HC Deb 28 April 1893 vol 11 cc1464-78

Order read for resuming Adjourned Debate on Question [27th April], That the Bill be committed to a Select Committee of Nine Members, Five to be nominated by the House and Four by the Committee of Selection: That all Petitions against the Bill presented not later than six clear days before the meeting of the Committee be referred to the Committee; that such Petitioners as would otherwise have a locus standi, praying to be heard by themselves, their Counsel, or Agents, be heard against the said Bill, and Counsel heard in support of the Bill: That the Committee have power to send for persons, papers, and records. That Three be the quorum.

MR. JAMES STUART (Shoreditch, Hoxton)

expressed a hope that the House would assent to the Motion without further delay.

*MR. KIMBER (Wandsworth)

said, he would offer no opposition to the Motion now, but he should like to make one observation in reference to the appointment of a Hybrid Committee. He had sat on several Hybrid Committees on London County Council Bills, and had found that there was a great deal of practical inconvenience in having such Committees appointed on political lines and having upon them one or two members of the London County Council. It appeared to him to be rather odd and out of place that the tribunal which had to decide upon a Petition of the London County Council—for that was what it really was —should have upon it some of the suppliants, who were thus made judges in their own case.

MR. BENN (Tower Hamlets, St. George's)

said, he should like to draw attention to the fact that on previous occasions, particularly with reference to the Metropolitan Board of Works, it had been the practice for the Chairman of the Board to be on the Committee, and that during recent years several members of the London County Council had served on Committees on London Council Bills.

MR. KIMBER

said, he merely mentioned the point because, when the Committee came to be nominated, some Members would feel disposed to object to the presence on the Committee of members of the County Council.

SIR R. PAGET (Somerset, Wells)

remarked that the proposed quorum would consist of only three Members. He thought that a very objectionable proposal, and desired to call attention to the fact that there was on the Paper a Motion for a Committee of a somewhat similar nature. That was a small Committee, and the quorum proposed was three. He therefore held that in a Committee of this size the quorum should be larger.

Amendment proposed, to leave out the word "Three," in the last line, and insert the word "Five."—(Sir R. Paget.)

MR. J. STUART

I have no objection to a quorum of five.

Amendment agreed to.

Main Question, as amended, put, and agreed to. Ordered, That the Bill be committed to a Select Committee of Nine Members, Five to be nominated by the House and Four by the Committee of Selection. Ordered, That all Petitions against the Bill presented not later than six clear days before the meeting of the Committee be referred to the Committee; that such Petitioners as would otherwise have a locus standi, praying to be heard by themselves, their Counsel, or Agents, be heard against the said Bill, and Counsel heard in support of the Bill. Ordered, That the Committee have power to send for persons, papers, and records. Ordered, That Five be the quorum. — (Sir John Lubbock.)

