LOCAL TAXATION.

HC Deb 01 May 1900 vol 82 cc433-88

[RESOLUTION.]

* MR. NUSSEY (Pontefract)

It is with a feeling of some diffidence that I rise to propose a resolution on such an extremely complex and difficult question as that of Local Taxation, for I am fully conscious that I am quite unable to do justice to a subject of this magnitude. Still I hope the House will bear with mo while I put forward what I think are some extremely salient points. It is a wonder to me that the country should remain silent while our expenditure for Imperial purposes is increasing so rapidly. It is quite true that some people grumble at the increase of Imperial taxation; but, on the other hand, no one seriously complains when the Chancellor of the Exchequer comes, year after Year, with demands for more money for National services both existing and fresh. The country, to a great extent, observes a quiet acquiescence in this great and growing expenditure. The cry of retrenchment is practically unheard on the part of the Government of to-day. The Chancellor of the Exchequer comes down at Budget time with his customary lecture on economy, although he fails to put into practice the precepts which he preaches. This acquiescence affords some proof that there is no very serious strain on the pockets of the people, so far as Imperial taxation is concerned. But while this indifference prevails with regard to Imperial expenditure, I maintain there is no such indifference respecting local expenditure. The complaint of local rates is that they have increased, are increasing, and ought to be diminished. I think there could be no more popular platform upon which a candidate for a county council or town council, or board of guardians, could make his appeal to the electors than that of retrenchment in local expenditure. It is extremely difficult for us to appreciate the real growth of that local expenditure. The rateable value of the United Kingdom has increased threefold during the last fifty years, and I find from an excellent memorandum by Sir William Hamilton, that whereas that in 1842–43 the rateable value of the United Kingdom was something like £85,000,000, it had by 1894–5 increased to £200,000,000. The local rates had also increased in an even greater proportion. In 1842 the Imperial Grants for local expenditure amounted to £650,000, and now they totalled something like £15,000,000 a year. It was estimated by Sir William Hamilton that in 1842 the grants in aid represented 2d. in the pound, whereas the assistance now given by the Imperial Exchequer is-equal to 1s. 3d. in the pound. While we are proud of the fact that we have been able to decrease our National Debt we must not forget that we have been in the same period more than corresponded by our various local debts; these amount to over £237,000,000 for the United Kingdom, or more than £6 per head of the population. I maintain, therefore, that the argument is an accumulative one. Local taxation is likely to increase rather than to diminish in the future, and the evidence which was laid before the Royal Commission points to this fact. We have also to consider that the drifting of large populations into our large towns is one of the most remarkable features of the problem which we have to consider. In London we have now to deal with the question of the housing of the poor, which must involve an increased burden of rates. In the West Riding of Yorkshire we have another problem which will have to be solved, in connection with the demand made upon various localities by the Rivers Board for the better disposal of sewage. This also means an increase in local rates, and I think we must look forward to the time when those rates will have to be much higher than they are today. I do not say that the local expenditure is necessarily extravagant, but new obligations are being constantly imposed upon local authorities which entail increased outlay. Hence it is that local expenditure is likely to increase rather than to diminish in the future. The urban ratepayers have constantly urgently demanded some relief or some readjustment of their burdens, and I think that Parliament by its action in the past has admitted the justice of their claim. The House has given more and more from the Imperial Exchequer in aid of local rates, and up to recent years these grants in aid have been distributed broadcast all over the country. Of late years the Government have thought fit to make some distinction between special classes of ratepayers, especially in agricultural districts, and the Agricultural Eating Act of 1896 is an illustration of that. Before that was passed the rates on agricultural land amounted to something like 2s. 4d. in the pound; I suppose they are now 1s. 2d. in the pound. I maintain that at the very time when the House was engaged in passing the Bill for the relief of agricultural ratepayers in this country the rates in towns were far higher and heavier than in the country. I am afraid they are not less heavy to-day, and that in a great many cases they are still more oppressive on the town ratepayer. It can hardly be disputed that, given an hereditament of a fixed rateable value in the country and comparing it with a similar one in the town, the rates in the town are far higher than those in the country. There has been published by the Royal Commission an excellent table showing the rates in 160 boroughs in England and Wales, and this gives an average rate for these places of 6s. in the £. Mr. Swainson has also prepared a table of rates of sixty-four boroughs in the United Kingdom, and in twenty-eight of these sixty-four the rates are over 6s. in the £. At Dewsbury and Norwich they total 8s. 6d. in the £, while in London we find the amount for Bow is 8s. 10d. in the.£, for Rotherhithe 8s. 9d., for Poplar 8s. 8d., and for Bromley 8s. 6d. It is only just to admit that the ratepayers in the towns have certain advantages over those in the country. They enjoy better drainage and water supply. They get improved lighting and policeing, etc. All these may be just and equitable advantages, and the money may be well spent, but these considerations do not in any way lessen the burden on the ratepayer, or reduce the demand of the rate collector. The general effect of these figures is well known. The evidence given before the Royal Commission confirms the impression made upon those who have studied the question for years From the time the present First Lord of the Admiralty made a report in 1870, down to the time when the right hon. Gentleman the Member for East Wolverhampton reported on the question in 1894, it has been admitted and repeatedly shown that the rates in towns are excessively heavy, and that some practical relief ought to be given to the unfortunate ratepayers who are called upon to pay such extremely high rates as those I have quoted. In my opinion what is wanted is a reform of the existing system rather than any relief in the shape of the additional Imperial grants. I have endeavoured to show how these grants in aid of local administration have increased, and I venture to maintain that this relief is largely fallacious, because a large portion of the money is, after all, taken out of the pockets of poor taxpayers in order to be paid in relief of rates on immovable property. It has been the Imperial fiscal policy of this country to relieve taxation on industry and on articles of consumption. But I must say that the taxes we have taken off with one hand have been more than put on with the other hand. We have taken them off with regard to Imperial expenditure, but we have devoted money largely raised by taxes on industry and articles of consumption for the relief of immovable property. I maintain that this relief is not only fallacious, but that it is also mischievous, in that it tends to extravagance on the part of local administration, and is contrary to the best spirit of local government. To begin with, the local authorities have no control over the collection of the money granted for Imperial funds, nor have they any power to say how the money shall be applied. It seems to me, therefore, to do nothing to foster that independent spirit of local self-government which is so valuable if we are to have our local affairs successfully administered. As it is the taxpayer has little or no control over these Imperial grants. By the reforms of 1888 these grants were to a large extent removed from the control of Parliament, without, however, at the same time giving any control whatsoever to the local taxpayer. I am strongly of opinion that these grants are against the true interests of local and economical administration. I should be very glad if this system could be done away with. At any rate I hope that under no circumstances will it be extended. What is required is that there should be a uniform basis of valuation of property. I have been told that nothing can be done in this or any other direction because of the Royal Commission, but I would point out that that body more than a year ago issued a Report in favour of a uniform basis of valuation of property in this country, and the Government have, therefore, no excuse for delaying the introduction of legislation upon this question. Let me point out the objections to the present system. It has neither uniformity, equality, simplicity, nor economy, although all these conditions should be obtained. At the present moment there may be five different valuations for the same projerty— for the Poor Rate, for the County Rate, for the Borough Rate, for the Income Tax, and for the Land Tax. Surely it did not need a Royal Commission to find out that if these five valuations were arrived at by the same means, there would be a saving of expense, and that one valuation would secure equality. The Royal Commission has recommended there should be one valuation authority in each county for all purposes. Whether the County Authority would be the best body to undertake this duty, or whether it would be better to entrust the work to an Imperial authority, I am not prepared to say to-day. But I do submit that there ought to be some uniform basis of valuation for all property on which all rates and taxes should be levied. I think I have shown that the rates have increased to a greater extent even than the rateable value, while no fresh sources of taxation have been thrown open. I observe that when the Chancellor of the Exchequer presented his Budget statement exception was taken because he had not thrown open new avenues by which taxation could be raised. We have been constantly reforming and extending local expenditure in this country, but during the last fifty years the sources from which the rates have been drawn have neither been reformed nor extended. It has been suggested that it would be a good thing to transfer certain burdens from the local to the Imperial authorities, and the transfer of the control of the prisons has been cited as an example of what may be successfully done in this respect. It has also been better suggested that certain Imperial taxes might be transferred to the local authorities, and one idea has been that the inhabited house duty should be so handed over. But that, I believe, only produces about one and a half million sterling per annum, and that amount would not be nearly sufficient to meet the increased local expenditure or to ensure an equitable adjustment of local burdens. No member of the Government has hitherto suggested the idea of tapping some new field from which rates can be raised. No one has suggested any new source from which revenue for local purposes can be derived. But I venture to think that whenever this subject comes up to be solved there is one factor which will have to be taken into consideration, and that is the increased value of freeholds in our large towns. It seems to me that the increase in that value has been even more surprising than the increase in local expenditure. It has been estimated that the rateable value of London in 1899 was thirty-seven millions, and that of this total no less than sixteen millions represents site values. Practically one-third of the rateable value of London is the value of the freeholds, and how this growing increase of value of building estate has benefited individuals can be plainly seen in cases where towns are practically owned by one man, as at Bootle, Devonport, and Huddersfield. It is equally true of all prosperous towns, as is shown by the prices obtained at recent sales of freehold property. The sites have realised high values, while the buildings have fetched practically nothing. Only the other day the Leeds Post Office was sold for a sum equal to £75 per square yard, a price which had been hitherto unheard of in Leeds. The same thing has occurred in London. 1,550 square feet at the corner of Fleet Street and Fetter Lane let for 12s. per square foot, the rent realised being £930. It is not difficult to account for this rise in the value of freeholds. We have seen the massing of population in our large towns creating the demand for house room and it is their enterprise and industry which has largely created this increased value. They must have house room and they have other wants and requirements which must be supplied, and I believe that everything in the shape of the creation of roads, of the provision of open spaces, and of the improved drainage of the district, everything which goes to make a place better, more healthy, more habitable, and more attractive to the people, enhances the value of the freehold. This increased value has been created, not by the expenditure of capital or by enterprise on the part of the owner of the land, but, with the exception of a few cases, it is due to the massing of the population in large centres and to the consequent growth of local expenditure. It is extremely difficult to determine upon whom the incidence of rates ultimately falls. I do not intend to say anything upon that this afternoon, but if the rates fall on the landlord I cannot see that there is any particular grievance or injustice in asking that the landlord should pay the rates directly instead of indirectly. If, on the other hand, the rates fall upon the occupier—and the majority of the occupiers believe they do so fall. Certainly any increase of rate or new rate which may be levied during the tenancy does fall upon the occupier. Rates have some tendency to stick where they first fall. The fact remains that, at any rate, the demand for the rates is made upon him, and his strong objection to any increase is some evidence that he believes he does pay them. The occupier believes he pays, and hence there is a very strong protest against any increase. If dwellers in towns generally owned their freeholds I quite admit that upon that heading the present system of taxation would not be wholly unfair. But it is quite the exception for the occupier to be the owner of the freehold. The ordinary occupier is a tenant —weekly, monthly, or yearly—or he may be a leaseholder. In London and other large towns, on the other hand, we have long building leases, the tenant undertaking to erect and maintain the buildings and pay all the rates and local taxes. At the end of the lease the landlord finds himself master of the buildings and the land—not the land as originally let, but greatly enhanced in value. The landlord, however, has not contributed to that increase of value by anything he has done. Therefore, the interest of the occupier differs from the interest of the landlord. In the case of leaseholders, as the lease runs out the interest of the occupier gets less and less while that of the landlord increases in an; almost corresponding degree. I suggest that we ought to have a separate valuation and assessment made of the owner's interest in such property. It seems to me that this proposition of the site valued separately and a rate charged upon it is a practical proposition, and one which would do much to afford equitable and just relief to occupiers in our towns. The objection has been raised that it would be impossible to value a site apart from the buildings, or, if not impossible, that the expense would be so vast that no local authority would undertake it. I think the evidence of the Royal Commission, disposes of those two fallacies. The evidence points out that there would be no insuperable difficulty in valuing the sites without the buildings, and that there would be no large increase of expense after the first valuation.

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. CHAPLIN, Lincolnshire, Sleaford)

Whose evidence?

