Commons Sitting of 6 April 1892

Preamble
The SPEAKER was in his place soon after Twelve o'clock, but not until half-past Twelve was a quorum of Members found in the House.
ORDERS OF THE DAY.
  RATING OF MACHINERY BILL.—(No. 31.)

    SECOND READING.
    Order for Second Reading read.
    MR. GERALD BALFOUR: In rising to move the Second Reading of this Bill, I am sensible that I have to contend against a double disadvantage. In the first place, though the practical issue is one of extreme importance, the subject is so complicated, difficult and technical that only speakers happily and exceptionally endowed could hope to invest it with anything like interest. In the second place, a Bill dealing with the rating of machinery has now for so many successive Sessions appeared among what are called the "hardy annuals" that it is difficult, if not impossible, to say anything on the subject which has not already been said, and better said, by hon. Friends who have had charge of the Bill on previous occasions. On the other hand, there is some encouragement in the reflection that on no one of these occasions, so far, has this Bill met with an adverse vote in the House of Commons. The Bill introduced in the year 1890 by my hon. Friend the Member for Cirencester (Mr. Winterbotham) passed its Second Reading by a majority of no less than 239 to 87; and last year the Bill introduced by my hon. Friend the Member for Nottingham (Mr. H. S. Wright) passed its Second Reading, no Division being challenged. Under these circumstances, and considering that the present Bill contains certain modifications which are intended to disarm criticisms brought against the Bill in its original form, I venture to express a hope that this Bill will be received as favourably as its predecessors have been. I think I may also claim not merely that the principle
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    is one which on more than one occasion has received the emphatic assent of the House of Commoms, but it has been supported, and is being supported, more and more in the country. Petitions have flowed in from manufacturing firms, from Chambers of Commerce, from Trades Councils, from Trades Unions, from Assessment Committees, in favour of the Bill; and only yesterday an influential general deputation waited upon the right hon. Gentleman the President of the Local Government Board in favour of the Bill, showing what force and importance this movement has attained. I am aware that opponents of the Bill will probably not lay very much stress on petitions and representations which have come from manufacturing firms and Chambers of Commerce. It has been said, and I daresay it will be said again, that the Bill is intended for the relief of rich manufacturers. Well, Sir, I am not a manufacturer, rich or otherwise, but I support the Bill not as one which is intended to relieve a particular class in the community from burdens that class now bears, but rather as a Bill to avert from the industrial community generally a danger hanging over them, which, if now merely a danger apprehended, will become a danger realised unless some present remedy be adopted to avert it. But I would call the attention of those who describe this as merely a manufacturers' relief Bill more particularly to the action which has been taken in connection with the Bill by the representatives of Trades Unions and of Assessment Committees. We have been given to understand by opponents of the measure on previous occasions that whatever advantage the Bill may give to manufacturers means by so much an addition to the rates; and this will practically be an addition to the rent paid by the artizan. But that is not the view taken by the majority of the Trades Unions—I might say of the overwhelming majority of Trades Unions. I believe the deputation the right hon. Gentleman received yesterday represented half a million operatives. Now Trades Unions are sufficiently enlightened and intelligent to be thoroughly aware how taxation affects the interests of the industrial community, especially having regard

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    to foreign competition, and they know that in part the loss must fall upon the operatives. They are entirely at one with the manufacturers in this matter. But the adhesion of so many Assessment Committees is even more incompatible with the view I am now dealing with than is the action taken by the Trades Unions. Assessment Committees have to value the property of manufacturers, and when you find that two parties whose interests are primâ facie entirely opposed acting in complete harmony, I think there is ground for a strong inference that the Amendment of the law which is suggested is one in the interest of the community generally. Now, what are the causes of the dissatisfaction which has brought about this state of things which has united the raters and the rated in one common action in favour of the Bill? We contend, first of all, that the present law is uncertain in its operation and application. We contend, secondly, that the most recent decisions on the question, the most authoritative declaration and interpretation of the law, tend toward a complete departure from the usages which have been followed hitherto by Assessment Committees; that if the principles of these recent decisions are carried out with strictness and severity they will really produce nothing less than a revolution in the present practice of assessment, and that the change will undoubtedly operate with great hardship on all the industrial classes in the country. These are our two main contentions. I do not say the principle of the law is uncertain. I only say the application of it is uncertain. I am aware that many legal gentlemen hold the opinion that the law remains unchanged in principle, and I am quite willing to avoid as far as I can ruffling their legal composure; therefore I will not even contend that the law has been changed. I will merely say there has been a development—and development is to my mind an equally efficacious word for describing what has taken place—and it is at the same time less disputatious. It has been my not altogether pleasant duty, since I undertook to move the Second Reading of this Bill, carefully to study the cases upon
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    which the most important declarations of the law have been made. I cannot say it is exactly the study I would recommend to any friend, unless he should happen to be very much at a loss for something to do—something to occupy his leisure hours. Indeed, to say the truth, I would advise him to adopt the alternative of the study of German metaphysics—a subject not more obscure, and certainly more attractive. But I have taken the trouble to thread my way through the winding mazes of argument and counter argument leading up to judicial decisions on the subject, and I would like, just as shortly as I can and avoiding all unnecessary details, to state to the House the direction in which there has really been a development of Judge-made law in connection with the rating of machinery. For this purpose it is not necessary to do more than to make a passing reference to the great landmark in this legislation, the Act of 1840. During the period since the passing of that Act no doubt important decisions have been given on the rating of machinery, but I do not think I need trouble the House with any of these until we come to the case "The Queen v. Leigh." In this case, tried before Lord Chief Justice Cockburn and Mr. Justice Blackburn, Lord Chief Justice Cockburn laid down a triple classification of machinery in respect to rating. The first class he spoke of as mere chattels, or simply chattels, and this class is not rateable. Then there is another class of machinery which is so far attached to the freehold as to form part of it, and with regard to this class of machinery there is also no obscurity or dispute: it is, of course, rateable with the rest of the hereditament. But between these classes there is an intermediate class, and that is where the trouble has arisen. With regard to the ordinary hereditament—a dwelling-house, for instance—such a class either does not exist or else it is so unimportant that we may practically neglect it. But that is not so in the case of manufacturing machinery. This debateable class unites in itself a variety of contradictory descriptions. It may be described as a class of "movable fixtures," or it may become an

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    "attached chattel." It may be said, on the one hand, it is not rateable, or, on the other hand, it is not exempted. It is not rateable, for this reason: it is certainly machinery which is the personal property of the owner, and as no personal property is rateable it follows that this is not rateable. Neither is it exempted, and therefore a new phrase has been found for it; it cannot be said to be rateable, but it is said to enhance the value of the hereditament for the purpose of rating. How is this nondescript class, which is "neither fish, flesh, fowl, nor good red herring," to be defined? Lord Chief Justice Cockburn defines it thus:—
    "Things which though capable of being removed are yet so far attached as that it is intended that they should remain permanently with the undertaking. … remain permanent appendages to it, and essential to the working of the undertaking."
    Now, in this definition there are two points to which special attention must be paid. In the first place, the machinery must be "attached"—whatever meaning may be conveyed by the word "attached." In the second place, it is to remain a "permanent appendage" to the premises, to be "essential to the working" of the premises. Then further light is thrown on the meaning of the word "attached" by the judgment delivered on the same occasion by Mr. Justice Blackburn. I will read his words—
    "The rule laid down has been that when the things are attached to the premises, although they are removable afterwards, still they are part of the premises. … But if things or chattels be merely fixed to the premises, and so far fastened to the premises as to be still chattels, but fixed and steadied for the purpose of use there, they remain chattels altogether. … The ordinary illustration is a mirror. …"
    I need not give all the words.
    "On the other hand, a grate which is built into a chimney, although it is capable of being removed by a tenant, would still be fixed to the premises, and, therefore, part of what would be considered to be let to the hypothetical tenant, and for which he would pay rent. … Look at the various matters put here. They all, with the exception of the meters. … are, although but slightly, attached to the premises. Nevertheless, I think it clear that they are all, in fact, attached to the premises, so as to come within the principle laid down."
    Now it is clear from these words of Mr. Justice Blackburn that in his view
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    the word "attached" implies that there must be some physical connection that the article must be in some way physically attached to the premises. Therefore, the result we arrive at from these two judgments is as follows: That first of all there are three kinds of machinery; first, machinery which is a mere chattel and not rateable; secondly, there are fixtures rateable with the rest of the freehold; and, thirdly, there is a debateable class not in itself rateable, but which is taken into consideration as enhancing the value of the premises on two conditions—first, that in some way the machinery is physically attached to the premises; and, secondly, that it is essential to the premises for the purposes for which the premises are used. I do not say the definition is perfect; I think it is rather calculated to give rise to litigation and increase lawyer's bills, and I think it is also possible, under a strict interpretation, that it might include certain machinery which by ordinary usage is exempted from rating. But I think if matters had remained there, notwithstanding our objection, we should never have heard of "Rating of Machinery" Bills; and it would not have been necessary for me or other Members to trouble the House with these somewhat dry disquisitions. The case at Bishop Wearmouth and the Tyne Boiler case have, however, completely swept away all these tests which, in the case of "The Queen v. the Inhabitants of Leigh" were recognised as necessary in connection with this debateable machinery—namely, the test of attachment. The Judgment of the Master of the Rolls really only enforced that in the Bishop Wearmouth case, and it so clearly and undeniably excludes attachment, in the sense of physical attachment, that I will read it—
    "The rule, as I shall try to express it, will leave out that word 'attached,' will leave out 'fixed,' and will leave out a great many other words that have been used, and I believe that that case and all the other cases will be found to come under this rule, that things which are on the premises to be rated and which are there for the purpose of making and do make them, that is those premises, fit for the particular purpose for which they are used ought to be taken into account in ascertaining the value of the premises for rating purposes. I have left out advisedly the words 'attached,' 'fastened,' 'annexed,' and the other words."

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    Now, Sir, that Judgment of Lord Esher authoritatively fixed the present law, and it is against this interpretation of the law in which physical attachment is left out as a test that we make our complaint, and it is this interpretation which we should like to see modified, and propose to modify, by the Bill I now have the honour to commend to the House. We do not admit that we in any sense propose to change the Statute Law; we merely wish to bring matters back to the state they were in before these two decisions were given. Our objections to the view taken by Lord Esher are, first, that this Judgment makes it really impossible to distinguish between what are mere chattels and this class of debateable machinery, and really so extends the debateable class as to include chattels; secondly, it makes the law altogether uncertain; and, thirdly, it has already caused the operation of the law to be unequal in different parts of the country, certain machinery being regarded in one part of the country as a mere chattel and not rated, and as in the debateable class, and rated in another part of the country. Another objection is, that if strictly applied it would cause a complete revolution in the existing practice of Assessment Committees and would be disastrous to the manufactures of this country. So far the situation has been saved by the action of the rating authorities, who in most cases have adhered to the system they have practised heretofore, and declined to enforce the ruling of the Master of the Rolls. But we see by the Chard case what the effect would be if Lord Esher's interpretation were enforced throughout the country, as the Judgment in that case was given, as far as I can judge, strictly in accordance with Lord Esher's ruling. The result was that machinery, before that time treated as mere chattels, was brought within the debateable class and rated, with the consequence that the premises are now rated three or four times as high as before. In Nottingham the same kind of machinery is still regarded as exempt from rateability. Subsequently the manufacturers in the Chard Union came to an agreement with the rating authorities, on the basis of this Judgment, to increase the assessment of
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    their premises not by the annual value of the whole debateable machinery, but only by 50 per cent. of that value. I rather think there is no judicial decision in support of that compromise which involves the principle that increased value arising from machinery not fixed to the freehold is not to be taken as equivalent to the increased value of machinery attached to the freehold. This compromise is one more proof that the law requires defining and amending. Now, Sir, if it be granted that some amendment in the law is desirable, what form should it take? Our proposal was simply to declare and make lawful the normal practice of the rating authorities by enumerating those classes and descriptions of machinery which are to be rated and excluding all other machinery. That was the principle in the original Bill of 1887, which made rateable all machinery used for the production or transmission of first motive power. A Select Committee reported on that Bill, and I think we are fairly entitled to read from the Report of that Committee three noteworthy Resolutions, which seem to have been passed unanimously. The first Resolution states—
    "That it is clear from the evidence that the system acted on by valuers in different parts of the country has varied considerably, and that practice in many cases will be materially affected in the future; they, therefore, recommend further legislation on the subject."
    The second Resolution is—
    "That this Committee, believing that the Bill referred to them affords a basis for an equitable system of assessment in the case of industries mainly depending on fixed motive power, is of opinion that the difficulties of defining a satisfactory principle of valuation for the purposes of assessment generally are so great as to render it desirable that the matter should be dealt with as part of a comprehensive scheme of local taxation."
    The third Resolution is—
    "That it is desirable in the meantime that the various rating authorities should not depart from their present systems of assessment."
    Now, Sir, it is not surprising that, in view of these strong statements, the Bill introduced in 1887 should, in 1889, have been passed by the enormous majority of 239 to 87. It may be said that the present Bill and that introduced

