§ Motion made, and Question proposed, "That it is expedient to authorize the payment out of moneys provided by Parliament of any expenses or remuneration payable in connection with any valuation of land or premises for the purposes of any duty charged under any Act of the present Session relation to finance."
§ THE PRIME MINISTER
Such Resolution, Mr.Emmott, as you have just read, even if the Bill had remained in its original form, would have been required, inasmuch 396 as the process of valuation must in any case involve the Inland Revenue in additional cost. But to meet all objections, and to remove all possible hardships, and to facilitate the smooth and rapid working of the Act, the Government have determined to ask the House to sanction the throwing of the whole cost of the valuation upon the State. With that object, extensive Amendments to the five clauses— 16, 17, 18, 22 and 23— which deal with the machinery of valuation, become necessary and have been placed on the Paper. I am not going— I assume it would not be in order, and it would be highly inconvenient to do so— in any detail into a contrast between the original proposals of the Bill in this respect, and those which are now before us, but this seems to be the proper opportunity to give a short summary of the effect of the suggested Amendments from a purely financial point of view.
The original scheme, as I have said, cast upon the owner of the land the duty of ascertaining the total value, and the site value, and where' the land comprised minerals, he was to make a separate valuation of the minerals, and all such valuations made in the first instance by the owner were to be sent in to the Board of Inland Revenue, to be examined by them, and, if necessary, corrected; and any points of difference were to be determined on appeal by Referees appointed by the Crown. The practical effect of these provisions would have been to throw the cost of valuation upon the owner, and the additional expenses incurred through extensions of staff and otherwise by the Inland Revenue was estimated to amount under that scheme to not more than £150,000 a year. The new scheme casts upon the Commissioners themselves the duty of making all valuation of all land in the United Kingdom showing separately the total value, the site value, and, where there are minerals, the value of the minerals. The owner may, if he wishes, himself furnish the Commissioners with a valuation of his own, and the Commissioners are bound to take into consideration any estimate so furnished. For the purpose of making their valuation, moreover, the Commissioners may require all material information within his knowledge to be supplied to them by the owner— a position exactly analagous to that of the Income Tax. For the actual working of the valuation scheme now proposed the country will be divided into valuation I districts about 120 in number. In each 397 district there will be at least one head valuer, and two or more assistants.
For the purposes of supervision and co-ordination there will be a body of travelling superintendent inspectors in the proportion of about one to 12. Those who are familiar with the matter will observe that this machinery is framed exactly on the line of that of the present Income Tax, the value of which has been proved by experience, and which it is intended, as closely as possible, to follow. It is estimated that the whole operation— that is to say, the valuation of the land in the United Kingdom and of the minerals I have described, that operation, which will be a comparatively easy one in Ireland and in Scotland, but less so in England, mainly owing to the existence of the English leasehold system — will be completed for the United Kingdom in the course of three, or perhaps four, years. The cost of this procedure will fall under three different categories. In the first place there will be an initial cost which will fall entirely upon the first and second years, which is estimated at £300,000.
§ The PRIME MINISTER
No; a total initial cost of £300,000. I do not know precisely how it will be divided, but it will fall between the two years. That will be partly in connection with the issuing of forms, tracing of owners, and preparing the necessary particulars for the valuers to act upon. Here, again, the machinery for the assessing and collecting of Income Tax will be followed, and as far as possible utilised. That is the first item of expenditure which, as the Committee will see, will be of a temporary character. Secondly, the salaries of the officers and the travelling expenses of the valuers themselves within the different districts are estimated— and here I must use round figures— at about £300,000 a year, and of that sum, roughly speaking, £150,000 will be temporary— that is to say, it will cease to be a charge at the conclusion of the valuation at the end of the three or four years, and the remaining £150,000 will be permanent. Finally, there is the cost of Referees. As the Committee will see from the Amendments which will be put on the Paper, we have made a very large change in deference to objections raised both as to the appointment and finality of the decisions of those Referees. I think it will be found that every reasonable 398 objection has been met. As to the cost of the Referees, until we have had some experience it is impossible to put it at a definite figure, but it will not be very large. When full allowance has been made for these items, and a very substantial margin left for possible contingencies, it is the opinion of the Board of Inland Revenue that the total cost, from beginning to end, of the valuation ought not to exceed £2,000,000. I will now briefly consider how much of this cost may be expected to fall upon the current financial year, and at the same time approximately what, during the same period, is likely to be the yield of the taxes to be imposed. As to the cost of valuation during the current financial year, as we have only to provide for one-half of a completed year, it seems safe to assume that the sum needed will not be more than £300,000, that is, £150,000— and I think that is a very liberal estimate— or one-half of the estimated total in respect to what I have called initial or nonrecurrent expenditure; and a further £150,000 for the salaries and expenses during that time of the district valuers. In regard to the estimated yield during the same time of the taxes to which the valuation relates, we have seen no ground for any substantial modification in the estimates already put forward so far as the Increment Tax, the Reversion Duty, and the Undeveloped Land Tax are concerned. The Committee will remember that the figures: £50,000 for the Increment Tax, £100,000 for the Reversion Duty, and £175,000 for the Undeveloped Land Tax, making a total of £325,000. I have left out of consideration the minerals, because, as hon. Members will see by a reference to the Amendment Papers being circulated to-day— I am sorry they were not circulated with the Votes this morning, but it was owing to some error and they are available now.
§ The PRIME MINISTER
At any rate, they were handed in last night; and when those Amendments are available hon. Gentlemen will see that in substitution for Clause 12, tax on what is called ungotten minerals, the Chancellor of the Exchequer will, when the time comes, propose a new clause, which will provide for an annual duty of 5 per cent, on mineral rents, not only on royalties, but dead rents and wayleaves, in respect of minerals which are actually in the 399 course of being worked. It is estimated that during the current financial year the yield of this duty of 5 per cent, on mineral rents will be £350,000. If £350,000 is added to the previous figure of £325,000, the total anticipated yield of these new taxes during the current financial year works out at £675,000. As there is a good deal of misapprehension on this question, let me add that the fruit-bearing character and effect of the system of State valuation which we propose to set up will not be confined to the three so-called Land Taxes. We anticipate that it will produce very substantial results in the yield of existing and future Estate Duty. So far, in regard to the Estate Duty, State valuation does not necessarily mean by a professional or expert valuer. The work in the past has been admirably performed within the limits of their resources by the officers of the Inland Revenue, but they have not had the advantage which they will have under the new system I have outlined of the constant daily assistance of the expert professional man. It is the opinion of the Commissioners of Inland Revenue that the effect of bringing to bear upon the Estate Duty a really proper and scientific system of valuation will be to yield a very substantial increase of revenue under this head. That has to be taken into account when you are setting the cost of valuation against the yield of the various taxes which bring you in a credit sum on the other side. Let me just recapitulate one or two points. In the first place, what I may call the capital charge, or, to speak more accurately, the non-recurrent charge in regard to the initial cost will fall only in the first and second years, and will never re-appear, and that is the sum of £300,000 to which I referred earlier in my observations. In the second place, about two-thirds, roughly speaking, of the total cost of valuation, which I put at £2,000,000, will also be non-recurrent— that is to say, when the original valuation, extending over three or four years, as the case may be, is brought to an end, we shall be able hereafter, for the purposes of valuation on the occasions upon which the various duties fall to be charged, to content ourselves with the expenditure of about £150,000 a year. At any rate, I think I may safely say that considerably more than one-half, and probably two-thirds, of the £2,000,000 will be a charge that will only fall in the first four years at the outside, and after that it will cease to be a 400 liability of the State. Therefore I think I am justified in saying two things— firstly, that we are dealing here with taxes, as far as the new taxes are concerned with the immediate yield during the current financial year, which will be comparatively small, but which is certainly calculated and destined to increase year by year; and, in the next place, so far as the valuation is concerned, we are dealing with an expenditure which will be comparatively large in the first two or three years, and will afterwards dwindle into a comparatively insignificant amount. The ground has been as carefully examined as is possible in a matter necessarily so speculative and conjectural— and it appears to me, if our estimates are realised, and we have every reason to hope they will be realised, that the general proposal I am now making to the Committee is based upon principles of sound finance, and will deserve the approval of the country.
§ Mr. AUSTEN CHAMBERLAIN
In rising to follow the very important statement just made by the Prime Minister, I am in a position of very much the same difficulty as that which falls to the lot of the man who has to reply at once on the Budget statement of the Chancellor of the Exchequer, for this is, in fact, a new Budget statement made to the House in the middle of the month of August in substitution of the Budget statement presented by the Chancellor of the Exchequer at the usual time. I should think there has been no more remarkable change of front announced by a Government on an important measure than that which has just been made by the Prime Minister in regard to the Finance Bill. The Prime Minister expressed some surprise yesterday that when it was announced in this House that the Government proposed to transfer the cost of valuation from the land-owning classes of the country to the Exchequer, the announcement was not received with surprise or with effusive gratitude on these benches. It was not received with surprise because, as usual, the Government had confided their intentions to us through the Press a long time before they thought it fitting to make any communication to the House of Commons, and it was not received with any gratitude because there is no occasion for gratitude in the circumstances in which the change is made. From the very first of the discussions on these taxes we pointed out that it was a monstrous injustice to impose upon these classes, quite 401 apart from the merits of the taxes themselves, this enormous cost of carrying out the valuation which the State requires for its own purpose, and we have held strongly the opinion from the first that it was absolutely impossible for the Government to justify in argument, to defend in Debate, or to carry through this House the proposal which they originally placed in their Bill. They mat our representations with a flat denial of their justice. They argued up to the last that it was a slight burden they were imposing upon the landowner in the matter of valuation, and that it was fair and proper it should be imposed upon and paid by him; and up to the very last they refused any kind of concession. They refused even to recognise any reason in our demands, and now the Prime Minister is here to-day in everything but an actual white sheet to recant all the views they have expressed, to admit that we were right from the first, and they have been persistently and obstinately wrong, and to acknowledge now, at the eleventh hour that he is not strong enough to perpetuate the injustice which he contemplated.
I am not going to attempt to discuss in detail the new Budget, which we have not yet seen. It only reached the Vote office since we met this afternoon, and it is obvious we must have the same opportunities of examining it as we had for the rest of the Government proposals; but I should like to make one or two general observations arising out of the statement which the Prime Minister has just delivered. I observe, in the first place, that the cost of the valuation carried out by the Government, who, carrying it out as a whole, can undoubtedly carry it out much more cheaply than separate individuals, many of them small people, can do for themselves, is placed by the Government themselves at £2,000,000. Therefore, on the very lowest estimate, the Government in their original proposal intended to take from the taxpayers £3,000,000 or £4,000,000 in cost for a revenue estimated by the Prime Minis-to amount in the present year to a little over £600,000. What are you to say to taxation which takes from the subject, whether he be liable to the tax or not— and there are many subjects who would be liable to no tax— a sum infinitely greater than that which the Chancellor of the Exchequer is going to receive? Then observe, in the next place, the Government have taken 402 credit to themselves for having been most generous in meeting objections and in dealing with every case of hardship or unfairness which has been brought before them and in scattering relief over the affected interests during the discussion of these Land Taxes. What is the value of the concessions they have made? Let us take the judgment of the Prime Minister upon them. They cost the Government nothing. If they cost the Government nothing they clearly are of no advantage to the taxpayers. All these concessions of which we have heard so much leave the Prime Minister's expectations of revenue exactly where they were at the beginning. Out of his bounty he has yielded and sacrificed nothing on behalf of the Exchequer, and the taxpayers have nothing for which to thank him. Then, I observe, in order to carry out the Prime Minister's new proposal, we are to have created a perfect army of new officials. The country is to be divided up into 120 valuation districts, not one of which is to have less than three officials located in it. There are to be anything from 360 to 1,000 officers, with, I think, about 10 per cent., or perhaps it is 8 per cent., of travelling supervising officers.
§ Mr. AUSTEN CHAMBERLAIN
Oh, with 12 travelling supervising officers! I agree they are unimportant in the army of a thousand new officials required by the Government.
§ Mr. AUSTEN CHAMBERLAIN
Because the right hon. Gentleman- tells me there will be not less than three in each district.
§ Mr. AUSTEN CHAMBERLAIN
The smallest district is to have not less than three. What number is the right hon. Gentleman going to put in the large districts?
§ The PRIME MINISTER
As far as possible the districts will be equal. My estimate is there will be about 500 officers.
§ Mr. AUSTEN CHAMBERLAIN
I hope the Committee is reassured as to the merits of the Land Taxes. They only require an additional expenditure of £2,000,000 to collect them, and an additional 500 403 officials to see they are collected. That is pretty good for a beginning, and let me say that, though it is perhaps rash, without further examination, to set my opinion against that of the Commissioners of Inland Revenue, if the work of valuation is to be done properly, carefully, and with that accuracy which both the individual taxpayer and the State have a right to demand, I think that the estimate is perfectly and ludicrously absurd. You cannot get competent men of proper standing to do the work and spend all the time that work will require for anything like the figure with which the Prime Minister has been supplied. The Prime Minister tells us that the whole system of referees, the method of appointment and manner of choice, is to be recast. The Government complain that their Budget takes a long time. Why did they not give a little more thought to it before they introduced it? Why, when they had introduced it without sufficient thought, and without knowing what they were doing, and when the impossibility of justifying their proposals was pointed out to them, why, I ask, did they not announce these changes at once, instead of wasting weeks of Parliamentary time before they gave way, not to reason, but to the utter impossibility of carrying out their original proposal? The system of the referees is to be recast! We have been told that the appeal to a court of law which was refused by the original Bill is to be granted. Things grow apace under a Liberal Government, but the country is not yet prepared, even at their instance, to place every man's interest at the mercy not of permanent officials, but of the officials temporarily nominated by the Taxing Department and governed only by regulations framed by that Department— the country is not prepared to give them the right to decide every man's fortune and every man's fate. The Prime Minister, surely, does not suppose that such alterations as he has adumbrated are going to remove our objections to this particular portion of the Budget, and still less to the Budget as a whole. These alterations, granted at the last moment and wrung from them in order that the Government may meet the case which has been presented against their original proposals, we regard as an admission of their defeat and of the obligation under which they have found themselves to recast from top to bottom the proposals which they originally presented to the House.