* MR. NUSSEY

I will read a question put to the valuer of the London County Council and his answer thereto. The question is— In forming the value of a site would you have to do anything more difficult than has to be done just now in forming rateable value? The answer was— On the contrary, I should have to do something simpler. For myself, if I had to value London I would much prefer to value it in sites than in hereditaments. I could do it more quickly, more cheaply, and more accurately, and obtain greater uniformity. And Mr. Costelloe, who certainly knew something about London rating, when asked if he agreed with this view, said he did. From my knowledge of London valuation I think it is entirely true. if the right hon. Gentleman reads the evidence given before the Royal Commission he must see that in the opinion of a great many experts this valuation of the site, apart from the buildings, can be done and without any vast increase of local expenditure. But after all, we sec it done every day in all our large towns. Property is bought and sold not for the buildings, but for the value of the site alone, and I think I am right in saying that in some cases the site value apart from the buildings is taken for the purposes of the death duties. I have endeavoured to establish that the occupiers of houses in towns and industrial centres cannot be made to take willingly a much heavier burden than they bear at the present time, that there is no likelihood of the burdens decreasing, the tendency being for them to increase, and that there is an interest and a fund visible in the property of urban landowners which may be made to contribute separately from that of the occupier. From these two sources, of the occupiers on the one hand, and the owners on the other, taken together, you would have a wider and more equitable field for taxation. In all probability the poundage charged would differ as between the two interests, but I maintain that we in this House ought to give the local authorities without delay power to tap these two sources simultaneously in order that they may more easily undertake new works, new expenditure, and new burdens, which this House is ever ready to impose, and make more widely spread those burdens. Above all, the feeling that the rates are in a great many cases unjustly levied will be removed. I believe that if this were done it would be in the long run not harmful but really beneficial to what I conceive to be the true interests of the landowners of this country. I beg to move the resolution standing on the Paper in my name.

MR. LLOYD-GEORGE (Carnarvon, etc.)

I rise to second the motion which has been moved by my hon. friend, and the comprehensive and lucid statement he has given of the case renders my task very easy indeed. I simply wish to make one or two points in addition to those he has already so well laid before the House. The motion states a fact which I do not think it is possible for the Government to controvert—namely, that the rates in the urban districts are heavy, and that they are growing, and the motion then calls upon the Government to deal immediately with this crying necessity. My hon. friend has already pointed out how heavy the rates are in the towns. As a matter of fact, when the Government came to deal with the question of local taxation, they dealt with the lighter burden first, and, in doing so, increased the heavier burden. In the towns the average rate is 6s. 6d. in the £; in the country the rates are 2s. 3d. in the £. What did the Government do.? Five years ago they paid half the rates of the 2s. 3d. ratepayer, and they went to the 6s. 6d. ratepayer and said, "Although you are already paying three times as much as the country ratepayer, not only will we not give you any relief whatever, but we will call upon you to contribute towards paying half the rates of the 2s. 3d. ratepayer." I do not think it requires much argument to prove that the 6s. 6d. rate is the heavier, and after five years experience it is about time the Government dealt with this grievance as well. As my hon. friend has already pointed out, this is not only a heavy burden, but it is a growing burden. It is growing for two reasons, the one legislative, and the other administrative. In the course of the evidence given before the If Royal Commission, I find it stated by a Treasury official that during the course of the last twenty-five years there were 119 purposes for which It new or additional local taxation had been authorised by Parliament. Those purposes have, of course, increased the burden of local taxation enormously, and I would point out to the House that most of those purposes have increased the burden of the urban districts rather than of the rural districts. Even the present Government, after having paid half the rural rates and given the magnificent grant to the landowners, have imposed additional burdens mostly upon the urban taxpayer by two or three Acts of Parliament which they have passed. I am not complaining of those Acts of Parliament; one or two of them were beneficial. Still, the Government have increased the burden, and it is time they did something to give relief. The second reason is an administrative one. There is greater stringency of administration in local districts than ever before. Take one ease. The "Worthing and Maidstone epidemics cost millions of money to this country, in this way. It suddenly dawned on the Local Government officials that possibly the administration had been too lax in the matter of water supply. I have a case in my own constituency which I will give as an illustration of scores more throughout the country. There was a, water supply which cost £30,000 or £40,000 to the town; it had gone on for a generation, and there had never been an epidemic. Then came the Maidstone epidemic, and the Local Government officials naturally got uneasy. They sent an official down to this place, and he condemned this water supply which had been working admirably for a whole generation. They insisted upon the town finding another water supply which would have cost another £40,000. It was found impossible to do that, and by way of a compromise the Local Government officials insist upon filtration and all sorts of things. All this means additional burdens upon the town. I am not criticising that action at all; I am simply showing that owing to the increased efficiency of administrative stringency the burden of the urban taxpayer has grown year by year until it has become almost intolerable. I will just give one or two figures to the House, which I think are rather striking, in order to show how the burdens of the town ratepayer are increasing, and certainly increasing as compared with the rural ratepayer. I will not deal with the poor law, for the simple reason that the burden of the poor law is very much the same whether in town or country. Take the burden of the School Board. The education rate is twice as high in the urban as in the rural districts, and for a very good reason. Voluntary effort is generally confined to those places where land is cheap and where there is a wealthy population who will contribute. When you come to the poorer districts, where there is a congestion of population, and sites are consequently dear, and it is difficult to raise contributions, the burden of education falls entirely upon the taxpayer, with the result that the education rate in towns is twice, if not three times, as heavy as in the rural districts. I come now to water, gas lighting, and street improvements, and what do I find? In the urban districts the whole amount for this purpose in 1897–8 was £30,500,000 in one year, while in the rural districts the amount was £822,000. [An HON. MEMBER: That does not include gas.] I am not referring to gas, but to the burden of local taxation. I will now turn to the indebtedness of these districts. I find that the total indebtedness in the urban districts in 1897–8 amounted to £143,700,000, while in the rural districts the total was £2,500,000. Of course this is outside the Poor Law. The rates increased in the urban districts from £25,500,000 to £30,000,000 or an actual increase of £4,600,000 in the course of four years. I come now to the indebtedness of these districts. The loans outstanding have increased from £121,000,000 to £143,000,000 in the course of four years. The total assessable value of the boroughs is £148,000,000, while the total rateable value of the rural districts is £51,000,000. That is to say, in the urban districts the indebtedness amounts to three times the total rateable value of the boroughs. The indebtedness in respect of some things in the rural districts is only one-twentieth of the whole rateable value, I want to make this point first of all, and I wish the House to confine itself to one point at a time. If you try to make six points at once you generally fail to make any point at all, so I hope that hon. Members opposite will bear with me. My first point is this: That from one cause or another the burden of the rates is increasing by leaps and bounds in the towns, while it is not increasing appreciably in the rural districts. The indebted ness is increasing at the rate of £5,000,000 a year in the urban districts, while it is increasing at a, very small rate in the rural districts. I cannot see the point made by hon. Members opposite who argue that we have something in return for this money in the shape of waterworks, gasworks, well-paved streets, and all sorts of modern conveniences. I do not see how that affects the argument. These things are the necessities of any town, and are essential to its existence. It would be impossible to keep the inhabitants of a town together without proper sanitation, lighting, a good water-supply, and all those other conveniences which now form part of the essentials of the age. You may say that you want police and lighting in rural districts, and it is equally true that they are essential there. But does the hon. Member mean to suggest that you should go without your water supply, sanitation, and gas in the towns, and that that really is the proper remedy? Any hon. Member who would venture to suggest that to the House as the only possible answer is really beyond argument altogether. We have to accept the situation as it is, and say that, partly owing to the laws passed by a Liberal Government and partly owing to those passed by a Conservative Government, a large portion of the taxation has been cast upon the urban ratepayers, and this House has got to deal with it. I now come to the individual ratepayer in the two districts, and I will consider how the Government deal with the urban and the rural ratepayers—or with one class of the rural ratepayers, because the shopkeeper is in a worse position, and so is the little factory owner. One witness before the Royal Commission said that about forty factories in the West of England had been closed within a certain period of years, very largely owing to the burden of local taxation upon them. I want the House to consider how the Government have dealt with these two classes of ratepayers. In the towns a man pays 6s. 6d. in the pound rates and in the country 2s. 3d. Relief is extended to the 2s. 3d. man at the expense of the 6s. 6d. man. Let us take a particular instance. Last year the Government paid half the rates of the clergymen of this kingdom. [An HON. MEMBER: On the tithes]. Yes, and that is exactly what we are making out. It was said that their total income consisted of tithes, and the proposition was laid down that you should impose your rates according to the ability of the clergymen to pay. [An HON. MEMBER: No, no!] I beg the hon. Member's pardon, but that is so; and I will refer him to the evidence of the hon. Member for Tunbridge Wells. What has been done in regard to local clergymen is that half their rates have been paid. Let us consider the case of the clergyman as contrasted with the case of the shopkeeper. Take the case of a clergyman receiving £200 in tithes and a shopkeeper paying £100 rent in an urban district. I will assume for a moment that the shopkeeper is clearing twice his rent in profits upon his shop, and I should like to know how many shopkeepers are doing that. Let us assume that he is making £200 out of his shop. He has to pay in rates £24. Now the clergyman used to pay upon his £200 the sum of £12 in rates, but what did the Government do? They gave £6 to the clergyman, and enacted that in future the clergyman should only pay £6 in rates instead of £12. Now what do they do for the shopkeeper who has to pay twice as much? They say to him, "Not only shall we not extend any relief to you, but you will have to help to pay the £6 of the clergyman as well." That is what the Government have got to face. The usual case is that of a struggling tradesman with a rent of about £75 a year, working from eight o'clock in the morning to eight, nine, ten, and often twelve o'clock at night, with every member of his family assisting him under very unhealthy conditions, barely making a living, and paying £18 to £20 in rates, while the clergyman who is getting £500 or £600 in tithes gets half his rates paid. The struggling tradesman has still to go on as before, and the Government only offer him a Royal Commission. When we come to the case of the landowner it is very much worse. Go down to a district in Buckinghamshire or Berkshire, and you will find an American millionaire receiving £50 or £100 a year out of the Bill which was supposed to relieve agricultural distress. In the same district you will find the artisan, with his workshop or factory, paying his rates in full, while relief is extender i to his millionaire neighbour. I think it is time that the Government should look after the urban ratepayer, who is now so heavily burdened. Those are the figures as far as the urban and other districts are concerned. All we ask is that you should give the same fair treatment to every class of the community. Two classes at the present moment have received relief at the hands of Her Majesty's Government. All we ask for is that you should extend the same equal rights is in this country as you are fighting to secure for the people in South Africa. I was alluding to the case of the landowner. My hon. friend has.; suggested a remedy, and I agree with him cordially that this is not a case for further grants in aid. I think the principle of doles is a perfectly vicious one. I do not know that it is a principle at all, but it is a form of almsgiving which is inconsistent with sound finance. There is a method of lightening the burden of the urban ratepayer, and that is by making all those who are interested in the community, and who benefit by the expenditure upon municipal undertakings, bear their fair share of the burdens. Take the case of the landowner. Most of these landowners who are receiving relief in respect of the rates on their property, because of the depression in agriculture and reduction in rents, are receiving increased rents in respect of their urban properties. This brings us straight to the remedy. Take the case of Bootle. A generation ago Bootle was a perfect wilderness, but during the last thirty or forty years there has been an enormous expenditure of money there upon docks and quays, and upon the development of property, and all that expenditure has been incurred on the part of the municipal authorities there. What is the result? Why, that the property there has increased enormously in value. Now nearly the whole of the property belongs to one landowner; and what does he receive by way of rents from that property? He receives no less than £150,000 a year for ground rents out of that one municipality. He has several vacant spaces there which used to be worth about £5 an acre, but they are now worth £5,000 an acre, and every inch of ground there has now got a considerable value. What does he contribute towards the rates? Not a penny; and yet those rates have been expended upon developing his property and increasing its value, and if it had not been for all this expenditure his property would not have been worth anything except the agricultural value. That is not all. This landowner has got agricultural property outside in Lancashire and Cheshire, and in respect of that agricultural property he is receiving under the Agricultural Eating Act a large grant annually because of agricultural depression. He was one of those who suffered, and he is receiving that large amount of money in respect of his agricultural land, paid very largely by the very men who are paying the £150,000 in respect of the town property which they have developed by their own skill and industry, and the investment of their capital. I say it is a monstrous injustice, and the Government ought to deal with it. I think it is opportune to address myself to the interruption made to one of my observations at the start. The objection made by the hon. Member opposite was that if they spend money for sanitary purposes, waterworks, and so forth, that is their own business. Is that an objection to imposing a fair share of the burden on the very people who benefit by these improvements? It may be an answer as between the town and the country; it may be an answer against imposing any further share of the burden on the rural taxpayer, and the hon. Member naturally thought that I was going to propose an additional burden on the urban taxpayer. My contention is that the people who benefit largely by all this expenditure should contribute a fair share of it. I think the hon. Member will now perceive that his interruptions were perfectly irrelevant. Let me give another case. In Harrogate a short time ago the burial authority wanted an additional cemetery, and applied to a landowner in the neighbourhood. He does not reside in the town; he resides outside, and therefore does not contribute towards the rates. He has got some very poor agricultural land outside the town, and he demands £1,200 an acre for that land. The gentleman who applied to him immediately looked up the assessment of that property, and he found that in respect of the land for which he was demanding £1,200 an acre, he was assessed for the local rates 5s. an acre. I ask whether it is fair. Who has given the value to this land? As agricultural land it is only worth 5s. an acre for assessment purposes. It is simply the energy and the organised effort of the people of Harrogate themselves which give value to the land; and I say all those waterworks and sanitation and gas, which excited the ridicule of hon. Members opposite, have given the improved value to the property, and therefore the owner of the land ought to contribute towards the rates. I could multiply instances. There is the very well-known case of Devonport. In the case of Devonport not long ago the whole of the freehold of the town was purchased for £12,000, and it is now yielding to the ground landlord £80,000 a year. [" No!"] What figure does the hon. Member suggest? [AN HON. MEMBER: I think it is given in evidence. It is about £14,000.] The hon.. Member is absolutely mistaken. [An HON. MEMBER: I think the landlord's agent knows more than a member of the town council.] If the landlord's agent has said he only gets £14,000 a year I am perfectly willing to accept that. Let us take it at that figure. The freehold, as I have stated, was only worth £12,000 a few generations ago. The landlord has not a house there, and he does not contribute anything towards the rates. On the whole of this property the rates are very high, and there is considerable overcrowding there owing to the difficulty of getting sites and the prices demanded by this agent. Then there is the well-known case of Fraserburgh in Scotland. The property belongs to Lord Saltoun. The corporation spent £150,000 in improving the harbour, and £36,000 on other improvements. This has increased Lord Saltoun's rental, but he does not contribute anything at all towards the rates of his own town. He is one of the noblemen who are receiving alms at the hands of the Government as a distressed agriculturist. Without multiplying these instances I think it is about time that the burden of the urban ratepayers should be fairly distributed among all those who have an interest and. whose property is increased in value by means of this expenditure on improvements. Of course, the Government may say that we have got a Royal Commission. Probably that will be the answer of the right hon. Gentleman, but really I do not think it is possible that the right hon. Gentleman can seriously advance that as a real and bona fide answer to this motion. "What has happened in regard to this Royal Commission? Just what has happened in regard to most of the Commissions appointed by the Government. They gave endless pledges at the last election. Old age pensions, for instance, was one of the questions they would deal with. What have they done? They have appointed two or three Committees to investigate the matter, and while they have been fighting we have to wait. They are experts in Boer tactics, and probably that is due to their great political mobility. That is what the Government have been doing with respect to old age pensions, and the same thing has happened as regards this question of urban rating. They promised to deal with that. In 1896 they found that something ought to be done to meet this grievance, and they promised to appoint a Commission. Of course, they managed to get an interim Report in order to make a grant of £3,000,000 to the landowners but how did they manage this Rates Commission? It was promised in 1896, and it was not appointed until August in that year. It was too late to do anything that year. In 1897 a few witnesses were examined, and a good many of them were parsons. In 1898 a few more witnesses were examined, and more of them were parsons still. In 1899 they examined no witnesses; they considered this Report. I suppose that was as much as you could expect in 1899. They forgot all about the urban ratepayers. Not one shopkeeper was examined, but there were fourteen or fifteen clergymen. I don't know that they have sat at all this year. They have given up the farce of meeting. It is a perfect farce. The right hon. Gentleman knows it perfectly well. A most significant thing about it is that there is a member of the Government at the head of the Commission. If the Government were really in earnest in dealing with this grievance they would have examined it and dealt with it long ago. Take the liquor question. There was a nobleman at the head of the Commission on that question who was in earnest on the matter he had in hand. It was appointed in the same year to deal with a much more complicated and a much more difficult subject— a subject which excited much more controversy. I find that they examined over three times as many witnesses, they held three times as many sittings, and re ported last year. This Rates Commission has not reported yet. Does anyone doubt that the Commission has been deliberately permitted to drag along in order not to frame a Report because the Government does not intend to deal with the question of the urban taxpayer? Anything which gives effective relief to the urban ratepayers they have shown no disposition to pass. I think this is a very urgent and very important matter. It is not only that the rates are increasing, but the efficiency of the municipal authorities is crippled. Take all the enormous new interests that have got to be dealt with. Take the new ideas as to the kind of work they are expected to do with regard to overcrowding and the condition of the people. The worst of all these burdens upon the shoulders of the urban ratepayers is that they have not got the means adequately to perform their functions. Look at their indebtedness respecting artisans' dwellings. The total amounts only to £2,000,000. Does anyone believe that they can adequately cope with this question on an expenditure of £2,000,000 over the whole kingdom? The right hon. Gentleman the Secretary for the Colonies has tried to do something for the housing of the working classes. He has brought in one or two miserable little Bills which he knows will have absolutely no effect. He knows perfectly well that it is not legislation that is needed, it is not so much more power to the municipal authorities, but what you want is to equip them with more means to deal with the question. We have got a Royal Commission to deal with this subject, but it is very significant that the Royal Commission which dealt with this subject was the Commission on the Housing of the Working Classes. One of the recommendations was that there should be a rate on land values. The rector of Suffolk the other day said that in his own parish the condition of the working classes was perfectly deplorable. There you have families crowded into one room. That is the state of things in most of the great towns of this kingdom at this moment. There has never been so much insisting upon the fame and glory and prestige of the Empire, but I say there is a hollow note in it altogether and an insincerity when you reflect that in the greatest towns of this Empire you have people crowded in misery simply because they cannot deal adequately with the circumstances of the case. Hundreds and thousands of people——

