HC Deb 02 June 1880 vol 252 cc1000-11

Order for Second Reading read.

Mr. RAMSAY,

in moving that the Bill be now read a second time, said, the object of the Bill was to assimilate the English and Scotch systems of valuation. The subject had been so much discussed of late years in the House that he would not reiterate the arguments in favour of the Bill he had formerly used. The fact was that the right hon. Member for North Devon (Sir Stafford Northcote) agreed to accept the principle of the Bill last year, and, accordingly, a similar measure then before the House had been withdrawn. On that occasion he had introduced a similar Bill, and for the sake of those hon. Gentlemen who were not then present he would explain it in a word. The principle was simply that of taking the rent of each tenement as the sole criterion of the value of such tenement. There was, no doubt, great diversity between the practice of England and that of Scotland, At the same time, when dealing with the method on which the whole system of taxation was based, he thought it only fair that the whole system should be considered. The English practice had been described as differing in every parish—so much so, that it might be said to be based on the discretionary power exercised by the different overseers in the several parishes and Unions throughout the country. Nothing was more anomalous than that this should be the foundation for the system of levying the Income Tax, and the practical result in Scotland was equivalent to an additional penny of Income Tax on real estate in that country. If he had no other inducement to offer to the House for accepting the principle of the Bill, he should say that that in itself was a sufficient reason. He thought hon. Members were inclined to give Scotch interests the same consideration as English ones. Having regard to the population of the two countries, one would suppose that the incidence of taxation would be so adjusted that it would not fall most heavily on the poorer country. But such was not the case. Instead of the revenue derived from Scotland being less than a seventh, which was the amount proportionate to its population, it was considerably greater, the revenue derived from Scotland, with its population of 3,600,000, being £7,719,500, as compared with £54,456,718 for England, with its population of some 25,000,000. That was one reason, if there was no other, for so adjusting the incidence of taxation that it would not fall most heavily on the poorer country. In addition to this, they had to consider what effect any such change as was proposed would have on England. He contended that it would be of great use to the people of England, as they would be able exactly to estimate the annual increase in the value of real estate throughout the country. No fair comparison could be instituted between the valuation of real estate in the two countries so long as the systems pursued were so diverse. In England the overseers in the various parishes of their Unions, by means of the assessment committees, prepared the valuation; and from letters he had received from all parts of the country he understood that the Guardians, who were the members of the assessment committees, proceeded to make up the estimate of any particular tenement, not according to its real value, or the rent for which it would actually let, but according to what might be estimated as suitable for local wants. Of that, Scotchmen had no ground for complaint, so far as local rates were concerned; but it was a very different matter when they came to the incidence of Imperial taxation, and it was on that account, and to give to the State the advantage of realizing the annual increase in the value of real estate, and to secure the equal incidence of Imperial taxation throughout the Kingdom, that he would urge the Government to adopt the system of valuation contained in his Bill, which was that of adopting rent as the sole criterion of value. When he bad got the promise to which he had referred from the right hon. Gentleman the Member for North Devon (Sir Stafford North-cote) he was satisfied; but, from various causes, the question had not been advanced. It was not necessary now to ask what were the causes; but, so long as the state of matters to which he alluded prevailed, it was the duty of everyone who felt that an injustice was done to press upon Ministers uniformity of valuation. In the Report of the Board of Inland Revenue for the year ending the 31st of March, 1879, it was stated that whereas in the whole of England other than the Metropolis the property on which the Income Tax was assessed was£l 17,392,385, the gross estimate of the rental for the poor rate assessment was £106,000.000, while the rateable value with which his Bill did not interfere was £91,119,973, so that the gross estimate of rental according to the poor rate was £11,000,000 less than was charged upon the same property for Income Tax. When they found that extreme diversity of practice between the Board of Inland Revenue and the local authorities throughout the Kingdom, he did not think it was creditable that such a system should continue; therefore, the principle of the Bill now before the House should be adopted. In Scotland the amount of valuation was £18,520,000, whereas in England it was equal to £117,392,385, exclusive of the Metropolis, which in a question of that sort might very fairly be excluded from their consideration, because the law in the Metropolis was different from that in use in any other part of the Kingdom. That the result of the present system was one of hardship to Scotland could be seen from the figures he had given. It seemed to him that no fairer cause of complaint than that could be had, and he hoped that the Representative of the Government would be able to assent to the second reading of the Bill. If refused, then he should say that the Scotch Members would require to practice that which they had never done, and endeavour to awaken some interest in the people of Scotland by that course of obstruction which they knew and had been taught how to practice; but that was a course they would enter upon with very great reluctance. Referring for a moment to an argument that had been previously employed, that what might be suitable for Scotland would not be suitable for England, he said the system was working satisfactorily in Scotland, in cases where the valuation was greater than it was in three-fourths of the counties in England; and when he said that, he thought he had said enough to show that the objection was wholly groundless. He was quite aware there was a difficulty in England, because of the different way in which the local assessments were made; but if they waited until they got a satisfactory system for imposing local rates and county government they might wait for a very long time to come; and, therefore, he hoped Her Majesty's Ministers would be prepared to give them what he regarded as simple justice to Scotland. If they did not, then he desired to say he should feel very much disappointed, be-cause he was certain there was not a Member from Scotland who was acquainted with the system in use in that country but would bear his testimony to the satisfactory operation of the law which had been in use there for 25 years and upwards. The Members of the House preferred practice to theory; and when they found a law similar to that he had submitted, which had been in operation for 25 years in Scotland, and had given satisfaction to the people, he thought he had said enough to commend his Bill to the acceptance of the House. The only objection he ever heard to the operation of the Valuation Act in Scotland was in respect of the charge levied on mansion houses in the country. They were said to be less heavily taxed than similar dwellings in other places. But that did not arise from the fault of any of those who were the assessors, but from the fact that the rent when coming to be let was regarded as the real value; and that was the only just way to deal with such cases. He did not see it was necessary for him to further detain the House. The real object he had in view was to secure a uniformity of valuation throughout Great Britain. He did not propose to interfere with the sister country, as the system in operation there was wholly different to that in any part of Great Britain; and, as he had no wish to occupy time, he would move that the Bill be now read a second time.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Ramsay.)