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    by my hon. Friend the Member for Nottingham are not the same as the Bill of 1889. These Bills are not the same, and far from being more strong or drastic than that of 1889; they are distinctly weaker, and recommend less thorough-going amendment of the existing law; by the existing law I mean the law as interpreted by judicial decisions, and not the Statute Law. The history of the modifications is very simple. The Bill of 1887 was opposed by my right hon. Friend the President of the Board of Trade (Sir M. Hicks Beach) for the purpose of allowing the interested parties to endeavour to come to some agreement; and the promoters of the Bill, while not admitting that it went beyond the limits of fairness and justice, were not unwilling to accede to a compromise which would secure the passing of the Bill. A compromise was arrived at and embodied in an Amendment, but, unfortunately, the Bill was squeezed out at the end of the Session. The Bill of 1889 really embodied the Amendment of which I have spoken, but that also was squeezed out at the end of the Session. The present Bill is, in the main, drawn on the lines of the Bill of last year. The objection of my hon. and learned Friend the Attorney General (Sir R. Webster) to the original form of the Bill was that it proceeded affirmatively—that is to say, it defined the machinery which was liable to be rated, and left all other machinery free. He contended that such a measure should proceed negatively—that is to say, should define the machinery which was not to be rated, and leave all the machinery which did not come within that definition within the area of rating. We have endeavoured to meet that objection in the 1st clause, in which we say that
    "Any increased value arising from machines, tools, or appliances which are not fixed, or are only so fixed that they can be removed from their place without necessitating the removal of any part of such hereditament shall be excluded."
    It will be observed that this definition is really a definition of movable chattels. We do not attempt to define the debateable machinery, but, incidentally, reversing Lord Esher's procedure, we have re-introduced the test of attachment. We say that machinery
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    not attached in the manner described in the 1st clause is not to be rated; and where it is so attached it is to be rated, and by inference we indicate what are to be the limits of debateable machinery. The clause is really intended to enable a clear and distinct line to be drawn between debateable machinery and mere chattels, and I think it is so drawn that the rating authorities will have little difficulty in applying it. It is true that this definition is somewhat wider than that of last year's Bill, and if taken alone would exclude from rateability machinery which that Bill included;. but we have introduced a proviso which will prevent the possibility of the unfair or unjust application of it. I do not refer to the second proviso, which is common to both Bills, and is to the effect that machinery for producing or transmitting first motive power shall not come within the Act, and shall be rated as heretofore. I refer to the previous one, which is to the effect—
    "That the gross annual value of any such hereditament containing machinery shall be estimated at not less than the sum at which it might reasonably be expected to let for the purposes for which it is used on a tenancy from year to year void of the machines, tools, and appliances which it might reasonably be expected would be supplied by the tenant."
    I shall be quite prepared to contend that that proviso contains in itself the right and proper rule for estimating the value of hereditaments containing machinery if they are to be rated on the same principle as dwelling-houses. But we have not gone so far; we contend that this rule merely expresses the minimum at which such premises should be rated. We are told that under this proviso such premises would be rated as mere shells. That is not our intention, and we make that clear by declaring the minimum at which such buildings shall be rated. If there were machines belonging to the debateable class over and above what would fall under the proviso the rateability of the hereditament would be by so much increased. Looking at the definition, and the way we have hedged it round from the possibility of abuse, I do not think it can fairly be contended that we are attempting to obtain for manufacturers relief to which they are not

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    properly entitled. I have shown how precarious is the position of manufacturers in most towns—how uncertain is the law; have pointed out how unequal it is in different districts, and in what an awkward position the rating authorities are placed; and have endeavoured to explain how the Bill will meet these points; and for these reasons I think the Bill should be passed. I would now venture to say something in anticipation of the objections which may be brought against it. From what quarter does this opposition come? Principally, so far as I have been able to gather, from the agricultural interest. I think if the operation of the Bill were fully understood this opposition would be largely abated. The agricultural interest cannot be affected by it, except in districts partly industrial and partly agricultural. In purely agricultural Unions the effect of the Bill, if any, would be favourable. At present, under Lord Esher's interpretation, it is impossible to define what is and what is not a chattel, and machines used in agriculture will probably be swept into the assessor's net. If the machinery in the Chard case ought to be rated, one cannot see why agricultural machinery should not also be rated. Take the case of Unions, partly agricultural and partly industrial. I would ask hon. Gentlemen representing agricultural constituencies whether it is really in their interest to take a step which would prevent the increase of industrial pursuits in their constituencies? Can it be to the advantage of a mixed agricultural and industrial population, that the employment now given to operatives in manufactures should be taken away? I should say it was to their advantage, as far as possible, to foster such industrial pursuits, and to afford full employment for everybody in the Union, and prevent throwing on the rates those who, not having the opportunity of following those industrial employments, might be unable to support themselves. If the principle of the Chard case is applied to districts partly agricultural and partly industrial, and manufacturers and others become liable to additional assessment, they will be very careful to see that the farmers and others employing
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    agricultural machinery do not escape. They will undoubtedly put the law into motion, and will take very good care that the agricultural interests do not escape. I would ask the Members for the agricultural constituencies to look frankly at this matter and consider whether this Bill does not offer a fair compromise. I do not think we are demanding more than we are really entitled to. I think in this Bill we have been as moderate as we could be expected to be, and I trust that the opposition will be withdrawn. Beside the agricultural interest, we have of course, to meet the opposition of the property owners, who are afraid that a portion of the rates now borne by the manufacturers will be thrown upon them. "Someone," the manufacturers say, "will have to pay the rates;" and if the manufacturers are relieved, the excess, they contend, will be thrown upon the owners and occupiers of house property. With regard to that, I should like to point out that, if the burden is borne by the community generally, it will not bear so hardly on any single member of the community. If the proposals adopted in this Bill are adopted, the rates will be raised something like 5 or 6 per cent. I do not deny that that is a very serious rise; but compare it to the additional assessment thrown on hereditaments containing machinery. If that is to be assessed at three or four times what is the ordinary practice of Assessment Committees, the hardship may be so great as to make it impossible to carry on such establishments at all.
    MR. STOREY: I think I ought to tell the hon. Member that his estimate is excessive.
    MR. GERALD BALFOUR: I was anxious not to overstate my case. I believe, in the case of Sunderland, the difference would be larger than in some other parts of the country. But I can understand that this House will not be prepared to accept the proposals we make in this Bill if the effect of those proposals is to transfer from manufacturing establishments rates which they have hitherto borne and place them on the shoulders of those who do not now pay. Our case is that we are not proposing what in practice would produce a large change.

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    We are endeavouring to prevent a large change. Sunderland is altogether an exceptional case, and my own belief is that in 99 cases out of every 100 no change would take place. The rating authorities have stuck to the old practice, and an opportunity should be given to them of not changing but of continuing their practice. On this subject, if I am not wearying the House, I will read a letter which was read yesterday in the course of a deputation to my right hon. Friend the President of the Local Government Board (Mr. Ritchie). The letter was from Mr. Thomas Lings, Controller of Poor Rates for Manchester, to my hon. Friend (Sir William Houldsworth.) Mr. Lings says—
    "With reference to your inquiry I am able to say from personal experience, as the Controller of Poor Rates for the township of Manchester, that there is absolutely no foundation for the statement that the Bill to amend the laws as to rating of machinery will in any way affect the existing poor rate for the City of Manchester or render a re-valuation necessary. From my experience I am also able to say that the Bill practically embodies the principle which has always been adopted in the manufacturing districts of Lancashire, Cheshire, and the West Riding of Yorkshire, and I believe throughout the Midland Counties also. I therefore think it is equally without foundation to say that the Bill, if passed, will render a new valuation necessary in any of those districts."
    It is clear from that letter that my contention is supported by a very high authority—that this Bill will not produce a change in the practice of the rating authorities, but will merely avert a change which is otherwise threatened. We have also been threatened with opposition from the Representatives of Birmingham; but the case of Birmingham is rather a peculiar one, because they have simply a valuation which I do not think has been adopted in any other place—according to the normal horse-power. I fail to see how our Bill would make any difference to Birmingham. The rating authorities of that town say that their system really carries out the existing law, for in making this valuation for horse-power they really include in the valuation hereditaments with machinery which comes under the debateable class. We really restrict it to machinery which comes under the debateable class, and, as I said, I do not see how the Bill will interfere. I may further say that I
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    do not believe Birmingham is more severely rated at present with regard to manufacturing establishments, than it would be rated under our Bill. I have gone through some of the objections which I imagine may be made to this Bill, and I can only say that, however natural it may be that these objections should be urged, I hope they will not prevail with this House. I deny altogether that it is a true description of this Bill to say that it is brought forward in the interests of a particular class of the ratepayers; on the contrary, it is a measure of national interest and national importance. We do not ask that the manufacturers of this country should have any special privileges. There are some countries in which the manufacturing industries are protected by means of bounties and protective tariffs, and where they are actually free from liability to the rates which are imposed on other forms of commerce. We do not ask for anything of that kind; we simply ask that the law should be clear, that it should be equal, and that it should be equitable. At present the law is not clear and it is not equal. It differs in different parts of the country, and what is more important is that it is different from the law of Scotland and Ireland. This Bill would simply assimilate the law in all parts of the United Kingdom. I do not think it is fair that English manufacturers should be called upon to bear a burden from which the manufacturers of Scotland and Ireland are free. All that we ask is that the law with regard to the rating of machinery should be on all-fours with the law for rating other kinds of hereditaments, and that the rating authorities of the country should not be compelled against their wishes, against the established practice, and against what they conceive to be best for the interests which are committed to their charge, to adopt what is practically an entirely new form of rating. There are some gentlemen who admit that a grievance exists, but they say this is a large question which should not be dealt with piecemeal. They say it is a question which the Government should take up and deal with as a whole. That is also the view that was taken by the Select Committee in 1887; but five years have

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    passed since then, and has anything been done? Are we any nearer to the prospect of this question being taken up by the Government? And it must be remembered, too, that the Select Committee, while they expressed the opinion that the question should be dealt with by the Government as a whole, at the same time added a recommendation to the rating authorities not to depart from the system of assessment which they had so far adopted. In the main, the rating authorities have observed that recommendation; but there have been exceptions, as in the notorious Chard case. But we cannot expect that system to go on perpetually. We cannot expect that the rating authorities will be content to remain much longer in their present position. They have to administer the law as it is laid down by the Judges, and that is why we ask the House to pass this Bill. We ask the House to relieve the rating authorities from the awkward position in which they are now placed by assimilating the declaration of the law to what has hitherto been the practice of the rating authorities and to what has also been the spirit of the law itself.
    Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Gerald Balfour.)
    SIR E. BIRKBECK*(1.45.) SIR E. BIRKBECK (Norfolk, E.) moved the rejection of the Bill. He said: I do not think anyone in this House can object to the agricultural interest having the opportunity of raising its voice against a proposal which, if passed, will impose increased burdens on the shoulders of their constituents; and especially do we feel the grievance in the matter, because it is only too well-known that the agricultural industry has suffered more than other trades, and is nearer the Bankruptcy Court than any other trade in the United Kingdom. The depression of the last 15 years proves conclusively the truth of what I say. But I do not only speak on behalf of the agricultural interest, because there are others who would feel deeply aggrieved if the burdens now imposed on the manufacturers were transferred to the shoulders of the small traders, the small shopkeepers, small owners of property,