* MR. SPEAKER

The housing of the working classes is outside the scope of this motion.

MR. LLOYD-GEORGE

I have only spoken one sentence upon it, and I submit it has everything in the world to do with the question. I submit that my case is a case of urgency, and that this matter ought to be dealt with forthwith. My reasons are twofold. First of all, the burden is growing; and secondly, it is crippling the powers of the municipal! authorities to deal with some of the I greatest problems in the towns, and these authorities declare that the Government ought to deal with the question forth with.

* MR. SPEAKER

The hon. Member is not entitled, under this resolution, to discuss the housing of the working classes.

MR. LLOYD-GEORGE

I had no intention of doing anything of the kind, and if I have transgressed in the slightest degree your ruling, Mr. Speaker, I am sorry. All I will say is that it is absolutely impossible for the municipal authorities to deal with the subject in small towns where the rates have run up to 8s. and even 10s. in the £. You cannot go to these people and say, "Look at the slums and misery there; put on another 2s. in the £, and deal with them." They reply, "We cannot; we cannot afford it; it is as much as we can do to pay our present high rates and retain a bare subsistence." I maintain that the Government should compel these huge landowners, who are making their hundreds of thousands of pounds a year out of these poor towns, to pay their share of the burden. Within the last few weeks hundreds of thousands of people were watching our troops going to South Africa, and then returning to habitations which, I venture to say, are a greater stain on the honour and glory of this Empire than anything that our troops are going to wipe out in South Africa. Under these conditions, therefore, it is not too much to ask in the interests of the urban taxpayers that something should be done to lighten their burdens, and to distribute them more fairly.

Motion made, and Question proposed, "That, having regard to the heavy and increasing burden of local taxation in urban and certain other districts, the House urges upon the Government the necessity of forthwith redressing the undoubted grievances from which many ratepayers suffer."—(Mr. Nussey.)

MR. CRIPPS (Gloucestershire, Stroud)

I do not propose to follow the seconder of this resolution through the great many subjects which he has treated, and which are not very germane to the main proposition brought forward—namely, the question of heavy local taxation in urban districts. I wish to say at the outset, and I speak for many Members on this side of the House, that so far as regards equalising the burdens of local taxation in country and urban districts, and bringing about relief to what is undoubtedly heavy taxation at the present moment, we on this side of the House have shown as earnest a desire as any Member opposite to accomplish these reforms. One or two matters have been referred to by the mover and seconder of the resolution which I think tend rather to divert the mind from what are the true points we ought to consider if we are to bring about reform of the system of urban taxation. A great deal has been said by the mover and seconder as to the difference between rural and urban taxation. It was said by both speakers that so far as the rural burdens are concerned they are less heavy than the burdens of urban ratepayers, and yet a measure of relief had been given to the rural taxpayers which had not been given to the urban taxpayers. I differ from that entirely. I maintain it is quite a fallacy to take the amount of the rates and say 2s. 3d. is paid in the rural districts and 6s. 6d. in the urban districts, and that therefore the urban districts are more heavily rated than the rural. It is an absolute fallacy, for two reasons. First of all, certain advantages are obtained for the 6s. 6d. in the urban districts which the rural ratepayers do not get. [An HON. MEMBER: What are they?] I will deal with that in the course of the argument, although I should have thought they were very obvious to anyone. And secondly, what you have to consider in all matters of taxation is the ability to bear. A 2s. 3d. rate in a rural district may be more oppressive than a 6s. 6d. rate in an urban district. That is the true test, and the true comparison to make. That was the basis of the reform in the Agricultural Rating Act which my hon. friend has misrepresented more than once in this House and elsewhere, although not intentionally of course. The principle was that the farmer was really paying on his business, on the raw materials which had afterwards to be manufactured, and that he was the only ratepayer so paying, and all this resuscitation of an old calumny——

MR. LLOYD-GEORGE

Surely the tithe is not raw material.

MR. CRIPPS

I am dealing with one matter at a time. The resuscitation of these old calumnies of the landowners is out of date at the present moment. Whatever we have to do for the reform of urban taxation, no hon. Member believes for a single instant in the argu- ment of the hon. Member for Carnarvon. Let me say one word in regard to tithes. This question of the rating of tithes is only incidental, and the hon. Member for Carnarvon, at any rate, mistakes entirely the spirit in which that great reform of local taxation was brought about. He may differ from hon. Members on the subject, but he should not misrepresent our objects or our motives. What he said was that on historical grounds the owner of the tithes paid the rates, and the occupier got the benefit. What we said was that the occupier was also paying the rates, and that when that long standing injustice was removed by the beneficial Act brought in by the Unionist Government they were not giving anything in the nature of a dole to the tithe owners. Let me deal with another fallacy in what was said by the mover and seconder of the resolution in regard to loans. Now, if we take the aggregate of these loans they are no real test of the burdens which have been thrown on the urban districts of recent years. A large number of these loans represent profitable investments. For instance, if an urban district obtained a loan of a million in order to buy up gas and water companies, a large additional income to that necessary to pay the interest on the loan is obtained, which goes to help the rates. So that a comparison of loans in rural and urban districts is no true criterion of the burdens on the ratepayers in the two districts. I admit that the burden of taxation in the urban districts is very heavy. We all feel that, and we shall do our best to obtain a reform consistent with true economic principles. I cannot, however, consent to the proposition as regards the rate of increase of the rates in the urban districts. A large amount of evidence was brought before the Royal Commission, and still more important evidence before the Towns Holdings Committee on the subject. The Committee said that the idea of a very large increase in the urban rates is not true, although, of course, the burden is very heavy. Statistics go to show, in fact, that in some cases there has been an increase, and in other cases a decrease. It is no test to say that the aggregate amount of the rates has increased by a million. You have got to consider in such a case how far the rateable value of the property has increased, and until that is done you cannot fix the true ratio of the local burden. Let us take the case of London itself. The London County Council rate, which is often used for purposes of prejudice in discussions of this kind, is not an increasing but a decreasing burden, and there is everything to show that, so far as increase is concerned, we have got to the top. The London County Council is receiving from year to year larger and new sources of income which they had not before, and the tendency is that these new sources of income will more than counterbalance the increase of rating. For instance, the London County Council last year got £80,000 from the tramway system in relief of local rates, and evidence was given the other day that they hope to get as much as a million a year in the future for the relief of the rates. This question, which is a very difficult one, cannot be argued without all the conditions are taken into consideration, because all the conditions must be weighed before the matter can be dealt with. I should like to say a few words as to the importance of the principles involved in this resolution. Both the mover and seconder repudiated on every ground what they call grants-in-aid from the Treasury. I submit that under the existing conditions of local taxation it is only by means of grants-in -aid that we can get anything approaching an equitable system at all. So far as local rates are concerned, they are all raised from one class of property, whereas the benefit arising is extended, at any rate as concerns a large number of matters, over the local community at large. Is it right as regards the police, for instance, which is rather Imperial than local, that only one class of property should bear the whole weight of the burden? And unless we have these grants-in-aid from the Treasury, how can we bring in the other sources which ought to bear their fair share of the burden—those sources classed under the head of personal property? You cannot do it. I invite the hon. Gentleman to go down to any local district and propose that the burden should be borne locally. Unless you have a local income tax or some other system by which you can bring property other than real property under taxation in a particular district, you cannot in any way relieve the burden borne by a particular class of property except by means of these grants in aid. The hon. Gentleman the seconder of the resolution also maintained that the grants from the Treasury led to extravagance. I have searched for evidence of that in every Committee which has sat on the question of local taxation, and there is not the slightest evidence that such grants have led to extravagance. In every case sufficient burden is left to guard against any temptation to extravagance.

