveloped Land Duty are being served with the provisional valuations and before these valuations have been agreed or settled in any sense. Is that a reasonable method of administration? Does the right hon. Gentleman realise what that means, and how the law is being nullified? Does he realise that by this Statute, as passed by this House, anybody who has a provisional valuation served upon him is entitled to sixty days within which he may object to it. Does he know—no doubt he does know—that when a notice for Undeveloped Land Duty is served, the owner upon whom it is served has only thirty days instead of sixty, and not only has he only thirty days instead of sixty, but he has no right of objection at all; and his only mode of procedure to contest this levy when he believes it to be illegal is to give notice of appeal under the Act, an expensive process which has to be done in duplicate.

He has to give notice of appeal to the Commissioners and he has to give notice of appeal to the Revenue Department. Consider the position of the ordinary owner of a piece of land who now receives simultaneously a provisional valuation and a notice demanding Undeveloped Land Duty based upon that provisional valuation—which in many cases is wholly inaccurate—such is the haste and hurry with which these notices are actually issued and the conditions under which they are served! They are being taken out of the hands of the district valuers—there is no time for them to serve them—and they are being sent direct from headquarters in London, who really have no knowledge of the particulars. In one case—I have no doubt in many cases—these valuations have been so carelessly served that the areas to which the figures apply are wholly incorrect. When this has been pointed out, the suggestion is made: "You can alter the areas, and you had better leave the figures as they are, and then it will be all right." Is that the way to administer an Act of this kind? Private individuals will now have to appeal, or the Act will be taken advantage of. I suppose that action will have to be taken to decide what is legal. I do not know whether the right hon. Gentleman will tell us when he replies of how many appeals notice has already been given to the Referee's Court. I hope he will give us the number. I believe there are many thousands. But the ground upon which I most strongly protest is that while all these cases are sub judice and have to be decided, this valuation is still being pressed on wholly indeterminate lines. I do not suppose the right hon. Gentleman suggests that all the points claimed by the Valuation Committee are necessarily going to be upheld by the Courts. His answer to me across the floor of the House was that where the final decision is given by the Court on a point which affects the other valuations that they will be amended, even if they have already been settled and agreed in an opposite sense prior to the delivery of the judgment.

But take such a case as the Deptford case in which is a most important point affecting hundreds of thousands of valuations. It is a simple case where the land that has been given up for roads is to be taken into consideration in making the deductions on the site value. The Commissioners refused to make that allowance, and the case has been brought before the Referee, and the Referee has decided against the Crown. This claim is still being refused. There are hundreds of thousands of valuations of small house property throughout the country where that alteration would have to be made if the superior Courts support the Referee's decision. Therefore, what is the use of coming to this House and pretending that it is otherwise! I know perfectly well what will happen. When the Budget is introduced we shall have the Chancellor of the Exchequer coming down here, producing long columns of figures, and telling us that so many millions of valuations have been completed. I venture to say that he will not be able to say for certain that one valuation has been completed—because there is not a single valuation made, so far as I know. Well, there may be a few, but the number must be very small, which will not be affected by some of these decisions, and which will not require material revision after the law has been decided.

This especially applies to agricultural land. The Act permits certain deductions to be made in regard to agricultural land to arrive at the site value. We had a very interesting admission from the right hon. Gentleman in debate the other night. He admitted that what purported to be the site value of agricultural land, as now being ascertained by the Department, was not its site value at all in the sense of the site value of building land. He admitted, he said, that these deductions necessary for the ascertainment of site value could be subsequently obtained at very little expense. The position is without precedent. It is absolutely unparalleled, and if only the country really realised we should see what would happen. Certainly one of the difficulties of this Act is the impenetrable shroud of gibberish with which it is surrounded; it is nothing else. The public mind and the public eye has not penetrated through that shroud. It is beginning to get through it. When it does get through it will make short work of the right hon. Gentleman and the whole proceedings. Here you have a figure which purports to be the site value of agricultural land. Tens of thousands of pounds are involved. What amounts to an immense sum of money is now being spent, and has got to be spent, to decide what that figure is legally. Does the House realise that? Does it realise that private individuals and the taxpayers of this country are fighting, and that something like a dozen separate lawsuits will be gone into at great expense for the Courts to decide by what method the figure called the site value of agricultural land is to be arrived at under this Act? The right hon. Gentleman tells us that the way that figure is arrived at means nothing at all. He says it is not site value, but simply x. I will take that even further. I will say that the whole expression "site value" in this Act is now proved to be absolutely meaningless, and is now being admitted, not only to be meaningless, but that it is not being used in reality. It is pretended to be used. It is used to blind the public. It is not used for the purposes of the Act in any shape or form. There is no use being made now of the site value which is being obtained by these laborious and expensive processes under this Act which could not be equally well fulfilled by the algebraical symbol x—not one of them!

Here you have the site value, or what you call the site value, of a piece of land or house. You call that the original site value. I will call it x. You have your figure, which I will put at anything you like, say £50. That figure you fix after days of debate in this House and a lawsuit and immense expenditure. You get your figure, and you are very proud of it. Supposing this is a piece of agricultural land, you take so many years' rental, say, twenty-six years' purchase of the rental, and there you get your total value. You take £50 as the site value, but I take this symbol x. The property is sold, say, for twenty-six years' purchase of the rental. Let us put the figure at £100, then you have a total value of £2,600. You have a site value, say, of £1,000, which you have arrived at after many lawsuits, but which I arrive at by taking the symbol x. It that property is sold, not for £2,600, but for £3,600, you simply add £1,000 to the other £1,000, and you say the site value, instead of £1,000, is £2,000, and there is £1,000 for Increment Value Duty. I will take the general case, not of agricultural land, because that is in dispute: it is in dispute whether a tax may be levied upon agricultural land. Let me, therefore, take the same figure, but suppose that it is a building in a town on a piece of land; £2,600 is the total value; you call the site value £1,000, but I call it x. It is sold for £3,600, which is £1,000 increase, which you add to the site value, and then you say the site value is £2,000, but you admit that the value of the site has not altered. I take x, which has the same effect, and I add £1,000 to x, and deduct it again, and I get exactly the same Increment Value Duty that you do. The whole elaborate system by which you arrive at site value, so far as the present administration of the Act is concerned, is not used. I should like the right hon. Gentleman to explain whether under the White Paper instruction the duty is to be charged upon anything the property is sold for more than it is worth? What has that to do with site value? Can the right hon. Gentleman suggest any connection between site value and the White Paper instruction? The White Paper instruction is when property is sold for more than it is worth, but that is the total value for which it is sold in the market more than the figure fixed by the Commissioners. I say the symbol x would do perfectly well, but why bring in site value at all?