404 I have not yet said a word on the greatest change of all— the complete withdrawal of that beautiful tax on ungotten minerals— the tax which constituted the gem of the collection, the tax on which the Chancellor of the Exchequer specially prided himself as having been suggested to him by the commons over which he wandered in Wales as a boy, and which was the sublimated essence of the new wisdom in matters of finance. The tax on ungotten minerals has gone, and what have we got in its place— a tax on minerals, which are being gotten. But the defence of the old proposal was that it was to force people to develop their minerals— minerals which they held back, which they did not develop themselves, and did not let others develop. The tax on ungotten minerals was to make the owner work his mine. But now you are going to say to him: "Leave the minerals undeveloped and you will save money. Do not sink a shaft, do not allow anyone to make a bore-hole, and you will have nothing to pay." But once a man begins to work the minerals, either himself or by anybody else, down will come the tax-gatherer and take his share! And what are these minerals? I do not know whether the Government have yet made up their minds as to what are minerals. I have been informed by a very high authority that that is one of the most difficult questions that ever comes before our courts of law, and I am certainly not prepared to undertake to answer in my own language the question what are and what are not minerals, seeing it is a question which it puzzles the courts of law to decide. But some things are obviously minerals, and the first is coal. You are going to put a tax on all coal which is gotten in this country— you are going, in fact, to put a tax on the raw material of everything. The next is iron ore. You are going to put a tax on iron ore gotten in this country— the raw material of one of our greatest industries. And so I might go on. Granite, I believe, is a mineral. You put a tax on all granite that is hewn in this country, as if the granite quarries were so prosperous at the present time, and then the Government goes to Norway and gets its granite there. The granite which is hewn for the Government in Norway pays no tax either here or in Norway, but if any British citizen in the United Kingdom wishes to compete for Government orders he must 405 pay a tax— an Excise without any corresponding Customs Duty on the imported stone.
We are not now discussing the Resolution on royalties. That will be necessary later on. Neither are we discussing matters which must be dealt with later, when we come to deal with the clauses themselves. We are now dealing only with the financial aspect of the question of valuation, and though it is quite in order to comment on what the Prime Minister said, it is not in order to discuss the new tax.
§ Mr. AUSTEN CHAMBERLAIN
It is always difficult, when a Member of the Government is allowed to make a statement, which is indeed very necessary to be made for the convenience and information of the whole House, but which we are not allowed to discuss at the present moment. But I must conform myself to your ruling, and I shall not complete the case. I must leave the rest of it for another time. But I have said, I think, sufficient for the moment. All I can add is that if I were not afraid to accept for my Friends and for my party the challenge which the Chancellor of the Exchequer threw down in his original Budget, still less am I not afraid to meet the Government on the ground of their transformed Budget and of the preposterous new proposals which they have substituted for their old unworkable ones.
§ Sir FREDERICK BANBURY
I do not think I need deal with the political aspect of this Resolution, which has been dealt with by my right hon. Friend, but I should like to say a word on the financial aspect of the question. The Prime Minister has given us a clear statement as to the financial results of these new taxes— or rather, I should say, of these altered taxes— and as far as I can understand him the result of these taxes, in this year ending April, 1910, will be £650,000, and of that one-half will go to local purposes.
§ Sir F. BANBURY
Of that sum one half will go to the local authorities, and therefore the gross result to the Exchequer, before the expenses are deducted, will be some £337,000. The right hon. Gentleman has mixed up the annual tax upon minerals with these other taxes. When, however, the Leader of the Opposition yesterday dealt with what the estimated cost of collection would be, and deducted it from one tax, the right hon. Gentleman 406 told him it was not fair to put the whole cost of valuation upon one tax, and he should spread it over the taxes which are collected. I say to the Prime Minister the same thing. It is not right to put the cost of the valuation on the annual mineral tax when no valuation will be required. The yield of the annual Mineral Tax will be a percentage, we are told, of 5 per cent, upon the actual sum obtained. No valuation is required for that. All that is necessary is that the owners of mineral rights and way leaves and other things which the Prime Minister enumerated should send their amount in in the same way as Income Tax is collected, and no valuation of any sort or kind will be necessary. Therefore, I think I should be perfectly right in saying that you should' take the yield of the annual Mineral Tax from the yield of the other taxes, before you compare the estimate of the taxes with the cost of collection. If that were done, it would show a very considerable deficit as the result of the operation. But I am quite content with the financial view of the case as it was put by the Prime Minister, and, for the sake of argument, I will allow the annual Mineral Tax, though I do not for a moment admit that it should be included. The net result of that is, £337,000 worth of revenue in this year, and, according to the right hon. Gentleman, the cost is going to be £300,000. For the year ending 5th April, 1910, the right hon. Gentleman estimated that the cost will be £300,000, and, therefore, these four taxes, the Undeveloped Land, the Increment, the Reversion, and the Minerals, are going to yield the Government £37,000.
I say that nothing more ridiculous was ever put before the House of Commons by a Minister. But that is not all, because in the course of the next four years, the cost is going to rise from £300,000 to at least £500,000 or £600,000. The Prime Minister told us that the total cost would be £2,000,000, and dividing that by four, you get an annual charge of £500,000, so that in the years following there will be a loss of some £170,000. The Prime Minister says that is not so, because these taxes are going to yield an increase. On what ground does the Prime Minister anticipate that these taxes will yield an increase? Take the Increment Tax. What increment is going to accrue in a year. The valuation will be made this year. What increment is going to accrue between the death of a man next year and the valuation now, or between the death 407 of a man in two years and the valuation now? I venture to say that taking the value of the Land at the present moment there will be no increment, but a decrement. The only land which is showing an increment at the present moment is agricultural land, and that is excepted and will not be included. All the land that will be included, therefore, is at the present moment showing a decrement, and therefore the Prime Minister has no ground for saying that there is going to be an increment. We all know that increment does not accrue in a year or two. There is, it is true, the Prime Minister's statement that land is always going up in value, and that the rise is always progressive and permanent, but a more fallacious statement could never be made.
§ 4.0. P. M.
§ Sir F. BANBURY
My right hon. Friend quoted it as having been stated by the right hon. Gentleman, but in view of the fact that the Prime Minister now denies it, of course, I accept his word, and will not press it, but that only emphasises my point, that there is no chance of an increase in the next two years in the Increment Duty. Coming to the Undeveloped Land Duty, what chance is there of people being desirous of investing their money in land in the next two, or three, or four years? I have always found that the instinct of a man is not to put his money in the thing which is to be assailed. Land is going to be assailed if this present Government remains in power, and I venture to say that there is not a single man in this House who will put his money into land if he can possibly avoid it if the present Government is going to remain in power, and I am quite sure that there is not a single society which will do so, not excluding the societies owned by hon. Members below the Gangway. How many trade unions will put their money in land? Not one; because they are not more anxious to be taxed in any unjust manner than anybody else. Therefore the Undeveloped Land Duty will show no increase, and it is evident that if it fulfils the prognostications of the Government it will not so increase, because this proposal is going to bring a lot of land into the market, and that will decrease the value of land. Anybody knows that if you have a lot, whether it is of stock or land, thrown into the market at one time it must depress the price. Where, therefore, is the increment going 408 to come from in the case of Undeveloped Duty? The same thing applies to mineral value, because unless there is going to be great increase in the trade of the country, unless there is going to be great development, and people are going to start new industries, I am forced to the conclusion that there will be no increase. Therefore I am forced to the conclusion. that, from the financial pointof view, no proposal more ludicrous was ever put before the House of Commons. Here we are, for the sake of obtaining a net revenue of £37,500, imposing a tax which is going to add 500 officials — a very bad thing — who will always want their salaries increased me moment they have them. In answer to an interruption of mine, the right hon. Gentleman (the Prime Minister) informed me that the Mineral Duty was going to be divided with the municipality. On what basis do we divide with the municipality? Did the community put the minerals into the ground? And if they did not, why should they have a share of it? They have done nothing. They have made no roads and sunk no bore-holes, and have taken no steps to obtain the minerals out of the ground.
§ Sir F. BANBURY
I accept your ruling. It is fortunate for the Government, because they could not have answered my question. Speaking in no way as a party man, but having had some small experience of financial matters, never in my life could I have conceived it possible that any Government, even a Government headed by the hon. Member for Leicester (Mr. Ramsay Macdonald), could have introduced four taxes which were going to cause all this trouble and confusion and the united efforts of which would only bring in £37,500.
§ Mr. CHIOZZA MONEY
The late Chancellor of the Exchequer told the Committee that that Government proposed to tax coal and minerals. There is, of course, an economic fallacy underlying that observation. It is a fallacy which we have had before, in regard to agricultural land. We have been told that a tax on rent is the same thing as a tax on agriculture. Just as a tax on land is, not a tax on agriculture, a tax on mining royalties is not a tax on coal or on any other mineral. It must fall upon the landowner. The owner of the minerals may, if he likes, argue that that is an injustice to him. I 409 do not think it is. but it is arguable. But it is not arguable that a tax on royalties is the same thing as a tax upon minerals. The hon Baronet (Sir F. Banbury) reproached the Prime Minister with taking into account the yield of the new Mineral Eights Duty. He argued that the Prime Minister was only entitled to take into account £325.000, which is the estimated yield of the new Land Taxes. I do not want to deal so much with that point as to remind the hon. Baronet that there is another most important consideration which he, in his turn, overlooked, and which the Prime Minister reminded him of. It is that this official valuation of land will affect not merely these taxes, but will affect also, and very materially, the yield of the Estate Duties. The capital which passes every year may be taken roughly at about £300,000,000. In the current year it will be rather more. If we take any reasonable multiplier to arrive at the amount of property in the possession of living owners, it is generally agreed by those who have given any attention to the subject statistically that 30 is about the highest multiplier one can take as the rati3 of the property of the dead to the property of the living. If one multiplies £300,000,000 by 30 one arrives at only £9,000,000,000 as the total value of the private property of the people of this country. If we take any other form of estimation we arrive at a considerably higher total. The most conservative estimate is £12,000,000,000. So that you get the difference between £9,000,000,000, arrived at by multiplying out the property of the dead passing i none year, and £12,000,000,000, which is the lowest reasonable estimate one can take as the value. What is the difference? The difference represents, divided by the same multiplier 30, very largely the value of estates which somehow or other escape the attention of the assessor. I think that must be very largely, though not entirely, due to underassessment in the case of landed property. If the hon. Baronet takes that into consideration, if he takes the effect of this official valuation upon the yield of the Estate Duties, he will get a figure, which I will not name, which would more than offset this deduction, which I am rather inclined to agree with him he is entitled to make in respect of the yield of the Mineral Rights Duties, which does not depend upon valuation but upon the declaration by the owner, very much of the same sort as in the case of the Income Tax.
§ Sir F. BANBURY
In making my calculation as to the net result of the tax, I purposely took the figures of the Prime Minister, but I did not deduct the £350,000 which I thought I ought to deduct.
§ Mr. CHIOZZA MONEY
My point is that if Estate Duties alone were under consideration, I myself think this valuation would more than pay for itself.
§ Mr. F. W. LAMBTON
The hon. Baronet (Sir F. Banbury) thinks the Prime Minister has exaggerated the yield of the tax. I want to ask a question. He has told us the valuation will take three or four years. Under the Bill, owners will be heavily penalised who do not make a return within 30 days. I wish to ask whether the right hon. Gentleman has calculated the total yield of these taxes? If valuation is not completed for three or four years, how is he going to get the taxation out of all of it? Are we going to tax according to value or not? The land is to be valued by 500 gentlemen in the course of four years. How are they going to tax the whole of the land of the country this year and next year before it is valued?
§ Mr. HAROLD COX
I want to make an appeal to my Friends on this side of the House, after the statement of the Prime Minister, that they will somewhat modify the arguments they have been using in. the House and in the country. I personally am strongly in favour of the Budget, but this is not the Budget. The Budget is a series of measures for raising £16,000,000. These Land Taxes, to which I am strongly opposed, are to raise£37,000. I appeal to my hon. Friends, when they go into the country to support the Land Taxes, that they will explain that they have other reasons than the desire to raise £16,000,000. With regard to the expense, which, I think, must still fall upon the landowner, these Government officials are going to make the assessment with a view to getting revenue. The landowner must defend himself. That may be a fairly easy matter in regard to the owner of a great estate who has an organisation, agents, and so on, and can, more or less, correct the Government estimate, but in the case of small landowners it will be a very difficult thing indeed. They will have to employ skilled advice in order to defend themselves against the Government estimate. My hon. Friend below me very ingeniously, and, to a large extent, quite rightly, pointed out that this valuation would probably assist in getting a truer 411 valuation for Death Duties. That point clearly only applies to the assessment for the total value of the property. People do not pay Death Duties on site values. A site value is a pure abstraction invented by the late Mr. Henry George, and it is only required for the purpose of these novel taxes. As regards Death Duties, it does not exist, and, therefore, from that point of view, we do not want this valuation at all. It may be a good thing that we should have a better valuation of the land of the country; I think it is; but surely we can do that more economically if we take into account the fact that this better valuation would be useful for local as well as for Imperial purposes; and I believe there is no opposition in any part of the House to a proper valuation of the property of the country for local or for Imperial assessment. What there is opposition to is taking out of a man's property a purely metaphysical abstraction and putting a value upon that. That seems to me a purely sporting proceeding, and I presume it is because of its sporting character that the Prime Minister suggests that the final judge shall be called a referee.
