§ MR. CUNINGHAME GRAHAM (Lanark, N.W.)
[Interrupting]: Perhaps the hon. Member will explain how shareholders in swindling companies— ("Order!") Oh, I am not going to be put down. ("Order!" and "Name!") 108 It is a matter of no importance to me whether I am named or not.
§ MR. CUNINGHAME GRAHAM
What I want to know is, how do swindling shareholders in a company derive their funds? ("Order!" and "Name!")
§ *MR. SPEAKER
; Order, order! The conduct of the hon. Gentleman is such that I must name him to the House. I name you Mr. Cuninghame Graham.
§ MR. CUNINGHAME GRAHAM
: All right! I am simply named for standing up for Socialism in this House in the face of a swindling speech endeavouring to draw ridiculous distinctions. That is why I am named.
§ THE SECRETARY OF STATE FOR THE HOME DEPARTMENT (Mr. MATTHEWS,) Birmingham, E.
I beg to move, in the terms of the Standing Order, that the hon. Member be suspended from the service of the House.
§ MR. CUNINGHAME GRAHAM
Suspend away! (To Sir J. Lubbock, London University, who had spoken to the hon. Member): Oh, leave me alone; I do not care a damn. ("Order!")
§ Question put, and agreed to.
§ Resolved, That Mr. Cuninghame Graham be suspended from the service of the House.—(Mr. Matthews.)
§ Mr. SPEAKER then directed Mr. Cuninghame Graham to withdraw.
§ MR. CUNINGHAME GRAHAM
Mr. Speaker, in withdrawing I wish, to apologise for the discourtesy to you; but I wish also to say that I consider I am suspended for standing up for Socialism. I shall be glad to argue that question in the Park with 100,000 men; but this House is a swindle on them.
§ The hon. Member then withdrew.
§ Debate resumed.
§ *MR. ASQUITH
I was endeavouring, when the hon. Member intervened, to point out that there was a substantial distinction between the unearned increment in the case of land and of other forms of property. The increase in value of rateable 109 property in London cannot be accounted for in any other way than by the increase of population. The gross rateable value of property in the Metropolis has risen, in twenty years, from £22,000,000 to nearly £40,000,000 a year; and although it may be true that during the time of that increase many buildings have been erected and street improvements made, nothing which has been done in that way can account for the enormous enhancement in the value of property in the Metropolis. To account for it we have to look to the ever-increasing aggregation of population, which has enabled the landlord to appropriate to himself the increased value he has done little or nothing to create. That being so, the question is, whether the unearned increment is or is not to become the property of the community? We say that it should; hon. Members opposite say that it should not. There a clear issue is raised, and it is upon that issue that the Division upon the Second Reading of this Bill will take place. I will now say one or two words as to the machinery of this Bill, to which so much criticism has been directed. I do not at all agree with my hon. Friend the Member for St. Pancras that the power of valuation given by the Bill, coupled with the power to purchase during the 20 years succeeding the valuation, will create a state of insecurity under which neither owner nor occupier of property will be able to make such use of it as he ought to be able to make in his own interest. My hon. Friend has failed to ob-observe, or, if he has observed, has failed to give weight to the fact, that for everything which is done during the interval elapsing between the period of the valuation and the ultimate purchase, either in the way of improvement or in the way of judicious management, full compensation is to be made. The only thing for which compensation is not to be received is that part of the added value which is due to the progress and the growth of the community. Therefore, it is absurd to say that a man whose land has been valued will be in the least degree prevented from making use of it and developing it by getting tenants to occupy. He will be in exactly as good a position as if a Railway Company were to purchase his land, subject only to a 110 difference in the measure of compensation which this Bill introduces. The fears that are founded upon the uses of that machinery appear, when carefully examined, to be altogether groundless. My hon. Friend has spoken as if the effect of this measure would be to plunge the Local Authorities of the country into land speculation. It will do nothing of the kind. He referred to the experience of the land companies in and about London, which paid very small dividends, and then went into liquidation. Those land societies, so far as I know anything of their operations, are companies which not only speculate in land as a thing to be bought and sold, but lay out and develop the land for their purposes, and sink a considerable amount of capital in these preliminary works, which, if they have mistaken the market, or if the site is unfortunate for the operations, result often in failure and disaster. It will not be in the power of any Local Authority under this Bill to indulge in operations of that kind. All it can do is to purchase land as required for public purposes, to value other land—a value to be confirmed by the Local Government Board—indicating thereby that the land so valued is likely to be required in the interests of the community, and that, therefore, the additional value which will arise in the interval from the growth of the community will belong, not to the owner, but to the community. Those are the proposals of the Bill. They do not in the least degree militate against any other plan which maybe proposed for what I may call tapping the unearned increment; but they will have the effect of securing to the community that which is part of its own patrimony, that which is now diverted into other hands and to other purposes, that which the community creates, but of which it reaps none of the fruit.
