HC Deb 09 May 1894 vol 24 cc733-45

Order for Second Reading read.

MR. CODDINGTON (Blackburn)

said, he regretted that the exigencies of the ballot should have placed this important Bill in his hands. The measure had already received the approval of the House on many occasions by very large majorities. In 1890 the Second Reading was carried by a majority of 152, in 1891 it was agreed to without a Division, in 1892 it was carried by a majority of 110, and last year by a majority of 153. The Bill had the support of nearly all the Assessment Committees in England; of, he believed, the representatives of all the Trade Unions; of the textile manufacturers; of the engineering trades; and, in fact, of everybody who was interested in the various trades of the country. The system of rating buildings, boilers, and mill-gearing still prevailed in Lancashire, in the West Riding of Yorkshire, in the Leicester and Nottingham districts, and in many other districts. It was also considered a matter of public policy in the City of London that machinery should not be rated, while in the Neighbouring borough of West Ham even a movable crane was rated, although the engine which drew the crane was not. While this system of rating only buildings and mill-gearing and engines existed in a large part of England, still there was a percentage of towns where the new system prevailed, and, unfortunately, that percentage was increasing. This very year the town of Wolverhampton had altered its system of rating, and the Assessment Committee had decided, against the wishes of all the owners of works, and against the Chamber of Commerce of that town, to rate machinery. In one instance in Wolverhampton the alteration in the assessment on works where 900 men, women, and children were employed had been increased from 10s. 3d. per head to 21s. 6d. Anyone connected with trade must know that such an increase in the assessment must almost kill that trade in that town. He felt, therefore, that, if the Assessment Committee could not see their way to make some change, they would do very great injury to the town. In Scotland no such rating existed, and, as a consequence, certain industries had already begun to migrate from England to that country. A very important deputation had waited upon the Secretary of State for India (Mr. H. H. Fowler), when he was President of the Local Government Board, in relation to this subject. The right hon. Gentleman had made a very able speech on that occasion. He had said in the course of his remarks— Now. I understand the position of the case to be this: that up to the decision which was given in the Chard case, and in the Tyne Boiler case…there was no difference of opinion prevailing among the Assessment Committees throughout the Kingdom. It was not a question as to whether this property should be exempt or not; in no case was it taxed and made liable to rates…Then I understood the next step was that by, no doubt, an accurate interpretation of the law—it would not become me to imply anything to the contrary—no doubt by an accurate interpretation of the law the Judges decided that a class of property which had never been rated was to be rated for the future, and so far from your asking—at least, so far from that class of property now asking—Parliament to exempt it from rates, it rather asks that the law which was generally understood to be the law should continue to be the law; or—there is another side to it—or that if Parliament in its wisdom should see fit that a property never hitherto rated is to be made subject to rates, that shall be done by Parliament. and not by the Judges. Well, gentlemen, I need hardly say that whatever view I may take of this question of rating, in that view I most cordially concur: it is the business of Parliament to impose taxes upon the Queen's subjects, and through their Representatives alone ought any class of the community to be subjected to any taxation whatever. Therefore, I think we see pretty clearly what the state of things now is. Then I understand from a gentleman who spoke to me on behalf of the Unions that at present only a small number of Unions have adopted this new view of the law. Therefore, the state of things is this—that we have chaos throughout the whole of the Assessment Committees of this Kingdom. The law is said to be, and is, one way; the practice is the other; and neither those who are claiming in favour of exemption, nor those who entertain a contrary opinion, know what will be done in any specific Union; and it is a matter of contest in each Union, now tending to increase year by year, as to whether property of a certain description or not is to be subject to rates or not. That was their position. They contended that the law should be made distinct. If machinery was to be rated, let it be done by Act of Parliament and not by the decision of Judges alone. He believed that many Members from agricultural districts were opposed to this Bill. He would like to point out to them that it was an absolute advantage that there should be as many large works in a town as possible, not only for the employment of the population, but also to relieve the rates. Take the case of Oldham. In Oldham, in proportion to its population, there were more large works than in any other town, he believed, in the United Kingdom. There were large machine works, large engineering works, and an enormous number of textile mills, and the consequence was that the rates of the town were lower almost than any other town in England. Last year the rates of Oldham, including the poor, the school, and the borough rates, were only 3s. 7d. in the £1, and this year they were only 4s. 1d. in the £1. He did not know another manufacturing town in so happy a position, and he admitted the fact that these mills and works were rated on the principle which they advocated, and contributed an enormous sum of money to the rates of the town, without incurring a similar expense to the town itself. Agricultural Members instead of opposing ought to support the Bill. Many industries in this country might be removed from the crowded towns, where rents were dear, to the country districts. If small industries were so removed they would contribute to the rates of the districts without taking from them money needed for the local burdens. If machinery, however, were placed within the powers of Assessment Committees such a change as that could not be expected to take place, and if Assessment Committees throughout the country were to be governed by the principle adopted in some parts of England—for instance, in Wolverhampton—almost the whole of the textile and engineering trades would leave the country. He feared whatever he might say would not alter the views of some hon. Members on this question; but he could assure them that if he thought the Bill would injure any portion of the community, if he did not believe it would be of great advantage to the country, he should not be moving the Second Reading.

