LAND VALUES ASSESSMENT AND RATING BILL.

HC Deb 27 March 1903 vol 120 cc470-535

[SECOND READING.]

Order for Second Reading read.

DR. MACNAMARA (Camberwell, N.)

, in moving the Second Reading of the above-named Bill, said the Budgets of the Inst few years had been awaited with much curiosity and speculation, but, whatever surprise those Budgets might have contained, there was always one thing certain about the speeches in which they were introduced by the Chancellor of the Exchequer, and that was that he would appeal for a broadened basis of Imperial taxation in order that he might be furnished with new revenues wherewith to meet the necessary charges on the public purse. Justifiable though that plea was with regard to the question of Imperial taxation, it was applicable with much greater force to the problem of local rating. In 1868 the amount raised by way of Imperial taxation in the United Kingdom was £63,700,000, in 1899–1900 the amount was £109,63000, an increase of 72 per cent. As to local rates in England and Wales, the amount raised in 1868 was £16,500,000, and in 1899–1900 £40,750,000, an increase, not of 72 per cent., but of 150 per cent. Then, to take the case of London, the amount raised by way of local taxation in 1868 was £3,702,000, and in 1899–1900 £11,154,000, an increase not of 72 per cent., or even of 150 per cent., but of 200 per cent. Therefore the plea for redress in the incidence of local rating was much more urgent and powerful than in the case of Imperial taxation, and the problem was bound rapidly to become more acute. The burden of local rating on the working, shopkeeping, lower middle and professional classes was becoming too grievous to be borne, and as the standard of comfort and civilisation was raised, a larger expenditure in local government would have to be contemplated. Apart from that, the Government last year passed a Bill which, in its immediate effect, would increase, by not less than £2,000,000, the aggregate amount of money to be raised by way of local rating.

While not professing to be a scientific economist, he had, after watching this matter with close interest for a considerable number of years, come to the definite conclusion that in great towns, and especially in London, there existed between rate expenditures and land values a direct relationship, viz., that of cause and effect. If the people of a city opened a park, widened a street, built an embankment, laid an electric railway, or constructed a bridge over, or a tunnel under a river, out of the rates, the value of adjoining land was enormously enhanced. To put his case in a sentence, the landowner was the residuary legatee of the great bulk of rate expenditure. Last year, in a debate similar to the present, the hon. and learned Member for the Stretford Division said there was no unearned increment. He had thought a great deal of that statement since, and he would put one case to the acute intellect of the hon. and learned Member. In 1865 a piece of land near the Temple Station, on the foreshore of the Thames, covered with coal sheds and wharfing, changed hands for £8,250. In 1809–70 the London ratepayers built the Embankment at enormous cost. In 1872 the I London School Board desired to secure a piece of land on which to build its central offices. They obtained the very piece of land to which he had referred, and the jury awarded the owners the sum of £26,420. That appeared to him to represent an unearned increment of about £18,000. The ratepayers were first of all hit to build the embankment, and were hit again when they wanted to purchase land for a public office. He could multiply such instances, as also no doubt could every urban Member.

They were confronted in London with two rapidly moving phenomena in connection with this question. In or near the centre of the City leases were falling in, and ground rents had become three, four and five times larger than the entire rental of the whole tenement as they stood before the leases fell in. Mr. Gomme, the Clerk to the London County Council, wrote to him as follows: It is not an unusual thing to find when leases expire in the central districts of London and new building leases are granted, that the ground rents obtained by the owners exceed in amount the total rental value of the business premises originally standing on the sites. The other phenomenon with which they were confronted was that at the present moment, as the result of the general desire to go away from the centre of the city in order to live in the suburban zone, the value of those sites was increasing fabulously at the present time. Take an estate in Wandsworth with which he was familiar. This estate stood near the Common, and contained an area of about twenty acres. About ten years ago it was occupied as a residence, and the whole thing had been assessed at £650. The house had been pulled down and the estate let out in building leases, and what was the result? They had now crowded on that property ground rents to the value of £3,500 per annum. That was an instance which he could multiply indefinitely. As chairman of the School Accommodation Committee for the School Board of London he had had to go into the question of buying sites for board schools. In 1895 they went down to Cavendish Road, Balham, and bought a large piece of land containing 87,120 square feet, at 9d. per square foot. Six years after they wanted another site close to this one, upon which to erect another board school, and they bought 90,660 square feet of land close by the other site, but they had to pay 1s. 6¼d. per square foot. That was they were charged more than double the amount six years later compared with what they had to pay in 1895. He had spent a certain amount of time studying the posters issued by land agents announcing sales of land. He found that the auctioneers in setting forth the advantages of certain sites put into their prospectuses either prospective or actual public improvements which were going to increase the value of the land. He had read with great care the Estates Gazette and the Land Agents' Record and similar journals, and there he found innumerable cases of prospective improvements given as a reason why a larger price should be secured for some particular land. There was a case at Wimbledon where the fact that electric trams were about to be constructed within 100 yards of an estate was given as a reason for improving the value of the land. This meant that the people having spent their money on trams would directly increase the value of that particular estate. In another instance, at Bridgwater, a reason given was that the Borough Council contemplated the formation of a new street which, if carried out, would give an important frontage to this particular property. He knew of a plot of land in Battersea where a factory or warehouse might be built. In the advertisement offering this land for sale it was stated that the land was almost opposite the Battersea Borough Council's Electric Lighting Station, from which power could be economically supplied. Therefore the landowner was the residuary legatee of the great bulk of this expenditure.

They did not propose to touch agricultural land at all; they confined themselves to the land in London, and they said that all urban land must be assessed whether occupied or not under the scheme set out in this Bill. That was compulsory. Having assessed the land the overseers would place the assessment in a separate column; having done that, then they might lay a land rate on the capital value of the land of not more than one penny in the pound. Who was to pay this new rate? They declined to interfere with existing contracts, and they said that for the moment in the case of all existing contracts, the new rate must be paid by the new occupying tenants. After the date of the passing of this Act, in the cases of all new contracts the occupying tenant would make a rent reduction on account of the land rate laid upon him. Hon. Members would recognise that they had based this scheme Upon the Minority Report of the Commission on Local Taxation. The majority of the Commissioners, he was a ware, were against him. The Majority Report was signed by Earl Cawdor, Sir J. T. Hibbert, the hon. Member for the Hallam division of Sheffield, the hon. Member for the Stretford division, Mr. C. N. Dalton, Mr. Harcourt E. Clare, Mr. J. H. Elliott, Mr. E. Orford Smith and the hon. Member for the Ripon Division. There was, however, a very remarkable Minority Report to which he particularly desired to call attention. It was signed in the first place by the Chairman of the Commission, who was a member of the Cabinet, Lord Balfour of Burleigh. It was also signed by Lord Blair Balfour (Lord Justice-General of Scotland), Sir Edward Hamilton (Assistant Secretary to the Treasury), Sir George Murray (Secretary to the Postmaster-General) and Professor Stuart. There was also a most powerful Report by His Honour Judge O'Connor, who also went the whole length of the Minority Report. He wished to give one or two brief extracts from this Minority Report. They said— That site and structure, which are now combined for rating purposes, differ so essentially in character that they ought to be separately valued. That when separated from structure, site is capable of bearing somewhat heavier taxation, and should be made to bear it, subject, however, to strict respect for existing contracts. That the differential treatment should take the form of a special site value rate, payable in part by means of a deduction from rent on the Income Tax method, and that thus a part of the burden should visibly fall on those who have interests superior to those of the occupier. That subject to the conditions which we have specified, the special site value should be charged in respect of unoccupied property and uncovered land. There was another quotation which he would give, because it touched the heart of an appalling social problem which they could not tackle until they had dealt with the land question, and that was the question of the housing of the working classes. It was because he was interested in that question that he had asked the House to pass the Second Reading of this Bill. They said— While the rating of site value thus concerns the public as an administrative reform, it is of special importance in connection with the urgent problem of providing house accommodation for the working-classes. Anything which aggravates the appalling evil of overcrowding does not need to be condemned, and it seems clear to us that the present heavy rates on building do tend to aggravate those evils, and that rating of site values would help to mitigate them, If more of the burden were thrown on sites, the portion left to be borne by building would be diminished, and this would weigh with the builder who is hesitating to embark on the erection of new structures. He could not add another word to such a convincing comment as that, it was said that it was not practicable to assess land separately. The right hon. Gentleman the Member for Sleaford in 1890 said that it would cost between £3,000,000 and £6,000,000 to do what was proposed, and that it would be ruinous, and the hon. Member for Tunbridge Wells said it would be impracticable and costly. What did the Minority Report say? They said— A valuation sufficiently accurate for the purpose and not inferior to the present valuation, could be made without undue labour and expense. Then there was the following remarkable comment by Judge O'Connor— Many witnesses who appeared before the Committee dwelt with emphasis on the alleged or suggested difficulty of estimating the value of land apart from buildings upon it; but no one of the expert witnesses would say that it was impossible, and none would admit that he could not himself do it if it was necessary. But, in fact, the matter is past the stage of mere argument, for not only is the thing being done every day for private purposes, but it is also done on public account in all three countries under the established practice. The entire system of valuation in Ireland under Acts of Parliament is based upon the separation valuation of land and of buildings. In England land has to be separately valued in the country for the purposes of the Agricultural Rates Act. Under numberless private Acts of Parliament the thing has been done for many years in connection with compensation to owners, lessees, and occupiers disturbed in their 'quiet enjoyment' by promoters. In the case of the Tower Bridge Southern Approach Act, 1895, not only was the valuation differentiated, but the principle was recognised and applied. Then it was actually objected that they did not propose to break existing contacts. It was pointed out by the hon. and learned Member for the Stretford Division that this would involve a new burden on the occupying tenant. He remembered with what horror the hon. and learned Member raised his hands at the suggestion last year. He said that they should go direct to the ground landlord, but the hon. and learned Gentleman knew better than he himself did that that was impracticable. The minority of the Commission reported that it was "neither workable nor equitable." It did seem to him that the Minority Report hit upon the best way out of the difficulty of the case. Let him examine the most serious charge brought against them, that they were proposing something very detrimental to the occupying tenant. It was said that they were imposing a new rate on occupying tenants. First of all he would suggest that the rating of unoccupied land would bring such a sum of money into the local purse with such a rebating influence that the occupying tenants would pay with the two rates together no more, and probably less, than the single rate they were paying now. He might be wrong there, but in any case his second answer was that for the great bulk of the I people, for whom he was concerned—I the working classes who felt the burden of rates so grievously before they knew where they were, their tenancies being so short, they would fall under the rent deductions which would come into active operation. And if they did not get relief by the rebating influence of the rating of unoccupied land, before the new burden—if there was a burden, and he challenged that—fell upon them, they would be universally applying the second part of the system which applied to new tenancies.