§ MR. AMBROSE (Middlesex, Harrow)
I always understood that the object of a Government was to protect individuals in the enjoyment of their property. For my own part, I am not, like my hon. and learned Friend the Member for East Fife (Mr. Asquith), able to distinguish between individuals and companies, because in my view the happiness and welfare of the community are best maintained by securing the rights and 111 welfare of the individual members of both. My hon. Friend suggests that there is a difference between unearned increment on land and on other property. He took the case of Consols, and attempted to point out the difference. I propose to deal with that portion of his argument. He says the difference in Consols is, that if Consols bought at 80 rose to 100, the holder would only get the £3 per year—that there would be no difference in the income. But where do you get the £100 for that which has cost £80? He has admitted that the cause is the increase in capital value. He says, too, that you get an increase in the value of the land. Why? Because the capital value of the land has increased. Therefore in both cases the increment arises from an increase in the capital value. The same point arises with reference to industrial undertakings. In each case the increment depends upon circumstances which are altogether beyond the control of the owner. The truth is that money is the representative of all kinds of property, whether it be land or anything else, and that contention can have no better test than the ease with which money can be converted into land and land into money. This Bill has been discussed as if it were a mere question affecting the owners of the land, but it is not so at all. One of its principal points has reference to the ratepayers, because it empowers the County Councils to take any land they may think proper. Under this Bill the County Council would have power to take any property they wished. But where are they to get the money from? I know of no powers under the Local Government Act of 1888 for raising money for such purposes as this, either from borrowing, or from the rates. But I do not lay much stress on that point, because the Bill might be amended in that respect in Committee. What about the ratepayers? Are we to allow County Councils, by dabbling in land speculation, to increase the rates that had to be paid by those who elect them? Surely the people of this country are taxed enough now, and it is not right that they should be exposed to the risk of increased taxation to enable County Councils to indulge in fantastic schemes such as are suggested by this Bill. The 112 Councils will have to pay the full market value of the land, and they may have to bear the expense of assessing the value, which will largely add to the price. And suppose the County Council make a mistake; if, instead of improving in value the land deteriorated, who is to bear the loss? I suppose it is to fall on the ratepayers. Mr. Speaker, it is no part of the duty of Government to make speculations of profit and loss, with a possible loss that may fall on the ratepayers. A ratepayer pays his rates to maintain the necessary authority for doing the work of the parish or district, and there is no obligation upon him to find money to enable the County Council or any other Local Authority to indulge in schemes of this kind. I contend that the principle of this Bill is entirely new, and that no analogous case has been quoted as a precedent. If anyone could make out a case for the Bill, I am sure the hon. Member for Fife (Mr. Asquith) could, but he has been unable to do so. The hon. Member for Haddington (Mr. Haldane) started with the case of Lord Cairns' Bill for the amendment of the law relating to settled land, but under that Bill the rights of the remainder-man had to be preserved, either in money or land. The other case quoted by my hon. Friend is that of railways. But in the case of railways, the necessity for the land proposed to be acquired compulsorily has to be proved before a Committee of the House of Commons. A specific case has to be made out, and upon that the House gives the necessary authority. Again, in taking powers for the construction of artizans' dwellings, proof has to be given of a distinct neglect of duty on the part of the property owner; and in all cases where land is taken for drainage and other purposes, under the Sanitary Laws, application has to to be made to Parliament for a Provisional Order. I contend, therefore, that my hon. Friend is in error when he says there is a precedent for the principle contained in this Bill. But the worst part of the Bill seems to be that which deals with the question of the land-charge. Let hon. Members consider for a moment what will be the effect of having a land-charge registered against any particular property, under any circumstances. Why, Sir, it will be putting a dead hand upon the property, and 113 sacrificing it, at all events, for 20 years. How could the owner deal with it? If he wanted to sell it he might get less—certainly not more—than the price fixed upon it by the County Council, and in addition to that his power of borrowing money on it would be greatly reduced. Supposing the owner wished to develop the property, and incurred considerable expense in making streets and laying down drains, and erecting houses. What then? "Oh," say my hon. and learned Friends, "he is to be paid for all that. That is to be taken into account when the County Council acts"! But, Mr. Speaker, it may happen that the owner may lay out a great deal of money, and that there may be no unearned increment arising from it. Instead of being successful, the development may be an entire failure. He may lay out the streets and fail to sell the land on either side, or he may erect houses and not be able to let them. In that case the Council may leave the property on his own hands; but if there should be an increase in the value of the land, the Council might come in and claim the result of his improvements as unearned increment. Mr. Speaker, there is a fallacy underlying the whole of this talk about unearned increment. The prospective value—or unearned increment, as it is called—really constitutes a part of the present value, and this is a point well known to every person accustomed to the valuation of land. You never can assess and arrive at the real value of a property unless, and until you take into consideration the possible future of that property, which is the unearned increment some hon. Members opposite have been discussing. Take a foal for example, which has a pedigree, and concerning which great expectations may arise when it shall have grown to maturity. Are you to fix the value of that foal by its capacity as a foal? No one in his senses would think of doing so. You consider what it may do in the future, and in that way the prospective value is taken into account. It is the same in the case of land. Well, if there is one thing we may congratulate ourselves upon, I think it is this: We have heard the hon. Member for West St. Pancras (Mr. Lawson), who is great on leasehold enfranchisement, and we have heard the hon. Member for Haddington 114 (Mr. Haldane), who is opposed to leasehold enfranchisement. The Mover of this Bill condemns the scheme of the hon. Member for St. Pancras, and the hon. Member for St. Pancras condemns the scheme of the hon. Member for Haddington. Well, I think we shall agree that both the hon. Members are right in condemning each the scheme of the other. With these remarks, Mr. Speaker, I shall have great pleasure in supporting the Motion of the hon. Member for Peckham (Mr. Baumann).