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

SIR A. HICKMAN (Wolverhampton, W.)

said, he most heartily supported the Second Reading. In our large towns every class of ratepayers was benefited by the extension of machinery. To workmen employment was thus afforded; shopkeepers benefited by the custom of the workmen. Benefit was also derived by the employers themselves, and the same might be said of all other classes. He maintained that any policy which tended to discourage the extension of machinery was for all classes mischievous in its effects.

MR. STANLEY LEIGHTON (Shropshire, Oswestry)

said, hon. Members could not expect to exempt one man from the payment of rates without making someone else pay them. One class of people could not be relieved without at the same time putting the burden on the shoulders of others. If this Bill were passed the House would save a single manufacturer in one town alone, Wolverhampton, no less than £500 a year. A Bill seeking to make such extraordinary changes in the incidence of taxation was, he should have thought, of sufficient importance to be either taken up or strongly opposed by the Government, instead of being allowed to pass through as a private Members Bill, without either support or opposition. These assessments on machinery, his hon. Friend had said, were levied under Judge-made law. If so, why not appeal against them? But the Law of Rating had existed time out of mind. It had never been repealed, and the House of Lords had declared what the law was on the subject. Those decisions of the Judges were on the principle of the old Act, 42 Eliz., and it was by no means newly-made law. The fact that some of our Rating Authorities evaded the law, forgot it, or did not know how to apply it, was no reason for supposing this was recent law. It was nothing of the kind. He would point out, however, that all Rating Authorities had not neglected their duty in this respect. Birmingham had long ago settled this question in a way which satisfied everyone. The application of the law was no doubt very difficult: it was not easy to decide what was the value of a hereditament. Only a very rough estimate could be made. But the difficulty had been solved at Birmingham and also at West Ham, where all machinery was rated. His hon. Friend's argument was that if the law of rating were carried out machinery and capital would be driven away, and the departing machinists and capitalists would carry everything and everybody else in their train. Such a misfortune had not happened in the towns where the law was carried out, and their industries were still going on. In every agricultural district where machinery was relieved from rating the rich capitalist would be relieved of a burden which the law placed upon him at the expense of the farmers and labourers. This was a rich man's proposal brought forward by the machinists of the country and their friends, who wanted to relieve themselves of a legal burden. Hon. Members on the opposite side did not deny that land was greatly over-taxed in proportion to personalty. Land was very heavily rated, and the farmer in the country was much more hardly treated than the capitalist in the town, who only paid upon house property. When the Government was engaged in placing heavier burdens of taxation on land, the moment was not opportune to come forward with a scheme for the exemption of machinery in towns from taxation under the ordinary law of the laud.

MR. WHITELEY (Stockport)

said, the great principle embodied in the Bill, and for which its supporters contended, was that it was distinctly wrong that machinery should be taxed in the way advocated. It was wrong in principle, and in practice harmful and injurious alike to the owners of machinery, the industrial community, and the country at large. He was surprised at the argument of his hon. Friend, though continually heard indeed in that House—the cry of "Land, land," nothing but "land." The Government had to levy taxation on the country, and large sums were required for naval defence. Those sums were levied alike on realty and personalty. What would they think if the owners of machinery and other personal property were to get up in that House and say, "We will not support your proposals, because we think it is advisable that taxes should be levied all round alike"? No injury whatever would be done by the passing of this Bill. It would not touch the lauded estates of the country. No greater misfortune or injury could be inflicted on any community than to prosecute a policy which would have the ultimate effect of hampering our large manufacturing industries and dislocating the business of the country by this interference with the machinery in our mills. Such a policy was simply "killing the goose that laid the golden eggs." As had been pointed out by the Secretary for India, the Manchester trade was gradually transferring itself to another part of the world; and the same thing was seen in other directions. The effects were seen in the great machine shops of the country, particularly in Lancashire, where, to a large extent, they were working one-fourth time. All our machinery was going abroad, and our policy should be to relieve the industries of the country as far as possible, which gave employment to our workpeople and relieved the rates throughout the country.