The next objection was that they were saddling the landowner with this new rate, and that he would take it out of the occupying tenant. It was said that he would increase rents. If that was true, he was lost in wonder at the objection to this proposal from the point of view of the landowner's friends. If that was true, let him take it out if he could. He would take all he could get, no doubt, like most of them. But the rating of unoccupied land would have such an effect upon building operations that he did not think the landowner would be able to get quite as much as he did now, where a large amount of land was held up and kept out of the market in order to enhance its value. He would suggest to hon. Members opposite that they should choose the horse on which they were going to win. They should choose whether it was to be the tenant or the landlord. When they came forward with a number of arguments on behalf of the tenant, and a number of arguments on behalf of the landlord, which were mutually self-destructive, he would respectfully suggest that they should stick to the one or to the other. They could not have it both ways. He was very much amused that morning in reading a memorandum issued by the Property Protection Society. There he found the same conflict of argument. They began by protesting against the bad effect which this Bill would have on property. They said it would enormously depreciate the value of freehold property. That was an understandable argument. Having said that, and laid it down as their first line of defence, they said,— The Bill would seriously diminish the existing check upon extravagant expenditure on the part of local authorities, who, at present, are restrained by the knowledge that the cost of any increase in expenditure comes immediately out of the pockets of the general body of their constituents. He thought that landowners were constituents as well as tenants. There were some that he knew who were constituents three or five times over. They were told, in the next place, by the hon. Member for Tunbridge Wells, and the hon. and learned Member for the Stretford Division, that this was not a question to be dealt with in a piecemeal way—that it was an important and far-reaching question of local taxation. That would apply very admirably to the case of the Agricultural Rating Act, or to the case of the Clerical Tithes Acts. His memory failed him as to whether the hon. Members raised it on those occasions. He rather thought that they did not. Then they were told that this Bill as it stood was not comprehensive enough. Now, that was a singular charge for Conservatives to bring against Radicals. Since he had been in the House he had learned to respect one excellent Conservative doctrine: "Drastic remedies often create greater evils than those you seek to remove." It was a little hard when they were endeavouring to apply such an unexceptionable doctrine that they should be reproved by those from whom they learned it. What was the Government's position in regard to this matter of the taxation of land values? At the General Election of 1895, the Unionist Party undoubtedly looked upon this as a matter calling for legislation. He remembered a debate on a similar subject on the 1st of May, 1900, in this House, when the hon. Member for North Islington made this statement— He had with him a hook issued at the Conservative Party's headquarters on the eve of the General Election. That book commended the Report of the present First Lord of the Admiralty's Committee, and suggested as possibly desirable that the ground landlords should contribute directly to the rates. On the strength of such authority he had made certain promises to his constituents. The Conservative Party at their headquarters were in favour, according to that statement, of the Report of the Committee presided over by the then First Lord of the Admiralty. He wondered if they had any idea of what they were committing themselves to. He would repeat one sentence from the Report of Lord Goschen's Committee of 1870. The Report was a most uncompromising document in favour of the rating of land values. Going through the matter in great detail, the Report gave statistics which were of the most admirable character. They showed how land, year after year, had borne less and less of the entire rating, and how the rating of houses had gone up, and up, to the amount they now bore. That was conspicuously set forth in this Report, which said— It has been conclusively proved that a great proportion of the rates, especially in towns, does not fall upon the owner, but is paid by the occupier. On that the Committee suggested the rating of land values, and their suggestion was entirely homologated by the Conservative headquarters in 1895. In 1896, after the General Election, the Government appointed a Royal Commission. In 1899 the late Mr. E. J. C. Morton, the Member for Devonport, moved an Amendment to the Address on the question of land values, and the right hon. Gentleman the Member for the Sleaford Division, who was in charge of the Government opposition to the Bill, said— For the hon. Member to comedown to the House on an afternoon like this, —he confessed that he forgot what was the matter with the afternoon— and move a Vote of Censure on the Government because they had not put into the Queen's Speech a matter which was being dealt with by a Royal Commission, was one of the wildest propositions he had ever heard. Well, of course, that killed it at once. In 1900 the hon. Member for the Pontefract Division moved a Resolution referring to the taxation of urban land values, and on that occasion it was ill-timed, according to the right hon. Gentleman the Member for Sleaford. It was said to be "academic," and that they must wait once more for the Report of the Royal Commission. They had done what. Lord Goschen told them to do. Lord Goschen told them not to bring forward general Motions, but to bring forward a specific Bill, and that the Government would give it due and proper attention. The hon. Member for Thirsk, as representative of the Local Government Board, spoke in the debate on behalf of the Government on what was practically a similar question last year. He said— If the Bill was as sound in principle as it was unsound, he would still say that it was not a suitable Bill to give a Second Heading to. That was a very good beginning. The hon. Member continued— The question of rating was too important to be dealt with as a plaything in a Private Member's Bill on a Wednesday afternoon. He could assure the hon. Member in all sincerity that this was not a plaything to them. It had been a matter of labour, and of some care and industry. In this connection he might paraphrase a saying of Lord Beaconsfield, and state, "If you want to know anything of a subject, bring in a Bill about it." The hon. Member for Thirsk also stated that— The Bill did not go near touching the crux of the problem of local taxation, which was: How could local burdens be better distributed according to the ability to bear them? If the quest in was to be touched, it ought to be touched by the Government, and the Government would deal with it. That was a year ago. The hon. Member also said:— He was not at liberty to say how the Government would deal with it. He asked this House to decline to wait to see how the Government would deal with it. While the Government procrastinated the ratepayers starved. Was it that we were to take a place behind Continental countries and our own Colonies in this matter? There were seventy-six towns and counties in Germany where already this system was in full vogue. Paris was already engaged on a separate assessment of urban land values. Five out of seven of the Australian Colonies had the system in effect. New Zealand had had a general land tax of one penny in the pound since 1891, and had, since 1896, a Local Option Act permitting municipalities to levy a rate on unimproved land values. Sixty-two localities had already adopted that local option scheme in New Zealand, and Mr. Seddon, the Prime Minister, had lately said on behalf of his Government that they intended to universalise the scheme. He had sent this Bill to a great many municipalities and had received a great many resolutions in its favour. He would read the names of a few of them. The Parliamentary Committee of the London County Council were in favour of the principle of the Bill, and were to have reported upon it last Tuesday, but that business was not reached, and it would probably be discussed next Tuesday. He had, however, not the shadow of a doubt that approval of the Bill would be carried. The Bill had been approved of by the Borough Councils of Camberwell, Hampstead, Battersea, Fulham, Deptford, the Town Council of Bradford, the Parliamentary Committee of the Town Council of Cardiff, the Town Council and Guardians of Blackburn Union, Dewsbury, Darwen Union, the Town Councils of Burnley and Torquay, the Finance Committee of the Town Council of Eastbourne, the Town Councils of Clitheroe, Loughborough, Newport in Monmouthshire, Northampton, Newton, Longton, the Borough of Bootle, and Hastings. He had had one letter out of all which was against the scheme and that came from the Metropolitan Borough of Stoke Newington, but why they were against it they did not say. He began his investigations on this subject by studying with great care the speeches of one of the most distinguished Members of the House of Commons. When he wanted information on questions of political reform he always went to these. He referred to the right hon. Gentleman the Colonial Secretary, and he based his plea for this modest little scheme upon a deliverance from the lips of the right hon. the Colonial Secretary, who said:— I would ask again why should owners of ground rents escape all contribution to the expenditure of their localities? These ground rents have all grown out of the prosperity and industry of the community. The property of the owners has been improved by local expenditure, and why should not the owners contribute towards the local expenditure of which they ought to bear a part? He could not add a syllable to that deliverance, and with these sentiments on his lips he begged to move that this Bill be now read a second time.

Motion made, and Question proposed, "That the Bill be now read a second time."

Mr. GRIFFITH BOSCAWEN (Kent, Tunbridge)

said that the hon. Member in the course of his very interesting speech had told them that his object was to do something to relieve the burdens of existing ratepayers; and that the rates had gone up something like 200 per cent. With that he was in cordial agreement with the hon. Member. And then the hon. Gentleman went on to say that there had been an enormous in crease in the value of urban sites. He did not deny that there had been an enormous increase in the value of urban sites, but when the hon. Member told the House that that increase was principally due to the expenditure of the rates, he took issue with him. His argument was that it was not the expenditure of the rates which, as a rule, had increased the value of urban sites; it was the advantage of the site and the presence of the community. That was not the same thing, for the expenditure of the rates in many cases, so far from increasing, had diminished values. Very often when a man took a house the first question he asked was "What are the rates?" and if the rates were high he would give less rent for it than if they were low. The hon. Member must be aware that certain public expenditure, while it improved one part of the town, operated in exactly the opposite direction in another part of the town; that there was a worsement as well as a betterment, and if the hon. Member was going to tax owners of property for the expenditure which had improved their property, was he going to compensate those owners whose property had been worsened? If they were going to put an extra rate on simply in consequence of betterment, they ought to differentiate the rate paid by the man whose property was diminished in value and make it smaller.

DR. MACNAMARA

His assessment would be lower.

Mr. GRIFFITH BOSCAWEN

The Assessment would be lower! But were they going to put this additional rate on capital value all over the urban district and then say to owners of certain property that they would get the benefit of a lower Assessment? He had been amused at the example given by the hon. Member of property being improved by expenditure by public bodies. What did he tell them? That the town or borough council spent money on electric tramways, and therefore that the charge which had been incurred by the borough or town council ought to be borne by the property which had been benefited. Well, but he thought that electric tramways and other forms of municipal trade were no charge on the rates. At least, that was what hon. Gentlemen opposite told them: that they were in fact a relief to the rates. What followed? They were going to relieve the rates, but the owner whose property was benefited by the relief of the rates was not to have any advantage of the benefit because he was not a direct payer of the rates. He sympathised entirely with the object of the hon. Member if he could do anything to relieve the burden that pressed so hardly on existing ratepayers, but this Bill, so far from diminishing the burden; on the existing ratepayers, would actually increase it; and so far from its promoters having found a great undeveloped source of wealth, never before tapped, they were simply sinking a shaft into an old mine, and putting fresh burdens on those who, at the present moment, were already overburdened. The Bill put an additional tax on the capital value of the sites to be paid for by the occupier. The hon. Member pointed to the fact that he did not propose to break contracts. Very well, but how was he going to benefit the present occupiers, the present ratepayers? The hon. Member dismissed that matter in an airy way, by saying "We put the tax on the occupier only for the moment." But there were leases for 999 years, and in the course of that very long period the "present rate-payers" were going to bear the burden of this extra rate. In fact, the Bill was precisely the same Bill which was rejected by the House last year, with one or two minor alterations. It got rid of the Schedule of the so-called permanent improvements to which this new site value rate was to be applied, but substantially the Bill was the same as that which was rejected last year. On that occasion the hon. Member for Launceston, who was perhaps the most learned and expert advocate of rating ground values in the House, condemned the proposals in the Bill. After referring to the fact that it was a source of satisfaction to him that a Bill on the subject had been brought in, the hon. and learned Member said— I am bound to say that there is another side to it; and that is that the minority [of the Royal Commission] in their practical recommendations abandon those principles and propose a plan which I think I shall show to the House is not only diametrically opposed to the opinions they accepted but which is one which will do great injustice to existing occupiers. And yet the hon. Member came forward with practically the same proposal of a new rate on the capital value of the site to be paid by the existing ratepayers!

He passed from that point to the argument that the owner of the ground values paid us rates. But what happened when a man let his land on building lease? The builder, knowing what he was likely to get for the house when built, in a particular locality, in the way of rent, agreed with the owner to pay so much ground rent, and he took into consideration that he would have to pay all the rates, including those on the ground rent, and therefore offered the owner of the land so much less. The hon. Member might say that the builder did not anticipate that the rates would be so high; he quite agreed, but the owner did not anticipate that there would be this large increase in value of his property. And who benefited by this increase in value? The lessee entirely, and very often the speculative builder could sell his building lease for a very large sum. No doubt the speculative builder, who was not a philanthropist, made a very shrewd guess of what were likely to be the rates before he fixed the ground rent; and therefore, he contended, so far from this rate being a new source of untaxed rent, it had been paid all along. He would quote a few opinions on that point. Sir Robert Giffen, in his memorandum submitted to the Royal Commission, said— The idea of the separate rating of ground values arises from a misunderstanding of the real incidence of rates. As that burden falls ab initio on the ground landlord, diminishing the sum of capital or income he is able to obtain for his property, there is really no separate ground value to be assessed. Very well, if that were so, where was this new and undeveloped source of wealth which had never yet been tapped? Take, again, an authority who had been recognised—the Secretary of the Cobden Club, Mr. Harold Cox. In his book on "Land Nationalisation," speaking of the very proposals in this Bill, Mr. Cox wrote— These three suggestions—the division of rates between occupier and owner, the taxation of ground values and the rating of vacant sites—are the proposals most frequently made for amending the present system or local taxation. As we have seen, they will none of them bear the lest of criticism; and this was to be expected, for they are all tainted in their origin by the false theory that rates fall upon the occupier, and are all prompted by the paradoxical desire to make the owner pay what he already does pay. What were the undeveloped sources of wealth which the hon. Gentleman thought he was going to tap for the benefit of existing ratepayers? On that point he would refer to the minority Report of the Royal Commission, because somehow or other, it was the practice of hon. Gentlemen opposite, not only on this question, but also on the licensing question, to accept minority Reports as gospel truth, and to argue from them The minority Report winch was signed by Lord Balfour of Burleigh and others did not hold out the prospect of large new sources of wealth. It said that the proposed tax— Would, or at least should, conduce to the removal of some of the widely-spread misconceptions which seemed to prevail, not only in political circles, but among economic authorities and responsible statesmen; for while it would be admitted that there were defects in the urban rating system, and an attempt, to remedy those defects, it would show that this is no large developed source of taxation available for local purposes and still less for national purposes. Therefore, taking the very authority on whose recommendation the Bill was founded, the large source of taxation and of wealth which hon. Gentlemen opposite thought was untaxed, was not going to provide any great relief for the existing taxpayer; and was only recommended in order to dissipate a misconception which appeared to prevail, he would not say with the hon. Gentleman, but at all events with some of his friends.

He wished the hon. Member to consider what would really be the effect of his proposal. When existing leases fell in, what would happen? Then, according to the hon. Gentleman, they would get at the rich and bloated owner of land values; and they would tax the noble Duke or the noble Marquess who owned large blocks of property in London, and who, according to the hon. Gentleman's contention, was deriving a large and increasing income on which he was paying no rates. But the hon. Gentleman should remember that ground rents had now become the subject of investment by the poor hard-working man, by the widow, and by the small Government or City clerk, who all invested in them because of the safe income, and for that reason were content with the very low rate of interest which attached to them. Now it was proposed to impose fresh taxation on these incomes, which would very largely diminish their value; but not only would these people be taxed, but great charitable and educational endowments would also be taxed. Mr. Matthews, one of the witnesses before the Select Committee of the House of Commons on Town Holdings, gave as an instance the case of King Edward's School at Birmingham. He said— Our income from ground rents is £27,000 a year. Supposing the £27,000 is rated (the rates in Birmingham are 6s. 8d. in the £) we should lose £9,000 a year, or one-third of £27,000. That, at twenty-five years purchase, would be £225,000. If our ground rents were to be rated, a portion of the school property equivalent to nearly a quarter of a million would be confiscated at one stroke. That was the sort of proposal which the hon. Gentleman contemplated with equanimity.

What was really wanted was to tax personal property for local purposes. The right hon. Gentleman said, quite frankly, that the Bill merely put a tax on real property; and he was rather sarcastic because hon. Members objected to an isolated proposition. But why they objected to an isolated proposition was that even the Minority Report, on which the Bill was based, only recommended it as part of a comprehensive scheme of rating reform, in which personal property would be brought in. He was quite prepared to admit that one part of the Bill, if given effect to, would find a new source of revenue—namely, the taxation of vacant land; but he was bound to say that that seemed to him to be the most extraordinary proposition he had ever heard. Take a concrete case. There was a certain amount of land in the immediate vicinity of a town paying, for instance, an agricultural rent of £2 an acre, and rates amounting to 10s. Under this Bill, it might be said that part of this land was building land. Many urban districts went very far into the country, and there must be a point at which building land ceased. The Bill would draw an arbitrary line, and say that all within the line was building land. Then the capital value of the land would be fixed at, for instance, £100 an acre, and 1d. in the £1 would have to be paid on that fictitious capital in respect of rates on the site value. In other words, for that land nearly £5 would be paid in rates, or nearly £3 10s. more than the rent received. He ventured to say that that was an unfair and absurd proposition. What was the reason given for it? They were told that it was because bloated landowners would not allow building. He challenged any hon. Member opposite to give one authentic instance where that had occurred. He had heard of many instances, but they had never borne the test of examination; and Sir E. Hamilton, in the Minority Report, distinctly said that there was not a single authentic instance. The Report further said that it was very unlikely to occur, at all events for a long period. Naturally a landowner receiving £2 an acre for his land, would only be too glad to sell it for £500, or £1,000 an acre. If land was held up there was a far better remedy than this unfair tax. The best remedy by far would be to give the local authorities power to buy and build for themselves.