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    and others, who can ill afford that any fresh burdens should be placed upon them. It is perfectly natural that hon. Members representing manufacturing constituencies should welcome this proposal, and everyone will congratulate them that, through the medium of this Bill, they think they are going to escape from rates which they have paid for many years. The supporters of this measure have sent round a number of circulars to Members on the subject of this Bill, and in one of them I find these words:—
    "Any taxation laid upon the industries of the country is a tax upon labour, and must to a large extent come out of the pockets of the labouring classes."
    That is precisely what we say. If this liability is to be transferred from the manufacturing to the agricultural industry, the farm labourers will, according to this argument, be sufferers in consequence of the change. The House must be aware, and, indeed, it is a well-known fact, that the manufacturers of the country have been making astounding fortunes, to say the least of it. At any rate, some of the limited companies have been paying very high dividends, and I would ask has the trade of the country suffered in consequence of this Bill not having been passed? The gross profits assessed under Schedule D of the Income Tax have increased between 1881 and 1890 by seventy millions, and the exports of home produce from the United Kingdom have increased by no less a sum than forty millions. But as regards the unfortunate industry for which I am pleading—an industry that is bound to be affected in some districts if this Bill passes—the value of the land assessed under Schedule A has decreased since 1879–80 by no less a sum than twelve millions, and that, I believe, is understated rather than overstated. This is some explanation of the fact that the Central Chambers of Agriculture and the Associated Chambers, 53 in number, have protested against this proposal, and have asked hon. Members who represent agricultural constituencies to do everything in their power to prevent its passing. Within the last few days more than 40 Petitions have been presented from the agricultural interest against this Bill, and I fail to see why rates

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    which have long been borne by the manufacturers, who are able to bear it, should be transferred to the shoulders of an almost bankrupt industry. The whole system of rating is an anomaly; but why, I ask, should this single question of machinery be taken up and everything else left out in the cold, and a pile of grievances created, simply because the Government had not acted upon the recommendation of the Select Committee? The Committee recommended that the whole subject should be dealt with by the Government in a comprehensive way, and my hon. Friend says that nothing has been done since 1887. I regret that the Government have not dealt with this matter as recommended by the Select Committee, and I should be glad to hear from my right hon. Friend (Mr. Ritchie) that when the Government come into office again after the next General Election they will take up this question and settle it once for all. It is no use trying to settle this matter piecemeal. Besides those I have mentioned, there is another class of men who will be affected by this Bill, a body for whom my right hon. Friend (Mr. Ritchie) has done so much—I mean the allotment holders in the vicinity of some of these manufactories, and, again, the small holders whom we are trying to create will be affected; and I ask are these men, on coming into their allotments, or their small holdings, to find themselves saddled with these increased rates which the manufacturers have borne in the past? It has been very justly said by the Birmingham and District Joint Rating Authorities that "If this Bill is passed into law the rating authorities throughout the country will have to revise their valuation lists and largely reduce the rateable values of buildings containing machinery; and many of such buildings will be rated simply as warehouses containing machinery." Further, they say "Parliament is asked to pass a law in the interests of one section of ratepayers at the expense of, and prejudicial to, the interests of the general body of ratepayers." Why is such a state of things to be allowed? On behalf of the agricultural industry I say most unhesitatingly that it will
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    be a very great disappointment to us if the Government encourage the passing of this measure, and I hope in the Division we shall see—though in all probability we shall be thoroughly well beaten—the President of the Board of Agriculture supporting the agricultural interests of the country in this matter.
    MR. MATHER: I should like to ask whether, for the sake of information, the hon. Gentleman will name any one agricultural district which will be affected by the Bill?
    SIR E. BIRKBECK: Every county in England will be more or less affected.
    MR. MATHER: Kindly name one.
    SIR E. BIRKBECK: My own county. In conclusion, let me say that although we may be beaten on this Bill, we are determined to do our utmost to prevent it from being carried through. I think it is only fair that I should state that we shall oppose it at every stage, because we feel that the recommendation of the Select Committee ought to be carried out, and the matter dealt with by the Government in a comprehensive manner. I trust, therefore, that every Member representing an agricultural constituency on this side of the House, or on the other, will do his utmost to prevent this Bill becoming law, a Bill which I consider is a mischievous attempt at piecemeal legislation, and one which this House ought not to pass to a Second Reading. I beg to move the Resolution standing in my name.
    Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."—(Sir Edward Birkbeck.)
    Question proposed, "That the word 'now' stand part of the Question."
    MR. JOICEY: I listened with great interest to the speech of the hon. Member who moved the Second Reading of this Bill. I agree with him that the question is a very complicated one, and I congratulate him too upon having so well mastered the legal difficulties in connection with it. I will not attempt to follow him through the legal part of the case, because I think that

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    that will be much more ably dealt with by hon. Gentlemen in the House who belong to the legal profession. But I was interested in the reasons that he gave for bringing in this Bill. He said, first, that the present law is uncertain in its operation. Well, I think that the decisions in our Law Courts are often uncertain, and I cannot think that the law in connection with the rating of machinery is any more uncertain than that in connection with any other matter. Then he said, as a second reason, that the recent decisions are against the usages of Assessment Committees in various parts of the country. Now, I take issue with him on that point. No doubt, for a number of years the manufacturers in Lancashire and the districts surrounding it where there are cotton mills and other mills of that description have been fortunate enough to avoid paying rates upon their machinery, owing, in my opinion, either to the negligence or the ignorance of the assessors, or possibly to some extent the fear that the assessors have of incurring expenditure. I can quite understand the action of an overseer when he refuses to assess machinery, if he is threatened by two or three large manufacturers, who say that if he persists in assessing their machinery, that they will take the matter into every Court that they possibly can in order to fight him. Naturally, looking at the interests of the ratepayer, he thinks it is undesirable to go to any great expenditure if he can avoid it; and he may think that the advantage he would get by levying the rate would be very much less than the disadvantage that he would put the ratepayers to by insisting upon it. The hon. Gentleman went on to allude to some of the disadvantages; and one in particular I should like to call his attention to, when he stated that if this Bill were not passed overseers or Unions would awake to their duties and undoubtedly rate all those people who have been fortunate enough for some years to avoid these rates. I quite agree with him; and I think it is high time that manufacturers, whoever they may be, who have not paid the rates that they ought to have paid legally, should be compelled to contribute their proportion to the rates of their own districts. He said, too,
    772
    that if this were carried through we should undoubtedly see rates put upon the agricultural people on their farms. Well, in my opinion—and I maintain and think that my opinion is the correct one—the agricultural people on their farms are actually rated now; and I maintain that they are. Every bit of machinery which contributes to increase the produce of the farm tends to increase the value of that farm for renting purposes; and if a farmer introduces machinery which largely increases the produce of his farm, you may rest assured that if the value of that farm has to be fixed by the landlord he will take that into consideration and will expect to have a larger rent. I maintain that the agricultural implements are indirectly assessed now for rates; and I should not be sorry if the same principle were adopted with regard to large mills which are now so fortunate as to avoid it. The hon. Member proceeded to say that many of the gentlemen who opposed the Bill last year and the year before should withdraw their opposition to some extent this year because of its being a much more moderate Bill. Well, that is a matter which rather increases my opposition. This Bill now intends to give a small section of manufacturers advantages which no other class in the community possess. In the part of the country which I come from we have always been assessed upon our machinery, and I confess I cannot see why we should continue to pay this assessment—this rate—and that gentlemen in Lancashire should be exempt from it. We have paid on all our machinery which is necessary for the working of our mines. All the machinery I possess is the property of the tenant or the lessee. If the mines run out, or my mines have to be let to another, of course I take away my machinery; and it is as much personal property in my opinion as any of the machines which hon. Members have in their mills. I cannot understand why any particular machine, because it happens to be fixed by a bolt to a wooden floor, should be exempt; and another machine, from simply being heavier, and having to be fixed to the hereditament by means of cement and a bolt, should not be exempt. I

    773
    think this extraordinary consideration for machinery in connection with our mills is quite unnecessary. Now, I oppose this Bill on other grounds. I oppose it because I believe that it is to the disadvantage of the community. I have notices from a considerable number of boroughs in connection with the coal trade on this question. The Durham Coal Trade Association, which is a very important body, because in that county some 20 millions of tons of coals are turned out every year, oppose the measure because, they say, the object of the measure is to relieve certain classes of machinery from rating; and the effect of it, if passed, would be to seriously diminish the rate able value in manufacturing districts by the exemption of a large amount of machinery used in factories and works which have hitherto been liable, and consequently the Bill largely increases the rates in order to make up for the deficiency thus caused under the Bill. No relief will be given to the class of machinery used in mines, because it does not come under the definition of that class which is to be excluded from rates; therefore, the colliery owners will have their rates increased in order to reduce those paid by the owners of machinery which the Bill proposes to exempt. Another important body in connection with the mining industry is the Mining Association of Great Britain, representing probably nearly the whole of the collieries in the country. They oppose the Bill because they believe that if it were passed into law the effect of it would be to relieve manufacturers owning extensive moveable machinery at the expense of colliery owners and other ratepayers. In many cases collieries are situated wholly within boroughs and Local Board districts, and are assessed for all improvement purposes; and colliery owners view with great dissatisfaction the attempted protection contained in the Bill, which is, in fact, a proposal to relieve the textile manufacturers and other owners of machinery which the Bill proposes to exempt at the expense of all the other ratepayers. I maintain that no case has been made out for that special advantage. I think that this is a question which requires very great
    774
    consideration, and, in my opinion, it will never be satisfactorily solved until the Government take the matter in hand. But it will affect another class very seriously, and that is the working class. In the borough of Gates head the population is composed almost entirely of working people, who depend for their living upon the manufactures situated in the borough; and I am told by the borough accountant, who has gone into the matter, that if this Bill should pass it will be most disastrous to the ratepayers. The rate able value of Gates head is £262,189, and he estimates that if this Bill passes, the rate-able value will be reduced by the exemption of machinery proposed by the Bill to the extent of £40,000. Now at the present time the rates in the borough of Gates head are no less than 5s. 10d. in the pound; that on £40,000 represents an income of £11,666 13s. 4d. What this Bill proposes is to take this large sum from the manufacturers and to place it practically upon the employees; and as most of them are men who have built their own houses out of Building Societies and own their own houses, of course they will have to pay a considerable increase in the rates. This is equal to nothing less than a considerable reduction in their wages. I confess that with such facts before me I think I am in duty bound to give all the opposition I can to this measure. Lord Salisbury in his speech about three months ago, speaking on this question, said that he considered it possible that the time might come when personal property should be taxed. Well, I think if that be Lord Salisbury's opinion it is most unwise of this House to enter into this retrograde method of taxation. When you consider the immense amount of money that has been spent by Local Authorities on the present method of taxation—I believe something like £190,000,000—I think this House ought to consider well before it attempts to decrease the area of taxation.
    MR. ELTON: I rather agree with one of the lines of argument used by the last speaker, in which he pointed out that revenue is raised on what I, for one, consider rather an obsolete principle. He touched upon the importance