*MR. KIMBER

said, he had a Motion on the Paper for the rejection of the Bill, but he would pass over that, and move the rejection of Clause 45. By this Bill it was sought to obtain powers to execute certain important works in London at a cost of nearly £5,500,000, which sum was to be raised by the County Council in the usual manner. Clause 45, against which his Motion was directed, was a code in itself, and contained 18 sub-sections and 11 sub-sub-sections. Under this code the owners of property in London would be taxed twice over in respect of the same thing; it proposed to create an entirely novel system of taxation, and to impose a mortgage upon a man's property without his knowledge and against his will; it would override and, in effect, alter contracts entered into for valuable considerations between persons sui juris. It violated the first principle of the representation of ratepayers, because it imposed charges upon a class interested in property without giving them adequate opportunities of controlling the election of the spending body, and it would confer power to alter the incidence of taxation without reference to that House. In order to prove these assertions he would call the attention of the House to the existing principles of rating. It would, no doubt, sound rather elementary, but the principle which, after centuries experience, the country had arrived at was to bring in all property for taxation upon an assessment at the full actual annual value, fixed de anno in annum, and revisable quinquennially. Convenience pointed to the occupier as the best person from whom to collect the rates, and the law had left it to freedom of contract between those interested to settle in what proportion the rates should be borne. Under this clause the ground landlord was made the object of attack, and, under cover of a Bill for the purpose of raising money on the principle of betterment, it was sought to alter the incidence of taxation as between the ground landlord, the lessee, and the occupier, and to override the contracts made by them. The Bill proposed that all the landlords in certain areas should be declared liable to have an improvement charge put upon their property. The charge was to be imposed at the sweet will of the County Council, and that body was not to be compelled to declare what properties were to be charged until several years after the completion of the works of improvement. There would for a period of seven years be a kind of lis pendens against the proprietors, lessees, and occupiers in the given areas, and for that period they would have great difficulty in disposing of their several interests, for they would inevitably be met with the objection that an improvement charge of unknown amount might be imposed upon their property. The County Council were to have the right at any time within seven years after the completion of the works to make a provisional award defining which lands should he liable to the improvement charge and to what amounts. None of the interested parties need be heard before the award was made. The Council was to put the charge at half the value of the supposed improvement of the property, and this enhanced value was not to be arrived at by the assessment or by a valuer, but again by the mere will of the Council. That charge was to be a mortgage on the freehold of the property, and if the property decreased in value the Bill provided no method for reducing or annulling the charge. The Council were then to pass a resolution adopting their own award— again without hearing the parties—and were to advertise it twice, and then, for the first time, to give notice to the parties affected. One month's notice was allowed to make objection, and if the mouth expired without the owner or lessee sending in objections the award was made absolute and the charge became a mortgage on the property, on which 3 per cent. interest was to be paid until the debt was liquidated. Suppose objections were made within the mouth, then an arbitrator must be appointed, and in that matter the owner, lessee, or occupier had no voice at all. He was not to be heard even on the question of such appointment. The London County Council might go to the Local Government Board and ask it to appoint an arbitrator forthwith, and the Board would appoint a man with the powers he had described. The arbitrator might state a case for the opinion of a Court of Law; but he might put it in his own words and in his own way, and he was not bound to do so except at the instance of the County Council. The incidence of the charge, too, was very peculiar. If the property was in possession of the freeholder, then the charge was to take effect on the freehold. If the freeholder was not in actual possession then it was to take effect in such a way as the London County Council by their award or arbitrator might apportion between the freeholder and the other parties. No regard was to be had to existing contracts between the parties. There was nothing to tell the arbitrator that he was to receive evidence as to what these contracts were. All these and other processes were to take place at the peril of the owner, occupier, or lessee, having to pay costs if they objected at all. For the first time parties whose property