§ *(4.5.) MR. C. S. PARKER (Perth)
I rise to support the Second Reading of this Bill upon the grounds which were eloquently and very discreetly stated by the hon. Member for Fife (Mr. Asquith). He so well submitted to the House the strong arguments in favour of the first part of the Bill that I shall not waste time in going over that ground again. But I should be unable to support the Bill if I had not this opportunity of saying that I am opposed to the three or four clauses dealing with unearned increment. As some hon. Members whose names are on the back of this Bill have still to speak, I hope they will give us a satisfactory reply as to whether they are not under a grievous fallacy in regard to the operation of those clauses. I understood the Mover and others to say that, however averse they might be to unearned increment, they are not prepared to meddle with the past. But my point is that they do meddle with the past, because, as the hon. Member who has just sat down has argued, there can be no doubt that in fixing the present value of land an expert valuer takes into consideration its prospective value. The County Council asks what is the value of certain lands. The valuer replies, naming a market price which includes the prospective value; but the County Council then has the option of purchasing immediately, or at the end of five, ten, or 20 years. Well, Sir, for argument's sake I will take a simple case, that of land in the City of London, where, as has been shown, it is rapidly rising in value. For simplicity I will assume that the owner makes no outlay in the meantime. Very well, the land may be valued at the present time at, say, £10,000, and in the course of 20 years it may be worth double that sum. Surely the owner has a just claim to sell at the present valua- 115 tion. But if the County Council, instead of taking the land as valued or leaving it, can hang it up for 20 years, and the owner goes into the open market to dispose of it, I say he can no longer get £10,000 for it, because it has been deprived of part of its prospective, and, therefore, of its present value. I think that is an inconsistency in the Bill, and I challenge hon. Members supporting it to say whether they do or do not intend it to interfere with unearned increment already accrued. My hon. Friend the Member for Poplar says there is no proposal in the Bill to take anything from anybody to which he has a just claim. Well, I contend that if the County Council wishes to buy land, the owner has a just claim to the increment already accrued, yet these clauses would take it from him. I distinguish, however, broadly between unearned increment and betterment. I do not know how far the right hon. Gentleman opposite has committed himself to that principle, but I think it is a fair one if properly defined. If Public Bodies expend public funds on improvements, which will be greatly for the good of private persons, I think it should be arranged so that a portion of the cost falls, say, by way of a special rate, upon those who are thus benefited. But that is altogether a different case from that of unearned increment. I will not detain the House longer, but I hope that hon. Members who are supporting this Bill, will explain whether they do, or do not, propose to interfere with the increment already accrued.
§ (4.10.) SIR G. RUSSELL (Berks, Wokingham)
The hon. Member who has just sat down was apparently prepared to support the outside of the Bill but not the inside, but as the inside is virtually the whole of the Bill I really do not see how he can support any part of it. Not a few hon. Members have been disposed to treat this Bill as a joke, and I am not surprised at that; but I must say that it appears to me not only to be a joke, but a very bad joke, and I should almost be disposed to consider it a practical joke if there were anything practical in the Bill at all. The hon. Member for Peckham told me last night for the first time of the existence of this Bill, and when he told me what were its provisions, I was 116 unwilling to believe that he had arrived at a correct estimate of them. I have now, however, satisfied myself that he was correct, and having done so, I looked to see who were the Gentlemen who were interested in this extraordinary Measure. I find that they consist of three Scotch Members, two philosophers, and one English County Member. As regards the three Scotch Members, I would remark that the only sensible clause in the whole Bill provides that it shall not extend to Scotland. As regards the two philosophers, I will content myself with saying that England never has been, and I am perfectly confident never will be, led by philosophers. With respect to Sir Edward Grey, I have the greatest respect for him as bearing a name honoured in this House and in this country, and I can only imagine that being the Member for Berwick, which is so near Scotland, he believed, when he put his name at the back of this Bill, that he was a Scotch Member. We have heard a great deal this afternoon with respect to the operation of this Bill in urban districts, and I, as a County Member, should like to say something with respect to its effect in the counties. As a matter of fact, under this Bill the whole of England could be scheduled, and if land were hung up in the manner that is suggested, no landlord would expend a shilling on the property so hung up, no tenant would dream of renting such land, and anything more disastrous to the productivity of the land of this country, if this measure became operative, I cannot imagine or conceive. There is one portion of this Bill which hon. Members seem disposed to glide over as if they do not like it. The hon. Member for Fife (Mr. Asquith) gave a sort of veneering aspect of seriousness to this preposterous and ridiculous measure; but I should like to ask him, as a practical question, how he would like some Society, like the Incorporated Law Society, to have power to-morrow to value his practice with a view to purchasing it, at that price, at anytime within the next twenty years. How would he like to have his income fixed at its present rate by Act of Parliament for the next twenty years? I expect he would not like it at all. And we do not like it, and on that ground we intend to fight against 117 this measure. The great inducement which is held out to hon. Members on the other side to support this measure is that it introduces their pet and favourite principle of compulsion. Nothing will go down now with them but compulsion. They will not let me be sober of my own free will and choice; I am to be sober by Act of Parliament. They will not let me sell my land of my own free will and choice; I must sell it by Act of Parliament. They will not let me work as many hours in the day as I please; must have my hours limited by Act of Parliament. In the whole range of public questions I only know of one on which the new fashioned Radical has adhered to the old principles of liberty and freedom, and that is the one single question in which compulsion ought to be applied—the vaccination question. I will give them the credit that they do remain free traders in small pox. But with that one isolated exception they introduce compulsion into everything, and it has found its way into this ridiculous measure which has been introduced today. It has been said that this measure is a joke. I should like to hear the right hon. Member for Derby (Sir W. Harcourt) in his most jocular spirit dealing with this measure. It would be a real treat. He would make it a hundred thousand times more ridiculous than I can make it appear, and he would possibly make it appear even more ridiculous than it is. I hope it will be rejected by a large majority, for it is a measure which deserves to be kicked out with ignominy and contempt.
§ (4.20.) SIR E. GREY (Northumberland, Berwick)
I am perfectly willing to admit that it is a failing on the part of any person who is unable to see a joke where one exists, and I honestly admit that I do not see a joke in this case. But I think there is one thing worse than failing to see a joke, and that is seeing a joke in a serious matter. Opposition has come to this Bill from several quarters. It has been complained that my hon. and learned Friend who introduced the Bill (Mr. Haldane) dealt too much with general principles. I am glad he did, because it has brought out clearly the fact that the great difference between us and hon. Members on the other side of the House is on general principles. They maintain that the land is to be treated 118 just like any other commodity, and they maintain that the unearned increment is to go into the pockets of private individuals. I think that is not an unfair construction to put on the argument of the hon. Gentleman who moved the rejection of the measure. At a time like this, when the great question which is agitating the popular mind is that of the condition and profits of the ownership of land and the general distribution of wealth, it is impossible that the question of the land can do otherwise than receive its full share of attention. It is as important as capital, and is discussed enough in connection with the profits arising from it. It is as necessary to industry, and it is fixed, and thus offers facilities for treatment in a way that capital does not. It is limited in quantity, and comes under a category which this House has always considered worthy of special treatment. The Member for East Down (Mr. Rentoul) seems to think that land is like goods in a shop window, which can be increased at pleasure. If the hon. Member has not got beyond that point of view, it is not possible for him to understand the reasons that have induced us to bring forward this Bill.