§ Lord ROBERT CECIL
I desire to remind the Committee that the Bill with which we have to deal is a Bill to make provision for the financial arrangements for the year, and it is on the basis of that statement that I desire to examine the figures that the Prime Minister has given us. I should also remind the Committee that we have to deal, not with an ordinary year, but with a very exceptional year, in which we have to meet a very large deficit, and what we have to consider is whether the taxes proposed are those which will be the best devised for meeting that deficit. What is to be the expense, of that valuation? The Prime Minister told us, on the authority of his officials, that it is not to exceed £300,000 this year. I do not quite follow how the officials have arrived at that figure on the other figures which he gave us, but I would assume that it is going to be £300,000. He also told us that the yield of the taxes will be the same as though none of the Amendments of the Chancellor of the Exchequer had been inserted in the Bill. I confess that I am absolutely unable to credit that statement, although I believe it was made in perfectly good faith by the Prime Minister. But I cannot believe that will be the actual financial result of the 412 Amendments made. I think the Prime Minister must have forgotten the immense change made in the Increment Duty. When all increments below 10 per cent, have been absolutely excluded from the tax it leaves nothing from that duty during the present year.
§ The PRIME MINISTER
The concessions in regard to the Increment Duty are more in respect of the future.
§ Lord R. CECIL
They will have very little effect on the duty this year. In the same way I cannot believe that the concession as to undeveloped land is going to produce no result at all. But be it so. we have got now the new Mineral Rents Duty clause, and it is quite clear that the valuation has nothing whatever to do with that. It is a duty imposed on rental, and it has nothing to do with the valuation of the land. That is quite plain, as anyone who reads the clause will see. I would ask the attention of the Committee to this point. You must strike that out altogether in considering the balance-sheet of mineral rents due. That leaves a gross yield from the taxes of £325,000 for the coming financial year, for which we are going to pay £300,000. But half of it does not come into the Exchequer at all. Therefore, you are left with about £160,000, which is coming to the Exchequer, and for which you are going to pay £300,000. That is the Prime Minister's estimate for the first year. I am dealing with the expenses of the current financial year. I remember when I was young there was a rhyme which said:—When I was young I had no sense,I bought a shilling for eighteenpence.The Government propose to spend nearly 2s. on that operation. Now what will they say in answer to that? The Prime Minister told us of the obvious objections that would be made to the financial aspect of this valuation, and suggested that it is necessary for the Mineral Rents Duty. I have endeavoured to explain to the Committee why it has no reference to that duty at all. The Mineral Rents Duty will be levied whether you have a valuation or not. What is the other answer? It is said that there is going to be en increased yield of the Estate Duties. Why have we heard that for the first time to-day? We have been debating the Budget since three or four weeks before Whitsuntide, and this is the first time the Government have said that there is an 413 additional source from which we are going to obtain money from the taxpayers, namely, the new valuation, which will greatly raise the Estate Duties. I think that raises a serious question of order as to whether the Estate Duties can be proceeded with in this Bill at all. It does not appear to me that a Resolution which authorises Estate Duties at particular figures can now be extended by a change in the Bill in regard to valuation, which will increase the yield of the Estate Duties already provided for. Whether it is in order or not, it is a most astonishing proceeding on the part of the Government. That does not deal with the whole case. The hon. Member for Preston (Mr. Harold Cox) has pointed out that no allowance is made for the cost which will be thrown on the landowners. Probably hon. Gentlemen below the Gangway think that that has nothing to do with national finance, but that is not so, for every penny you take in taxation, whether from the tenant or the landlord, is taken from the resources of the country. You cannot force anyone to spend money on land valuation, or anything else, without diminishing the resources from which you may get the money from the taxpayer. "Whether the landowner spends money in defending himself against the valuation proposed by the Government, or spends it in a direct contribution to the revenue of the country, you are, by forcing him to spend that money, diminishing the resources of the country and imposing a burden on the taxpayer. Therefore, in order to get this miserable £160,000 to pay for "Dreadnoughts" and the defence of the country, and to spare a copper to the aged poor, you are going to spend £300,000 directly, and in addition to that you are going to put a burden on the taxpayer of the country of which we have no estimate whatever. And this is the Budget which the Government and their supporters are advocating throughout the country as a great source of revenue to the people. Well may the Chancellor of the Exchequer say:£To deceive the poor is the meanest ofall crimes.
Mr. J. ELLIS GRIFFITH
I think hon. Members, in looking at this Resolution, must do so not only in respect of the present year, but in respect of the effect it will have some years later. The Noble Lord (Lord R. Cecil) takes a limited view of the operation of the Resolution. He says you must divide the sum of £325,000 by two before you get at the amount of the proceeds to the State in regard to the tax. 414 I do not think that operation by division is at all necessary. The amount to be paid from the yield of the tax to the local authorities may be regarded as another grant in aid, and therefore I think the reasonable outlook is that if we receive £325,000 and give half, for municipal purposes, there is not that distinction which the Noble Lord emphasised in the argument which he has just addressed to the Committee. In regard to the Noble Lord's contention that this is an unfair tax, and that the Resolution dealt with a tax which is unfair in itself, I do not suppose that it would be in order to discuss that matter on this Resolution. My own view is— and I have expressed it on one or two occasions— that these taxes are fair taxes. At any rate, that is not under discussion now. But grant that they are fair or unfair, the fact remains that they are to be levied. How in the world can you levy them without a valuation? The question is, is it right or wrong for the State to make this valuation? I think I am right in saying that every hon. Member opposite a week ago insisted that the State ought to make this valuation, and that the landlord ought not to be called upon to pay. Therefore they are estopped, at any rate, from denying that the State ought to make the valuation. The hon. Gentleman opposite made no complaint as to the method of the valuation. If the valuation is necessary, and if the method of the valuation is correct, all his complaint is that it is a little too cheap. The sum proposed to be spent is not enough, so that our economy is a matter for his contempt. If the valuation be necessary, and if the method foreshadowed by the Prime Minister be correct, it seems to me that this Committee is bound to pass this Resolution in order to make the taxes applicable.
The hon. Gentleman opposite (Mr. E. Griffith) began his speech by saying that in estimating the value of the taxes to be imposed we must look to future years. The present Finance Bill deals with the present year only. The hon. Member also made an observation about half of the yield of this tax going to the municipal authorities. That is one of our objections to it. This is a Finance Bill, and not a Local Taxation Bill. I want to say a word or two in reply to the Member for North Paddington (Mr. Chiozza Money) on the question whether a tax upon royalties is or is not a tax upon 415 the coal industry. I have always thought it was considered that mining royalties were a great oppression to the coal industry. I have seen statements made that the royalty was equivalent, or nearly equivalent, to the amount paid for wages to a particular section of workers in connection with the coal industry. But I have also been brought up as an old-fashioned economist to believe that the consumer pays the tax. If the Government put a tax upon mining royalties it is a dead certainty that the tax will eventually find its way to the cost of the coal.
§ Mr. CHIOZZA MONEY
It is the universal opinion of all economists, old and new fashioned, that a tax on rent falls upon the landowner, and that a tax on royalties falls upon the mineowner.
§ Mr. AUSTEN CHAMBERLAIN
If the hon. Member will look at the Resolution he will see that this is not a tax on royalties, but on gotten coal.
If you increase or diminish the income a man is getting from anything whatever it is a dead certainty that that man will try to get it out of the consumer. As to the time which the Prime Minister reckons as necessary for the making of this valuation, I would point out that there is an instructive little paragraph in the Report of the Comptroller and Auditor-General for last year, which state that the War Office could not obtain possession of a little bit of land in the Island of Malta because it had taken more than two years to value the land of that island. If that is so in the case of Malta, how are you going to value the whole of the land of England in two years? I believe, therefore, the calculation of the Prime Minister is too small.
§ Sir ALFRED THOMAS
I beg to congratulate the Government, and the Prime Minister especially, upon the statement which the right hon. Gentleman made this afternoon. I congratulate him especially in regard to the question of valuation. We know that valuations differ very much even in the same county. I know that in the county in which I live there are towns where there is a difference of 25 per cent, in the valuation of properties. Therefore one has to pay very much more in taxation than the other. But we are much more pleased with what the Prime Minister has stated with regard 416 to the taxation of royalties. That has been a burning question in Wales for many years past. I have known from one of the valleys an owner getting £40,000 a year by way of royalties and not paying a single sixpence to local taxation. But now that the taxation of royalties is being divided between the State and the local authorities the local authorities would get half. This is a concession for which I must express my gratitude to the Government.
§ Viscount HELMSLEY
The hon. Member who has just sat down (Sir Alfred Thomas) has expressed his gratitude to the Government, and is surprised that we on this side of the House, do not hasten to thank the Chancellor of the Exchequer and the Prime Minister for the boon which they have conferred. There is nothing to be grateful for because an injustice has been removed, and whether this proposal is a good one or a bad one another reason why there is no particular cause of gratitude is that the Government in putting the cost of valuation upon the Exchequer are, as a matter of fact, putting a large propor-portion of it on the owners of mines, because from the figures the Prime Minister gave the estimated yield of the new tax on mines is to be £350,000, whereas the former estimated yield of the proposed tax on mines was £175,000. Therefore the bulk of that represents really on this reconsideration of the Budget what the mine-owner is going to pay under this system of valuation. So that the tails of the miners are being twisted by the Government in order to pay for this valuation by the State. Therefore there does not seem to be much to be grateful for in that particular operation. A question which I want to ask the Attorney-General, who is present, is what is to be the purpose of the valuation when obtained, over and above the purposes which are apparent under this Act? For instance, is it going to be the purpose of the valuation to use it for the assessment of local rates, because that is most important; because if it is not you are going to have an obvious anomaly. You are going to have one system of valuation in local districts by the local assessment committees and another system of valuation for State purposes by the State. We ought to know whether it is proposed that this system of valuation is going to upset all existing systems, and whether it is to be taken as one cardinal basis on which taxes are going to be levied on all forms of real property in this country. Hon. Members opposite have endeavoured to show that the yield from these taxes 417 over and above the cost of valuation is something which is sufficient to recompense the State for making that valuation.
My hon. Friend the Member for the City of London (Sir F. Banbury) made out that the yield over and above would be £35,000; but if we deduct, as we legitimately may, the share which is given to the local authorities, and look at the Mining Tax as if it would yield the same as it was going to yield before this new clause was introduced, we should find that, so far from there being anything coming into the Exchequer at all, there would be a deficit of £50,000. So it seems to me that the argument adduced from this side of the House that it is buying a shilling for eighteenpence is one that cannot by any possibility be controverted, because it is perfectly obvious that you have to increase the yield of the taxes in order to pay this valuation. I do not know that there is anything one can say more than has been said about the number of officials, but I for one, if there was no other ground for objection against this proposal, would certainly advance that objection, which indeed has already been referred to by the right hon. Gentleman the late Chancellor of the Exchequer (Mr. Austen Chamberlain). I think in every Bill almost which this Government have introduced they have appointed Commissioners or officials of some kind or another. We shall soon be a country swamped and overridden by well-paid officials of the State, and when such very trying and inquisitive duties are to be thrown upon them as is done by these proposals, I venture to say that this is a proceeding which the people of this country will not long submit to. The people of this country are a nation which is very adverse to being overridden by a bureaucracy and officials sent from headquarters, and, to my mind, this is as grave an objection as any of the others that have been or can be alleged against this proposal.
§ Mr. F. W. VERNEY
I most heartily and cordially congratulate the Government on their most important change of front. A change of front very often means better power of attack as well as of defence, and I think that the Government have gained both one way and the other by their change of front. Perhaps I may be allowed to congratulate the Prime Minister more heartily because I had the temerity, about a month ago, to put down a clause on the Paper devoted entirely to the substitution of a State 418 valuation for an individual valuation. I think that anybody who thought the matter out would come to the same conclusion, that an individual valuation must be made according to the interest of the individual, that is to say, whereas Jones might wish to value his estate high and Robinson might wish to value his estate low, you would not have got a valuation which would be of permanent use to the public at large; and if the intention is— as I believe it now is— to have a new Domesday Book, there was one way of doing that, that is, have a State valuation in order that the country at large, and every interest, might— as I believe it will— decidedly gain the benefit and feel the beneficial results in years to come. In regard to gotten royalties, instead of un-gotten minerals—
§ Mr. F. W. VERNEY
May I refer to it to this extent, that I hope it is carrying out the same idea, that wealth in their hands is taxed and—
§ Mr. F. W. VERNEY
There is one point that I should like to refer to in regard to the valuation itself. Although it will be a State valuation, I sincerely hope that local experts will be taken into confidence and that it may not be a mere central bureaucratic valuation as was hinted at by the last speaker (Viscount Helmsley). I am inclined to agree with the Noble Lord that if that idea was carried cut and if local experts were put on one side the result would be most objectionable. They ought to take into account the enormous differences of different counties and even of different parishes and different districts in the same county. If the work was done from headquarters without regard to local knowledge and experience, then I think we might have a great many of the ills upon us which the Noble Lord just now hinted at as arising from a central bureaucracy operating up and down the country for the purposes of valuation.