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    of fixtures attached to the freehold; and I think when the Government, as they will some day, take up the question of rates, they will probably consider that the question should be regarded in a wider view. From studying the answer which the right hon. Gentleman the President of the Local Government Board gave to the various deputations that waited upon him, I am satisfied that the Government would not permit this Bill, if passed, to be made into an engine for transferring the large weight of the rating from one class of persons to another. And I should for one vote against this Bill unless I had sufficient confidence in the Government that that particular result would not in any case be allowed to take place. The only reason I intervene in this Debate is because I happen to be a member of a body which has certainly been held up to opprobrium, the Chard Board of Guardians.
    MR. GERALD BALFOUR: What I said was that the Chard Rating Authority showed more good sense than good law.
    MR. ELTON: The hon. Member takes it as rather a question of good sense than a question of good law. I observe that it has been described as notorious. There are several small factories in the neighbourhood of Chard and the Wellington Division of Somerset which it is necessary to protect, and for this purpose, and with regard to the question of rating, I think it is very important that we should ascertain and make the law clear upon the subject, and I shall support the Second Reading of the Bill.
    MR. KELLY: Reference has been made in vague terms to the alleged serious effect which would be entailed upon the community at large if the rating authorities carried out the law as it now exists; but I cannot understand why the general rating of machinery should be disastrous to the country. I admit that this is one of the Bills in which great interest is taken; but I cannot ignore that it is one in which many hon. Members have a strong personal interest, either as manufacturers or as Representatives of constituencies where much alarm is
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    felt at the prospect of seeing the existing law on the subject of the rating of machinery enforced. However, I am glad to think that, on the other hand, there are a number of hon. Members who represent constituencies in which machinery is rated at the present time, who have consistently opposed the passing of it in the form in which it has been introduced into the House year after year. The hon. Member who introduced the Bill said his opponents would be found characterising it as a Manufacturers' Relief Bill; but I am not at all sure that that is an accurate description of it. It seems to me that it would be better described as a Bill for the relief of those who are interested in textile industries. It may be that hon. Members who have promoted this Bill are in favour of a system under which personal property should not contribute towards the rates. That is not my view of what should obtain, nor is it the view that was originally entertained in this country, for centuries back, in the time of Edward I., it was laid down that every member of the community should, according to his ability, contribute towards the sustenance of the poor so that none of them should die of starvation. That seems to be a sound principle to go upon, and I fail to see why, if a man should invest his money in machinery instead of in house property, he should be relieved from paying according to his ability towards the relief of the poor. We have heard a great deal about the notorious Chard case, as the hon. Member who introduced the Bill styled it; but is the House aware that the Chard case was only decided by a Court of Appeal? Those who find fault with that decision should have taken the case before a higher tribunal and ascertained what the law really is upon the subject if they were and are sincere in their contention that there is great confusion on the subject of the law with reference to the rating of machinery. Those who are against this Bill have always maintained, and always will maintain, that there is no real uncertainty in the law, although there may be some little difference in the mode in which it is applied. If the right hon. Gentleman the Member

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    for Bury is rightly reported in the Times, he seems to be of the opinion that the difficulty has arisen out of the Chard case; but I take it that the promoters of this and previous Bills on the same subject deny this, and have consistently maintained that it arose not out of the Chard case, but out of the decisions in earlier cases.
    MR. WINTERBOTHAM: We did not carry the appeal in the Chard case further, because we thought we would wait until we had a better case to take to the House of Lords.
    MR. KELLY: The hon. Member, when in 1890 he brought in the Bill, said it was brought in entirely for the purpose of clearly defining the law upon the subject, and, further, that it would settle the law of England and put it on all-fours with what it is in Scotland.
    MR. WINTERBOTHAM: Hear, hear!
    MR. KELLY: I am glad the hon. Member says, "Hear, hear!" for I have looked into the Act which regulates this matter in Scotland, and I say there is a considerable distinction between the present Bill and that Act of 1854. In the present Bill we are told that the machinery shall only be exempt which is so fixed that it cannot be removed from its position without necessitating the removal of a portion of the here ditament in which it stands. I think the hon. Member will be the first to admit that the words of the Scotch Act are very much wider in their meaning. The present Bill has been described as a measure which would put an end to the difficulties which now exist in regard to the rate ability of machinery, but I will venture to say that, instead of doing that, it will make confusion worse confounded.
    MR. GERALD BALFOUR: I do not think the hon. Member has fully understood the object of the Bill. Its object is to draw a line distinctly between what I would call typical classes of machinery and those which are not typical.
    MR. KELLY: If we are to have the machinery defined which is to be rate able, then there will be no difficulty in putting the law in force, but if there is to be a debateable—the word used by
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    the hon. Member—class of machinery, the law had better remain as it is.
    MR. GERALD BALFOUR: If the distinction was made it would cease to be debate able.
    MR. KELLY: The whole question of the incidence of taxation must be dealt with on a permanent and satisfactory basis, and what we maintain is that it should be dealt with in a comprehensive scheme brought in by the Government. The Committee who had to deal with this matter in 1887 could never have thought that it could be dealt with in any other way than by means of a Bill which would cover not only the small question of the taxation of machinery, but the whole question of the incidence of local taxation. I think it has been proved that since 1783 down to the present day the law has been the same as it now is. The Judges have never decided that machinery per se is rate able. Personal property is not rate able, and they have never sought to make it rate able. Well, Sir, as I have stated, since 1783, when the case of "Reg. v. St. Nicholas, Gloucester" (Cald. 265), was decided, there has been a continuous stream of decisions by which machinery, under a given state of facts, has been made subject to rating. In the case I have just mentioned it was held that a house valued by itself at £5 should be rated at its enhanced value by reason of its containing a steel yard, which was treated, in the arguments which were addressed to the Court, as not being annexed to the freehold. In that case—which dates from a period when the non-rate ability of personalty was a matter of local custom and not of law—it is very remarkable indeed to find that these striking words were used by Lord Mansfield:—
    "What is the house? It is the machine house. They are one entire thing, and are together rated. The steel yard is the most valuable part of the house, which may be said to be built for the steel yard, and not the steel yard for the house."
    Now, Sir, it is idle to look to the question of the yearly value of premises without considering the purpose for which they are used, and the machinery put into them. I quote another case—that of "Reg. v. Guest, 1838" (7, A. & E. 951), which is one of the cases most strongly relied upon

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    by the Parochial Authorities in furtherance of their contention. The question there involved was the rating of machinery and ironworks, and what Lord Denman said was this:—
    "Real property ought to be rated according to its actual value, as combined with the machinery attached to it, without considering whether the machinery be real or personal property, so as to be liable to distress or seizure under a writ fieri facias, or whether it could descend to the heir or executor, or belong, on the expiration of the lease, to the landlord or tenant."
    Now, Sir, in that case it was not by any means laid down whether machinery was personalty or realty; the real question was, how far the two were so identified as that in considering the one you had to consider how far its value was enhanced by the other. I will pass to the next case, that of "Laing v. Bishop-wear mouth," in which Lord Chief Justice Cockburn divided the matter subject to rate ability into three classes, thus:—
    "First, things removable, such as office and station furniture; secondly, things so attached to the freehold as to become part of it; and, thirdly, things which, though capable of being removed, are so far attached as that it is intended they shall remain permanently connected with it, as certain permanent appendages to it, and essential to its working."
    Now, Sir, it was held that it was impossible to rate the first; that the second was clearly rate able; whilst the third was treated and governed by the principle which has already been laid down by the Courts. To some extent I admit that this case presents, in the matter of permanence and intention of continued user, ideas different from those which have recently been accepted as the test for distinguishing rate able from unrateable machinery. Now, Sir, I come to the case of "Reg. v. the Tyne Boiler Works Company," where the counsel for the appellants were obliged to admit that in valuing the premises from the point of view of a tenant from year to year their capabilities for the purpose of boiler-makers' business must be taken into account, and under this head the Court conceded, as they were almost bound to concede, the fact of the machinery and plant being there for a tenant to take if he chose. Now, Sir, I was astonished to hear some of the comments on the
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    words used by Lord Esher in his judgment in that case. Some of the hon. Members who are responsible for this Bill have actually contended that the words of Lord Esher would clearly justify the rating of a plough or a drill, or any agricultural machine. The absurdity of such a contention is at once manifest when one considers that a plough may be in one parish to-day and in quite another parish to-morrow. But, Sir, the question the House has to consider is whether the Bill now under consideration is likely to make the law clearer; or whether, as a matter of fact, it will not have an exactly contrary effect. In the words of the first clause, there are many material alterations from the language of previous Bills. We always heard in previous Bills introduced on this subject that the object was to exempt from rating that machinery that was not affixed to the hereditament, or that was affixed only for the purpose of steadying it. Well, Sir, this is the first occasion upon which such an alteration of the incidence of taxation has been proposed as is involved in the substitution for the word "machinery" of the words "machines, tools, and appliances." Now, Sir, in so far as this matter is concerned, or at any rate in so far as I can judge the fact, there could be no words more likely to lead to confusion than the words I have read. In every trade the words "machines, tools, and appliances" have a different meaning, and a different signification must necessarily be given to them. They include sewing machines in some trades, and in others they include the enormous and weighty engines used in an engineering establishment, or very costly and intricate pieces of machinery; and I can conceive no words which in this connection would be likely to lead to more doubt and difficulty. Then, Sir, we are told that these machines, tools, and appliances are to be exempt only when not affixed, or so fixed as to be capable of being removed from their places without necessitating the removal of any part of the building. I fail to understand how those words, entailing as they must endless litigation, can remedy the grievance of which the promoters of this Bill complain. Now, Sir, the first proviso of the 1st clause says that—

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    "The gross annual value of any such hereditament shall be estimated at not less than the sum at which it might reasonably be expected to let for the purpose for which it is used on a tenancy from year to year."
    I fail to understand how any tenant from year to year would ever be able, with regard to ordinary business considerations, to place expensive machinery in his premises. It might be worth a man's while to do so if he had a lease of the premises, but if he held under a yearly tenancy of course he could not do it. But whether I am right or whether I am wrong in that matter, I wish the House to consider the meaning of the words in the proviso—
    "Machines, tools, and appliances that might reasonably be supplied by the tenant."
    Just as the meaning of the words "machines, tools, and appliances" varies in every trade, so the different articles described by them "which the tenant might be reasonably expected to supply" must also vary. If that is so, it is idle for the promoters of this Bill to contend that the measure will be an improvement on the existing conditions of things. The 2nd proviso says that—
    "The term machines, tools, and appliances, for the purposes of this Act, shall not apply to any machinery, machine, or plant used in or on the hereditament for the purpose of producing or transmitting first motive power or for lighting or heating the said hereditament."
    I cannot see the justice of such exceptions, which would mean that a man wishing to make provision for the health of his workpeople by having the electric light in his factory would be rated on his dynamo. I suppose the clause was introduced in order to disarm the opposition that would otherwise have come from the Corporations; but, at the same time, it is liable to confusion, and there can be no doubt that if it is carried it will operate most unfairly in the case of small people. For example, a nurseryman will be rated on his heating pipes, whilst a manufacturer whose valuable machinery is removable will go scot free. But that the confusion is greater far than this may be made abundantly clear by taking only two or three typical cases. There are two well-known processes for the
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    manufacture of steel—the Siemens and the Bessemer. The Bessemer process is so carried on, the converters not being attached or fixed, that it will be exempt; whereas in the Siemens process the whole plant will be rated. That arises from the different character of the machinery used, and not from any difference in value. Let me take another case—that of a man who establishes blast furnaces for the purpose of making pig iron. He would be rated, whilst his neighbour, an engineer, who had expended the same amount of money in engineering plant (lathes, planing machines, slotting machines, punching and shearing machines, boring mills, &c.) would be exempt. These are samples of what will necessarily arise if this Bill passes, so that I am justified in saying that the claim of those who introduce this Bill, that it will extinguish the prevailing confusion, is a claim that cannot be sustained. It is perfectly clear that if you take the rates off these buildings you must, as the same amount will have to be raised, put them on other classes of property. It is said that in the interests of the working classes there should be some re-adjustment of this matter of the rating of machinery. Now, Sir, I have some figures which may be relied on to throw some light on the question as to how far the working classes now suffer from the rating of machinery. The first case is that of Messrs. J. L. Thompson and Sons—estimated turnover £450,000, rate able value of works, £1,300, rate able value of machinery, £300, amount paid thereon, £75; proportion of rates to turnover, ·001. The next case is the Hendon Paper Works—turnover, £144,000, rate able value of works, £2,573, of machinery, £1,200; amount paid in respect of machinery, at 5s. in the £1, £300; proportion of rate to estimated turnover, ·20. The last case I will mention is that of J. Priestman and Co.—turnover, £127,794, rate able value of works, £408, of machinery, £90, rates paid on machinery, £22; proportion of rates to turnover, ·017. These figures show that there is no foundation for the contention that either the working man or the manufacturers will gain a great relief if this Bill passes. In the