§ MR. RENTOUL
The hon. Member says I referred to the goods in a shop window. I said nothing of the kind. I referred to a newspaper, or to the practice of a solicitor or a doctor in a growing town.
§ SIR E. GREY
I will take the case as the hon. Member puts it now, and speak of a newspaper in a growing town. In a town where land is rising in value, and a newspaper is rising in value, the increase in value does not necessarily arise from the same cause. The land may have been lying idle for years. It may be a rubbish heap, and no money have been spent on it, and yet, because of surrounding conditions, the land may have increased in money value. But the newspaper if it has risen in value, however greatly the population of the town has increased, must have had expended on it industry and ability, and that is the difference between the two cases. The hon. Member asked also where was the demand for this Bill. I believe he is in the habit of addressing popular audiences, and I cannot understand how it can have escaped his atten- 119 tion that nothing excites more interest with popular audiences than the question of land reform. There is a great desire for it, and it is as wide-spread as any feeling can be. Many schemes of land reform are brought forward, and it is not enough for us to content ourselves with criticising schemes for land nationalisation, and with saying that many of these schemes are crude, unworkable, and unjust. It is our business to bring forward better considered, more matured, and more equitable measures. The business of Members of Parliament is not to wait till a popular demand has arisen for some particular Bill, but to recognise the difficulty which the public mind feels in dealing with such measures, to elucidate and elaborate the details, and put them into practical and workable form. That is why this Bill has been brought before the House. The second principle contained in this Bill is that we wish to extend the public ownership of land. I quite admit that private ownership of land has served many useful purposes. But the most useful purpose is that it develops energy and enterprise in the cultivation of the soil perhaps better than public ownership can do. But the land has ceased to be wanted solely for agricultural purposes, and it is when it is wanted for purposes other than agriculture that this Bill will come into operation. The hon. Member for St. Pancras (Mr. Lawson) seems to regard Public Bodies as in some way hostile to the community at large, and intimated his belief that they were the worst owners of land that could exist.
§ SIR E. GREY
I understood him to say that public ownership of land, so far as it had been tried, was unfortunate, and I read somewhere the other day a remark of his that Corporations were about the worst owners of land it is possible to find. I think we ought not to be guided entirely by the experience of the past. Local Authorities are developing in life and energy every day, and public opinion is developing and paying more and more attention to the action of the Local Authorities and founding greater hopes and expectations on the work of the Local Authorities. I do not mean the public feeling of the moment, but that steady and con- 120 tenuous feeling which is turning more in the direction of the Local Authorities. Look, for instance, at the election for the London County Council the other day, when a large Progressive majority was returned. What did that mean? We are told that many persons who are by affinity and for Party purposes Conservatives, and who are prepared to vote for Conservative Members at a Parliamentary election, had yet voted for Progressive members of the County Council. That means that they have overcome their natural affinity, because they are interested in the scope of their own Local Authority, and that that Local Authority has attracted to itself men of enterprise and ability, who possess the confidence of the community. Surely this is the time when we ought to give Local Authorities more power, and I maintain that this Bill will place in their hands a power which will stimulate public interest in their work; and it also provides an opportunity the best calculated to draw out the interest, the energy, and the ability of the members of those bodies. And there is no other way. We cannot progress in any other way except through the Local Authorities. There are people, of whom I think the hon. Member for Peckham is one, who say that the unearned increment should go into the pockets of private owners. The hon. Member has used such strong language in denouncing this Bill that I do not know how he will be able to denounce any future Bill which may be introduced for taking not only the future, but the present, property of persons without compensation. The point of view of the hon. Member, as I understand it, is that a certain favoured class is to be entitled not only to what they have earned, but to a great deal that they have not earned by their own exertions or capital, and land is to be maintained at monopoly prices. We are also opposed on the ground that the unearned increment of land is not different to that of other commodities in which it is difficult to distinguish it from other increased value. Even if we admitted that, I should contend that the unearned increment of land can, to some extent, be distinguished, and the fact that we cannot get all unearned increment is no reason why we should not get that which can be so distinguished. Some hon. 121 Members oppose this Bill because they have plans of their own which they prefer for dealing with land reform. The hon. Member for St. Pancras (Mr. Lawson) has a Leasehold Enfranchisement Bill which he prefers, but I utterly fail to understand his position. He said he was in favour of acquiring the unearned increment of land; but surely there is opposition enough to that principle, without the hon. Member proposing to increase manyfold the number of persons resisting our efforts to get the unearned increment for the State. The Bill before us is not perfect or complete, as it will only acquire the unearned increment of the land which the Local Authority has had valued, so that one owner may be valued and have to pay, and be side by side with another who is not valued and is getting the increment; but the good fortune of the one man is no reason why justice should not be done in the case of the other. To meet the case we might invoke the powers of the Bill of the hon. Member for St. Pancras for special rating. This Bill is put forward as an instalment. I wish to deal with the alleged injustice in the Bill. The hon. Member for Perth (Mr. C. S. Parker) put the case very dearly when he said that the Bill might lower the speculative value of land, as in valuing for the purposes of the Local Authority the prospective value will not be taken into account, and the Local Authority will be able to purchase at a price which does not include the prospective value of the land. I think the Bill will have a tendency to lower the speculative value of land, but will not touch its agricultural value or the increased value due to the expenditure of capital and labour upon it. The answer to the charge that injustice will be done in that respect is that the value which will be lowered is purely speculative, always has been, and will always remain, open to risk. There have been many schemes for obtaining this