§ Mr. LEVERTON HARRIS
The Prime Minister has put forward certain figures with regard to the cost of this valuation. I think it is impossible for anybody to decide what is the cost, but on this side of the House we think that it will cost a 419 great deal more than the amount which has been, mentioned. At all events, we have a great deal of experience of former estimates given by the Government, especially that which was given with regard to old age pensions last year, which were estimated to cost £600,000, and which have cost a very much larger figure; but it would be interesting to know whether the Prime Minister and the Government, in framing these estimates, have consulted the London County Council with regard to the cost of their many years' laborious work which they have had in connection with the valuation of London. If they had consulted the London County Council they would probably find that the factors which they have taken into consideration in framing this estimate have been very ineffective ones. For instance, take the question of the 12 surveyors. We understand from the Prime Minister that 12 surveyors are going to do the work of the whole valuation of the United Kingdom in the space of something like four years. This valuation is a very different kind of valuation from that which is required for the purpose of Death Duties. It cannot be done in an office. You have got to take the gross value of the estate; you have got to ascertain the site value. You have got to take the site value and apportion it almost field by field; and this must necessarily mean that a surveyor must be present on all estates of any material size, and that he must go carefully over the estate itself, rind must work out his valuation item by item, which is a very long process, and one which cannot be done in a few days or even a few weeks. To conceive that 12 surveyors will be able in four years or even in 40 years to do all the valuation detail by detail, estate by estate, field by field, of the whole United Kingdom, is, I venture to say, an absurd undertaking. But the excuse put forward for the cost of this valuation is not so much that the revenue at the present time will compensate the State for the cost, but that we may look forward in the future to an increased revenue which will amply repay the expense to which the State is to be put for this valuation.
The Prime Minister said yesterday in the course of his speech that these Land Taxes would be growing taxes, not in magnitude, but growing in produce, and he believed that they would be found to be a most important and useful and fruitful addition to our fiancial stock. That 420 statement involves one of two alternatives. It means either that the extent of the undeveloped land in this country will increase or that the valuation of the undeveloped land in this country will increase, which is a very strange proposition to put before the House, when we remember the argument that has been put forward from the opposite side that these taxes will bring undeveloped land into the market and convert it into developed land, and will also reduce the value of this undeveloped land which will remain undeveloped. That is not the only inconsistency which we have had in connection with these calculations. With regard to the difficulties of this valuation, the Prime Minister said yesterday that the difficulties had been exaggerated by my Friends on this side of the House throughout the whole Debate on the Finance Bill, and he said that they were to a large extent figments of the Parliamentary imagination. It is really, he said, a very simple problem, and he went on to inform the House that when a landowner wished to dispose of any land to a railway or a public body the process was a very simple one, and was put into use every day in the week. That statement was entirely opposed to the statement put forward by the Attorney-General yesterday afternoon when he told us that the method of valuation which obtained for the purpose of selling land to railway companies or to corporations was a most difficult and expensive process.
I do not know whether the hon. Member applies his remarks to this Resolution. If not, they are out of order. I do not see their connection with it.
§ Mr. LEVERTON HARRIS
We have been constantly told that the question of valuation is a very simple one, and that valuations can easily be made, and are being done every day. I want to show that these valuations are not so simple a matter as hon. Gentlemen opposite seem to suppose they will be. However, I will not argue that point any further. I should like to give one example of the great complexity which exists in making these valuations— the amount of trouble which they entail and the amount of expense which they involve. There is a small property which was valued some short time ago for the purpose of Estate Duties. The property is something like 82 acres in extent, lying about 25 miles from London. When the valuer was called in, first of all on be- 421 half of the executors, he made a valuation which was something under £8,000. It was based upon 25 years' purchase of the rateable value. That valuation was sent to the authorities at Somerset House— I presume the same authorities as will have to deal with valuation under the present land clauses of the Finance Bill. The valuation, having been sent to Somerset House, was returned with the remark upon it that it was "Insufficient," and that the correct value to be put on this property should be approximately £500 an acre, at which one acre in the neighbourhood of the property had been sold. That was a difference of between £8,000 and something over £40,000. The trustees and executors who were dealing with this property offered to go to arbitration, but the Somerset House authorities refused, and they sent down their own valuer, pursuant to the powers they have under the Act of 1894. Their own valuer made a third valuation, which amounted to something like £15,000. So that we have, first of all, a valuation of £8,000 made by one valuer; secondly, a valuation of between £40,000 and £50,000 made by the Government itself; thirdly, a valuation of £15,000 made by the valuer sent down by the Government; and ultimately a fourth valuation of £10,500, which was the figure eventually agreed upon.
The argument of the hon. Member really does not apply to the Resolution, which authorises expenditure in connection with the valuation of land.
§ Mr. LEVERTON HARRIS
The point I was making was this: We are asked to pass a Resolution empowering the Government to spend certain sums of money in paying valuers to make certain valuations. That valuation is based on a prior fallacy that it is a very simple process to make valuations, and that it can be done by twelve surveyors.
The question of four valuations and how they dinered and what they cost does not affect the cost of the one valuation to be made by the Government, and the hon. Member must confine his remarks to the point raised by the Resolution.
§ Mr. LEVERTON HARRIS
The point T wish to make is whether the owners of these various properties will be satisfied with the valuation made by these twelve men of their properties.
§ Mr. LEVERTON HARRIS
The 12 surveyors. I do not know at present who the 12 surveyors will be, of course. We understand that there are to be 12 surveyors who will wander about the country, and who are to go over every person's land, to divide field from field, and to fix the gross value.
§ The PRIME MINISTER
The hon. Member is under a total misapprehension. The 12 gentlemen are simply to perform the same duties as the superintending travelling inspectors perform with reference to Income Tax. They are merely to see that there is co-ordination of principle between the different persons in making the valuations. They have nothing to do with making the valuations at all.
§ Mr. LEVERTON HARRIS
Are we to understand that in addition to these permanent officials there are to be other officials who are to take part in this work?
§ The PRIME MINISTER:
The hon. Gentleman apparently did not do me the compliment of listening to any part of what I said. I explained most carefully mat there are 120 districts; I explained what staff there is to be in those districts and their functions, and what is the relation of these supervisors to the other officials. If the hon. Member will refer to what I said he will see that the matter was perfectly explained.
§ Mr. LEVERTON HARRIS
I gather that there are in each of these districts three persons— one head superintendent and two superintendents under him?
§ Mr. LEVERTON HARRIS
They are inspectors. [An HON. MEMBER: "There are 500."] Five hundred altogether. The point which I desired to make was that this valuation is not the simple matter' which the Prime Minister has led us to suppose it is likely to be, and that it is not only complicated, but the figure of £2,000,000 which has been put upon it will eventually, in my humble belief, prove to be entirely inadequate.
Sir GILBERT PARKER
The Prime Minister has had a good deal to do with business matters in his long and distinguished experience, and I would like to ask him if he thinks that the expenditure of £300,000 in order to get a return of £75,000, or £27,000 for this first year, is what is called a good business transaction? 423 Secondly, the Prime Minister said that after the four years had elapsed which would be taken for the valuation, and after the £2,000,000 had been spent, we should then settle down to an expenditure, I think, of something over £600,000—a fixed expenditure of £600,000. Even supposing we may get by the expenditure of that £600,000 a revenue of £700,000 or £800,000—which I think is extremely problematical and doubtful—does the Prime Minister think that a good business transaction? By imposing this system of valuation he is laying a burden upon the people who are quite willing to contribute to the revenue of this country, but they are not willing to pay in any case, however just the duty, such an excessive cost for arranging for the collection of that duty, and for the valuation of their land. It is perfectly absurd. The United States, for instance, collects on its hundred thousand millions' worth of goods which it imports between 5 and 6 per cent, for the collection of the duty. We have to pay for the collection by the Revenue Department about 4 per cent. I think that now we are paying something like £2,000,000 for the collection of £60,000,000 of revenue from customs and excise. What are we doing here? We are asking the people who own undeveloped land—people who must contribute to this duty—to pay a sum which would represent probably £3, as the cost of the collection, for every £1 that is to be given as duty. ["Who pays it?"] I do not know who pays it, if not the owner of the land.
§ The PRIME MINISTER
The hon. Gentleman seems to think that the cost of collection is thrown on the owners of the land. We are taking it away from him and putting it on the shoulders of the general taxpayer.
Sir GILBERT PARKER
Surely the landowner pays his share, and a very large share, of the cost involved? But admitting that the burden falls on the whole community in connection therewith, does not the right hon. Gentleman see that the cost of collection is out of all proportion to the fruit of the tax? The right hon. Gentleman cannot give an estimate. What is the use of imposing a heavy burden on the taxpayers of this country if he cannot give an estimate of what will be the probable result when we settle down to the normal expenditure of over £600,000 for setting up the Department which is to collect this duty? I think nobody will be convinced by the 424 statement the right hon. Gentleman has made. Secondly, I do not think that there is a single Member of this House but is firmly convinced that the value, of land will go down immediately after this Budget is passed and this tax is imposed. The depreciation may not be permanent, but for the next few years you will have, instead of an increasing value of land, a decreasing value. You will get a violent disturbance in purchase and sale. You will disturb the market, and you will disturb the confidence of the people. The right hon. Gentleman, I have no doubt, thinks that he will get ultimately from this tax an increase, as the Member for Paddington (Mr. Chiozza Money) said, of the value of land from which the State can collect revenue, but I am not so sure about that, in spite of the testimony of the Member for Paddington. I have no doubt the right hon. Gentleman thinks that the Death Duties will increase. People must die, but you cannot insist upon people buying or selling land. If you decrease the value of land you disturb the economic market, and it is absolutely certain that instead of the Chancellor of the Exchequer getting from this new imposition a great increase of revenue, that the increase will be extremely slight, while the price you pay for it will be very great. I should like the right hon. Gentleman, if he does not think my questions too trivial, to give an answer to them.
§ 5.0 P.M.
§ Mr. LEIF JONES
The arguments of the Opposition to-day are in singular contrast to those we listened to from them for the last few weeks. Throughout the whole of this Budget Debate on the Finance Bill we have had the claim from the Opposition that the valuation should be made by the State, and not by the owners of the land. We have been told that it is exceedingly unjust to put the expense of valuation upon the owner, that it was making the owners their own executioners, and, not content with taxing them with a new tax, that they were getting an additional burden of valuation. The Government has taken the Opposition at their word, and has agreed, and quite properly agreed, I think, to have the valuation made at the cost of the State. That is a concession to those who were pleading against what they thought to be an injustice. I agree I think it was a hardship to condemn the owner to pay the large expenses of valuation, and I am glad, for one, that the Government have come to the decision to 425 have a State valuation made. The Noble Lord (Viscount Helmsley) tells us he has no gratitude to give the Government, and says why should he express gratitude because an injustice is removed. That is a very sternly logical attitude to take. Has the Noble Lord found justice so common that he does not even feel inclined to acknowledge when at last justice is done? For my part, I am always ready to join in a hymn of thanks when an act of justice is at last done. I would venture to recommend that line of conduct as a more gracious one, if not a more logical one, than the present one taken by the Noble Lord.
Another great point was the impossibility of the proposed tax on ungotten minerals. The Opposition have urged that you could tax gotten minerals, that you knew what they were, and the amount they would realise, and that they could be fairly taxed. Again the Government have taken them at their word, and propose a tax on royalties. There is an immediate outcry that it is going to be a burden on the coal industry and the iron industry. I was distressed to hear the hon. Member for Dorset, the Chairman of a Committee on which I sit, and whose teachings I am very ready to follow, saying that the taxation upon royalties would be a burden upon the industry. The hon. Member for Paddington (Mr. Chiozza Money) interrupted and said that every economist of note had stated that a taxation of rent and royalties did not fall upon land or upon minerals, and was very different from a taxation on the commodities themselves. I do not think there is any proposition on which economists are more thoroughly in agreement than that. I would ask the Opposition, if they are inclined to follow my hon. Friend, what sort of position they would be in if they say the tax was a burden on the industry, because what about the royalty itself?
I am continually calling hon. Members to order for discussing this matter. There must be a fresh Resolution about it, and then it can be discussed.
§ Mr. LEIF JONES
I am very sorry. I was only following the argument used on the other side, and I will leave that part of the subject. The point was made by the Noble Lord the Member for Marylebone (Lord R. Cecil) that the yield of the tax was altogether disproportionate, and that it was a mistake to collect this tax 426 at the expense of such a valuation. I think that all through the discussion a mistake has been made in trying to explain the valuation as if it were comparable with the annual return from the tax. After all, as the Prime Minister told us, at least two-thirds of the cost of valuation, and I take it to be correct that the greater part of it, at any rate, is expenditure which will not be recurrent. It is, therefore, in the nature of capital expenditure, and you ought not to compare it to the return of the tax, because the tax, once established, that expenditure suffices in all future years. I think, therefore, it is a fallacious comparison to attempt to set up a comparison between the cost of valuation and of the return in any given year of the tax based upon the valuation.
§ Lord ROBERT CECIL
We are now considering the means of raising money for the expenses of this year.