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    Chard case, the amount on which machinery was rated was reduced from £1,000 to £500. Supposing it was still rated on £1,000, that at 5s. in the £1 would only be £200, and what difference would that make to the undertaking? With a turnover of £100,000 a year, there are very few businesses in which a matter of £200 a year in rates would mean the difference between a paying and a losing concern. The working classes have been led to take a view of this matter that would have been impossible if the full facts had been before them. Attempts have, however, in vain been made in districts where machinery is rated to get them to take that view. It was attempted in the North of England and utterly failed, and I am also aware that it was sought in London to get a very important Body, representing hundreds of thousands of working men, to petition in favour of the Bill. They declined, as I was told by Mr. Shipton, the Secretary of the Parliamentary Committee of the Trades Congress. We who oppose this Bill oppose it mainly on the ground that unless a far stronger case can be made out it would be wrong to shift the burden of taxation from the wealthy machinery owners to the community at large, and thus to some extent to the working classes. Though ridicule has been thrown upon the statement it is unquestionably the fact that in towns like Sunderland the operation of the Bill would make a difference of 2d. or 3d. in the £1. It is, I believe, admitted that the taxation of land for local purposes is calculated on 98 per cent. of its annual value; upon ordinary houses at 80 to 84 per cent. of their annual value; whilst in the case of manufacturers they are only assessed upon at from 66 to 75 per cent. of the annual value of their premises. If manufacturers are coming to this House complaining of the burden which is cast upon them in the matter of the rating of machinery, it ought to be able to be stated that they are as fully rated as owners of house property; that their factories are rated as other buildings are rated; then they might possibly claim the exemption of this machinery from rating, but they would not claim it, because they would be
    784
    enormous losers. They have no right to possess the advantage which they have now of paying upon only 70 per cent. of the value of their premises, and at the same time to complain of the infinitesimal amount which is levied upon their machinery in those parts of the country where machinery is rated. I have never been able to understand why machinery should not be rated all over the country, except that I am aware that in many districts the influence of the manufacturers is so great that it cannot be withstood, and that in some they have expressed, in no vague terms, their determination to fight the question, so that to impose a rate and seek to enforce it would be ruinous to the ratepayers. At any rate, we are not to blame because the proper taxation has not been enforced, and we can conceive that nothing would be more easy than for the right hon. Gentleman the President of the Local Government Board to see that instructions were given to rating authorities which would lead to one uniform and proper practice by such rating of machinery as would compel manufacturers, like everybody else, to contribute according to their ability to the maintenance of the poor, and to pay their proportion of all the rates in their Unions.
    MR. MATHER: One of the false issues which have been raised in the course of this Debate is that which has been placed before the House by the hon. Member who has just sat down—namely, that this Bill is an attempt to shift the burden of taxation from one set of taxpayers to another; that great capitalists would be relieved from the taxation which they are at present paying, and that some of the poorer classes would have to bear the burden. I am surprised that the hon. Member for Camberwell (Mr. Kelly) has not listened attentively to the speech of the hon. Member for Leeds (Mr. G. W. Balfour), because in that very able speech on the Second Reading of this Bill I thought he made it quite clear to the House that the promoters of this Bill bad no desire whatever to alter the prevailing customs of this country. The hon. Member for Camberwell has reminded us that the law of this land has been

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    the same for about a hundred years. So say we all of us. This law has been interpreted up to recent times by the common sense of the country, by the Local Authorities of the country, by the Assessment Committees of the country, by surveyors and valuers in one sense only—namely, that the manufactory consists of land, bricks and mortar, plus that kind of machinery which constitutes and actually gives the character to the land and buildings of a manufactory—namely, boilers, engines, driving gear, &c., and this alone shall be rated. That state of things has never been disturbed by any Assessment Committee in the great industrial centres of England, until Sunderland adopted another system of rating. And, with all due deference to Sunderland, Lancashire and Yorkshire, and some portions of the Midland Counties, are as much interested in the industries of this country as Sunderland. There is no case in point, up to the time when the Judges gave their recent decision, in which any Assessment Committee ever doubted as to their interpretation of the law of the land in regard to enhancing the value of buildings by taking machinery into account. They have invariably throughout the country taken the motive-power machinery into account, excepting in the agricultural regions of the South, where the Assessment Committees have not had sense or wisdom in the matter. If they have not reckoned these things as giving value to the buildings, I am very sorry that the localities have been so badly served. I think there is abundant testimony to prove that the universal custom has been to rate the building according to the appliances which constitute it a manufactory. But that is a very different thing from estimating not only that which constitutes a manufactory in the form of machinery and building, but that the tools and appliances used in the manufactory are to be taken into account. That is an entirely new matter.
    MR. KELLY: There is no decision of the law which allows the rating of tools and appliances. The word in this Bill is "machinery."
    MR. MATHER: The Chard case proves beyond doubt that in the opinion of certain Judges, that tools used in the buildings and instruments driven by gearing do not of themselves constitute anything of that quality of the building by which it is designated a manufactory, and yet they have interpreted the law to admit of such tools being rated contrary to custom. The term manufactory receives its full and complete development from the fact that it is a building especially designed to hold machinery and is supplied with a certain class of driving power to enable it to be devoted to any of the purposes of a manufactory. In that very Chard case you might have taken the machines out of the building and put in another class of machinery on the floor. Those buildings we have on our minds, and which we desire to exclude from increased rating by reckoning the value of the machines they contain, are manufactories which might be devoted to any purpose whatsoever which could be called a manufacturing purpose. I have personal experience of this matter in Manchester, where I have large works which have been used for all sorts of purposes, one part as a woollen mill and another for bleaching works, and others for separate purposes, but by degrees I have included all those buildings in an engineering establishment, and they are just as good as if I had erected fresh buildings in the green fields. The custom universally adopted up to recent times by Assessment Committees and assessors has been to interpret the law according to commonsense. It has given satisfaction to the manufacturers throughout the country, and would have continued to all time, probably, to be the custom of the country had it not been for the extraordinary genius of a surveyor in the North of England who thought he might ride to fame by upsetting the interpretation of the law when he got the Judges to differ, thereby putting the whole manufacturing interests of this country into a state of disturbance. I do not propose to support this Bill on considerations as an owner, but I claim that the

    787
    working man may be injured if you do not pass this measure. The hon. Member for Camberwell has spoken of exceptions. I do not know whether Sunderland is an exception to the rule, because it is lower in public spirit than we are, to be assessed in this way.
    MR. KELLY: Part of Manchester?
    MR. MATHER: The Chorlton Union, part of the City of Manchester, has attempted to put this interpretation of the law into force in one particular small portion of Manchester and that happens to be in my own division. They have tried to do it, and, if justice is on their side and the law has been wrongly interpreted in the past, let them do it. They attempted to adopt this new interpretation of the law with reference to one of the largest concerns in the country, Messrs. Whitworth & Co., and I shall be willing to stand by any final decision on the point without regard to the way in which it might affect my pocket or the industry in which I am engaged. But there is a very serious question involved in this, and I would remind hon. Members that the industries of this country, large as some of them are, yet great establishments have almost invariably been built up from small beginnings. The smallest industries of this country are the pride and glory of our land. We do not take sufficient notice perhaps of the fact that, though we have colossal concerns like the Armstrongs and Whitworths, and other enormous manufacturing industries in Lancashire connected with the cotton trade—we do not take into consideration the fact that the perpetual flow of energy, enterprise, skill and intelligence, is ever from below upwards. The maintenance of small industries, the encouragement of the working man who has saved a little money to push forward his ideas and inventions, is a thing we should keep steadily in view. In that way seed may be sown from which will spring a large and flourishing concern, carrying out new ideas and new discoveries of genius. It is upon that class of persons the picturesque champion of the working classes (Mr. Cuninghame Graham), and the hon. Member for Sunderland (Mr. Storey),
    788
    should look with favour. Is it not important that this field for enterprise should be left unrestricted and unembarrassed by any kind of taxation—is it not important that we should prevent such small industries from being in any way afflicted by higher taxes or rates than hitherto they have had to pay? At the present time not one small industry could receive any impediment from a movement of this kind. How would this new ruling operate? I know many men—I know off-shoots from my own concern—that have become very flourishing in their way. The men who start these concerns, after having probably held responsible positions as foremen, save a little money and start small works of their own. Probably they have some new idea or invention to perfect. The first thing is to find a piece of land or a building which can be rented at almost next to nothing, and they put the whole of their savings into the machinery necessary to enable them to make this particular article by which they hope to start a fresh industry. But if they have to encounter, under the new custom established by the recent decision of law, not only the expense of their buildings, but also the great difficulty that for every machine they put down they will be taxed, is that not an obvious impediment in their way in entering upon those small industries which are so essential to the well-being of the country? As small holdings are important to the agricultural interest, in order to cultivate the energy, fertility of resource, and scientific knowledge of small farmers in the enormous field of agriculture, so are small industries in the great industrial, producing, and manufacturing world necessary to keep building up the important and large concerns which make this country so famous over the length and breadth of the globe. Technical instruction is now spreading, and adding immensely to the fertility of the resources of the country on the part of our great industrial classes, and the natural outlet for this increase of fertility and inventive power is for working men themselves to become producers. You want to encourage them. Anything we do, no

    789
    matter how slight, to put a tax upon energy, enterprise, fertility of resource, and inventive power must in the long run materially affect those industries which we most desire to promote. The circulation of the life blood of industry is of the greatest importance to us, and Parliament ought to remove every impediment from the path of the working classes in these matters rather than promote this impending evil which the hon. Member for Leeds has described and pointed out as likely to come into the region of industry. It is the duty of the Legislature to seek to remove impediments from their path so that there should be no difficulty whatever in their enterprise and intelligence increasing, or any impediment in the way of the working classes of England entering more and more into the development of our resources and producing products which will go over the globe and enable us to compete with foreign nations, and maintain the sway we have hitherto held among the nations of the world. It is on this account that I support this Bill. I may remind my hon. Friend the Member for Sunderland, who with his usual sledge hammer eloquence will endeavour to smash my arguments up, that there are eleven cases on record of towns or districts already placed in difficulties which the recent decision of the Judges has brought about. In some 60 other cases they are doing precisely now as we have done for all time. It is to confirm a well-known and established rule of the past, and to make it well-defined in the future so that no quibble can come in on the part of those who are in utter ignorance of the trade of the country, and who give us all sorts of varying decisions on certain important points, that we have endeavoured to promote this Bill. I trust the House of Commons will express unmistakably this view of the matter on the grounds on which I have put it. It will give great satisfaction to the working classes of this country, especially the small trading class, if they do so, and it will not damage a single agricultural district. A purely agricultural district cannot possibly suffer. Mixed communities, partly agricultural and partly industrial, may
    790
    have some objections to this Bill, but, according to the return to which I have referred, there is nothing on record to justify the statement which has been made by several hon. Members to day, that we are seeking to remove a burden from one set of men altogether and put it on another set. On the contrary, we are trying to avert the burden which threatens to weigh eventually on the smaller producers of the country.
    MR. STOREY: The interesting speech to which we have just listened appeals rather to our sympathies and hearts than to our heads. When the hon. Member appeals to us to do what we can to foster the great industries of the country, such an appeal touches us just as much as it touches him. But the consideration we have to act upon here is legislating for the country at large—what is just and what is fair for the great body of the country. The hon. Member's argument, if it amounts to anything, amounts to an argument for relieving all machinery from taxation.
    MR. MATHER: May I explain what I said was the very reverse. I said there had been a general custom of including machinery in the rating, and, it was only a pending evil which we were seeking to avert.
    MR. STOREY: That was not the point of my observation at all. I say the hon. Member's argument if it amounted to anything at all amounted to this, that in order to foster small industries we ought to relieve all machinery from taxation. I can understand that that is an argument that might be very consistently urged in this House. I for one, if this had been a proposal to relieve all machinery from taxation, should have been able myself to give some sort of general assent to it. But this is a proposal to relieve a certain class of machinery from taxation and certain industries but not others. For instance, take the great coal mining industry, an industry which involves the employment of hundreds of thousands of men, and the engagement of millions upon millions of capital. Will my hon. Friend tell me whether this Bill, as it is drawn, will relieve to the extent of one farthing of