MR. JAMES LOWTHER (Kent, Thanet)

No, no. That is municipal trading.

MR. GRIFFITH BOSCAWEN

said he was certainly in favour of that amount of municipal trading in preference to the plan suggested by hon. Gentlemen opposite. Passing from that to the case of vacant land, did the hon. Gentleman seriously suggest that the rates benefited vacant land? That could not be contended for a moment, and as soon as ever the land was built on and the rates did benefit it, then the owner of the land bore his share of those rates. This was a very important question, and it had been brought forward in a very lucid and temperate speech by the hon. Member. It had been brought forward in order to give some relief to the taxpayer, and to give some case in the matter of overcrowding. He was equally sincere in agreeing with those objects, but he doubted whether they could be accomplished in this manner. To sum up the position, he would only say that this Bill, so far as it went, only added to the burdens of the existing ratepayers on all land values, because they were taxed already; and, so far as vacant land went, it was obviously unfair to put a tax on that, because it was putting a tax on capital unrealised. For these reasons he moved that this Bill be read a second time this day six months.

MR. M. WHITERIDLEY (Stalybridge)

said the hon. Member who moved the Second Reading of this Bill had two objects in view—first, to tap new sources of revenue, and second, to diminish the existing burdens on building enterprise. Every Member of this House could sympathise with those objects, but he thought that they would not be attained by this Bill. How did the hon. Member propose to tap a new source of revenue in relief of the taxpayer, when it was already taxed sufficiently heavily? He proposed to get relief of rates by taxing twice over. If this Bill proposed to alter the whole system of rating, then there might be something to be said for separating land values from other property for the purpose of taxation, but under this Bill the hon. Member proposed to tax land values and leave the old system of land rating untouched. The hon. Member had brought forward some striking cases as to the increased value of land, and those cases might be multiplied in every district in the country; but as the value of the land increased, so the assessment of that land also increased, and the land paid more rates in consequence. That was a matter which the hon. Member had appeared to have for gotten. Then the hon. Member proposed to diminish the existing burdens on building enterprise by taxing unoccupied houses. It did not seem to him that taxing unoccupied houses was likely to encourage building, and he did not see how taxing unoccupied land was going to bring real relief to the problem of housing the poor. The land was an essential portion of the house which was built upon it, and although separate taxes might be placed on the house and the land, they could not be separated one from the other, because bricks and mortar without the land would be worth nothing. This Bill, which was founded on the Minority Report of Lord Balfour of Burleigh's Committee, had a different object altogether to the objects of that Committee. The object of that Committee was to redistribute values, and although they thought no scheme, that they had considered, satisfactory, for political and sentimental reasons, it was better to redistribute values in appearance, if not in reality. If this Bill was founded on Lord Balfour of Burleigh's Report, then it ought to carry out the objects of that Committee, and if those were its objects, he contended that the Bill was premature and totally unnecessary. That Committee examined all the schemes submitted to it, and having examined them and found they were unsatisfactory, said it was better on sentimental grounds to redistribute values, but the Bill which the House rejected last year by a majority of seventy-one was a much better Bill than this, and he sincerely hoped that on this occasion that majority would be largely increased This Bill was inconsistent. It had already been pointed out that it introduced the novel principle of taxing unrealised capital, but the striking inconsistency, as he read the Bill, was that in Clause 5, Sec. b, it broke existing contracts by providing that where a house was divided into two, the rate was to be paid by the person who owned the whole house. It was not right to lay down a general principle unless that principle was carried to its logical conclusion. The general principle laid down by this Bill was that land was a separate source of revenue which did not pay enough rates under the present system of rating. With that principle he totally disagreed, and it was one that he hoped the House would not endorse. On these grounds he hoped the House would accept the Motion of his hon. friend and reject this Bill which, though dealing with excellent objects, would not, he felt sure, attain those objects, but would lay down general principles which would be most injurious, and would establish a lack of faith in landed property.

Amendment proposed— To leave out the word 'now,' and at the end of the Question to add the words 'upon thisdaysixmonths.'"—(Mr. Griffith Boscawen.)

Question proposed, "That the word 'now' stand part of the Question."

MR. SOARES (Devonshire, Barnstaple)

said he was one of those who recognised the difficulties which lay at the bottom of a measure of this kind. To a very considerable extent he agreed with Lord Rosebery when he said that so far he had not seen a Bill to which he could give his whole-hearted approval; but that should not prevent the House endeavouring to find a satisfactory solution to this problem. He believed that if this Bill which was now before the House was read a second time to-day, that after it had gone through the Committee Stage, and certain alterations had been made in it, it would be a Bill which would be acceptable, not only to Lord Rosebery, but to the whole of the Liberal Party. This question had made considerable advance during the past few years. People were beginning to understand it, and what was meant by it, and the Report of the Royal Commission had helped considerably in that direction. It was true that the Report did not lead them to any very drastic conclusions, it did not take them very far in the direction which they wished to go, but it assisted them materially in one respect, and that was with regard to the doctrine of unearned increment. He contended that both the Majority Report and the Minority Report recognised the doctrine of unearned increment, and that was by far the most important part of the case, because that deduction was the foundation on which they applied for public support, and it was undoubtedly the ground on which they based the whole of this proposed legislation. The Majority Report, on page 44, admitted that the value of land might be enhanced by circumstances beyond the influence or control of its owner, and the Minority Report, on page 167, stated. There is, however, another feature about urban site value which appears to us to be almost if not quite peculiar to it, that is the increase of value by the expenditure of the public authority upon improvements. Since the issue of the Report there had been additional testimony in the same direction. Another Daniel had come to judgment in the person of the right hon. Gentleman the Member for Cambridge University. Sir John Gorst, in the March number of the Nineteenth Century. in an article on Social Reform, had stated— But owners of property had more interest financially than any other class in the prosperity of the people; a large share of prosperity means greater power of production, and the additional production finds its way into the landowners' pockets. He quite agreed with all these statements, and held that the right hon. Gentleman had rightly diagnosed the situation. Nevertheless, he said that this state of affairs was undoubtedly wrong, because in the first place no member of the community should be allowed to arrogate to himself profits which are made by another portion of the community, and therefore rightly belonged to them, and in the second place because the attempt to obtain these improper profits leads to grave social evils, such as over-crowding, hindrance to the development of trade, and the extension of towns in unsuitable directions according to the caprices of landowners.

Now in dealing with a new legislative idea, and this course was a new legislative idea, it was important for one moment to consider the principles of the State with regard to the ownership of land. It was unnecessary for him to remind the House that in law no one was an absolute owner of land. The Crown was, of course, the ultimate owner of all land, and the holder of the freest and largest fee-simple in the country was only a tenant in the eyes of the law. Notwithstanding this fact, everyone recognises that land is private property, but it is property of a peculiar description. Land is a monopoly, but a monopoly of such a nature that the user of it is necessary to the existence of everyone of us. Therefore land is quite distinct from other kinds of property, and consequently the State has never hesitated when the rights of the community, and the rights of the landlords, came into conflict to declare that the rights of the landlords should go to the wall. For instance, no man is allowed to use his land in such a way as to permit it to become a nuisance to his neighbours. Then, too, in many towns there are restrictions put upon the right of a man to build what he may think fit on his own property. It is seen in many existing urban building by-laws. Then, too, in the country districts the State has gone so far as to interfere in the contracts between landlords and tenants—as in the Ground Game Act. Now, in all these cases the interests of the community have come first, and the interests of the landlord have come second, and if therefore it could be proved that the rating of site values was in the interests of the community, the case will have gone a long way towards being established.

Then, too, he was not sure that the principle for which they were now contending, namely, that a landlord was not entitled to take the profit of other people's work, had not already been admitted by the State. He thought it had been admitted with regard to agricultural lands, because in agricultural tenancies the landlord was obliged to pay the tenant, in some cases, compensation for improvements which had been made by the tenant. He thought, therefore, that it was this doctrine, mutatis mutandis, which they were now endeavouring to apply to urban land. There was another argument which he would like to place before the House, because he thought the strength of it had not been sufficiently considered. The argument he alluded to was the argument used in the Minority Report, when the signatories of the Minority Report stated that the rating of site values was advisable, both on the ground of sentiment and political expediency. In the course of the debate last year, over and over again it was said that politics and sentiment had nothing to do with this matter, and the hon. Gentleman who had just sat down had again repeated this argument. It is said that this subject is a dry-as-dust subject, and should be settled by mutual arrangement between all parties. He did not agree with that statement. He thought that sentiment might in the future play a very large part indeed in the settlement of this question, and he considered that those gentlemen who had signed the Minority Report were not by any means talking shallow nonsense, but displayed a quite unusual intelligent anticipation of events.

He said that, if he were a Socialist, if he were a man who believed in the single tax, if he were in favour of confiscatory measures, then he would hope that this Bill would not pass into law. And why? Consider for one moment the present condition of matters. Remember that £100,000,000 are annually paid as rent. Remember that the landlords who receive this money, quâ landlords, "toil not, neither do hey spin." Remember that taxation is steadily increasing; remember that much is being put on the shoulders of the working class, more and more by corn duties and sugar duties. Remember, also, that taxation is likely to increase in the future. Remember, ten, that working men are becoming more and more educated, and more and more powerful every day. Consider the lessons of Woolwich [MINISTERIAL cries of "Chertsey"]. Yes, they had succeeded in holding a seat by a reduced majority in what was one of the greatest Conservative strongholds. Nevertheless, this Government would not always be in power, and sooner or later the great town landlords would be arraigned at the bar of the nation. What would they ask for in that day? They would ask for justice, for equity, and appeal for no confiscation. What would be the reply? It was possible in those days they might be reminded of the old equitable maxim, "He who comes to equity must come with clean hands." If when that day came it were proved that these town landlords had ground the faces of the poor; if it were proved that they were even the partial cause of the overcrowding which has proved such a curse to our large towns; if it were proved that they had taken profits not rightly theirs, then, perhaps, they might be dealt with more severely than was absolutely just, and would regret not accepting this mild and moderate measure, which would remove for ever the principal ground of agitation against them.

Having alluded to the general principles, he would like to say a few words with regard to the Bill, and more particularly with regard to some of the difficulties in connection with it. Perhaps one of the greatest difficulties was the question of the alteration of existing contracts. He admitted that the Majority Report, and the Minority Report, and Judge O'Connor had all spoken against the alteration of existing contracts, and he admitted also that this Bill did alter them in certain cases; but it must be remembered that there are precedents for the alteration of existing contracts. You had them in the Irish Land Acts; then in the Education Act of last session you had alterations in the most solemn form of contracts, contract and trust deeds under seal. Then, too, it must be remembered that by the law of this land contracts made in restraint of trade were looked upon as void, and he was not sure that many of these contracts between landlord and tenant were not morally, at all events, contracts in restraint of trade. Personally, he was not against the alteration of existing contracts. So far as he could see there was only one class which would suffer to any appreciable extent, namely, the purchasers of ground-rents. He admitted that this was a large class. He admitted that many people who were poor enough, at all events, to be excused the Income Tax, had invested their money in this security, and he also admitted that their securities were very little improved by public improvements. But he desired to point out one important fact in connection with this matter, namely, that this subject, the question of the taxation of ground values and ground-rents had been under discussion for years, many people had been frightened in regard to it, and consequently the class of purchasers of ground-rents had been reduced in number, hence there was not the same competition, and a great majority of people had purchased ground-rents for a much less amount than they were intrinsically worth. Then there was another difficulty. The difficulty in regard to occupiers. He admitted this difficulty, and admitted it was a flaw in the Bill, but he thought it could be put right in Committee. It would be necessary to divide the occupiers into three classes. The first class were the occupiers on weekly tenancy, and they would not be affected by the contents of this Bill, because in almost every instance their rates were compounded for. The second class were the class which he might describe as on short tenancy, namely, the occupiers on an annual tenancy, and on short leases, leases for five, seven or fourteen years. With regard to this class, he would advise that a similar course should be taken as is taken with regard to the Private Improvement Rate in Section 214 of the Public Health Act, 1875. That clause provides that if a tenant holds at a rack rent, he should be entitled to deduct three-fourths of the Private Improvement Rate from his rent. He would suggest that instead of taking three-fourths that the whole of the Site Value Rate should be deducted. Then the clause went on to say that if the landlord of this tenant held for a term of which less than twenty years was unexpired, and if he paid rent to his landlord he should be entitled to make a similiar deduction, and so on right up till you get to the original vendor. Then, with regard to the third class, the tenants who hold for twenty-one years or more, and without doubt this is a very large class of leaseholders, embracing as it does leases for twenty-one, sixty, ninety-nine and 999 years. He said that he would protect them by inserting a clause giving drastic powers of leasehold enfranchisement. In this way he considered the difficulties would be solved with regard to all the various classes of tenants, weekly, short tenancy, and long leaseholders, and they could then place the burden on the shoulders of those by whom it ought to be borne.