§ Mr. LEIF JONES
That is quite true, but also, considering the means of raising taxes in future years. Undoubtedly, in every Budget that has ever passed through the House, the consideration of the tax in future years has been a point of merit or demerit with the tax proposed. I would refer to the speech mentioned only yesterday, the speech of Gladstone, in 1853, where he laid down the course of our taxation and the future of our financial system for many years to come. It is utterly new and entirely characteristic of the topsy-turveydom in which the Opposition find themselves at the moment, that they should be urging it as an objection against the present Tax that it will in future years be a valuable tax for the financial system of the country. We are entitled to claim that. Another doctrine which seems to me equally extraordinary is that you ought to deduct from the return of this tax to the State that portion of the money which is granted to the local authorities. That is a most extraordinary doctrine. Why is this money being granted to the local authorities? Is it not because the local authorities, as I am sure the Noble Lord has argued, and as I have argued many a time, the local authorities are paying for many services which ought to be paid for by the State. Therefore, when you make a grant from the State towards those purposes, paid for by those localities, and which ought to be paid for by the State, are we suddenly to be told by those 427 who are asking for more money to be given to the local authorities that such expenditure is not State expenditure at all?
§ Viscount HELMSLEY
Let me explain. That expenditure does not go towards diminishing the deficit in the finances—that is, the £16,000,000.
§ Mr. LEIF JONES
I take it, if this is an expenditure made by the local authorities which ought to be paid for by the State, we ought to provide it in this financial year. It is as legitimate a part of our expenditure as any other part of our expenditure in the present year. I am surprised that any hon. Member on the other side should say it is not so. My complaint is that the Government have not seen their way to give more even this year. I think the Government have come to a wise decision in throwing the burden of this valuation on the State. I think it is a wise expenditure for them to be making, and I am glad to know that they hope to complete it at a cost of something like £2,000,000.
§ Mr. WALTER LONG
I want to ask a question of the Prime Minister, whose absence I regret, but I daresay the Under-Secretary of State for the Home Department will be good enough to pass it on. The announcement which the Government made to-day is one of the most serious we have had made in connection with the whole of these Budget Debates. I confess I listened with some little astonishment to the hon. Member for Glamorgan, who appeared to be very much pleased with the action of the Government. I do not think he quite realised that the immediate effect of this new proposal must be to cause an immense amount of confusion. My hon. Friend behind me, referring to the new proposal, was under some misapprehension as to what its precise effect would be. Of course, with the knowledge at our disposal, we have but the vaguest knowledge of what the Government proposal with regard to valuation is. I doubt whether this new valuation is going to help the hon. Member, who wishes to see the new charge on mining royalties. The real difficulty that arises there is one that will not be covered. I think, as I understand it. that the new system does not differ from the existing system of valuation for Income Tax purposes, so far as machinery is concerned, but it differs in toto from the principle which is affected in the two valuations. I venture to say the Income 428 Tax machinery and principle afford no precedent. Do the Government suggest that they are going deliberately at the expense of the country to have a fourth system of valuation in addition to those in existence, and to produce no connecting link between the two, and putting us in the state of being worse than at present? At the present moment in almost every part of the country, as every hon. Member familiar with the system of local Government must know, there are three distinct and separate systems. We have the county valuation, and the borough valuation, and the valuation made by the valuation committee, and you are going to add a fourth, made by the Government, so far as we know, on totally different principles. We do not know at all what is the plan the Government intend to adopt in the selection of their districts. I do not know what the proposal is. Are we to hear of it in some more definite form. I submit this ought not to be passed from the consideration of the House without our being afforded the opportunity to discuss the method and machinery by which the Government propose to deal with it.
After the speech which we have had from the Prime Minister to-day, and after the speech we have had from the hon. Gentleman who has just sat down, and I thank him for it, I thank him for the admission he made, after those speeches from the Prime Minister and from the hon. Gentleman and others, I do hope, in com-man fairness, and in common honesty in the country, we shall hear no more of those statements of hon. Gentlemen opposite that the cry of the landed classes has been of a selfish kind to escape their contribution to taxation now wanted for certain purposes. The hon. Gentleman who spoke last has emphasised that point, and tried to turn it against my hon. Friend. He said you have no right to complain of the fact that the revenue is small to-day, but will increase. He, with his friends, I do not say necessarily he, though he is largely affected by the action of his friends, and hon. Gentlemen opposite, have been going over the country stating that the intention of the landed classes was to object to their fair share of the Budget, and that it was pure selfishness. Every word we have said has been justified by the action of the Government to-day, and realising that our criticisms have been just, they have been now compelled to abandon their original intention of throwing the burden of this new valuation 429 upon the individual. That is an admission on their part that there has been mo such attempt on ours to escape from -our fair burden. What we have contended all along has been justified by the statement of the Prime Minister, namely, that these new taxes on land have nothing to do either with "Dreadnoughts" or old age pensions, and that they are for a totally different and for ulterior objects. They are created for different purposes. I hope we shall not after to-day's Debate hear any more of those unjust and unfair and cowardly charges which have been made.
§ Mr. GEORGE YOUNGER
I desire most respectfully to suggest to the Prime Minister that his estimate of the cost of this valuation is far from being a correct one. As I understood him, presumably 500 officials are to be employed for making the State valuation and the sum for their expenses, office and travelling expenses and salaries, is put at about £300,000 per year. That is an average of £600 for each official, but that £600 has to include the whole of the Government expenditure on the office. May I point out to the Prime Minister that the salary proposed to be paid to those 500 men, with the knowledge and experience which is required, is very much less, I do not know that it will be more than half, of what is at present paid to the assessors who are sent down from Somerset House to perform this work. Therefore, it is quite impossible that, for that money, the Government can obtain men with the necessary qualifications and knowledge; and if they do not obtain men of that character, the work will be useless and unsatisfactory. They must also remember that the assessors, to whom at present they pay anything from £700 to £1,200 a year, are merely valuing the annual rental, occasionally hypothetical I agree, but always with the assistance of the local authority; whereas those who are required for this purpose will have to value, not only the capital value of these estates, but to take out the site value, which it will be extremely difficult to estimate, even by those most competent to do it. I submit therefore that the sum of £300,000 is a ridiculous amount to suggest as the cost of this valuation, unless, indeed, the valuation is to be of no great value, or is to be made by men without the necessary experience and practical knowledge. I am sure the Prime Minister will admit that it will not be easy to get men with the necessary knowledge for the figure he has 430 named. I believe that this valuation will cost a great deal more than the Prime Minister has suggested, and I am bound to say, as one of those who have always protested against the burden being laid upon individuals, that, if the valuation is to be made, it is perfectly fair that the State should pay for it. From the very first I have seen that the Government would be forced into this position, because I am perfectly certain that a valuation made by individuals in the haphazard way suggested by the Bill would have been absolutely useless.
The only other remark I would make is that in formulating this scheme of valuation and in dividing the country into districts, I am extremely sorry to see no indication in the Prime Minister's statement of any desire to take advantage of the existing machinery in Scotland. The right hon. Gentleman knows how good that machinery is, and how admirable is our system of valuation; and I would suggest to him, as an economist, that he would value Scotland much more economically if, instead of dividing the country into districts and treating it in the same way as England, he imported some sort of expert assistance into the existing local system. In that way he would get the local knowledge which is absolutely necessary, and the valuation would be much more satisfactory. I hope the right hon. Gentleman will consider that suggestion. As one who has had a great deal to do with valuation in Scotland—I have presided over the valuation court in my own county for many years—I know pretty well what the work is, and as the result of that experience I believe that this valuation would be made much more satisfactorily in the manner I have suggested than by any system of divisional offices which the Government may set up.
§ Mr. MUNRO FERGUSON
I think the suggestion thrown out by the hon. Member opposite (Mr. Younger) is well worthy of consideration, not only for the reasons the hon. Member has given, but because I believe it would be more difficult to get the services of so large a number of skilled valuers in Scotland than it would be in England. We have not enjoyed the peculiarities of the leasehold system in Scotland. Perhaps that is one reason to account for the regular valuator being a practically unknown quantity there. It is no doubt fair that the cost of this valuation should be thrown upon the State, but 431 the objection to it is that the work of valuation conducted by the State must necessarily be very costly. It is shown to be very costly by the figures which have been given. But that will not represent all the cost, because if these official valuators nominated by the State are to do the whole of the work it must involve counter-valuing, and there will be cases of appeal. I think that, both by the suggestion made by the hon. Member opposite and by a suggestion which I myself made at an earlier stage of the proceedings, the cost of valuation might be very considerably reduced. In addition to the suggestion of the hon. Member opposite I believe that another alternative would be to have a list of independent recognised valuators—men who do the ordinary valuation and who are recognised as the leaders in their calling. If there was a list of these men in, say, half a dozen centres in Scotland or in each county, and if the valuators were selected by the Treasury and by the individual, I think the work would be done much more cheaply, with much less friction, and with far fewer appeals. We have that system already for the farm valuing, and I do not see why it should not be equally applicable to the present case. Then you would not have the Inland Revenue Department brought into personal contact with the individual. They would nominate their valuer, or, if they could not agree on a valuer, one might be nominated by the Lord President in Scotland, or by a corresponding official in England. In many ways the bringing of the Inland Revenue into direct relations with the individual in these matters is greatly to be deprecated. The power of the Department is enormous, and the only security of the individual is to go to a lawyer at enormous expense. That may be done by an association of owners of property, but I do not know that it is to be desired. The alternative of independent valuers is one which I think ought not to be overlooked by the Government.
I am certain that with regard to many estates the estimated cost of this valuation has been greatly exaggerated. Many of the valuations would be given far better by the estate offices than by any valuator whom you could call in. So far as many of the estate offices are concerned, they would not call in a valuator, because they could give at once a far better valuation than any valuator could give. In such cases that would not involve any expense; but it does not apply to all cases.
§ Major ANSTRUTHER-GRAY
Has the hon. Member taken into consideration the site value? That is where the great difficulty occurs.
§ Mr. MUNRO FERGUSON
I quite agree; but I am sure that many managers of estates, and even the owners of some, if they came into consultation with two or three good writers, could get out a much better note of the valuation than almost any outsider you could call in. I think, therefore, the State will lose heavily by employing a professional class, who are not nearly so well acquainted with the properties to be valued as those who ordinarily manage them. If it were possible to secure the co-operation of the owners of property, and to have independent valuers instead of State officials, the cost of this valuation, I do not say in all cases, but certainly over the greater part of the area of Scotland, might be considerably reduced. Beyond that pratical advantage, I would urge that, even with an appeal, it is undesirable to increase the enormous powers of a bureaucracy. The remedy of the law is a costly one, which ought to be avoided. I do not think the present relations of the Inland Revenue with the individual are satisfactory, and that is why I urge so strongly that we should not put out of sight the independent valuer.
§ Mr. A. J. BALFOUR
You, Sir, have quite rightly ruled that we must not travel into the merits even of all the subjects raised by the Prime Minister in the course of his statement. There is, and must be, I think, a latitude of exposition given to the Minister in charge of a Bill, which cannot be driven to its extreme logical consequences by those who follow or comment upon the Prime Minister's statement. I shall be very brief in what I have to say, because I shall endeavour most carefully to follow the indications which you have let fall, and not deal with subsidiary points indirectly connected with the proposals of the Government. For example, I shall not do more than ask—I shall certainly not dwell upon it—a question which is inevitably suggested by some of the speeches which have been made, as to the principles on which the Government are going to divide among local authorities their share of the various taxes. I do not know whether the Prime Minister could indicate at this stage how he proposes to divide that money, but so far he has not done so, and there is no indication of it on the Paper. My right hon. Friend (Mr. 433 A. Chamberlain) reminds me that this allocation of half the proceeds of these taxes to the local authorities is one of the innumerable afterthoughts of the Government, and therefore, by the nature of the case, there could not be in the Budget, as introduced, particulars of the proposed method. But I beg the Government not to abuse their power of deferring putting on the Paper Amendments which are going to change the whole substance of their proposals. They have already profoundly altered the proposals, and there are indications that they are going to alter them even more profoundly in the future. It is only fair that we should have adequate notice of the character of those changes, and how they are going to be carried out. I do not press the Prime Minister to go into detail now, but if he could indicate the manner in which the various local authorities are to share in the proceeds of these taxes it would be a convenience to the House and to the local authorities themselves.
