§ *THE LORD ADVOCATE (Mr. GRAHAM MURRAY,) Buteshirerose to ask leave to introduce a Bill to amend the law with respect to the classification of lands and heritages for purposes of rating in Scotland; for the relief of the occupiers of agricultural lands and heritages; for the creation of a fund for the improvement of congested districts in the Highlands and Islands; and for relief from the payment of Land Tax in burghs in Scotland.
§ DR. CLARK (Caithness)asked, on a point of order, whether this was a Bill which could be brought in under the new Standing Order, by which no discussion could take place on the Bill beyond a speech from each side of the House?
§ *MR. SPEAKERThis is not a question of Order; and certainly I can express no opinion at present. I have not yet heard what the Bill is. No doubt there are Bills which ought not to be introduced under Standing Order No. 19; but I cannot form an opinion as to whether this is one of them until I hear the statement of the Lord Advocate.
§ *THE LORD ADVOCATEThe House is aware that the English Bill for the relief of agricultural rating passed its Third Beading yesterday. I apprehend that the principle of the Bill was to attempt the partial redress of the inequality existing between personalty and realty in the matter of local taxation, and the application of that relief to the class of realty which suffers most from the undue impact of taxation—namely, agricultural land. When you come to look at Scotland, the antecedent inequality is the same; but when you come to apply the relief, it is obvious that you cannot follow directly English precedent, because the Scotch system of rating is so different, that if you did in words what seemed to be the same you would be doing in effect something entirely different. The rates from which you gave relief would be different, and the measure of relief would be different in amount. Accordingly, as obviously 547 the intention is to confer an equal benefit to the two kingdoms, you cannot let the, relief in Scotland be conditioned as it is in England as to the amount by the rate relieved, but you are driven logically in the Scotch case to the principle of equivalent grant. The sum of money which under the calculations made will be given to England is £1,650,000 per annum, and applying to that figure the now well known proportion of 11 to 80 you get for Scotland, the available yearly sum of £214,500. Accordingly the problem which the Secretary for Scotland in framing this Bill had to face was this—how best to apply that sum with the same ends in view as in England, but having regard to the peculiarities of the Scotch rating system. The House will remember that in Scotland the rates are half upon the owner and half upon the occupier. The county rates other than the public health rates are imposed a full rate upon the total valuation. The public health rate follows the condition of the poor rate, and the poor rate is not necessarily charged a full rate on the total valuation, but may be a classified rate. I wish to ask the House to consider what classification is, because I believe that in considering what classification is we get something very near the kernel of this whole question. There are two parallel considerations which are parallel, but which are often confused. There is the question of realty having to pay much that personalty may be called upon to pay, but is not called on to pay under our present system. But when you come to the question of what realty pays, there is this obvious distinction when you come to the occupier as between one class of realty and another. The agriculturist when he is rated as he is upon his land is rated upon his whole stock in trade, and in that he differs from anyone else who possesses realty, who is practically not rated upon his whole stock in trade. After all, all taxes, although they may be said to be upon land, are really upon the means and substance of the person who owns or occupies that land, and the means and substance will bear a very different proportion in the case of the agriculturist to the case of anybody else who is occupying land and carrying on any different business. Of course, the House 548 will see that is a standing grievance in our present system as regards agriculture. It is a grievance which is very much accentuated when you come to the depressed condition of agriculture, such as has existed in a great degree in England, and in a real degree, though probably not in so great a degree, in Scotland. Classification therefore I think is just in principle, but in practice it has been obscured by two blots. In the first place, it is optional to the local authorities, and the result has been that out of a total of 900 parishes in Scotland only 190 have adopted classification. In the second place, it is under present law liable to be capriciously abandoned, a result which all those who have had experience of county affairs know is particularly hard when you come to the practical working of the public health rate. Now by the simple expedient of applying our relief not directly to the rate, as it is done in the English Bill, but to the valuation on which the rate is levied, we are enabled to kill three birds with one stone. We give the agricultural occupier relief. I will state the proportion presently. Note that we give it to the occupier alone. We do not touch the owners' rate, and I hope that in the discussions that will follow on this Bill we shall hear no more about the dole to the landlords. ["Hear, hear!" and laughter.] Speaking generally, there are exceptions, the agricultural land of Scotland is let on leases, which at least have a currency of five years, and as regards that peculiar class of crofters it is of course absolutely impossible that in any way the relief of the occupiers' rate could ever reach the landlord. Having done that we are enabled to do away with the existing classification and the anomalies which under the existing law take place as between parish and parish, and we are enabled to put the public health rating on the solid basis of the other county rates. So far as regards agricultural land. But there are two other classes of realty which specially call for relief. There has been for a long time a tax known as the burgh land tax, not very great in amount, but vexatious, and very difficult and expensive of collection. We propose to abolish that tax, which takes a sum of £7,000 a year. But in doing 549 that, although we only give £7,000, we save the expense of collection, which has been £2,000 a year. Of the £2,000 £700 will revert to the Exchequer and £1,300 will revert to the burghs themselves. Besides that there is another question.