Then there was the difficulty with regard to valuation. The Majority Report quoted the evidence of a number of surveyors, and he would like to point out that there was one thing in common with all of them. They all said it could be done, but they were all extremely shy as to doing it. Not one of them considered he was incompetent. What was the reason of this? Why did we find this startling unanimity? The reason of this was because they made such valuations every day, or rather as often as they could be paid for it. Not only did they make these valuations, but they must notice that the law recognised the validity of them, and allowed people to act on them. A good many of the vacant sites in the large towns of this country, and in fact nearly all those vacant sites which are in the hands of speculators, are mortgaged, in many cases the first mortgage is held by trustees, and the law said that these trustees could be held indemnified for any loss, provided they had acted on the report of a valuer and had only advanced two-thirds of his valuation. Hence the law now recognised that these gentlemen were competent at the present time, and they take money for doing something which seemed when they were before the Royal Commission to send a cold thrill of nervousness down all their spines. But there is one serious matter in connection with these valuations which was not touched upon by the Bill, viz., the question of restrictive covenants. If this Bill became law as it now stands, it would be found that there was much land which looked like valuable building land, and from which it was expected that a site value rate would be obtained, which would be valued at almost nothing, because of the restrictive covenants upon it. For instance, he knew of a plot of land of nine acres in an urban district which was absolutely suitable for building cottages or shops upon, and could be sold for that purpose, but nothing could be got out of it by way of site value rate because of the restrictive tie upon it that only houses of £100 a year were to be built upon it. In order to remedy this serious defect, he would suggest that local authorities should be given power to deal with these restrictive covenants whenever they were a drawback to the selling value of the land, and if the Bill got to the Committee Stage he would move a clause to that effect.

He had referred to some of the difficulties in connection with the Bill. What were the advantages to be derived from it. All landlords would benefit by it, because the greatest cause of the agitation against them would be removed. The poor landlords especially would benefit by it, because land which remained undeveloped could only be held by rich landlords or speculators, as the poor landlord was compelled to use his land to its fullest capacity. Then there was no doubt whatever about the public gaining from it. More land would be available for building, trade would be encouraged, there would be an equitable distribution of burdens. To his mind, it was a great social reform, with which many other social reforms were closely intertwined. Who would believe, for instance, that the question of the cure of phthisis was affected by this Bill. Yet such was the case, because it was no use building expensive sanitoria, or paying doctors, so long as there existed the foetid dens in the large towns which were the fruitful breeding-grounds of the tubercular bacillus. In the same way, with the drink problem. It was no use restricting the opportunities of getting drink while the people were housed worse than the animals. The more the question was looked into the more would the conclusion be arrived at, that all social reforms were closely connected with the reform of the Land Laws, and he sincerely hoped that this Bill would be read a second time, and become the keystone of the arch of Progress.

MR. CRIPPS (Lancashire, Stretford)

said he did not propose to follow the hon. Member for Barnstaple in some of the wide considerations he referred to in the speech he made just before the adjournment, because it appeared to him that this Bill had to be considered as a Rating Bill, and the question was whether as a Rating Bill it suggested a fair and equitable solution of what he admitted was a difficult question, and upon which there was so much difference of opinion, He did not think that those who opposed this Bill were in any sense opposing a Bill which would give facilities for the housing of the working clashes. This was a matter they had to consider on the Royal Commission, and he was bound to say that for his part he could not see how they facilitated a solution of this difficulty by placing a further charge on the site value of land, the value of land itself being one of the chief reasons why it was so difficult to bring about a true solution of the housing of the working classes. That question was quite outside the purview of this Bill, and would not be substantially affected whether this Bill were passed or not. There were two points in this Bill which constituted its novelty, and it was in reference to these two points that he would ask the House to decide whether this Bill as a rating reform was a Bill which ought to be accepted or not. The novelties were these. In the first place this Bill brought in the principle of rating capitalised value which had never before been recognised in the rating law of the United Kingdom.

The second point raised by this Bill was also an extremely important one, and it was as to whether they ought to select a particular class of property, and put upon it special and exceptional burdens in addition to the burden which it shared equally at the present time with all other classes of rate able property. It was an entire mistake to suggest that the owners of land were in a position at the present moment to escape their fair share of burdens for the purposes of local taxation or rating. The question really was not whether a man was fairly rated or not at the present time, but whether land was a class of property which ought to bear some special charge beyond what other rate able property bore in reference to local improvements and local expenditure. That was the way in which the Bill was brought forward by the hon. Member for North Camber-well, and he would meet the hon. Member on that issue. Before he came to those two points he wanted to say a word about what had been called "the unearned increment." He did not know what passage the hon. Member referred to when he quoted him in regard to this unearned increment. It was obvious that from various causes land was enhanced in value outside any special effort on behalf of the owner. That was certainly a proposition familiar to anyone who had anything to do with landed property. What was said both in the Majority and in the Minority Report of the Commission was that so far as land was enhanced in value it was rated to a corresponding extent. Supposing these enhancements of value had taken place, be contended that the land was rated to a corresponding extent, and if certain land was worth £200 a year and was rated on that basis, if, owing to enhancement or to unearned increment, it became worth £500 to £600 a year, that, land would be rated on the increased value. What the Royal Commission pointed out was that land was not alone in regard to this question of unearned increment, for there were other classes of property for which the value was enhanced outside the particular effort of the particular owner, and there was no reason whatever as regarded the unearned increment to put any extra burdens on land alone, and at the same time exempt all other classes of property in a similar position. It was not true that the cause of the unearned increment was always local expenditure.

DR. MACNAMARA

Not always, but in a great many cases

MR. CRIPPS

said there was one notable exception he would quote in order to show that the principle, as laid down in this Bill, went too far and would operate very unjustly. Take land which had been enhanced by a railway being brought into the city. This was a case quite outside any local expenditure of the particular district or locality. He understood that the hon. Member for North Camberwell, in a case of that kind, considered that there was no unearned increment due to public local expenditure. Nevertheless, he would put this burden on the increased value of land whether it was due to local expenditure or to outside causes. They were not dealing with the question of unearned increment at all in any real sense of the term. This Bill would apply to land whether the increased value was due to expenditure by local authorities, or some entirely outside body, such as the advent of a particular railway. If they took the case where land had decreased in value, they would still put a special and exceptional burden upon it under the Bill brought forward by the hon. Member. In rating, apart from whether there was any exceptional burden to be put upon land, they took the value of the thing as it was. It might be enhanced or diminished, and directly they went away from that principle and tried to introduce some clement of prejudice, they lost sight of the principle altogether and got to the level of mere prejudice, as regarded this question of justice and fairness. What had been the operation of the Betterment Clause? When a particular improvement had given enhanced and special value to a particular district, it laid down that such district should specially contribute towards that particular improvement. But that was not a rating principle. They could not apply it fairly as regarded rating, or even seek to apply what might be perfectly true as regarded betterment. It would be unfair to lay that down as a general principle as regarded questions of rating in their various town and country districts. He did not think that in a case of this kind there was any true distinction at all between the land in urban districts and outside. He was not seeking to emphasise the difficulty which the hon. Member for Tunbridge Wells pointed out the extreme difficulty of drawing the line. As the hon. Member pointed out whenever they got to a particular point they would put such an extreme burden upon the land that it might prove to be an actual loss to be the owner. If this were a true principle to put an especial burden upon land then they ought to put it just as much upon land in the urban district as in the rural district. The attempt to limit this to urban districts was for the purpose of getting rid of the prejudice, and it did not consist in the rating principle. They ought to apply a true principle not to one class of property but to all classes, and to apply it to one class of property as proposed in this Bill would produce results which could never have been anticipated, or thought of, by the hon. Member for North Camberwell.

This Bill proposed to put 1d. in the pound on the capitalised land values. Land values capitalised were worth about thirty-three years purchase on land in towns, and upon the annual value that meant a rate of about 2s. 9d. in the pound. That penny was very misleading. It looked a small sum, but when they brought it down to the annual value, and saw how it compared with the rating of other property, it was not one penny but it was 2s. 9d., and in some cases it might be even a much larger figure. It amounted to about one-seventh of the entire value, and this was the exceptional burden which they were seeking to put upon one class of property for the first time. Let them see how it would work out. Take one or two different classes of property. Let them take building property, which was not yet ripe for building purposes. There was not the slightest doubt that under this Bill the owner of that property would be paying more in rates than he was receiving in rent. Was that just? It was contrary to every rating principle which they were applying at the present moment. Take another illustration. Take the case of an undeveloped mining property. What would be the effect? The owner of a mining property, which was not for the moment developed, would under this Bill have to pay far more per year under the head of rates than he would receive. Take a third illustration. Take for example a railway company. A railway company, after all, could not be looked upon as an institution which had done harm to a district, but probably railway companies had been great benefactors as regarded facilities of transport, and the introduction of advantages into the district through which they ran which they did not enjoy before. What did they propose under this Bill? Not only would they rate a railway company at the full annual value as the occupier, but they would take the site value of all the property over which the railway had been constructed. They would capitalise that, and if the hon. Member for Camberwell had his way they might put upon it a rate of 2s. 9d. in the pound. That would be a great injustice, and would be sufficient not only to prevent railway enterprise in the future, which would be nothing but a disaster, but it would put a burden upon railway enterprise and railway interests, for which, in his opinion, there was no justification. Upon an occasion of this kind, to seek to introduce this principle of rating capitalised value would mean an entire revolution in their rating machinery, and it could not be done justly at all without it was accompanied by a similar rating proposal with regard to all other kinds of property. The hon. Member brought forward this Bill on the ground that he was supported in it by the Minority Report.

DR. MACNAMARA

Generally.

MR. CRIPPS

said this Bill would be condemned by almost every principle which was to be found in the Minority Report. Let him take the particular subject matter with which he was dealing The question of the rating of capitalised value was before the Royal Commission. Did the hon. Member find either in the Minority or Majority Report anything which supported his view of seeking to rate capitalised value as distinguished from annual value, which was the basis of all rating at present? He thought it was rather hard on the names associated with the Minority Report to quote them in this way. He thought it was particularly hard on those great names when they were quoted as supporting Bills which were introduced not in accordance with their Report, but altogether contrary to every principle which they put forward. They should not be made indirectly responsible for a Bill framed in the teeth of their propositions. He would give another illustration before he came to the question of special or exceptional burdens upon the land. The hon. Member introduced this Bill as one to a great extent in relief to other ratepayers. He said they would get a large fund from this Bill in relief of local taxation, but that was not the view of the Minority Report. Those who signed the Minority Report pointed out that even if they had some system of rating land values, they would not touch any new source of revenue at all. They pointed out first of all that any Bill would not in substance assist the ratepayers in this respect, although on sentimental and political grounds they thought they might get rid of a grievance which was brought forward from time to time. Surely it was very hard to attach to these names, which were appended to the Minority Report, principles not only antagonistic to their views, but principles which they considered it neither right nor just to apply to rating questions.

He would now come to the other point which was really involved in the hon. Member's Bill. Upon this point he agreed with the strong criticism of the hon. Member for Barnsley, although it would pass his wit if the Measure went into Committee to draft clauses to remedy defects in the Bill at the present moment. If landed property was rated at the present time up to its full value, and if on the same principle as all other classes of rate able property, was there any reason why they should put a special and exceptional burden upon it? That was the proposition put in its shortest and simplest form. He did not think there was any reason for taking out any one form of property and putting an exceptional and a special burden upon it, and that was the ground on which the Majority Report was based. There was no reason why land should be selected, and the considerations applying to land should apply to every other class of property. It was unfair to take out one particular class of property in order to put a special and exceptional burden upon it.

What was the answer made to-day? In the first place, if he understood the hon. Member, they ought to put some special and exceptional burden on the land because the land in a particular sense got some special and exceptional advantage. Let them follow up that argument by putting a concrete case, because one very often lost sight of an important principle of this sort by the use of general terms. He took the most familiar case in London—the case of the ninety-nine years lease. He took it that when the lease was originally made the burden of the charge with respect to the land as between the lessor and the lessee was thrown upon the owner. That was the whole basis of the Minority Report, and in that respect they agreed with the Majority. Who got the benefit during these ninety-nine years? Suppose that during the course of these ninety-nine years land had gone up very much in value, and that the lessee had given £100 for what he could now sell for £200. The owner did not get the advantage of that, nor did he get a penny out of it during the pendency of the lease. [An HON. MEMBER "What if the owner wants to sell?"] That made no difference. He took the ordinary case. Suppose they had a thoroughly secured ground rent—did they mean to say that whether that was secured twenty or thirty times over made any difference? During the pendency of the lease the lessee or occupier got the advantage out of letting the premises. The hon. Member for Camber-well would agree with him on that point. That was why he thought the Bill required looking at closely, and that was why, he assumed, the hon. Member proposed to put the rate on the occupier and not on the owner. So far as this Bill was concerned it would be almost entirely a new charge on the occupier, because they were not going to rate property under existing contracts. He recollected he pointed out last year that nothing could be more unfair than that under a Bill which purposed to relieve existing occupiers of burdens which they could hardly bear, they should make a proposal of this kind, which put a special and exceptional charge upon them, from which, at any rate at present, they were free, and in substance, as long as these existing contracts continued, this charge would be entirely a charge upon occupiers—the men who ought not to bear a charge of this kind, and who were heavily burdened at the present time. Some matters of prejudice had been introduced regarding the Bill. He should like to know whether the hon. Member for Camber well would go into one of the crowded districts and point out that his proposal was to put a further charge on the occupiers in that district, it might be for 999 years.

DR. MACNAMARA

I have done so.