I do not dwell either upon the economic points raised by the hon. Member for North Paddington (Mr. Chiozza Money). We shall have ample opportunity for discussing the incidence of the tax, of which we have heard to-day for the first time, which is to be placed, not upon ungotten minerals, but upon minerals in process of being gotten. I think the hon. Member will find that the rather narrow economic doctrine which he has laid down will not apply in its admirable simplicity to the tax it is now proposed to introduce. There was, however, another point raised by the Prime Minister and by the hon. Member for North Paddington which is strictly and closely relevant to the Resolution now before us, and that is the effect which the valuation carried out at the cost of the Government will have, not upon the taxes contained in the first part of this Bill, but upon the Death Duties. This, as my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) pointed out, is the first time we have heard of this expected effect of the new land valuation, and I think we ought to know more about it than the Government have yet vouchsafed to tell us. They are not only constantly altering their Bill, but they are constantly altering their estimates; and as some sort of valuation has always been contemplated by the Bill, the effect of that contemplated valuation on the Death Duties must have been in their mind; but why we have not heard of it or of its effect on the revenue of the pre- 434 sent year and of years to come until it is casually mentioned by the Prime Minister in dealing with a matter which we had supposed was connected only with the taxes in the first part of the Bill, I really do not know. I see, for my part, the value of the argument. I do not believe in it. His argument is to the effect that this valuation now proposed by the Government in this Resolution to meet the deficit is based upon this calculation; that there are various ways of arriving at the total amount of property in the country. We have very precise information of the total amount that passes each year at death. If you multiply that by any reasonable factor you ought to be able to find from the resultant figures what the total value of the national property is, and that that amount should correspond with the results of other calculations provided from other data, and by different lines of argument. There may be a discrepancy between the amount that passes at death and the amount which you would expect to pass at death if you calculate the capital value of the property of the country. But it is not in connection with that amount that the discrepancy occurs. It is not land that escapes Death Duties; that evades the action of the Government. It is those more fluid and flexible forms of property which, I venture to say, will always evade the grip of the tax-gatherer when that grip is drawn too tightly, and if the owners of that particular kind of property think they are singled out for special, exceptional, and unjust treatment. Therefore, I should like to understand upon what the Prime Minister or the Government base their calculations that the new valuation will increase the amount which the Government are going to collect on real property. Real property in this country is a diminished fraction of the total national assets. It is not a fraction of the total national asset which easily escapes the taxes. I was rather surprised when the Prime Minister indicated in his speech that he thought one of the indirect results of the Motion that he was putting before the House was to increase the yield of the Death Duties. He did not at the same time tell us that justice was going to be done to the owners of land in respect of Income Tax. There, again, that injustice is great and is admitted. It is now apparently alleged that the owners of real property have escaped paying their fair share of the Death Duties under one valuation. By all means let the owners of real property pay their proper 435 proportion to the Death Duties in common with all others. But at the same time while you are making your machinery more perfect, do try to see that your system of taxing annual values is made as fair as your method of taxing capital values is made severe. I come to the point which is really most closely relevant to the issue before the House. The Prime Minister has suggested that this valuation has got to do with the Death Duty. That is only a subsidiary consideration. It is mainly regarded by us as an integral part of the machinery for obtaining the three taxes dealt with in the first part of the Bill. It is perfectly clear now—it was not clear before—that the first part of this Bill is not a revenue-raising operation at all, and that the machinery now proposed in this Resolution is not a machinery for raising revenue. The objects of the Government in moving this Resolution are not to get revenue. The object of the Government in moving the portion of this Bill of which this new machinery is to form part is not to get revenue. Their objects are different. They are ulterior. They touch wholly different issues. They are not methods to meet a great national emergency. This Resolution and all the clauses with which it is connected is a plain, obvious mechanism for carrying out some special scheme which the Government—or perhaps not so much the Government as a Member here and there of the Government, and those more extreme sections of the Radical and Socialist party on whom those Members of the Government depend. It is machinery for carrying out their schemes. If any evidence is required of that it is surely provided in the calculations which have been given by the right hon. Gentleman near me, by local Members behind me, and by others who have spoken. For the most part, so far as I can follow the figures, my hon. Friends have been far too lenient to the Government.
Then I should like to ask the Prime Minister, who, I suppose, will conclude the Debate, whether the figures I am now going to read are not correct, or at all events based upon statements, calculations, and estimates of himself or his Government? I exclude from these estimates the new tax which is announced to-day, for the first time, a tax upon un-gotten minerals, because that has nothing whatever to do with this valuation. I do not gather from the Prime Minister that this new machinery called into existence is 436 going to value the amount of the royalties, or the amount that ought to be credited to royalties in cases where royalties are not paid. If they are to do that, the object would be far more easily carried out by the Inland Revenue machinery already in existence. You do not want experts in the valuation of agricultural or urban sites to deal with that kind of property. Therefore I confine myself to the three taxes—the Increment Duty, the Undeveloped Land Duty, and the Reversion Duty. Before I leave the other tax, though I am not going into the merits or demerits of it, I would observe what I do not think the Prime Minister did observe, that the amount is exactly double that he means co extract, and this alteration he mentions without a word of explanation or apology. The amount he is going to get out of this 5 per cent, upon coal rents and other duties is exactly twice what it was said was going to be got out of—I will not say the same source of taxation, because it is quite a different source of taxation—under the original plan which the Chancellor of the Exchequer and the Government was so proud of only a few weeks ago, and which they have now abandoned. But I revert to the three taxes which this Resolution is intended to deal with. I understand that the Increment Duty is Likely to produce £50,000 a year; that the Undeveloped Land Duty will produce £175,000 a year; and the Reversion Duty £100,000 a year.
§ Mr. BALFOUR
Very well. That is a total of £325,000, of which I suppose half goes to the local authorities. Half of that sum, namely, £162,500, is to go elsewhere, leaving the other half to go towards the £10,000,000 for building "Dreadnoughts" and for the payment of old age pensions. What is the cost of collecting in this year that £162,000? As I understand it, the Government are going to spend this year £300,000, and that is only for half the year. I presume, therefore, that the rate of expenditure, at any rate for the first two years, will be at the rate of £600,000 per year. You cannot get it less than £600,000, and it may be more. If you take £162,000 from the £600,000 which will be spent, you will find, a real deficit of £438,000. We have, therefore, in order to meet a deficit of £16,000,000, in order to deal with a great national emergency, in order to protect our shores, and to provide for our aged 437 poor—we have for all this been now discussing—for how many weeks in Committee? —proposals, the total result of which will be an increase in the present year to the deficit of £16,000,000 of no less than £438,000! If the Members of the Committee, and the Prime Minister, will look at the cost of the collection of the Inland Revenue taxes, they will find that it costs £1,250,000 to collect a total of £69,750,000, or say, £70,000,000. Under the new system we are going to spend about half that sum, more than half that sum, in order to obtain the minus quantity of no less than £430,000. This is the latest triumph of Free Trade finance!
§ Mr. BALFOUR
Does the hon. Gentleman question my figures? I admit I collected them hastily, and they may be wrong, but the figures are those of the Prime Minister, and I am not aware that they are wrong. If the Government are right in their estimates of the cost of valuation—it is quite impossible for me, or I suspect anybody in this House, to speak with precise and expert knowledge upon this subject, and the hon. Gentleman who has just sat down seemed to think that the cost has been exaggerated—but the cost of valuation of the total value I do not think need be a costly operation. The most difficult part of the task is to carry out those curious, elaborate, novel, hypothetical calculations, the full complexity of which I do not think either the country or the Committee fully realise, and which it is suggested that it will need an army of officials, some 600,000—[a laugh]—I mean 500 or 600,—to make. I am afraid I made a slip, but I do not think I clouded the general course of my argument, though I may have added to the merriment of the House. These 500 or 600 gentlemen will have to map out in a most elaborate way every holding in the country, however small, not merely as to its present value as a going concern but as to its valuation in certain hypothetical circumstances which are not realised, which have never been realised, and which will never be realised. I am not positive that this operation can be rationally carried out at all, but certainly to endeavour to carry it out rationally is not an easy business, and not being an easy business it will not be a cheap business. I do not for a moment believe that 438 the Government have not been sanguine in their estimate upon this matter as they have been sanguine in their estimates of the larger financial transactions into which they have led the House. However that may be, is it not perfectly clear now, more clear than ever before, that this part of the scheme is not a Finance Bill, and that the valuation schemes as now proposed are really no part of the Finance Bill at all? I cannot understand how the Government can justify the hitching into the four corners of a Finance Bill elaborate provisions which always, up to the present time, have been regarded as a proper subject for a different and independent measure. It seems to me they are really departing from all constitutional practice in this matter. It seems to me the most amazing way to construct a Finance Bill, and I do not believe—and I do not think it is possible now for anybody on the platform or in the House to maintain—that this part of the Bill is dealing with finance at all. We are not dealing with finance. We are not dealing with the methods for meeting the financial strain to which the country is subject. We are dealing with schemes, be they good or bad, which have not the character of financial provisions, but of social revolution. Social revolution may be an excellent and admirable thing—I am not going to argue that point—but it is a very expensive thing. And you ought not, and it is unwise, to introduce these schemes of social revolution, which cannot produce money, and obviously will not produce money, into a Bill avowedly brought forward on a scale of magnitude and with a glory of exposition as if a great national crisis was being met in a bold spirit. There is no national crisis. We admit your need for money, but this money will not enable you to pay the smallest of your debts. It will not enable you to pay for the new expenditure, and even with all the solidity of Free Trade arithmetic to go upon, you will not pretend that the amount to be put into the Exchequer by this expedient really meets the ordinary new charges which the Government announce to us in the airiest fashion from month to month and from year to year. So far from dealing with our £16,000,000, it deals with nothing at all. I do not care how high you put it. You have got to meet a deficit of millions, and these taxes are going to give you at best thousands. It is for that reason I certainly think we ought to take this view of the whole scheme of 439 the Bill of which the Resolution is a part, and we are bound to record our opposition to it. I do not, of course, in the least deny that, as far as individual hardship is concerned, the proposals of the Government are intended to diminish that hardship. I think the gross injustice of requiring individual owners to value their land has come home at last to the Government, and that injustice they are now trying to remedy. But we cannot consider that in isolation. We have to consider the whole scheme, of which this is part. And, doing my best to consider the whole scheme, I say this is not a true Finance Bill at all. I believe it is unconstitutional and I believe it is unwise, and I shall vote against this Resolution as part of the larger fraction of the Bill which, as I think, is the gravest infraction of those traditional principles on which the sound finance of this country has always been maintained.
§ The PRIME MINISTER
Very few of those who have listened to our Debate this afternoon can, I think, realise that the Resolution I proposed is an attempt on the part of the Government to remove a hardship which from the very earliest stages of the Debate has been put forward most seriously by the critics of the Opposition to this part of the Finance Bill. The right hon. Gentleman the Leader of the Opposition speaks contemptuously of our proposal. The right hon. Gentleman who sits beside him, the Member for East Worcester (Mr. Austen Chamberlain), was, if I may say so without offence, almost truculently indignant. "No one supposes," he said, "for a moment that by throwing the cost of valuation upon the shoulders of the taxpayer or by substituting a tax on royalties for what we denounced as an absolutely inconceivable piece of folly, namely, the tax upon ungotten minerals—you cannot suppose for a moment that by these concessions you will remove our objections." The object of the Government, I can assure the right hon. Gentleman, is only to remove the objections of reasonable people, and in so far as the right hon. Gentleman's objections coincide with those of reasonable people, we are ready to remove them, and so far as they do not, we shall not make any attempt to remove them. What is the gist and gravamen of the criticisms? Let the Committee remember that the House, both on the second reading and in the earlier stages of the Committee upon the Finance Bill, has given its deliberate assent by overwhelming majorities to the creation 440 and levying of these new taxes—Increment Duty, Undeveloped Land Duty, and Reversion Duty, and the other duty which I agree still remains for discussion. But as regards these three, the House has decided they shall be brought into existence and made effective fiscal instruments. It is quite obvious, if that is the case, either you are to have no valuation at all—in which case the whole of the proceedings of the Committee up to this moment are completely stultified and frustrated—and that is the object of some hon. Members who do not take a serious part in our deliberations—or, if you are to have a valuation, the cost must be borne by the State or by the owner of the land. The first alternative being for all reasonable people unthinkable, the choice lies between the other two—
§ The PRIME MINISTER
The hon. Baronet says you can give it up. But suppose you are not going to give it up, and we are not going to give it up—that the valuation must be made by somebody and at some one's cost is inevitable. The Government, having originally proposed it should be made at the cost of the owner, now, in deference to objections well founded, and after carefully weighing them, are asking the Committee to give them authority to put that cost on the shoulders of the taxpayer. That is the proposition that will presently be put from the Chair, and anyone who votes against it will vote against putting the cost of the valuation upon the State. That is the issue, and the only issue, and I think it is well to make it clear at present.
I come now to some of the detailed criticisms made, particularly by the right hon. Gentleman, on my figures. He has demonstrated by a process of arithmetic which used to be more familiar two or three years ago, that we are actually going to incur a deficit in regard to the new taxes, and that, so far from adding to the revenue, we are really increasing expenditure. Let us see what are the facts. First of all, the right hon. Gentleman, by a very convenient process which has been adopted by several of those who preceded him, has committed the singular mistake of confusing the collection of the tax with its subsequent destination and expenditure. It is quite true we have promised to give to the local authorities, in the shape of a grant, a sum which will be equivalent to a half of the net proceeds of the tax. 441 When you are considering what the net proceeds of a tax are you take its gross yield as it comes into the Exchequer, and you put that on one side of the account, and upon the other side of the account you put the cost of levy and collection, and the difference between the two is the net proceeds of the tax. It does not make the least difference for the purpose of the calculation whether the tax is going to the local authority in the shape of a grant-in-aid to ease the expenditure on the Poor Law or whether it is going to bear part of the cost of a "Dreadnought" or to contribute to old age pensions. The right hon. Gentleman began by doubling the proceeds of those taxes—
§ Mr. BALFOUR (who was indistinctly heard, was understood to say)
The amount produced by this tax, so far from meeting any deficit, will not pay for the cost of collection.
§ 6.0 P.M.
§ The PRIME MINISTER
The point I am on is this, that if you take the yield of these taxes and the cost of collecting them together you will find that they practically bring nothing into the Exchequer. I am trying to show that is an improper calculation. It starts with the fallacy of dealing with the distribution or destination when you ought to be dealing with its levying and collection. The second deduction of the right hon. Gentleman was the whole of the proposed mineral rights, but I cannot in the least degree assent to that, because it will be found that the valuation of minerals is an essential and integral part of this general scheme of land valuation. As regards none of these taxes, certainly not as regards the Increment Tax, you could not levy them unless you valued minerals as well as the land. You will find also, when you come to investigate the working of the Minerals Rights Tax, at any rate, that the valuation, if not absolutely indispensable, is an enormous facilitation of the solution of the practical problems with which the tax-collector will have to deal. I, therefore, consider that we are perfectly entitled in treating these taxes as integral parts of one connected scheme, and bound to take into account the proceeds of the Mineral Rights Duties, as well as of the other duty.