§ *THE LORD ADVOCATEThere is nothing in the Bill about that. There are certain districts where it is obvious no mere relief of rates would ever touch the difficulties under which they suffer, and we have thought this a profitable opportunity to take a sum, which we have put at £15,000 a year, in order to form the nucleus of a congested district board, but in this Bill we do not propose to introduce any scheme. We propose simply to earmark that money, leaving details of the scheme over for future legislation; and I would ask those Members interested in the crofting interest to remember that there is not much hardship in that, because the money will actually only be available on 31st of March next. Therefore legislation in the early period of next Session will be in time, as soon as the money is available. The balance of money available fixes a proportion of relief which is given, as I have said, to the agricultural occupier, and it is sufficient to reduce his existing rates by five-eighths, that is to say, to reduce the valuation to three-eighths instead of a whole. To sum up what the Bill does, £214,500 is intercepted out of the proceeds of the Estate Duty just as in the English Bill, and it is put into the Local Taxation Account just as in the English Bill. It is disposed of in this manner—£7,000 for the abolition of the Burgh Land Tax, £15,000 for the formation of this congested districts nucleus, and the balance to replace the deficiency in the rates, which will take effect by reducing the valuation of agricultural land to the occupiers to three eighths. The limits of the Standing Order have compelled me to make this statement of extreme brevity. I can only hope it has not induced me to obscurity. I trust that when the Bill comes to be read and understood, that the House will recognise that it is an honest endeavour to lay out this money to the best practical advantage under the Scotch system, always with 550 due regard to the underlying principles on which relief is primarily granted in these cases by the Imperial Exchequer.
§ *SIR GEORGE TREVELYAN (Glasgow, Bridgton)said the right hon. Gentleman had explained the Bill with a clearness which would certainly have enabled them to discuss it, if the Government had adopted another method of introducing it. But he did not wish for a moment to enter into any controversy on that point. The object of the Government was to place this Bill as soon as possible before the representatives of the people of Scotland. In his opinion, and that of many around him, it should have been introduced at an earlier period. The present date was very late—unfortunately late, and the only amends the Government could make was to print it at the earliest possible moment, and to give a good long time between the First and Second Reading to the consideration of the Bill in Scotland. The Scotch people knew a good deal about local taxation and about Imperial taxation, and about their relation to each other—on which this Bill depended. The ratepayers and taxpayers of Scotland would study this Bill, and their representatives in the House would discuss it thoroughly. The Leader of the House said yesterday, with reference to this Bill, that the most controversial part had already been discussed ad nauseam. The right hon. Gentleman must know very little of his countrymen who lived in the towns if he thought for a moment that they would silently accept the principle that the ratepayers and taxpayers of the towns were to pay five-eighths of the rates of the rural occupiers of Scotland, because that principle had been passed—not silently, but after a long discussion—by an English majority. The circumstances under which the Bill was introduced would render it the duty of Scotch Members to discuss it thoroughly. Very serious questions were dealt with in the Bill. The Highland grant, the assimilation of the Public Health Rate to the other county burdens, the abolition of the Land Tax in burghs—on these points English Members probably knew little or nothing at all, and they would not say anything; but they would come into the House and vote upon them as if they understood them, 551 Scotch votes in this matter would not settle Scotch questions; and Scotch Members must see that Scotch arguments were given to the House and afterwards read in Scotland. The form of the Bill was complimentary to Scotland. It was not in appearance a mere crude paying of rates; but in essence it was the same as the English Measure. The right hon. Gentleman said it was founded on the principle of classification in