MR. CRIPPS

said that was entirely antagonistic to the argument the House had heard. Every hon. Member on the Opposition side of the House had denounced the view of putting the charge on the occupiers, and one gentleman made an animated speech, in which he said that the time had come when the owners should look after the future, because, if they did not accept this, something worse would come. It was not for him to reconcile opinions of that kind, but he was justified in pointing out that the principle of the Bill as it stood, was to put a new charge on the occupier—the man who was overburdened at the present time. The hon. Member for North Camber well referred to what was said by Lord Goschen in 1870. Lord Goschen differed entirely from the view expressed in the Minority Report of the Commission on which his hon. friend relied. He thought that the charge did not go back to the owner. What the Royal Commissioners, the Minority included, thought was that the charge did go back on the owner when a fresh contract was made. That was perfectly right. There was no doubt that these burdens were ultimately borne by the owner. They ought to be, and he thought that they were. The only thing was that during the existence of the contract the person who might have to pay for a time was undoubtedly the occupier. The whole principle of rating law was that the occupier should pay and not the owner, but the ultimate incidence did fall back on the owner, and they could not alter that unless they had an entirely different system as regards representation on local rating authorities. What Lord Goschen pointed out was that before any scheme such as he suggested was carried out, they must have an initial alteration in representation, and have some system or other in which the owner was represented with respect to the local expenditure of local bodies.

He had listened very carefully to what was said by his hon. friend who introduced the Bill, and he was not aware of any other point made which would suggest the putting of this exceptional burden on site land or land value apart from the value of the land which was used. He had a strong view that when land was occupied they got the advantage of local expenditure, and they ought in that case to make a contribution. It was when there were buildings on land that there were occupiers, and they wanted light and all those other matters incidental to local expenditure, and it was quite right in principle to take hereditaments as a whole, because the great mass of those privileges or advantages granted by local expenditure were what were wanted by people living on the sites from day to day. It was very important to see what the principle involved was. If they once got away from that they got amongst the shoals and rocks of a large number of prejudices which were brought to bear on questions of this kind. He opposed the Bill for these two reasons. In the first place the principle of selecting a particular form of property and rating it on its capitalised value was bad and unsound, and unjust to the owners and persons interested in that particular class of property. Secondly, there was no case whatever made out why land, either in country or town, should bear an exceptional and special burden. It ought to bear the full share of burdens which it did at the present moment. The Minority Commissioners themselves said that the prejudice of some people who did not understand the rating question had gone by, and it was realised that the land did bear its full share of local burdens at present. He was quoting the substance of the words used in their Report. He denied absolutely that they should take one class of property, whether land, buildings or anything else, and treat it separately and distinctly. They ought to have equal treatment all round, and if they departed from that they would have nothing but confusion and difficulty in dealing with the rating question.

MR. THOMAS SHAW (Hawick Burghs)

said the House always heard his hon. and learned friend with pleasure on the rating question, but he confessed that he listened on the present occasion to his speech with a great sense of dissatisfaction. The two points which he elaborated with much ingenuity and care were, first, that this was a novel proposal to have taxation levied on capitalised value; and second, that there was a proposal involved in this Bill for special and exceptional rating upon ground value as apart from other types of hereditaments. The proposal in the present Bill was to tax the value of sites, and, if his learned friend preferred it, he would use the term site values. With regard to capitalised values, he was anxious to hear whether there was anything in the principle of the proposal which was made which was open to any. and, if so, to what objection. He could con ceive no objection to the taxation of capitalised value unless there was some inequitable result produced by that operation. He listened in vain to the speech of his hon. and learned friend to ascertain where the inequitable result would be. But his hon. friend answered his own arguments. In the course of his speech he was quick enough to show how very flimsy his objection to this Bill was, because in the limits of a minute or two he was able to transmute capitalised value into annual value. He wondered then what the hon. and learned Gentleman was complaining about. The fact was, that capitalised value was a convenient method of ascertaining real as against fictitious value. The present system was one under which a fictitious value had substantially taken its place in local administration. Although land might be of itself of enormous value, if, at caprice, or from interested motives, the proprietor of that land was holding it back from profitable occupation by members of the community, it was dealt with at the unreal and fictitiously low valuation thus arrived at, whereas it should be treated on the basis that its real value "was much higher, and that that value was in point of fact the value which the community had given it. The whole argument as to capitalised value was an argument amounting to nothing in the result except this, that the capitalised value was a proved method of getting the better of a fiction of law which had wrought much havoc in social communities. He hoped he had satisfied his hon. and learned friend that there was nothing of substance in the objection as to capitalisation. All that was required as to capitalisation was for him to transmute the whole thing into annual value, and the idea of capitalised value being objection able at once disappeared.

The hon. and learned Gentleman's second objection was this, as he understood him—it was a cardinal objection to the Bill—that there was what he called a special and exceptional rate to be put upon site values. He would present this view to the House as a sufficient and, he thought, complete answer to that consideration. The site owners were members of the community. The community as a whole had its local exchequer. Nobody proposed, certainly not the authors of this Bill, to keep existing local taxation at its present amount, and to put on the top of that a special and exceptional rate. What was proposed was that the special and exceptional rate should fall upon the person who had value out of that rate, and thereby, ipso jure, there would be effected, to that extent, a relief for the local exchequer, and therefore relief from the local discontent which the present system caused. That was, in a word, the answer to what had been said with regard to a special and exceptional rate. It was only special and exceptional in respect that it went behind the artifices of the law at the present moment, and it got at the owner of the land. [An HON. MEMBER: "It touches the spot."] That was so, and the effect of that was that they had, pro tanto, relief to the entire body of the community to that extent. He was extremely interested in the opposition to this Bill, which was stated in the excellent speech of his hon. friend the Member for Tunbridge. The hon. Member stated his case with great moderation. But his in tial and cardinal proposition was that this Bill was founded not on unsound but really on sound principle. He said that site value was increased by the advantages of the site and the presence of the community. That was just about as near the ratio of this Bill as anything. It was a concession that the improvement in value was not an improvement which had been executed by the owner of the site it was a concession that the owner of the site was going to reap where he had not sown; and further, it was a concession that the presence of the community had caused that increase in the value. While the community had done certain things to make the property valuable and worth living in, why should one section take the advantage of all these things without being rated for the advantages? Assume that the community provided a new park, built a new bridge, or gave a magnificent avenue or road leading through an estate, would any man in the House get up and say that it was fair that the property thus benefited by the labour, expense, industry, and enterprise of the community had a right to pocket all that without bearing the fair and special share applicable to these improvements?

Then his hon. friend said that it was a Bill for taxation in regard to betterment, but that it did not apply to the case of "worsement." The Bill provided both for the case of worsement and betterment. If a community was badly administered, if its roads went into decay or if its bridges became rotten, from that moment the site value would be decreased, and therefore the taxation on that site value would be lessened. He submitted to his hon. friend that the argument he had used with regard to betterment was altogether out of place in regard to a carefully drawn Bill of this kind. The site value went up and down according to the actual facts of the situation. His hon. friend said this Bill would not be a present benefit to the occupier. He agreed with him in that, but the reason why the could not get a present benefit to the occupier was that his hon. friend who drew this Bill had paid strict and sacred regard to private contract. On the other side they objected to this Bill because it respected existing contracts. That was a strange objection to come from such a quarter. Would they like existing contracts to be interfered with? Well, so far as he was concerned he thought some recent contracts might very well, without any real injustice, be interfered with. His hon. friend had seen that it was better that he should take the line of least resistance, and accordingly he had respected contracts. For that reason he himself regarded the Bill as a moderate and sensible proposal. There was a sense of wrong and injustice in many communities throughout the country. That sense of injustice was, he thought, well-founded. It was undoubtedly established—he thought almost by the Majority as well as by the Minority Report—that taxation within the ambit of the community itself had produced, he did not say the whole of, but in a marked sense, the very value which it was now proposed to make a contributor. There was a feeling among the members of many communities that they were being deprived of this contribution to the general well-being to which they were entitled. It was realised, and it would go on being realised in a much greater degree, if Parliament was too guarded in this matter, that site owners were not in a position of partners in the community, but really were parasites upon it, and that this state of things should be brought to an end.

Besides all these considerations there was a system of speculation in land areas and in burghal communities which was legally permissible, but was certainly in many cases socially disastrous. Under that system the industry and enterprise of the community were really put in pledge for private profit and advantage, to the prejudice of the community as a whole. This Bill was only permissive. It allowed local authorities to exercise their judgment on the particular circumstances of the locality. He could conceive many cases in which the local authorities would see no cause to interfere because the conditions of congestion on the one hand and improvements on the other did not arise; but in many other cases, such, notably, as those of great cities, it was clear that the local authorities would rejoice in this privilege of really putting the burden on the exact shoulders which ought to bear it. He totally disagreed with the argument of the hon. and learned Gentleman the Member for the Stretford Division that this was solely and exclusively a rating question. It was far more than a rating question. There were collateral advantages to be derived from this legislation of, he had almost said, an infinite kind. The Majority and the Minority Reports of the Commission all tend to show that this problem was intimately associated with a deep and growing feeling in our midst connected with the question of the housing of the working classes. He thought this all would provide, not a new source of taxation in an exceptional sense, but would provide certainly a fresh channel for taxation in the direction of uncovered and unbuilt on land. He knew that it was said that cases of held-up land for speculative purposes did not exist. He differed from that criticism, and he would give an illustration from the county in which he dwelt. There was unbuilt on land in Edinburgh which was rated on a value of £2,570 per annum, and it only brought in an assessment to the town of £344 a year. If it were rated on 4 per cent. on its actual value it would give a rateable basis of about £220,000, and would bring in at least £27,500.

One result of taxing land according to what it would bear on its actual as distinguished from its fictitious value would be to bring necessarily an alleviation of the taxation of the remainder of the land in the borough. It would remove the existing friction and make these sites available for building dwellings and manufactories upon. The new houses would be the competitor in the market with the old houses, many of which were slum properties, and the demolition of the slum property would make way for houses more worthy of being occupied by human beings. The true issue was often avoided in discussing this great question. It had been said that the true issue was not the housing issue. In answer to that he would not give his own opinion, but that of the Housing Commission of 1885. In their report it was said— At present, land available for building in the neighbourhood of our populous centres, though its capital value is very great, is probably producing a small yearly return until it is let for building. They can thus afford to keep their land out of the market, and to part with only small quantities, so as to raise the price beyond the natural monopoly price which the land would command by position. Meantime the general expenditure of the town on improvements is increasing the value of their property. If this land was rated at, say, 4 per on its selling value, the owners would have a more direct incentive to part with it to those who are desirous of building, and a twofold advantage would result to the community. First, all the valuable property would contribute to the rates, and thus the burden on the occupiers could be diminished by the increase in the rateable property. Secondly, the owners of the building land would be forced to offer their land for sale, and thus their competition with one another would bring down the price of building land, and so dimmish the tax in the shape of ground rent, or price paid for land, which is now levied on urban enterprise by the adjacent landowners—a tax, be it remembered, which is no recompense for any industry or expenditure on their part, but is the natural result of the industry and activity of the townspeople themselves. That was the testimony of the Royal Commission of 1885 with regard to the intimate connection of the taxation of site values with the problem of the housing of the poor. It was perfectly plain that there was a system afoot in this country under which land was not only purchased, but held up for the purpose of bleeding the community as a whole when it required that land for public purposes. There were some striking illustrations of that fact in and about the neighbourhood of Edinburgh, but he would only give two. There was a little block of land near the city, forty-five acres in extent, which the Water Trust some time ago wanted for the purpose of forming filtering beds. Now, the value of that land at thirty years purchase of the existing rent was £4,387, but when it was wanted for this public and necessary purpose the owner charged for it £20,000, or at the rate of 136 years purchase. Would any person get up in this House and tell them that that vast sum was a fair representation of the interest of that property in the fortunes of the community? The thing was impossible. There was another transaction this time between the Town Council of Edinburgh and the Duke of Buccleuch. The city required land for the purpose of erecting new gas works in the neighbourhood of Granton, but within the territory of the borough. The ground extended to 105 acres, and it was partly built upon, but the average price at which it was rated was £5 10s. per acre. At thirty years purchase the amount would be £165 per acre, or a total value for the ground of £17,300. How much had the city of Edinburgh to pay for that ground? No less than £124,000, or 212 years purchase of the rating value. Therefore he contended that under the existing law, which this Bill would go a little, not the whole, way to remedy, astate of matters existed which was perfectly legal but socially scandalous. It was time that these estate owners came to the full burden of their responsibilities as members of the community in or near which their property was situated.

This Bill was not a mere rating reform. It would promote civic development on proper lines, and do much to alleviate many of the sordid conditions of life amongst the poor, and its effect would not confiscate but would eradicate what, in his opinion, was the constant confiscation of the values contributed to the land by the community. Opposition to this reform would provoke discontent and poverty, and might lead to violent efforts for a more drastic reform. In a matter of this kind, going so near the roots of our social system, the Parliament which gave promptly, gave twice. If we were too tardy in our legislation we might find that we would be too late altogether for moderation in this reform. He commended the Bill to the House as one which would essentially make for the peace and welfare of the community.