was affected against their will had to object at their own peril. Interest on the mortgage had to be paid at 3 per cent.; but the increased annual value of the property would be assessed as well, and at the present rate of taxation there would have further to be paid about £6 13s. 4d. per £100 besides this interest, so that the owner would be taxed twice over for the same increase in value. But that was not all. It would scarcely be believed that this Bill did not propose to say what was to be done with the proceeds of this improvement charge when it came in. There was no liability imposed upon the County Council to account for it. There was no public Auditor, and there was absolutely no appropriation of the money. It was for them to explain how they proposed to get over that difficulty. They had two Reports of Committees of that House, both of them large Committees, and upon these Committees some excellent Radicals sat. One was the Town Holdings Committee, which sat for several years, and made its final Report in 1892, declaring that no sufficient cause had been shown for interfering with existing contracts for the payment of rates. Then there was Mr. Goschen's Committee of 1870, which reported that, in the event of any division of rates between owner and occupier, it was essential that such an alteration should be made in the constitution of the bodies administering the rates as would secure the direct representation of the owners. The Town Holdings Committee also reported that in the case of a division of the rates the claims to such representation must be met within the four corners of the Bill. The American system had been quoted. He was personally acquainted with the system of taxation in America. Their system was altogether different from the English system. They did not impose taxation on annual values, as was the case here. The condition of the country did not yet render that desirable. They were, therefore, compelled to adopt the taxation of capital. It became a sort of private improvement rate. A man had, however, only to pay the tax one way, and not, as in this Bill, both ways, that is, on capital and on annual value also, or twice for the same thing. That showed the great injustice of this Bill. Even that was not all. Clause 12 provided for the set off of betterment against any compensation a man was entitled to for property actually taken from him, but there was no converse clause by which a man might set off against betterment a charge for worsement, say for loss of business by reason of the divergence of traffic. If the man who had a charge put upon him for betterment had other property injured by the scheme, he was not allowed to set one against the other. There were hundreds of cases in which under schemes of this kind the traffic was lost entirely to certain streets, and in this proposal there was no provision made for the unfortunate devils who carried on business in these streets, and who would be worsened instead of bettered. Although there was nothing said on the subject—for naturally the London County Council had no great desire to bring their points too prominently before the London public—the Bill empowered them to tax vacant lands during the time they were vacant. That was done, not by even mentioning vacant land, but by a provision which enabled the County Council to place on freeholders in possession of property, without saying whether built upon or not, the charge of 3 per cent. interest. It was entirely opposed to public policy that such lands should be taxed; it destroyed the marketable value of lands intended for building purposes, and injuriously affected the employment of the working classes. Then, again, the beneficent provisions of the existing Acts, by which the value of property was revised every five years, was not included in the Bill. He could not believe that the London County Council, which had many astute minds, overlooked that matter. He believed it was intentionally omitted. If, when the quinquennial valuation of property was made, it was found that property had not depreciated in the meantime, it would not answer the purpose of the County Council to reduce the charge. Another point to which he wished to direct attention was the injustice this proposal would do to those holding mortgages on properties. The improvement charges were a mortgage not on the improved interest of the property only, but paramount to all existing interests. What would hon. Gentlemen say who were trustees of money placed on mortgage in London when they, without notice, found themselves not first mortgagees but second mortgagees? Trustees should consider their duties. It was a breach of trust to invest as second mortgagees under the law, except the instrument specially provided for it. He w were the County Council going to provide for that objection? But his main objections to this wretched Code were that it introduced a novel and unjust system of taxation and without representation; that it delegated to the London County Council a power which the House should not delegate to any Body in the United Kingdom—the power of altering the incidence of taxation, a power which, according to every Constitutional principle, should be retained by the House, and by the House alone.

