§ Undeveloped Land Duty and Mineral Rights Duty shall be assessed by the Commissioners and shall be payable at any time after the first day of January of the year for which the duty is charged, and any such duty for the time being unpaid shall be recoverable from the owner of the land for the time being or from the person for the time being entitled to the freehold of the minerals, as the case may be, as a debt due to His Majesty, and shall be borne by that owner or person notwithstanding any contract to the contrary:
§ Provided that in any case where the Commissioners are satisfied that land is in the course of bonâ fide development, and that it would be just in the special circumstances of the case to postpone the payment of Undeveloped Land Duty in any year, the Commissioners may postpone the collection and payment of the duty for that year for such period, not exceeding five years, as they think fit.
§ Mr. LLOYD-GEORGE moved to leave out the words "and Mineral Rights Duty" ["Undeveloped Land Duty and Mineral Rights Duty"]. This is a consequential Amendment.
§ Mr. F. W. LAMBTON
I understand from the Chancellor of the Exchequer that this is a consequential Amendment. What is it consequential upon? Is it consequential upon the abandonment of Clause 12?
§ Mr. LAMBTON
The House need not be surprised at the course the Government are taking, and the emotion of surprise no longer exists amongst us. I feel, however, some grief at parting with 676 Clause 12, and I look upon Clause 13 as absolutely consequential on Clause 12; it deals with Undeveloped Land Duty and Mineral Rights Duty. The Chancellor of the Exchequer, by his Amendment, now says that we ought to leave out the words "Mineral Rights Duty"—I presume in consequence of some Amendment he is going to bring forward on a future occasion. When that future occasion is to be the House has not yet been informed.
The DEPUTY CHAIRMAN
The Amendment is consequential on Clause 12 being struck cut, the words proposed to be left out having now no meaning where they stand.
§ Mr. J. C. WEDGWOOD
Is it not in order on this Amendment to discuss the question of the Mineral Rights Duty, though we have struck out Clause 12?
The Question to be put is that the words "and Mineral Rights Duty" stand part, and the discussion is limited to the retention of these words.
§ Mr. WEDGWOOD
Will it be in order to discuss the advantages of a Mineral Rights Duty, apart altogether from Clause 12? I do think that the Government's tax upon royalty should be put on a perfectly sound foundation.
It is quite obvious that, as the Committee have struck out Clause 12, the decision of the Committee cannot be gone back upon, and that the present Amendment is purely consequential on what the Committee has done.
§ Mr. WEDGWOOD
I bow to your ruling, Sir, but I want to put this point. Under Clause 12 we have ruled out the question of a general tax on mineral rights. Surely we are still allowed to discuss the question of the tax in regard to unworked minerals, where pits are at work, and where there are virgin fields? Am I in order, Sir?
§ Lord ROBERT CECIL
I observe in the new clause of which the Government has given notice that it is described as a Mineral Eights Duty Clause. I wish to ask the Government what provision they propose to make in regard to machinery for the collection of that sort of revenue. The machinery does not exist in the clause, so far as I can see. The Prime Minister told us yesterday that one of the purposes of the machinery he was setting up under the Resolution that was passed by the Committee yesterday was to provide for the collection, not only of Undeveloped Land Duty, Increment Duty, and Reversion Duty, but also Mineral Rights Duty. I wish to ask the Chancellor of the Exchequer what machinery he proposes to provide if he strikes out from this clause the machinery for the collection of that duty. The clause does not provide for any machinery which can possibly depend on valuations of the land. Has the Government given notice of it? I may be wrong, but this is an important question.
§ Mr. LLOYD-GEORGE
On a point of order. The Noble Lord is inviting the Committee to discuss the question of machinery on an Amendment in respect of which there has not even been a Resolution adopted by the Committee. I submit that this obviously has reference to the recovery of duty under the clause, and, Clause 12 having been omitted, I submit that this is purely a question of drafting.
May I ask the Government whether they mean to bring in a new clause to deal with the machinery of the new tax? We all understood from the Prime Minister yesterday that the machinery for collecting the tax was to be in this clause, but that does not appear to be so. I would like to ask the Government whether they mean to have a new clause with reference to that matter?
§ Mr. LLOYD-GEORGE
The right hon. Gentleman, if I may say so, is inviting me again to discuss the same thing. If he will look at the clause he will find that the machinery is provided, and, I venture to think, is complete.
§ Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.678
§ Mr. G. D. FABER (York) (for Mr. James Mason), moved to leave out the words "and shall be borne by that owner or person notwithstanding any contract to the contrary."
My mind travels back to the speech made two years ago or a year and a-half ago by the Prime Minister in the City of London, with reference to existing contracts. I should like, if I may, to refresh the minds of the Committee by a few sentences from that speech. The Prime Minister said:—
So far as he was acquainted with the fact, and he supposed he ought to know, in any legislation which was likely to be proposed in regard to matters of that kind they might be certain that existing contracts would be rigidly respected as sacred. There was no intention, under any pretext of public policy, to rip up obligations which had been incurred in good faith.
§ A good deal of water has run under Westminster Bridge since then. I do not know whether the Prime Minister has forgotten those words or not, but evidently he has been made to toe the line, because here we find words introduced in Clause 13 of the Bill which run directly in the face of and athwart that profession, that great profession laid down in that speech. What is the meaning of this speech and the provision "shall be borne by that owner or person notwithstanding any contract to the contrary." Mineral Eights Duty has gone for the moment, but it will come up again. Undeveloped Land Duty remains. I can well conceive a case where the owner of property might let land to a lessee on the faith and on the understanding that all Imperial burdens, new taxation or otherwise, should be borne by the lessee. Do those words interfere with such a contract? Take a contract where A, the owner, lets to B, with the condition that he bears the Imperial taxation other than the Income Tax. The Government come in, and, I contend, proceed to interfere with the existing contract, and make the owner liable for the Undeveloped Land Tax of a halfpenny. The Chancellor of the Exchequer has nothing to recant in this matter, but the Prime Minister has. I would like the Attorney-General to reconcile those statements if he can, because if he cannot there is no more ingenious man in the House. I think there is a direct contradiction in the words of this clause and the words of the Prime Minister. I beg to move.
§ The ATTORNEY-GENERAL (Sir William Robson)
The hon. Member has referred to me in terms of such generous confidence that I shall not adopt even the 679 semblance of ingenuity, but shall confine myself as strictly as possible to the substance of the controversy between the hon. Member and myself. The Bill stipulates with regard to Undeveloped Land Duty that that shall fall on the owner, and that the owner shall not be at liberty to divest himself of that liability by any contract, and that if in form or substance there is already a contract which puts the obligation for all taxes, local or Imperial, upon the tenant as one of the conditions of the tenancy that that contract shall not suffice. I would like the Committee to look at the matter as one of substance and fairness, as well as one of form. What is the contract between the tenant and the landlord? It is a contract to give to the tenant the user of the land according to the existing purposes to which the land is devoted, For instance, if the landlord puts the tenant on a farm the tenant is a farmer, he is not a builder. All he gets, therefore, is the use of the land for agricultural purposes. He may be put on the land for business purposes, for a rope walk or some other defined object, and the letting is made with reference to that user, and no other. For instance, it would be possible for the tenant with some agricultural land to say to himself: "This is very good land near a town. I dare say my landlord will not trouble me very much, and I will proceed to build on it." Of course, he would be a very foolish person to do so. The landlord would say, "You have no right to do anything of the kind. That is not what is let to you. All that is let to you is the right to use the land for the purpose contemplated by the contract." There is another value attaching to the value other than that which attaches to it in respect of existing user—a value with which the tenant has nothing to do. That value is not let to him. He has no right to appropriate it or take advantage of it. That is the value which may arise not in respect of existing user, but in respect of some potential or anticipated user. The contract has no real substantial relation to that, and it is in respect of that part of the value of the land, which is really outside the contract altogether, that the tax is imposed. The contract contemplated by both parties is a contract contemplated in reference to existing user and existing purposes of the land, and nothing else.
I would ask hon. Members, and especially the hon. Member who proposed the Amendment, and whose opinion, if he will allow me to say so, from long experience 680 on Grand Committee, is fair and direct; and I am not merely reciprocating the compliment in any way, to apply his business mind, and not to be misled by technicalities, in which the lay mind delights to confuse lawyers. The business mind is a fair mind; it is honest, and it is a candid mind, and let him apply that mind to this problem. Assuming, as a basis, that the Undeveloped Land Tax is a fair tax, would it not be the grossest injustice to put it upon the tenant who does not get the undeveloped value, who has no right to it, and who would be restrained by a judge if he sought to take advantage of it. Why would it be unfair? It would be unfair because the tenant would be told, "That is outside the contract; you are a farmer, your business is with cattle, sheep and poultry." The landlord would also say. "I am looking forward to that value" at perhaps the not distant future; "leave that to me. When the time for building comes you must go." Therefore, clearly it would be putting on the tenant at the time a burden entirely outside the contemplated scope of the contract. The tenant would probably say to the hon. Member, that it was not a fair thing for his landlord to make him pay under that contract because he had not made a contract to use generally. Obviously, he would say that the covenant he made to pay local and Imperial taxes was a covenant to pay such taxes in relation to the existing user of the land, and that the landlord was now trying to construe the terms of that covenant so as to make him pay taxes which have no relation to the user his contract gave him of the land. That would not be a fair thing to do. I base my argument on the assumption of the tax being a fair one.
§ Sir W. ROBSON
I have shown precisely what is the nature of the interference. I say there is no interference in substance when the existing contract comes to be fairly interpreted and construed. It is a contract that the tenant should pay the rates and taxes incidental to the existing user of the land. It is not, and was not in truth, a covenant that he should pay taxes, either local or Imperial, in relation to some user of the land which he has never had and cannot get. I say that, under these circumstances, the tax is in reality made upon the landlord in respect of a subject matter which is not in truth and in fact a part of the contract at all.
681 I will make this concession to the legal spirit of hon. Members opposite—that I ought perhaps to justify the proposal by precedent. There is an abundance of precedents interfering with contracts in one form or another when taxes come to be imposed, though I do not say precisely in this form. When one looks at a precedent there are always grounds of distinction between one set of facts and any antecedent set of facts. Take the Income Tax for example. The Income Tax might be said to come within the terms of the very class of covenant which we are now discussing. The Income Tax is not a tax upon property, and we must not use it as a precedent further than it will go. The Income Tax is not laid upon any specific class of property, but it does, in fact, affect particular classes of property. Take the operation of Schedule A. A tenant has to pay Income Tax under Schedule A in the first instance, but he makes a deduction in respect of it from the rent, and the landlord is forbidden by statute, no matter what his contract may be, to prevent that deduction. The landlord is not allowed to say, "I do not care what Parliament says to you; those gentlemen at Westminster are always trying to interfere with the true course of our business transactions. I will let you the land on condition that you pay me such and such a rent, without any deduction." Parliament says, "Not at all. The tenant has to make a deduction for our benefit, and you must allow it, or you shall pay three times the duty." There is a case of interference with contract. It is not an exact precedent to the point. I should be very foolish if I so greatly underrated the intelligence of hon. Gentlemen opposite as to put it forward as being an exact and conclusive precedent. But it is a precedent on the broad principle. It is a strong case of what might be called interference with contract, and a limitation of the contractual rights of the parties.
I think I have shown that these words are just. Would it be fair if this tax is assumed to be possible at all, to leave it to be paid by the tenant? Obviously not. It is a tax on something which is the landlord's alone, and is not comprised in the contract. It is a tax on a subject matter from which the tenant can get no benefit at all, and, therefore, it is a tax upon something outside his contract.
The Attorney-General has given a parallel which I think weakens rather than strengthens his case. In regard to the Income Tax, it is absolutely a question, not of who pays the tax, but of 682 how the tax is to be collected. It is purely a question of machinery. Everybody admits that the landlord ought to pay Income Tax on the income he receives; and it will be equally admitted that the tenant should pay Income Tax on everything he receives. The actual method adopted, as I understand it, is merely machinery. It has nothing whatever to do with the incidence of the tax; therefore it is not in the least degree cognate or relevant to an argument which has to do with the incidence of the tax. I do not know that anything will be gained by the Government or by those who support this part of the Bill by bringing in the question of the Income Tax. The Attorney-General points out that you ought not to ask the tenant to pay Undeveloped Land Duy on land which he cannot develop. I agree; it would be grossly unjust. But what are the Government doing? Supposing land is let on an agricultural lease for a term of years. Precisely the same argument which the Attorney-General has used, I think quite rightly, on behalf of the tenant, may be invoked to protect the landlord. If it is true, as I think it is, that you have not the smallest right to ask the tenant to pay Undeveloped Land Duty on land which he cannot develop, it is also manifestly unfair to ask the landlord to pay Undeveloped Land Duty on land which he cannot develop.
I am not imposing the tax. I am not now arguing against the tax which the Committee has passed. I am arguing that if the Attorney-General in language which, if not simple, is at all events a very good imitation of simplicity, tells us that it is a clear injustice to make a man pay Undeveloped Land Duty on land which he cannot develop, when I turn round and say that that argument is a very good one, but it is good not only for the tenant, but also for the landlord, he has no right to come forward and say that that makes absurd a tax which was passed by the infallible wisdom of this Committee a day or two ago. The defence of the Government clearly will not do. It is inconsistent, and it breaks down. It will not for a moment hold water.
I am afraid that the views which the Government have expressed to-day in regard to contracts do not represent the real views of the Government. I will explain why. My hon. Friend (Mr. G. Faber) brought to the recollection of the House certain speeches made by the late 683 Sir Henry Campbell-Bannerman and the present Prime Minister, when a great agitation had been raised in Scotland by the prospect of the taxation of feus. A feu, as every Scotsman knows, and as some Englishmen are beginning to know, is in effect a perpetual lease, under which all the rates and taxes are borne by the perpetual lessee. The proposal to get the owner of the feu taxed for local or Imperial purposes was held, I think justly, in Scotland to be a violent interference with contract; and as feus in Scotland happen to be owned by a very large number of investors, as the number of persons who would be injured by this particular breach of contract was very large indeed, there arose in connection with the Scottish Valuation Bill of the Government an agitation of such strength that, with all solemnity, two principal Members of the Government had to go down and say two things—namely, in the first place, that to make the owner of a feu liable to burdens from which he was by contract exempt would be a violation of contract; and, in the second place, that the very last thing which a Radical Government would do was to sanction in the smallest degree any violation of contract—on the sanctity of which, I think, they piously observed the whole stability of our commercial system in the last resort depended. But that is not the view of the Government now, as I understand it. They have shown that in this particular provision, and they would have shown it still more had they retained Clause 12, because all this argumentation of the Attorney-General about the thing which was leased not being the developable property in the land, but merely the land under another aspect, land as an instrument for agricultural production, would have vanished. As the clause originally stood, as it would have stood had not the consequential Amendment of the Chancellor of the Exchequer been carried, it would have affected contracts, and no such "plain, simple, and untechnical" argument as that used by the Attorney-General would have had the slightest bearing or effect. It would be out of order for me to argue the new clause which the Government are bringing forward, but I am at liberty to refer to it. If hon. Members will look at the Paper they will see that the whole theory of contracts laid down by the Attorney-General is absolutely inconsistent with the wording of the new clause. Therefore, moved as I am by the blandishments of the hon. and 684 learned Gentleman, anxious as I am not to show myself too enamoured of those legal technicalities in which laymen are said by him to excel, I think it is manifest on the face of the clause of which the Government have given notice, and on the face of this clause as it stood before the recent Amendment in reference to minerals, that the Government have now adopted a principle of dealing with contracts which, in the most solemn manner, their most important Members declared was absolutely inconsistent with that regard for contracts and for formal arrangements between parties which, in the then view of His Majesty's Government, lay at the root of all civilised commercial dealings. Although I see objections to the Amendment, I see greater objections to the proposals of the Government, who have not attempted to justify their position. All that they have said is that the injustice is inherent in their tax, and as their tax has been passed we have no right to describe their plan as inequitable. Under these circumstances I hope the hon. and learned Gentleman who is sitting near the Attorney-General will be able to give us some more effective and fundamental defence of the policy of the Government than the ingenuity of the Attorney-General has yet been able to advise.