MR. SCLATER-BOOTH

denied that any injustice was done to Scotland by the present system of valuation. The hon. Member had not made out any case whatever for his Bill. The hon. Member seemed to have assumed that he was the author of the principle that rent should be the basis of valuation; but that principle was contained in the Scotch Act of 1854—

MR. RAMSAY

I stated that the system had been in operation in Scotland for 25 years, and I never claimed the authorship of it.

MR. SCLATER-BOOTH

said, the hon. Member had forborne to remind the House that on every occasion on which he on the part of the late Government had introduced a Valuation Bill the constant burthen of his song was that his object was to get more and more the principle established that rents paid and received should be the criterion of value, and it was with that view alone that they proposed to associate with the assessment committee an officer of the Inland Revenue. The hon. Member brought forward this measure as one of justice to Scotland; but the Inland Revenue, in levying the Income Tax in England, were not bound by the Poor Law assessment, which their assessment exceeded by at least £10,000,000, and they levied the property tax both in England and Scotland upon a uniform principle. It was quite true that Scotland had gone a step beyond that which was adopted in England—namely, in the identification for all purposes, both local and Imperial, of the value of real property. There was, however, no in- justice to Scotland. The present Bill, however, did not merely propose to extend to England the principle of rent as the basis of valuation. A more preposterous step than to get rid of the whole of the existing machinery, which had worked for the last 15 years in this country with great success as compared with what formerly was the case, he had never heard. The Bill proposed at one coup to get rid of the whole existing machinery by which value was assessed. The real principle of the Bill was the establishment of county valuation boards instead of assessment committees; and though that would work satisfactorily in the Scotch counties, it would in England be attended with great injustice and inequality. No case had been made out for the adoption of such a principle, and he trusted the House would not sanction it by reading the Bill a second time. The principle of rent as the criterion of value had already received the sanction of the House.

MR. HIBBERT

said, he was obliged to oppose the Bill. He was not prepared to admit that no improvements should be made in the mode of carrying out the Valuation Act. Five or six Bills had been before the House from time to time, and great improvements had been made. But that was no reason for accepting the Bill now before the House. He did not object to the principle that rent was the criterion of value; but the Bill went much further than that. It proposed entirely to disestablish and get rid of 646 assessment committees, who were so usefully engaged in carrying on the assessment work of the country. The Bill would entirely upset that system, which he was sure the House was not prepared to do. The assessment committees had been doing really good service to the country. When they commenced their work, 12 or 13 years ago, the assessments were in a very unsatisfactory state. A great improvement had now been effected —parish assessments had been brought to an equal valuation, and what was now wanted was to compel uniformity between Union and Union. It was said injustice was done to Scotland. In the Metropolis a considerable increase had of late years occurred under the Valuation Act. With a population of 3,200,000, the gross value of the assessment in the Metropolis amounted to £30,000,000; and in the whole of Scotland, with a population about the same number, the gross value was not £30,000,000, but only £22,000,000, or £8,000,000 less than the Metropolis. He thought the true result of his hon. Friend's proposal would be to increase the pressure on the Government to proceed with their Valuation Bill as soon as possible. It would be practically impossible to carry on the work of assessment by means of such boards as the hon. Member proposed, as in such large counties as Gloucester, the West Biding of Yorkshire, or Lancashire, they would comprise over 300 members. There was no reason for overriding England with the Scotch system, nor for overriding Scotland with the English system. The principle that rent should be the basis of valuation had already been adopted; and he had no doubt that it would be adopted in the Bill which would be brought forward by the Government on the subject of valuation and assessment as soon as possible— most probably next Session. He trusted, therefore, his hon. Friend would not press his Bill to a division, but would rest satisfied with the discussion that had taken place.