unearned increment; the principle of betterment is one; John Stuart Mill proposed another; and from that time everybody has been bound to run the risk of Parliament adopting one of the numerous plans, and thus interfering with the speculative value of land. We believe that in giving the Local Authorities power to value the unearned increment we are asserting the right of 122 the community to that which is its own, which it has always been entitled to, but which it has, for want of knowledge of its powers, or from laziness, not claimed hitherto. As to the argument that the unearned increment will be taken from the owners, and the undeserved detriment fall entirely on them, I believe that future buyers will buy land with their eyes open to the risks they run, and they will take account of them in the price they pay. When we consider how vast the unearned increment has been, and what a difference it would have made if the public had acquired it years ago in relieving the pressure of rates and in the amount of money available for public purposes, I am inclined to defend the generosity of the Bill in being so little retrospective rather than to defend it from the charge of injustice. We contend that land is a monopoly, and that the State has a right to limit the conditions under which it is held. In the case of a Railway Company, the profits are affected by the limits placed on the rates which the company can charge; but if the company fails through a change by depopulation in the character of the district through which it runs, the country does nothing to compensate it. If profits are made in trade the income is taxed; but if there is no profit in consequence of bad trade, the State pays no compensation for the loss. I claim for the Bill that it is one advisable in the public interest, and that it has proper regard for private interests. It is an experimental Bill, which will enable the Local Authorities to advance on right lines—the lines of experience. They will be called upon to run no risks, nor will they be called upon to buy land until it is rising in value. Yes; I am using that argument against the hon. Member for St. Pancras, who has spoken of the risk the Local Authorities would be called upon to run if the Bill were passed. The Bill has a third merit — it is capable of progressive application. It can be extended from town districts to county districts; in fact, there is nothing in it to prevent its immediate application to country districts. The President of the Board of Agriculture complains of the hardship of men wanting allotments having to pay three or four times the price paid by a neighbour who has a larger holding; he might 123 find some method of extending the Bill to remedy that injustice. Hon. Gentlemen opposite may admit some of our arguments, but I do not expect they will admit the conclusions we draw from them. We who consider ourselves the guardians of the Public Purse are bound either to accept this Bill, as it is, to improve it, or to reject it in favour of a more complete measure, which is not at present forthcoming. It is said that public opinion does not call for it. It is our business to rouse public opinion to a proper sense of its own rights. When hon. Members talk about justice in connection with this Bill, what they call justice does not deserve the name, because they look at it from the point of view of the individual and monopolist. In talking about justice between man and man, you must take the view of both, and draw the line fairly between the two. So in this Bill you are bound to occupy the position of both the individual and the State which is interested in the rising value of land. Hon. Members opposite only look at the question from the point of view of the owners of land, and it is not possible for them to decide equitably where the line of justice lies. The Bill takes a larger and fairer point of view; it proceeds on principles, sound and just, which will, sooner or later, commend themselves to the larger body of people in the country, and on these grounds I have endeavoured to defend and justify it; and I hope to see it, or some measure of the same kind, passed in the not very remote future.
§ *(4.43.) THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE,) Tower Hamlets, St. George's
The hon. Baronet has made a very able speech in favour of this Bill, but I was very much astonished at one of the reasons he gave for considering that it was a fair and generous Bill. He pointed out, in answering another objection to the Bill, what a commendable feature it was that it did not compel County Councils to buy laud until it is increasing in value. That may be very generous from the County Council point of view, but it is hardly generous to the landowner. I will deal with one or two others of the hon. Baronet's arguments later on. I would like to say, first, that there is hardly a Member who has 124 supported the Bill in its entirety. Some hon. Members have supported one portion and condemned another; some have endeavoured to pin the House to the question of principle and have asked it to altogether disregard the question of details. One hon. Gentleman said that the Division to-day will not be on the question of the details of the Bill, but on the question of whether or not the community is to obtain a share of the unearned increment of land. I can very well understand, looking at the details of the Bill, that hon. Gentlemen who desire to support the Bill are extremely anxious to pin the House to its principle rather than to its details. But I would suggest for the consideration of the House whether, when it is proposed in a Bill to alter so fundamentally the existing law of the land, it ought not to be shown by the authors of the Measure how it can be done, and that it can be done without manifest injustice. That is the great difference between a Resolution and a Bill. One of the many objections taken to a Resolution is that it commits the House to the assertion of a principle which it may be impossible to carry out in detail. But if you ask the House to insert in a Bill a novel principle, you ought to show how it is to be carried out. I shall have to allude to some of the details of the Bill which I do not think are defended in their entirety by any hon. Member. The hon. Member for Poplar (Mr. Sydney Buxton), who is as thorough-going a supporter of land reform legislation as anybody, asked the House to confine itself to the principle, and said he did not care much about the details, but was prepared to amend or cut them about in any way the House thought fit. The Bill consists of two parts—one part gives compulsory powers to Local Authorities to purchase land and facilitate its purchase; and the other part deals with what is understood by the term unearned increment in the value of land. In regard to the first part of the Bill, the hon. and learned Gentleman who brought forward the Bill spoke of the difficulties Local Authorities have in obtaining the land they require in consequence of the existing state of the law. He spoke in an extremely general way, and gave no illustration of the kind of 125 difficulty in which Local Authorities found themselves. So far as I am concerned, having some knowledge of the subject, I say without hesitation that no difficulty of any moment exists at the present time in enabling Local Authorities to obtain land for all the various purposes for