§ MR. ALDERMAN SALOMONS,
in rising to bring forward the Motion on this subject of which he had given notice, observed, that he would most willingly have given way to allow the important debate on the second reading of the Representation of the People Bill to be proceeded with; but, as the House was aware, the hon. Member for Dudley (Mr. H. B. Sheridan) declined to accede to the suggestion which had been made to him to do so. He, therefore, hoped the House would give him a patient hearing while introducing to their notice a subject which was one of considerable national importance, and in which his con- 1991 stituents were especially interested. About two years ago he had called the attention of the House to the anomaly which existed with respect to lands, houses, and buildings occupied by the Government for public purposes being held to be exempt from the payment of local rates. The Government claimed the privilege of occupying houses, premises, and lands without being subjected to the rates for local purposes, for the relief of the poor, for maintaining highways, for lighting, watching, sewerage, or sanitary rates, while other occupiers of property in such neighbourhoods were compelled to pay and did pay a greater proportion of rates than was their fair share in consequence of the Government not paying their proper quota for the property they occupied. The rate of the United Kingdom amounted to a very considerable sum, and they were yearly increasing. In England and Wales they amounted to about £17,000,000; and, taking Ireland and Scotland into account, they probably amounted to over £20,000,000—an amount equal to the revenue of some of the large kingdoms of Europe. Surely it was but just that those rates should be fairly distributed among occupiers, so that every occupier should only pay his proper share? Last year the important question of liability to local rates was brought before the highest court of appeal in order to determine a case which had been many years in litigation between the Mersey Docks and the parochial authorities of Liverpool. The result was an unanimous decision of the Law Lords, concurred in by a majority of the Judges, that all property in useful occupation, whether held by trustees or not, was rateable. From time immemorial charitable institutions had been exempt, but by the decision of the House of Lords even property of that description was now liable to the payment of local rates, and he might mention that King's College Hospital had already acknowledged its liability in accordance with the decision. The only property now held to be exempt—not by statute, but the precedents of the Courts of Law, was property occupied by the Crown, whether for personal or for public purposes, the Crown not being held to be liable to any rates or taxes, unless specially named by Act of Parliament. The subject was not new to the House, for in 1858 a Committee was appointed composed of many most experienced Members, to consider this question, and it was presided over by the late Sir 1992 George Lewis. The opinion of that Committee was expressed very much in the language of the Resolution of the hon. Member. In fact, he had copied his Resolution from it—that all lands and buildings used and occupied for public purposes ought to be liable to local rates in the same manner as other property, and pay rates accordingly. His constituents were peculiarly aggrieved by the present exemption of Government property from rates. In Deptford especially the whole district around the Dockyard Victualling Establishment was at one time comparatively uninhabited and the neighbourhood pauperized. A large proportion of the Government property there was situated in a small parish, and the consequence was that the poor's rate at one time amounted to 12s. in the pound, and the other rates to 2s., making together 14s. in the pound. To give effect to the Report of the Committee of 1858, the right hon. Gentleman then Member for Wiltshire brought in a Bill to make all property liable to rates. The first clause of that Bill was to this effect—After the 1st of October next no lands, tenements, or hereditaments shall be held to be exempt from assessment to the poor rate or other local rate on the ground of the Royal prerogative, or because the trusts on which the same are held or the purposes to which they are applied are of a public nature, or because no person derives any beneficial interest from the occupation thereof. That Bill was opposed by the representatives of the charitable institutions which would have been affected by it, and their opposition prevailing, the measure was withdrawn. In the next Session the Government proposed in the Estimates a sum of money to be given in certain cases to those districts where the public establishments were large, and by their exemption from rates added greatly to the burdens of the inhabitants. But that he thought was found to be a very unsatisfactory arrangement; and, seeing that now every occupation, whether for charitable purposes or otherwise, was by the recent decision subject to local rating, he thought it would be becoming in the House and the Ministers of the Crown to accept the terms of his Resolution. It was not only his constituents who complained of the present state of the law, he had also received numerous applications from different parts of the country from persons who felt aggrieved. The wrongs of Chelsea had been brought