MR. PAGET

said, he was gratified to hear a protest from the Government against the wholesale disestablishment of existing rating authorities advocated by the hon. Member for the Falkirk Burghs (Mr. Ramsay). He was also glad to learn that the Government proposed, at an early period, to introduce a measure of their own. There could be no difficulty about the matter, which would have been settled last Session, had there been time, by the Bill of the late President of the Local Government Board. That Bill was nearly through Committee, and all contentious matter had virtually been disposed of. He therefore hoped the hon. Member, who was justly regarded as a great authority on this subject in Scotland, would be satisfied with the discussion which had been held, and withdraw the Bill.

MR. MUNTZ

said, if he had any doubt about the necessity or the desirability there was for the Bill being read a second time, he should have had that doubt removed by the speeches that had just been delivered. The hon. Member for Oldham (Mr. Hibbert) told them they had had 13 years in which attempts had been made to pass a Valuation Bill, and in all those years they had not made any progress; and, therefore all the injustice had continued because neither Party had been able to act upon any fixed principle. A good deal had been said as to the clause in the Bill particularly referring to the assessment committees. Now, he thought that was an essential part of the Bill; but whether continued or not, the great principle of the Bill had nothing to do with that, but was whether those valuations that were made were made on a fixed system, whether they were made on the real value of the property or not. It was said it would be monstrous to interfere with the Metropolis Bill; but the Bill, in his opinion, was very unjust, and a large number of persons were of that opinion, whereas the Scotch system, which had been in operation for 25 years, was generally affirmed. He supported the second reading of the Bill, and believed if it was so read they might have the subject discussed in Committee, when there would be a chance of doing what they had never been able to do before.

GENERAL SIR GEORGE BALFOUR

said, he must express his disappointment at the manner in which the Bill of his hon. Friend the Member for the Falkirk Burghs had been received by the Government. The rise in the amount of the assessments was no proof of improvement in the mode of assessing; and, seeing that we had in England no fewer than three principles of assessment —one for the poor rate, another for rent, and another for Income Tax—it could not be claimed for any of these three modes any degree of exactness such as the Bill would insure. In the county of Bedford there were differences of 40 and 20 per cent in the assessments for different purposes—that was to say, the gross estimated rental at which Income Tax assessments exceeded the value for local rates was 2097 per cent higher than the gross estimated value in poor rate, and actually 40.54 per cent higher than the rateable value used for levying the poor rate. In Carnarvon the differences were even greater. These diversities had been strongly condemned by the Commissioners of Inland Revenue. Indeed, hardly a Report came to hand in which these valuations were not denounced. In England and Wales the values for Income Tax were, in 1876–77, upwards of £142,000,000, against the £130,000,000 value for poor rate, and £111,000,000 value for levying that rate. ! The result of such variations was to bring on attempts to palm off the lower value for levying the poor rate for the value to levy the Income Tax. The contrast between the value in Scotland, as shown by the rent roll, and the value for the Income Tax, was very great, the Income Tax value being close on the value of the rent roll, so that local taxes and Income Tax were assessed on the like values. This equality fully bore out the assertion of his hon. Friend that Scotland contributed to the Income Tax a far higher ratio of payment according to values than did England. In these circumstances, the objections taken to the details of the Bill on the part of the Government did not justify their opposition to its principle. The valuations had risen in Scotland in a far higher ratio than in England, mainly owing to the excellent Act of 1854, which laid down a uniform scale for making values in that country. Then, again, the contrast of values in the Metropolis with those of Scotland did not hold. It was quite unfair to compare a poor country like Scotland with the concentration of wealth in the Metropolis. He urged the hon. Member for Falkirk to go to a division, in order to show the Government that there was a grievance which urgently required to be dealt with. In his opinion, it was a scandal to the country that action in this direction had not been taken long ago.

MR. GREGORY

said, there were two principles in the Bill—the basis of assessment, and the machinery by which it should be carried out. The methods of arriving at value laid down in the Bill were open to criticism in detail, and it could hardly be amended by a Select Committee without altering its machinery, so as to make it virtually a new Bill. After the assurances that had been given, the Bill might very well be withdrawn, and the subject left in the hands of the Government.