which they have statutory powers. The hon. and learned Member for Fife, I think it was, completely answered the hon. and learned Gentleman who proposed this Bill with regard to that. The hon. and learned Member enumerated a large number of Acts of Parliament connected with the public health, and many other matters in respect to which the Local Authorities have full powers to acquire land. The only cases in which, so far as I remember, the hon. and learned Gentleman said they were restricted were one or two particular ones—he did not specify them—in which some greedy landlord possessed the land outside a town, and thereby interfered largely with the development of the town. That was the only instance he alluded to, and he gave no particulars with regard to it. I have no doubt there may be one or two cases of that kind; but what I venture to say is this—if this Bill were passed it would add enormously to the difficulties of the development of towns, because it is perfectly clear that the landowners who have land in the neighbourhood of a town would be prevented—and effectually prevented—from dealing with their estates in such a way as to relieve the pressure on the town. But there is this further difference between what the hon. and learned Gentleman proposes by this Bill and the existing law with regard to the acquisition of land by Local Authorities. Parliament has laid it down that Local Authorities should only acquire land for the purpose of carrying out the duties which devolve upon them by Statute, and the proposal of the hon. and learned Gentleman is that they should acquire land—Where it appears to any County Council that it is for the interest of the inhabitants of any district within the countyto acquire land. My own view is that this is entirely a novel, and, I think, quite an unjustifiable extension of the powers of Local Authorities. One of the reasons, I take it, why it is that Parliament has restricted Local 126 Authorities in acquiring land to the acquisition of such land as may be required for the purposes of the duties which devolve upon them is to secure that the ratepayers' money should be safeguarded, and that the Local Authority should not embark in land speculation or any other speculation which might be foreign to the powers and the duties that devolve upon them. But I think the proper course to pursue, if the hon. and learned Gentleman believes that there are any duties which ought to be devolved upon Local Authorities which they do not now possess, is to let Parliament consider what these duties should be. I do not pretend to say that Parliament has clothed Local Authorities with all the powers and duties which ought to devolve upon them; but I say that Parliament ought to consider very carefully what additional powers should be conferred upon them, and ought to decide for what purposes the land is to be acquired before it gives to County Councils or Local Authorities such a roving dispensation as that proposed by the hon. and learned Gentleman. I say it is not for the interest of the community, and certainly it is not for the interest of the ratepayer, that any further powers should be conferred on Local Authorities for embarking in an undertaking which might be foreign to their duties, and might involve speculative enterprises such as, I think, ought not to be encouraged. But there is the further question which has been alluded to by subsequent speakers, by the hon. Baronet who has just sat down, and, I think, by the hon. and learned Member for Fife—namely, that certain conditions which are now imposed on the action of Local Authorities in regard to the compulsory acquisition of land ought to be removed, and that instead of coming to Parliament with the cost attendant upon it, the Local Government Board ought to issue an Order which should not be provisional, as it is now, but an Order that should require no Parliamentary sanction. Well, that is a proposal which requires, and which ought to receive, very careful consideration. The first point to be considered is whether or not the existing conditions are such as entail great expense and a great grievance. I deny that they do. It will be, perhaps, a matter of 127 surprise to hon. Gentlemen who complain about the difficulties which Local Authorities now have to acquire land compulsorily for the purpose of their duties, to know that out of 2,130 Provisional Orders granted by the Local Government Board and their predecessors up to 1890, not more than 105 were petitioned against and referred to Select Committees; and that of those 105, no less than 88 were afterwards confirmed by Parliament. With regard to the inquiries held upon the applications of Local Authorities, the interference of the Local Government Board is very largely regarded as an assistance by such authorities. When works are undertaken with regard to drainage, or water supply, or gas, or matters of that kind, an experienced and professional expert is sent down from the Local Government Board, and he assists very largely by his advice and by his suggestions Local Authorities in dealing with the questions which come before them at that time; and, further than that, the way in which an Inspector is often able to reconcile the various conflicting interests leads to a harmonious settlement of the question hitherto in dispute, and no appeal to Parliament is required. It may be said, "Why not, then, abolish the right of recourse to Parliament?" But I do not think that is a good argument, because the Local Government Board, in dealing with these questions, knows that it has behind it an appeal to Parliament, if it should be considered necessary, and the Local Authorities know also that an appeal to Parliament may be taken; and I think that in all probability this inquiry and negotiation with regard to the acquisition of land by Local Authorities would not be half as well done, would not be half as successful, and would not behalf as sound, if Parliamentary interference were done away with. Besides, it is a very strong order to say that we should take away the right of ultimate appeal from a man who might wish to exercise such a right. I do not think that any grievance worthy of the name has been suggested with regard to the existing mode of dealing with applications for the acquisition of land by Local Authorities. I am perfectly ready to admit, however, that several improvements could, perhaps, be introduced in the 128 provisional Order system; and if we were discussing that I should be quite willing to admit that much delay might be saved in connection with these matters by some proposals, or suggestions, or recommendations I should make. But we are not discussing that. Nor is this by any means the most important part of the Bill. There are some hon. Members supporting this Bill who are going to ride off upon this particular part, and ignore, if not condemn, the very much more serious proposals made in the other part. With regard to the other portion of the Bill, so far as I understand, the proposal contained in this Measure has never been approved of by any competent authority upon political economy, nor by any responsible statesman.
§ *MR. RITCHIE
I beg the right hon. Gentleman's pardon—Mill never proposed any such extreme mode of dealing with land as that proposed by the hon. Member in this Bill. What John Stuart Mill proposed was some rearrangement of taxation and rating.