Motion made, and Question proposed, That it be an Instruction to the Committee on the Bill to omit Clause 45, and any other clauses creating new charges or rates upon houses, shops, or other property already rated, or otherwise giving powers to raise money thereon."—(Mr. Kimber.)

MR. JAMES STUART

said, the hon. Gentleman who had moved this Instruction to the Committee had made a speech which he would see, on consideration, to be really a suitable speech for Committee upon the clause. What the hon. Member asked the House to do was to reject the clause, and not to allow the Committee upstairs to take into consideration the principle of betterment, and he made that proposal on what appeared to be a misconception of the situation. The hon. Gentleman seemed to think that this question of betterment was some utterly novel principle which the House had never before considered. The fact was that the London County Council had brought before the House on two separate occasions—in 1890 and 1192— in which improvements were contemplated, and for these improvements the principle of betterment was proposed to be employed for the provision of the necessary funds. These clauses were sent to the Committee upstairs by the united approval of both sides of the House. Mr. Ritchie, who was on both occasions President of the Local Government Board, stated that the principle was already embodied in Acts of Parliament. There was no foundation for the statement of the hon. Gentleman that the principle was entirely novel, for not alone had it been accepted by the House as worthy of consideration by the Committee upstairs, but it was actually existing in our present legislation. There had long been existing in London, at any rate, in principle and practice, what he would call a bastard system of betterment, which had been employed frequently by the Metropolitan Board of Works, and employed after by the County Council, and by which, when improvements were carried out of distinct advantage to a given district, besides the general rate charged on the whole of London, by which part of the cost was defrayed, there was a special rate placed on the immediate district concerned. That special rate acted in many cases very unfairly, because it put a second charge on a large amount of property, which was so distant from the improvement that it received no special benefits apart from the rest of London from the existence of that improvement. What the London County Council now proposed was an extension of that principle — namely, that the second charge should be confined to the district which was shown by investigation and arbitration under the Local Government Board to have received special benefit from any particular improvement. The principle of betterment had been adopted in the He using of the Poor Act, 1879, in this way—that when a man claimed compensation in respect to property taken from him for the building of houses for the working classes, if it were found that other property of his was improved by the same transaction, the one thing was set against the other. Then, again, in the He using of the Poor Act of 1882 the betterment principle was actually enforced in the way the London County Council desired to apply it—namely, that when a district was improved by the removal of houses the cost might be placed, partially or entirely, on the remaining houses in the area benefited. The principle had, therefore, been abundantly admitted, and was now actually in operation in legislation. The Committee which had decided against employing the principle of betterment for the improvement of the Strand did so on the ground that it was not applicable, as brought forward by the County Council, particu- larly to the improvement to which it was proposed to be applied. All the House was asked to do was to allow the Committe upstairs to consider the clause. It would be for the Committee to adopt or reject the principle, or to suggest restrictions and Amendments, and when the Report of the Committee was before it the House could take any steps it liked in the matter. The hon. Gentleman who moved the Instruction to the Committee stated that owners of property would, if the clause were adopted, be put to great advantage in respect to future possible transactions with their property, because it could be said that the property was liable to a charge being imposed on it by the County Council. Anyone who read the Bill would see that the County Council would have no power to fix a charge. The County Council indicated, in order to shorten the proceedings, what charge ought to be put on the property; but the matter went before the arbitrators of the Local Government Board. The hon. Gentleman said that the County Council might get arbitrators favourable to themselves appointed. Was there anything in the past history of the Local Government Board which proved that such a thing was likely to happen?

*MR. KIMBER

I did not cast any reflection on the fairness of the Local Government Board.

MR. JAMES STUART

said, the hon. Member had suggested that the County Council would be able to go to the Local Government Board and suggest the appointment of a favourable arbitrator. What did that mean but that there would be collusion between the London County Council and the Local Government Board of the most nefarious character? The Local Government Board would appoint the arbitrators fairly, as they had always done; and these arbitrators would act fairly, as they had always done, even in transactions just as important as any that were likely to arise under this Bill. Then the hon. Gentleman tried to make out that this would be a double charge upon property. That was not the case. The hon. Gentleman might as well have said that the charge for the School Board and the charge for the Vestry brought a double rate on property. The County Council did not propose a new rate. All they said was that if, by the expenditure of the ratepayers' money, any property was found, after investigation, to have been improved to the extent of £200, £100 should be taken towards defraying the cost of the improvement. He asked the House to remember that if they declared that the charge for improvements must not be thrown upon the group of persons benefited, but upon the occupying ratepayers, they would go against the recommendations of every Commission that had reported on that matter from 1886 to the present moment. The hon. Member also declared that if property improved was to be subjected to a charge, the owners of property worsened should be recompensed. But that was the law at present, and it was because it was the law that the County Council proposed to make a charge for improvements. Everyone knew the case that arose out of the Putney Bridge improvement. A new bridge was built, and a public-house which had been on the main road was placed in a bye-road. The owner of the public-house brought an action for compensation; the jury awarded him £1,100; there was an appeal, but Lord Herschell, the highest legal authority in the country, supported the decision of the jury. That being the ease, there was no doubt that the London County Council would be called upon to make good any damage done to property by the improvements they might any out, and all they asked for by this betterment clause was tit for tat—that where property was bettered they should get some return for the improvement.

*COLONEL HUGHES (Woolwich)

said, it was only fair to mention that many of the schemes proposed in the Bill had been abandoned by the County Council, and what was now proposed was an expenditure of £500,000 instead of £5,500,000. He considered the time of the House fruitlessly occupied by the present discussion. The proper time to discuss the matter was when the Bill came before the Committee. He thought the principle of worsement should be included in the Bill as well as the principle of betterment; and with regard to betterment, the question arose whether it would not be better treated by a reference to the annual value of the property three or four years after the improvements had been effected, instead of a preliminary inquiry of a problematical nature, at which experts would be sure to contradict each other? No doubt a betterment provision of some kind was wanted, but the London County Council had not in their wisdom found the right way to levy it yet. The principle of betterment was admirable. He supported it in theory, hut its proposed application was generally inequitable. He did not think it was impossible to arrive at a just conclusion; but they had not vet arrived at that conclusion. There was no reason whatever why they should not send the clause to the Committee upstairs, to see if they had anything to suggest for the guidance of the House in the matter.