SIR HENRY FOWLER (Wolverhampton, E.)

They have enormously increased the expenditure.

MR. CRIPPS

The increased expenditure has arisen from different sources altogether, not from the grants in aid from the Treasury. That is shown by the fact that there are greater increases where there are no subventions at all. The hon. Gentleman said that these Treasury grants interfered with local control and the principle of local self-government. I should like to ask what evidence he has of that. What interference is there with the police, for instance, or the main roads, in regard to both of which there is this subvention of the Treasury? Such statements are current fallacies, and no one who really desires that the urban districts should be less heavily taxed locally than they are at present could at the same time wish that the Treasury subventions should be withdrawn. Respecting the question of site values, when, in the first instance, the question of local taxation was raised, the question of site values was not raised at all. It was raised in the form of ground rent, but it so happened that, so far as ground rent was concerned, it was charged both on the land and the building, and when Mr. Costello was giving evidence before the Committee he made the statement that the idea of rating ground rents was an intricate idea which had never been properly thought out, and that when it was thought out it was objected to altogether. It is on crude ideas of this kind that we are now asked to deal with the local taxation of this country. This question of site values was referred to a Committee, and the two answers with regard to it appear to be unanswerable. In the first place, there would be extreme difficulty in assessing property if we separated the site from the building. That was the finding of the Town Holdings Committee, and the opinion of everyone who has practical experience in the matter. It is quite true that in some places, such as Bootle and Devonport, there has been a great rise in the value of property, but then that rise contributes its fair proportion to the rates of the district. Is there any reason why a particular kind of property should be rated twice over?

MR. LLOYD-GEORGE

My suggestion was that the landowner should be taxed on the income he receives.

MR. CRIPPS

The landowner is taxed on the income he receives. The property is assessed at its full value, but the occupier is rated. That is the principle adopted in this country, so that whether you rate the property or the person the property is assessed at its full value. The hon. Gentleman seems to think that if you separated the site value from the building you would get some additional source of taxation. If that were so you would have to rate site values twice over. If a site has gone up very much in value it is the occupier who gets the immediate advantage, and he is the right person to be assessed. The whole value is rated now, and the rate is paid by the person who receives the benefit—that is the person in occupation. There are various matters of Imperial concern—such as elementary education, police, and pauper lunatics—which for reasons of convenience are thrown on local taxation, and I do not think either the mover or seconder of this resolution took cognisance of the fact that one of the reasons why local taxation is so heavy is because of these really Imperial matters having been thrown on to it, because it is a convenient method to deal with them in order to obtain local administration. The greatest part of the burden which is thrown upon the urban districts is caused by the School Board. Take for instance the School Board rate. Except for the convenience of local ad-ministration, does anyone suggest that education ought to be thrown on a particular class of property and on one locality? It is an Imperial concern in which the whole country is interested, and from the point of view of principle it is a matter which ought to be dealt with out of Imperial resources and not by local expenditure at all. Let me take the case of the police or of pauper lunatics. If there is one thing more than another that the central Government ought to be responsible for, it is the management of the police, in order that there should be proper security in all parts of the country. I admit that the administration of the police locally is of enormous importance, but my argument is that you should only leave just sufficient of these services on the local rates in order to secure economy and efficiency as regards local administration. The remainder should be paid out of. Imperial resources, because these charges are properly Imperial, and all classes of property ought to pay their proportion of them. That, in my opinion, is one of the main directions in which we ought to look for reform. Let the whole sum be paid locally in matters that are properly local, but in matters which are really Imperial, but are for the purposes of administration managed locally, the charge should be paid out of Imperial resources, leaving only a sufficient margin to secure efficient administration. That, to my mind, is one of the chief directions in which we may hope for reform as regards the question. But what a will-o'-the-wisp it would be to follow the suggestion of the mover and the seconder of this motion. They would take away the whole of these Imperial subventions, whereas I would increase them where we have really Imperial matters dealt with locally. This undoubtedly is a complex and difficult subject, and should not be judged by isolated statistics taken away from their surroundings, or approached without the fullest consideration. Much as we on this side of the House desire that the burden of local taxation should be relieved both in urban and rural districts, without raising the question of prejudice as between town and country, I hope the Government will feel that as this matter has been committed to a Royal Commission we ought, at any rate, to await the Report of that Commission before proceeding with legislation.

MR. GEORGE WHITELEY (Stockport)

After the eloquent and exhaustive speeches of the mover and seconder of this motion, no additional light is needed to support our contention. The seconder of the resolution referred to the Royal Commission which was appointed in 1896 to consider the whole question of the rating of real and personal property. I am in entire agreement with him in saying that the Rating Commission was the gilding which enabled many hon. Members opposite to swallow the pill of the Agricultural Rating Act. The Commission has proved itself a farce and almost a delusion and a snare. No progress has been made with its deliberations, and there is no prospect whatever of legislation resulting from it. I challenge the right hon. Gentleman who supervises the Local Government Board to say that during the life of the present Parliament there is any prospect of legislation on the subject. It is all very well for the hon. Member for Stroud to confine his argument to the question of rating as between the town and the country. There is no fact more ascertainable and certain than that for years past there has been in towns an increasing assessment and an increasing rate, whereas in the country, unfortunately, there is a decreasing assessment, and, for the last twenty or thirty years, a decreasing rate also. The average rate in towns is from 6s. to 7s., and yet the towns are asked to contribute to the reduction of the county rates. I maintain that the unfortunate ratepayers in towns are much injured by the legislation and will continue to be injured until it is repealed. I do not think that the President of the Local Government Board will say that the urban ratepayers have received justice at the hands of the present Government. The hon. Member for Stroud referred to the earnest desire of many hon. Members opposite representing county divisions to do something to rectify the existing inequalities between urban and rural districts. What evidence have we of that desire? I see no evidence of it. The hon. Member also referred to the advantages which towns are supposed to enjoy, and for which they pay largely increased rates. All these advantages are visionary. What advantage is it to a man to walk on a paved granite road instead of on a country lane? What degree of merriment or jocosity is there in a sewage farm or a system of sanitation? All these matters are forced on the towns by the Local Government Board. They are the direct result of the aggregation of large masses of people in a circumscribed area, and if the towns did not provide all these luxuries, as they are regarded by hon. Members opposite, the Local Government Board would compel them to carry them out. The hon. Member has furbished up the old doctrine that the burden of rates ought to be in proportion to ability to pay rates. That has been furbished up "to give an air of verisimilitude to an otherwise bald and unconvincing narrative." If you are going to inquire into the question of ability to pay rates, you will upset the whole of your rating system. The hon. Gentleman urged that the landed interest and the clerical tithe receivers were in a desperate position. I venture to say that the class of property which suffers most from the burden of rates is not to be found in the country, but in the towns. It is the shopkeepers in the towns who have to pay heavy rates on large assessments, with probably a decreasing turnover—especially shopkeepers in the outskirts, who find that their trade is going towards the centre—who suffer most. They have a heavier burden to bear than either the landlord or the clerical tithe receiver. But if ability to pay rates is the principle to be adopted for assessment, you must classify the ratepayers, and say that this shopkeeper has a good business and can pay a heavy rate, and that another shopkeeper has only a small business and cannot pay as much. The hon. Gentleman said that the clerical tithe receivers suffered a great grievance. The House knows very well that when the Commutation Act was passed, in 1836, an amount was added to the clerical tithe, and the whole was then calculated at 4s. in the £, making the tithe receiver practically free from rates on tithe. The hon. Member also referred to the subject of grants in aid. I am in entire agreement with him in thinking that it will be impossible ever to do away with the system of grants in aid. But we have argued and we will continue to argue that if you have any doles to give they ought to be distributed fairly and equally. You have no right whatever and never will have the right to select one or two particular kinds of rateable property in which you are particularly interested, and say that relief shall be given to them, leaving all other classes unrelieved. The hon. Member mentioned the question of sites. I will put a case to him. Take two adjoining sites, each representing a value of £50 a year. On one is erected a braiding, also of the value of £50 a year, and the occupier of that building is assessed at £100. The adjacent site is covered by an exceedingly poor class of property, and the owner of the site is waiting until the time comes when, in all probability, he will be able to sell to great advantage. Although that adjacent site may be worth £50 a a year in the open market, it is covered by buildings which are bringing in only £30 a year, and the owner is assessed at only £30. If that man is assessed, as we argue he should be, and had to pay on the £50—the site value—and subsequently on the value of his buildings, which might be £20 a year, he would pay on £70 instead of on £30. If the scheme suggested by my hon. friend were adopted, and that man rated, as he ought to be, on the £70, the result would be that he would immediately say, "If I am to pay rates on an assessment of £70 when I am receiving only £30 from the property, I must either sell my land for what it will fetch or cover it with buildings similar to those on the adjacent plot." Let me give another case. We know of land on the outskirts of boroughs which is let at agricultural value—land which would be worth, perhaps, 1d. a yard in the open market—and its real value is what it will fetch in the open market. The owner of that land is a rich man, and he is holding that land in order to get 3d., 6d., or even 1s. per yard ground rent for it. He is by that means "doing," if I may so describe it, the ordinary ratepayer, who is paying rates upon property assessed at its proper value. We say that if you rectified some of these grievances you would have other revenues upon which you could lay your hands, and you would not be limited to the very few excisable and taxable commodities to which at present you are. The Agricultural Eating Bill was a bad Bill, and the Clerical Tithes Bill was, if anything, worse. The money you have expended to give relief to those two particular classes of ratepayers you very much want now. If you could lay your hands upon those doles and repossess yourselves of those £3,000,000 a year, you would not have been obliged during this session of Parliament to increase the taxation on tea by 2d. per pound or the duty upon tobacco by 4d. per pound. You are practically taxing the whole community in order to continue these doles to the landed interest and the clerical tithes owner. I ask the Government: Are you going to deal with this question? Is there any prospect of dealing with it? Are we in the boroughs in the populous areas of Lancashire and Yorkshire to pay increased rates and increased taxation in order that your landowners and clerical tithe owners in Norfolk, Hampshire, Suffolk, and other districts where clerical tithe is paid should be relieved of half their rates? It is a growing injustice; it is a scandal that no hon. Member can justify; and until it is removed there will be experienced by all urban ratepayers a very great grievance —a grievance which, I am sure, when the next election comes round, if it comes at a time when the judgment of the people can be taken upon the ordinary legislation of the present Parliament, will have a very great effect in the constituences. I did not intend to address the House this afternoon, because, after all is said and done, these questions have been debated time after time, and they will be debated and pressed home upon the Government on every occasion which offers, not only in this House but in the country likewise, until we have some distinct declaration of the intention of the Government towards the towns and urban localities of the country—an intention of which we have no indication at the present moment.