§ *MR. RITCHIE
I thoroughly under stand. I well know that several proposals have been made with regard to attacking the unearned increment by means of taxation, and I well understand what John Stuart Mill specially proposed; but never has there been such a monstrous proposal made with regard to this matter as has been placed in this Bill. Certainly, I think the right hon. Gentleman the Member for Derby (Sir W. Harcourt), who I am sorry to see has left the House, would never have made any such proposal. I should be glad to ask him, if he was here, whether he adheres to the opinion he expressed on this subject in 1874? Unfortunately the right hon. Gentleman sometimes has a habit of not being present when awkward points are likely to be raised. Perhaps it is only by accident. At any rate, the opinion which he expressed in 1874 was so sound that I do not like to deprive the House of the opportunity of hearing it. He said in Oxford in 1874:—I shall not discuss with you the unearned increment of land. That is an idea so illogical so unreasonable, so perfectly unjust, so abso- 129 lutely philosophical, that it does not require a refutation. Neither shall I inquire into the nature and origin of property in land. I am content to assume that a man's right to his land depends on the same principle as your right to the coat on your back—namely, that you have paid for it.I should be very glad to know whether the right hon. Gentleman adheres to that very sound doctrine, which he enunciated in 1874; or whether, with regard to that, as with regard to some other matters, he has changed the coat to which he refers in the speech which he then made? Now, the hon. Member for Poplar, when I was out of the House, I understand, alluded to some remarks I made the other day on the subject of betterment, and asked whether or not, from what I had then said, I had not admitted the principle of this Bill?
§ MR. SYDNEY BUXTON
What I said was, I understood that the right hon. Gentleman practically, the other day in Debate, accepted the principle of betterment; and I stated that, in my opinion, the principle in this Bill went no further than the principle of betterment on the same lines, and that this proposal only carried out the same principle for a public purpose.
§ *MR. RITCHIE
I do not think it has anything to do with the principle of betterment. The principle which I said the other day was not an unjust one was this: that where it can be shown that a particular house or particular houses have been specially raised in value by a public improvement I saw no reason why the owners should not pay specially for that improvement. And that is the principle that is recognised by the existing law. But I made it very plain that, with regard to the proposal then before the House, I myself was unable to see how that principle could be so generally and widely applied with justice. But what is there in the betterment principle analogous to the proposal contained in this Bill? The real betterment principle is this: that if you can show that a particular property has been benefited, then let that property be taxed on that increment; but you are not going to benefit any property. What you are going to do is to worsen, and not to better, property. It has been said that this proposal is confined to land and houses, and is not one which is properly 130 applicable to other matters. For my part, I agree with the right hon. Gentleman the Member for Derby, and I cannot myself see how to dissociate land from any other kind of property. The hon. Baronet the Member for Northumberland (Sir E. Grey) said he was prepared to see this principle extended to other property; and he said, because it was not extended to other property why should we not take advantage of the Bill as it stands? He did not see any difference between this and any other property.
§ SIR E. GREY
I beg the right hon. Gentleman's pardon. What I said was, adopting, for the time being, the contention of the other side of the House, there was no difference.
§ *MR. RITCHIE
The hon. Baronet adopted it for the purpose of argument, and said take this as the first step, and then afterwards apply it to other property. The hon. Baronet gave an illustration. He said take a piece of property, divide it into two parts; if you deal with only half the property, that is no reason why you should not deal with the other half.
§ SIR E. GREY
I said because you could not prove your title to the other part of the rateable property—it was not possible.
§ *MR. RITCHIE
I do not wish to push the matter any further; but the principle of this Bill is, that where property has been increased, not by any action of the owner of the property, but by the development of the town, and the development of enterprise, the increased value of that property should be the property of the community. I have heard no satisfactory answer given to my hon. Friends who have contended that this principle affects other property, such as Consols, railway shares, and shares in all industrial undertakings; and I say there is no reason why it should not be applied to banks in towns, or shopkeepers in towns. It is quite true that a share of the increased value of a shop or a bank may be attributed to the energy or enterprise of those who have conducted the business; but it is perfectly obvious that a very large share of the increased value, at any rate, may be attributable to improvements made in the town, and to 131 the growth of the population of the town. Why, in that case, should there not be the same means of assessing what increased value is owing to this movement of the population, what increased value is owing to the industry and development of the town, and allow the town to take its share of it? Let us see for a moment what are some of the unjust details of this proposal? The property may be valued for purchase; let us see at what cost that is to be done to the landowner. We have first of all a Local Government Board inquiry. Then we have a valuation by an arbitrator, and both of these items of expense have to be incurred by the landowner, and the land does not benefit at all.
§ MR. HALDANE
The right hon. Gentleman will see that the Bill specially provides that the expense shall be borne by the County Council.
§ *MR. RITCHIE
I am sure the hon. and learned Gentleman will know as well as any Member of this House, that the costs which are likely to be dealt with in the way he suggests are probably the smallest portion of the costs, which would be involved in the transaction which he proposes. And then again, if ultimately the land is to be purchased there is another appeal to arbitration with regard to the value, so that after depriving the landowner of the power of taking the increased value of the land at the time the purchase is made, you undoubtedly, by these operations, subject him to a very large and serious expenditure. And what is more, so far as I understand the Bill, there is nothing to prevent it being done once every 20 years. There is no reason why, at the end of 20 years, the County Council should not say, "Oh, this land has not risen in value sufficiently for our purpose! We will go on repeating the experiment for the next 20 years." So that they would be able absolutely to put the owner to a very considerable expense every 20 years, and for that time completely paralyse the operations of the landlord, and the action of the landlord with regard to his own property, and there is no part of the community, I venture to say, which would be likely to suffer more from that paralysis than those whom the hon. Member desires to benefit by the operation of his Bill. Let 132 us see for a moment what the result to the owner would be during the 20 years, with regard to which he is under an obligation to sell. Something has been said by hon. Members in supporting this Bill to the effect that the only injustice—they acknowledge there would be an injustice done—but they say that if there is an injustice, the only injustice that will be done to the landowner is that perhaps it will not be worth the while of the speculator to come in and buy the land. Why should the landowner be debarred from selling his land to the speculator? Why should he be debarred from the opportunity of selling his land in the best market? Let me tell the hon. Member that perhaps the very best thing for the town and neighbourhood may be that the land should be sold to the speculator, who would provide outside the town those houses which, perhaps, it is impossible to provide within the area of the town. Therefore, I cannot acknowledge that the fact of the speculator being shut out as a possible buyer is not also a gross injustice to the owner of the land, and very possibly it may be a great injustice to the town. Suppose during the first 20 years the owner thinks a favourable opportunity in the land market has arisen for him to dispose of his land? Prices are high, probably higher than they may remain, and he desires to sell his land. But he cannot do it, with that charge upon it no one will buy it. And then at the end of 20 years the County Council may turn round upon the owner and say, "We are very much obliged to you for the offer of your land, but we don't think that the time is favourable, and we won't buy the land." Then the owner is put in this position. For twenty years he has been debarred from dealing with his land—it may be 40 or 60 years, but I am taking the shortest term—and he has been debarred from selling at a time favourable to himself. Then it is thrown upon his hands at the end of twenty years by the County Council at a time when, probably, it has been greatly depreciated in value. Then, again, this Bill says that no added value is to be given to the landowner unless that added value is owing to some expenditure of his own. Suppose a Railway Company goes through his 133 land. That surely has nothing to do with any expenditure incurred by the town; yet, the owner of the land is not to profit by a development which has been caused, not by the action of a Public Authority but by the action of a private company. The County Council has no disability of that kind, and I understand that it may take the whole or any part of the land. Then what may they do? They may go and take the land where the railway has come, and where the value has enormously increased—an increased value for which the owner will receive not one penny—and they may throw on the hands of the owner the other portion which they have scheduled, but which may have depreciated in value. Could anybody conceive anything more grossly unjust than that? I doubt whether the hon. and learned Member himself would be prepared to say otherwise than that such a proceeding would be a gross and monstrous injustice—a spoliation and a robbery.