Mr. MASTERMAN

If the hon. Gentleman will pardon me, I do not see, in making his case, where he gets his datum line if he puts x as a purely imaginative point.

Mr. PRETYMAN

I want to make this point quite clear. The White Paper says Increment Value Duty is levyable upon property as sold for more than it is worth at the time. Does the right hon. Gentleman accept that? The White Paper instruction says that Increment Value Duty can be levied when the property is sold for more than it is worth at the time, which is a comparison of total value, not of site value. Nobody ever sells the site value; it does not exist. You can only sell the market value, and the total value purports to represent market value. The words are "unit of valuation," and when the unit of valuation which is a composite subject is sold for more than it is worth at the time. That is a comparison of the total value, and has nothing to do with the site value whatever. Take the Richmond case. The symbol x would have done perfectly well for site value. In the Richmond case the symbol x is the difference between the total value—it was sold for £500 and valued at £380, and the site value was fixed at £50, or something of that sort. You have there a concrete case and you have the site value at £50.

Mr. MASTERMAN

May I ask one other question? Supposing the total value and the price coincides, which is the normal condition in ninety-nine cases out of one hundred, how would you measure the increment?

Mr. PRETYMAN

When they coincide there is no increment.

Mr. MASTERMAN

Not if the total value when sold in the open markets coincides?

Mr. PRETYMAN

I am speaking of the way in which the Act is being administered. If the Act was being administered differently, and if either value was going to be the measure of increment not the actual value in the site, it would be a totally different proposition. What we are dealing with now is the Act as administered under the White Paper instruction. It is true if the Act was administered as the House was led to suppose you would have site value which was the value of the site, but we have the direct statement made in evidence that site value is not the value of the site—that was definitely stated in the Lumsden case—but is a Statutory conception, and these are the actual words of counsel for the Crown. He said site value was not the value of the site, but was a Statutory conception. That is my complaint. I say you are continuing to act upon a Statutory conception and not upon the value of the site, and that x would do just as well as the figure arrived at after a long, expensive process of litigation. The right hon. Gentleman's interruption makes the point much better than I could make it. It is perfectly true, and he must see it, that if you are going to claim to tax property when it is sold for more than it is worth at the time—that is the very thing we are dealing with—the total value and the price must differ.

Mr. MASTERMAN

Supposing it is sold for what it is worth at the time?

Mr. PRETYMAN

Then the White Paper instruction does not apply. If the total value and the price coincide it is not sold for more than it is worth at the time and the White Paper instruction does not apply. My criticism does not deal with that point; my criticism is that the expression "site value" used in the White Paper instruction is a mere blind, for the tax has nothing to do with site value, and the symbol x would just be as useful to the Department in carrying out the White Paper instruction as the figure they have arrived at after so much pain and calculation. I defy the right hon. Gentleman to disprove that statement. So far as the element is concerned of the selling of property for more than it is worth at the time, the site value has no connection with it in any shape or form, and the only use it is is to fog the issue. This question is so complicated and difficult, that it is not easy to make even one point clear. There is another case of administration which I want to raise, and it is the refusal of the Department to allow the amendment of obvious errors. That particularly applies in the case of Increment Value Duty on minerals, and the way it is being treated. I know a case where, in July, 1910, just after the time this Act was passed, a colliery company were actually negotiating for the purchase of some land comprising 224 acres near Dover. The owner was actually in negotiation with the company for the sale of his minerals, when he received Form IV. As hon. Members are aware, the early issue of that form was pronounced to be ultra vires, and a good many people put it in the fire, and if this man had put his Form IV. in the fire, nothing would have happened to him.

9.0 P.M.

Instead of doing this, however, he returned the form, and the particular space reserved for entering the value of minerals he left blank, because he did not consider it was necessary under the circumstances to fill it in. He returned the form, but did not state there was no value of minerals, and he did not state that there was any value of minerals. The negotiations with the company were completed, and when the lease was entered into, a claim was made for Increment Value Duty, and it is claimed that the total value of the minerals is liable to Increment Value Duty, because leaving the space in Form IV. blank is treated by the Department as a nil return. The trustees have demanded the right to amend this return in order to show that the value of the minerals, for which they were actually negotiating, was the same on the 30th April, 1909, as they are now. The Department do not deny that fact, but instead of accepting that fact, and allowing the duty to be levied upon any real increase of the value of the minerals, they take advantage of the fact that the owner did not fill up this space, and they are demanding Increment Value Duty upon the whole value. Is that a reasonable adminstration of the Act? Is that what the House intended? Was it intended to fine a man hundreds of pounds, and in some cases probably thousands of pounds, because he did not understand the filling up of a blank form? Of course, the matter will have to be taken to the Courts, if it is persisted in. All these cases will be taken to the Courts, and the only way people in this position can meet the charges levied upon them is either to pay what they believe to be illegal, or go to the enormous expense of fighting the case in Court. I am sure the right hon. Gentleman cannot defend claiming Increment Value Duty on a very large sum of money, simply because Form IV. was returned not filled up in a particular column. I cannot believe that such a claim is legal, but whether it be legal or not why should it be made? Another important matter is the appalling delays occurring in connection with this valuation in the settlement of Estate Duty claims. The Estate Duty is levied upon principal value, and this valuation, as such, has got nothing to do with it. A kind of system of blackmail is being followed, and there are actual cases dating from 1909 which are not settled, and the Commissioners of Inland Revenue are refusing to settle the value of estates, including real property for probate, until the valuations are complete. They are putting pressure upon trustees and executors and those who have to administer estates by refusing to agree to the clearance of the estate, even where the figures are agreed upon, and there is no real difference of opinion as to the value of the estate for probate. Because the provisional valuations affecting the land in question are not settled they are refusing to clear the estate, and will not let it be distributed simply because the provisional valuations have not yet been agreed to. I am sure that is a most indefensible procedure. There are cases four years old which are not yet settled, and on that ground I hope the right hon. Gentleman will look into this question.