§ Mr. BALFOUR
As I understand the Resolution before us, it is to authorise any expenses or remuneration payable in connection with any valuation of land or premises for the purposes of any duty. Does that include minerals?
§ Mr. AUSTEN CHAMBERLAIN
On a point of order, if land includes royalties does not that entirely alter the ground of your decision restricting myself and other speakers from discussing royalties.
What the Prime Minister has said is that land includes minerals. I do not quite see how that affects the point of order. What I said was that there must be a Resolution of the House dealing with royalties, and that that was the proper occasion to deal with them.
§ The PRIME MINISTER
I did not say anything so absurd as that land includes royalties. My proposition is that land includes minerals. When you are having a valuation as is perfectly clear from the earlier clauses of the Bill, which is to be adequate for the purpose of the Mineral Duty, or any one of these duties you must have a valuation. You cannot get on without it.
§ Mr. YOUNGER
Is it not a fact that the duty which is being laid on royalties has nothing whatever to do with the valuation of minerals along with land?
§ The PRIME MINISTER
If the hon. Member examines the clause I think he will find that it is very material. Quite apart from that, what can be the fairness or justice of taking the estimated proceeds of these taxes during the half of the first year in which they will be put into operation and treating that as if it fixed for all time, or even for the immediate or prospective future, what their yield was going to be as against the cost of collection? The cost of collection we are able to ascertain with very much greater precision than the yield of the taxes themselves. Take a tax like the Increment Tax; it depends on the number of transactions that take place in a given year in land, the value of which is increasing. The Reversion Duty depends on the number of leases to which it is applicable which happen to fall in within a given time. Those are necessarily capricious, and you cannot put them down in any definite form as you can an estimate of the salaries and expenses of the officers. Therefore, we are necessarily on much more speculative and conjectural ground in estimating the yield of these taxes in the future than in estimating the cost of collection. I do not 443 hesitate to express the most confident opinion that every one of them will be found in the years to come a tax growing in productiveness, bearing more and more fruit, and bringing more into the Exchequer, and I do not see how anyone who I regards the existing social and industrial conditions of the country, unless some revolution, some unexpected and unforseeable revolution in those conditions should startle us in the immediate future, can fail to perceive that the proceeds of taxes of this kind must tend to be an ever-increasing quantity. They absolutely justify themselves as contributions to the revenue of the present year, and they justify themselves still more, as the Chancellor of the Exchequer has said, as trees which will grow in strength and productiveness in the years to come, and which will help you to meet the growing expenditure of those years, which, unfortunately, we are I obliged to anticipate. The right hon. Gentleman said you are laying down "Dreadnoughts" this year. The real cost of the "Dreadnoughts" arises, not this year, but next year, and the year after, and it is quite as important—indeed, it is even more important—when you are unsettling and, as it were, resettling your system of taxation with a view to the ultimate responsibilities of the country, to look forward to the liabilities you may be called upon to incur next year and the year after as it is for the expenditure of the currant year. In my opinion, and in the opinion of the Government, on that I ground, and on that ground alone, this part of the Finance Bill amply justifies itself as a fiscal instrument. The right hon. Gentleman asks me to throw out some information in regard to possible changes in the Bill as to Income Tax and in regard to distribution of these taxes as between Imperial and local authorities. I cannot say that I feel encouraged to venture upon new ground at this moment on that invitation. Quite sufficient for this afternoon is the Valuation and Mineral Rights Duty. The right hon. Gentleman (Mr. Balfour) may be sure that neither of these matters is being lost sight of, and I hope, in ample time for their deliberate consideration and full discussion, the proposals of the Government will be laid before the House. The reference I made to the Death Duties has greatly shocked the Noble Lord the Member for Marylebone (Lord R. Cecil) as a most astonishing proceeding. Is it so very astonishing? Under this Bill as originally framed the 444 cost of valuation was to be borne by the owner. Provisions based on those lines would obviously have no effect on the yield of the Estate Duties. The moment you transfer the duty of valuation of all the land of the country to the State, and set up for that purpose a machinery or authority which has never previously-existed, the very object of which is to ascertain what you have never hitherto ascertained in anything like an accurate or scientific form, namely, what is the value of the land and of each piece separately owned or occupied, is it not perfectly clear that as an incidental result you must get a great deal of new light on the value of estates that are passing? There is no dark or sinister design in it. It is an incidental result of yielding to an eminently reasonable demand. I am sure the right hon. Gentleman the Member for South Dublin will be the first to agree that when a landowner or anybody else who' dies and leaves property which is subject to Death Duties, his representatives ought to pay those duties on the true, and not on the artificially depreciated value, whether the property be land or anything else. If it turns out, as a result of this more complete and more accurate machinery of valuation, that properties that have hitherto, no doubt in perfect good faith, not been estimated at their precise market value are hereafter estimated at a higher value, no injustice is done to anybody. The strict rules of justice are observed, and incidentally the revenue of the State will be satisfactorily increased.
§ The PRIME MINISTER
I was coming to that. The Leader of the Opposition surprised me by saying that the evasion—I do not like to use such a word—of the Death Duties took place in regard to the more fluid forms of property, namely, personalty. I do not agree. Those are just the forms of property which cannot in this sense of the word escape Death Duties, because they are the things most easily valued. Go to the Stock Exchange lists and any broker will easily tell you the value of the fluid part. The part that is difficult to value and does require expert knowledge is not the fluid, but the immobile, the real property, and it is for that purpose, to fill up that gap, this machinery of valuation, we hope, will prove a useful adjunct to the fiscal engines of the State. The right hon. Gentleman the Member for South Dublin asked 445 whether we would take the opportunity, in setting up this new system of valuation, to establish some kind of co-ordination between it and the existing system. I entirely agree that steps in that direction ought to be taken, and I was very glad to hear what was said by the hon. Member for Ayr Burghs (Mr. Younger), who is very familiar with valuation in Scotland, as to the importance of associating the Scottish system of valuation, which is a very good and admirable one, with whatever machinery is set up under this Bill. In Scotland we are very much in advance of our less enlightened fellow citizens in England on all these matters. But though I should agree that this co-ordination of different systems of valuation for rating and taxing purposes is not a proper or congruous part of a Finance Bill, it might give rise to objection that the finance Bill was being used for purposes which are alien to its proper scope, and therefore we have not found it possible to introduce provisions of that kind in this Bill, which is strictly confined to purely fiscal objects. We shall not lose sight of the right hon. Gentleman's suggestion, arid I hope we may be able to make some progress in that direction before many months or years have gone. The other point which I think he put to me was whether the House would have a full opportunity of discussing the new machinery. Certainly. I am sorry the clauses were not circulated this morning, but they are being circulated now. My hon. Friend reminds me that the proposals take the shape of Amendments, as far as machinery is concerned, of the old clauses. They will no doubt be most fully and carefully discussed. The Government have no reason to wish otherwise. The hon. Member for one of the divisions of Durham also asked a question which I think is very pertinent. He said: "If you are going to take three or four years for the valuation of your land, what is to happen to the man whose land is not fortunate enough to fall within the operations of the valuer during the first two years?" It is obvious, of course, you cannot deal with the whole of the land of the country at the same time; in fact, the very nature of the whole scheme shows you cannot complete the valuation within a single year. I have no doubt, having regard to the character of this taxation, that the first subject to which the valuing authorities will give their attention will be the Undeveloped Land Tax, because the Increment Duty and the Re-version Duty are things which are not of 446 so pressing importance. I have no doubt they will give their first attention to that, but we shall make provision in the Bill to the effect that if the site value is not ascertained during the current year the collection and payment of the Undeveloped Land Duty is postponed until the site value has been ascertained. The owner, therefore, in the case put by the hon. Gentleman, has to set off against the misfortune of not having his land valued at the earliest possible moment the saving in interest which he gets through keeping the money in his pocket and not having to pay the Undeveloped Land Duty until the time comes. That, I think, is an arrangement with which the hon. Gentleman ought to be extremely well satisfied. I think I have covered the whole ground traversed during the course of the Debate. I extremely regret that these proposals, which were honestly put forward in the hope, not only of helping and smoothing the working of the Act, but also of facilitating its progress through the House, should have been received, I will not say with ingratitude, but with such scant appreciation on the part of the bulk of those whose demands they were intended to meet. I regret still more that the right hon. Gentleman (Mr. Balfour) has announced his intention of voting against a Resolution which, if negatived, would require us to do a thing which I think inexpedient, namely, to place the whole cost of valuation on the shoulders of the landowners of the country. In those circumstances, I have no hesitation in asking the House to pass the Resolution.
Sir GILBERT PARKER
During the course of his remarks the Prime Minister puzzled everyone, I think, in the House by his reference to the definition of land, which, he said, included minerals. I think it would greatly meet the convenience of the House in considering this Bill if the right hon. Gentleman could arrange to give us a definition of land as the word is used in the Bill and a definition of minerals. We have only in Clause 27 a limited definition of the word "land," and no definition at all, I think, of the word "minerals." A Constituency, like mine, which has cement works, is concerned very deeply in the definition of "minerals," and is very anxious to know whether chalk, for instance, is included as a mineral. I think my question a pertinent one. I am asking the Prime Minister whether he does not think it would be for the convenience of the House if we had a definition of the word "land" and the word "minerals."
§ The PRIME MINISTER
I can only speak from my recollection, and I am afraid it is somewhat rusty of the law on this subject; but I am strongly of the opinion, and I have no doubt it is correct, that the word "land" includes "minerals," unless the context shows it does not. It is perfectly clear in this Bill the word "land" must be used in its natural and legal sense. I have therefore no hesitation in saying that "land" will include "minerals." "With regard to "minerals," we are on much more thorny ground. I believe whether a particular substance—say, clay—comes within the term "minerals" in an Act of Parliament must depend upon the circumstances. I believe the learned judges have held over and over again that it is quite impossible for a Department to take to itself the power to lay down a definition of "minerals," irrespective of special and particular circumstances.
§ Mr. AUSTEN CHAMBERLAIN
I understood the right hon. Gentleman to say that the new valuation proposals do not constitute a new clause, but that they would be met by Amendments to the existing clause. Could we have that clause reprinted as it will be with the Amendments?
§ Mr. JOYNSON-HICKS
I want to ask the Prime Minister a question on a point which is not quite clear to me. Apparently, as far as I understand, the valuation is to be made as soon as possible, and upon the basis of that valuation the Undeveloped Land Tax is to be paid. For how long is that valuation to frank the rate of tax upon an undeveloped piece of land?
§ Mr. JAMES HOPE
I understand some new form of Referee is going to be set up, and I gathered their salaries were included in the estimate. Is the cost of the proceedings before the Referees included?
§ The PRIME MINISTER
The total cost of £2,000,000 leaves a very large margin, and the cost of the Referees will be included in that. As regards the procedure 448 before the Referees, it is most carefully set out in the clause as it is to be amended.
§ Mr. JAMES HOPE
Will anyone going before the Referees and proving his case, showing the Commissioners to have been wrong, get his costs?
§ Mr. JAMES HOPE
Did the Prime Minister include the cost of the quinquennial valuation of the land? There will, of course, every fifth year be a very considerable addition. I was a little confused by two statements the Prime Minister made with reference to the estimate itself. He said, in the first place, that the cost will be £2,000,000, but that only something less than one-third of that will be recurring. If that is something less than one-third, it will be some £600,000. Later I understood the Prime Minister to put it at something from £300,000 to £400,000. Which is correct?
§ The PRIME MINISTER
I was using very rough figures, and I said the best estimate the Inland Revenue could form at present was that two-thirds of the £2,000,000 would no longer be necessary after the expiration of four years. That would bring it down to about £600,000. They would hope it would not be so much, but we cannot give, and I should not like to pledge myself to any very definite figure. The answer to the other question put by the hon. Member is in the affirmative.
§ Mr. WALTER GUINNESS
The Prime Minister stated that the object of this Resolution was to remove an objection felt by all reasonable people to the valuation as it was. I think this Amendment of the Bill will really create a very large new grievance. There will be an extraordinary injustice as between one landowner and another. It has already been felt that, under the Bill, those who own land are treated in a less favourable way than the owners of other forms of capital. Now you are going to set up a quite arbitrary distinction between one landowner and another. If a man has his land 449 valued this year and sells it in four years' time, he will have to pay Increment Duty upon it, but another man, whose land is not valued, simply for the convenience of the valuer, for four years will get off the Increment Value Duty altogether. I think that is a very great injustice, and one which calls for deferring the operation of the Increment Value Duty until the whole valuation has been made.
This Resolution is for the purpose of authorising certain expenses. The hon. Member is now discussing a point which may arise in Committee on the Bill.