§ Lord ROBERT CECIL
There is an Amendment standing in my name, but before making reference to it perhaps my right hon. Friend would allow me to tell him what he could not possibly know and which accounts for a small mistake into which he has fallen. He could not, of course, know that at half-past five this morning the Government materially modified their Bill in Clause 11, Section (5); and perhaps I may also inform the Solicitor-General, who I think was better employed then than attending to these debates—
§ Lord R. CECIL
As a matter of fact, at half-past five this morning the Government accepted the Amendment of my hon. and learned Friend the Member for Kingston (Mr. Cave), striking out the words "that do not exceed twenty-one years" in Section (5). The result of that is that the tax is not payable at all on agricultural land, as I understand it, subject to any existing lease at all of more than one year. The acceptance of that Amendment by the Government clears 685 the ground a little, because it limits, of course, very much the cases in which these words of the Amendment would apply. It limits the case of leases not of an agricultural character entered into by the owner of the land; and, in other words, it applies to leases, I suppose, for industrial or building purposes. What becomes, then, of the argument of the Attorney-General?
§ Sir W. ROBSON
I did not refer to that matter just now. I gave an illustration of industrial uses, and only selected part of the subject as a small illustration.
§ Lord R. CECIL
As far as industrial purposes are concerned, I think the Attorney-General is right. So far as building purposes are concerned, why is it essentially more unjust that the tenant who has agreed to pay the tax on his land should pay this new tax, which is really the very purpose for which the land was put into his hands? Supposing you have a building lease granted for the purposes of developing land of which there is less than 50 years to run at the time this Bill becomes law. Then comes this Bill and says that with respect to that land not yet developed, under a lease in which the owner is doing his best to have his land developed, and has put it into the hands of a tenant for that purpose, the tenant to pay the tax on the undeveloped land which he has agreed with his landlord to pay—that the tax shall be paid by the landlord.
On a point of order, I want to ask you, Sir, whether, if this precise line of argument obtains, we shall be ruled out when we come to the Amendment in the name of my hon. Friend the Member for Liverpool (Mr. Watson Rutherford), who proposes that where the land is leased or let on the terms that the tenant shall develop it, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period as the owner recovers possession. This deals with precisely the point to which my Noble Friend has referred.
The question raised in the Amendment of the hon. Member for Liverpool will raise very much the question which is, or can be, raised by this Amendment. A good deal will depend upon the turn the discussion takes on this Amendment.
§ Mr. WATSON RUTHERFORD
If I may, I would like to be allowed a word. 686 This point has been considered of tremendous importance in the building trade. I have been asked to put down the Amendment, and I am very anxious, therefore, to have the opportunity of moving it. Of course, I did not anticipate that the whole of this subject would be raised on the Amendment before the Committee.
§ Lord R. CECIL
On the point of order, I quite agree, and I shall be careful not to say anything that will trench upon any discussion that can subsequently arise. The point I am anxious to press is, not whether it should be the tenant or the owner, but that whoever has agreed to pay the tax should pay it. I shall be very glad to have your ruling as to whether the subsequent Amendment of the Chancellor of the Exchequer meets the point.
If the Amendment of the Chancellor of the Exchequer to leave out the words "or person" is carried, the clause would then stand that the duty was to be recoverable from the owner.
§ Mr. AUSTEN CHAMBERLAIN
May I submit that the Amendment standing in the name of the Chancellor of the Exchequer to leave out the words "or person"—I am sure the Attorney-General will confirm me—is clearly consequential for the omission of the Mineral Duty.
§ Mr. WATSON RUTHERFORD
On the question of order, may I say that my Amendment, which I have been deputed to move, is, if I may so put it, considered the essential Amendment to the whole of this clause. It will be a great pity if it is ruled out incidentally.
§ Mr. AUSTEN CHAMBERLAIN
May I also repeat what I said about the words "or person"? What I said is confirmed by the hon. and learned Gentleman opposite. Further, may I submit that the word "owner" cannot prevent us from putting a limiting proviso. Any proviso would be in order if we were permitted to limit something which had previously been stated in broad terms.
That, of course, is frequently done by way of proviso or limiting words. But a good deal will depend on the nature of the discussion on this Amendment if it raises the same question as that raised in the Amendment of the hon. Member for Liverpool.
§ Mr. WATSON RUTHERFORD
But my Amendment commences with the word "but" or "provided that." It would be in order, Mr. Caldwell?
That might be. The difficulty I have in a matter of this kind is that I am asked to give a ruling on a point which, when it comes before the Committee, I shall in all probability have left the Chair. As much must depend upon the discussion of this Amendment I would rather not express any opinion at present, but leave the matter to be dealt with at the time when the Amendment of the hon. Member for Liverpool (Mr. Watson Ruther-ford) is reached.
§ Lord R. CECIL
The proper course for me is not to deal with the illustration of building land. It is a small illustration, and I can deal much more safely with the argument by assuming that it only applies for the moment to industrial land. The question is: Why, where you have an industrial owner or tenant, and where the tenant has entered into an agreement that he will pay all the rates and taxes, should it be — that it is manifestly unfair — that the new tax should be paid by the man who cannot develop his land, and has given it up, rather than by the man who, if he likes to develop it, or has entered into an agreement, is in the same position as the landlord to whom a man surrenders his lease and allows the landlord to develop the land] The Attorney-General speaks as though this was an entirely novel question, which had never been considered by the courts or anybody else. Of course, the imposition of any new tax is a circumstance that everybody who has to deal with land has to take into consideration. It is not only the Government who imposes a new tax on land. It sometimes happens that you have an improvement charge levied under, I believe, the Private Streets Improvement Act. That is exactly the same case. This is a new proposal, a new charge which is to be paid either by the tenant or landlord, without reference to the circumstances applying when the original contract was entered into. It has been decided, and business men have acted upon it, that the man who has agreed to pay the tax and charges is to pay any new charge, whether he be the tenant or the landlord. Surely that is a fairer rule Why should you make an exception in this particular case? The landlord and the tenant are equally unable to comply with the desire of the Government to develop 688 the land. Therefore you are going to impose a charge on the land, which will be quite unjustified by the circumstances of the case. You are taxing the landlord for not developing his land when ex hypothesi he cannot. Whether the tax is paid by the landlord or the tenant, it appears to me that the case is perfectly clear that under the circumstances it is better to leave the parties to make their own agreement, and not attempt to interfere with them. I agree, if you will impose a heavy charge which interferes with contracts into which people have entered, the proper course, if possible, is to make some provision whereby the contracts can be put an end to. Each party can then start fair. It would be better to make an end of the contract, having in view the existing condition of affairs. I had an Amendment down which, owing to the course of the discussion, has not been reached. Whether that is the way out of the difficulty or not, it does not appear to me that the Government have made the slightest defence, even on the ground of what would seem to be fair. We are really left face to face with this broad problem: The Government deliberately select that form of legislation that has been condemned by the present Prime Minister and by the late Prime Minister, and which is exactly the kind of thing which makes so many people alarmed and disquieted by the provisions of this Budget. It is just because it interferes with what hitherto has been regarded as the essential principle upon which property is enjoyed in this country that this Budget is being so bitterly opposed. We do not think it is really a genuine step, either in the direction of the principles of Mr. Henry George, or of Socialism. If we believed that, there would not be the same feeling against this Budget. It is because we regard it as a revolution in the existing laws of property that we feel compelled to oppose it as strenuously as we can.
§ Sir ROBERT PERKS
We are in a difficulty with reference to this clause. There is no doubt that the clause as it stands is at variance with promises in regard to contracts which have been made in Scotland with reference to charges intended to be imposed by statutes on the owners of feus, and it is absolutely at variance with the declarations made by the Prime Minister at two meetings held on the eve of the introduction of this Bill; one was made in connection with the United Temperance Society Buildings in the Strand, and the other was made to commercial 689 men at the Mansion House. On both these occasions there was a very explicit and clear declaration made by the present Prime Minister that whatever legislation might be introduced there should be no interference whatsoever with existing contracts. It is exceedingly difficult to reconcile this clause, which says that this tax, which in contracts with the tenant is payable by the tenant, is in future to be paid by the owner and not by the tenant who has contracted to pay all rates and taxes and impositions, wholly or otherwise, which is, I think, the common phraseology. If the Attorney-General is right in his construction of the law that this duty was never intended—and that the contracts were construed in that way—to be payable by the tenant, then of course there would have been no necessity for this provision, and therefore I do not think it is necessary to spend much time upon that branch of the Attorney-General's argument. There is no doubt there is an absolute breach and violation of existing contracts in this provision. I do not believe in the principle which has been adopted for getting at undeveloped land. I voted against Clause 10 because I think the whole principle is an unjust one, and I am not at all surprised that even in the passage of this Bill through the House we have to meet and to deal with these exceptional instances of injustice or difficulty which arise even now, and which have, I believe, only a small proportion of what will arise when this Bill has to be interpreted in practice in the country.
But we have to meet the difficulty and to impose an injustice on somebody. [An HON. MEMBER: "Why?"] The Undeveloped Land Tax will have to be paid by the owner. I think the proper course would have been in such circumstances to give the parties leave to put an end to existing contracts so that they might devise a new position between themselves if they were willing to do so. But I think one of the effects of this provision unquestionably will be to make the owners of property more unwilling to grant leases than they ever were before. Because although we are starting only with this halfpenny tax upon undeveloped land, we have had most specific declarations made in this House by some of our Friends that the halfpenny tax is only the commencement of further taxation in this direction, should future Parliaments wish and desire to increase the halfpenny to a much larger figure. It is clear from that that under the provisions of this Bill all 690 these impositions in the future are to be placed upon the owner, and even if the tenant contracts himself out that that contract would be ultra vires and could not be enforced. I say if the landlord, having had notice of that disposition on the part of an influential section of the Government and its followers, grants leases, he must grant them with the full idea that he may be imposing upon himself in the future charges in respect of undeveloped land very largely in excess of the comparatively small figure which may be realised in the halfpenny tax, and it would be impossible in such circumstances for the owner to know what charge he could reasonably make upon his tenants. Face to face therefore with that difficulty, no: knowing what the charge is to be upon his property, he will naturally say, "I cannot, as in the past, fix a rental that will reasonably remunerate me for my outlay over a long period of years; I must naturally, for the purposes of self-protection, grant leases only from year to year or for an extemely short number of years. I do not know precisely what will be the incidents of the tax in the future or what rent I can properly charge." That seems to me contrary to the interest of the tenant farmers and the small occupiers and people who wish to take leases, and therefore I think this clause is an extremely unfortunate clause to be inserted in a Bill by those of us who always have been preaching in the country the theory that we ought to get security for the tenants as far as possible, and that the longer leases we can get for the farmers the better for the farming classes and the small occupiers of the soil.
I venture to say, in face of the very clear and emphatic statement made by the Prime Minister on the two occasions to which I have referred, and which created a profound impression throughout the country, and allayed some of the fears which had been excited by some irresponsible statements which had been made by Members of the party, it is extremely unfortunate that the Government should, in the face of these pledges, come down to the House with a clause which unquestionably violates existing contracts. But the point we have to consider is, in these unfair impositions, arising from, I think, a foolish and an unjust method of trying to get at this undeveloped land, who shall pay? Shall the owner or shall the tenant? I think personally that neither should bear it, but if I had to make a selection between the I owner and the tenant I am bound 691 to say I should myself vote in favour of the tenant rather than vote for the owner. I greatly regret that I, in common, I think, with many more, have been asked to vote for a clause which T certainly consider unjust and economically unsound, which I think will prejudice the interests of thousands of small lessees and tenants throughout the country, but, being put to that election, I think the course open to one in such circumstances is to vote for the tenant, and not for the imposition of this tax upon him.
§ Mr. AUSTEN CHAMBERLAIN
I regret that the very important speech made by the hon. Baronet who has just sat down has been made in a House where there were barely a dozen representatives of the party opposite with which he acts and only one Member of the Government to profit by what he said. If there had been more of that party present they would have learned from the hon. Baronet's observations some of the deeper reasons which make us so hostile to the course of policy which the Government is pursuing in regard to this Bill, and they would see it is the shallowest and the most untruthful accusation to suggest that we are fighting merely a selfish battle of the wealthy classes, and they would see that we are equally concerned for the effects that these taxes are going to have upon the business life of the community and on the necessities of the humbler and poorer members of the public. We have tried upon many occasions to bring home to the Government, as the hon. Baronet tried to do today, the ulterior injurious effects which their proposals are going to have when brought into practice not upon the rich and the strong and the wealthy, but upon the poor and upon the weak, not upon the luxuries of the few, but upon the means of livelihood and the necessities of the many. I will not pursue the particular subject raised by my Noble Friend and developed by the hon. Baronet further, but I want to go back to a point of a slightly different form that was touched upon by the Leader of the Opposition. I am afraid I misled the Leader of the Opposition, because I was not here at 5.30 this morning, and I was not aware of the Amendment in regard to agricultural land introduced into Section (5), Clause 11. That, at any rate, only affects agricultural land. As regards any other land, no direction was given in the earlier hours of this morning. 692 The Government has admitted that where the landlord, in granting an agricultural lease which gives the tenant no right to develop the land for building purposes during the currency of the lease, and which prevents him from developing it, that in that case it would be very unjust to make the landlord pay, and for that reason the Amendment was made. That does not apply equally to certain industries. The Attorney-General used the illustration of a rope-walk. I should have thought the illustration of the rope-walk was a bad one. There could not be any Undeveloped Land Tax on a rope-walk, because undeveloped land is described as land which is not being used bonâ fide for any business, trade, or industry other than agriculture. Would not land used bonâ fide as a rope-walk come under that description?
§ Mr. AUSTEN CHAMBERLAIN
I say there could not be undeveloped land if it is being used bonâ fide as a rope-walk, and not for pretence or sham.
§ Mr. AUSTEN CHAMBERLAIN
I did not rest my case upon the illustration supplied by the Attorney-General. Take the case of land let to tenants who have developed part of it and kept the rest in order that as his business expands he may have room to develop it. That is not the case which has been made, because there is no obligation on the part of the tenant to build, and it is obvious that the landlord has no power to build. He has let for the purposes of a factory half as much again as is covered by the factory, and he has no power to cancel that lease or force his tenant to build upon the remainder of the land. The landlord is unable to enter upon that land in order to build. I think that is exactly the same case as the agricultural leases which were exempted by the Government yesterday morning, because they did not think it fair that a tax should be levied in such cases.
§ Sir S. EVANS
That is hardly the case. What happened was this. Under Clause 11, Sub-section (5), it was provided that where agricultural land was leased for more than one year, and not more than 21 years, it should be exempted from the Undeveloped Land Duty. The Chancellor of the Exchequer was under the impression that agricultural leases were seldom granted for more than 21 years, but it was 693 pointed out to him in Scotland that you have a "double 19" lease, and the hon. Member for Kingston (Mr. Cave) also pointed out that there were much longer leases than 21 years. The Chancellor of the Exchequer then stated, if that was the case, he would extend the principle in this clause to those cases.