Very similar action is being taken in the case of putting the Increment Value Duty stamp on particulars delivered. There is a typical case occurring in this way: The owner of some land has leased sites to a builder, and that is the occasion, and we have been told that on these occasions where there may be still any outstanding question, the sale of the property on the completion of the lease need not be delayed, because the stamp can be immediately fixed to the particulars delivered. What is now happening is that the Inland Revenue Department are refusing to affix the stamp to particulars delivered until the owner gives them the information, which I believe they have no sort of right to claim. They want the information from the owner as to what sum of money the lessor, who is taking the lease, is spending or is going to spend upon the buildings which he is going to erect. The owner has no means of ascertaining that, if the builder refuses to give him those particulars. The lessor is put in this position: He cannot deal with his property because he cannot get a good title until the Increment Value Duty is stamped, and the Inland Revenue Department refuse to affix the stamp until the owner gives them that information. Surely it is monstrous this kind of indirect pressure should be exercised.

The Department seem to forget that they are a public Department who have got to administer the Act in a fair spirit. The way in which this Act is being administered seems to be this: "Here we are out with a sort of roaming commission to get revenue where we can, honestly if possible, but in any case to get it." That is the kind of principle upon which it seems to me this Act is being administered from headquarters. I do not desire to make any attack upon the local valuers. Great pressure is being put upon them from headquarters to complete these valuations in an impossible period with the object of making a great show in this House of the number of valuations which have somehow or other been rushed through. None of these valuations, however, can be regarded as really settled or decided. The moment there is an objection that matter is put aside and nothing is settled, and fresh valuations are served on other people in the hope that they will not object, so that as many valuations as possible may be stated to have been completed. All this is hurting the little man much more than the big man. The big man has good advice and can protect himself. He certainly will pay nothing and do nothing until all these numerous cases in the Courts of Law have been decided. I do not know what the position of the small owner would be if it were not for the Land Union. What would Mr. Linsell have done or what would have happened in the Richmond case? The right hon. Gentleman with regard to the Lumsden case said it was the only case. It is rather odd to speak of a test case as the only case. The Lumsden case was a test case, and it is obvious, if the decision is given finally in favour of the Crown, that particular procedure will be followed in every case hereafter. There was the Aylesbury case. It was almost exactly similar. The right hon. Gentleman I am sure had forgotten the Aylesbury case when he stated that not a single farthing had ever been claimed from another builder. I confess I thought at the time that was rather a sweeping statement to have made.

We are told that there are no concrete cases. Let us take another one. Let us take a church site in the Kennington Road. That site before the passing of the Act was allocated for a church and was restricted to the purpose of building a church. The church has not yet been built for the simple reason that sufficient money has not up to the present been raised for building it. A claim has now been sent in to the Rochester Diocesan Trust, in whom this land is vested, for £24 odd for Undeveloped Land Duty on the ground that the land has a certain selling value, about £50, on which three years' Undeveloped Land Duty is claimed. It is perfectly obvious that as the land at the time of the passing of the Act was under the restriction that it could only be used for the purpose of the erection of a church that demand is actually illegal, though I suppose it is technically right. How could the Rochester Diocesan Trustees appreciate the very recondite fact that that restriction might have been claimed as a deduction? The Chancellor of the Exchequer told us in the House at the time that the Commissioners of Inland Revenue and the valuers would give every assistance to owners and do all they could to administer the Act fairly and to make the proper deductions at the proper time. They not only not make the deductions at the proper time and do not inform owners that these deductions should be made, but in face of the fact that this restriction must have rendered the land wholly valueless for any building purpose they claim Undeveloped Land Duty. It could only have been used for a church, and that restriction obviously cleared it from Undeveloped Land Duty. I myself raised the matter once or twice at Question Time, but no redress whatever has been given. I do not believe the money has been paid, and I hope it will not be paid, because I believe the claim to be strictly illegal, but it is still being pressed. These cases can be multiplied to any extent. I have got sheaves of them here. I hope the hon. Member for Northampton will take it that I have quoted some cases to-night. I hope he will believe there are any number of such cases all over the country.

The administration of this Act is now causing the gravest dissatisfaction all over the country. It being the duty of an Opposition to oppose, whatever Act is introduced meets with criticism, but, if that Act is a good one, it becomes accepted, and the opposition to it gradually settles down and very little more is heard about it. That is one of the best tests which can be applied to any legislation. It is quite true there was most vehement opposition to this Act. There has been plenty of time for it to die down, but instead of it dying down it is now increasing daily throughout the country. The right hon. Gentleman pays a very high compliment to the Land Union if he is going to endorse the suggestion which has just been made that the opposition which now exists and which is growing is manufactured by that Union. Could a private organisation of that character maintain an agitation against an Act against public opinion for something like four years? If the public who are experiencing the actual effects of this Act are satisfied with it, it is paying the Land Union a great compliment to suppose that a mere politically manufactured agitation can rouse public opinion as public opinion is being roused to-day. I claim no such credit for the Land Union, and, as far as I am concerned, if I thought there were any elements of fairness in this Act or that the principles of it were sound, I should accept it, endeavour to discover what particular points of hardship existed, and bring Amendments before the House and ask the House to accept them, to reduce or remove those hardships without altering the principles of the Act. I felt, however, from the very moment this Act was first introduced that the whole basis of it was impossible and impracticable. I am of that opinion still, and I hold it more strongly every day that passes. I am perfectly certain right hon. Gentlemen opposite know it too. They know this Act cannot go on as at present, and in the administration of it they are incurring a most grave responsibility. We have had even the hon. Member for the Newcastle Division (Mr. Wedgwood) condemn it the other day. He said the Increment Value Duty ought to be abolished. I must say I sympathise with the right hon. Gentleman opposite and the Chancellor of the Exchequer, because they were pushed into this by the land tax group and now that group turns against them. I am afraid that the land tax group now think that the Increment Duty is indefensible.

Mr. PRINGLE

They never advocated it.

Mr. PRETYMAN

Does the hon. Member say that the land tax group never advocated the Increment Value Duty in the Budget?

Mr. DEPUTY-SPEAKER (Mr. Whitley)

I am afraid the hon. and gallant Gentleman is not keeping to the point.

Mr. PRETYMAN

I have almost done, and I apologise. If what the hon. Gentleman says is true, I will at once withdraw what I said. They voted for it.

An HON. MEMBER

That is a different thing.

Mr. PRINGLE

The statement which the hon. Gentleman is making is that this policy was forced upon the Chancellor of the Exchequer by the land tax people. That is untrue.

Mr. PRETYMAN

The hon. Gentleman went on to say that they were opposed to the Increment Value Duty?