    791
    liability for rating coal mining machines? No; because the bulk of the machinery in coal mines is fixed machinery, and being fixed machinery this Bill will not relieve it of rates.
    MR. MATHER: My hon. Friend obliges me to interrupt him again. I will only say that in this Bill fixed machinery in the sense of being motive power, such as pulleys, shafting, &c., shall be rate able.
    MR. STOREY: I quite understand that, but I am pointing out that this relief from taxation which he appeals to us to grant in respect to trades only, affects certain other trades and industries, and he now admits that, so far as the Bill goes, it would make no appreciable difference in the method of rating mines and mining machines. Now, who would it relieve? The hon. Member could scarcely realise the fact that there are ship-building yards in Sunderland which turn out hundreds of thousands of pounds' worth of shipping in the year, and the effect of this Bill will simply be to relieve them to the extent of some £75 to £150 a year. My hon. Friend opposite urged that such a relief as that was an inappreciable relief, and was not worth taking into account. As to any poor man starting in the ship-building line—and poor men have done so—my hon. Friend (Mr. Mather) does not think there is any great necessity for making a change in the law; at any rate, he does not propose it. To whom will this Bill give relief? There is a certain class of manufacture which involves the use of a large amount of non-fixed machines or partially-fixed machines, and these are woollen manufactories, cotton manufactories, machinists, or makers of machines, whether for land or sea. And when I look into this Bill I find it is practically a relief for these three classes of manufactories, and therefore I am not surprised to find Gentlemen like the hon. Members for Gloucestershire, Yorkshire, and Lancashire, coming to us, and asking for this change in the law.
    MR. MATHER: It is not a change.
    MR. STOREY: I say this change in the law. Well, the hon. Member who moved the Second Reading of the Bill
    792
    was more frank. He said, "I admit that the law has not changed; but what I want is to act because there has been a development of the law." He said the law was so because the Judges defined it to be so; it was a development of the law. It is the law; for the law is always the law as the Judges define it, whether in England or Ireland. It has been defined by one Court after another, and always in the same direction. The hon. Gentleman spoke as if Lord Esher, in the Tyne boiler case, altered the law. I see the Attorney General agrees, as he nods, his head.
    THE ATTORNEY GENERAL (Sir R. WEBSTER,: I agree that he did not alter the law.
    MR. STOREY: Then I need not say another word about it. The law, as defined by Lord Esher, was the same as that laid down in case after case 40 or 50 years ago. Besides being a Bill for the relief of the three classes I have mentioned, it is a Bill for the relief of defaulting Local Authorities. The Mover of the Second Reading said he wanted the law to be clear and equal, and then said if it had been carried out the law would have been equal as it is.
    MR. GERALD BALFOUR: I said it would be equal in Scotland and Ireland, but not in England.
    MR. STOREY: We have nothing to do with Scotland now. The reason the law is not equal in England is from no defect in the law, but is owing to the inaction or wrong action of the Local Authorities. Reference after reference has been made to Sunderland, as if Sunderland had found out some new and improved method. What Sunderland has done with the definition of the law, when founded on justice—which course has always distinguished the town—has been to apply the law to all classes of property, and to rate everybody according to the law, and because we have done that the law is equal to us. And it is because the people of Lancashire, Gloucestershire, Yorkshire, and the West of England, whose Assessment Committees are largely influenced by the great manufacturers, and; who are influenced by a desire to foster one or two

    793
    little industries, have disobeyed the law that it is unequal with them. If I were a ratepayer in one of those counties I would quickly undertake that they should carry out the law, for any one ratepayer in a county can upset a rate which is not founded on the law, and the law compels the rating of machinery. It compels the authority, in estimating the annual value of a factory, to take into account what that building with the machinery, fixed or unfixed, would let for as a manufactory. Is the law as it exists fair or unfair, just or unjust? I will take a concrete case as an example; I will take the case of our own factory in Sunderland—for I am concerned in some great manufactures, and would get any benefit if the law were changed, so that I argue from the public point of view—at the present moment this factory is rated as a building containing machinery for the purposes of manufacture, and the Assessment Committee take what would be the fair letting value of this building, standing on this ground, with this machinery all ready for the purpose of carrying on manufacture, and we pay on the annual value of that. If this Bill were passed, we, as manufacturers, would be assessed at a considerably less amount, because large portions of the machinery would be exempt from rating. What would be the effect on the town generally? From 30 to 40 manufacturers would be rated at so much less per annum, but that money would have to fee found, and the tax collector would go to the small shopkeeper and the small householder for twopence or threepence more in the pound in order that the manufacturers might be relieved. I call that inequitable and unjust, and especially unjust when I consider that we have put the ratepayers to expense. There is not a large factory in the North which has not caused additional expense to the ratepayers. In our own case, instead of the ordinary macadamised road, the Corporation had to put down one of the best paved roads, so that our heavy waggons could pass over it in the most economical manner. If we have been an extra charge on the rates, is it not right that we should pay a
    794
    reasonable share of the rates? Why should we who have works not pay on their annual value? I think it is extremely difficult to reconcile the proviso with the clause, and one proviso with the other. The first proviso is—
    "Provided that the gross annual value of any such hereditament containing machinery shall be estimated at not less than the sum at which it might reasonably be expected to let for the purposes for which it is used on a tenancy from year to year void of the machines, tools, and appliances which it might reasonably be expected would be supplied by the tenant."
    Now, Sir, I would suggest that this house was the house we were dealing with, and that next to it there is a similar house filled with machinery, all provided by the landlord, and let to me for £1,000 a year. My hon. Friend gets this house for £100 a year and puts his own machinery in. How would you rate us? At £100 each. Then a building full of valuable machinery is to be rated to the relief of the poor at the rate of £100 a year. That is what you say if the machinery is movable. If you put in an engine and boiler they are to be rated, but if you put in a steam hammer it is not to be rated. Then it comes to this: that hon. Gentlemen who want to relieve and help poor industries say if you go into a business which uses engines and boilers and fixed machinery you shall be rated, but if you go into one that only requires a small engine and a lot of looms you shall not be rated. My hon. Friend says it is a defined class, but it is a definition which will itself have to be defined, first, by the Assessment Committee, and then by Courts of Law. I say that is inequitable and insufficient, as it only deals with one class. There is another point which I should like to press on the House, and that is that my hon. Friend has unwittingly misled the House when he stated that there are only eleven districts where our method of assessment is followed. What he really means is, that there were only eleven districts from which he got replies. But Sunderland by no means stands alone. Newcastle is a larger town than Sunderland, and Newcastle carries out the law. The whole of Tyneside, an enormous manu-

    795
    facturing district, carries out the law; the whole of the County of Northumberland, and the whole of the greater County of Durham, carry out the law. When my hon. Friend says it was the energy and activity of a clever valuer at Sunderland which drew the attention of the Authorities to the fact he is quite right, and though he seems to sneer at Mr. Hedley because he moved in the matter, we think we are under an obligation to that gentleman for having pointed to the Assessment Committees what the law actually was. The members of Trade Societies have been seduced, without full knowledge, into supporting the Bill, because they are assessed at more than they ought to be, and are actually paying more rates than they should pay; whilst a certain class of manufacturers in the same localities are being relieved and are escaping from their legitimate share of the burden. But we in Northumberland and Durham have put an end to that state of things. We have vindicated the law and carried out what is just between poor and rich. Therefore, we come boldly to the House and say, as the Attorney General said, this is the law, and it is the duty of the Assessment Committees to carry it out; and it ought to be the law because it is founded on justice and fair play, whereas the system which is adopted in other parts of the country is illegal, and is used for the purpose of relieving certain rich classes from taxation and imposing an undue share of the burden on those who are less capable of bearing it. There is another point which I will submit to the House. Many of these municipalities have borrowed money on the security of their rates, and we learn that the total amount borrowed is about £190,000,000. We in Sunderland have borrowed £450,000 on the security of the rates, but if my hon. Friend achieves the change in the law which he is seeking you will, he says, diminish our rateable value from 5 to 10 per cent. You will diminish it more than that, but I will take it at 10 percent., and to this exent our security will be diminished in value. I think if this Bill passes the Second Reading an Instruction should be moved that
    796
    the interests of that large class of persons who have lent money on the security of the rates should be properly safeguarded. In conclusion, we hold that the present law is a good law, a just law, and an equitable law. We think the change which is proposed will only benefit a certain class of manufacturers and not the manufacturing industry as a whole, and therefore on the ground that the law is good, and that the change which is proposed is insufficient if a change is desirable at all, we shall resist this Bill both now and at every other time.
    SIR W. HOULDSWORTH: The hon. Gentleman who has just sat down has insisted very much on the law in this matter, but I think he has omitted to notice that in the Bill which is now before the House that law is embodied, and that the proviso which embodies that law goes further than the Acts from which it was taken, and provides that not only shall the hereditament be assessed at the sum at which it might reasonably be expected to let from year to year, but that it shall be assessed at the sum at which it might reasonably be expected to let for the purpose for which it is used. The hon. Gentleman knows very well that these words are not to be found in the old Acts, but they have been inserted in order to prevent the danger of hereditaments which contained machinery, and are being used as manufactories, being simply assessed as empty warehouses, or, in the case of shipbuilding yards, as vacant spaces. The words in the Bill which I have just quoted cover this case. The hon. Member for Camberwell referred to the Report of a Select Committee which recommended that a comprehensive scheme of assessment should be introduced by the Government. I can say, on behalf of the supporters of the Bill, we have no objection whatever to such a comprehensive scheme of rating being brought in and passed into law. Many of us have for years been of the opinion that it was desirable that a new Act should be passed dealing with the whole of this matter, and I presume that such an Act would include personalty, and if you choose to assess the furniture of

    797
    a dwelling - house as well as the machinery in a hereditament I should offer no objection. But this does not seem to me a fair argument to use against our humble attempt to avert the very serious evils which will arise from the introduction of an entirely new system of assessment under the shelter of present Acts of Parliament. The hon. Member for Sunderland (Mr. Storey) said that if this Bill passed there would be a very great change made in the incidence of rating in that town. That may be so, because we know that Sunderland is in a peculiar position. But I do not know that everyone in Sunderland is very well satisfied with the present system, for I see the boiler makers and iron shipbuilders of Newcastle, where the same system is observed, are opposed to it, and so is another important trade society in the same district. But although it may be perfectly true that if this Bill passes there will be a great change in the incidence of taxation in Northumberland and Durham, the hon. Member forgets that if it does not pass a very great change will take place in the incidence of taxation all over the country. I think, therefore, that we are entitled to make use of the hon. Gentleman's argument and to say if it is desirable that the incidence of taxation should not be altered in Sunderland and the neighbourhood, how very much more desirable it is that the incidence should not be altered over a very much wider area and a very much larger population. This afternoon I have noticed that there ran through many speeches the fallacy that machinery is being rated. That is not the case. In the first place, machinery in a manufactory is not by law rated, and, in the second place, except in special districts in the country, machinery is not at present actually rated.
    MR. STOREY: That may be true; but, while it is not rated, it is taken into account as enhancing the valuation of the premises.
    SIR W. HOULDSWORTH: That is so; but it is by judge-made law, and, while I do not wish to say anything against judge-made law, I think we
    798
    have a right to say that that law should be perfectly clear and without any mistake whatever, so that the Assessment Committee on the one hand and the manufacturers on the other may know exactly what the law is, so that the system throughout the country may be uniform, and that no injustice may be done between one district and another and between one class and another. I take an extract from the Judgment of Lord Esher which has been inserted in a circular, in which it is described as perfectly clear, and fair, and reasonable. Lord Esher, in his Judgment, stated that—
    "Machines, whether fixed to the floor or not, if necessary to the use of the premises as such were to be taken into account in estimating the rateable value."
    Well, that does seem a tolerably clear definition; but I find in the same Judgment, only a line or two above, he actually says—
    "In the case of sewing machines they are not necessary to the use of the premises, avid therefore they ought to be excluded."
    I cannot see why it is to be said that sewing machines, in a factory which is used for sewing machines, are not necessary for the use of the premises as such—as a sewing machine manufactory—any more than other machines in other industries; and, therefore, I say that if we are to have Judge-made law, let us have a clear, definite law, so that we shall know exactly what is meant, and that will treat properly of the rating of all machinery, whether large or small, whether fixed or not. And I venture to say that a system should not be introduced, even under the ægis of Judge-made law, unless it is carried a great deal further, and that the furniture and fittings of the house, and, more than that, the appliances and stock-in-trade of warehouses, should be taken into account in the estimate; so that all—manufacturers, farmers, and citizens—may be placed on the same footing. I should like to refer for one moment to the case of Birmingham. The case of Birmingham has not come up to-day so strongly as it has done on former occasions. But I do not know whether the Representatives of Birmingham have realised what I think really