forward by the hon. Member for Bath. The Govern- 1993 ment occupied seventy-six acres in Chelsea, which was about one-tenth of the whole surface of the parish, the total rates levied in the parish of St. Luke's being £51,000, to which the Government contributed only £515. There was not a town in the kingdom that had not a post office, and a post office was nothing more than a trading establishment carried on in the name of the Government. The business of the post office might be thus described. It possessed an entire monopoly of the carriage of letters at a profit. It carried parcels at a profit. It sold stamps, competing with private dealers. It transmitted money at a profit, competing with bankers. It had opened Government savings banks, competing with the other institutions of this kind. And it now undertook to grant annuities, &c, thus competing with the insurance offices. And yet these various establishments, competing as they did with private establishments and carrying on this large amount of business, contributed nothing towards their share of the local burdens in the districts in which they were placed. This exemption was an antiquated remnant of a system of privilege enjoyed by the Crown to the detriment of the subject, and ought no longer to exist; for it was clearly unjust that the people of any parish should be subjected to additional taxation, merely because of the existence of a Government establishment in it. Parishes mostly preferred submitting to the injustice, to the uncertainty and expense of seeking redress in the Courts of Law, but the law reports were full of cases of this kind, and the Judges had repeatedly expressed their opinion of the hardship which was inflicted by this practice. The legal tribunals having now laid down the broad principle that all property of whatever description, whether occupied for charitable purposes or otherwise, should be subjected to rating, he thought the time had come when the House and the Government might, with propriety, accede to his proposition. The hon. Member concluded by moving—That, in the opinion of this House, Her Majesty's Government should consider the expediency of recommending to Parliament that all lands and buildings used and occupied for public purposes ought to be liable to local rates in the same manner as other property, and pay rates accordingly.
§ MR. TITE,
in seconding the Motion, said, that by way of illustrating the grievances which now existed, he would take the parish of Chelsea, in which he was a resident, and acted as one of the overseers of 1994 the poor. The parish contained 771 acres, and a population of 60,000 persons; the annual rating was £51,000, and the Government occupied seventy-six acres or one-tenth of the whole parish—and yet, although the parish was exceedingly poor, the Government contributed nothing to the rates, except for a few houses occupied by military officers. They had, however, recently taken a large extent of land and had built an enormous extent of barracks, thereby greatly increasing the burden on the parish, but they had only thought it right to contribute the mere agricultural value of the land some £300 or £400 per annum. The parochial burdens were exceedingly heavy, and the presence of the pensioners entailed a great expense to the parish. An appeal had been made to the Lords of the Treasury on the question, and they replied that their rule was, that if the Government property amounted to one-sixth of the area of the parish they considered themselves liable to the poor rate; but, as in the case of Chelsea the proportion was only one-tenth, no remedy was obtainable. If that rule was universally enforced something might, perhaps, be said in its favour; but at Plymouth, where the Government only held one-twelfth of the parish, they contributed £6,000 to the local burdens, whereas at Chelsea they paid only £600 for some additional land and buildings. He could see no reason for such an inequality, and as the poor rate in Chelsea was 2s. 10d. in the pound on the rack rental, and he had himself paid 4s. in the pound on his own property, he thought that a strong case for redress had been made out, and that the rule applied to Plymouth should be also applied to Chelsea.
Motion made, and Question proposed,
That, in the opinion of this House, Her Majesty's Government should consider the expediency of recommending to Parliament that all lands and buildings used and occupied for public purposes ought to be liable to local rates in the same manner as other property, and pay rates accordingly:"—(Mr. Alderman Salomons.)
§ MR. P. WYKEHAM MARTIN (Rochester)
remarked that in the case of St. Margaret's, Rochester, the grievance was even greater than that complained of in Chelsea, as the Government refused to make any contribution to the local burdens, although, in addition to their military prison or hospital, they kept a large part of the parish under grass, and rendered some of the best building sites useless on account of 1995 the present kind of artillery necessitating a much larger space for fortifications. The parish was principally inhabited by the poorer classes, who complained very much of the pressure of the rates, to which the Government refused to contribute one farthing. He thought, therefore, that the sum voted for the rating of Government establishments ought to be shared in fairer proportions among the various parishes entitled to participate in it.