*THE CHAIRMAN OF COMMITTEES (Mr. MELLOR,) York, W.R., Sowerby

I entirely agree with what the hon. Gentleman who has just sat down said in regard to this matter. I am not going to discuss the betterment principle, or the details of this somewhat difficult question, especially in its application. But I would remind the House that this Bill is going to a strong Hybrid Committee of nine Members — a somewhat unusual course; and when a Bill is sent to a good Committee of that kind the House intends that the Committee shall examine into its defects and report to the House, and if its defects are insuperable the House, no doubt, on the THIRD READING, will reject the Bill. It seems to me that it is most desirable, owing to the difference of opinion on the matter, that the Committee should have a full opportunity of examining the Bill in detail, and of hearing evidence, and of seeing whether they can devise some practical mode of carrying out this system of betterment; the Committee may think the whole matter impracticable, and so throw out the clause. But what the proposal before the House means is this: that having appointed a strong Committee of nine, we are to send them up the Bill with a mandatory Instruction that they are not to deal with this particular clause; that they are to deal with the rest of the Bill, but in regard to this particular clause they are to strike it out. That would place the Committee in a somewhat false position, and I hope the House will take the usual course of allowing the whole Bill to go up to the Committee and be examined by them.

MR. BOULNOIS (Marylebone, E.)

said, that as the House had heard the views of the majority of the London County Council on the subject before them, perhaps they would allow him, as a Member of the minority, just to say one word. The hon. Member for Woolwich had said the greater portion of the Bill had been dropped. Practically, what remained was the improvement of the approaches to the Tower Bridge and Vauxhall Bridge, and the minority of the London County Council considered that the principle of betterment was not applicable to these matters. Wood Lane, Hammersmith, was, by a clause in the Bill, exempted from the principle of betterment. He thought it was reducing the principle of betterment to an absurdity when the House was only asked to approve of the principle of it as applied to the approaches of the Tower Bridge and the Vauxhall Bridge. He was told—he did not speak with authority—that in the case of the approach to the Tower Bridge the idea of the Progressive Party in the London County Council was that betterment there would amount to something like £10,000; and he asked anybody who knew anything about the neighbourhood of Vauxhall Bridge what would be the result of building a new bridge and widening it in the case of betterment? All parties in the London County Council might agree ultimately as to the principle of betterment; but at this moment they were not prepared to accept the principle as applied to this emasculated Bill.

*MR. WHITMORE (Chelsea)

thought the London Members opposite must admit that it was rather hard that, owing to the procedure which the London County Council had adopted with regard to the principle of betterment, London had been kept waiting so long for the execution of improvements which were so desirable. He would not go into the merits or demerits of the principle of betterment. He submitted, however, that this vexed question could be dealt with in a more satisfactory manner by a Public Bill than by the piecemeal method which had been hitherto adopted by the London County Council. One Select Committee might sanction betterment, and in another year another Committee might reject it. So that they might have in one part of London the betterment principle applied, and in another part of London not applied, with regard to street improvements. As far as he knew, hon. Members on his side of the House had no prejudice on the subject, and were quite open to conviction. So far every scheme for betterment which had been introduced had been rejected by Select Committees on the ground of their impracticability; but that did not convince hon. Gentlemen on his side of the House that there was not equity in the principle, but let it be applied after thorough discussion in a public and general Bill.

MR. A. J. BALFOUR (Manchester, E.)