MR. CHAPLIN

Whatever may be the fate in store for this motion, I think the House cannot have failed to come to the conclusion by this time that the discussion in which we are engaged can be nothing more than purely academic, and that it cannot possibly lead to anything like a practical result. Under these circum-stances, perhaps the House will permit me to intervene thus early in the debate. I frankly own that when I first saw the motion of the hon. Member, having regard to all the circumstances under which it was to be moved, I thought that anything more unusual or more ill-timed had not very often been placed upon the Paper. As far as I can recollect, with a considerable number of years experience, it is really without precedent in this House, ["Oh, oh! "] Perhaps the hon. Members who say "Oh, oh!" will allow me to remind them of what the circumstances are to which I refer. I think it is desirable, if there is any forgetfulness upon that point, as I think there must be, that I should bring the circumstances back to the minds of hon. Members. Early in the present Parliament Her Majesty's Government, in fulfilment of pledges which almost every Member of the Government had given before the General Election, introduced a measure dealing with the rating of agricultural land. That was a measure which gave effect not only to those pledges which had been given generally by the Conservative party when they went to the country, but also to the recommendations of a Royal Commission which had been appointed by the last Radical Government, of which the late lamented leader of that party, Mr. Gladstone himself, was the head. That measure became law, and, so far as I know, by all impartial and capable students of the question the equity, justice, and expediency of its provisions have been very widely recognised, and, I think I may say, very generally admitted. [Opposition laughter.] I am perfectly aware that that is not the view of hon. Gentlemen who laugh, but perhaps they will forgive me for saying that I was referring to impartial and capable students of the question, and I am not aware that the hon. Gentleman on the back bench, whose hilarity is so much excited, has ever given us much reason to believe that he is either the one or the other. I am able, at all events, to support the view which I bold, and which I have just put before the House, by testimony which even hon. Gentlemen opposite will be very slow to dispute. We have had already a good deal of the results of the Royal Commission laid before the House, and among other items hon. Gentlemen will find a Memorandum of questions on various points which were considered of great importance, and which I believe was drawn up by Sir Edward Hamilton and addressed to certain well-known financial and economic experts—I think sixteen in number. The fourth question in the Memorandum related to the equity of any tax or system of taxation, and in his answer to that question, one of those experts, no less an authority than Professor Sidgwick, who was the only one who referred specifically to the Agricultural Rating Act and its bearing on this particular question, argued the matter most closely. I need not say that he argued it with great ability, but I regret to say it was at too great length to justify me in quoting it in full to the House. Hon. Gentlemen would do well to read and consider it, and I will take the liberty of submitting to the House the general con elusions at which Professor Sidgwick arrived. What he said was this— I conclude, therefore, that the principle on which partial relief from rates was granted to the owners of agricultural land in 1896 is sound from the point of view of equity. This conclusion is independent of the economic objection to special onerous rates on agricultural land as discouraging the investment of capital in agriculture. The force of this objection would remain unaltered even if the question of equity were otherwise decided. I commend that statement to the attention of hon. Gentlemen opposite, and, coming from the quarter it does, I do not think it deserves to be received with laughter. When I remember the attacks which have been made upon that Bill and the unscrupulous misrepresentations which over and over again have been showered upon it throughout the country by a good many hon. Gentlemen who sit on the other side of the House, it is gratifying to me to be able to turn to the verdict of a witness so able, impartial, and thoroughly independent, especially when that witness is such an acknowledged authority as a political and economic expert as the gentleman whom I have named.

MR. BIRRELL (Fifeshire, W.)

Would the right hon. Gentleman tell us what was the verdict of Professor Sidgwick?

MR. CHAPLIN

I have just read it.

MR. BIRRELL

What is it?

MR. CHAPLIN

I have just read it —that it is a most equitable Act, that it is perfectly sound from the point of view of equity—and I have made that statement in reply to the burst of derision which greeted the remark I commenced by making, namely, that by impartial and capable students of the question that was the conclusion arrived at. Passing from this interruption, I will go on with the statement I was making as to the circumstances under which this motion is brought forward. The House will remember that it was during the passage of that Act that a demand arose and was made upon Her Majesty's Government that as there had been an inquiry into the claims of rural districts with regard to local taxation, so also another inquiry should be made and a Commission appointed into the grievances of the town ratepayer. That request was at once acceded to by Her Majesty's Government, and a Royal Commission immediately appointed. Some of the results of the labours of that Commission are before us at this moment, and, as I am advised, the Commission are now engaged in the consideration of their Report.

MR. LLOYD-GEORGE

And have been.

MR. CHAPLIN

With the vast mass of evidence and material which has been collected and upon which their judgment is required, I do not think it is anything to be disappointed with or cavilled at that some months should be required for the elaboration of their Report. Those being the circumstances, the hon. Member comes forward with his proposition, which is practically a motion to supersede altogether the labours and work of that Commission, and demands from the Government "immediate legislation," which I suppose is legislation in this present session, to deal with the question. If the House will bear in mind who those Commissioners are who have voluntarily undertaken this work, they will universally admit that there is hardly a gentleman amongst them who is not known and recognised as a consummate expert upon the subject, and it is not too much to say that they comprise much of the best intellect of the country which has been devoted to the study of this question. Out of respect for the members of that Commission, if for no other reason, I do not believe the House of Commons will for a moment listen to the motion of the hon. Member.

MR. NUSSEY

May I ask the right hon. Gentleman——

MR. CHAPLIN

Perhaps the hon. Gentleman will allow me, as I am making my speech, to make it in my own way. I did not interfere with the hon. Gentleman; I allowed him that privilege to himself, and perhaps he will extend the same privilege to me. What does the hon. Gentleman say in support of his proposition? I thought that at least, after the exceptional course he had taken on this occasion, he had probably devised and was about to submit some carefully considered scheme of his own. Even then, if he will permit me to say so, he would have done more wisely if, instead of submitting his proposals to the House of Commons, he had laid them before the Royal Commission for careful examination and investigation. But the hon. Gentleman was certainly very sparing in the definite proposals he submitted to the House. He does not want doles; he does not want any more grants-in-aid from the Imperial Exchequer, as that is a most mischievous and immoral proceeding, and one which leads to additional extravagance and waste in regard to rates. What he does want is a complete and general reform of the whole existing system, and that reform, as I understand him, is to be found mainly in a uniform system of valuation and also in a now system, which is to be the taxation of ground values. In this view he was supported generally by the hon. Member for Carnarvon. But this question of the taxation of ground values, as everybody who has studied the question knows, is a most complicated subject, and full of difficulties on almost every side; and I am bound to say, though I listened as closely as I could to all that they said, neither of those hon. Gentlemen appeared to me to say much, if they said anything whatever, calculated in the slightest degree to contribute to the solution of the difficulties. I was not at all surprised, and I do not wonder in the least, at the way in which they slurred over this part of the question, for the hon. Member for Stroud —who has had a great deal of experience as one of the members of the Royal Commission—stated in his speech that this question was coming to be considered more and more as one of those questions which were not the least sufficiently understood when they were first mooted, that the difficulties were becoming more and more apparent every day, and that it was one of those questions which in the end he felt would be universally thrown over. ["Oh, oh!"] I am merely quoting the statement of the hon. Gentleman behind me; I am expressing no opinion myself upon the question. As the member of the Government chiefly responsible for the appointment of that Commission, it would be disrespectful on my part to pronounce an opinion in a debate such as this upon subjects of the very greatest difficulty, which I have expressly asked that body to investigate and report upon. The hon. Member for Carnarvon complained of the different treatment which he says we have awarded in this matter to the two different interests—the rural interest on the one hand, and the urban interest on the other. All that he asks, with the modesty which invariably characterises him, is that we should extend the same treatment to both. He says we have helped those who are the more lightly rated, and that the time has come when we should do something for the more heavily rated interest, namely, the urban interest. In the state of fervour to which he was moved by our iniquities on this point, the hon. Gentleman referred to old age pensions and the housing of the working classes, and in doing so he made some very remarkable statements. In fact, he attributed all the difficulties in the way of doing everything that was desired to be done to improve the condition of the working classes to the present iniquitous system of local taxation; he said that the system made it impossible to carry out these improvements. The hon. Gentleman must know that he was guilty of a very grave exaggeration when he said this. A complete and conclusive answer to this statement is the fact that, although it may not be nearly as much as we should desire—certainly not as much as anyone desires who wants to see the poorer classes housed properly and their needs attended to as they ought to be—although, as I say, everything is not being done, undoubtedly a great deal is being done at the present moment——

MR. LLOYD-GEORGE

I actually said that £2,000,000 had been spent.

MR. CHAPLIN

And the work is being carried on without any of those insuperable difficulties which he supposes surround the question. Then, too, the hon. Gentleman seemed to think that the mere statement of the facts as to the rates being higher in towns than in the country is quite sufficient to establish the claim to immediate relief. No one denies for a moment that the rates in towns are infinitely higher at the present moment than in the country, and still less does any one deny that during past years they have risen in the towns, while at the same time they have fallen in the country. But there is this great distinction between them which I must press upon the House. The expenditure in rural districts is chiefly expenditure from which little or no return of a beneficial character comes to the ratepayers themselves. In urban districts, on the other hand, the chief part of the expenditure to which the increase of rates is due is expenditure from which there is a return which is direct and admittedly beneficial to the ratepayers of the particular locality. Where that is not so, where there are no such returns, hon. Gentlemen will find that there is by no means the same disparity between the rates in town and country, and in some instances, indeed, if there is any disparity at all it is in favour of the town. I will give the House an instance of what I mean. One of the principal rates which is common to both urban and rural districts, and from which but few benefits accrue to the ratepayers, is the rate levied for the expenses of boards of guardians. How do urban and rural districts compare in regard to this particular rate? I am not referring to the poor rate as a whole, but to the expenses of the guardians alone. In rural parishes in 1897–98 the average of this rate was 12.7d., while in parishes in urban districts it was ll.9d.; so that this most important rate was higher in rural than in urban districts. It is the same in non-county boroughs, where the rate was 12d. as against 12.7d. in the rural districts.

* MR. JONATHAN SAMUEL (Stockton)

rose to make a statement.

MR. CHAPLIN

I will not give way. I have been in the House a good many more years than the hon. Gentleman, and really these perpetual interruptions are quite a new feature in the proceedings of the House; they used seldom if ever to occur.

* MR. JONATHAN SAMUEL

I have not interrupted before.