§ *MR. RITCHIE
The Local Government Board! I may be wrong, and if so, the hon. and learned Gentleman will correct me, but as I understand the Bill, the Local Government Board does not act in regard to this question except in the matter of scheduling for valuation.
§ *MR. RITCHIE
Oh, very well. We will assume that the Local Government Board is to step in to prevent this manifest injustice. But what have the Local Government Board to consider? That it is "for the interests of the inhabitants of the locality." If it cannot be shown that it is not to the interests of the inhabitants of the locality the Local Government Board has no option. Clearly it is very much to the interests of the inhabitants of a locality, if a railway has come on to the land and enormously increased its value, that the land should be obtained by the Local Authority, and what would prevent the Local Government Board doing anything else but giving their assent to the proposal? It would not be for them to say whether the thing was just or unjust, but only whether or not it was 134 in the interests of the inhabitants of the locality, and that being shown, I declare on my responsibility, that no President of the Local Government Board could withhold his assent to such a transaction, which is a possibility quite within the four corners of the Bill. Such a proposal only requires to be stated to show its gross injustice. It is true the concession is made that if any expenditure is incurred in improvement by the owner during the twenty years, such expenditure will be valued. I am surprised that the hon. and learned Member did not put a clause in the Bill that no improvement should be made without the consent of the County Council. It would have been perfectly logical to say that, as they had got to pay for the improvement, no improvement should be made on the land for twenty years without the consent of the County Council. Then it has been said that there is no corresponding obligation on the County Council where the land may decrease in value, and that while the unfortunate owner is compelled to sell the land which increases in value he cannot compel the Council to buy if it decreases, although he is debarred of a market by the operation of the Bill. I believe the hon. and learned Member (Mr. Haldane) would be bound to insert in the Bill a clause compelling purchase in such a case. I think I have shown that the Bill proposes a grossly unjust and inequitable way of dealing with a principle which has never yet been recognised by Parliamentary law, and, so far as I am concerned, although I agree with hon. Gentlemen who have said that the operation of this Bill might possibly be to the present advantage of some particular locality, I do not believe that anything which is founded upon a gross and manifest injustice such as the proposals of this Bill are, can ever be for the permanent benefit of the community.
§ *(5.22.) MR. CREMER (Shoreditch, Haggerston)
It is very difficult in the few moments which remain to deal adequately with such an important question, and I shall not attempt to follow the right hon. Gentleman in the extraordinary speech which he has just delivered. I could not help reflecting during that speech that the supporters 135 of this principle of intercepting the unearned increment for the benefit of the community were getting hon. The right hon. Gentleman was pleased to twit the right hon. Gentleman the Member for Derby (Sir W. Harcourt) with his inconsistency on this subject. Whether the rigbt hon. Member for Derby was right in the opinions which he expressed years ago, or in those he entertains to day, does not matter much to us who have been for years pegging away for the realisation of this vital principle. The President of the Local Government Board says he cannot distinguish between property in a coat which is the product of human industry and property in land which is the gift of Nature. I am sorry that the right hon. Gentleman has not got further in learning his lessons. To us and to a daily-increasing number there is a vast distinction to be drawn. I sat at the feet of John Stuart Mill and heard this doctrine of the unearned increment formulated by that great philosopher. "An ounce of fact is worth a ton of theory"; and the results which have followed the construction of the Thames Embankment supply one of the strongest arguments which can be reduced in support of the principle affirmed in this Bill. Had that principle been accepted twenty-five or thirty years ago the ratepayers of London to-day would not be saddled with a legacy of debt incurred by the late Metropolitan Board of Works, for the cost of the Embankment would have been liquidated by the increase of from thirty to sixty per cent. which has taken place in the value of the adjacent land and property—an increase mainly due to the expenditure of £800,000 which the ratepayers of London incurred in the construction of the embankment, but which increase has gone into the pockets of the ground landlords of the locality. I should like to have given other practical proofs which could be found in the Metropolis in favour of the principle which this Bill affirms, but I have no desire to stand between the House and a Division, and I can only congratulate myself and those who supported John Stuart Mill twenty-five years ago that a principle which was then scouted as a monstrous idea has to-day been seriously discussed by the House of Commons.
§ (5.30.) Question put.
§ The House divided:—Ayes 148; Noes 223.—(Div. List, No. 104.)
§ Words added.
§ Main Question, as amended, put, and agreed to.
§ Second Reading put off for six months.