§ Mr. AUSTEN CHAMBERLAIN
I am much obliged to the Solicitor-General for his explanation. I understand that the Chancellor of the Exchequer, having had it brought to his attention that there were agricultural leases not covered by his words, he altered the words to cover the longer leases.
§ Sir S. EVANS
Yes, he originally covered all agricultural leases up to 21 years, and then it was pointed out to him that some leases exceeded that term, and he extended it.
§ Mr. AUSTEN CHAMBERLAIN
I understand the right hon. Gentleman said that wherever there was an agricultural lease under which the landlord had not power to re-enter until the expiration of the lease, no Undeveloped Land Duty should be charged during the continuance of the tenancy. I do not think there is any controversy between us on that point. But surely the principle which underlay the action of the Chancellor of the Exchequer is that, he admitted in the case of agricultural land that where the landlord had no notice of this tax being about to be imposed—he may have a bonâ fide lease which debars him from developing the land—he was not to be taxed for not having developed it until the moment came when he re-entered into his power to secure that development. Surely that principle is equally applicable in the case I have put Why do you confine the principle to agricultural leases? Does it not apply with equal justice to industrial leases? Take the position of the owner of a factory. Take a case which was given the other day where, besides the land upon which the factory was erected a good deal of spare land was reserved for the deposit of slag. Supposing in this case the Commissioners said, "You have too much land here for industrial use, and, accordingly, we are going to levy the tax upon it." The reply of the Government to this is that that is a question to be dealt with not by 694 this House, but by the Commissioners or the Referee, and it depends upon them whether they think the amount of land reserved is more than would be reasonably required or not. Supposing the proprietor is not the owner of the land, but has only got a lease of it, and has got extra land for the purpose of developing his business, which he thinks he may require in the future. If he were wise he would probably allow a large margin. What happens? Down come the Commissioners, who say that that land is not being developed within the meaning of this Act, and they go to the owner and impose the Undeveloped Land Duty. In this case the owner has no power to develop the land, and I submit that that is very hard upon him. This is recognised in the case of agricultural leases to be a hard case, and if the Government cannot accept this Amendment, which I admit only shifts the injustice from one set of shoulders to another without remedying it, surely they are bound to find a remedy for the injustice, as they have done in the case of agricultural leases. I think the Government ought to either accept this Amendment or undertake to deal with this specific case.
§ Sir S. EVANS
The bearing of a particular Amendment in a particular case may no doubt be a very important one, but in principle this Amendment comes within a very narrow compass. I will not follow the right hon. Gentleman into the discussion of the question whether there may or may not be other leases which are upon a similar footing to agricultural leases, and ought to be exempted; because that is a matter which cannot be considered on this Amendment. We have already dealt with that point—whether finally or otherwise is not for me to say—in Clause 11, Section (5), The sole question that arises upon this Amendment is when land is subject to the Undeveloped Land Duty upon whom ought that duty to fall?
§ Mr. AUSTEN CHAMBERLAIN
Perhaps I did not make my point sufficiently clear. In the case I was trying to put before the Committee the power to develop the land rests with the tenant and not with the owner, and that is why I think it is germane to raise it on this Amendment, which says that where there is a contract in existence it is the tenant and not the owner who should pay the tax.
§ Sir S. EVANS
I did not suggest that the point is not in some sense germane, 695 but it is obvious that we are discussing now whether or not a particular land ought to be subject to this Undeveloped Land Duty or not.
§ Mr. AUSTEN CHAMBERLAIN
Clearly in the view of the Government the land ought to be developed, but you refuse to exclude it from the tax. We contend that these particular cases ought to be exempt from the tax, but the Government refuse to admit this exemption. Our point is as the tax has got to be paid by whom should it be paid in the case I have submitted?
§ Sir S. EVANS
Surely that question must arise upon some exception to the general principle here laid down. I am not going to argue a question which may be a very important one about the tacking of a particular proviso upon this general principle. Here we are dealing with land which has been made subject to this Undeveloped Land Duty, and Clause 13 deals with the recovery of that duty. Looking at it from that point of view, I think the right hon. Gentleman (Mr. Austen Chamberlain) rather fought shy of the battle of the strong against the weak, and his point was whether it ought to fall upon the owner or the tenant. Some remarks were made by the hon. Member for Louth (Sir R. Perks) on the general character of the tax, but I do not think that is a matter which ought to be discussed here. Take the case of two leases which may have been granted by a lessor. If he grants the lease for purposes entirely outside the developable character of the land, obviously the tenant of that land ought not to pay the Undeveloped Land Duty. If, on the other hand, the lessor has granted what is tantamount to a building lease then he gets the consideration on that land as such, and therefore the profit derivable by him is a profit to which this duty ought to attach. That is analogous to the case of the Income Tax. Whatever the eon-tract is between the tenant and the landlord the property tax in respect to a particular property has to be borne by the landlord. This proposal we regard as similar to a property tax.
§ Sir S. EVANS
That does not change the matter at all. That is an annual tax, and it does not change the principle because it is calculated upon the capital, and tot upon the yearly value. Although this matter has only been considered in this Debate as if it related to past contracts it 696 does really also relate to future contracts; as a matter of fact this is a new duty placed for a first time, and intended to be placed upon something which is not a value inuring to the tenant, but inuring to the landlord. In such cases if there are any contracts made which were not made in contemplation of these circumstances the owner ought to pay, and this particular duty ought to be home by the owner and not by the tenant.
§ 6 p.m.
§ Mr. EVELYN CECIL
It was very obvious that the speech to which we have just listened was going to be an extremely ingenious one without that simplicity which generally carries conviction. After all the question raised is a perfectly simple one. The question is who has contracted to pay the tax, and we do not want to go behind that. It is quite sufficient if either the lessor or the lessee has in the particular case contracted to pay he should carry out his contract, and we do not want to go behind that. Both parties enter into the contract with their eyes perfectly open, and they know if the tax is imposed the party that contracts in the language of the agreement to pay the tax ought properly to do so. I do not see that we can go behind that, and to suggest anything else is to introduce a wholly new principle. That is a doctrine which I cannot say I have ever heard used except by most extreme Socialist opinion, and I cannot help feeling that the Attorney-General is in reality simply assisting the Socialist programme, because if these taxes are to be imposed by limiting fiscal convenience to State purposes, I do not see where the matter is to end. It strikes, as does so much of the rest of the Bill, at security of property. Proposals of this kind, of which this is one of the most conspicuous in the Bill, especially shake public confidence, and are doing much harm to property and trade in the country. I cannot understand how the Government can come forward with defences of this character when we recollect the statements made by the Prime Minister, and which have already been referred to. Perhaps the crucial sentence in the Prime Minister's speech on the occasion of his opening the new offices of the United Kingdom Provident Temperance Institution on 12th July, 1907, was that they might be certain existing contracts would be rigidly respected as sacred, and there was emphasis on the word "rigidly." Can it be pretended that the provision in this Bill is rigidly 697 respecting the sacredness of existing contracts? It is, of course, doing nothing of the sort. The more one listens to the Debate as this Bill goes on the more he is driven to the conclusion that the Prime Minister is being forced by the more hardened Members of his Cabinet from his original and better thought-out political theories, and to adopt theories which are far more dangerous, and which really take a leaf out of the book of the hon. Members who sit below the Gangway on this side of the House. One is also convinced that the Prime Minister and his Government in these matters are laying foundations upon which Socialists can hereafter build, as is only too obvious from interruptions which have come from below the Gangway. The hon. Baronet the Member for the Louth Division (Sir R. Perks) mentioned the halfpenny Undeveloped Land Tax in connection with this new proposal. There was instantly a shout from below the Gangway. "It will soon be more than a halfpenny." I do not think I am straying beyond the limits of the Debate. I am illustrating generally that provisions of this kind disregarding existing contracts do shake the security of property and the Debate both by its speeches and interruptions has shown this more than ever.
§ Sir W. ROBSON rose in his place, and claimed, "That the Question be now put," but the Chairman withheld his assent and declined then to put that Question.
§ Mr. MITCHELL-THOMSON
We have heard a great deal about security of tenure and freedom of contract, and now a Government which in the name of Free Trade declared it could not tax raw materials is proposing to do it so as to give a maximum amount of interference with security of existing contracts. What was the defence given by the Solicitor-General of the position of the Government? He defended their position on the analogy of the Property Tax. The Property Tax falls upon owners, and not upon tenants. This tax, therefore, ought to fall upon owners, and not upon tenants. I think his analogy is entirely without foundation, and I will endeavour to show why. There is all the difference in the world between the Property Tax and this tax. The Property Tax is a tax in which property is taken as a standard for the measure of the tax. There is no way in which you can remove that standard. You may sell the property, but somebody else has to pay the tax. Nothing you can do will prevent 698 the tax falling upon the property. This tax is quite different. If you do a certain thing, if you develop the property, then the sword is suspended. Therefore, whereas the Property Tax is a tax proper, this is not a tax at all, but a fine or a penalty. That being so, is it not obvious that our whole case must be a good case? You have no right to attempt to collect from A when A has not the power to do what the tax asks him to do. If you fine a man for not doing a certain thing when it is not he but another person who alone has the power to do it, then you are doing the greatest of all possible injustices, and that is what the Government are doing.
§ Sir J. JARDINE
I came here to listen and not to speak, but, having heard some of the Debate, "within me the fire burns." I take exception to the language of ethics used by the hon. Baronet who sits below me (Sir R. Perks). If the money has to be raised for the purposes of the Crown, and there is no other way competent to the House of Commons to raise it, then, I think, the word "injustice" ought not to be used about this tax any more than about any other. With regard to the Prime Minister's speech about the sacredness of contract, I would only refer to the well-known maxim of judges that "Every phrase has to be taken in connection with the context and subject-matter." I think in the case we are dealing with, both parties entered into these contracts absolutely innocent of what the Parliament of the future might enact, or what the Ministry of the present might propose, and therefore a contract couched in general terms can hardly be considered as referring to the particular imposition which it is now proposed to enact. It comes simply to be a question upon which of the parties it is expedient or fair that the tax should be imposed, and in that connection I would refer to the ordinary canons about taxation, and chiefly to that one which says, "Taxes should be put on people according to their ability to pay." I think we ought to look, not at special instances, but at the general practice or custom under which deeds, conveyances, and leases have been made. Speaking as a Scotch Member, and in particular remembrance of the system of perpetual feus there, and the restrictions of different sorts that are usually found, I would like to ask two questions. First, whether the language used by the Government in the clause is intended to allow or forbid the superior landlord, on whom the new tax 699 will in terms fall, to bring an action for the application of adjustive equity by requiring the lessee or feuer to recoup him in whole or part? And, secondly, whether, in respect of the widespread tenure of perpetual feu in Scotland, the intention of the Government in drafting the clause was to levy the tax upon the superior or the feuer? Perhaps, in the reply, some answer will be given to those two queries of mine.
The subject is a very important one, and it began, in the case of both the Government and myself, in ignorance of what occurred at half-past five this morning in Committee. I venture to think it would be better if my hon. Friend were to withdraw his Amendment, and that it would save time and meet the general convenience if a specific Debate were taken on the particular proposal contained in the Amendment of my hon. Friend the Member for the West Derby Division of Liverpool (Mr. Watson Rutherford).
§ Amendment, by leave, withdrawn.
§ Sir W. ROBSON moved to leave out the words "or person" ["and shall be borne by that owner or person, notwithstanding any contract to the contrary "].
§ Question, "That the words proposed to b-3 omitted stand part of the Question," put, and negatived.700
§ Mr. LAMBTON moved to insert after the words "any contract to the contrary," the words "made after the passing of this Act." I think it is obvious that, in justice and fair play, existing contracts ought not to be broken.
§ Sir W. ROBSON
I submit that this Amendment has been covered by the discussion which we have just had. There is also another Amendment to come on dealing with this particular phase of the question.
It is extremely difficult to decide as to the Amendments in the names of the hon. Members for South-East Durham (Mr. Lambton) and Liverpool West Derby (Mr. Watson Rutherford), whether they should be discussed after the discussion we have had. I have already allowed that of the hon. Member for West Derby, and I cannot say that that of the hon. Member for South-East Durham is out of order, but I suggest discussion on both is not desirable.
§ Question proposed, "That these words be there inserted."