MR. CHAPLIN

I am not saying my-thing in the nature of a retort to the hon. Gentleman, but rather to vindicate myself from any charge of want of courtesy. As I was pointing out, this most important rate was higher in the rural than in the urban districts. If I may turn for a moment to urban rates apart from rates in London, the most important rate of all is the general district rate. This averages about 2s. 11d., and undoubtedly is a very high rate. But it is very largely spent on purposes which confer direct benefits upon, and give a direct return to the ratepayers in the particular locality. For instance, it is spent on such purposes as paving, cleaning, lighting, baths, washhouses, the maintenance of sewers, of parks, recreation grounds, tramways, and matters of that kind. In regard to all these things which I have quoted, surely it will not be contended by anyone that the Government ought to come forward and contribute in matters like these, which are purely of a local character. But that is not all. It is the fact at present, whatever it may have been in the past—and of late years there has been some change in this respect—the burden of rates in rural districts is increasing at this moment in proportion more rapidly than the rates in the urban districts. I learn this from a calculation which has been made for me, and it shows these results. I want to show the House the rate in London county boroughs and other urban districts and in rural districts, and then show how much those rates have increased in the last five years. In London the rate was 4s. 9.3d., the increase during the five years being 3.8d., showing an increase of 7.1 per cent. In the county boroughs the average rates amounted to 4s. 11d., the increase was 5.5d., or a percentage of 10.2 increase. In other boroughs the rate was 4s. 10.7d., the increase was 5.ld., showing an increase percentage of 9.5. In other urban districts it was 4s. 4.3d. The increase was 5.8d., the percentage of increase being. 12.4. In the rural districts the average rates were 2s. 3.7d., the increase was 5.ld., and the percentage of increase was 22.5 per cent. Therefore these statements made this afternoon in regard to the constant and perpetual increase in the rates in towns which are held to be so much greater than in the country are susceptible of considerable modification. I pass from that point, and with the permission of the House I will say a few words upon the remedy suggested by the hon. Member. I believe every speaker on the opposite side of the House has repudiated what they have been pleased to term the remedy known as doles. At the same time they are most desirous of relieving the burden of taxation in the towns. I hope I shall not be misunderstood in regard to what I have said about taxation in towns. I wish to guard myself against that, for I do not wish it to be supposed that I hold the opinion that there is no claim for relief whatever in the towns. If that was the opinion of Her Majesty's Government they would not have appointed this Commission. I shall await with the greatest interest the Report of this Commission, and I think it is extremely probable that when that Report is presented the claims of the towns will be made good; and that being so hon. Gentlemen may rely upon it that, sooner or later, the matter will have to be dealt with. Hon. Gentlemen opposite, although they repudiate doles and assistance from the Imperial Treasury, are most desirous that there should be considerable relief from taxation in towns. The main proposition, so far as I understand it, is that this object is to be accomplished by a new system of taxation which is to be imposed on what are called ground values. I see at once, with regard to that proposition, quite apart from its merits or demerits, one difficulty in particular connected with this proposal which it seems to me it is almost impossible to get over. To give effect to this proposition there must be at once, or at all events before it is attempted, a complete valuation of all the land in the country apart from the buildings upon it. This is an absolute necessity without which it cannot be done. The hon. Member who introduced this motion was good enough to say that evidence has been given before the Commission which showed that there was no difficulty at all in doing this, and that it would not be a very great cost. It is quite possible that one or two witnesses may have given very exceptional evidence with regard to this question, but the evidence of all the witnesses on this subject has not yet been published, and I am not yet able to say what it is. I have, however, a very shrewd suspicion that when the whole of the evidence is published, and we have no longer to rely only upon the evidence of the experts of the London County Council and of a gentleman who adopts precisely the same view, I shall be very much surprised if we do not find that the great mass of the evidence is overwhelmingly opposed to the views which the hon. Member has submitted to us just now. Has the hon. Member ever considered the magnitude of this operation? What is the rateable value of the properties which are concerned, and which have to be valued? From the latest figures I can find I learn that the statistics given with regard to urban districts, including London and the boroughs, show a rateable value of over £145,000,000 sterling. If we take off £25,000,000 sterling for agricultural land within urban districts, that leaves £120,000,000. If we capitalise that £120,000,000 at twenty years purchase, the value of the property which is to be dealt with under the proposal of the hon. Member would amount to something between £2,000,000,000 and £3,000,000,000 worth of property. What would be the cost of carefully valuing this enormous property? The cost of valuation varies no doubt very greatly, and if we waited until we heard the whole of the evidence given or about to be given before the Royal Commission, I daresay we might hear a good deal more upon that subject. In the absence of this evidence, I consulted, not long ago, a well-known valuer connected with a firm of very high standing in London upon this particular question, and I asked what would be the charge made for valuations of this kind. I was told that in the case of leading valuers business was seldom done under a loss charge than 1 per cent., and that charge was by no means unusual. But taking it at 50 per cent. less than that charge, the cost of making this valuation, which the hon. Gentleman thinks is exceedingly simple, would be over £10,000,000 sterling. Who is going to pay that sum? Are you going to get it out of the rates which it is your object to relieve? or are you going to throw that charge upon the owner? But quite apart from the question of cost altogether, the difficulty of separating the land from the buildings in regard to valuation would be enormous, because we have no experience and no data whatever to go upon. There has been some evidence given upon that subject which was remarkable, although it was not quoted by my hon. friend behind me. That evidence was given by Lord Farrer, who was certainly not an unfriendly witness to the views being put forward to-night. What did Lord Farrer say? He said— Valuers will no doubt put a valuation on anything whether they know anything about it or not; but the question is what real basis they have for their valuation. The only ultimate basis of a valuer's knowledge is his experience of actual market values; and as the land and the houses upon it are sold and let together, no such. basis can exist for a separate value of the two things. A valuer's judgment is limited by his experience, and, where there is no experience his judgment is untrustworthy." I am disposed to concur in the main with Lord Farrer, and to believe that the scheme which has been proposed is impracticable, and if practicable the cost would be absolutely ruinous. But supposing it turned out to be a workable scheme, why is this special tax to be imposed upon land? What is the justification? The justification given by the hon. Member for Carnarvon was this. He said this was the unearned increment with which the landlord has had nothing; whatever to do, and that it is something to which the owner has no right at all. I submit to the hon. Member that land is not the only rateable property the value of which is affected by circumstances entirely beyond the control or influence of the owner, and the value of which is enhanced by circumstances to which the owner did not in any way contribute. The value of almost everything is affected in this way, and why is land to be the only thing taken in consequence of this? Take railway shares, Consols, furniture, pictures, works of art, jewellery, and almost everything you like to name; all these things are subjects of unearned increments at times. Why is land alone to be taxed and everything else allowed to go free? The argument is, because the owner has done nothing to contribute to that enhanced value; but this argument applies to hundreds of other things in addition to land, and no reason has been given to-night by any one of the speakers who have taken part in this debate why land should be saddled with this new and additional burden for a particular purpose which is of interest to all parties in the community, and from which all other kinds of property equally subject to the same increase of value are to be allowed to go free. There may be no answer to this question —there may be many answers, for anything I know, which can be adduced in support of this proposition—but what I do say is that no answer whatever has been given to these objections to-night. I cannot say that I think either the hon. Gentleman who moved or the hon. Member who seconded his proposal have thrown much light on this problem which is before us, or have contributed much towards its solution by the speeches which they have made to-night. If I may say so again, I think they would have been wiser if they had reserved their proposition until the House of Commons and the country had had the full advantage of hearing the views and opinions of that great and important Commission which is now sitting on the question. I think it would be a most unusual and an almost unheard of proceeding in this House to consent to a resolution which calls on the Government to take immediate steps to promote legislation upon the very subject which they have referred to a Commission before they have had an opportunity of hearing their views. For these reasons I shall most certainly oppose the motion of the hon. Member.

SIR WALTER FOSTER (Derbyshire, Ilkeston)

I have listened to the speech of the right hon. Gentleman with a sense of growing disappointment. At the commencement of that speech he did not do even bare justice to the mover and seconder of the resolution. The mover of the resolution delivered a speech which was admirable in its tone, and which did not deserve the somewhat unmeasured strictures which the right hon. Gentleman has made upon it. I think for a senior Member of the House, occupying the position of the right hon. Gentleman, he has shown in these strictures a want of consideration for a younger Member of the House which is unworthy of him and his position. The right hon. Gentleman throughout his speech, at the commencement, and also at the end, adopted a method of defence which is hardly worthy of the Government. He complained that the mover and seconder of the resolution have thrown no light upon this great question of the taxation of ground values. I should like to know what light the right hon. Gentleman himself has thrown upon taxation at all. A more jejune or barren speech I have seldom heard. The right hon. Gentleman has indulged in a form of defence which is not uncommon in Cabinet Ministers on the opposite side of the House, and that is the entrenchment of a Royal Commission. Fighting under cover of that Commission, the right hon. Gentleman has been very valiant, but not very effective. In arguing and considering this question of the incidence of taxation the right hon. Gentleman referred, in his defence of the Agricultural Rating Act, to the fact that that measure was the result of the Report of another Royal Commission. I wish to point out that that was the result of an Interim Report, and he was so anxious to adopt that Interim Report and to bring about legislation in connection, with it that he did not wait for the completion of the work of that Commission, but he at once introduced into the House a measure by which he might give some benefit, I will not say to the landlords, but to the agricultural interest. He admits that all the time, and yet he has defended himself behind a Commission which has also issued an Interim Report which suggests that one of the best things to be done with reference to rating is that there should be one valuation authority for each county, and one valuation list to form the basis of all rates and taxes. If the right hon. Gentleman were equally in earnest in favour of the town ratepayer as he is about the agricultural interest, why has he not introduced a Bill to carry out the Interim Report of the Royal Commission? That would have given a beginning for reform, and would have shown a desire on the part of the right hon. Gentleman and the Government to meet the difficulties, dangers, and troubles which now afflict the community in regard to the rating of towns. This question of rating and assessment is at the bottom of all reform, and if the right hon. Gentleman had brought in a measure to carry out the interim recommendations of the Royal Commission he would have shown a sincerity of purpose which his present action does not justify us in attributing to him. The right hon. Gentleman told us that some ratepayers had a direct return for a rate of 2s. l1d. in the £ because that rate was used for the purpose of adding to the general amenities of the locality in giving better roads, drainage, lighting, and other conveniences for the public who dwell in the locality. But every one of these things given to the occupier adds to the capital value of the land where the money is being spent; and while that expenditure contributes a little to the benefit of the occupier, it brings untold wealth to the pockets of the owner of the site value. So in that case his argument is not a sound one, but recoils upon him, and tells in our favour.

MR. CHAPLIN

I adduced that argument merely to show the difference between the state of things in the country and the towns.

SIR WALTER FOSTER

The argument that this money is a direct advantage to the occupier is an equally fair argument with reference to the increased value which is given to the land. This expenditure goes to increase the wealth of the man who "toils not, neither does he spin," whose land acquires increased value, not by the expenditure of his own money—for he does not contribute a penny of it—but by the expenditure which other people make by improving the surroundings of the land which he owns. With reference to another point, the increased percentage of the rates in town and country, the right hon. Gentleman arrives at the extraordinary conclusion that, because there was a general increase of about 5d. all round, the ratepayer in the country who is paying 2s. 3d. in the £1 in rates, and who suffers about 22 per cent. of an increase, is a much greater object of commiseration than the unfortunate ratepayers in the town, who are paying 6s. 6d., and have had 5d. put on, which is a less percentage of increase. He gave this as an illustration of the increased percentage of rates in the country as compared with the towns, but that is a kind of argument which I do not understand.

MR. CHAPLIN

I said in reply to the statement made that the rates wore increasing in proportion in the towns much faster than they were in the country.