Mr. PRINGLE

I did not.

Mr. PRETYMAN

Some hon. Gentleman did.

Mr. PRINGLE

I said they never advocated it.

Mr. PRETYMAN

They never advocated it, but, they voted for it. I will withdraw the statement that they approved or endorsed it, and I will simply say that they voted for it. I will only conclude by saying that right hon. Gentlemen opposite must know that they are incurring a most serious responsibility in putting private individuals and the country to this enormous expense, endless trouble, and heavy burden. The burdens we have to bear are already enough. Some of them are gigantic. We have many necessary heavy burdens. There is great expense thrown upon the country by this Act which is wholly unworkable, and has got to come to an end. It is quite impossible to go on administering the Act upon that system. The country will not stand it.

Mr. PRINGLE

The country is not worrying at all.

Mr. PRETYMAN

They are beginning to worry. I think he will find the country is going to worry.

Mr. PRINGLE

You never hear about it at by-elections at all.

Mr. PRETYMAN

I think the hon. Member is mistaken.

Mr. PRINGLE

I have an hon. Gentleman beside me who knows.

Mr. PRETYMAN

He has got his information, no doubt—

Mr. PRINGLE

I was there also.

Mr. PRETYMAN

I am glad to see that the hon. Gentleman is one who knows. He is very familiar to us. I think that "one who knows" is not always very accurate.

Mr. PRINGLE

I have followed him at several by-elections.

Mr. PRETYMAN

As I have said, it is a very grave responsibility, and it is only a question of time when this Act will be altered and its administration will have to be altered. The right hon. Gentleman must recognise that the sooner it is done the sooner will there be a saving of the enormous expense and burden which is imposed upon the country to bolster up legislation which was hasty and ill-considered and the administration of which is rapidly becoming a public scandal.

Mr. MASTERMAN

I must thank the hon. and gallant Gentleman for the courtesy extended to me in allowing me to give a general reply, and I hope he will acquit me of discourtesy on my part if I venture to say that his speech, forcible though it was, suffered from the necessary unreality of the conditions of this Debate. You, Sir, and your predecessor in the Chair, have been endeavouring to keep hon. and right hon. Gentlemen on both sides of the House to the subject which we are discussing, but it is the last thing in general that they want to discuss. Only occasionally in one or two parts of his speech did the hon. and gallant Gentleman opposite ever get into touch with the only legitimate subject which is under discussion—the administration of the law as it stands by the officers of the Inland Revenue. It is not a question of how the law ought to be amended. The hon. and gallant Gentleman, in an eloquent peroration, declared that the Act was futile and hopeless, and that he always knew that it was; that it would have to be amended and that public opinion was rising in a stormy tide against it, in Houghton-le-Spring and elsewhere; and that we knew that in our hearts. That is interesting to listen to, and very eloquent, but it is utterly irrelevant to the question which is before us. The subject is the administration of the Act—whether as a matter of fact the officers of the Inland Revenue are carrying out the law as it stands, and whether in carrying out that law they are indulging in unusual hardships or unusual oppression of the subject of taxation; or whether the valuation is being made as, under Clause 26, the valuation should be made, and whether as a result of that valuation the Increment Tax is being collected as it should be collected under the conditions of the Clauses of the Budget which still hold good. The hon. and gallant Gentleman must confess that in no part of his speech did he deal with the question of administration on that basis. With all the willingness in the world to obtain some subject upon which I could remonstrate with the officers of the Inland Revenue, I was unable to find any in the cases which he offered. Again and again in his speech, after some complaint of hardship, he announced that our course was technically legal, and apparently because there were hardships he thought the officers were not to enforce the law. But we possess no general dispensing power of taxation, either with regard to Land Taxes or ordinary taxes, or the levying of the duties on tea and sugar, and if a thing is technically right the hon. and gallant Gentleman should know that his function is not to impeach the officers of the Inland Revenue with such fervour as he has done, but to suggest on a proper occasion what should be the legislation to make these technicalities less burdensome.

Mr. PRETYMAN

I said the exact opposite. I said that in the Linsell case the claim was illegal and yet was being made.

Mr. MASTERMAN

Take the case of the Kennington Church. The hon. and gallant Gentleman admitted that the Inland Revenue were probably technically right, because the claim for exemption had not been made, and apparently therefore they were, what he called technically right, which is legally right.

Mr. PRETYMAN

We must have this point clear. They are technically within their right, because they have a power under the Act not to reopen it; not to allow an amendment to be made. If they allow it to be made, they are also within their right, but they refuse. It is a power of administration, whether they allow it or not. In that particular case they have a right to amend the valuation, and also in the mineral rights case they have the right to amend the original valuation. The question is whether it is to be reopened. That is purely administrative. They are acting within their rights in refusing, but they have an administrative right to allow it.

Mr. MASTERMAN

That, I agree, is a perfectly fair point. The hon. and gallant Gentleman has made it considerably clearer by his interposition, and if he can show me any case in which, though they are technically right within the law, the officers of the Inland Revenue are acting harshly, I will guarantee to inquire, and, if I think they are acting harshly, I will try to see that it is put right. That, however, is not the gravamen of the charge which the hon. and gallant Gentleman has made. Take the Lumsden case, which has been the subject of ninny Debates. There we were not only technically right in exercising our powers, but the High Court stated that we had no alternative but to exercise those powers in that fashion under the Act as it stands. There is no dispensing power either with the officers or with myself, and I do suggest that instead of coming forward with legislative proposals for the removal of hardships the hon. and gallant Gentleman has turned his attention to making a general attack upon the officers of the Inland Revenue. I utterly repudiate his statement as to what he conceived to be instructions issued, either by the Chancellor of the Exchequer or myself, or by the central head quarters of the Inland Revenue, to those who are engaged in the administration of the Act throughout the country. He said the sole demand upon them had been to get revenue if they could—to get it honestly if they could, and, if not, to get it otherwise. That is an extraordinarily grave charge to levy. I do not think that the hon. and gallant Gentleman knew what a grave charge he was bringing, or whether he was bringing it against us, as representing the Department in Parliament, or whether, as he seems to suggest, he was levying it against the officials at headquarters, whom he seemed to think, in order to please the Chancellor of the Exchequer or a Liberal majority in this House, were endeavouring to get revenue dishonestly if they could not get it honestly. Not only had they had no instructions to get revenue dishonestly if they could not get it honestly, but they have had no instructions to get revenue, if they could, anyhow. The sole instruction they have had is to get revenue where they are legally bound to get revenue, and only under conditions where it can be properly collected. Anyone who knows will endorse the statement made by the hon. Member for the Thornbury Division of Gloucester (Mr. Rendall) and endorsed by the hon. Member for Northampton (Mr. M'Curdy), that in every case where the subject becomes a matter for negotiation, in so far as the officers are legally able to do it, they are only too willing and anxious to meet the demands of the subject on the question and to carry out the tradition of the Inland Revenue in other matters that, if there is any doubt, the subjects should have the consideration rather than that the law should be unduly pressed against them. I could bring 40,000 cases where in such negotiations it might have been possible that the statements made originally either by the valuers or by the Inland Revenue could have been maintained against the subject, yet on the remonstrance of the subject, so far from wishing to drag everyone into Court, with all the expense incumbent upon it, those statements of the subjects have been accepted, and the conditions have been adjusted in accordance with those state- ments. Not only so, but the hon. Member for West Aberdeen (Mr. J. M. Henderson), who for four years has been the doughty opponent in this House, not of this special administration, but of the Act as a whole—