I may, perhaps, venture to offer my advice on the present occasion, as this is a question which came up once or twice during the period of Office of the last Government; and as my right hon. Friend (Mr. Ritchie), in whose charge the policy of the Government then was, is no longer among us, I may be allowed to take his place. On each of those occasions the advice tendered by Mr. Ritchie was similar in substance to that given by the Chairman of Committees. It was proposed that a Bill should be sent up to a Grand Committee, evidence was taken, and the result was that the Betterment Clause was rejected. I see no reason to advise my hon. Friends to adopt a different course on the present occasion. But I must warn the House that it is perfectly clear that, should the Committee pass the Betterment Clause in its present form, there would be a severe and protracted contest at a later stage, and the whole scheme would be endangered. In my opinion it is most inexpedient that this question, affecting potentially the whole property of the Metropolis, should be left to be dealt with by Select Committees upon no established principles laid down by Parliament. Let it be recollected that betterment means possibly a very arbitrary form of taxation, and in the only country which we need consider where it has been introduced it has been fenced round and accompanied by safeguards in the interests of individual rights which the London County Council do not desire to imitate. This House, in the Lands Clauses Bill, has laid down the principles under which private property is to be taken for public uses, either by Public Bill or some other method, and has laid down the broad principles upon which, if at all, private individual owners are to be called upon to pay for public betterment, so that we may avoid the inconvenience— I had almost said the scandal—of the London County Council coming forward with biennial Bills treating with these vast interests and asking them to be decided by the action of a Select Committee. There is a great question of policy involved. I agree with my hon. Friend who has just spoken that it is not for us to say that no form of betterment can be conceived which shall be just equally to the individual and to the public; but the claims of the County Council, so far as I have been able to understand them, by no means carry out such an ideal. Do let the Government or County Council, through a Public Bill, consider whether it is not possible, and, if possible, whether it is not eminently desirable, to lay down a broad general principle dealing with the matter, by which much time would be saved, great injustice obviated in the case of individuals, and no ground left for thinking that by the action of a body not wholly divorced from politics and faction injustice is intended upon a particular class of the community.

*THE FIRST COMMISSIONER OF WORKS (Mr. SHAW-LEFEVRE,) Bradford, Central

As the right hon. Gentleman is not prepared to recommend the House to reject the clause at this stage of the Bill, I do not think it necessary to say more than a very few words. The right hon. Gentleman has said that, in his opinion, it would be far better that this question of betterment should be dealt with in a general law, and should not be left to clauses proposed by the London County Council for special occasions. I venture to say that nearly the whole of the principles of our Private Bill legislation have been gradually built up by precedents arising out of particular cases, and I think, on the whole, there is some convenience in that course. By degrees you apply the principle, and you have experience as to the working of it, and gradually it is embodied in a general Act dealing with all cases, and I venture to think that that will probably be the case in the principle which is now under consideration. I may remind the House that the principle of betterment has practically been admitted by the Legislature in several cases already. The hon. Member for Shoreditch pointed out several modes in which the Legislature has practically sanctioned it. He forgot to mention the case where a Local Authority is empowered to take land and houses to which additional value is given by a public improvement, such as the widening of a street, so that they may obtain the increased value. That is a principle which has been gradually introduced into Parliament, and it was only finally affirmed in 1877. Experience has shown that that is a very inconvenient mode of getting the increased value. I venture to hope that the Select Committee to which the Bill is referred will sanction the principle, and make such Amendments as they may think fit. I believe that in the case of the Strand Improvement Bill, which went before a Committee of which I was a Member, the Committee would have approved of the principle of betterment had the case been one to which it could have applied. But that was not a case in which it could apply, and, therefore, the majority of the Committee objected. I believe there would have been a majority on that occasion in favour of the principle had the case been one in which betterment could have applied.

*MR. KIMBER (who was met with cries of "Divide!")

said, he merely rose for the purpose of asking leave to withdraw his Motion. He did not want to prevent the Bill being discussed in a Select Committee, but he hoped it would not be considered that he was at all out of Order if, when the Bill came back, he discussed to the bottom the principle of betterment. [Cries of "Order! "]

*MR. SPEAKER

said, the hon. Member had no right of reply.

Question put, and negatived.

Forward to