§ MR. CHILDERS
would first state what the proposition of the hon. Gentleman the Member for Greenwich was, and then what was the exact state of things with regard to the rating of Government property at the present time. The proposal made by the hon. Gentleman was that all public property should be rated, and that, not according to its then value, but according to what its value would be if it were built upon by private speculators. The annual amount at present paid by Government for rates upon public property in different parts of the country was about £27,000, but what they would have to pay were the property to be rated as if it were built upon—for instance, in Chelsea—he could not even guess at. Therefore, in the interest of the general taxpayers of the country, he trusted the House would hesitate before they acceded to the proposition of the hon. Member. The state of things as regarded the payments made by Government on account of local rates was this—It had been supposed that the law made a distinction between property said to be beneficially occupied and that not so occupied; and that the latter was not subject to local rates. That appeared to have been the received doctrine on the subject until the decision in the House of Lords in July last, which laid down the rule that all property whether beneficially occupied or not was subject to the payment of rates, but that as the Crown was not expressly mentioned in the statute, Government property was generally exempt. Until 1861 no payment whatever was made by Government on account of rates upon public property, but in 1858 there was an inquiry into the subject by a Committee of that House, and the result was that a Bill was introduced to render Government property liable generally to poor rates. That Bill was not proceeded with beyond the second reading, but the late Sir George Cornewall Lewis took the opportunity of entering fully into the question, and eventually an arrangement was come to whereby all Government 1996 property, when it should amount to one-sixth of the whole rateable value—not one-sixth of the area—of the parish should pay rates for the relief of the poor, but no other local rates; the amount to be provided by an annual Vote to be taken for that purpose. Where the Government property did not amount to one-sixth of the whole rateable value of the parish, it was not considered that the parish had such a claim as would justify Government in asking Parliament to supply funds to meet it. In the case of new property to be acquired by Government, however, it was agreed that Government should continue to pay, not only the poor rates, but all other local rates to which the property was liable before it passed into their hands, but only according to the value assessed at the time of Government becoming the owners. That was the state of things up to the middle of last year, but since that time two things had happened by which the question had been substantially affected. In the first place, by the decision of the House of Lords in July last, the whole doctrine of beneficial occupation, as it was formerly understood, was swept away. The law as laid down by that decision was simply this—that all property was subject to rating except that in the occupation of the Crown, the Crown not having been mentioned in the Act. The next disturbing cause was the passing of the Union Chargeability Act, by which the area of rating was extended from the parish to the union, so that the proportion of Government property before it would become liable to be rated, must amount to one-sixth of the rateable value of the union instead of one-sixth of the rateable value of the parish. These two changes had taken place since last year. As regarded the object of his hon. Friend the Member for Greenwich (Mr. Alderman Salomons) the great anomalies of which he had complained would thus be to a great extent removed. For instance, the parishes which most complained of the operation of the rule of one-sixth would, he believed, have no cause of complaint when the union rule should come into operation. At the same time, he was prepared to say that it was difficult after the decision of the House of Lords, and after the change in the area of rating, to say at once whether the present system was entirely satisfactory; and, therefore, before either the Government or the House pledged themselves to maintain the existing state of things they required further time 1997 to see how the present law operated, If necessary, Government would at some future time ask the House to make such alterations in the present system as might be found necessary. At the same time, it must be remembered that there were two sides to the question. It was perfectly true, as the hon. Gentleman stated, that in certain districts the local authorities did not receive anything from Government in the shape of rates upon public property; but if local rates were to be paid fully by the Government, it would be proper to charge property belonging to local authorities, such as parochial or local institutions, with Government taxes such as the income tax I and the house tax. And in such case it was by no means clear that the change would be to the benefit of the local taxpayers. Believing that he had shown to the House that the adoption of the Resolution might lead to many difficulties, he would strongly urge its rejection.
§ MR. FERRAND
thought that the hon. Member who had brought forward this subject had by so doing done good service to many persons who at present suffered considerably. He was almost afraid to refer to the injustice which the present state of things inflicted upon the inhabitants of his own constituency (Devonport), lest the Chancellor of the Exchequer, instead of confining himself to the disfranchisement of the dockyard men, who were to lose their power of voting in consequence of their Members having made known their grievances, should introduce a clause into the Reform Bill disfranchising the whole of the borough. He must, however, so far perform his duty as to state that the exemption of Government property in Devonport from rating was a great injustice to the ratepayers, and constituted another reason, arising from the additional taxation, why the dockyard men were entitled to the increase of wages which they had petitioned for.