§ The Committee divided: Ayes, 90; Noes, 200.701
|Division No. 438.]||AYES.||[6.20 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Gibbs, G. A. (Bristol, West)||Percy, Earl|
|Anson, Sir William Reynell||Gordon, J.||Powell, Sir Francis Sharp|
|Anstruther-Gray, Major||Goulding, Edward Alfred||Randles, Sir John Scurrah|
|Arkwright, John Stanhope||Guinness, Hon. R. (Haggerston)||Rawlinson, John Frederick Peel|
|Ashley, W. w.||Guinness, Hon. W. E. (B. S. Edmunds)||Renton, Leslie|
|Baldwin, Stanley||Harris, Frederick Leverton||Renwick, George|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Hermon-Hodge, Sir Robert||Ronaldshay, Earl of|
|Banbury, Sir Frederick George||Hills, J. W.||Ropner, Colonel Sir Robert|
|Beach, Hon. Michael Hugh Kicks||Hope, James Fitzalan (Sheffield)||Rutherford, John (Lancashire)|
|Beckett, Hon. Gervase||Joynson-Kicks, William||Rutherford, Watson (Liverpool)|
|Bowles, G. Stewart||Kennaway, Rt. Hon. Sir John H.||Salter, Arthur Clavell|
|Bull, Sir William James||Kerry, Earl of||Smith, Hon. W. F. D. (Strand)|
|Butcher, Samuel Henry||Lane-Fox, G R.||Stanler, Beville|
|Carlile, E. Mildred||Lee, Arthur H. (Hants, Fareham)||Staveley-Hill. Henry (Staffordshire)|
|Cave, George||Lockwood, Rt. Hon. Lt.-Col. A. R.||Stone, Sir Benjamin|
|Cecil, Evelyn (Aston Manor)||Long, Col. Charles W. (Evesham)||Talbot, Lord E. (Chichester)|
|Cecil, Lord R. (Marylebone, E.)||Long, Rt. Hon. Walter (Dublin, S.)||Thomson, W. Mitchell- (Lanark)|
|Chaplin, Rt. Hon. Henry||Lonsdale, John Brownlee||Tuke, Sir John Batty|
|Clive, Percy Archer||Lowe, Sir Francis William||Walker, Colonel W. H. (Lancashire)|
|Clyde, J. Avon||MacCaw, Wm. J. MacGeagh||Walrond, Hon. Lionel|
|Coates, Major E. F. (Lewisham)||Magnus, Sir Philip||Warde, Col. C. E. (Kent, Mid)|
|Courthope, G. Loyd||Marks, H. H. (Kent)||Williams, Col. R. (Dorset, W.)|
|Craig, Captain James (Down, E.)||Mildmay, Francis Bingham||Willoughby de Eresby, Lord|
|Dickson, Rt. Hon. C. Scott||Moore, William||Winterton, Earl|
|Doughty, Sir George||Morpeth, Viscount||Wyndham, Rt. Hon. George|
|Douglas, Rt. Hon. A. Akers||Morrison-Bell, Captain||Younger, George|
|Du Cros, Arthur||Newdegate, F. A.|
|Fell, Arthur||Oddy, John James|
|Fletcher, J. S.||Parkes, Ebenezer||TELLERS FOR THE AYES.—Mr. Lambton and Mr. G. D. Faber.|
|Forster, Henry William||Pease, Herbert Pike (Darlington)|
|Foster, P. S.||Peel, Hon. W. R. W.|
|Acland, Francis Dyke||Harcourt, Rt. Hon. L. (Rossendale)||Partington, Oswald|
|Adkins, W. Ryland D.||Harcourt, Robert V. (Montrose)||Pearce, Robert (Staffs, Leek)|
|Ainsworth, John Stirling||Hardle, J. Keir (Merthyr Tydvil)||Pearce, William (Limehouse)|
|Alden, Percy||Hardy, George A. (Suffolk)||Price, Sir Robert J. (Norfolk, E.)|
|Armitage, R.||Harmsworth, Cecil B. (Worcester)||Rainy, A. Rolland|
|Asquith, Rt. Hon. Herbert Henry||Harvey, W. E. (Derbyshire, N.E.)||Raphael, Herbert H.|
|Atherley-Jones, L.||Harwood, George||Richards, Thomas (W. Monmouth)|
|Baker, Joseph A. (Finsbury, E.)||Haworth, Arthur A.||Richards, T. F. (Wolverhampton, W.)|
|Balfour, Robert (Lanark)||Hazel, Dr. A. E. W.||Richardson, A.|
|Baring, Godfrey (Isle of Wight)||Hazleton, Richard||Ridsdale, E. A.|
|Barker, Sir John||Hedges, A. Paget||Roberts, Charles H. (Lincoln)|
|Barnard, E. B.||Helme, Norval Watson||Roberts, G. H. (Norwich)|
|Barnes, G. N.||Hemmerde, Edward George||Robertson, Sir G. Scott (Bradford)|
|Barran, Rowland Hirst||Henderson, Arthur (Durham)||Robertson, J. M. (Tyneside)|
|Barry, Redmond J. (Tyrone, N.)||Henderson, J. McD. (Aberdeen, W.)||Robinson, S.|
|Beale, W. P||Herbert, Col. Sir Ivor (Mon. S.)||Robson, Sir William Snowdon|
|Beauchamp, E.||Herbert, T. Arnold (Wycombe)||Roch, Walter F. (Pembroke)|
|Bellairs, Carlyon||Higham, John Sharp||Rogers, F. E. Newman|
|Berridge, T. H. D.||Hobart, Sir Robert||Rose, Sir Charles Day|
|Bethell, Sir J. H. (Essex, Romford)||Hodge, John||Runciman, Rt. Hon. Walter|
|Bethell, T. R. (Essex, Maldon)||Holland, Sir William Henry||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.||Schwann, C. Duncan (Hyde)|
|Bright, J. A.||Jardine, Sir J.||Sears, J. E.|
|Brocklehurst, W. B.||Jenkins, J.||Seely, Colonel|
|Brooke, Stopford||Johnson, John (Gateshead)||Shackleton, David James|
|Bryce, J. Annan||Jones, Leif (Appleby)||Sherwell, Arthur James|
|Burns, Rt. Hon. John||Jones, William (Carnarvonshire)||Shipman, Dr. John G.|
|Buxton, Rt. Hon. Sydney Charles||Jowett, F. W.||Silcock, Thomas Ball|
|Byles, William Pollard||Kekewich, Sir George||Simon, John Allsebrook|
|Carr-Gomm, H. W.||Kimber, Sir H.||Snowden, P.|
|Cawley, Sir Frederick||King, Alfred John (Knutsford)||Soames, Arthur Wellesley|
|Chance, Frederick William||Laidlaw, Robert||Soares, Ernest J.|
|Channing, Sir Francis Allston||Lambert, George||Stanger, H. Y.|
|Clough, William||Lament, Norman||Stanley, Albert (Staffs. N.W.)|
|Cobbold, Felix Thornley||Lehmann, R. C.||Stanley, Hon. A. Lyulph (Cheshire)|
|Collins, Sir Wm. J. (St. Pancras, W.)||Lever, A. Levy (Essex, Harwich)||Steadman, W. C.|
|Compton-Rickett, Sir J.||Levy, Sir Maurice||Stewart, Halley (Greenock)|
|Corbett, A. Cameron (Glasgow)||Lewis, John Herbert||Summerbell, T.|
|Corbett, C. H. (Sussex, E. Grinstead)||Lough, Rt. Hon. Thomas||Taylor, John W. (Durham)|
|Cornwall, Sir Edwin A.||Lupton, Arnold||Taylor, Theodore C. (Radcliffe)|
|Crooks, William||Luttrell, Hugh Fownes||Tennant, H. J. (Berwickshire)|
|Davies, Ellis William (Eifion)||Lyell, Charles Henry||Thomas, Sir A. (Glamorgan, E.)|
|Dewar, Arthur (Edinburgh, S.)||Lynch, H. B,||Thorne, G. R. (Wolverhampton)|
|Dickson-Poynder, Sir John P.||Macdonald, J. R. (Leicester)||Thorne, William (West Ham)|
|Dilke, Rt. Hon. Sir Charles||Macdonald, J. M. (Falkirk Burghs)||Verney, F. W.|
|Duncan, C. (Barrow-in-Furness)||Maclean, Donald||Walsh, Stephen|
|Dunne, Major E. Martin (Walsall)||Macpherson, J. T.||Walters, John Tudor|
|Ellbank, Master of||M'Callum, John M.||Walton, Joseph|
|Erskine, David C.||M'Micklng, Major G.||Wardle, George J.|
|Evans, Sir S. T.||Maddison, Frederick||Warner, Thomas Courtenay T.|
|Everett, R. Lacey||Massle, J.||Wason, John Cathcart (Orkney)|
|Falconer, J.||Menzies, Sir Walter||Waterlow, D. S.|
|Ferens, T. R.||Micklem, Nathaniel||White, J. Dundas (Dumbartonshire)|
|Ferguson, R. C. Munro||Molteno, Percy Alport||White, Sir Luke (York, E. R.)|
|Findlay, Alexander||Mond, A.||Wilkie, Alexander|
|Gibb, James (Harrow)||Montgomery, H. G.||William, J. (Glamorgan)|
|Gill, A. H.||Morgan, J. Lloyd (Carmarthen)||Williamson, Sir A.|
|Gladstone, Rt. Hon. Herbert John||Morse, L. L.||Wilson, J. W. (Worcestershire, N.)|
|Glover, Thomas||Morton, Alpheus Cleophas||Wilson, P. W. (St. Pancras, S.)|
|Goddard, Sir Daniel Ford||Murray, Capt. Hon. A. C. (Kincard.)||Wilson, W. T. (Westhoughton)|
|Greenwood, G. (Peterborough)||Myer, Horatio||Wood, T. M'Kinnon|
|Griffith, Ellis J.||Napier, T. B.||Yoxall, Sir James Henry|
|Gulland, John W.||Nicholls, George|
|Haldane, Rt. Hon. Richard B.||Nicholson, Charles N. (Doncaster)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.|
|Hall, Frederick||O'Grady, J.|
|Hancock, J. G.||O'Malley, William|
§ Mr. WATSON RUTHERFORD
then moved to add at the end of Section (1) the words, "but where the land is leased or let on the terms that the tenant shall develop the same or occupy the same within the meaning of this part of this Act, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period 702 as the owner can in due course recover possession."
This Amendment is, I submit, one having an important bearing on this clause, which provides, so far as we have gone, that the Undeveloped Land Tax is to fall upon the owner of the property, and not on the lessee or the tenant. It certainly is a very 703 useful thing to consider for a moment what ordinarily takes place in connection with the development of land. As a rule the owner of the property does not develop it; he finds it necessary to get some one else to step in and do that. It is just one of those things which should be entrusted to an expert. When an amateur tries to do it, in nine cases out of ten he makes a mess of it, and loses his money. The development of land in our large cities has therefore become a special business, to which skilled people devote themselves, and the result is that the best is done both for the land and for the community. In the ordinary course this takes the form of a building lease, and it is in just that case of the building lease that I wish to bring before the Committee What takes place. The landlord signs a building lease, the lessee is bound by covenant, within the period named in the lease, to build upon that land. That is part of the terms of the lease. It is in consideration of that covenant that he gets possession of the landlord's land. It is that very building upon the land which prevents it from being liable to the Undeveloped Land Tax. So long as the building and the development of the land is postponed, so long, if we pass this Bill, that Undeveloped Land Tax will be payable, and the only way to get out of the payment of the tax is for somebody to build upon the land. In the early hours this morning we practically disposed of the difficulty arising out of agricultural leases, and as land under £50 in value is exempt, and land that has £100 an acre spent upon it is exempt, if follows that really and substantially the only case that is not provided for or dealt with is the case that we are now putting before the Committee—namely, the case of the building lease. In the case of the building lease land which has not had £100 an acre spent upon it, but presumably to start with is over £50 an acre in value, is liable to this Undeveloped Land Tax, and it must be so until it is developed. The lease is signed. What are the terms of 999 out of a thousand leases? What are the terms of the ordinary lease—the lease which is in existence to-day, the lease which will probably be signed to-morrow? They are that the lessee, the tenant of that property, covenants to build, he also covenants that he will pay a certain small rent during the term of the lease, which is the rest of his consideration, for getting possession of the land. The consideration for getting possession of the land there- 704 fore consists of two things—the covenant to build and the comparatively small rent. There is also in that lease, as everyone knows who is acquainted with land at all, a covenant by the lessee that ha will during the term of the lease pay ail rates, taxes, and impositions of every kind and description whatsoever, with the exception of the Property Tax or Income Tax.
That is the common form of the lease which exists to-day, and why? Because the lessee is getting the absolute possession of the property for a given term of years, or indeed he has already got it in the case we are considering, and it is partly expired. He has got possession of the property, and he has entered into these covenants, and that is the contractual position between the parties. He has contracted, that whatever the rates, taxes and impositions are, or may be, during the term of the lease, he, the lessee, will pay them. Then we come to consider the effect of this clause, which sets up a new tax, called the Undeveloped Land Tax, and the owner must pay that tax. How does that tax arise? It arises in this way, that the man who has covenanted to build and to develop the property fails to do so. He, the lessee, or tenant, has got possession; he has covenanted to develop and build, but he has failed to do so, and under this Bill there is a tax payable, and who is to pay it under this measure? The man who has got possession of the property and can develop it? No. The man who has made default in carrying out his covenant? No. The man who could go and carry it out and develop the property? No. The position is, I venture to submit, to the Committee, an absurd one because the owner of the property has got to pay the tax for somebody else's default, when he, the owner, could not develop the property if he wanted to, because somebody else has got possession, and it really seems to me a case in which this difficulty will arise, and which calls for this exception, that I venture to suggest n my Amendment, which runs:—"But where the land is leased or let on the terms that the tenant shall develop the same or occupy the same within the meaning of this Part of this Act, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period as the owner can in due course recover possession."
Of course, if there is a breach of the covenant, and the owner is empowered thereby to recover possession, when he 705 does so, he is in a position himself to proceed to develop that property in the ordinary and natural way, in which this Bill seeks to make somebody develop it. And then he ought to do so, but until that point arises, when the owner of the property has got it himself and turned this defaulting tenant out, it is unjust and unfair and a breach of the existing contract—though I do not want to lay much stress upon the breach of existing contract, because Parliament can break any existing contracts; but I want to put it upon the ground of plain, common English justice that you should not make a man pay who has committed no default, and when somebody else has committed a default, and when you are making a man pay, who has no opportunity of putting the matter right, because someone else has got possession of his property for the time being. That is my case. My case is that as a matter of common fairness and justice you should make the tenant of undeveloped land pay the duty until the landlord can turn him out for breach of covenant, and then you should make the landlord pay if he himself fails to develop. I should like, if I am in order, just to refer for a moment to the following words, which I have put down and intended to move as the next Amendment, for the reason that they show the justice of the proposition I am making:—"Provided always that where the land is leased on terms that the tenant shall develop the same or occupy the same within the meaning of this Part of this Act, then, in case the tenant fails to do so, such failure shall constitute a default entitling the owner to recover possession." I do not know that that Amendment could be made in the Finance Bill, and I dare say the answer of the hon. and learned Attorney-General would probably be that it would be absurd in a Finance Bill to alter the law in regard to defaults of covenants in leases.
§ Mr. WATSON RUTHERFORD
I am raising that point as an illustration, and therefore, although it would be out of order to move such an Amendment as that, I think it bears upon the point whether you should not give some relief of this kind to the landlord and make the tenant pay this tax until the landlord can, in the state of the law as we have it today, turn him out and get possession of the property himself. It was to illustrate 706 that point that I put down an Amendment, and not for the purpose of pressing it on the Committee. Without further argument, therefore, because I do think the point needs no further elaboration, it is so simple. I beg to move the first Amendment.
§ Sir W. ROBSON
The only difficulty I have in regard to the hon. Member's Amendment is the multiplicity of arguments there are against it. They are very numerous, and each one of them is conclusive. Let us take the case he puts, of a lease by which a landlord has bound the tenant to develop the land—in other words to build on the land, because that is the precise kind of development which is aimed at by the Bill. That would be a long lease, considerably over 50 years, and the tenant in such a case would be the owner of the land for the purpose of the payment of the duty; and, therefore, the tenant would be the one, primarily, to pay the whole burden of the tax. That disposes of the common, if not the invariable case, but in order to find something else, which I may urge in favour of the hon. Member, in order that I may have the satisfaction of answering it, I will suppose a case in which the land has been leased for something less than 50 years, but in which, nevertheless, the tenant has bound himself to develop the land and the tenant fails to develop. The provisions of such a lease would provide for the building of the house, and that house is to be security to the landlord for the ground rent which he exacts; therefore, the landlord is, of course, interested in enforcing the contract and seeing it is carried out. If it should happen to be the case it is difficult to imagine that a landlord, notwithstanding this, still remains under this Bill the owner, and liable to pay the tax, he has also got an obligation under a lease which he can enforce against the tenant, if he finds that he has got to pay Undeveloped Land Tax, because the land is undeveloped. His remedy is in his own hand under his covenant. He may say to the tenant: "Why do you not; develop my land, you do not do it, and I have to pay Undeveloped Land Duty because you are not doing it."
What he has got to do is to enforce his covenant, and he will get as part of his damages for failure to carry out the covenant, the sum that he has had to pay for Undeveloped Land Duty, but apparently what the hon. Member desires is that instead of the landlord enforcing his contract, which is the reasonable and 707 sensible thing to do, he is to use the State in some indirect and some imperfect manner as a means of getting the tenant to develop the land. Instead of acting upon his contract which would be really effective in compelling the tenant to do what he undertook to do, he wants the Chancellor of the Exchequer or the Inland Revenue Department to bring an action against the tenant, or an action against somebody else, to compel him not to continue in default when the simple course is for him to enforce his own contract. I think the only answers I need give are, first of all, that the hon. Member has supposed an extreme case, one of which he has scarcely given us any concrete example, because in nearly all the cases he referred to the tenant would primarily be the person bound to pay the duty; and, secondly, if he is not the person bound to pay the duty, it is the landlord's duty to enforce the contracts and see that he pays it. There is still a further answer. If the tenant is doing anything at all under his contract he will certainly be making an expenditure on roads and sewers, which will also probably be sufficient to prevent the attachment of the duty. I can scarcely imagine a case of the hardship of which the hon. Member complains, and which he desires to meet by the Amendment.