SIR WALTER FOSTER

I am very sorry that the right hon. Gentleman is becoming an exponent of the new manners of which he has just complained. He has taken the opportunity of appearing in the character which he is unwilling to allow to others. I object to being interrupted by the right hon. Gentleman, who will not allow others to interrupt him. The whole question is so largo that I think these recriminations from one side of the House to the other, and especially the tone which the right hon. Gentleman adopted in criticising my hon. friend behind me who moved this resolution, are scarcely worthy of the occasion. This is really a question of great and growing importance, and when we consider the figures we shall see how large a question it is. We are raising in this country for local purposes about £37,500,000 a year by rating in. That total is an increase of about 130 per cent. upon what it was thirty years ago. Under these circumstances we can easily understand why, while the population has only increased some 26 per cent. and the rates have gone up 130 per cent., there should be a general groan from the ratepayers all over the country. In addition to that we have a debt at the present time of some £262,000,000 which the local authorities of this country have raised to carry out their works, and when that is considered one can understand how great and severe the burden of the rates is everywhere. Every Member of this House knows it personally and feels it, but it is felt to a much more painful extent by persons not so well off in the social scale. The pressure comes not only upon the working classes, but with excessive cruelty upon the small trader and shopkeeper. They have been crushed out of their callings in some cases by the burden of these heavy rates. It is in the town districts especially that we on this side of the House feel that the case is one which demands early consideration, and has acquired an urgency which demands such a motion as my hon. friend has moved. In these cases it is a question of the increased population bringing about these results. Wherever the population moves the whole tendency is in the direction of crowding into the towns, and wherever the population grows in this way, in very self defence, the community is obliged to expend money freely, and even lavishly, in order to keep up the conditions of life which are necessary for a healthy population congregated together in a limited area. And so we have all this expenditure carried out for the benefit of the population, and the population not only finds the money out of its own. rates, but at the same time it contributes to increase the value of the land on which it dwells. This burden falling in this way upon these localities is one which cannot be borne much longer, without legislation. The right hon. Gentleman should know, and I think he does know, that upon this question of finding some source of revenue to meet this growing burden of the rates, nearly; all the great municipalities, or at least a large number of them, have expressed their views. No fewer than 300 local authorities have passed resolutions in favour of the taxation of ground values, and I think that expression of opinion alone is sufficient to justify my hon. friend behind me in bringing forward this resolution. When you have 300 local authorities in this country expressing such an opinion, surely it is right and just that we should discuss some reform of rating in the House of Commons. If the right hon. Gentleman had looked at the Report of the Committee on Petitions which reported last year, he would have seen a very long list of petitions from some of the most important municipalities of the country. No less than 175 petitions were presented last session to this House in favour of the rating of ground values for relieving the burden of the rates in these urban districts. Those petitions express a growing demand outside for some reform in the direction which I have indicated. The right hon. Gentleman and some of his supporters on the opposite side of the House have pointed to subventions as a means of lessening the injustice of rating. We object to these subventions on several grounds, but more particularly because they are not the most economical way of bringing about a reform in the administration. The hon. and learned Member for Stroud said just now that we could give no examples of extravagance caused by these subventions. If the hon. Member had ever sat on a Watch Committee and listened to a debate upon the expenditure he would often have heard the remark made, "That will cost £100, but we shall get half of it back from the Government." That kind of argument is continually brought up, and it is an argument which tends not to economical administration, but rather to extravagance. Such a state of things lessens the regard which the local authority has for the expenditure of the ratepayers' money, and in doing that it does harm to the general administration of the district. I think these subventions have gone far enough already, and I hope they will not be extended. With reference to the position we are working for, I shall say a few words about it before I sit down. There are certain injustices connected with our rating system which need to be; remedied. We see, for instance, that in a town like Huddersfield, or in any other-town where a great part of the land is owned by one owner, under the existing law that owner may use or not use that land as he likes, and except in certain cases the local authorities have no power to force him to use the land for the public benefit. He may refuse to allow his land to be used for building purposes, and he may keep it vacant for a considerable time until he gets a higher price for it, and all the time the community is being injured and retarded as regards enterprise and extension. The community has no power to force the owner to sell, and he may keep the land vacant to the detriment of the surrounding people, while the surrounding people are adding to the value of his land. I remember hearing from a personal friend of mine an instance in which an estate was increased in value in this particular way. About twenty-three years ago a station was built in the metropolis. The land was bought from a relative of my friend, and after the station was built a small portion of land was left over worth a few hundred pounds. A few weeks after the completion of the station a would-be-purchaser went to the owner and said he would like to buy the plot of land, naming a certain sum. "Oh, no," said the owner, "I want £30,000 for that plot." This was looked upon as an absurdly excessive price, but the owner kept the land vacant for a number of years in the midst of a very busy and active population. He paid no rates on it, though it is true that he received no rent, though even if he had, the rent would have been a comparatively small sum. The land gradually increased in value as a result of the industry and enterprise of the people living around, and in the course of time the owner sold that plot for £30,000, having done nothing to increase its value. All that time he had injured the community by keeping it out of the market and by not letting it be used for useful purposes. That dog-in-the-manger policy of not using property in the midst of a populous community is a wrong policy, and we ought to be able to prevent it by some method of taxation, and to see that the in creased value of the land bears its share of local rates for the benefit of the community. If vacant land were rated on its capital value, it would not be kept long unused. We have in this case a splendid illustration of the manner in which land is increased by the industry and enterprise of the community, and it is this injustice which makes ratepayers in the great towns cry out against the system, The Corporation of Birmingham, over their improvement scheme, spent some two millions in acquiring a large property, which they let out, with the wisdom of the serpent if you like, on seventy-five years' leases, and when those leases fall in Birmingham will become one of the richest corporations in the country. But every landowner in Birmingham will also be benefited, in conjunction with the corporation, by the enrichment of the city by an investment to which he has not contributed a penny. That system is unjust and iniquitous as regards the people, because the present generation will receive no benefit from it, and it shows how the system can be used by an enterprising corporation for the benefit of future generations. With reference to the increase in the value of land in towns brought about by the expenditure of the ratepayers' money, that increased value ought to bear its share of the local rates, and I think myself, while there may be difficulty in applying that principle generally by taxing site values, I think at all events a beginning might be made by taxing heavily land which is not used. This proposal was made some fifteen years ago by a Royal Commission—one of the most important Commissions that ever sat—the Royal Commission on the Housing of the Working Classes. It recommended that a 4 per cent. tax should be placed upon all unoccupied land, and yet for all these years we have done nothing in the direction of bringing about legislation for this beneficent purpose, which would relieve the struggling ratepayers of the large towns and take away that sense of rankling injustice which the present system perpetuates in the minds of people. Ratepayers in towns never will be satisfied until some Government grapples with this question and endeavours to find a new source of revenue from unoccupied land and land values which will enable communities to undertake those great public works which are necessary for the health of the locality and the progress of the nation.

MR. GRANT LAWSON (Yorkshire, N. R., Thirsk)

Until I heard the speeches in favour of this resolution I was inclined to agree with it with the exception of the one word "forthwith." I objected to that word, because it suggests that the wise thing to do is to legislate first and hear evidence afterwards, and not wait for the Report of the Royal Commission. You have asked several eminent gentlemen to sit on that Commission, and it is only common sense and courtesy to wait until it has given its decision. They have sat for many days and pondered many things, and surely we might now wait until they have decided the questions submitted to them. I should have supported the motion with the exception of the word "forthwith" if it had not been for the speeches made in its favour. In every Parliament that has sat for the last thirty years a resolution somewhat in these terms has been carried, and it has always been admitted that a grievance does exist. Hon. Gentlemen opposite propose to remedy this grievance by putting another tax on ground values which are already rated. When you rate a house you do not rate it as a castle in the air, but you rate it as standing on a certain spot, and a great part of its value depends upon where it stands. A house in Belgrave Square and a house in Bethnal Green, each costing the same amount of money to build, would be of very different values indeed, because the site is included in the value at which a house is rated. The hon. Member for Carnarvon referred to the Agricultural Rating Act. Hon. Members will remember the sleepless untiring interest the hon. Gentleman took in that Bill as it wended its slow way through the House. The hon. Member brought forward once again the argument that all the money given under that Act was given to the landlords, but the effect of that argument in this case is that if you relieve the burden you relieve the landlord, and surely the clients of the hon. Member are the occupiers, who are numerous, and whose votes are valuable. The hon. Member also referred to the increase of the debts of localities. That is an extraordinary argument in my mind. In the first place the loans raised have in many eases been for the purposes of municipal trading, and we have been assured only recently that municipal trading has been so successful that there is no need to appoint a Parliamentary Committee to inquire into it. Again, these loans are only partly raised at the expense of the present occupiers, and some part of them must fall on the occupiers of the future. A great deal has been said during this debate to endeavour to prove that the farming interest has a great advantage over every other interest in the matter of rating. I should like to give a concrete case to illustrate the actual position. Take the case of a farmer owning and occupying house, land, and premises of the rateable value of £300 per annum. He pays an average rate of 2s. 3d., and in the old days paid £33 15s. a year, which the Agricultural Rating Act has now brought down to £18 11s. 3d. But what happens to a tradesman in the same district living in a house valued at £30, which would be about the value of the farmer's house? He pays only £3 7s. 6d. That is to say, that in the old days the unfortunate farmer had to pay eleven times as much, and now pays six times as much, as a tradesman occupying a house of the same value in the same locality, but even if the tradesman lived in a town and paid the average urban rate, which is not, as has been stated, 6s. 6d., but 4s., he would only pay £6, as against £18 11s. 3d. paid by the former. Then it must be remembered that the farmer is rated on three times his income, whereas the tradesman only pays on the actual amount of his income. The farmers are my clients and constituents, and it is in their interest that I have intervened in this debate.

* MR. JONATHAN SAMUEL

When I interjected a remark during the speech of the President of the Local Government Board I had no intention whatever of being offensive to the right hon. Gentleman. I knew that it was customary for Members on both sides to interject remarks, and the reason I interjected a remark was this. The right hon. Gentleman was giving a comparison between the rates in rural districts and the rates in urban districts, and he was pointing out that for poor law administration rural rates were higher than urban rates. What I wished to state was that this was entirely due to the assessment or valuation being lower in rural districts than in urban districts. Let me give two striking instances from the evidence which was given before the present Royal Commission. In the case of East Sussex it was pointed out that in fourteen poor law unions the rateable value was £1,617,000, and that that for county purposes was increased to £1,758,000, or an increase of 8 per cent. In Norfolk the case is stronger, the increase being 15 per cent., and the difference ranged in some unions from 10 to 34 per cent. It is, therefore, impossible for anyone to draw any true comparison between rural and urban rating. There appears a general impression that it is because municipalities trade in gas, water, and tramways that the rates amount to 6s. 6d. That is an entire mistake. When municipalities have waterworks or gasworks they appoint a committee to manage them. That management is entirely separate from any other department in the Corporation, and the accounts are also kept separate. If there is a profit it is handed over to the borough fund for the purposes of reduction of the rates, and the average rate is arrived at after this contribution. I agree with the last speaker that the complaint made with reference to the indebtedness of the municipalities does not hold water, for the simple reason that the bulk of that indebtedness is in connection with gas, water, and other similar concerns. Of a total indebtedness of 120,000,000, over 80,000,000 is in connection with remunerative works, and I, therefore, do not hold that this is a very strong argument in favour of relief being given. What I do say is that the large towns have a responsibility placed upon them which is not placed upon rural districts, and it is an injustice that a man living in a town should have to pay an average rate of 6s. 6d. in the £1 on a high assessment, whereas a man living in the country only pays 2s. 3d. on a low one. The hon. Member for Stroud said that subventions did not lead to extravagance. I entirely disagree with that view. I have had experience as a member of a highway committee in a town where we levied a rate of 14d. for the maintenance of the highways. I have then gone to a county council meeting, where found that the whole cost of the maintenance of the main roads in the county came from grants which were spent in a most extravagant manner. These subventions are levied in a very unfair manner. According to a recent return, there was no less a sum than £9,175,000 intercepted last year and handed over to the Local Taxation Fund. If that amount is analysed it will be found that the bulk of it comes from our large towns and urban districts in the shape of beer licences, spirit licences, pawnbrokers' licences, and the like, and it is handed over to the county council to spend. The same applies to the death duties. If there is going to be a tax levied for local purposes on the personal property of the men who have made wealth in our large towns, then, in my opinion, it should be handed over to the localities where the wealth was made. It is unfair that the bulk of the money should be handed over to the county councils. If this resolution proposed to increase these subventions or doles, I should vote against it, because I believe that the system is a most extravagant one, and that we have no right to tax people and extravagantly spend the money without that responsibility which is essential to economy. The resolution does not propose that. It proposes to widen the means by which we collect our revenue for local purposes, and it is because I believe that it will result in increased revenues to our large towns that I heartily support it.

SIR ALBERT ROLLIT (Islington, S.)