§ MR. GATHORNE HARDY
observed, that the Government already paid rates in some instances, and, therefore, they to a certain extent admitted that there was some claim upon them for rates in respect of their property. It did not seem unjust that when all other property paid rates Govern- 1998 ment property should also pay. As to the rateability of public property and of private property not beneficially occupied, the whole question had recently undergone a material change. The decision to which attention had been called, though it did not affect Crown property, yet affected the decisions of the Courts that had decreed originally the exemption of Crown property. In the Statute of Elizabeth, Crown property was not mentioned, and therefore from the beginning it was exempt from rating; and the Judges looked not merely to the fact of the exemption, but to the ground of exemption—namely, that the buildings were occupied for a public purpose, and not for the benefit of the persons occupying them; and they carried out that principle. On that principle the docks at Liverpool, and the great charities in London and other large cities, were exempted from rating. But the decision which had lately been given in the House of Lords materially changed all this, and, therefore, it was time that the law should be carefully looked into. He thought his hon. Friend had done good service in bringing forward this Resolution, although he should not advise that the Motion should be pressed to a division, as investigation was promised; yet he wished to say that lie thought that the matter should be investigated, not by the Treasury only, but also by the Poor Law Board. The question was a very large one, and he should be glad to see the whole subject inquired into, and the exemption, if continued to Government property, extended to charitable, and literary, and scientific institutions.
§ MR. DENMAN
wished to illustrate the hardship of the present state of the law, by a case in which he had been professionally concerned. Formerly, property vested in the old East India Company was rateable; but it was decided some short time since that, from the time the Act of Parliament passed transferring the government of India to the Crown, the same property when invested in Her Majesty for the purposes of India was exempted. The consequences of this was, especially in one instance—of the parish of Lambeth—that when the Crown possessed large property, the burden of heavy poor rates was thrown upon those who, from their own poverty, could ill afford to support it.
§ MAJOR DICKSON
denied that the Government works at Dover were any attraction to strangers, and contended that the land which was employed for the safety of 1999 the country ought to share the burdens of the district upon whose inhabitants it conferred no special benefit.
THE CHANCELLOR OF THE EXCHEQUER
said, there could be no doubt as to the importance of the question now raised, particularly after what had been said by the hon. Member for the University of Oxford. He said, "We admit our liability to local taxation by the provisional arrangement which now subsists." [Mr. GATHORNE HARDY: Not our liability, but the justice of the claim.] He was bound to say that the observation just made reflected upon another point of the speech of the hon. Member, which was not quite accurate. The hon. Member observed that the question was not a great change in the law; but, in point of fact, it was a very great change in the law which was now the question—in as much as, by law, up to the present moment, the whole of the property of the Crown for purposes of rating was entirely exempt from taxation. He inferred, however, from the tone of his hon. Friend, and the general tone of the House, that, owing to a want of information on the subject, it was not now possible to come to any conclusion upon it. Perhaps, however, the House would allow him to bring into view one or two topics which it was very necessary to bear in mind in discussing the question. In the first place, it was necessary to bear in mind that, whilst Gentlemen appeared there as the advocates of particular parishes which had Government works within their limits, the great majority of the parishes in the Kingdom had no such works. In passing, he would relieve the mind of the hon. Member for Devonport, who seemed to labour under great anxiety with regard to the borough he represented. He seemed to think that his fate was trembling in the scales; but there would be no betrayal of confidence if he were to state that the Government had not the slightest intention of proposing the disfranchisement of the borough of Devonport. [Mr. FERRAND: Will the right hon. Gentleman omit Clause 10?] He would limit his answer to the question which was first put to him, and he replied that there was no intention to disfranchise the borough of Devonport. As he understood the matter before the House, there were four great classes of exemptions from rates in the country; but it was the double character of the exemptions which he wished to impress upon the mind of the House. Besides the question 2000 of rateability very fairly raised by his hon. Friend, there was another question which it would be the duty of the Government to raise when the important and extensive inquiry was instituted to which reference had been made—namely, the question of taxability. By rateability he