§ Mr. CLAVELL SALTER
I go day by day through the same experience. I sit here and listen to an Amendment, and, notwithstanding my growing experience of the powers of the Attorney-General, I wonder what the possible answer will be, but the answer is always forthcoming. In fact, three answers have been forthcoming, prefaced by the observation that there were so many that he hardly knew which to choose. Are we not agreed upon this, that, unless there is some special and conclusive answer to an Amendment which is based upon justice, it is upon the face of it unjust to say that a man who not only has not failed to develop, but has let it for development, should be taxed for not having developed his land; and is it not equally plain that justice would seem to say not merely that you should not tax the owner in such a case, but that you should tax the tenant, who, upon the hypothesis upon which they are proceeding, is committing a flagrant breach of a fundamental portion of his covenant on the strength of which he has obtained possession of his land? Then I think we may ask for a special answer. The Attorney-General gave 708 us three, and he says in the first place that if the lease is for more than 50 years this Amendment is not required, because the lessee will be technically the owner, but the Attorney-General knows quite well that what this Bill says is, that where land is let on lease, of which more than 50 years is unexpired, that technical effect shall take place. The Bill is not concerned at all with the length of the original lease, except, of course, that it must be more than 50 years. It is only concerned that there shall be 50 years unexpired, and therefore if, when the Bill comes into operation, the land is in the hands of the tenant for development, and is not developed, and there are 45 years unexpired, the Attorney-General's first point falls to the ground.
§ Sir W. ROBSON
Is it really suggested that it is a frequent case that a building lease, which is generally for 90 years, should have been left unacted on for 30 or 40 years?
§ Mr. CLAVELL SALTER
I think it is not so rare as might be supposed that part of an estate should have remained undeveloped for a very considerable time, but if the case is so exceptional that does not at all prevent us from asking for justice in any case in which justice is required. The Attorney-General's second point is that the owner has the remedy in his own hands. What is his position? Here is a tenant committing a flagrant breach of his covenant. He has no right of re-entry. He must bring an action, and he must enforce it by action of ejectment. His tenant has equitable rights given to him by the Conveyancing Act. He can go to the court for relief, and no one knows better than the Attorney-General how protracted are these ejectment cases in which appeals are made to the court for equitable relief against forfeiture. And while these proceedings are dragging on, very likely against a man who has not a farthing, and who is failing to develop because he has not a farthing, the unfortunate owner of the land, who has been guilty of no default at all, besides expending his money on these proceedings is to pay the tax for not having developed the land which his tenant ought to have developed. With regard to the last point, it seems to me to depart from the hypothesis. The Attorney-General says the undeveloping tenant will probably have spent at the rate of £100 an acre. If he has, the whole hypothesis falls to the ground. But we must keep to the hypothesis oh which we are arguing the matter, which is that the land is in fact being 709 developed within the meaning of the Bill so as to subject someone to the payment of this duty. None of the three grounds which the Attorney-General has given us show the slightest business reason why the inherent justice of this Amendment should not be recognised.
§ Mr. GEORGE RENWICK
I wish to say a word from the point of view not of a landowner, but of a manufacturer. I am not in any sense a landowner myself, but I am associated with companies which have land to lease, and we find it, and I think it is the general rule, extremely convenient on the part of those who carry on industrial undertakings, to acquire land upon lease rather than to purchase it. It means that we have not to raise capital by debentures or otherwise to pay for the cost of the land. The lease contains covenants, but in the course of his business the lessee finds it inconvenient at a particular time to carry them out. It may be a building lease or a lease to carry out certain developments other than by building. We hear from the Attorney-General that if the tenant fails to pay the Development Tax, the duty of the landlord is to step in and say to the tenant, "Carry out your covenant." That is exactly the position of the manufacturer. We rely upon the good feeling between the owner of the land and the tenant, and if the owner sees that it does not suit the manufacturer or the tenant, perhaps owing to depression of trade, to carry out at a particular time the covenants of the lease, he very sensibly says, "Very well, I will shut my eyes to the fact, and I will wait until there is an opportunity for carrying them out." It is very easy for a lawyer, and it is like a lawyer, to say that the hard-and-fast remedy is for the owner of the land to insist upon the covenants being carried out. That may be the way a lawyer looks at it, but it is not the way that the owner of the land looks at the matter. It would be an extremely unfortunate thing for many manufacturers and owners of industrial work if they had not that give-and-take system between the owner and the tenant. I support the Amendment because. I think it would be a manifest injustice to the owner to ask him to pay this Undeveloped Land Duty in case the tenant should not develop. Let me ask him, in case the tenant eventually could not pay it, what is the effect of putting this into the Bill? It means that in future the owner of the land will always have in view the possibility that he may have to 710 pay it, and, therefore, he comes down upon the lessee and says, "Carry out, immediately, the covenants of the lease." Has the right hon. Gentleman any idea of what the effect will be? I can give a dozen cases where no profit is being made, rates and taxes and rent are being paid, but the owner of the works has the greatest difficulty in carrying them on, and are you going to add to his burdens by having the owner of the land saying, "Carry out these developments, otherwise I will take possession"? It would be disastrous. From this fact and others of a similar character it appears that the right hon. Gentleman, when he introduced this Bill, did not take into account what was going to be the effect of it. I have tried to put before the Committee from a business man's point of view what is going to be the effect of the Bill without an Amendment of this description. Then there is another fact. Suppose we want a renewal of the lease or want to have a lease for a longer period, which is not uncommon, and negotiate to have the lease lengthened. Suppose it is not in a prosperous condition at the moment. The landlord refuses to meet the tenant, and there you do an injustice to a struggling tenant or would-be tenant. Again, you are going to favour the rich as against the poor. Suppose a rich man comes into competition with a needy man, the owner of the land will give it to the rich man. The Committee will see that the effect of this provision is likely to be more far-reaching than those in charge of the Bill have any idea of. For these reasons I sincerely hope the Chancellor of the Exchequer will give his most favourable consideration to this most reasonable Amendment.
Mr. LYULPH STANLEY
I do not think we need consider the question of an estate which is not being developed. I should like to take the case of a plot of land—10 acres—let on a building lease to a man who only intends to put up one house and to keep the rest as a garden. I take the case of an existing lease for 99 years. For the first 49 years of the lease he will be treated as the owner, and will pay the Undeveloped Tax on his garden, but at the end of the 49 years the tax will swing over to the lessor, and the lessor will be called upon to pay the halfpenny tax on the garden of the lessee. The lessee gets the advantage of the garden, but the lessor pays for it. That may be all right under a newly created lease after the passing of the Act, 711 because both lessor and lessee have notice of what is intended. But it seems doubtful whether justice will be met in imposing such terms upon an existing lease, and if I am correct in my understanding of the provisions of the Bill I hope the Chancellor will consider such a case as I have mentioned and deal with it now. I am very desirous to support the Government on all occasions I can, but, still, such cases as this rather strain one's party loyalty.
§ 7.0 P.M.
I wish to express my sympathy with the hon. Member opposite (Mr. A. Lyulph Stanley) in the position in which he finds himself, and I would extend also to the Government my sympathy on the rather half-hearted support which they have received from the hon. Gentleman. I should think that the discussion which has occurred since the Attorney-General made his speech has convinced him that the numerous reasons he gave, and the numerous reasons in his mind which he did not give are hardly sufficient to meet the case put by the hon. Gentleman opposite and by my hon. Friend who moved the Amendment. Under the Bill a landowner will have to pay the tax who is not in a position to develop the land himself and has handed it over to another man who is not carrying out his contract. It is not denied that that is a gross hardship. What is the remedy? Eviction. The only way which is suggested to the ingenious mind of the Attorney-General and to the Government to which he belongs by which the halfpenny tax is to fall upon the shoulders of the person who ought to pay is to evict the man who has not fulfilled his contract—to begin with a lawsuit and to end with an eviction. And this is the tax about which the hon. and learned Gentleman, in triumphant accents, told us two days ago that one thing which could be said of it was that it never interfered with trade and commerce in any form. My hon. Friend the Member for Newcastle (Mr. Renwick) speaks of this from the manufacturers' practical point of view, just as the hon. Member opposite (Mr. A. Lyulph Stanley) speaks of it from the point of view of house property, and my hon. Friend who moved the Amendment (Mr. Watson Rutherford) speaks of it from the point of view of one who has great acquaintance with the actual methods by which building is carried out in this country. My hon. Friend the Member for Newcastle pointed out the gross 'Hardship which would be inflicted upon 712 manufacturers, and that for the simple reason that it is neither the interest of the landlord nor the interest of the tenant in many cases that the landlord should enforce by means of a lawsuit, and consequent eviction, the carrying out of building operations. The natural way of dealing with it, of course, is that there should be an arrangement between the two. That was not contemplated by the Government at all—I mean a general arrangement as to the not carrying out of a building contract. That is not the view of the Government. The view of the Government is that the proper relation between landlord and tenant is that when a contract has been entered into between them the landlord should enforce it to the uttermost farthing. This from a Government who, when it suits them, and when under different circumstances and speaking to different audiences, state that every landlord who does carry out his business transactions in accordance with the plain and legal rights of property is a being no better than a blackmailer. I really cannot conceive why the Government should resist this Amendment. It is a simple and easy form of getting over one of the difficulties of their Bill which can hurt nobody, which does not detract from the value of the tax, and which does not lessen the wretched pittance which this tax is going to bring in to the Exchequer. But for some occult reasons—certainly for none of the reasons given by the Attorney-General—they resist the Amendment which I should have thought every Member of the House would agree carries out the plain principles of justice and makes the tax a little less injurious, a little less hurtful, a little less inexpedient, and a little less injurious to the ordinary commercial transactions between man and man which wall be left after the Government have finished tinkering.
§ Mr. ATHERLEY-JONES
If it were assumed that there were short leases of this nature there might be a great deal of force in the contention that has been urged, but everybody knows that it is the invariable practice for the land to be let or long lease. Clause 27 provides that where there is an unexpired term of over 50 years "the lessee under the lease shall be deemed to be the owner, instead of the person entitled to the freehold." What is the possible combination of circumstances which would operate so as to prejudice the lessor? It is the possibility 713 that the lessee having a lease remaining of some 45 years unexpired might leave the land undeveloped in such a way that the lessor would fall the victim of this tax. That is a contingency which I venture to say that anyone, having experience in regard to leases would state never does arise. I myself cannot conceive a case where it would arise. The Leader of the Opposition said a great deal with reference to eviction. I think the right hon. Gentleman in times past found eviction a very effective weapon. It certainly has been used in the most effective manner—I do not say in this country, but in Ireland. In every lease what do you find? You find most careful covenants and provisos for re-entry in the event of the lessee not having performed his duty by the land. Surely that is sufficient for the lessor. Let the right hon. Gentleman recognise that it is the genius of the English law that the freeholder, except for certain specific purposes, is to be regarded as the true owner. Income Tax is collected from the tenant who can recoup himself from the landlord. I do think that the right hon. Gentleman on reflection will see that there is the most perfect security for the landlord. I would vote for the Amendment in a moment if I thought that the landlord could be compelled to pay without indemnity in the way suggested by hon. Members opposite. I can assure them that such a case will never occur, and, if it did occur, the landlord would have the effective remedy of retaking possession of his land, and not by the long process which has been suggested.
§ Mr. AUSTEN CHAMBERLAIN
The hon. Member has not offered any answer to the case which was put forward by the hon. Member for Cheshire (Mr. A. Lyulph Stanley). It is a very common case in the part of the country from which I come. If the hon. and learned Member for North-West Durham (Mr. Atherley-Jones) will accompany the Prime Minister when he goes to visit Birmingham, and if he will spare an hour or two from the attractions of Bingley Hall, he will find a great many houses where there are very large grounds attached which will not be covered by the concessions in regard to garden grounds. The landlord has leased the ground on long building lease, the tenant has complied with the obligation by putting up a house, and the landlord has no power to evict him, but the landlord is to be charged the tax because he has not built on other portions of that land more houses. Having 714 taken five acres of land and put up one house upon it, and has not covered the remainder with other houses in which he does not wish to live, the landlord is to be taxed.
§ Mr. ATHERLEY-JONES
The leases define what houses are to be built and the time in which they are to be built in many cases.
§ Mr. AUSTEN CHAMBERLAIN
Of course they do in some cases, but in other cases they do not. What I am now dealing with is not the case of the leases which provide that the whole of the land shall be covered with houses. We know that when the whole of the land is covered with houses the Government will have succeeded in introducing what they think will be a paradise on earth, but in the meantime, and under other and older-fashioned ideas, landlords, tenants, and other people, and even a whole community, have thought it a great advantage not to have the whole of the land covered by houses. It is perfectly unjust in a case where the landlord cannot secure other buildings on the land that he should become subject to the Undeveloped Land Tax. I do not doubt, although the Attorney-General did not deal with that case, that the Government will deal with it before we have proceeded much further with the Amendment. I wish to put another, but possibly rarer, case which has come under my own notice. A friend of mine who held land took a further piece adjacent to his land, with the obligation to build upon it, but the landlord, not having been able to foresee the terms of this Bill, was not prudent enough to provide that he should build upon it at once. Though there is an obligation to build, it is not an immediate obligation. My friend, I think, is not under obligation to build until 21 years from the time his lease began. He will fulfil his covenant to his landlord if he puts up houses within 21 years. I may be wrong about the exact period, but I am certain that there is a considerable number of years during which he need not carry out the building covenant. There, again, the landlord has ceased to have any power during those years to get the land developed. I do not think that I inquired at the time, and I confess that I am speaking with imperfect knowledge; but the right hon. Gentleman may take it from me that the essential point for the purpose of my argument is correct as stated by me. My friend is under no obligation to build 715 for several years after he took the lease. Surely it would be most unfair under those circumstances to charge the landlord, who has no power, even by the summary process so dear to the heart of the learned Attorney-General, to secure the development of the land, because the land is not built on. I hope that we may have an assurance from the Government that they will meet these cases of great and gross hardship, which are on all fours with the cases they excluded under Clause 10 in dealing with agricultural land, and that they will admit that where the landlord could not compel development, and while he could not compel development, it was not fair to tax him because the land was undeveloped. In these cases, until the landlord is in a position to secure development, and secure it without hardship to his tenant, as was pointed out by the hon. Member for Newcastle (Mr. Renwick), he should certainly be protected.
§ Mr. W. R. PEEL
I listened with great interest to the advice to landlords given by the Attorney-General (Sir W. Robson). My right hon. Friend below (Mr. A. J. Balfour) alluded to the statement of the Chancellor of the Exchequer with regard to blackmailing attributed to landlords in ordinary business transactions. I think it is only fair, as my right hon. Friend quoted that statement, to refer to the statement in a similar case of the Secretary for Foreign Affairs (Sir E. Grey). The Secretary for Foreign Affairs said it is only an ordinary business transaction. It is perfectly fair, I think, to quote one Member of the Government on one side, and to quote the other on the other. I notice that one generally contradicts the other before a fortnight or a week is up, and sometimes, as I am reminded, on the same night. I quite understand that the Government should want to put this tax upon the land, because if the tax was fairly laid, and in certain cases was upon the lessee, then it would be perfectly clear that the tax was laid upon the industry, and of course the Attorney-General tried to argue all through that these are taxes which in no case fall upon the industry. He tried to conceal the real incidence of the tax by placing it in the first place on the shoulders of the landlord; but the fact that it will be a burden on the industry is absolutely patent to everyone. It is in exactly the same way a burden on the industry if placed upon the landlord as if 716 placed upon the lessee. The Attorney-General poured scorn on the suggestion that there would be many cases of this kind. He was speaking of leases of 99 years. But there are a great many building leases about London of 60 years, and it is quite obvious that in the case of these 60-year leases before 10 years, are up a very considerable portion of the estate would not have been developed. I take one instance of this which is rather apposite. It is land in the hands of a municipality, and it is quite obvious that the municipality would be as anxous as possible to develop the land; and of course it is well-known that municipalities can borrow money more cheaply than a private trader. There was in the estate 225 acres. The municipality developed about 45 of them. It has had this lease about 10 years. Therefore if it were let under these building leases, which are common about London for 60 years, it is quite clear then in that case someone will have to bear the burden of Undeveloped Land Duty on 180 acres. The municipality is advised in reference to this particular estate that it is hopeless to cover that land with houses for some time to come, and that it may take at least 30 years before these different houses would be inhabited. Surely that is a case which very frequently occurs, when the greatest possible hardship might happen to the landlord who had done all he could to get the estate developed while the lessee has not been able to develop the whole of the estate.