MR. VICARY GIBBS (Hertfordshire, St. Albans)

said that the hon. and learned Gentleman had concluded his speech with something approaching to a threat of violence; that we were to agree with our enemies while they were in the way lest a worse thing might happen to us. He was not prepared to accept an unsound Bill because he was told that at some future time somebody might bring in a worse measure. On what did the hon. Gentleman rely? He read a strong passage from the finding of the Royal Commission on housing with regard to vacant building land; but he would remind the House what it had probably forgotten, that that statement was based on no evidence, and that it was objected to and dissented from by Mr., now Lord, Goschen on whom the hon. and learned Gentleman relied for some of his statements—and by Lord Salisbury and Lord Cross. The hon. and learned Gentleman assumed a case where a town needed some large and expensive permanent improvement, and asked whether it was right and proper that a man who benefited from that improvement should escape altogether from the rates. Of course it was not right and proper if by that the hon. and learned Gentleman meant the ground landlord. The ground landlord did not escape at all, as had been shown very clearly by the hon. and learned Member for Stretford, for he could not possibly be interested in anything but permanent improvement. He had made a calculation of what proportion of the rates in any city was devoted to permanent improvements, and, roughly speaking, it was under 3 per cent. Was it reasonable to enter on a very large expenditure to charge the owners with 3 per cent of it? The hon. and learned Gentleman spoke a great deal about land being rated at its actual value. What did he mean? One would suppose that it was the value the owner received from it. But the hon. and learned Gentleman meant something quite different. It meant that although the owner might be getting nothing out of the property, he was to be rated on its potential or problematical value.

MR. THOMAS SHAW

If the hon. Member will allow me, I will take the term "market value."

MR. VICARY GIBBS

said he was venturing to deal with facts as they were. He distinguished himself from those people who introduced these measures and who dealt with what might be. He was dealing with what the hon. and learned Gentleman said, not what he might have meant to say. He wished to express the pleasure with which he had heard the extremely interesting speech of the hon. Member for Camber well. He thought some of his remarks were received with loud cheering more from the effective way in which they were made than from any real or essential merit in them. The hon. Gentleman had told a very interesting and pathetic story of what had happened to a piece of land in the neighbourhood of the Embankment. That portion of land on the Embankment had to be bought at great expense by the people who made the improvement. But the local authorities had a simple and complete remedy, by availing themselves of the recoupment clause under the ordinary law, to take any property which they thought might be of value to them in consequence of the improvement. Such a Bill as that before the House was not necessary to meet the case mentioned. The Minority Report of the Commission recommended that site values should only be rated in respect of permanent improvements. That was the Bill of last year but it was not the Bill of this year. The site values were to be rated on all improvements, whether permanent or not, or whether the owner ever had or ever would have any advantage from them. He would refer to the foreign and colonial examples given by the hon. Gentleman, as he thought it very likely they had impressed the House. New Zealand was one of the cases cited. Inquiry had been made of the town clerks of the various colonies as to who bore the rates and in almost every instance the answer was that it was left to be adjusted by freedom of contract as between the occupier and owner of property. Well, that was directly contrary to the spirit of this Bill.

MR. TREVELYAN, (Yorkshire, W. R., Elland)

Will the hon Gentleman give us his authority, because there are towns in the colonies where the sole rate is on the land?

MR. VICARY GIBBS

said he had not got the document with him, but the hon. Gentleman would have an opportunity of correcting him and showing how far he had misrepresented the gentleman from whom he quoted. The hon. Member for Camberwell said that there was also a national land tax in New Zealand, but why did he not also tell the House that land in that colony was specially exempted from Income Tax. The House should realise how dangerous it was to draw an inference from one or other particular circumstance in another country unless they knew all the circumstances and all the taxation. The hon. Gentleman certainly implied that this sort of system of taxation was general in the colonies, but the hon. Mr. Reeves, in his book published this year, said that very few of the colonies had adopted the rating of land values, and those who had done so had done so quite recently, so that there was no opportunity of judging how the system had worked. In regard to the city of Paris he would quote one of his political enemies. A newspaper called Justice, a Socialistic organ, said that in their opinion the action of the Paris municipality in taxing land values had done more harm than good to the working classes. Prussia had been referred to; but the hon. Gentleman who now so ably represented the Government—Mr. Grant Lawson—had told them last year that the system had been abandoned in Prussia because it was found that it did not work well.

He should like to say a few words on the general question. These measures turned up every year, but always under different names. They reminded him of those gentlemen with high sounding aliases who were charged at the police courts with obtaining money by false pretences. The pretence in the case of this Bill was shown in the Memorandum accompanying it, by an audacious begging of the whole question. It was said that this was a new source of revenue. That was not the view of the hon and learned Member for Launceston, nor of the hon. Member who introduced the Bill. They did not increase their supply of fruit by cutting apples in two, although that might be a cheap and simple amusement. But the proposals in this Bill were neither simple, cheap, just, nor effective, and this was not the way in which this matter could be properly handled. He recognised that there was a grievance. At present the way in which the net rateable value of property was reached was by deducting from the gross value the cost of annual repairs and insurance. It was the habit of the rating authorities to allow the maximum deduction in every case, a system which bore obviously too heavily on certain poor classes of property and too lightly on such property as Bond Street. The remedy was very simple. All they had got to do was to instruct the valuer to decide what was the difference between the value of a repairing and non-repairing lease of any particular property, and the difference was the amount which ought to be deducted, and no more. In Clause 1, sub-Section 2, there were four hypotheses, every one of which was false in fact, at any rate in London. Freeholds in possession were so few as to be practically negligible. Leaseholds might be subjected to restrictive covenants which materially reduced the value of the property. But these covenants were to be ignored as if they did not exist. Another hypothesis was that land had no building upon it. But there were such things as easements. This Bill opened up a vista of appeals and litigation, and was based on the assumption that something had happened which, in fact, had not happened, and would present a continual puzzle to valuers. They were going to respect present contracts of course, but they were going to put a fresh rate on, to relieve the rates of the man who was going to bear the fresh rate. Intact, complicated machinery was to be set up to take a shilling out of a man's pocket and put it into his other pocket. But they would get at the ground landlord in one event. If they let certain municipalities sup pose that they were going to get fresh sums of money to play with and spend unremuneratively on fancy experiments, then so far they would get at the ground landlord.

The hon. Member for North Camber-well said that he explained the Bill to his constituency. Many of them were not orators of the same power or capacity as the hon. Member, and he thought they would find it very difficult to persuade any lessee to support a measure of this kind. He had no right to occupy the time of the House longer, although there were several questions to which he wished to refer. There was the question of vacant land, and the question of unoccupied houses. He would only say in conclusion that the proposal of the Bill was to rate vacant land in order to force it into the market for building purposes before the owner considered it suitable. Hon. Members opposite would say to the owner, "This land is susceptible of being built upon, and we will so rate it whether you build on it or not." The unfortunate owner, having to pay a building rate, entered into a speculation, built on the land, and, like many other speculative builders, he went bankrupt or lost a large sum of money. The houses instead of being occupied remained unlet; and having forced the unfortunate owner, in self-defence, into an injudicious speculation, it would have been thought that the poor wretch would be left alone. Not at all. Then, under the Bill, he would be told: "Halloa, you have a row of houses; they bring in no income to you; they cost you money, but we will rate you on them." First of all he was made to put up houses that nobody wanted; and then when that was proved he was again rated on houses which were a source of outgoing, not income to him. That was justice! That was reform of the rating system! This was a fantastic scheme which was based on an economic fallacy. It gave the maximum of trouble and the minimum of advantage to the country. It was perfectly true that it escaped the Scylla of dishonesty, but it was wrecked on the Charybdis of futility.

MR. TREVELYAN

said he would deal with a practical question in connection with the Bill. It had been urged that a tax of the capital value of the land would be new, revolutionary, and impossible. After all, the evidence of one man who bad practical experience was worth the evidence of a hundred men who had merely a theory. In Paris during the last three years local taxation had been gradually changing. Direct taxation was imposed to some extent, instead of octroi, on which the revenue of the city hitherto chiefly depended. In 1889, a Committee of Assessment was appointed by the Hotel de Ville, which cost something between £40,000 and £50,000, to assess the whole of the city afresh—first, on the annual value, then on the capital value. In the case of the capital value, it was to be, firstly, the buildings, then the land, and thirdly both together. This Commission sat for two years; and without any greater expense than he had mentioned, it assessed the whole of the city of Paris; and now there was a tax both on the buildings, and also on the capital value of the land. He inquired into the matter himself, and he found that there was no doubt that the greatest city, next to London, in Western Europe, succeeded in doing what they were now told was difficult, revolutionary, and impossible. He wished to mention one extremely important consideration, when the House was asked to reject this Bill on the ground that it was fragmentary; and that was, that it would have a very profound influence on the National Exchequer. They had heard a good deal recently about economy, but even if they were able to reduce the expenditure on the Army and the Navy, there would still remain the unfathomable pit of local expenditure into which they were thrusting the money of the nation at the present time. It was taking a very comfortable view of human nature, which experience did not actually justify, to assume that if another Government came into power, not particularly interested in agricultural interests, it would resist the demand on the part of the towns for new doles from the National Exchequer. They were at an early stage of a long series of projects of plunder on the part of different sets of ratepayers from different kinds of Governments. He appealed to all interested in reducing the national expenditure to look forward, and see what was likely to occur with the enormous increase in local burdens. The Bill proposed other means of local taxation. They did not admit that, in this great and prosperous country, the local authorities had not themselves resources from which to provide the money they spent at the present day, and more. Their contention was, that the loud cries of the burdened ratepayer were justified, because the system of raising revenue, to which they had got accustomed, was one of the worst.

He wished to approach the question chiefly as to its aspect as a housing reform, and he thought the House would realise that, whether consciously or not, the ratepayer rebelled against the existing system. If they looked at the census returns, they would find that greater London was increasing at the rate of 95,000 per annum, and that Manchester and Salford were increasing at the rate of 61,000. How was it possible that municipalities would be able to deal with such an enormously increased population. It was only by making it easier for private enterprise to build houses that they could possibly get any real advance in dealing with overcrowding in cities. It was one of the most deplorable and strangest phenomena that, while there were complaints of overcrowding in the cities, there were constant complaints that the building trade was slack. Looking through the Reports of the Labour Gazette for the last eight months, he found that there was not a single month in which it was not stated that the building trade was dull or slack. What was the reason? He would recall to the House an instance he gave last year. A property was given to the London County Council at Edmonton on which to put up workmen's dwellings. The County Council decided that they could not put up dwellings on that property, and they handed it back to the philanthropic gentleman who gave it to them. They found it would be necessary to pay on the buildings £2,056, and that there would be a deficit of £793 annually. He wished to show the House how the operation of a land tax would work. The value of the land in that case was small and comparatively insignificant; and what they maintained was that in the part of the town where it was wanted to expand in order to relieve the overcrowding at the centre, there should be a relief of taxation, because almost every penny imposed in such a part was upon the building value, the land value being very small. The real point was, that if a large part of local taxation was raised from land values, it would relieve property where the land value was comparatively small—that was to say on the outskirts of a town. The only place where the burden would be greater, would be in the centre of a town, where the land values were great and growing. Was not that right, because there the value upon which assessment was based was chiefly landed property, and it was steadily increasing in value, with the increase of the town. The chief object of this taxation was to relieve buildings in the outskirts of a town; and he said that if it put some further taxation upon the occupier, the ratepayer in the centre of a town could afford to pay.

MR. BOND (Nottingham, E.)

said it was rather amusing for one who, like himself, had watched for a long time the progress of opinion with regard to this matter to see how policy had changed. He could remember the time very well when the House was treated to fierce denunciations of the great ground landlords of London, and other places; and a spirit was being engendered against those landlords, under which, although they did not derive any immediate benefit from the works on which the rates were being expended, they were to be brought in, and compelled to pay a substantial contribution to those rates. Apparently, some of those engaged in that attack had come to a better mind; and now, after many years of discussion, they had the Bill which was before the House. It was suggested that a new field of taxation would be opened up in a way which he had not been able entirely to apprehend. It was suggested that the imposition of this tax would do something to promote the housing of the working classes. He could not discover that the hon. Member had made out any real case for the suggestion contained in the memorandum of the Bill that a new area of taxation would be opened up. To complete the metaphor of his hon. friend, he did not think they would get any more out of their apples by cutting them in two, or that they could squeeze any more out of their lemons by dividing them into four. The fact really was they would find by this new system of taxation that while it produced an immense amount of inconvenience, on which sufficient stress had not yet been laid, it would not result in bringing into the exchequer of the local authorities one single penny more. It would have the effect of reducing rather than of increasing their revenue, because this system of double valuation and taxation could not be carried on without involving extra expense; and expense which would recur from time to time. Further, it would produce an immense number of appeals, and they would have the inconvenience and friction which inevitably resulted. Every person who paid or received rent, every owner of property would find the inconvenience which arose in cases of dispute with regard to the reductions which had to be made, and very considerable loss would accrue to the community.

As to the question whether the Bill would have any appreciable effect on the housing problem, he could not discover what had got into the heads of the very able men who signed the Minority Report when they agreed to the suggestion on which the Bill was based. It seemed to him that it would tend rather to discourage than to encourage buildings. The case put forward was that land, not occupied by houses, should be brought before an Assessment Committee, and that an attempt should be made to estimate its intrinsic value; and that on that intrinsic value a rate should be levied. Incidentally, he would remark that that was an entire departure from the principle of valuation as at present adopted. Assessments were not made on capital value, but on the income derived from the property; or if the hereditament was occupied by the owner, then on the rent he would be able to obtain from a hypothetical tenant. A great deal of criticism of the hon. and learned Gentleman opposite was based on an entire misapprehension as to the way in which rating was conducted in England. He suggested that assessment was based on a fiction. He said that the assessor, in determining what value should be put on a particular property for assessment purposes, was actually benighted enough to have regard to the existing condition of affairs, the state of the property, and the rent it was producing, or might be supposed to produce. That the hon. and learned Gentleman called fiction; but it would be much more of a notion if the assessor set himself to find out what a particular land would be worth if put into the market. The real sting of the Bill was that it proposed, for the first time, to set up the principle of rating unoccupied land, or land within an urban district occupied as agricultural land, not on the value it produced, but on the value it might fetch if it were used for other purposes than those to which it was devoted. It was evident that they would be embarking on a very dangerous course if they accepted that principle. The suggestion that the adoption of this principle would facilitate the erection of houses, and would remove the evils of overcrowding, which they all deplored, he could not accept. He knew something about the housing question from practical experience, and he also knew something—indeed, if he might say so, more than many hon. Members—of the way in which towns were developed. He did not think that the House realised that in dealing with the housing question they had to rely principally, if not entirely, on the efforts of speculative builders and commercial men who went into the business with a view of getting a fair return for their money.