* MR. POWELL WILLIAMS (Birmingham, S.)

said, there ought to be some definition of the law and, at any rate, some uniformity of practice in rating. Different methods of rating prevailed throughout the Kingdom, and, therefore, a change in the law would be welcome. He opposed the Bill because, though its promoters desired to put the matter back into the position in which it stood before the decision in the celebrated Chard case, the Bill distinctly made a change which would act adversely in certain places in the Kingdom. In Birmingham the Assessing Authorities had, it was admitted, gone beyond the motive power and the shafting; and recent decisions had justified that course in rating machinery. Matters had been included which would be excluded if this Bill became law. The question was what had been the practical offect of that course upon the assessment? Those in charge of the assessment in Birmingham had informed him that if the Bill passed in its present shape the assessment would be reduced by £20,000 to £25,000—which the promoters of the Bill themselves would not desire. That was to say, whereas the authorities of Birmingham had assessed the motive power and shafting and something beyond at 50s. per nominal horsepower, that amount would have to be reduced by the value of the assessment beyond the shafting. That would make a difference in the annual rating of between £7,000 and £8,000, which was practically a 1d. rate to be levied on other classes of property. To whose shoulders would that burden be transferred? That raised the whole question. The hon. Member for Wolverhampton had stated that the more machinery was used the greater number of persons would be employed; but he would make precisely the contrary assertion. Anyone acquainted with commerce and manufactures would know many instances where the introduction of machinery had driven numbers of workmen out of employment. This Bill would put the rating on the shoulders of the very people thrown out of employment. If the rating value of Birmingham were reduced £8,000 a year, who would have to pay it? Why, the workmen of Birmingham and no one else. It was proposed to place a burden now levied upon manufacturers in the shape of annual rent-charges on the shoulders of the working classes. The small houses in Birmingham constituted about 95 per cent. of the occupation holdings; and if the manufacturers were to be relieved at the expense of the householders, the owners of the houses in which the working classes lived would know how to take care of themselves. If it were contended, as a principle of political economy, that the sources of industry ought not to be taxed, why was it proposed by the Bill to allow the rating still to operate upon motive power and shafting? If there was anything in that argument about not taxing the sources of industry, he would go further and ask what right had they to tax the buildings used for production or the fixed plant employed? He objected to the Bill on another ground—of principle. He was strongly in favour of the taxation of personalty. The present Government had very rightly committed Themselves in that direction to a large extent. One class of personalty ought not to be taxed while another went free, and this Bill was in the wrong direction, inasmuch as it was designed to avoid the rating of certain personalty. The sooner some Government undertook a general rating of personalty the better. The late Government took a considerable step in that direction by applying the Death Duty in relief of local taxation. This Bill as drawn went a long way towards denying a useful principle which had been admitted to some extent. He had put down an Amendment for Committee on a former occasion which would at any rate preserve the state of things now existing in Birmingham, and prevent any reduction of assessment by the operation of the Bill. But that was scarcely a satisfactory way out of the difficulty. He thought the House would do well to refer the Bill to a Select Committee in order to obtain evidence which would enable the House to arrive at a just and equitable decision in the matter. Evidence would be obtained from Birmingham and other places where the rating had gone beyond the shafting, showing precisely the principle there adopted. A Bill could thou be formulated upon the subject which would be satisfactory to all who took an interest in this important question.


said, he was surprised at the attitude of the hon. Gentleman, since not only had the Bill been referred to a Select Committee, but that Committee had discussed very fully the whole Birmingham custom. If the new system of rating was carried into effect, the tendency would be to drive manufacturers from England to Scot-laud, where a different law prevailed. The effect of rating machinery would not be to substitute manual labour for machinery, but to drive our industries to other countries. No part of the country was more interested in the Bill than the agricultural districts. Their great grievance at present was that they could not get markets for their produce; and if they could establish little centres of industry in their midst, they would at once obtain these markets.