Mr. J. M. HENDERSON

No; I was the first man who proposed the Increment Tax.

Mr. MASTERMAN

Who for four years has been engaged in active warfare upon the Land Taxes under the guise of criticisms of this Act—

Mr. HENDERSON

No, no.

Mr. MASTERMAN

The hon. Member himself acknowledged that the most satisfactory method would be the method of self-valuation which was ordinarily adopted, which was recommended when the Act was originally introduced, and which was withdrawn in deference to the very strong protests made by practically the whole Opposition. [An HON. MEMBER: "On your side, too."] It was said, "What is the good of spending so much money; why not accept a declaration of the subject if he wishes to have the valuations altered?" How can you reconcile those statements? First, as to the anxiety of the valuers at Somerset House to accept the valuations which the subjects themselves believe are the valuations, and, on the other hand, the spectacle outlined by the hon. and gallant Gentleman of an iron bureaucracy coming down, quite apart from any question of what the subject thinks right, and imposing its will, even to the ruin of the person on whom that will is imposed. There is no kind of reconciliation or justification in the suggestion made by the hon. and gallant Member. The hon. Member for the New Forest Division (Mr. Perkins), who opened this Debate in a very moderate speech, said he was not challenging the law or the judgments by which the law had been declared in the High Court. In these circumstances I listened with very great attention to see what he was challenging in the administration. I found the same figures, the same assertions, the same shifting of the challenge from the administration to legislation in his speech, as I found when we last debated this subject. But I found a specific impeachment of the valuation. Once more I would appeal to the hon. Gentlemen opposite on this point. They hate the Increment Value Duty and they have never concealed their hatred of that duty. They fought it on what the hon. and gallant Member calls an ill-considered Bill, which lasted, I think, longer than any Bill has ever lasted in this House, and which was discussed for something like seven months. They fought it here, and afterwards they fought it at two elections, in neither of which did they receive any public sympathy. [HON. MEMBERS: "We won a hundred seats."]

Mr. PRETYMAN

There was an English majority against the Bill.

Mr. MASTERMAN

May I correct one injustice which I am sure the hon. and gallant Gentleman did not intend? In opposition to this Increment Duty as a duty, the Opposition were entirely allied to the group in this House the hon. Gentleman calls "the land taxers." Increment Duty as a duty is not and never was part of the programme of the advocates of the taxation of land values.

Mr. HENDERSON

That is why I proposed it.

Mr. DEPUTY-SPEAKER (Mr. Maclean)

I am unable to connect these remarks with the power of administration.

Mr. MASTERMAN

I gladly bow to your ruling, Sir, but I think you will agree that I was merely taking up a subject which has formed a considerable part of the controversy in the Debate. Let me turn from the Increment Value Duty to the valuation, of which the hon. Member for the New Forest Division made a special subject. They fought valuation as strongly as they fought the duty, and they objected to the valuation even more than to the duty. I asked them to come from the objection to land valuation in general, and site valuation in particular, to the question on which they wished to impeach the valuations as at present made. I would appeal to anyone who has been present during the four or five hours of discussion to find anything specific in the matter. Against any such suggestion I have two very strong points to urge, which I think fair-minded Gentlemen opposite will agree are points which give me some justification for my advocacy of what have been somewhat contemptuously called the "young men" valuers of the Inland Revenue. The first point is this: Specific cases, very few in number, as the hon. Member for Northampton said, but occasional specific cases, have been brought up in this House, partly in debate, and partly in question and answer, in which there appears to have been a discrepancy between the valuation as originally suggested by one of our valuers in regard to a particular house, field, or plot of land, and the valuation as finally decided. There was a suggestion made last July in the House by the hon. Member for Sleaford (Mr. Royds), that not only were there specific inaccuracies in the valuation, but that the valuation was being conducted on totally different methods in different parts of the country, and that, therefore, a man in Lincolnshire, under the methods adopted by the Inland Revenue, might find himself subject to a totally different method of assessing the value of his property, and consequently having to submit to a totally different method of estimating the taxes from, say, a man in Worcestershire or Cornwall.

What was our reply to that suggestion? It was immediately to offer to hon. Gentlemen opposite an expert Committee which should thoroughly go into the whole subject of the methods of valuation under Section 26. Of course, it is impossible to get anyone to serve on an expert Committee to go through and repeat the work done by the valuers in every town and country in the United Kingdom. It is also impossible to ask an expert Committee to criticise the actual declarations of valuation required by an Act of Parliament, but what we offered was this: "You say there are gross inaccuracies in valuations. You say there are differences in the methods adopted in one county and another. We will appoint an expert Committee, we will agree as to the names of that Committee with hon. Gentlemen opposite, and we will allow that expert Committee to study in the closest possible fashion the methods of valuation adopted by the valuers of the Inland Revenue, and to declare whether, as a matter of fact, those are not the methods which would be adopted by the best skilled expert advisers if they were asked to produce a similar valuation, and whether the methods are not, as a matter of fact, the same in one town as in another—the same in Lincolnshire as in Cornwall." For what reason I know not, though we have repeatedly made the offer to the hon. Gentleman and his Friends, they have never accepted it, and the offer remains as clearly to day as it was made last July. If hon. Members opposite desire this to test the administration of the Act, apart from legislation and the creation of the Valuation Department, and the instructions issued from the Valuation Department in order to obtain accurate valuations, as defined by Section 26 of the Act, as soon as they can make up their mind that they want that Committee we will agree with them on the names and have the Committee appointed.