What was the process which usually took place? Assuming it was desirable to extend the area of building in a town owing to the increase of population land was mapped out on the outskirts, oftentimes on a large scale. Then the people engaged in that class of business set to work and made roads; and they then offered the land on building leases. A man who was considering whether he would go into a venture of that kind would be very much disposed to take into account the fact that under this scheme the land which he took, whether he would be able to put it to immediate use or not, would be rated from the very first; and, in course of years that might amount to a very formidable sum. It should be remembered that it was not because a particular speculator thought land was ripe for building that, therefore, it was ripe. There might be a check in the growth of the population of the town, or in the prosperity of the district It would be felt to be a monstrous injustice if a man, who found himself with the whole estate on his hands owing to some mistake, found himself involved in the payment of rates to a considerable amount on land that was practically useless to him. That would discourage rather than encourage building. He was quite unable to understand how those who signed the Minority Report arrived at the conclusion they did. If at any time the owner of land set to work to arrange with a builder to put up houses, both sides would have to take into account all the facts of the case. A man who was going to build would give less for the land where the rates were high, and more for that on which the rates were low, and therefore he could not see what possible advantage could be obtained from separating the rates which belonged to the land from those which appertained to the building on the land. The whole argument was founded on an illusory basis. He objected to the Bill because it did not carry out the promises hold forth in the Memorandum. He thought that to effect such the separation proposed would be of no value as a means of increasing the revenues of a town, and he was perfectly sure that to introduce a system not thoroughly needed and foreign to our habits and traditions would create an immense amount of friction, inconvenience, and injustice, and it could be hardly worth while to bring in such a system merely to produce an illusion in men's minds that they were not paying such high rates as they were before. He hoped the Motion for the rejection of this Bill would be carried by a large majority.

SIR H. CAMPBELL-BANNERMAN (Stirling Burghs)

said this subject was one which excited the greatest interest in many parts of the country, and yet, during the whole of the discussion, the Parliamentary Secretary to the Local Government Board had been practically the sole occupant of the Treasury Bench. Of course every one recognised how competent the hon. Gentleman was to deal with subjects of this kind, and what his knowledge on the subject was, but the Government appeared not to have realised the fact that this was no mere whim or notion of his hon. friend the Member for Camber-well. This was not a question of coquetting in an amiable sort of way with some strange doctrines. The object of the Bill was one which attracted the warmest appreciation and approval throughout the country. The hon. and learned Member for Stretford had asked what was the real principle of the Bill. He would say what he considered to be the principal and main object of the Bill. It was the recognition of the distinction between site value and structural value. It was the recognition of the fact that they had separate values; that they advanced or receded on altogether different scales and sometimes in opposition to each other. He thought that once they recognised that fact, they were led directly to the purpose of the Bill—that it should be incumbent on the local authorities to ascertain and record those separate values. The further action which should be taken was left to the local authorities themselves, except that the Bill excluded existing contracts.

This extreme moderation on the part of his hon. friend had been seized on by hon. Gentlemen opposite as a fault in the Bill. He believed the opinion of the country would have supported his hon. friend if he had dealt a little more valiantly with existing contracts. That might have been done without creating any terrifying precedents. Sir Robert Peel dealt in a more manful way with existing contracts when he introduced the income-tax in 1842; but his hon. friend, coming upon somewhat degenerate days, had yielded to what he believed to be the general sentiment, and had omitted existing contracts altogether. The advantages of this recognition of site values as apart from the general value of the hereditament, were clearly set out in the Report of the Minority Commissioners. They pointed, first of all, to the fact that the benefit of municipal and other improvements attached to the site, and, therefore, if a tax were necessary at all, it ought to be in proportion to the site value. It was not the house, but the site, that was increased in value. Here was a case of the value that had been given to land within quite recent years by a great public improvement. The Manchester Ship Canal, which was largely made with the money that was found by the City of Manchester, had the effect of raising the value of land on the Trafford Park estate from £237 an acre to £4,840 an acre within the years of its construction. That was a proof, surely, that there was a case for saying that land so artificially increased in value should contribute to the very expensive processes by which that new value was given.

The Minority Commissioners further pointed out that if more of the burden of rates was thrown on the site, the proportion left to be borne by the buildings would be diminished, and this would weigh with builders. Then there was the question of overcrowding, which, of course, was part of the same matter, and which was greatly aggravated by the present system. The rating of sites, in the opinion of the Commissioners, would help to mitigate this evil; and, if it was objected that it ran in any way counter to established principles, they pointed out that a structure was, after all, perishable property, but that the site was permanent property, which rather increased than diminished in value. These were the sort of arguments, of which they had not heard much in that debate, by which the Minority Commissioners supported this proposal. The most urgent matter of all seemed to be to break down the ring fence which was in some places established round a rising and prosperous community by the owner or owners, who withheld their land from building in order to gain the benefit in the increased value. Public energy or private enterprise increased the value of the property, and why should it not be assessed? They wished to prevent the occupiers from actually suffering in their health, comfort, and convenience, by the action of such owners, for suffering was caused, and an insanitary condition of things was created by the circumscription of a community. Anything which tended to distribute the burden more equably, and to prevent such evils, deserved the favourable consideration of Parliament. This Bill represented a desirable reform in the interests, not only of urban communities but of the whole people, and he gave it his heartiest support.

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

, regretted that his right hon. friend the President of the Local Government Board could not reply, but he was absent in order to pay a last tribute of respect to an old friend. This was a very difficult question, and he quite believed that it would be possible on a public platform to obtain a certain amount of applause and support to the principle that someone else ought to bear the burden of taxation, He had great sympathy with the restlessness of the ratepayers under the increasing weight of their burdens. Perhaps it would not be fair to consider how far the occupiers had been compensated for that increase by increased health, and consequently increased wage-earning capacity, or how far the weight of the burdens had arisen from the apathy of the ratepayers, who would not take part as councillors, or even as voters in their own affairs. But one thing was certain, that both the control and the advantage of the expenditure of rates from day to day came into the hands of the occupiers as such. The ratepayers of this country had, he believed, this serious grievance, that only one form of property, real property, was put under substantial contribution to local burdens; but this Bill proposed to put an additional burden on realty, which was the very part of our property that was already injured by our rating system. He objected to the Bill in the interests of economic local government. Anything which would distinctly encourage the local authorities to extravagance must stand condemned; and this applied to the Memorandum which prefaced the Bill, which stated that it was framed to provide local authorities "with a new source of revenue." Nothing could be more disastrous than to give these authorities the impression that a new gold-mine had been discovered in which they could dig.

With regard to occupied houses, the whole hereditament is rated together, and it is rated at its full annual value, so that nothing else is left to rate. There is consequently no new source of revenue. To rate unoccupied houses would be to take from those who had not sold or let their houses in order to give to those who had. This, too, would have a most discouraging effect on the building trade. Land in an urban district, if it was not occupied, received no benefit from the expenditure of the rates. This was a very difficult question, but he wished to dispose of the impression that the increased value of some of our towns was mainly due to the expenditure of the rates. In nineteen cases out of twenty it was due to some natural position, or to money laid out not by the local authorities but by railway companies or industries due to private enterprise. In the case of the land for the Edinburgh gas-works, which had been cited, the Duke of Buccleuch and his ancestors had spent £500,000 there on making a harbour. High rates, so far from benefiting land in the neighbourhood of the town, were absolutely detrimental to its value.

The hon. Member for the Elland Division had both in this and the previous year made considerable electioneering use of the proportions to which land rents in towns had increased entirely owing to the expenditure of the rates, but he could cite a case where land was offered to a Town Council as a free gift, yet so high were the rates upon it that they refused. Did that show that the owners of land had lost nothing by the rates increasing? There was a misapprehension as to who provided the streets and sewers for the accommodation of urban property. Hon. Members not learned in the law probably considered that the streets and sewers were provided by the community, while hon. Members learned in the law were aware that they had to be provided by the landowner. He would like to know where was the land in urban districts that was wilfully kept out of the market. He personally knew of land in a high-class district where the landowner was not prepared to let his property go to be used for small cottages or factories, but in so doing—although he was not restrained by covenants—he was acting in good faith towards those who already had built high-class houses on the estate. Other land might be kept out of the market because the owner had not received an offer which he felt justified in accepting. But it was suggested that one of the advantages of this Bill was that it would bring land into the market. Was that so? What it did do was to seek to so arrange the taxation as to force one individual to part with his property to another. It was a proposal to put a special tax on unoccupied land in urban districts so as to force individual owners to part with it, not to the State but to some other individual who might desire to possess it, but was not prepared to pay the present value of it.

In a recent debate it was suggested that the taxation in South Africa should be so arranged as to compel the native to go to work on terms which he would not otherwise accept, and it was urged that that was justified because cheap labour was necessary for the development of South Africa. To-day it was being contended that cheap land was necessary for the development of our towns, and, consequently, they had the proposal to compel landowners to part with their land. Was it the duty of the community so to arrange taxation that one citizen should be forced to part with his property to another citizen on terms which he would not otherwise accept? He maintained that the rating of unoccupied land at a hypothetical value was not a legitimate, though it might be a new, source of revenue. Let the House remember that the Royal Commission had already reported that there was no considerable undeveloped sources of taxation available for local purposes.

It was said that this Bill did not impose a new burden; that it simply redistributed an old burden. That might be so if they put a limit on the spending powers of local authorities. But only give them the idea that they had a new fund to draw upon, and they would at once increase their expenditure. The economic objection to subventions in aid of the rates from the exchequer was that it encouraged extravagance. Their objection must equally apply to a rate which was paid only by a small proportion of the community, as was proposed to be authorised under this Bill. Lord Balfour of Burleigh, in his Report on that matter, used very strong language. He said the danger was that if a rate were charged directly on the lessors, it led to extravagance and plunder, since the lessees, in most cases, had no votes, or if they possessed any at all, it was an inadequate voting power. There had been an attempt to fasten this Bill on Lord Balfour. But the Bill differed from the Minority Report of the Royal Commission on the three most essential points—the amount of the rate, the hereditament on which it was to be levied, and the purposes to which it was to be applied. Take the first point. The Minority Report recommended a strictly limited rate. But this Bill proposed a rate of 1d. in the £ on the capital value. That was an extremely deceptive proposal. It really amounted to an income-tax of 2s. 9d. in the £, to be levied on one particular form of property, whether any income was forthcoming from it or not. As regarded the next point, the Bill proposed that the rate should be levied on all land in urban districts where, as one knew, there was much land in so-called urban districts which was of a purely agricultural character. Lord Balfour's suggestion, on the other hand, was that only land covered by houses or ripe for building, in districts where the population was comparatively dense should be thus rated. He said that to put a tax on other land would be anomalous and oppressive, and go undoubtedly it would be.

Again, the Minority Report recommended that the rate should only be applied to purposes closely connected with and tending to improve the value of land. But under this Bill it might be used for the purchase of water carts, and how could such expenditure be held to improve the value of a reversion at the end of a ninety-nine years' lease? The Bill could not, therefore, fairly be fathered on his noble friend the Secretary for Scotland. The Report suggested many safeguards that were not to be found in the Bill. One was that if a local authority thought certain land was ripe for building purposes, the burden of proving that should rest on it. But there was no such provision in this Bill. Then there was the difficulty of valuation. How was it possible to arrive at a fair judgment of the capital value of something which had never been sold in the market? How was it possible to decide the value of a site apart from the building on it? According to the expert witnesses, whose evidence was relied on in the Majority Report, separate valuation would be expensive, complicated, and uncertain; while those who relied on the Minority Report held that it could be efficiently carried out without unreasonable expense. He did not deny that a valuation of the site as separate from the structure could be arrived at—a valuation of some sort. If one paid a valuer he would value anything But these were valuations on which the rights of individuals would depend, and the contributions of individuals would be levied. If a bad valuer were employed, it would be necessary to employ a good lawyer; so that to valuers or lawyers the rating authority would probably have to disburse an enormous sum if the principle of valuing the site apart from the structure were adopted. In order to meet the difficulty presented by the existence of so many covenants restricting the use of land, and the existence of so many easements, the hon. Member for Barnstaple had suggested that the local authority should be empowered to dispense with such covenants. What, however, was to happen to the rights of those in whose interests the covenants had been made? They would have to have continual revaluations, or else great injustice would be done to the different persons interested in the matter.

He had a report in his hand as to the effect in Berlin of attempting the separation of site values and structural values, from which it appeared that the inconvenience which it had entailed on that city had been so great, and the cost so excessively heavy, that it had been decided to abolish the tax altogether. It would perhaps, however, be worth while to accept the risks attending the Bill if it would adjust local burdens more fairly. But what would actually happen? Take the case of an occupier of a moderate house on a good site, and of an occupier of a good house on a moderate site, both

rated at present at £200 a year. If this Bill passed, the man whose house was on a good site would not only pay on £200, but would also pay this extra tax on the site, while the other man would escape the site tax. The measure violated all the four canons of taxation laid down by Adam Smith—that the contribution should be in proportion to the-revenue enjoyed under the protection of the State; that the tax which each individual paid should be certain, and not arbitrary; that it should be levied at the time most convenient to the contributor; and that it should be levied in the most economical manner possible. He asked the House to reject it on the ground that it would cause extravagance and introduce a new principle—an annual tax on capital value—in respect, to one form of property only. His most solid objection to this Bill was that it did not in any way approach the real remedy for the high rates which were the crux of the housing problem, while on the contrary it would create many more grievances than it would remedy. The real solution was to obtain contributions from other forms of property than the form which was now rated, and the passing of the Bill would only delay the steps which the Government would shortly have to take for the reconsideration of the whole question of the incidence of the taxation.