    799
    is the case: that this Bill, if passed into law, would not in the slightest degree, as it appears to me, touch them or affect them. They have a peculiar system in Birmingham—I will not say it is peculiar, because a similar system exists in other parts of the country. But the way in which their rates are assessed is not by valuation, but by 40 or 50 shillings per indicated horsepower; that is taken to represent the value of the manufactories. I believe in Bolton, and I believe in other parts of Lancashire—certainly in Bolton—a very similar principle is used: they take a certain rate per square yard of flooring, and work out the result from that. But I have calculated very carefully as far as I could the Birmingham and Bolton system, and I find that the result come to is really entirely in harmony with the principles of this Bill. I would point out that if this Bill passes no change need be made in the system under which the Assessment Committees arrive at their results. Reference has been made by the hon. Member for Camberwell to the words of the proviso, but if any complaint is to be made with regard to them in Committee, it must be remembered that in this Bill we have kept as close as we possibly could to the Act as it at present exists. We believe that we are defining more clearly what the present Statute Law is, and in that way preventing the evils which from time to time arise owing to the various decisions which are given under this Act of Parliament. We have been asked wny we do not go to the House of Lords with an appeal. If we did that, under present circumstances, we should have to take every case to the House of Lords. Assessment Committees have complained that no broad principle has been laid down for their guidance, and it is in order to give them that guidance that this Bill has been introduced. I believe that if it is passed it will promote the interests not only of manufacturers but of the country at large.
    MR. WINTERBOTHAM: The hon. Member for Sunderland referred to the names which are on the back of this
    800
    Bill, and he almost intimated that we were looking after our own personal interest and advantage in promoting this legislation.
    MR. STOREY: No, no!
    MR. WINTERBOTHAM: The hon. Member deprecates having had any such intention. I am very glad to hear it. I understand there is not a single Member whose name is on the back of the Bill whose works and machinery have not always been rated in accordance with the custom of the last century, and who does not wish to make it quite clear by passing this Bill that this almost universal custom has been right. Neither of them, I am sure, seek to derive any personal advantage out of it. I am one of those who say that the true interests of capital and labour require that they should be good friends, and that labour is in favour of this Bill is sufficiently shown by the fact that half a million of men, through their trade societies and organisations, have petitioned in support of it. I repeat what I said on a former occasion, that this is no attempt to alter the existing custom. The object of the Bill is only to define the law so as to prevent litigation, and to put an end to the ravages of two or three valuers who have made a rare picking out of the uncertain interpretation of the law. That is a state of things that ought not to be allowed to continue. I admit that Sunderland and Tyneside are an exception to the general rule; but, after all, the figures with respect to Sunderland come to this: that the total difference caused by Sunderland reverting to the old rule and custom would be only 1s. 11d. a year on a £6 house. And the House will mark that is the worst case that can be taken. The opponents of this Bill have got into their heads a strange misconception—that this is a measure for the relief of machinery from rating. Now, by 3 & 4 Vict., cap. 89, machinery per se is not rateable. Only 16 per cent. of the rating authorities in this country have adopted what has been called by a previous speaker the new Judge-made law, while Scotland and Ireland have not adopted it at all. The policy of the opponents of the Bill

    801
    is a sort of ostrich policy. Attempts have been made to tax different articles. In Gloucester an attempt has, I am assured, recently been made to tax such things as the machinery of a dairy, of a laundry, of a sausage maker, and even portable engines! That is getting very near indeed to the agricultural interest, in whose favour some hon. Members who have opposed the Bill profess to have spoken. Now, I ask, where is this to stop? What about furniture in hotels? It is there on the premises for the purpose of carrying on the business for which the premises are specially constructed or adapted, and it cannot be carried on without it. It would even be necessary to tax the books in lawyers' libraries, with the aid of which they make use of the hereditament for their special profession. When some Government, able and strong enough, shall have tackled the whole question of rating, it must follow that there will be no longer any excuse for inequalities in the Death Duty or for Grants in Aid of local taxation from the National Exchequer. Meanwhile the owners of machinery ask the House for justice. They say—"Do not single out this personal property alone for exceptional treatment, because, after all, it is a class of property which employs labour, and you cannot tax it without handicapping injuriously the industry of the nation." I will repeat what I said some years ago—"Tax the products of industry as much as you like, but do not tax the bees who make the honey; rather tax the honey when it is made." We want the law in this respect to be made precisely like the law of Scotland and Ireland, and we ask the House by a large majority to decade this principle of equal laws throughout the United Kingdom by passing this Bill. We have tried to meet our opponents in this matter, and small thanks we have had for it. It is by endeavouring to settle the question by a fair and reasonable compromise that we seem to have failed to please both friend and foe.
    SIR H. JAMES: I wish to say a few words on behalf of a class of supporters of this Bill who by no means desire to see machinery entirely exempt from rating.
    802
    Many votes will be given for the Second Reading of this measure by those who do not wish for one moment to cast any additional burdens upon those persons who are not now rated for machinery. In the course of this Debate it has been apparently mentioned, as a matter of reproach, that those whose names are at the back of this Bill represent constituencies in which machinery is employed to a great extent, and that, therefore, they are interested in obtaining exemption of machinery from rating. I would point out that such Representatives are most interested in seeing this question properly settled, and for this reason: those who are interested in agricultural constituencies within which there is no machinery must recognise that it is of comparatively little importance to them whether machinery is rated or not. Those, however, who represent manufacturing constituencies are interested in seeing that machinery bears its proper quota of the rates, and its proper quota only. If you exempt machinery from rating you will directly benefit a few, but by seeing that it is only properly rated you will benefit a great number, because machinery might be overrated to such an extent that the factories might have to be closed, and the workmen employed in them would thus be deprived of their wages. If we unduly relieve machinery from rating the amount of the assessment must still be lessened, and somebody must pay for the relief afforded to the owners of machinery. It seems strange that hon. Members on this side of the House should treat this Bill as if it were a Bill to exempt machinery from rating. There is no such intention. All really fixed property will still be rated. Such fixed machinery as exists in collieries, to which the hon. Member for Sunderland referred, will, when placed in factories, still be rated. On the other hand, it is agreed that perfectly movable machinery shall be exempt. But in textile factories it is unfortunately difficult sometimes to determine what machinery is "movable" and what is "immovable." Although I quite admit that there has been no technical alteration of the law,

    803
    yet there have undoubtedly been alterations in the practice, and unfortunately disturbing ones, which make it very difficult for Assessment Committees to know what course to pursue in the matter of rating different classes of machinery. When we cast upon voluntary bodies like Assessment Committees the duty of administering the law, we ought to show them what the law really is and to make it clear and definite; and, further, we ought to see that manufacturers in different localities are treated equally. I would therefore appeal to the Government to see whether they cannot do something definite in the direction I have indicated. I would undertake to say that if I could enjoy the luxury of cross-examining, say, the Attorney General, I would make him admit that he could not tell how to apply the Chard decision in its entirety, nor could he define the exact meaning of the Court of Appeal. The burthen of the rates will differ according to the opinions—according to the state of things—existing in different localities. Are we to say that it is an impossible duty to define the subject-matter of rating? If this Bill be read a second time the language of the clause can be altered if the House thinks fit to do so. At any rate, the House ought to come to some conclusion, and ought really to attempt to arrive at some solution of this difficulty. If the Government cannot, consistently with what they regard as their responsibility, define the exact subject-matter of taxation, so that there will be no difficulty hereafter, then let the House attempt to solve the difficulty. If we succeed we shall have done a great deal; if we fail we shall have done something. The question is not one affecting conflicting interests, and it is one upon which we shall enter with a desire to see that there is no exemption of any particular class, and that the fair burden of taxation shall fall fairly, equally, and justly upon all.
    THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE,: I rise to say that the Government do not propose as a Government to oppose the Second Reading of this Bill. The Government see no reason to depart from the neutral attitude which they have hithert*(5.2.) THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE, Tower Hamlets, St. George's): I rise to say that the Government do not propose as a Government to oppose the Second Reading of this Bill. The Government see no reason to depart
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    from the neutral attitude which they have hitherto adopted on the Second Reading of measures of this kind. But, Sir, for my own part, I desire briefly to state to the House the reasons in respect of which I shall certainly cordially support the Second Reading of this Bill. My hon. Friend the Member for Leeds, who introduced this Bill to the House, and introduced it—as all who heard him will acknowledge—in a most lucid and comprehensive speech, left no doubt in the mind of any impartial person as to what his intentions are. He said in express terms for his own part—and I take it that he spoke on behalf of those other hon. Members whose names are on the back of the Bill—that he and they did not desire by this Bill to alter the Statute Law, but merely to endeavour clearly to define it, and to recite what has always been understood to be the Statute Law on the subject. Now, Sir, are there any grounds for supposing that the application of the law causes uncertainty, and creates confusion? I think the evidence is so overwhelming in affirmation of this point that it is hardly necessary for me to elaborate it. It was uniformly admitted by the Representatives of the very strong Committee to which this matter was referred in 1887, and who, in express terms, said that great difficulties did arise in consequence of the uncertainty of the law, and the different and varying mode in which it was administered. Sir, I yesterday received a very large deputation, comprising many members of Assessment Committees, who came to represent to me the great difficulty under which they laboured in consequence of the uncertainty of the present state of the law. The representations of these gentlemen, coming as they did as the representatives of Assessment Committees—many of them coming from very important districts—were entitled to great consideration and weight. Deputations from Assessment Committees of Bolton, Charlton, Manchester, Dewsbury, Wigan, West Derby, Nottingham, Rochdale, Halifax, Stockport, and other communities, joined in the representation. I think, Sir, that that thing itself shows very strongly the desirability of Parliament