Mr. PRETYMAN

We cannot agree on the reference.

Mr. MASTERMAN

Why? Because you do not want an investigation into the methods of valuation.

Sir G. YOUNGER

You will not allow them to say whether the value is a true value.

Mr. MASTERMAN

I want the Committee to say whether, given the values as laid down by this House, the methods are being carried out equally between one subject and the other.

Mr. PRETYMAN

The whole point is, as the Debate shows, the extraordinary difficulty of disentangling criticism of the Act from criticism of its administration. The word "interpretation" was barred, and as no one knows what the interpretation is, and where it begins, and where administration ends, it was practically impossible to carry on the Committee under the reference proposed.

Mr. MASTERMAN

If it is impossible, the hon. Member and his Friends ought not to have made the impeachment they made on the Second Reading of the Consolidated Fund Bill, because we give the widest reference as far as administration is concerned, and it is administration that you are supposed to be impeaching to-day, and if you try and impeach administration in this general fashion, as I think very unfairly to the valuers who are carrying out the work, and at the same time refuse a Committee which will declare whether the administration is or is not right, it seems to me that the ground is cut from under you when you go into such a controversy as that. If you wish to impeach the Act as it stands, and the legislation dealing with it, that is a totally different question, and on that we are prepared to meet the hon. Gentleman on any possible occasion which is open to him. That is the first point. They have never accepted that condition, and I believe if they honestly thought valuations in Lincolnshire were being conducted on different conditions from valuations in Cornwall they would press for that Committee; but because they realise that, as a matter of of fact, the instructions given by the Inland Revenue are the instructions which would be given by any outside firm of valuers doing similar work, and that there is no special pressure on the subject, and no inequality in different parts of the country, when we offered the Committee they stated that they had no desire for it.

Mr. PRETYMAN

We never said anything of the kind.

Mr. MASTERMAN

Again and again we have offered it and you have never accepted it, and I think the hon. Baronet said it was useless, which is practically a refusal.

Sir G. YOUNGER

So it is, unless they can say whether the value is a true value.

Mr. MASTERMAN

I leave it at that. That is the whole point. They make certain statements, and ask for an investigation into them, and when we offer it they say it would be quite useless. The second reason why I believe this general impeachment of the administration is erroneous is because I do not find this general attitude which the hon. Gentleman says exists outside, as a matter of fact to exist in connection with the valuation. I find far more the attitude adopted by the hon. Member (Mr. M'Curdy)—some suggestion of legislative reform, which we shall certainly be only too glad to listen to, but, on the whole, no statement that either the valuation or the Act ought immediately to be swept away before the rising fury of the people of the country. That is also borne out by the actual statement of the facts as they are submitted to the Inland Revenue. The hon. Gentleman may make as much play as he likes with what he calls the ignorance of the landed proprietors of this country, and, if he likes, he can say that the small men in this country know nothing whatever about either what the valuation is made for or what the Act was intended for. It is not only the small owners. Men, with every expert advice which can be given and with money enough to spend as much as they like on expert advice, the owners of large landed estates, men to whom money is no object at all—[HON. MEMBERS: "Where are they?"] I see many hon. Gentlemen opposite. Men of that sort are equally subjected, as far as I heir real property is concerned, to this valuation, and if they were feeling a grave sense of injustice at the valuation which was served on them of course the great majority of them would be appealing at present, either first for a revision or afterwards to the Referees, who are purely impartial persons appointed by people altogether outside the Government. What are the actual facts of the case? The number of hereditaments valued up 28th February, 1913, was 3,770,000. The number of hereditaments the provisional value of which is the subject of appeal to the Referee is 4,466. The percentage of hereditaments subject to appeal to the total hereditaments valued was 118 per cent—that is, one in every 884. [An HON. MEMBER "Test cases."] I have nothing to do with test cases at all. I am dealing with the facts of the valuations and with the impeachment of the original valuations. It has nothing to do with the collection of Increment Duty at all, because the amount fixed by the Inland Revenue as the value of the land or the building, or both together, was different from that which the hon. Gentleman thought it ought to be.

Mr. PETO

Is that the total number or the number that happened to be under appeal at the moment?

Mr. MASTERMAN

I think it is the total number.

Mr. PETO

Otherwise the calculation is wholly erroneous.

Mr. MASTERMAN

The appeals against provisional valuations heard by the Referee have been twenty-one cases heard; withdrawn or disposed of, 188; total disposed of, 209. The whole number dealt with and now being considered is 473. That makes up a total of 682. Of the twenty cases which have come before the Referee on valuation—cases actually where the valuation was supposed to be erroneous—twelve were decided in favour of our valuers, five were decided what I might roughly call half and half—something between our valuers' decision and the suggestion of the subject—and three only were decided wholly in favour of the subject and against the Government Department. Under those circumstances, with that tiny percentage of disagreement, and with the further tiny percentage of disagreement in those cases not settled in conjunction with the subject, and in cases brought before the Referees with such an enormous percentage decided by those impartial persons in favour of the Government contention, surely it is monstrous to say that this great valuation is being conducted in such a manner as to cause general indignation in those subjected to it, or to say that the figures established in that valuation bears no kind of relationship to the actual value which people imagine it to be themselves. The whole charge, so far as the valuation is concerned, disappears upon examination. I have no hesitation in saying that if the hon. and gallant Gentleman were standing where I am now, and if—I agree that it is a very great assumption to ask him to accept—he were to accept the Act as it stands, and wished to criticise the action of the Inland Revenue in deciding what Parliament intended the valuation should be, he would have no kind of criticism to make. But his criticism is not against the Inland Revenue, but against the work of Parliament in setting up this valuation at all.

The next question raised was that brought forward in a very moderate speech by the hon. Member for Northamptonshire (Mr. FitzRoy) in connection with the valuation of agricultural land and the Increment Duty being charged on that land. He seems to think that in some fashion the decision in the Lumsden case has overridden the clear directions of Section 7 of the Act as to the exemption of agricultural land from the Increment Value Tax. I can assure him that he is wrong in that deduction, for Section 7 remains as distinct as it was before the Lumsden judgment was given. Section 7 is that under which the Inland Revenue has worked, and no increment value is charged upon agricultural land, whatever the price that agricultural land may be sold at, while that land has no higher value than the value for agricultural purposes only. That was the condition laid down after a very long discussion in this House. The final position of differentiation in building land, on the one hand, from agricultural land, on the other, is the question whether the land had a higher value than its value for agricultural purposes. In the Lumsden case the price was greater than the total value of the composite subject, and therefore Increment Duty was levied on the price apart from the agricultural value. Section 7 does exempt agricultural land, whatever the price may be, so long as there is no higher value than the value for agricultural purposes.