said, he proposed, on behalf of the Government, to take the course adopted in former years both by the Secretary for India and by Mr. Ritchie, and to leave this matter to the judgment of the House But he had no hesitation in expressing his own opinion on the subject. Until a few years ago it was the almost universal practice of Assessment Committees throughout the country not to rate machinery. The matter was brought before the Judges, and they gave their decision. It would not be right to say they laid down any new law; on the contrary, they merely affirmed the old law, which had been to a large extent lost sight of. But, to all intents and purposes, it was new law as regarded the greater part of the country, and if it had been acted upon a great change would have taken place in the practice of the majority of the Assessment Committees. The Assessment Committees had continued their former practice. In 1887 a Select Committee heard evidence on the question, and recommended that a comprehensive measure should be brought in dealing with the whole subject of rating, and that in the meantime Assessment Committees should continue to exempt machinery from rating. In other words, they recommended that these Committees should not conform to the law of the land. That was a very serious position. Either the practice ought to be brought into conformity with the law, or the law ought to be brought into conformity with the practice. He believed the wiser course would be to bring the law into conformity with the practice, seeing that 388 Assessment Committees carried out the practice, and only 10 or 12 conformed to the law. He would not advise that course if he thought the result would be to throw fresh burdens on land but that would not be the case, because in the rural districts machinery was not now subject to rating. It was extremely important, in the interests of the rural districts, that every inducement should be given to manufacturers to establish factories there; and, on the whole, he thought that it would be wise for the House to re-affirm its decisions on this subject.

SIR R. WEBSTER (Isle of Wight)

said, he hoped the Bill would be read a second time. It was, however, quite a mistake to suppose that Lord Esher had laid down any new law on this subject. The law was laid down in the same direction more than 50 years ago. The subject was, undoubtedly, a difficult one. On the one hand, no one would wish to rate sewing machines, which were chattels in the ordinary sense of the term, but it was ridiculous to attempt to exempt heavy machinery, which was not intended to be movable, but to pass from tenant to tenant. He recollected that some 20 years ago he was engaged in a case in which the Local Authorities at Newcastle sought to rate a steam hammer striking a blow of some 300 or 100 tons, which was part of the machinery at Sir W. Armstrong's works, and that the rate was resisted on the ground that it was not affixed to the freehold, it being bedded on a mass of metal weighing 400 or 500 tons which had been laid upon the earth. It was absurd to describe such a machine as movable, and in his opinion it ought to be rated. Then there was the case of the great sheer-legs, some 120 feet in height, that were used in the shipbuilding yards, which were in no sense affixed to the freehold, but which were never intended to be removed from their position in the shipbuilding yard, but were intended to pass from tenant to tenant. Surely such machinery as that ought not to be exempted from rating on the ground that it was movable. He thought that the measure should be referred to a competent Committee, which should be empowered to lay down some definition which should clearly show what machinery should and what should not be liable to be rated. If all machinery were to be exempted from rating very much heavier burdens would be thrown upon houses and land than was the case at present. He did not care whether the Bill was referred to a Select or to a Grand Committee, as long as an adequate inquiry into the subject was had and a clear definition of rateable machinery was laid down.

Mr. CODDINGTON rose in his place, and claimed to move, "That the Question be now put"; but Mr. SPEAKER withheld his assent, and declined then to put that Question.

Debate resumed.


described the measure as being a manufacturers Bill, which was brought in for the purpose of enabling them to avoid paying the fair contribution which they ought to make to the local rates. The Bid had been changed a little since last year, collieries, which were previously exempted, being now included; but it was idle for the promoters to say that if the Bill passed a greater burden would not be thrown upon the workmen. Machinery never had been rated, and the Courts had decided that no machinery was assessed. He protested against the Bill being described as a Bill for the rating of machinery; it was a Bill to exempt certain parts of premises which contained machinery, and unless the House were prepared to adopt that principle it ought not to read the measure a second time.

Sat J. JOICEY (Durham, Chester-le-Street)