meant liability to contribute to the funds contributed for local government; and by taxability, liability to contribute to the funds necessary for Imperial Government. It had been said that it was exceedingly unjust that Government property should be exempted. His hon. Friend (Mr. Alderman Salomons) had said—and the point was not at all an ill-selected one—that he was connected with a large institution, the London and Westminster Bank, opposite to one branch of which was a Post Office, which transacted mercantile business in the carriage of letters, and which, as a savings bank, competed with the Bank in the transmission of money, and so forth. Now, did his hon. Friend think that the London and Westminster Bank suffered any serious detriment, or any detriment at all, from the competition of the Post Office savings bank in the receipt of deposits of 1s. and upwards? He (the Chancellor of the Exchequer) would gladly make the bargain with the hon. Member, that if he would admit the savings banks to the general banking business, savings banks and money order offices should be rated. The fairest case of complaint, however, of the exemption of Government buildings from payment of rates was that with which the hon. Member for Devonport was conversant, where manufacturing premises were exempt. In those establishments competition was carried on with private traders; but the business of the Post Office savings bank consisted of the dregs, the refuse which nobody else cared to appropriate. With regard to the case of fortifications, the Member for Dover had stated a case. It was somewhat singular, it amounted almost to a paradox, that when the State was at great expense to surround a particular place—certainly for the special advantage in case of invasion of the inhabitants of that particular place—with walls and trenches and other fortifications, they should be made subject to rates for the purposes of local government. What he wanted to point out, however, was that it was not a question merely of Government buildings, nor a question merely of liability to local rates, but that if exemptions from direct taxation were to 2001 be removed all classes of exemption must be removed, and removed not merely as it regarded local taxation, but Imperial taxation. All buildings required for local government, all the municipal buildings, and the buildings of local bodies of every kind would necessarily, if this principle were to be established, become liable to contribute towards the revenues of the State. The question was a very large one, and he did not think it was possible for any hon. Member to take into view at the present moment the complexity and diversity of results which such a change would involve. The present arrangement, as had been stated by his Friend the Secretary to the Treasury, was a defective arrangement. It was not, however, to lie considered as an arrangement that rested upon any ground of law; he apprehended that it was a provisional arrangement made to meet a pressing and urgent demand. His hon. Friend the Member for the University of Oxford was perfectly correct when he stated that the subject was not a matter merely for the investigation of the Treasury; it was quite evident that it must go beyond the province of that Department, and embrace the case of religious buildings and charitable property, the case of municipal property, the property of all public boards, and of quasi-public and semi-public boards. And with regard to these different classes of public buildings it would be necessary to consider their liability, not merely to local rates, but to the direct taxation which was levied for Imperial purposes. The subject was undoubtedly assuming a somewhat urgent character. It was very hard when, owing to the construction of some new works of the Government in a parish, a large area of land, which formerly was made contributory to the rates, was withdrawn; for the consequence was that the rates levied on the other portion of the parish became proportionately heavier. The question from its nature, extent, and variety was one of great difficulty; but undoubtedly it ought to be searched to the bottom, with the view, if possible, of arriving as soon as might be at an advantageous settlement.
§ MR. WARNER
stated that the anomalies which had been brought forward that night had been very much aggravated during the last year or two. If there were to be exemptions, they should be founded on some fixed principle. According to the decision of Lord Westbury, charitable institutions—which formerly, by a kind of 2002 courtesy or oversight, had not been rated—were now liable to contribute to the local rates. If schools for the education of the poor were to pay poor rates, it seemed but fair to levy rates upon buildings erected for the general benefit of both rich and poor. He was very glad that the question had been raised, feeling convinced that the discussion would lead to a re-consideration of the law. He believed that nothing was more needed than a consolidation of the law of rating, and he hoped the Government would turn their attention to it.
§ MR. ALDERMAN SALOMONS
expressed his satisfaction at the turn the discussion had taken, and with the understanding that the subject would not be lost sight of, but be thoroughly investigated at an early day, he begged leave to withdraw his Motion.
§ Motion, by leave, withdrawn.