Sir G. YOUNGER

Does the right hon. Gentleman remember the case in which agricultural land was valued at a higher price?

Mr. MASTERMAN

I am not aware of the case, but I shall be glad to inquire into the matter.

Sir G. YOUNGER

It is a very important case, and perhaps the right hon. Gentleman might deal with the question.

Mr. MASTERMAN

I am quite sure that I am accurate in laying down the general principle, and if the hon. Gentleman opposite knows of any case in which, as he suggests, the Inland Revenue departed from the principle, I shall be glad if he will inform me.

Sir G. YOUNGER

There was such a case.

Mr. MASTERMAN

If the hon. Member will give me particulars of it, I shall be glad to inquire into it. The hon. Member for West, Aberdeenshire (Mr. J. M. Henderson) dealt very largely, I must confess, with subjects which were outside the scope of this Debate, and which require legislation if his wishes are to be fully met. The question, for instance, whether we ought to have maintained our first principle that self-valuation should be the method by which the work should be carried on, and that the valuation should afterwards be criticised by Government valuers, is not a question appropriate to to-night's discussion. The question was very fully discussed in this House in 1909, for better or for worse, and it was largely owing to representations from hon. Gentlemen opposite that the scope of the Bill was changed, and that the Government valuation, which has been so much criticised, was adopted. I agree it may be much more costly, but that, for better or worse, remains until legislation alters it. The hon. Member said that it was hopeless to search for site values. As a matter of fact, I might remind him that what he calls the fetish of site value has been sought for and found in the majority of the progressive countries of the world, and that that most distinguished body of men who, in 1901, signed the Minority Report of the Commission that inquired into Local Taxation not only stated that site values could be found, but recommended that special rates should be levied upon them. Then the hon. Gentleman criticised the question of minus value. There he raised a subject and made a criticism which, I believe, is entirely without foundation, so far as I have been able to inquire since he raised it. He said that minus values were now solely the product of his own native land, and that the method adopted in England is quite different to that which is adopted in Scotland. There are not only many minus values registered in England as well as Scotland, but the method of valuation is precisely the same in the two countries, whatever the ultimate effect of the entities there registered as minus values may be. I cannot go into that, for it is sub judice at present in the House of Lords. The ultimate effect will be exactly the same in the two countries. I do not think I need point out to the hon. Member that the mere fact that these values in one particular column of the valuation book are registered as minus values does not in the least affect the validity and accuracy of the general valuation. There is no suggestion in the valuation book, or in any statement made by any Minister, that any of the land of England is of minus value apart from the charges on the land. What occurs is that you have a charge on the land and buildings, and where the capitalised value of the charge on the composite subject is greater than the capital value of the land as a bare site, you may have an entry in the valuation book of the assessable value being of minus value. There is not the slightest difficulty in interpreting these values.

Mr. J. M. HENDERSON

The Scotch judges have had difficulty.

Mr. MASTERMAN

No, Sir. What I mean to say is that you can register minus value, and you can, if you like, by an alteration of the law, if the House deems it expedient, where there is a fixed charge on the land and the buildings, levy the duty in the case of the original land without subtracting the fixed charge, and making it plus value without any further valuation. But a re-valuation should certainly be made if the House of Lords decides that minus values are not dealt with in the sense I have stated. In that case we shall propose immediately, in a very short clause, what would be only really an alteration which will make these minus values into plus values. It is quite easy, especially when you add the two things together or subtract two things. When the hon. Gentleman states that if this appeal goes against the Government the result will be to ruin the work of the Valuation Department, and that hundreds of thousands of properties, lands and houses will have to be revalued he is entirely remote from the facts altogether. All the subjects that are required in order that these minus values shall be represented as plus values are in the columns of the valuation book at present. It is merely a matter of adjustment. Here is another case with which the hon. Gentleman made considerable play. He said what is the good of the Inland Revenue valuing site value at all, spending hundreds of thousands of pounds on it, when, as he said, the whole House knows that under the Lumsden judgment site value is not wanted at all, and we might just as well by some imaginary x which he suggested put in any quantity whatever. That is also a statement which is utterly remote from the facts of the case, and which I should have thought that the hon. Gentleman who is as a rule a very accurate critic must have known to be so, because under certain circumstances—I must say they are very rare—where the price is different from the total value the Increment Duty is collected on the difference between the price and the total value, and therefore, says the hon. Gentleman, all you need know is the price and the total value. But in ninety-nine cases out of a hundred the price and total value coincide. In every case where property is sold in the open market the price and the total value do coincide, where property is sold by a willing seller to a willing buyer.

10.0 P.M.

In all those cases if the value has gone up, the total value and the site value, or if the site value alone has gone up, if you take the site value as from the datum line, the measure of the value, which is subject to payment, is the difference between site value deduced from total value, the price—say it is sold in 1914–in 1914, and the site value on the datum line as it was on the 30th April, 1909. So far from the hon. Gentleman being correct in his statement that the only thing we need is the difference between the price and the site value in order to obtain the Increment Duty, I say, without hesitation, that in ninety-nine cases out of a hundred in which Increment Duty is obtained or in which increment is found to be existing, it is a comparson with the site value of 1909 which gives you the whole subject of increment. What on earth either he or anyone would do with his imaginary x under those conditions altogether passes my comprehension. Then he states that in several cases the Department refused to allow amendment of obvious errors. I have no evidence of any such action of the Depart- ment. He complains of one case, and says that where an owner fails to specify the nature of the minerals and to give his estimate of the capital value that value shall be treated as nil. I suppose that no Clause of the Bill was more fully discussed than that when passing through the House of Commons. The Clause in the Act as it stands at present is that unless the claim is made the value shall be treated as nil. I remember that there was a very long debate on this point, but where the Board are given reasonable grounds for believing that the minerals claimed were of value to the owner at the time he made his return, and that he knew they had a value which by error or inadvertence was not inserted, the policy of the Board is to allow it, despite the fact that he has no right to claim it. I do not believe that the hon. Gentleman can bring before me any such case as he refers to—

Mr. PRETYMAN

I will send you the particulars.