said, that this Bill was intended to alter the law, and great injustice would be done to the district he represented if the Bill passed. He regretted the absence of his hon. Friends, whose constituencies were deeply interested in this measure. This was a question that ought to be dealt with not by a Private Bill, but by the Government. The question had been considered by a Select Committee, who had found that it bristled with difficulties. It would therefore be extremely unwise for the House to pass this measure that day. He himself represented a constituency consisting largely of working men. He believed the rateable value was about £270,000, and to give the House some idea of the population he might state that £77,000? of that value was made up of tenemented property. If this Bill passed, he was told on the best authority—the authority of men who had gone into the question very carefully—that it would increase the rates from 6d. to 11d. in the £1, and that increase would undoubtedly fall upon the working classes in the town. He maintained that if the Bill passed it would be the large Companies like the Northern Eastern Company and John Abbot and Company, and others in the town of Gateshead, that would get relief, but it would be at the expense of their workmen, and he failed to see how an industry could be seriously affected either for advantage or disadvantage by taking the rate off the manufactory and putting it upon the men who were working the manufactory. In Gateshead they had adopted the Public Libraries Act, the rate for it at present being 1d. in the £1. The whole of that rate was required to maintain the library there. One-third went to pay off the money borrowed to erect the library, one-third was expended on salaries, and one-third upon literature. If this Bill passed, it would take a very considerable sum from the library which was now available for that purpose, and the only way to meet the loss would be by increasing the rateable value of the workmen's houses, otherwise they would not be able to buy the necessary books for their library. The Mover of this Bill had stated that the working classes were practically unanimous in favour of the Bill. That was not the case in the Counties of Durham and Northumberland. There the working classes were averse to this Bill, and the united coal trade in the North of England had petitioned against it again and again. He thought it would be a great shame if Gateshead, which had observed the law with respect to rating, were punished because in other districts the law had been broken. Long before the Chard decision the system in his district had been the same as at present. Their assessors had understood the law, and had assessed property accordingly, and on the strength of their assessment they had raised £200,000 under the Public Loans Act, and they should not be punished now simply because other districts had not taken the right view of the law. Machinery itself was not rated, but its existence was taken into consideration in the valuation of the building. It would be most unjust if this Bill passed, because it would put places like Gateshead, Sunderland, and Jarrow in a very great difficulty. It was perfectly plain, from the clear definition of what the law was given by the late Attorney General, that this Bill proceeded to alter the law, and that the only cause for this proposal was difference in practice among the Assessing Authorities. They in the North of England had obseryed the law. It was in other districts that the law had not been observed. He had heard it stated that machinery on farms was not rated. Well, he held a great many farms on which there was machinery, and he knew that when these farms were let the machinery and the facilities created by the existence of the machinery were taken into consideration in the rating, and on that ground he held that agricultural machinery was rated. He hoped that before the House came to a Division Members would take into their serious consideration all that had passed in this Debate, and if they did so he felt sure that they would not readily interfere with the present arrangement.

COLONEL KENYON-SLANEY (Shropshire, Newport)

referred to the case of a small town with a circle of purely agricultural laud round it. In that small town was a certain amount of machinery which was available for rating purposes; and if this Bill passed that portion of the rates would be lost, with the result that the rates in the agricultural area would be increased. He hoped that the fact that the Bill might put an additional burden on the agricultural interest would have some effect with hon. Gentlemen in coming to a decision on this Bill.

MR. MATHER (Lancashire, S. E., Gorton)

said, he hoped the House would allow the Bill to go to a Second Reading. He thought that after discussion in four different years and four large Divisions it would be highly desirable that the Bill should be sent to the Grand Committee on Trade, where the matter could be discussed in the light of day.

MR. EVERETT (Suffolk, Woodbridge)

submitted that this Bill did not stand in the same position as the Bills of previous years, for the House had now under discussion a Budget which would put realty and personalty on the same footing so far as it was possible to do so, and this Bill sought to exempt from rating a certain section of personal property. He, therefore, proposed to vote against it.

MR. POWELL WILLIAMS (Birmingham, S.)

If this Bill should be read a second time, Mr. Speaker, will it be competent to move that it be referred to a Committee?


It is perfectly competent for any hon. Gentleman to make a Motion of that kind.

MR. AMBROSE (Mayo, W.)

said, no doubt, in point of law, machinery was assessable when affixed to a freehold: but the effect of decisions in the Courts had been to make machinery, such as looms standing by their own weight, liable to rating. This Bill would not prevent the rating of machinery belonging to the landlord of the premises or the owner of the freehold.

Question put.

The House divided:—Ayes 211; Noes 120.—(Division List, No. 42.)

Bill read a second time.


I beg to move "That the Bill be committed to the Standing Committee on Trade."

Motion made, and Question proposed, "That the Bill be committed to the Standing Committee on Trade."—(Mr. Coddington.)

MR. S. EVANS (Glamorgan, Mid)

Mr. Speaker, can the hon. Gentleman move that without notice?


Yes; it is competent to the hon. Member to move it.


Then I object.

It being after half-past Five of the clock, the Debate stood adjourned.

Debate to be resumed To-morrow.