Question put.

The House divided:—Ayes, 170; Noes, 183. (Division List No. 45.)

AYES.
Allan, Sir William (Gateshead)	Beckett, Ernest William	Boland, John
Ashton, Thomas Gair	Bell, Richard	Bolton, Thomas Dolling
Asquith, Rt. Hon. Herbt. Hy	Bignold, Arthur	Bousfield, William Robert
Austin, Sir John	Black, Alexander William	Brigg, John
Barry, E. (Cork, A.)	Blake, Edward	Broadhurst, Henry
Bryce, Right Hon. James	Hayter, Rt Hon Sir Arthur D.	Pickard, Benjamin
Buchanan, Thomas Ryburn	Healy, Timothy Michael	Pirie, Duncan V.
Burke, E. Haviland	Hemphill, Rt. Hon. Chas. H.	Power, Patrick Joseph
Burns, John	Hobhouse, C. E. H (Bristol, E.	Priestley, Arthur
Burt, Thomas	Jacoby, James Alfred	Randles John S.
Buxton, Sydney Charles	Jones, David B. (Swansea)	Rea, Russell
Caldwell, James	Joyce, Michael	Reddy, M.
Cameron, Robert	Kearley, Hudson E.	Redmond, Jn. E. (Waterford)
Campbell-Bannerman, Sir H.	Kennedy, Patrick James	Redmond, William (Clare)
Chamberlayne, T. (Southmptn	Labouchere, Henry	Reid, Sir R. Threshie (Dumfries
Channing, Francis Allston	Lambert, George	Rickett, J. Compton
Clancy, John Joseph	Law, H. Alex. (Donegal, W.)	Roberts, John H. (Denbighs.)
Cogan, Denis J.	Leese, Sir Jos. F. (Accrington)	Robertson, Edmund (Dundee)
Condon, Thomas Joseph	Leigh, Sir Joseph	Robson, William Snowdon
Corbett, T. L. (Down, North)	Leng, Sir John	Roche, John
Craig, Robert Hunter (Lanark)	Levy, Maurice	Roe, Sir Thomas
Crean, Eugene	Lewis, John Herbert	Rollit, Sir Albert Kaye
Cremer, William Randal	Lloyd-George, David	Rose, Charles Day
Crombie, John William	Lundon, W.	Runciman, Walter
Crooks, William	MacDonnell, Dr. Mark A.	Russell, T. W.
Dalziel, James Henry	Macnamara, Dr. Thomas J.	Samuel, Herbert L. (Cleveland)
Davies, M. Vaughan- (Cardign	M'Crae, George	Samuel, S. M. (Whitechapel)
Delany, William	M'Fadden, Edward	Shaw, Charles E. (Stafford)
Dewar, John A. (Inverness-sh.)	M'Killop, W. (Sligo, North)	Shaw, Thomas (Hawick, B.)
Dilke, Rt. Hon. Sir Charles	M'Laren, Sir Charles Benjamin	Sheehan, Daniel Daniel
Donelan, Captain A.	Mansfield, Horace Rendall	Shipman, Dr. John G.
Doogan, P. C.	Mitchell, Edw. (Fermanagh, N.	Sinclair, John, (Forfarshire)
Douglas, Charles M. (Lanark)	Mooney, John J.	Sloan, Thomas Henry
Dunn, Sir William	Morgan, J. Lloyd (Carmarthen)	Smith, Samuel (Flint)
Edwards, Frank	Morley, Charles (Breconshire)	Soares, Ernest J.
Elibank, Master of	Morley, Rt. Hn. John (Montrose	Spencer, Rt. Hn. C. R. (Northants
Emmott, Alfred	Murphy, John	Sullivan, Donal
Esmonde, Sir Thomas	Nannetti, Joseph P.	Thomas, Sir A. (Glam., E.)
Farquharson, Dr. Robert	Newnes, Sir George	Thomas, F. Freeman (Hastings
Farrell, James Patrick	Nolan, Col. John P. (Galway, N.)	Thompson, Dr E. C. (Monagh'n, N.
Fenwick, Charles	Nolan, Joseph (Louth, S.)	Toulmin, George
Ferguson R. C. Munro (Leith)	Nussey, Thomas Willans	Trevelyan, Charles Philips
Ffrench, Peter	O'Brien, James F. X. (Cork)	Ure, Alexander
Field, William	O'Brien, K. (Tipperary, Mid)	Wallace, Robert
Flavin, Michael Joseph	O'Brien, Patrick (Kilkenny)	Warner, Thos. Courtenay T.
Flynn, James Christopher	O'Brien, P. J. Tipperary, N.)	Wason, E. (Clackmannan)
Gilhooly, James	O'Brien, William (Cork)	Wason J. Cathcart (Orkney)
Grant, Corrie	O'Connor, Jas. (Wicklow, W.)	White, Luke (York, E. R.)
Grey, Rt. Hn. Sir E. (Berwick	O'Connor, T. P. (Liverpool)	Whiteley, G. (York, W. R.)
Griffith, Ellis J.	O'Donnell, T. (Kerry, W.)	Whiteley, H. (Ashton-u.-Lyne)
Gurdon, Sir W. Brampton	O'Dowd, John	Whitley, J. H. (Halifax)
Haldane, Rt. Hon. Richard B.	O'Kelly, J. (Roscommon, N.)	Williams, O. (Merioneth)
Hammond, John	O'Shaughnessy, P. J.	Wilson, J. W. (Worcestersh, N.
Harcourt, Rt. Hon. Sir Wm.	O'Shee, James John	Woodhouse, Sir J. T. (Hud'sfild)
Harwood, George	Palmer, Sir C. M. (Durham)
Hay, Hon. Claude George	Partington, Oswald	TELLERS FOR THE AYES—
Hayden, John Patrick	Paulton, James Mellor	Mr. Herbert Gladstone and Mr. Causton.
Hayne, Rt. Hon. Chas. Seale-	Pease, J. A. (Saffron Walden)
AYES.
Agnew, Sir Andrew Noel	Boulnois, Edmund	Clare, Octavius Leigh
Aird, Sir John	Bowles, T. G. (Lynn Regis)	Clive, Captain Percy A.
Allhusen, Aug. Henry Eden	Brodrick, Rt. Hon. St. John	Cochrane, Hon. T. H. A. E.
Allsopp, Hon. George	Brown, Sir Alx. H. (Shropsh.)	Cohen, Benjamin Louis
Anson, Sir William Reynell	Bull, William James	Collings, Right Hon. Jesse
Arkwright, John Stanhope	Burdett-Coutts, W.	Colston, Chas. Edw H. Athole
Arnold-Forster, Hugh O.	Butcher, John George	Corbett, A. Cameron (Glasg.)
Atkinson, Right Hon. John	Campbell, Rt Hn J. A. (Glasg.)	Cox, Irwin Edwd. Bainbridge
Aubrey-Fletcher, Rt. Hn. Sir H.	Campbell, J. H. M. (Dublin Univ.	Craig, Charles Curtis (Antrim, S.
Bain, Colonel James Robert	Carson, Rt. Hon. Sir Edw. H.	Cranborne, Viscount
Baird, John George Alexander	Cavendish, R. F. (N. Lancs.)	Crossley, Sir Savile
Balfour, Rt. Hn. A. J. (Man'r	Cavendish, V. C. W. (Derbysh.)	Cubitt, Hon. Henry
Balfour, Capt. C. B. (Hornsey	Cayzer, Sir Charles William	Dalkeith, Earl of
Banbury, Sir Frederick George	Cecil, Lord Hugh (Greenwich)	Davies, Sir H. D. (Chatham)
Bigwood, James	Chamberlain, Rt. Hon. J. (Birm	Dickinson, Robert Edmond
Blundell, Colonel Henry	Chamberlain, Rt. Hn. J. A. (Worc	Dickson, Charles Scott
Bond, Edward	Chaplin, Right Hon. Henry	Dimsdale, Rt. Hon. Sir Jos. C.
Boscawen, Arthur Griffith	Charrington, Spencer	Disraeli, Coningsby Ralph

Dixon-Hartland, Sir F. Dixon	Legge, Col. Hon. Heneage	Roberts, Samuel (Sheffield)
Douglas, Rt. Hon. A. Akers	Leveson-Gower, Frederick S.	Rolleston, Sir John F. L.
Duke, Henry Edward	Lookwood, Lieut.-Col. A. R.	Ropner, Colonel Sir Robert
Dyke, Rt. Hon. Sir Wm. Hart	Long, Col. Chas. W. (Evesham	Round, Rt. Hon. James
	Long, Rt. Hn. W. (Bristol, S.
Elliot, Hon. A. Ralph Douglas	Lonsdale, John Brownlee	Sackville, Col. S. G. Stopford
	Lowe, Francis William	Sadler, Col. Saml. Alexander
Faber, Edmund B. (Hants, W.)	Lowther, C. (Cumb. Eskdale)	Sassoon, Sir Edward Albert
Faber, George Denison (York)	Lowther, Rt. Hon. Jas. (Kent)	Seely, Chas. Hilton (Lincoln)
Fellowes, Hon. Ailwyn Ed.	Lucas, Col. Francis (Lowestoft	Seely, Maj. J. E. B. (Isle of Wight
Finlay, Sir Robert Bannatyne	Lucas, Reg'ld J. (Portsmouth)	Sharpe, William Edward T.
Fisher, William Hayes		Shaw-Stewart, M. H. (Renfrew)
FitzGerald, Sir Robt, Penrose-	Macdona, John Cumming	Simeon, Sir Barrington
Fitzroy, Hon. Edward Algernon	Maconochie, A. W.	Skewes-Cox, Thomas
Flower, Ernest	Martin, Richard Biddulph	Smith, Jas. Parker (Lanarks.)
Forster, Henry William	Maxwell, Rt. Hn. Sir H. E. (Wigt'n	Stone, Sir Benjamin
	Meysey-Thompson, Sir H. M.
Garfit, William	Middlemore, Jn. Throgmorton	Talbot, Rt. Hn J. G. (Oxford Univ
Gibbs, Hn A. G. H. (City of Lond	Milvain, Thomas	Thornton, Percy M.
Gibbs, Hn. Vicary (St. Albans	Mitchell, William (Burnley)	Tollemache, Henry James
Godson, Sir Augustus Fredk.	Montagu, G. (Huntingdon)	Tomlinson, Sir Wm. E. M.
Gordon, Hn. J. E. (Elgin & Nrn	Morgan, D. J. (Walthamstow)	Tritton, Charles Ernest
Goschen, Hon. Geo. Joachim	Morton, Arthur H. Aylmer	Tufnell, Lieut.-Col. Edward
Greene, W. Raymond- (Cambs	Mount, William Arthur	Tuke, Sir John Batty
Guest, Hon. Ivor Churchill	Muntz, Sir Philip A.
Guthrie, Walter Murray	Murray, Rt. Hn. A. Graham (Bute	Valentia, Viscount
	Murray, Col. Wyndham (Bath)	Walrond, Rt. Hon. Sir W. H.
Hamilton, Rt Hn Ld. G. (Midx		Welby, Lt.-Col. A. C. E. (Taunton
Hanbury, Rt. Hn. Robt. Wm.	Newdegate, Francis A. N.	Whitmore, Charles Algernon
Hare, Thomas Leigh	Nicholson, William Graham	Williams, Rt. Hn. J. Powell-(Birm
Harris, Frederick Leverton	Nicol, Donald Ninian	Willoughby de Eresby, Lord
Henderson, Sir Alexander		Willox, Sir John Archibald
Hobhouse, Rt. Hn. H. (Somrst E	O'Neill, Hon. Robert Torrens	Wilson, A. S. (York, E. R.)
Hogg, Lindsay		Wilson, John (Falkirk)
Horner, Frederick William	Palmer, Walter (Salisbury)	Wilson-Todd, W. H. (Yorks.)
Hozier, Hon. Jas. Henry Cecil	Percy, Earl	Wodehouse, Rt. Hn. E. H. (Bath
Hudson, George Bickerstern	Pilkington, Lt.-Col. Richard	Wolff, Gustav Wilhelm
	Platt-Higgins, Frederick	Wortley, Rt. Hon. C. B. Stuart-
Jeffreys, Rt. Hn. Arthur Fred	Powell, Sir Franc's Sharp	Wrightson, Sir Thomas
Jessel, Capt. Herbert Merton	Pretyman, Ernest George	Wyndham, Rt. Hon. George
Johnstone, Heywood	Pryce-Jones, Lt.-Col. Edward
	Purvis, Robert	Yerburgh, Robert Armstrong
Kenyon-Slaney, Col. W. (Salop	Pym, C. Guy	Younger, William
Kimber, Henry
Knowles, Lees	Rasch, Major Frederic Carne
	Rattigan, Sir William Henry	TELLERS FOR THE NOES—
Laurie, Lieut.-General	Remnant, Jas. Farquharson	Sir Alexander Acland-Hood and Mr. Anstruther.
Law, Andrew Bonar (Glasgow	Renshaw, Sir Charles Bine
Lawrence, Sir Jos. (Monm'th)	Renwick, George
Lawson, John Grant	Ridley, Hon. M. W. (Stalybridge,
Lee, A. H. (Hants, Fareham)	Ritchie, Rt. Hn. C. Thomson

Main Question, as amended, put, and agreed to.

Words added.

Second Reading put off for six months.