I desire to say a few words on this matter, because the large towns are greatly interested in it. Only the other (lay the Association of Municipal Corporations passed a resolution affirming the principle of the resolution before the House. It is difficult to deny the force of that resolution. It appears to me to be a truism, because it asserts that there is an increasing burden on ratepayers in towns, and that is beyond question. It also asserts that undoubted grievances ought to be redressed. Of course they ought. The only question that appears to arise is as to the use of the word "forthwith" in the resolution. The fact has, however, been overlooked that two Committees have already reported on this subject, one of them, presided over by that able economist the right hon. Gentleman the Member for St. George's, Hanover Square, recommending the direct rating of ground landlords, and it even went so far as to suggest interference with existing contract between landlords and tenants. Let me ask first whether it is a fact that the rating burden in our large towns is increasing. The smaller tradesmen undoubtedly have to bear a very considerable burden. I am not going to question for one moment the advantage of increasing the debt and levying rates for public works which are remunerative and reproductive. It seems to me that that is not a matter between town and country. My hon. friend the Member for Stroud said that ability to pay was the true criterion of taxation; but that is too wide. It is a question of the amount of the services rendered, and how far these services are beneficial. I am not, however, going to enlarge on that subject. I voted against the Agricultural Rating Act, which is now the law of the land. Having made my protest I say no more on the matter. At the same time, some feeling still exists, and the strongest part of that feeling is as to the differential character of the principle of rating between urban and rural districts; that the one is a higher rating than the other. No doubt if you take the burden off one shoulder you put it on the other; and, so far as you relieve one portion of the community of a burden, the other portion must bear an increased burden, and the urban ratepayers think that is unjust. It is not only the question of rating that is a grievance; there are exemptions from rating. I think the ratepayers in the towns have a great grievance against the Government' because Government property is exempt. Although owing to long-continued efforts in the House that grievance has been somewhat abated, yet the Government put on their own valuation. Now, how would the principle act if every man was made his own assessor of the value of his own property for taxation purposes? As to grants-in-aid, I would say they are necessary, and that we could not surrender them. On the other hand, there is in them a tendency to a want of economy in administration. Of course, I acknowledge that the House did something to remedy injustice when they passed the Equalization of Rates Act for London. That Act recognised the principle that the whole community should share in bearing the burdens, and I would hope that that principle might be extended. I come to the question of taxation of ground rents, which has been a substantial item in the discussion this afternoon. Some striking illustrations were given of this great grievance. I know Huddersfield well, where one landlord of the whole borough has drawn immense revenues for a very long period of time without contributing in the slightest degree to the municipal development of that community. I admit at once that the taxation of ground rents is a complex question, and practically is not without great difficulty in its application. We have heard from both sides of the House several theories as to the ultimate incidence of the taxation of ground values, but I do not accept any of these positive theories. I think the exact incidence is determined by economic friction, and how far it is possible, having regard to the demand for houses, the length of the lease, and other circumstances, the burden can be shifted. For my part I think no argument can be based on any absolute statement as to the incidence in any particular case. I point out that whatever the burden may be there are certain cases in which the ground landlord derives a positive advantage from the contributions of his tenants to the rates. Where a loan is obtained for a great public improvement, and that loan is repaid out of the rates, the tenant never receives the benefit of his contribution, and the reversion of the great benefit goes to the landlord, who never makes any contribution to the rates whatever. That is one of the reasons which justifies to my mind leasehold enfranchisement. In Scotland and Ireland the division of the rates between occupiers and owners is an expedient for meeting this question, but it raises the point of incidence, and I think it is answered in the way I have ventured to suggest. It seems to me to be a very fair deduction from this discussion, what

ever the result may be, that there is a very strong feeling that everyone living in a developing community, living upon its resources and deriving benefit and wealth from it, ought to make a direct contribution to the taxation which makes these things possible. When that is not the case, you have an unwholesome and undesirable feeling in the public mind that benefits are derived without taxation. In this way you alienate in a very large degree the relations between landlord and tenant, and you may do irreparable injury not only to the tenant, but to the community, and oven to the landlords themselves. I have a book here issued by the Conservative party on the eve of the General Election of 1894, and published at a central Conservative office in London. I do not intend to road the book, but it commends the Report of the right hon. the First Lord of the Admiralty's Committee and its recommendation. It suggests, in the interest of the landlord and of the community, that the ground landlords should directly contribute to the rates. On the face of this recommendation, and as an authoritative account of the intention of the Conservative party, I gave certain promises to my constituents, which I have not been able to fulfil; and the responsibility, whatever it may be, of my position, rests between the Government Report of the right hon. Gentleman the First Lord of the Admiralty and his Committee and this declaration of the party intentions.

Question put.

The House divided:—Ayes, 98; Noes, 140. (Division List No. 107.)

AYES.
Abraham, William (Cork, N.E.)	Curran, Thomas (Sligo, S.)	Harwood, George
Abraham, William (Rhondda)	Dalziel, James Henry	Hayne, Rt. Hn. Charles Seale-
Allan, William (Gateshead)	Dillon, John	Hedderwick, Thos, Chas. H.
Asquith, Rt. Hon. Herbert H.	Doogan, P. C.	Holland, William Henry
Austin, M. (Limerick, W.)	Douglas, Charles M. (Lanark)	Humphreys-Owen, Arthur C
Bainbridge, Emerson	Duckworth, James	Hutton, Alfred E. (Morley)
Bayley, Thomas (Derbyshire)	Dunn, Sir William	Jacoby, James Alfred
Billson, Alfred	Fenwick, Charles	Johnson-Ferguson, Jabez Edw.
Bryce, Rt. Hon. James	Ferguson, R. C. Munro (Leith)	Jones, Wm. (Carnarvonshire)
Burt, Thomas	Fitzmaurice, Lord Edmund	Kay-Shuttleworth, Rt. Hn. Sir U
Buxton, Sydney Charles	Foster, Sir Walter (Derby Co.)	Langley, Batty
Caldwell, James	Fowler, Rt. Hon. Sir Henry	Lawson, Sir W. (Cumberland)
Cameron, Sir Chas. (Glasgow)	Gladstone, Rt. Hn. Herbert. J.	Leese, Sir J. F. (Accrington)
Cameron, Robert (Durham)	Goddard, Daniel Ford	Leng, Sir John
Campbell-Bannerman, Sir H.	Gray, Ernest (West Ham)	Macaleese, Daniel
Colville, John	Grey, Sir Edward (Berwick)	MacNeill, John Gordon Swift
Crombie, John William	Gurdon, Sir Wm. Brampton	M'Arthur, William (Cornwall)
Curran, Thomas B. (Donegal)	Haldane, Richard Burdon	M'Crae, George
M'Dermott, Patrick	Reckitt, Harold James	Tennant, Harold John
M'Kenna, Reginald	Richardson, J. (Durham, S. E.)	Thomas, A. (Glamorgan, E.)
Maddison, Fred.	Roberts, John Bryn (Eifion)	Trevelyan, Charles Philips
Mendl, Sigismund Ferdinand	Roberts, John H. (Denbighs.)	Ure, Alexander
Molloy, Bernard Charles	Rollit, Sir Albert Kaye	Wallace, Robert
Morgan, J. Lloyd (Carmarthen)	Runciman, Walter	Walton, John Lawson (Leeds, S)
Moulton, John Fletcher	Samuel, J. (Stockton-on-Tees)	Walton, Joseph (Barnsley)
Norton, Captain Cecil Wm.	Shaw, Charles Edw. (Stafford)	Weir, James Galloway
O'Connor, T. P. (Liverpool)	Shaw, Thomas (Hawick B.)	Whiteley, George (Stockport)
O'Malley, William	Sinclair, Capt John (Forfarshire)	Wilson, Frederick W. (Norfolk)
Palmer, George Wm. (Reading)	Smith, Samuel (Flint)	Woods, Samuel
Pease, Joseph A. (Northumb.)	Souttar, Robinson	Yoxall, James Henry
Pickersgill, Edward Hare	Stanhope, Hon. Philip J.
Price, Robert John	Steadman, William Charles	TELLERS FOR THE AYES—Mr. Nussey and Mr. Lloyd George.
Priestley, Briggs	Strachey, Edward
Randell, David	Sullivan, Donal (Westmeath)
NOES.
Anson, Sir William Reynell	Goldsworthy, Major-General	Mount, William George
Archdale, Edward Mervyn	Gorst, Rt. Hn. Sir John Eldon	Mowbray, Sir Robert Gray C.
Arnold-Forster, Hugh O.	Goschen, Rt. Hn. G. J. (St. Geor's)	Muntz, Philip A.
Atkinson, Rt. Hon. John	Goschen, George J. (Sussex)	Murray, Rt. Hn. A Graham (Bure)
		Murray, Charles J. (Coventry)
Balfour, Rt. Hon. A. J. (Manch'r)	Hamilton, Rt. Hon. Lord George	Myers, William Henry
Balfour, Rt. Hn. G.W. (Leeds)	Hanbury, Rt. Hon. Robert W.
Banbury, Frederick George	Hare, Thomas Leigh	Nicol, Donald Ninian
Barnes, Frederic Gorell	Haslett, Sir James Horner
Bethell, Commander	Heath, James	Pease, Herbert Pike (Darlingt'n)
Bill, Charles	Hoare, Sir Samuel (Norwich)	Penn, John
Bond, Edward	Houston, R. P.	Phillpotts, Captain Arthur
Bowles, Capt. H. F.(Middlesex)	Howard, Joseph	Pilkington, Sir G. A. (Lancs SW)
Bullard, Sir Harry	Howarth, Sir Henry Hoyle	Platt-Higgins, Frederick
		Plunkett, Rt. Hon. H. Curzon
Carson, Rt. Hon. Edward	Jackson, Rt. Hon. W. Lawies	Pretyman, Ernest George
Cavendish, R. F. (N. Lancs.)	Jebb, Richard Claverhouse	Purvis, Robert
Cavendish, V. C. W (Derbyshire)	Johnston, William (Belfast)	Pym, C. Guy
Cecil, Evelyn (Hertford, East)	Johnstone, Heywood (Sussex)	Remnant, James Farquharson
Cecil, Lord Hugh (Greenwich)		Ridley, Rt. Hon. Sir Matthew W.
Chamberlain, Rt. Hon. J. (Birm)	Kennaway, Rt. Hon. Sir J. H.	Ritchie Rt. Hon Charles T.
Chamberlain, J Austen (Worc'r)	Kenyon, James	Rothschild, Hon. Lionel Walter
Chaplin, Rt. Hon. Henry	Keswick William	Russell, T. W. (Tyrone)
Clare, Octavius Leigh	Kimber, Henry	Ryder, John Herbert Dudley
Coddington, Sir William	King, Sir Henry Seymour
Coghill, Douglas Harry		Sassoon, Sir Edward Albert
Collings, Rt. Hon. Jesse	Laurie, Lieut.-General	Shaw-Stewart, M. H.(Renfrew)
Cook, Fred. Lucas (Lambeth)	Lawrence, Sir E. Durning- (Corn)	Sidebottom, Wm. (Derbysh.)
Corbett, A. Cameron (Glasgow)	Lawrence, Wm. F. (Liverpool)	Simeon, Sir Barrington
Cornwallis, Fiennes Stanley W.	Lawson, John Grant (Yorks)	Skewes-Cox, Thomas
Cox, Irwin Edward Bainbridge	Lea, Sir Thomas (Londonderry)	Smith, Abel H. (Christchurch)
Cross, H. Shepherd (Bolton)	Lecky, Rt. Hon. William E. H.	Smith, James Parker (Lanarks.)
Curzon, Viscount	Leigh-Bennett, Henry Currie	Stanley, Sir Henry M. (Lambeth)
	Llewelyn, Sir Dillwyn- (Swansea)	Stone, Sir Benjamin
Dorington, Sir John Edward	Long, Col. C. W. (Evesham)	Talbot, Rt. Hn. J. G. (Oxf'd Univ.)
Douglas, Rt. Hon. A. Akers-	Long, Rt. Hon. W. (Liverpool)	Thorburn, Sir Walter
Doxford, Sir William Theodore	Lopes, Henry Yarde Buller	Thornton, Percy M.
Dyke, Rt. Hon. Sir Wm. Hart	Lowe, Francis William
	Loyd, Archie Kirkman	Welby, Lt-Col A. C. E. (Taunt'n)
Elliot, Hon. A. Ralph D.	Lucas-Shadwell, William	Welby, Sir Charles G. E. (Notts.
		Wharton, Rt. Hon. John Lloyd
Fellowes, Hon. Ailwyn Edw.	Macartney, W. G. Ellison	Williams, Joseph Powell-(Birm)
Finch, George H.	MacIver, David (Liverploo)	Willoughby de Eresby, Lord
Finlay, Sir Robert Bannatyne	Maclure, Sir John William	Willox, Sir John Archibald
Fisher, William Hayes	M'Killop, James	Wilson-Todd Wm. H. (Yorks.)
Flannery, Sir Fortescue	Martin, Richard Biddulph	Wodehouse, Rt. Hon. E. R. (Bath)
Foster, Sir M. (London Univ.)	Mellor, Col. (Lancashire)	Wylie, Alexander
	Meysey-Thompson, Sir H. M.	Wyndham, George
Galloway, William Johnson	Monckton, Edward Philip	Young, Commander (Berks, E.)
Garfit, William	Monk, Charles James
Gibbs, Hn. A. GH (City of Lond.)	Moore, William (Antrim, N.)	TELLERS FOR THE NOES—Sir William Walrond and Mr. Anstruther.
Giles, Charles Tyrrell	More, R. J. (Shropshire)
Godson, Sir A. Frederick	Morton, A. H. A. (Deptford)

Main Question, as amended, put and agreed to.