The Attorney-General deals with cases under contract, where he says: "Let the landlord enforce his rights on the lessee." It is hardly necessary to point out the utter absurdity of asking them to do so in these circumstances. So far as I know these leases do not contain obligations that the whole of the land should be covered with houses. They say they should develop the land, but the rate at which the estate is to be covered with houses is left in many cases to the lessee, and of course it is obvious that it must be so, because it is impossible to foresee when the lease is granted what would be the state of the building trade three or four years hence. Therefore, in most of these cases where the Attorney-General says it is simple for the landlord to enforce he would not be able to enforce because the lessee would discharge his obligation by building a certain number of houses on the land. But there is a case where the landlord would be absolutely without any remedy whatever. He would have to pay this 717 Undeveloped Land Tax, and he could not recover himself against the lessee; and as this tax is in the nature of a punitive tax, and is placed on the unfortunate free-holder to make him develop the land, it is extremely hard in cases of that kind that it should fall upon the landlord because he has got no call whatever to enforce development of that land, and in fact he has done everything he could do to see that that land has been developed. I appeal to the Attorney-General to consider cases of that kind where the hardship would be very severe. We need not transfer the rule to cases where there are building leases of 30 or 40 years, which are sometimes given, because so far as my knowledge goes 60 years is the commoner case, and that is the case where the greatest hardship will fall on the landlord. The Attorney-General presents a stiff front to ns on this particular occasion, but we are not frightened off by that because the Government have done that on other points. On the last two points they were very hard to move. When they do move they generally move at some respectable hour in the morning, but still after several weeks of vigorous Debate they generally do change their minds. But this is so unfair, and it would have so bad an effect on the building trade and the development of houses in putting this additional burden or landlords, and making them more exacting in their terms with their lessees, that I am confident that on consideration the Government will give some mitigation of the harshness of this tax.
§ Sir JOHN BARKER
We have listened to a great many fairy tales during the discussion of this financial clause, and we have also listened to a great many arguments used in favour of landlords and against landlords. I have a great deal of experience of leases and of buildings, and I have never yet found a landlord who would give me a lease to build, and who would allow me to build and give me grace for 21 years. That is one of the things that have never come before me. I certainly think that that gentleman who did that should have employed a solicitor, and I think he would have guarded him against such a foolish arrangement. There have been a great many things said about landlords, and there has been a great deal said in and out of this House about the Gorringe estate. I was a friend of Mr. Gorringe, and I knew everything in connection with the dealings that he had with the Duke of Westminster. I also know that he built a 718 great part of the back portion of his premises on a 19 years' lease, for the very reason that he could not get a longer lease from the Duke; and I believe that he also continued building some of the private part of his establishment at a less time than even 17 years. I think that if anyone had the experience, as I have had, of London ground landlords he would not have the sympathy that is expressed for them on many occasions in this House. I assure you, as a man of business, that has to unite something like 40 or 50 houses under different landlords, as well as knowing the difficulties and the trouble with the solicitors on each side—
§ Sir JOHN BARKER
I am very sorry, but I want to speak of the question of building in London. There is a very large house in Oxford-street. The lessee built a magnificent pile of buildings with a 40 years' lease, and the excuse given by the Duke of Portland's solicitors was that they could not hamper their successors. The landlord is in possession of that block of buildings, and he has to fix the rent for the property to be rebuilt by this firm; and unless the parties can come to terms for the rent of the premises that are to be built the landlord is in possession of the goodwill of the business. I want to show the difficulty which there is under the leasehold system in London with regard to uniting one house with another, and the difficulty there is in getting a reasonable lease from the landlord at a reasonble price when any man is fairly successful in business; and I think myself that if we consider fairly, with regard to this development of property, the reason—
§ Mr. J. W. HILLS
The hon. Member who has just spoken started by saying he never knew a building lease of 60 years or less. He then proceeded to give three cases of building leases of 40 years, 19 years, and 17 years.
§ Mr. HILLS
Surely it is perfectly well known, if you take that one point where 719 there is a large tract of land adjoining to be developed, that a very free hand is given to the tenant. I have a case in my mind at the present moment. There a large tract of land has been let, and 50 years have been given to the tenant to put up the last house. He has 50 years to build that line of houses. It is a perfectly common case in the suburbs of London. They do not develop very rapidly, and it is useless to build houses too quickly. They give a free hand to the tenant. He is the man in possession. He builds very much as he pleases. All the landlord cares for is that the rent is fairly secure, and that when the time comes to an end the houses are on the land. We are not discussing the general conduct of landlords on the Amendment, but merely the narrow point who pays the taxes in these cases. Surely it is proved to demonstration that the Amendment will remedy a very clear and obvious injustice, and I hope even now—at the eleventh hour—the Government will reconsider their position and accept the Amendment.
§ Mr. AUSTEN CHAMBERLAIN
May I respectfully ask the Government to give some answer to the questions that have been addressed to them, and the arguments which have been used by hon. Gentlemen on this side of the House?
§ Mr. LLOYD-GEORGE
I think my hon. and learned Friend the Attorney-General really did give a complete answer. The case that the hon. and learned Member gave was that of a building lease, time being given to the tenant to develop. He says: "Suppose he has not developed, and the halfpenny is charged on the undeveloped land, why should the landlord pay, the fact of the tax becoming due being entirely attributable to the default of the tenant?" That is the case, I think, which the hon. and learned Member put, and it is a totally different case. I agree it is a case we have to consider when we come to the definition of the word "owner." The point put by the hon. Member for Cheshire (Mr. A. L. Stanley) had reference to a wholly different case. I think that is a case which will require careful consideration, but I would rather deal with the Amendment on the basis stated by the hon. Member who moved it. What is the position? If a lease has more than 50 years to run, well then the tax falls upon the tenant, and, as a man of experience in these matters, I think the hon. and learned Member opposite will 720 admit that, in the vast majority of cases, the lease will be carried out a number of years before it has expired.
§ Mr. LLOYD-GEORGE
The sort of case put by the hon. Member behind me, the short lease of Messrs. Gorringe, and cases of 17 years and 40 years, are cases in which there is not a yard of undeveloped land; but the majority of cases put by the hon. Member opposite are not of that nature, and I do not know that there are many cases of 10 acres. I should think a 10 acre case is very exceptional. I very much doubt if there are many cases of more than five acres. I should say they are very exceptional indeed. But that is not the case intended to be covered by the Amendment. There are very exceptional cases where landlords have allowed the tenant 10, 20, and even 30 years to carry out his covenant.
§ Mr. WATSON RUTHERFORD
I just want to make my point clear. I did not know it was going to be replied to in this way. It is just this, that in a very large number of leases the lease comprises, as a rule, a very large piece of land, and it is taken up gradually in a series of years. There are numbers of cases of which I could give particulars of all over the country with which I am acquainted myself, where there are very considerable leases-in which breaches of the covenants have occurred, pieces of the land being left unbuilt upon. A very large piece of land belongs to the father of Lie hon. Member opposite within a few miles of where I live myself—Hoylake. It is just in those cases where hardship arises.
§ Mr. LLOYD-GEORGE
Those are rather different cases. Leases are not granted until the land is taken up actually for building. Where leases are granted, there are agreements which cover options very often; those options are taken up, and the lease is then granted from the date of the actual completion of the covenant. These are not cases of 50 or 60 years' leases. The hon. Gentleman himself answers his own argument by taking the Hoylake case. I do not know whether the hon. Member will agree, but I should have thought that there were a very large number of leases, not of 60 years, but more like 80 years.
§ Mr. LLOYD-GEORGE
Then until the lease is taken up the document has not been signed, and there is no lease. I should be very much surprised if the hon. Gentleman could point out a single case to me—I will not say a single case—if he can point any number of cases to me where the lease is taken up with 50 years to run, and there is still a large tract undeveloped. It is really almost an impossible case. I do not know any case at all in which there is no covenant under which the landlord can bring pressure to bear. It is not necessary for him to forfeit his lease. He could go and say to the tenant, "I am willing to give you time, but I am not going on paying the halfpenny tax while you will not develop." I have no doubt an arrangement could be come to in regard to the matter.
§ Mr. LLOYD-GEORGE
There is nothing to prevent the tenant from sending on his cheque. The provision making the landlord pay the tax quite apart from the question of any other contract is a totally different thing. If the tenant wants to get indulgence from the landlord, the landlord can say, "Why ask me for the indulgence? I cannot extend indulgence to you whilst I am paying this tax." At any rate the remedy is in the hands of the landlord. After all it is a very exceptional thing. The hon. Member will not deny that somebody ought to pay. ["No."] The whole point is whether the landlord or the tenant ought to pay. The remedy is entirely in the hands of the landlord at the present moment. The case, it is admitted, is a very exceptional one, but even in this exceptional case the matter is entirely in the hands of the landowner.
§ Mr. JOYNSON-HICKS
The suggestion which is made by the Chancellor of the Exchequer that where a lease has got down to 50 years, and where the tenant is not developing the land, then the landlord may go to the tenant and say to him, "Unless you will refund the amount of Development Tax I will put an end to your lease." I say at once that is an illegal bargain. The words of the section are clear that the tax shall be borne by the owner, notwithstanding any contract to the contrary. The right hon. Gentleman says the landlord may go to the tenant and may make a bargain, and that he may turn him out of his holding unless he pays the tax. That is an 722 illegal bargain within the terms of this section.
§ Earl WINTERTON
Will the Law Officers of the Crown support the Chancellor of the Exchequer in the suggestion that when this part of the Bill becomes law the tenant and the landlord may get over the legal restrictions contained in the clause by coming to an arrangement behind the back of the law? I would ask the Attorney-General whether he really supports the Chancellor of the Exchequer in making that illegal suggestion?
§ Sir W. ROBSON
The Noble Lord must state accurately what my right hon. Friend said before he can expect to get a legal answer. He did not state the case pint by my right hon. Friend at all, nor did he endeavour to state it.
I certainly understood, the Chancellor of the Exchequer to say that if a tenant did not develop the land, and if, in consequence of that, the landlord had to pay the tax, then the landlord might, in spite of what is in this Bill, pay this tax and hold the tenant liable for it. ["No."] That is what the right hon. Gentleman said. The Chancellor of the Exchequer will not deny that he suggested that the landlord said, "First of all send on your cheque." That argument has no meaning whatever unless the cheque was for the tax. I think I have stated the point quite clearly, although I may have misstated the argument of the Chancellor of the Exchequer. We ask for a legal opinion on the point. Of course, if I have misstated what the right hon. Gentleman said, he will correct me, and will tell us what he did say or intended to say.
§ Sir W. ROBSON
Without discussing whether or not the right hon. Gentleman has exactly stated the case put by my right hon. Friend, at all events I will deal with the case stated by the Leader of the Opposition. What is the prohibition contained in Clause 13 with respect to contracts? It is that the owner of the land shall pay the Undeveloped Land Duty, notwithstanding any contracts to the contrary. That is all. It simply means that the owner shall pay, even although he made a contract to the contrary. These are the precise words of prohibition. The section does not say that a man may not make a contract; he may make thousands of contracts, he may go on doing nothing else but make contracts, and they will not be worth the paper they are written on. The 723 Noble Lord says it is going behind the back of the law. The law is very indifferent to things which go on behind its back, and which it has not forbidden. What is the case put? The tenant is under the obligation to develop, and if he does not develop the landlord goes to him and says, "You must develop your land according to your contract." There is nothing illegal in it at all in either the tenant saying or the landlord suggesting "What are you going to turn me out for?" and the landlord saying "I have been paying Undeveloped Land Duty by your neglect of your obligation." There is nothing to prevent the tenant from saying, "Oh, if that is all, I will pay the Undeveloped Land Duty for you." He is perfectly at liberty to do it. There is nothing in the Act to prevent him or to prevent the landlord giving that legal intimation which will induce the tenant to adopt that course.
§ Mr. AUSTEN CHAMBERLAIN
We understand that in fact the words which the Government insisted on keeping in just now have no meaning whatever. The landlord may make a contract with the tenant that he shall pay the tax, but the contract would be worthless. He may hold a pistol to the head of the tenant and extort money thereafter. He will then be in his legal right in taking the course which the Government advise him to pursue, and the tenant will be helpless.
§ Sir W. ROBSON
I am quite certain no one who has heard what I have said supposes that to be a fact.
§ regard to the case he has put to the Committee. He says that notwithstanding what is in the Act, the landlord may go to the tenant and say; "I am paying Undeveloped Land Tax; unless you pay it, and it is jour fault, I will break the lease." [An HON. MEMBER: "He never said that."] That is absolutely what he said. The hon. Gentleman himself does not deny it.
§ Mr. BONAR LAW
Suppose that is done, and suppose the landlord gets the money on that basis, will the tenant not have the right on this clause in the Act to go back to him when the whole thing is over and say, "You have extorted that money from me in contravention of the Act, and I demand it back."