Mr. MASTERMAN

If I receive the particulars I will examine them, but they may be like the great majority of the hon. Gentleman's particulars, which vanish when one comes to a close examination of them.

Mr. PRETYMAN

I challenge the right hon. Gentleman to give me one such case.

Mr. MASTERMAN

I will give one case. Last July or August he impeached the Inland Revenue for what he said was "making law" in laying down certain conditions as to where Increment Value should be levied. He said that in the case of a builder called Lumsden the Act was quite clearly in favour of Lumsden, but that the Inland Revenue "made the law" and insisted on Increment Tax when they had no right to insist on it, and he displayed great indignation in the House against officials of the Inland Revenue making laws which were contrary to the Act of Parliament. The matter went to the Court, and the Court said that the regulations of the Inland Revenue were in accordance with the Act of Parliament, and the Inland Revenue had no choice but to carry out the intentions of the Act of Parliament. That is what I mean when I say that these charges which are made prove on examination to be altogether without foundation.

Mr. PRETYMAN

My excuse for that statement is that I accepted the statement of the Chancellor of the Exchequer.

Mr. MASTERMAN

It is a very serious impeachment of the Inland Revenue officials, quite apart from the Chancellor of the Exchequer. Statements have been made as to statements of the Chancellor of the Exchequer in a most unfair, and in some cases almost scandalous, manner, and I may perhaps give one example with which I will conclude the speech that has occupied the House too long. The hon. Gentleman and all his Friends in the last Debate on this subject quoted a specific statement made by the Chancellor of the Exchequer which I could not trace at the moment. The statement was this:— Unless the bare value of the land as land, and apart from anything done to it in the meantime, has risen while the house was being constructed, it could not be taxed at all. That, he said, is a very definite and specific statement made on the authority of the Chancellor of the Exchequer that under no circumstances shall any house or any land at whatever price it is sold be subject to Increment Value Duties unless the bare value of the land has risen. I have now found the original of this statement. It is a letter addressed to the "Times" of 29th October, 1909. It is taking up a definite case put before him by my hon. Friend the Member for Tottenham, with definite figures as to actual money spent, actual interest involved, and actual value that had been created. He says in Mr. Evans' case, so far as he can judge, no such thing would happen. On the contrary, the difference in charge in a case like this is fully provided for in the Bill. He says the value in that particular case has been created by the builder, and therefore the builder would not be taxed. He ends up:— I think I have made it quite clear that in a case such as this there is no reason for the apprehension expressed in the pamphlet that the builder would be taxed upon any value created entirely by his own enterprise and expenditure to an amount equal to or greater than the whole of his net profit upon the transaction. On the contrary unless the bare value of the land as land, apart from anything done to it, has increased while the house was being constructed, he would not be taxed at all. With all respect to the hon. Gentleman I ask, Is there a more scandalous case in his memory of a, statement like that—of a statement like that referring to definite, specific figures put before him that certain values have been created, and builders are apprehensive that those values have been taxed? The Chancellor of the Exchequer has, on the figures given, stated that unless the value of the estate had been raised they would not be taxed, and that statement has been treated as a general one, covering all the decisions, and that the Chancellor of the Exchequer is breaking down the Act of Parliament. I speak with some heat on the matter, and I feel some heat upon it, because I have examples in which attempts have been made to state that the Chancellor of the Exchequer had laid down general propositions incompatible with the Act or with the decisions of the Courts of Law, and I have found that the cases have always been cases in which material facts, material facts in the letters themselves, have been omitted when brought by the hon. and gallant Gentleman before this House. In ninety-nine cases out of a hundred his statements have been actually and entirely irrelevant.

May I very respectfully suggest to the hon. Gentleman opposite that a different method of procedure might be adopted? We do not intend, we never have intended, and we never intended to tax builders' profits, and builders' profits are not being taxed now under the Increment Tax. If it is necessary, in view of the agitation which the hon. and gallant Gentleman suggests exists on account of wide misrepresentations and misstatements on this subject, more definitely and specifically to reassure builders in this country by terms stated in the Act, then we are quite ready to listen to any suggestion that may be made on the subject. That is not the attitude of the hon. Gentleman. He is not controverting any particular item; he is not controverting any matter that ought to be altered in the interests of the subjects; he is not really controverting the administration of the Act. He is engaged in trying to fan a general agitation against the tax, and more especially, in company with certain of his Friends, against the carrying out of the valuation. He has tried to destroy the valuation—not that he could possibly do it or get people to repent of having passed a law in favour of valuation—by continually nagging at the administration of the valuation, and by continual statements of isolated cases which he thinks he can make good, cases where error may have crept into the valuation. I say without any hesitation that the valuation has been carried out both in law and spirit, and is being carried out to-day in conformity with the desire of Parliament. Hon. Gentlemen opposite, in connection with agricultural land, say, "Oh, valuation will not form a proper subject as far as agricultural land is concerned in any future scheme of general taxation of land values." That may be so. That has nothing to do with valuation as it is at present being carried on.

As soon as this House has decided what kind of deduction it considers would be desirable to make for agricultural land in connection with any scheme of general taxation of site values there will be no difficulty at all in making those deductions under the Valuation Roll as it is being at present established. But to say that we are not to obtain the real site value because we do not make deductions from that real site value of improvements which have been made is really quite contrary to the knowledge of hon. Gentlemen on both sides of the House. It is perfectly easy to add another column to the Valuation Roll, giving not only the real site value of a field at the present time, but the value of that field when you have deducted from that real site value anything that you may attribute to improvements. You may deduct improvements made in ten years, twenty years, a generation, or a century; but it would be idle to ask the administrators of Inland Revenue to add that extra column in the Valuation Roll, and arbitrarily to decide among themselves to what extent they should deduct agricultural improvements, when, on the one hand, that deduction is not required for the purpose of taxation, and when, on the other hand, there are no instructions, either from the Government or the House, as to what figures will be required in accordance with any future scheme. When the figures are clear there will be no difficulty at all in the matter. I submit that I have been able, without any difficulty at all, to reply to such part of the case of hon. Gentlemen opposite as is relevant to the present Debate. No one would have greater pleasure than myself and my right hon. Friend, and indeed most Members on this side of the House, when the opportunity comes, if the hon. and gallant Gentleman and his Friends once more raise the whole question of valuation and Land Taxes, upon which I submit the country has made up its mind, and we shall be only too glad that the controversy should be carried on.