§ Mr. WALTER GUINNESS
I would like to say a word on the remarkable estimate given of the cost of valuation. We are told it is only going to cost £2,000,000. The hon. Member for Ayr Burghs (Mr. Younger) gave some pertinent considerations which, I think, show conclusively that the cost will be very much increased. We have had experience of the cost of valuation in the past. The Griffith's valuation in Ireland, authorised under the Act of 1852, cost £325,000, and the rateable value of Ireland under that valuation was shown to be £13,000,000. The cost of the valuation worked out at 2½ per cent, of the rateable value. I have not had time to get at the figures for last year, but the statistical abstract of the previous year shows the rateable value of this country to be £207,000,000, so, on the same basis, the cost of valuation would be over £5,000,000. The Griffith's valuation was a very simple process, being for poor rate assessment. This valuation is clearly of a far more complicated and expensive character. There are two valuations—total and site valuation. The Griffith's valuation was carried out by valuers who accepted a rate of remuneration which would be quite impossible at the present day. Section 36 of the Valuation Act of 1852 authorised the granting to the Commissioner of Valuation—that is the head man of all—of only three guineas per day, and all the rest of the officials were to have not exceeding £l per day. It is quite evident from those figures that the Griffith's valuation was carried out on a far more economical scale of payment than is in any way possible today, and for that reason I think the estimate of £2,000,000 is quite absurd. I will not go into the profit and loss account as between this valuation and the Land Tax, but I would like to point out that hon. Members speaking on this side have only 450 objected to the Mineral Rights Duty as being set off as one of the advantages to be gained by the valuation now being paid by the State. But the Reversion Duty is also quite independent of this valuation, because the Reversion Duty does not depend on the total value of the land, it depends on the value-benefit accruing to the lessor when the lease is determined; it depends on the excess of that over the consideration for the grant of the lease, and as the Reversion Duty is not in any way dependent on this valuation, the advantage to be gained by this valuation must be decreased by the total expected from the Reversion Duty, and that will mean that your balance in the first year will be very much on the wrong side. The Prime Minister declared that those who voted against this Resolution would vote against the valuation cost being put on the State, but I would suggest that in voting against it we are voting against any valuation at all, and it would be perfectly absurd to suggest that by opposing this we are favouring an even more unjust proposal.
§ Mr. WATSON RUTHERFORD
As a point of order, I should like to raise this question. In that portion of the Bill which has been disposed of a decision has been come to as to the time at which the taxes shall come into force. The point I have to submit is this: Is it not possible for us to go back on the decisions already come to by the whole Committee as to these dates—a decision come to under a state of affairs with regard to valuation which it is now clear will be impossible, because it is admitted it is going to take four years to get the valuation, and we shall be placed in a very different position with regard to the taxes coming into operation? Can we be allowed to re-open this question of when the tax shall begin?
§ Mr. G. S. BOWLES
Do the Government propose to bring in a Supplementary Estimate this year for the sum of £300,000 to be actually expended?
§ Question put.
§ The Committee divided: Ayes, 217; Noes, 96.453
|Division No. 417.]||AYES.||[6.35 p.m.|
|Abraham, William (Rhondda)||Hardy George A. (Suffolk)||Pickersgill, Edward Hare|
|Acland, Francis Dyke||Harmsworth, Cecil B. (Worcester)||Pirie, Duncan V.|
|Agar-Robartes, Hon. T. C. R.||Harvey, W. E (Derbyshire, N. E.)||Price, Sir Robert J. (Norfolk, E.)|
|Ainsworth, John Stirling||Harwood, George||Rainy, A. Rolland|
|Armitage, R.||Haslam, James (Derbyshire)||Raphael, Herbert H.|
|Asquith, Rt. Hon. Herbert Henry||Haslam, Lewis (Monmouth)||Rea, Rt. Hon. Russell (Gloucester)|
|Baker, Sir John (Portsmouth)||Haworth, Arthur A.||Richards, Thomas (W. Monmouth)|
|Balfour, Robert (Lanark)||Hazel, Dr. A. E. W.||Richards, T. F. (Wolverhampton, W.)|
|Baring, Godfrey (Isle of Wight)||Hedges, A. Paget||Richardson, A.|
|Barnard, E. B.||Helme, Norvat Watson||Ridsdale, E. A.|
|Barnes, G. N.||Hemmerde, Edward George||Roberts, G. H. (Norwich)|
|Barran, Rowland Hirst||Henderson, J. McD. (Aberdeen, W.)||Robertson, Sir G. Scott (Bradford)|
|Barry, Redmond J. (Tyrone, N.)||Herbert, Col. Sir Ivor (Mon., S.)||Robinson, S.|
|Beale, W. P.||Herbert, T. Arnold (Wycombe)||Pobson, Sir William Snowdon|
|Beauchamp, E.||Higham, John Sharp||Roch, Walter F. (Pembroke)|
|Beck, A. Cecil||Hobart, Sir Robert||Rogers, F. E. Newman|
|Benn, W. (Tower Hamlets St. Geo.)||Hobhouse, Rt. Hon. Charles E. H.||Rose, Sir Charles Day|
|Berridge, T. H. D.||Hodge, John||Rowlands, J.|
|Bethell, Sir J. H. (Essex, Romford)||Holland, Sir William Henry||Runciman, Rt. Hon. Walter|
|Birrell, Rt. Hon. Augustine||Holt, Richard Durning||Russell, Rt. Hon. T. W.|
|Bowerman, C. W.||Hudson, Walter||Rutherford V. H. (Brentford)|
|Brace, William||Hyde, Clarendon G.||Samuel, Rt. Hon. H. L. (Cleveland)|
|Branch, James||Illingworth, Percy H.||Samuel, S. M. (Whitechapel)|
|Bright, J. A.||Jardine, Sir J.||Schwann, C. Duncan (Hyde's|
|Brocklehurst, W. B.||Johnson, John (Gateshead)||Scott, A. H. (Ashton-under-Lyne)|
|Brooke, Stopford||Johnson, W. (Nuneaton)||Sears, J. E.|
|Bryce, J. Annan||Jones, Leif, (Appleby)||Shackleton, David James|
|Burns, Rt. Hon. John||Jones, William (Carnarvonshire)||Sherwell, Arthur James|
|Burnyeat, W. J. D.||Jowett, F. W.||Shipman, Dr. John G.|
|Buxton, Rt. Hon. Sydney Charles||Kekewich, Sir George||Silcock, Thomas Ball|
|Byles, William Pollard||King, Alfred John (Knutsford)||Simon, John Alisebrook|
|Carr-Gomm, H. W.||Laidlaw, Robert||Snowden, P.|
|Cawley, Sir Frederick||Lambert, George||Soames, Arthur Wellesley|
|Channing, Sir Francis Allston||Lamont, Norman||Soares, Ernest J.|
|Cherry, Rt. Hon. R. R.||Lehmann, R. C.||Stanger, H. Y.|
|Clough, William||Lever, A. Levy (Essex, Harwich)||Stanley, Albert (Staffs, N. W.)|
|Cobbold, Felix Thornley||Lever, W. H. (Cheshire, Wirral)||Stanley, Hon. A. Lyulph (Cheshire)|
|Collins, Sir Wm. J. (St. Pancras, W.)||Levy, Sir Maurice||Steadman, W. C.|
|Compton-Rickett, Sir J.||Lewis, John Herbert||Stewart, Halley (Greenock)|
|Cornwall, Sir Edwin A.||Lupton, Arnold||Strachey, Sir Edward|
|Cowan, W. H.||Luttrell, Hugh Fownes||Summerbell, T.|
|Crooks, William||Lyell, Charles Henry||Taylor, John W. (Durham)|
|Cullinan, J.||Lynch, H. B.||Taylor, Theodore, C. (Radcliffe)|
|Davies, Ellis William (Eifion)||Macdonald, J. R. (Leicester)||Tennant, Sir Edward (Salisbury)|
|Dewar, Arthur (Edinburgh, S.)||Macdonald, J. M. (Falkirk, Burghs)||Tennant, H. J. (Berwickshire)|
|Dickson-Poynder, Sir John P.||Macnamara, Dr. Thomas J.||Thomas, Abel (Carmarthen, E.)|
|Dilke, Rt. Hon. Sir Charles||Macpherson, J. T.||Thomas, Sir A. (Glamorgan, E.)|
|Duckworth, Sir James||Ni'Callum, John M.||Thompson, J. W. H. (Somerset, E.)|
|Duncan, C. (Barrow-in-Furness)||M'Micking, Major G.||Thorne, G. R. (Wolverhampton)|
|Dunn, A. Edward (Camborne)||Maddison, Frederick||Thorne, William (West Ham)|
|Dunne, Major E. Martin (Walsall)||Markham, Arthur Basil||Tillett, Louis John|
|Elibank, Master of||Mason, A. E. W. (Coventry)||Verney, F. W.|
|Erskine, David C.||Massie, J.||Vivian, Henry|
|Everett, R. Lacey||Masterman, C. F. G.||Walters, John Tudor|
|Falconer, J.||Menzies, Sir Walter||Walton, Joseph|
|Ferens, T. R.||Micklem, Nathaniel||Wason, John Cathcart (Orkney)|
|Ferguson, R. C. Munro||Mond, A.||Waterlow, D. S.|
|Fiennes, Hon. Eustace||Money, L. G. Chiozza||Wedgwood, Josiah C.|
|Findlay, Alexander||Morgan, G Hay (Cornwall)||White, J. Dundas (Dumbartonshire)|
|Fuller, John Michael F.||Morgan, J. Lloyd (Carmarthen)||White, Sir Luke (York, E. R.)|
|Gibb, James (Harrow)||Morse, L. L.||Whitehead, Rowland|
|Gill, A. H.||Morton, Alpheus Cleophas||Wilkie, Alexander|
|Gladstone, Rt. Hon. Herbert John||Murray, Capt. Hon. A. C. (Kincard.)||Williams, J. (Glamorgan)|
|Goddard, Sir Daniel Ford||Myer, Horatio||Williams, W. Llewelyn (Carmarthen)|
|Greenwood, G. (Peterborough)||Napier, T. B.||Wilson, John (Durham, Mid.)|
|Grey, Rt. Hon. Sir Edward||O'Connor, James (Wicklow, W.)||Wilson, J. W. (Worcestershire, N.)|
|Griffith, Ellis J.||O'Donnell, C. J. (Walworth)||Wilson, P. W. (St. Pancras, S.)|
|Gulland, John W.||Partington, Oswald||Wilson. W. T. (Westhoughton)|
|Haldane, Rt. Hon. Richard B.||Paulton, James Mellor||Wood, T. M'Kinnon|
|Hall, Frederick||Pearce, Robert (Staffs, Leek)||Yoxall, Sir James Henry|
|Hancock, J. G.||Pearce, William (Limehouse)|
|Harcourt, Rt. Hon. L. (Rossendale)||Pearson, W. H. M. (Suffolk, Eye)||TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.|
|Harcourt, Robert V. (Montrose)||Perks, Sir Robert William|
|Anson, Sir William Reynell||Balfour, Rt. Hon. A. J. (City, Lond.)||Beckett, Hon. Gervase|
|Anstruther-Gray, Major||Banbury, Sir Frederick George||Bowies, G. Stewart|
|Arkwright, John Stanhope||Banner, John S. Harmood-||Bridgeman, W. Clive|
|Ashley, W. W.||Barrie, H. T. (Londonderry), N.)||Butcher, Samuel Henry|
|Baldwin, Stanley||Beach, Hon. Michael Hugh Hicks||Carlile, E. Hidred|
|Cave, George||Hills, J. W.||Rawlinson, John Frederick Peel|
|Cecil, Evelyn (Aston Manor)||Hope, James Fitzaian (Sheffield)||Renton, Leslie|
|Cecil, Lord R. (Marylebone, E.)||Hunt, Rowland||Renwick, George|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Joynson-Hicks, William||Ronaldshay, Earl of|
|Chaplin, Rt. Hon. Henry||Kennaway, Rt. Hon. Sir John H.||Ropner, Colonel Sir Robert|
|Clive, Percy Archer||Kerry, Earl of||Rutherford, John (Lancashire)|
|Clyde, J. Avon||Kimber, Sir Henry||Rutherford, Watson (Liverpool)|
|Coates, Major E. F. (Lewisham)||King, Sir Henry Seymour (Hull)||Sheffield, Sir Berkeley George D.|
|Corbett, T. L. (Down, North)||Lambton, Hon. Frederick William||Smith, Hon. W. F. D. (Strand)|
|Courthope, G. Loyd||Lane-Fox, G. R.||Stanier, Beville|
|Craig, Captain James (Down, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Starkey, John R.|
|Dairymple, Viscount||Long, Col. Charles W. (Evesham)||Staveley-Hill, Henry (Staffordshire)|
|Dickson, Rt. Hon. C. Scott-||Long, Rt. Hon. Walter (Dublin, S.)||Stone, Sir Benjamin|
|Doughty, Sir George||Lonsdale, John Brownlee||Talbot, Lord E. (Chichester)|
|Douglas, Rt. Hon. A. Akers-||MacCaw, William J. MacGeagh||Thomson, W. Mitchell- (Lanark)|
|Du Cros, Arthur||Magnus, Sir Philip||Tuke, Sir John Batty|
|Faber, George Denison (York)||Mildmay, Francis Bingham||Walker, Col. W. H. (Lancashire)|
|Fell, Arthur||Moore, William||Walrond, Hon. Lionel|
|Gardner, Ernest||Morpeth, Viscount||Williams, Col. R. (Dorset, W.)|
|Gibbs, G. A. (Bristol, West)||Morrison-Bell, Captain||Willoughby de Eresby, Lord|
|Gordon, J.||Newdegate, F. A.||Wilson, A. Stanley (York, E. R.)|
|Goulding, Edward Alfred||Nicholson, Wm. G. (Petersfield)||Winterton, Earl|
|Guinness, Hon. R. (Haggerston)||Oddy, John James||Wyndham, Rt. Hon. George|
|Guinness, Hon. W. E. (B. S. Edmunds)||Parker, Sir Gilbert (Gravesend)||Younger, George|
|Hamilton, Marquess of||Percy, Earl|
|Harris, Frederick Leverton||Powell, Sir Francis Sharp||TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W. Forster.|
|Harrison-Broadley, H. B.||Pretyman, E. G.|
|Hay, Hon. Claude George||Randies, Sir John Scurrah|
§ Resolution agreed to: to be Reported tomorrow.