§ Mr. JOYNSON-HICKS
I want to put this case, this bonâ fide case. The tenant is in default and the landlord goes to him and says, "I am paying this Undeveloped Land Tax. I shall turn you out." The tenant says, "Will you give me another five years to go on, and in consideration of your doing that I will pay the tax." They enter into a contract to that effect.-I suggest that that contract is in direct contravention of the Act, and the next morning the tenant cannot enforce it, and the tenant can refuse to pay.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 87; Noes, 198.725
|Division No. 439.]||AYES.||[7.50 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex, F.||Douglas, Rt. Hon. A. Akers-||Lee, Arthur H. (Hants, Fareham)|
|Arkwright, John Stanhope||Du Cros, Arthur||Lockwood, Rt. Hon. Lt.-Col. A. R.|
|Ashley, W. W.||Faber, George Denison (York)||Long, Col. Charles W. (Evesham)|
|Baldwin, Stanley||Fell, Arthur||Lonsdale, John Brownlee|
|Balfour, Rt. Hon. A. J. (City, Land.)||Fletcher, J. S.||Lowe, sir Francis William|
|Banbury, Sir Frederick George||Forster, Henry William||MacCaw, Wm. J. MacGeagh|
|Barrie, H. T. (Londonderry, N.)||Foster, P. S.||Magnus, Sir Philip|
|Beckett, Hon. Gervase||Gardner, Ernest||Moore, William|
|Bowles, G. Stewart||Gordon, J.||Morpeth, Viscount|
|Bull, Sir William James||Guinness, Hon. W. E. (B. S. Edmunds)||Morrison-Bell, Captain|
|Butcher, Samuel Henry||Harrison-Broadley, H. B.||Newdegate, F. A.|
|Carlile, E. Hildred||Hay, Hon. Claude George||Nicholson, Wm. G. (Petersfield)|
|Cecil, Evelyn (Aston Manor)||Herman-Hodge, Sir Robert||Oddy, John James|
|Cecil, Lord R (Marylebone, E.)||Hills, J. W.||Parkes, Ebenezer|
|Chamberlain, Rt. Hon. J. A. (Worc'r)||Hope, James Fitzalan (Sheffield)||Pease, Herbert Pike (Darlington)|
|Chaplin, Rt. Hon. Henry||Hunt, Rowland||Peel, Hon. W. R. W.|
|Clive, Percy Archer||Joynson-Hicks, William||Percy, Earl|
|Clyde, J. Avon||Kennaway, Rt. Hon. Sir John H.||Powell, Sir Francis Sharp|
|Coates, Major E. F. (Lewisham)||Kerry, Earl of||Pretyman, E. G.|
|Corbett, T. L. (Down, North)||Keswick, William||Randles, Sir John Scurrah|
|Courthope, G. Loyd||King, Sir Henry Seymour (Hull)||Rawlinson, John Frederick Peel|
|Craig, Captain James (Down, E.)||Lambton, Hon. Frederick William||Renwick, George|
|Dickson, Rt. Hon. C. Scott-||Lane-Fox, G. R.||Ronaldshay, Earl of|
|Doughty, Sir George||Law, Andrew Bonar (Dulwich)||Ropner, Colonel Sir Robert|
|Rutherford, John (Lancashire)||Talbot, Lord E. (Chichester)||Willoughby de Eresby, Lord|
|Salter, Arthur Clavell||Tuke, Sir John batty||Wyndham, Rt. Hon. George|
|Smith, Hon. W. F. D. (Strand)||Walker, Colonel W. H. (Lancashire)|
|Stanier, Seville||Walrond, Hon. Lionel||TELLERS FOR THE AYES.—Mr. Watson Rutherford and Earl Winterton.|
|Starkey, John R.||Warde, Col. C. E. (Kent, Mid)|
|Staveley-Hill, Henry (Staffordshire)||Williams, Col. R. (Dorset, W.)|
|Stone, Sir Benjamin|
|Acland, Francis Dyke||Hall, Frederick||Newnes, F. (Notts, Bassetlaw)|
|Adkins, W. Ryland D.||Hancock, J. G||Nichoils, George|
|Ainsworth, John Stirling||Harcourt, Rt. Hon. L. (Rossendale)||Nicholson, Charles N. (Doncaster)|
|Alden, Percy||Harcourt, Robert V. (Montrose)||O'Malley, William|
|Armitage, R.||Hardy, George A. (Suffolk)||Partington, Oswald|
|Atherley-Jones, L.||Harmsworth, Cecil B. (Worcester)||Pearce, Robert (Staffs, Leek)|
|Baker, Joseph A. (Finsbury, E.)||Harvey, W. E. (Derbyshire, N. E.)||Pearce, William (Limehouse)|
|Balfour, Robert (Lanark)||Harwood, George||Price, Sir Robert J. (Noriolk, E.)|
|Baring, Godfrey (Isle of Wight)||Haslam, James (Derbyshire)||Rainy, A. Rolland|
|Barker, Sir John||Haworth, Arthur A.||Raphael, Herbert H.|
|Barnard, E. B.||Hazel, Dr. A. E. W.||Richards, Thomas (W. Monmouth)|
|Barnes, G. N.||Hazleton, Richard||Richards, T. F. (Wolverhampton, W.)|
|Barran, Rowland Hirst||Hedges, A. Paget||Richardson, A.|
|Barry, Redmond J. (Tyrone, N.)||Helme, Norval Watson||Ridsdale, E. A.|
|Beale, W. P.||Hemmerde, Edward George||Roberts, Charles H. (Lincoln)|
|Beauchamp, E.||Henderson, Arthur (Durham)||Roberts, G. H. (Norwich)|
|Beaumont, Hon. Hubert||Henderson, J. McD. (Aberdeen, W.)||Robertson, Sir G. Scott (Bradford)|
|Berridge, T. H. D.||Henry, Charles S.||Robinson, S.|
|Bethell, Sir J. H. (Essex, Romford)||Herbert, Col. Sir Ivor (Mon. S.)||Robson, Sir William Snowdon|
|Bethell, T. R. (Essex, Maldon)||Herbert, T. Arnold (Wycombe)||Rogers, F. E. Newman|
|Bowerman, C. W.||Higham, John Sharp||Russell, Rt. Hon. T. W.|
|Brace, William||Hobart, Sir Robert||Rutherford, V. H. (Brentford)|
|Branch, James||Hodge, John||Samuel, Rt. Hon. H. L. (Cleveland)|
|Bright, J. A.||Hudson, Walter||Sears, J. E.|
|Brocklehurst, W. B.||Hyde, Clarendon G.||Shackleton, David James|
|Brooke, Stopford||Illingworth, Percy H.||Sherwell, Arthur James|
|Bryce, J. Annan||Jenkins, J.||Shipman, Dr. John G.|
|Burns, Rt. Hon. John||Johnson, John (Gateshead)||Silcock, Thomas Ball|
|Buxton, Rt. Hon. Sydney Charles||Jones, Leif (Appleby)||Snowden, P.|
|Byles, William Pollard||Jones, William (Carnarvonshire)||Soares, Ernest J.|
|Causton, Rt. Hon. Richard Knight||Kekewich, Sir George||Stanger, H. Y.|
|Cawley, Sir Frederick||King, Alfred John (Knutsford)||Stanley, Albert (Staffs, N. W.)|
|Channing, Sir Francis Allston||Laidlaw, Robert||Steadman, W. C.|
|Cherry, Rt. Hon. R. R.||Lamb, Ernest H. (Rochester)||Stewart, Halley (Greenock)|
|Clough, William||Lambert, George||Summerbell, T.|
|Cobbold, Felix Thornley||Lamont, Norman||Taylor, John W. (Durham)|
|Collins, Sir Wm. J. (St. Pancras, W.)||Lehmann, R. C.||Taylor, Theodore C. (Radcliffe)|
|Compton-Rickett, Sir J.||Lever, A. Levy (Essex, Harwich)||Tennant, H. J. (Berwickshire)|
|Corbett, A. Cameron (Glasgow)||Levy, Sir Maurice||Thomas, Sir A. (Glamorgan, E.)|
|Corbett, C. H. (Sussex, E. Grinstead)||Lewis, John Herbert||Thompson, J. W. H. (Somerset, E.)|
|Cornwall, Sir Edwin A.||Lloyd-George, Rt. Hon. David||Thorne, G. R. (Wolverhampton)|
|Crooks, William||Lupton, Arnold||Thorne, William (West Ham)|
|Cullinan, J.||Luttrell, Hugh Fownes||Tillett, Louis John|
|Davies, Ellis William (Eifion)||Lyell, Charles Henry||Verney, F. W.|
|Dewar, Arthur (Edinburgh, S.)||Lynch, H. B.||Walsh, Stephen|
|Dickson-Poynder, Sir John P.||Macdonald, J. R. (Leicester)||Walters, John Tudor|
|Duncan, C. (Barrow-in-Furness)||Macdonald, J. M. (Falkirk Burghs)||Walton, Joseph|
|Dunn, A. Edward (Camborne)||Maclean, Donald||Wardle, George J.|
|Dunne, Major E. Martin (Walsall)||Macnamara, Dr. Thomas J.||Warner, Thomas Courtenay T.|
|Ellbank, Master of||Macpherson, J. T.||Wason, John Cathcart (Orkney)|
|Erskine, David C.||M'Callum, John M.||Waterlow, D. S.|
|Evans, Sir S. T.||McKenna, Rt. Hon. Reginald||White, J. Dundas (Dumbartonshire)|
|Everett, R. Lacey||M'Laren, H. D. (Stafford, W.)||White, Sir Luke (York, E. R.)|
|Falconer, J.||Massie, J.||Whitehead, Rowland|
|Ferens, T. R.||Masterman, C. F. G.||Wilkie, Alexander|
|Ferguson, R. C. Munro||Menzies, Sir Walter||Williams, J. (Glamorgan)|
|Findlay, Alexander||Micklem, Nathaniel||Wills, Arthur Walters|
|Fuller, John Michael F.||Molteno, Percy Alport||Wilson, Hon. G. G. (Hull, W.)|
|Gibb, James (Harrow)||Mond, A.||Wilson, John (Durham, Mid)|
|Gill, A. H.||Montgomery, H. G.||Wilson, J. W. (Worcestershire, N.)|
|Gladstone, Rt. Hon. Herbert John||Morgan, G. Hay (Cornwall)||Wilson, P. W. (St. Pancras, S.)|
|Clover, Thomas||Morgan, J. Lloyd (Carmarthen)||Wilson, W. T. (Westhoughton)|
|Goddard, Sir Daniel Ford||Morton, Alpheus Cleophas||Wood, T. M'Kinnon|
|Greenwood, G. (Peterborough)||Murphy, John (Kerry, East)||Yoxall, Sir James|
|Griffith, Ellis J.||Murray, Capt. Hon. A. C. (Kincard.)|
|Culland, John W.||Myer, Horatio||TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.|
|Haldane, Rt. Hon. Richard B.||Napier, T. B.|
§ Mr. LLOYD-GEORGE moved, after the words "contract to the contrary," to insert the words, "If at any time Unde- 726 veloped Land Duty is not assessed within the year for which it is charged, owing to there being no value either shown in the 727 provisional valuation or finally Settled on which the duty can be assessed, or for any other reason, the duty may be assessed at any time, and shall be payable at any time after the expiration of two months from the date of the assessment."
§ Mr. WATSON RUTHERFORD moved to leave out from the proposed Amendment the words, "may be assessed at any time, and shall be payable at any time after the expiration of two months from the date of the assessment," and to insert, after the word "duty," the words "for that year shall not be payable."
§ I am bound to say that when I got to the words in the Chancellor's Amendment, "finally settled," I looked around to see if there was any substance that finally settled could possibly deal with. I came to the conclusion that the draftsman had left a word out by mistake. What exactly that means I do not know. The Amendment says "may be assessed at any time," and may be insisted on being recovered. It seems to me this is a case of great hardship. When, for some reason or other, probably and possibly through no fault in any way of the owner of the property, but for some reason in a given year, the duty is not assessed and is not asked for, then the Chancellor of the Exchequer wants to get permission to come down at some future date, possibly years afterwards, and ask him for those arrears of duty.
§ I consider that a most unfair suggestion. It seems to me that if the Inland Revenue have not taken the necessary precautions to enable them to collect the duty in any year that duty ought to cease to be payable. In many of the offices all over the country there will be a tremendous congestion of business. It will be almost impossible to get some of the site values and other details settled, and there are certain to be arrears of collection. I shall probably be told that, in the case of Income Tax, if a man does not pay what is due, the Crown can come upon him for all the arrears. But, as a matter of practice, the Crown never does ask a man for arrears where he has not himself committed some default. That, however, will not be the case here.
§ For a variety of reasons the assessment may not be made, and then, when the circumstances, perhaps, have entirely altered—possibly the man may have disposed of the property or have entered into contracts in a variety of ways—the 728 Chancellor of the Exchequer asks for the power to collect the arrears without any limit. The object of my Amendment is to prevent that and to say that if the Government do not take the trouble to ask for the tax in the year in which it is payable, they shall not be able to demand it in subsequent years.
§ Mr. LLOYD-GEORGE
I think the hon. Member will realise that there must be some power of collecting arrears. What he really wants is to limit that power. I agree that there should not be unlimited power to collect five, ten, or even twenty years' accumulations of arrears. I think the hon. Member's point is that the Commissioners might say, "Here is a piece of undeveloped land which we have never discovered before. It was equally valuable twenty years ago, and therefore we will claim twenty years' arrears of undeveloped Land Tax." The hon. Member will probably agree, however, that it is quite impossible for us not to take power to collect arrears, especially now that we are to make the valuation ourselves. Otherwise it might be said that the Commissioners could pick and choose. They might value one man's property now and that of another man not until next year. That is obviously a state of things we cannot allow. I do not mean to say that it would lead to any corrupt partiality, but there might be a suggestion of favouring one landlord and penalising another. I think the best way of meeting the case would be to adopt the limitation which obtains in the case of Income Tax, namely, three years.
§ Mr. WATSON RUTHERFORD
I think the Chancellor of the Exchequer has in mind the converse position, namely, that if you pay too much Income Tax you cannot get it back after three years.
§ Mr. LLOYD-GEORGE
I think I am right in saying that the power to collect arrears of Income Tax is limited to three years. If the hon. Member will accept a similar limitation in this case I shall be prepared to insert words either now or on the Report stage.
§ Mr. AUSTEN CHAMBERLAIN
I think my hon. Friend will be wise to accept the proposal of the Chancellor of the Exchequer. With regard to the general working of the tax, I think it is a reasonable compromise. When once the tax is in working order, I think it will be a fair solution. But I confess that when I saw the Amendment of the Chancellor of the Exchequer 729 it did not strike me in the light of applying to a piece of land which, not coming under the tax when the Commissioners make their first survey, at some future time becomes undeveloped land within the meaning of the statute, and therefore liable to the tax, but escapes the notice of the Commissioners. I thought it was to deal with cases which will arise in the first years before the valuation is completed.
§ Mr. AUSTEN CHAMBERLAIN
That is quite a different matter, and the Amendment will at any rate cover it. Though I think the concession promised by the Chancellor of the Exchequer meets the case of the normal working of the tax, I think it will leave considerable unavoidable injustice in regard to the first period. The Prime Minister expressed the hope two days ago that the valuation might be completed within four years. Then the very case which the Chancellor of the Exchequer deprecated will arise, and some estates will not have been assessed during the first year, and the man who is assessed in the first year after the passing of the Act will say, "Why do you choose me? Why not begin with X? If you begin at one end of the scale, I shall pay during all of the first four years, while X will pay perhaps only for three." That kind of difference between the treatment of one man and the treatment of another in exactly similar circumstances must arise, and the Commissioners will be open to the complaints of the taxpayer who is charged while his neighbour escapes. But that is due to the determination of the Government to proceed in the way they have adopted. It only shows once again that the methods of this Bill are radically wrong. You ought to begin with a Valuation Bill, and then, when you have completed your valuation, you could proceed to impose your tax. But because you have chosen to smuggle a Valuation Bill into scattered clauses of a Finance and Taxing Bill, and to impose taxes years before the valuation is completed, then will and must occur not only injustice as between individual and individual, but in many cases inconvenience of a serious character in the ordinary transactions of business. A man whose property is unassessed may wish to sell it, but there will be the uncertainty introduced into the bargain by the Chancellor of the Exchequer. The parties will not know exactly what they are doing until 730 the valuation is completed, as they will not be able to calculate the tax to which the owner will be liable. In this case it will affect the purchaser more than the owner, because he will be buying in ignorance of his exact obligations.
§ Mr. WATSON RUTHERFORD
If I understood the Chancellor of the Exchequer aright, he said that while he could not accept the Amendment as it stands, he would be prepared to insert words to the effect that the recovery of arrears should be limited to three years.
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ Mr. WATSON RUTHERFORD moved to add at the end of the proposed Amendment the words, "But the arrears shall be limited to three years."
§ Mr. LLOYD-GEORGE
Might I suggest that the hon. Member should move his Amendment in this form: "Save, however, that no such duty shall be recoverable more than three years after the expiration of the year for which it is payable"? It is really the same thing.