MR. D. M'LAREN

said, that parts of the Scotch Act had been referred to as antagonistic. In point of fact, they were consistent and worked together. One was that the real value of the land or house was to be taken, and the second was that the land or houses should be taken at a rent at which they could reasonably be expected to let. The solution of the supposed antagonism was this—The real rent was to be taken wherever a rent was paid; but wherever a man occupied his own land or his own house the real value was to be taken, as nearly as could be ascertained, in comparison with what other houses or other lands were rented at in the same neighbourhood. Nothing was more common in Edinburgh than for a man to occupy his own house. Perhaps one-half of a street was occupied by owners, and the other half let to tenants. Well, that was to be done with a house occupied by the owner if the assessment was to be only by the real rent? Since no rent was paid no assessment according to the rent could be taken; but hero came in the provision that the real value was to be ascertained by the rental of property of the same kind in the neighbourhood. The same provision applied to land as to houses, and hence the two provisions worked together, and the fact was that the Act was regarded by all parties in Scotland as valuable and equitable.

MR. DUCKHAM

said, he should vote for the second reading of the measure.

LORD HENRY SCOTT

said, the present condition of things was not the fault of the late President of the Local Government Board, but rather that of the late Parliament; for when the last Government brought forward a Valuation Bill it was obstructed by Amendments which complicated the question with that of county government. He hoped Government would introduce a Valuation Bill this Session, and that they would keep the question of county government quite apart from it.

MR. POUND

thanked the Secretary to the Local Government Board for announcing the intention of Her Majesty's Government to bring in a Bill to deal with the subject of valuation at the earliest opportunity. He joined in the appeal just made by hon. Member for Lincolnshire (Mr. Heneage) that the Government would see their way to introducing it in the present Session, in order that, although it might not be passed, it might be brought before the Chambers of Agriculture, Boards of Guardians, and other local bodies interested, during the autumn, and thus, having been ventilated and thoroughly discussed by the country, a basis of legislation would be afforded, so that the Government would be able to pass an Act next Session. He considered the subject demanded attention —chiefly on the ground of want of uniformity. There were now, it was well-known, three different assessments:—1, the county rate assessment; 2, the Poor Law assessment; and 3, the Income Tax assessment. It was most desirable that there should be only one. He had an opportunity occasionally of sitting as an Income Tax Commissioner, and he felt bound to say that complaints were made in the constituency which he represented as to the present mode of this assessment. He thanked the hon. Member who introduced the Bill. Scotchmen were well-known in the House for the excellent and quiet way in which they attended to Scotch Business; and on this occasion the hon. Member had departed from the usual practice of attending only to Scotch Business, but had brought in a Bill legislating for England. He understood the reason for so doing after the explanation he gave—namely, that Scotland now paid 1d. too much under the present mode of assessment, and England 1d. too little. If the hon. Member could prove this, he (Mr. Round) thought it a fair question to raise, and, for his part, was prepared to give him and his countrymen their penny.

MR. STORER

said, the many attempts that had been made to deal with this question had not resulted in a good settlement, for one distinct and clear reason, which was, that it was impossible to get one assessment for local and for Imperial taxation, because, while a man's income was a fact, the rent paid was not always an indication of the relative value of property when it had to be determined as between one tenant and another. He thought the old basis of assessment should be maintained. Farms were sometimes let at a nominal value, in order to keep them in cultivation; and if they were assessed at their nominal value an unfair burden would fall on occupiers who paid a fair rent. In these cases uniformity must be attained, and the real point at issue was the basis on which the assessment was to be made. He trusted the Government would take this question in hand.

SIR JOSEPH BAILEY

said, that, as chairman of an assessment committee, he was by no means satisfied with the present rating of woods. They ought to be rated exactly like other property, at the actual value they had from year to year. It was true they could not get the value of woods for one year; but they could take a number of years, and when it was known what was the worth of the wood on being cut down, any actuary could tell the value from year to year. They could not arrive at the value of a farm in any one year. He believed that in what had been said about the county of Bedford trading and professional income was included in one assessment, and, of course, excluded in the other. He was glad that a promise had been obtained from the Government to bring in a Bill next year; but he hoped that no great change would be made in the assessment committees.

MR. ALDERMAN W. LAWRENCE

expressed a hope that the Government would take up the question and remove the inequalities which existed in the present system, and which were in nothing more conspicuous than in a comparison of the low valuations of great mansions throughout the country for the purpose of the house tax, and the high valuations of houses and gardens occupied by the middle classes and houses occupied by traders and shopkeepers.

Question put, and negatived.