Scotland, but that principle, as described by the right hon. Gentleman himself, was fallacious. The right hon. Gentleman said that principle was that a farmer who had an income of £100 a year paid on a rental of £100 a year; whereas a tradesman who had an income of £100 a year paid on a rental of, say, £20. That might be so; but the rates were paid by the owners of the land, and a man who had an income of £1,000 a year in ships paid just as much as a man who had an income of £1,000 a year from farms. Not only was the whole of this money, with the exception of £7,000 to the burghs and £15,000 to the Highland counties, to go to the rural occupier, but it was to go in relief of the rates on farm houses and buildings, as well as the rates on the land. If the case against such a proposal was strong in England, it was stronger in Scotland. In the first place, the average rate outside the burghs, in Scotland, was much lower than in England. It was 2s. 0½d. against 2s. 3d., and it included the Education Rate in every parish; while in England education was very largely met by voluntary contributions. In the rural areas of Scotland, non-remunerative rates amounted to only 8½d., and that was not enough to justify their special relief. But his next reason was much stronger. It was that the evidence given before the Agricultural Commission, and especially the reports of the Assistant Commissioners, proved that agricultural distress was a very different thing in Scotland and in England. Mr. Hope—who himself paid £4 10s. an acre for 1,100 acres—reported there was an appreciably increased demand for farms, and that farms when exposed to public competition had in many cases been let at an increased rent. Mr. Speir, another Assistant Commissioner, reported that, 552 on an immense district covering four counties—
There are no farms on the landlords' hands, much less any lands, lying idle, nor is the least difficulty in letting a farm of almost any kind.The President of the Local Government Board gave as a reason for supporting his Bill, that in 99 cases out of 100, when a farm was to let, the rent was lowered instead of being raised; but the evidence given before the Commission by factors, farmers and Commissioners alike, showed that, when a farm was vacant, for the most part the rent was increased. Both the Assistant Commissioners reported that temporary abatements were one of the crying evils in regard to agriculture, and everyone knew that where these abatements were given, every penny of this relief would go into the landlord's pocket. In the next place, this was not what the farmers of Scotland had been asking for. They had spoken at great length on the questions of entail, the cropping clauses in leases, the game laws, the burning of heather, and the provisions of the Ground Game Acts in regard to hares and rabbits in the neighbourhood of moorland—that is to say, over half Scotland. What they all maintained was that the Agricultural Holdings Bill was a sham and a nullity. These were the matters on which they had spoken, and yet the only remedy for agricultural distress was that the ratepayers of Glasgow, whose poor rate was 10½d., the ratepayers of Stirling, whose poor rate was 1s., the ratepayers of Dundee whose poor rate was 10¼d. and the ratepayers of Greenock, whose poor rate was 11d., were to pay five-eighths of the burdens of the rural districts in such counties as Kincardine and Kinross, where the poor rate was 4d., 3d., and even 2¼d. On the Second Reading and afterwards, a great deal would be said about this Bill, and a strong and even hostile attitude would be taken up and maintained by those who held, that in the case of money which came from every taxpayer in Scotland, the lion's share many times over should not go to one industry, however important, or to one set of districts however extensive, but should be devoted to the general purposes of the community and the welfare of every corner of the Kingdom. [Cheers.] 553 Bill to amend the Law with respect to the Classification of Lands and Heritages for purposes of Rating in Scotland; for the Relief of the Occupiers of Agricultural Lands and Heritages; for the Creation of a fund for the Improvement of Congested Districts in the Highlands and Islands; and for Relief from the payment of Land Tax in Burghs in Scotland, ordered to he brought in by The Lord Advocate, The First Lord of the Treasury, and the Chancellor of the Exchequer; presented accordingly, and read the first time: to be read a second time upon Monday 13th July, and to be printed.—[Bill 303.]