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ Mr. WATSON RUTHERFORD moved to add at the end of the proposed Amendment the words, "Save, however, that no such duty shall be recoverable more than three years after the expiration of the year for which it is payable."
§ Mr. RAWLINSON
May I point out how very largely the Government have altered their views in this matter of valuation. The question of the coming into operation of this Act was raised previously, and it was pointed out that unless its operation was postponed till 1911, or some such date, the inequalities which have since become apparent would continually occur. The Chancellor of the Exchequer said that so far as undeveloped land was concerned, there would not be the slightest difficulty of dealing with the matter between the time of passing the 731 Act and 31st March next. The work of the Commissioners, he said, under this system would be no greater; would be, in fact, substantially the same as under the present system. Under the Bill as it was then, the Chancellor of the Exchequer said that they would have to take out the valuation of the whole of the undeveloped land in the Kingdom. I only make this comment, which I wish to emphasise, and on a comparatively small matter, to point out how, in much larger matters, the Government have underestimated the importance of this great valuation which they are undertaking.
§ Amendment to the proposed Amendment agreed to.
§ Amendment, as amended, agreed to.
§ Mr. LLOYD-GEORGE moved to leave out the words, "Provided that in any case where the Commissioners are satisfied that land is in the course of boná fide development, and that it would be just in the special circumstances of the case to postpone the payment of Undeveloped Land Duty in any year, the Commissioners may postpone the collection and payment of the duty for that year for such period, not exceeding five years, as they think fit."
§ Mr. AUSTEN CHAMBERLAIN
On a point of order, may I ask whether the Amendment standing in the name of my Noble Friend the Member for Marylebone (Lord R. Cecil) is in order? It says:—"Provided that such owner or person may, instead of paying the duty, require the Commissioners to purchase the land or mineral rights for their total value, and the Commissioners shall thereupon purchase such land or mineral rights on behalf of the Crown or of the local authority of the district if they so desire."
§ Mr. AUSTEN CHAMBERLAIN
I submit it requires no Resolution. It can only require a Resolution if it imposes a burden on the taxpayer. It is the essence of the Government's case that the land is not put to its best economic use or there would be no tax, and if it is put to its best economic use then its rise in value would be steady, continuous, and progressive.
§ Mr. LLOYD-GEORGE
If the words I have moved to omit were left in they would 732 detract from the value of the words that have been inserted.
§ Mr. AUSTEN CHAMBERLAIN
I agree that in some respects the Amendment dealing with the £100 goes further than these words. Does it in all respects cover the same thing? Take the man who has not spent his £100. He gets some small accommodation, but scarcely relief. I think that in the main the £100 provision is more valuable than these words that the Chancellor of the Exchequer is taking away. He is taking away something by simply striking out these words, which he has not provided for anywhere else.
§ Mr. LLOYD-GEORGE
I do not want to deprive anyone of any advantage. But I am desirous of meeting the right hon. Gentleman.
§ Mr. AUSTEN CHAMBERLAIN
The Chancellor of the Exchequer has met me very fairly, and I want to meet him, but I want to do the thing the other way round. If you leave the words here you might take them out on Report, or bring in other words.
§ Mr. LLOYD-GEORGE
No, I am afraid I cannot. I am certain I can put them in on Report. I am not clear that I can take them out.
§ Mr. AUSTEN CHAMBERLAIN
Your only reason why you could not take them out on Report is that taking them out is in fact imposing a charge.
§ Mr. AUSTEN CHAMBERLAIN
The Chancellor of the Exchequer says that the matter needs grave consideration. I think that is an additional difficulty. I say quite frankly why I wish to proceed the other way round is because the Chancellor knows we on this side of the House are at the mercy of the Government. I might put down an Amendment on Report, and owing to the circumstances of Debate—
§ Mr. LLOYD-GEORGE
If the right hon. Gentleman prefers it that way I do not want to dispute the matter with him, I do not mind, but I would warn him as to what may happen.
§ Mr. AUSTEN CHAMBERLAIN
The Chancellor of the Exchequer has warned me both ways. I think I had better fall in with the original proposal of the Chancellor of the Exchequer that he should take the words out now, and give the matter his personal consideration. The only 733 reason why I was going to press the thing was that the Chancellor of the Exchequer can always secure a hearing for an Amendment. We on this side may under circumstances which are familiar to the House, in the course of the Debate, or owing to the ruling of the Chairman as to the importance of the subject, be unable to do so. I am quite content if the Chancellor of the Exchequer undertakes to look into it if he finds by omitting these words to restore that which was subtracted.
§ Mr. SALTER
If I might venture I would point out that the Amendment, a much larger one no doubt in scope to which the Chancellor of the Exchequer has referred, is not by any means the same thing as the case which he has dealt with in the clause which is now under discussion. The Amendment of the Chancellor of the Exchequer provides that the duty as such shall be payable where money at a certain rate had been expended upon the land; this provides for the postponement, but does not provide for non-payment or immunity of the land at all. I have put down an Amendment to this clause suggesting that in cases where the development of the property is going forward with due speed to the satisfaction of the Commissioners within a time which they consider reasonable, that then there should be, not only first of all postponement, but that at the expiration of that time remission would be only right and just. You are proceeding on the hypothesis that at the commencement of the material period in the area the owner is doing his best and developing, and is going forward at a proper speed, and gets his development completed over the area in a period of time which the Commissioners think proper. It appears to me it is only common justice to say that in that case the duty should be first postponed, and I do not think it is too much to ask that at the end of the time it should be remitted. But if the Chancellor's Amendment stood,
§ what would happen is that the Commissioner would be allowed to remit in the case of a deserving owner who has got to work as rapidly as possible, as soon as he has spent nearly all of the £100 an acre. The area is then franked, but until the amount is expended he will be liable, but his liability will be postponed. I think a man who is doing his best to develop his land, and does develop it in the proper time, should not in any way be charged this duty, and therefore I would ask the Chancellor of the Exchequer to consider whether, if he strikes out these words, he will not be sacrificing a serious protection?
§ Mr. LLOYD-GEORGE
These words, at any rate, would not do that for which the hon. Member pleads. He pleads for the man who is in the course of spending £100; that he should not be charged, and that eventually he should be exempted. That is a good alternative, but if that case is to be safeguarded it will not be safeguarded by these words. I agree with the hon. Member that it is a case which ought to be safeguarded, that is where the man is in the actual course of expending £100. There ought to be power on the part of the Commissioners to say, "We will not charge him, we will exempt him." The case is put first of postponement and then of exemption. What you really want is something between the two, and I think we had far better stand by the suggestion of the right hon. Gentleman (Mr. Austen Chamberlain), and take out the words now and see if we can put in words later which will first postpone and eventually exempt the owner.
§ Question put, "That Clause 13, as amended, stand part of the Bill."
§ The Committee divided: Ayes, 179; Noes, 61.735
|Division No. 440.]||AYES.||[8.30 p.m.|
|Acland, Francis Dyke||Bethell, T. R. (Essex, Maldon)||Collins, Sir Wm. J. (St. Pancras, W.)|
|Adkins, W. Ryland D.||Bowerman, C. W.||Compton-Rickett, Sir J.|
|Ainsworth, John Stirling||Brace, William||Corbett, A. Cameron (Glasgow)|
|Armitage, R.||Branch, James||Corbett, C. H. (Sussex, E. Grinstead)|
|Atherley-Jones, L.||Bright, J. A.||Crooks, William|
|Baker, Joseph A. (Finsbury, E.)||Brocklehurst, W. B.||Davies, Ellis William (Eifion)|
|Balfour, Robert (Lanark)||Brooke, Stopford||Dewar, Arthur (Edinburgh, S.)|
|Barker, Sir John||Bryce, J. Annan||Duncan, C. (Barrow-in-Furness)|
|Barnard, E. B.||Burns, Rt. Hon. John||Dunn, A. Edward (Camborne)|
|Barnes, G. N.||Buxton, Rt. Hon. Sydney Charles||Dunne, Major E. Martin (Walsall)|
|Barran, Rowland Hirst||Byles, William Pollard||Elibank, Master of|
|Barry, Redmond J. (Tyrone, N.)||Causton, Rt. Hon. Richard Knight||Everett, R. Lacey|
|Beale, W. P.||Cawley, Sir Frederick||Falconer, J.|
|Berridge, T. H. D.||Cherry, Rt. Hon. R. R.||Ferens, T. R.|
|Bethell, Sir J. H. (Essex, Romford)||Clough, William||Ferguson, R. C. Munro|
|Findlay, Alexander||Lewis, John Herbert||Runciman, Ht. Hon. Walter|
|Fuller, John Michael F.||Lloyd-George, Rt. Hon. David||Russell, Rt. Hon. T. W.|
|Gibb, James (Harrow)||Lupton, Arnold||Rutherford, V. H. (Brentford)|
|Gill, A. H.||Luttrell, Hugh Fownes||Samuel, Rt. Hon. H. L. (Cleveland)|
|Gladstone, Rt. Hon. Herbert John||Lyell, Charles Henry||Sears, J. E.|
|Glover, Thomas||Lynch, H. B.||Seely, Colonel|
|Goddard, Sir Daniel Ford||Macdonald, J. R. (Leicester)||Shackleton, David James|
|Greenwood, G. (Peterborough)||Macdonald, J. M. (Falkirk Burghs)||Sherwell, Arthur James|
|Griffith, Ellis J.||Maclean, Donald||Shipman, Dr. John G.|
|Gulland, John W.||Macnamara, Dr. Thomas J.||Silcock, Thomas Ball|
|Haldane, Rt. Hon. Richard B.||Macpherson, J. T.||Snowden, F.|
|Hall, Frederick||M'Callum, John M.||Soares, Ernest J.|
|Hancock, J. G.||M'Laren, H. D. (Stafford, W.)||Stanger, H. Y.|
|Harcourt, Rt. Hon. Lewis (Rossendale)||Massie, J.||Stanley, Albert (Staffs, N. W.)|
|Harcourt, Robert V. (Montrose)||Masterman, C. F. G.||Stanley, Hon. A. Lyulph (Cheshire)|
|Hardy, George A. (Suffolk)||Menzies, Sir Walter||Steadman, W. C.|
|Harmsworth, Cecil B. (Worcester)||Micklem, Nathaniel||Stewart, Halley (Greenock)|
|Harvey, W. E. (Derbyshire, N. E.)||Molteno, Percy Alport||Strauss, E. A. (Abingdon)|
|Harwood, George||Montgomery, H. G.||Summerbell, T.|
|Haslam, James (Derbyshire)||Morgan, G. Hay (Cornwall)||Taylor, John W. (Durham)|
|Haworth, Arthur A.||Morgan, J. Lloyd (Carmarthen)||Taylor, Theodore C. (Radcliffe)|
|Hazel, Dr. A. E. W.||Morton, Alpheus Cleophas||Tennant, H. J. (Berwickshire)|
|Hedges, A. Paget||Murray, Capt. Hon. A. C. (Kincard.)||Thomas, Sir A. (Glamorgan, E.)|
|Helme, Norval Watson||Myer, Horatio||Thompson, J. W. H. (Somerset, E.)|
|Hemmerde, Edward George||Napier, T. B||Thorne, G. R. (Wolverhampton)|
|Henderson, Arthur (Durham)||Newnes, F. (Notts, Bassetlaw)||Thorne, William (West Ham)|
|Henderson, J. McD. (Aberdeen, W.)||Nicholls, George||Walsh, Stephen|
|Henry, Charles S.||Nicholson, Charles N. (Doncaster)||Warner, Thomas Courtenay T.|
|Herbert, T. Arnold (Wycombe)||Norman, Sir Henry||Wason, John Cathcart (Orkney)|
|Higham, John Sharp||Partington, Oswald||Waterlow, D. S.|
|Hodge, John||Pearce, Robert (Staffs, Leek)||White, J. Dundas (Dumbartonshire)|
|Hudson, Walter||Pearce, William (Limehouse)||White, Sir Luke (York, E. R.)|
|Hyde, Clarendon G.||Pickersgill, Edward Hare||Whitehead, Rowland|
|Illingworth, Percy H.||Price, Sir Robert J. (Norfolk, E.)||Wilkie, Alexander|
|Jenkins, J.||Priestley, Arthur (Grantham)||Williams, J. (Glamorgan)|
|Johnson, John (Gateshead)||Rainy, A. Rolland||Wills, Arthur Walters|
|Jones, Leif (Appleby)||Richards, Thomas (W. Monmouth)||Wilson, John (Durham, Mid)|
|Jones, William (Carnarvonshire)||Richards, T. F. (Wolverhampton, W.||Wilson, J. W. (Worcestershire, N.)|
|King, Alfred John (Knutsford)||Richardson, A.||Wilson, P. W. (St. Pancras, S.)|
|Laidlaw, Robert||Roberts, Charles H. (Lincoln)||Wilson, W. T. (Westhoughton)|
|Lamb, Ernest H. (Rochester)||Roberts, G. H. (Norwich)||Wood, T. M'Kinnon|
|Lambert, George||Robertson, Sir G. Scott (Bradford)||Yoxall, Sir James Henry|
|Lamont, Norman||Robinson, S.|
|Lehmann, R. C.||Robson, Sir William Snowdon||TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.|
|Lever, A. Levy (Essex, Harwich)||Roch, Walter F. (Pembroke)|
|Levy, Sir Maurice||Rogers, F. E. Newman|
|Arkwright, John Stanhope||Gordon, J.||Newdegate, F. A.|
|Ashley, W. W.||Guinness, Hon. W. E. (B. S. Edmunds)||Parkes, Ebenezer|
|Barrie, H. T. (Londonderry, N.)||Hermon-Hodge, Sir Robert||Pease, Herbert Pike (Darlington)|
|Bull, Sir William James||Hills, J. W.||Peel, Hon. W. R. W.|
|Butcher, Samuel Henry||Hope, James Fitzalan (Sheffield)||Percy, Earl|
|Carlile, E. Hildred||Hunt, Rowland||Powell, Sir Francis Sharp|
|Cecil, Evelyn (Aston Manor)||Joynson-Hicks, William||Pretyman, E. G.|
|Cecil, Lord R. (Marylebone, E.)||Kennaway, Rt. Hon. Sir John H.||Randles, Sir John Scurrah|
|Chamberlain, Rt. Hon. J. A. (Worc'r)||Kerry, Earl of||Renwick, George|
|Clive, Percy Archer||Lambton, Hon. Frederick William||Ropner, Colonel Sir Robert|
|Clyde, J. Avon||Lane-Fox, G. R.||Rutherford, Watson (Liverpool)|
|Corbett, T. L. (Down, North)||Law, Andrew Bonar (Dulwich)||Salter, Arthur Clavell|
|Courthope, G. Loyd||Lee, Arthur H. (Hants, Fareham)||Stone, Sir Benjamin|
|Craig, Captain James (Down, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Tuke, Sir John Batty|
|Dickson, Rt. Hon. C. Scott-||Lonsdale, John Brownlee||Walrond, Hon. Lionel|
|Doughty, Sir George||Lowe, Sir Francis William||Warde, Col. C. E. (Kent, Mid)|
|Douglas, Rt. Hon. A. Akers-||MacCaw, Wm. J. MacGeagh||Williams, Col. R. (Dorset, W.)|
|Du Cros, Arthur||Magnus, Sir Philip||Winterton, Earl|
|Fell, Arthur||Moore, William|
|Fletcher, J. S.||Morpeth, Viscount||TELLERS FOR THE NOES.—Mr. G. D. Faber and Mr. Rawlinson.|
|Forster, Henry William||Morrison-Bell, Captain|
Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.