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    attempting to put an end to this uncertainty. My hon. Friend the Member for Camberwell (Mr. Kelly), who strongly opposed this Bill, felt himself obliged to admit the great uncertainty that now exists. But, Sir, how did he propose that that uncertainty should be removed? He made this very novel proposition: that the Local Government Board should send a circular round to the various Assessment Committees throughout the country defining the law as it stands. Well, Sir, if that is to be a duty which is to be cast upon the Local Government Board, I devoutly hope I shall not occupy the position of President when it is to be done. But, Sir, it having been on all hands admitted that this uncertainty exists, is there any objection to the Second Reading of a Bill which is intended and calculated to remove it? Objections are made by the agricultural interests, and I need hardly say that we have all very great sympathy with the straits to which they have been put in recent years, and that we should be very unwilling to cast any further burden upon that industry which we all hope at some time or other will be again revived, and once more be reckoned as one of the successful industries in this country. But, Sir, I rather take exception to the allusions that were made as to the way in which the manufacturers, with their astounding fortunes, were represented as attempting to shift the burden and the responsibility of meeting taxation from their own shoulders to the shoulders of someone else. I feel very certain that in many parts of the country in the textile industries the depression is quite as great as it is in the agricultural industries; and to talk about the enormous prosperity and the astounding fortunes of the manufacturing industries, and the desire of the manufacturers to shift their burdens from their own shoulders to the shoulders of someone else, is, I think, to say the least of it, somewhat misleading. I do not want to make too much of that; but I only want to enter my protest against what I heard to-day, and in the Conference Room yesterday, about the capabilities of the manufacturing districts to bear the taxation
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    that it is desired to put upon them. Now, Sir, I think the agricultural interests have considerably exaggerated this matter. In the first place, it is not a question—even if everything desired by this Bill was carried out—it is not a question of shifting the burden in the rating of machinery, because we are told, and for my part I have no reason to doubt the accuracy of the information, that between 80 and 90 per cent. of the Unions in this country do not rate machinery. Well, now Sir, if an unjust extension of the principle of rating of machinery is laid upon the manufacturing industries, I think that that in itself would not prove very favourable to the manufacturing interests. I can conceive nothing in which the agricultural industry is more interested than in our manufacturing industries being developed so that anything which would tend, in however small a degree, to extinguish any branch of industry in this country would undoubtedly in the long run hit the agricultural interest. It has been alleged that this Bill would operate unfairly to the working classes. Well, Sir, I received yesterday a deputation on which large numbers of the working classes were present, and who came to represent to me very strongly that if the practice complained of were in any degree extended it would be disastrous to to them. There, again, I say that anything disastrous to the manufacturing interests of the country would be injurious to the working classes. It has been said that legislation on this question ought to be deferred until the whole question of valuation and rating is taken up by the Government. I should, for my own part, be glad if the Government could take up the whole question; but I cannot promise that they will do anything of the kind during the present Session, whatever may be done next Session. I see no reason why, grievances having been admitted, an attempt should not be made by the present Parliament to put the matter on a better footing. It is perfectly true that the Select Committee recommended that the matter should be dealt with as a whole. An Amendment was moved the year before last by the right hon. Gentleman the

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    Member for Great Grimsby (Mr. Heneage) to the Second Reading of a Bill on similar lines to this, asserting that this matter ought to be dealt with only in a comprehensive Bill, and that Resolution was rejected by this House by 239 to 87. That being so, I hardly think that we are justified in asking the House again, when they expressed their opinion so strongly before, to assent to any proposition that this matter should be deferred until the whole question of local taxation is taken up. I have stated what, in my opinion, is the purpose of this Bill. It is a question whether the Bill goes further, or whether it does not go further, than its promoters assert. I say nothing on that point, because it is capable of being dealt with in Committee. I only say that I shall vote for the Second Reading of this Bill, because it is intended clearly to define what is the existing law; and on that ground I shall have no hesitation in voting for it, and it will be the duty of the Government to see, when the Bill reaches Committee, that it does not go beyond the lines that have been laid down.
    SIR H. DAVEY: I intend to support the Second Reading of this Bill. The present state of the law is uncertain; more than that, it is artificial. It is incomprehensible, both to the layman and to the lawyer, and it is unequal and uncertain in its operation as among different members of the community. Well, Sir, whenever there is uncertainty, it leads to litigation, and litigation, as the House knows, has to be paid for by the classes of the community who resort to it. I have said that the law is artificial, and I will show why it is so. You must not rate machinery but you may take into account any enhancing value it may have on what you do rate. In some districts the whole value of the machinery is taken into account as it has an enhancing value on that which is rated. That appears to me to be an artificial and unsatisfactory system. I do not know what the House may think, but I do not myself exactly comprehend what is meant by saying that you shall not rate loose machinery but that you are to take it into account as
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    enhancing that which you do rate. I am aware that in every case that is not done, but that in other cases an arbitary standard is taken as in the Birmingham case. Under these conditions I think there can be no doubt that the law ought to be defined; at any rate it ought to be made clear whether machinery should be rated or not. The law ought to be made certain and equal in its application to different parts of the country, and to all members of the community. But whether this Bill does that in exactly the right way or not I will not undertake to say beyond saying that in my opinion it is capable of very considerable improvement, and I have no doubt the promoters of this Bill will carefully consider any Amendments which may be proposed. The effect of this Bill would be to relieve owners of machinery from the burden of having their machinery taken into account in enhancing the rateable value of the buildings. I think that goes too far, because, that would, no doubt, operate as a relief to owners of machinery, and, so far, cast an additional burden upon the public. I think the Bill will require amendment, but I will vote for the Second Reading of it. I desired to say these few words, because in voting for the Second Reading of the Bill I by no means commit myself to the exact provisions which I find in the Bill without Amendment.
    MR. CUNINGHAME GRAHAM: I shall oppose this Bill for certain specific reasons which I desire to point out. It has been already pointed out that a certain rateable value must be raised by the various Unions, and, therefore, I presume if that is not raised from the richer ratepayers it stands to reason and common sense, that it must be raised from somebody else, and the great majority being poor, it must be raised from them. I do not speak as the Representative of agricultural electors, nor do I speak personally of the effect of this Bill. I have always considered, and I am absolutely well aware that I am the only one in this House who

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    does consider, that property of whatever kind is a fair and proper subject for rating. And therefore, as I see an opportunity by opposing this Bill of throwing the rates upon what I consider to be a proper subject for rating, I cannot Vote for the Second Reading. But I have another reason for so acting. It has been represented to us as a reason for assenting to the Second Reading that if we do not do so we are going in some mysterious way to throw great pains and penalties upon the working classes. Such a statement would be almost ridiculous if in any other Assembly than the House of Commons it was put forward for one moment. I would ask hon. Members if they are serious in saying if machinery were exempted entirely from rating, one single fraction of a farthing would go into the pockets of the working classes. Ever since hon. Members, coming from the same portion of the country as those who are now furthering the passage of this Bill, opposed the ten hours Bill, the endeavour of the manufacturing interests has been to prevent the participation of the working classes in any of the benefits which have been built up by national industry. If hon. Members can exempt motive power in their manufactories—steam hammers for example—if by exemption from rating of appliances of that sort they propose to increase, by way of bonus, the wages of their operatives, all I can say is they are going to take a new departure from the course in which they have acted since the beginning of the century. I want to know why the life-saving apparatus of coal pits, like pumping engines and the winding apparatus are to treated in a totally different spirit to that in which hon. Members propose to treat steam hammers and other such appliances. If we are to exempt machinery and other appliances which are designed for the production of wealth from rating, my contention is that that machinery now used in coal pits, and which would be exempted if driven by horse-power or hand labour, should also be exempted. I hope the House will not assent to the Second Reading of this Bill. I believe in
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    making this artificial distinction betwixt different sections of machinery this House would be inflicting a wrong on the community as a whole. And, therefore, as a member of the community I object to any injury being done to us by the action of the House of Commons, which is a good individualistic sentiment that I have no doubt the Member for Gloucestershire will applaud. I would ask hon. Members on this side of the House what would have been their attitude towards a Bill framed by the Irish landlords to escape rating? We should have had them rising up as guardians of the interests of the poor, and protesting against this injustice being done to their poor constituents. I want to know what difference there is between a landlord attempting to escape his due share of rating, and a Liberal manufacturer or even a Conservative manufacturer endeavouring to do the same thing? Ten days ago we appealed to the hon. Member for Gloucestershire, and asked him to vote for the Payment of Members Bill, and in that way do justice to the working classes. I can understand his purity of motive, but somehow there must have been some confusion in the hon. Member's mind over his desire to benefit the working classes, when his action then was so singularly different from that which he invites the House of Commons to take to-day.
    Question put.
    The House divided:—Ayes 232; Noes 122.—(Div. List, No. 70.)
    Main Question put, and agreed to.
    Bill read a second time, and committed for To-morrow.

  SEA FISHERIES REGULATION (SCOTLAND) BILL.—(No. 233.)

    SECOND READING.
    Order for Second Reading read.
    MR. MARJORIBANKS: May I ask the Lord Advocate to inform us as to the course the Government purpose to take in regard to this Bill, which has been introduced to give effect to the Resolution moved by myself and accepted by the Government, together with the addition suggested

    811
    by the First Lord of the Treasury?
    THE LORD ADVOCATE (Sir C. J. PEARSON,: I believe it is possible a measure may be introduced by the Government for dealing with this matter. But in reference to this Bill it is out of the question that it should pass a Second Reading without a full discussion.
    Second Reading deferred till Monday next.

  SHERIFF CLERKS DEPUTE (SCOTLAND) BILL.—(No. 197.)

    SECOND READING.
    Order for Second Reading read.
    MR. PHILIPPS: May I ask the Lord Advocate has he had his attention called to this Bill, and does he consent to the Second Reading?
    SIR C. J. PEARSON: No, Sir.
    Second Reading deferred till To-morrow.

    GAMING ACT (1845) AMENDMENT BILL— [Lords].—(No. 247.)
    Considered in Committee, and reported, without Amendment; read the third time, and passed, without Amendment.

  EQUIVALENT GRANT (SCOTLAND) DISTRIBUTION.
  Return ordered—
  "Showing for each County in Scotland, and each Royal or Police Burgh in such County, how much each would receive of the sum of £100,000 if distributed according to valuation, 1890–91, and population, 1891, respectively.—(Mr. Hunter.)

  NATIONAL DEBT.
  Return ordered—
  "Showing at the close of each financial year, from 1835–6 to 1891–2, both inclusive, the aggregate Gross Liabilities of the State as represented by the Nominal Funded Debt, Estimated Capital Value of Terminable Annuities, Unfunded Debt, and other Liabilities in respect of Debt, the estimated Assets, and the aggregate Net Liabilities, also the Exchequer Balances; and, showing at the close of each financial year, from 1835–6 to 1891–2, both
  812
  inclusive, the Gross and Net Expenditure charged on the Consolidated Fund on account of the National Debt, and other payments in respect of Debt (in continuation of Parliamentary Paper, No. 390, of Session 1891)."—(Sir William Harcourt.)

  BUILDING SOCIETIES.
  Return ordered—
  "Of Building Societies incorporated under the Building Societies Acts which have terminated, or been dissolved, or have otherwise ceased to exist, under the following heads:—Register number.—Name of Society.—Year of establishment.—Year of termination. Manner of termination.—Number of members where known.—Remarks.—(Mr. Gerald Balfour.)

  PUBLIC PETITIONS COMMITTEE.
  Sixth Report brought up, and read; to lie upon the Table, and to be printed.
  MOTIONS.

    EDUCATION (SCOTLAND) LAW AMENDMENT BILL.
    On Motion of Mr. Donald Crawford, Bill to amend the Education (Scotland) Acts, 1872 to 1883, ordered to be brought in by Mr. Donald Crawford, Mr. Buchanan, Mr. Edmund Robertson, and Mr. Munro Ferguson.
    Bill presented, and read first time. [Bill 261.]

    TECHNICAL INSTRUCTION (SCOTLAND) BILL.
    On Motion of Mr. Bryce, Bill to explain and amend "The Local Taxation (Customs and Excise) Act, 1890," with respect to contributions for Technical Instruction in Scotland, ordered to be brought in by Mr. Bryce, Mr. James Campbell, Mr. Marjoribanks, Mr. Parker Smith, Mr. Leng, Mr. Esslemont, and Mr. Donald Crawford.
    Bill presented, and read first time. [Bill 262.]

    RIGHTS OF WAY PROCEDURE (SCOTLAND) BILL.
    On Motion of Mr. Bryce, Bill to amend the Law relating to Procedure in Right of Way Causes in Scotland, ordered to be brought in by Mr. Bryce, Mr. Robert Reid, Mr. Munro Ferguson, Mr. Haldane, Mr. Donald Crawford, and Mr. Asquith.
    Bill presented, and read first time. [Bill 263.]
    House adjourned at five minutes before Six o'clock.