§ (1) For the purposes of this Part of this Act, the total value of land means the amount which the fee simple of the land, 736 if sold at the time in the open market by a willing seller in its then condition might be expected to realize.
§ (2) For the purposes of this Part of this Act the site value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller, might be expected to realise 737 if the land were divested of any buildings, and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or used in connection with any such buildings and of all growing timber, fruit trees, fruit bushes, and other things growing thereon.
§ (3) For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any easements affecting the land, and to any covenant restricting the use of the land entered into before the thirtieth day of April nineteen hundred and nine, where, in the opinion of the Commissioners, the restraint imposed by the covenant is reasonably necessary in the interests of the public, or in view of the character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final and not subject to any appeal.
§ (4) The Commissioners shall allow as deductions from the site value of any land:—
- (a) Any part of that site value which is proved to the satisfaction of the Commissioners to be directly attributable to works of a permanent character executed bonâ fide by or on behalf of any person interested in the land for the purpose of fitting the land for use as building land or for the purpose of any business trade or industry other than agriculture; and
- (b) Any sums which in the opinion of the Commissioners it would be necessary to expend in order to divest the land of buildings, timber, trees, or other things of which it is to be taken to be divested for the purpose of arriving at the site value and of which it would be necessary to divest the land for the purpose of realising the full site value;
§ Mr. WATSON RUTHERFORD moved, in Section (1), after the word "the" I "the amount which the fee simple"], to insert the word "net." The section would then read, "(1) For the purposes of this Part of this Act, the total value of land means the net amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition might be expected to realise." It is an important point, and not a very lengthy one. My point is this: Supposing 738 a property is sold, say, for £1,000. It would naturally be assumed, for the purposes of this clause, or for any other purposes, that £1,000 would be the exact figure to be taken into account for the purposes of this calculation, but, as a matter of fact, when the property is sold nominally for £1,000, it does not actually realise £1,000 to the owner, but probably £982 10s., or something like that, because there is frequently the cost of valuation, and always the legal expenses of the vendor. The result is that it is more equitable in all these cases to take the net amount which a man would realise, because this clause is giving the definition of how the value is to be arrived at, and than value has got to be deducted or other values deducted from it later on for the purpose of arriving at the amount of the tax, and it is just the difference between one value and the other that is going to make all the difference in the world. It is therefore important that the duty should be accurately ascertained. If you take the ordinary case of a man who in round figures buys a property, say, for £800, and sells it for £1,000, the difference is £200. If he had Increment Duty to pay upon that, it would be one-fifth of £200, namely, £40. Taking the two together, it makes an immense difference, because in the case I am putting the man who had given £800 would really pay £825, because he would have £25 expenses at the time he bought it, and if he sold it for £1,000 he would get probably £982 10s., or something like that sum. You take merely the price which appears in the conveyance. Looking at these clauses in other places it is the exact amount of the consideration which is referred to, and that is the gross price which appears in the conveyance. I want to make it clear that if a man has to pay one of these duties and is going to pay 20 per cent. on some profit he has made, let him pay 20 per cent. on the actual profit, and let the net amount be taken into account. In cases where men keep books and enter the cost of what they buy and the amount they receive for what they sell they do not enter the price which appears in the conveyance, but they enter the actual money paid out by the bank or by cash, as the case may be, and they enter as receipts the actual net amount they receive, and not the gross total that appears in the conveyance. I am anxious that common justice should be done in this matter, and it is with that object that I move the Amendment which stands in my name to insert the word "net."
739§ Sir W. ROBSONThis Amendment involves some rather complex considerations. We are dealing in Clause 14 with two taxes—first the Increment Value Duty and next the Undeveloped Land Duty. We have got to test each Amendment—first with the Increment Value Duty and next with the Undeveloped Land Duty. The comparison for the purpose of the Increment Value Duty between the purchase money paid and the transfer with the original site value—that is to say, the total value—does not really enter into it. It would not really matter whether you included expenses or not, because it would be the same in both cases. But that is not what we are doing. The hon. Member will see that I shall deal with both of his Amendments in the same argument.
§ Mr. WATSON RUTHERFORDMy argument applied to both as well.
§ Sir W. ROBSONI think I can show the hon. Member that his proposal would not be to the advantage of the taxpayer.
§ Mr. WATSON RUTHERFORDI did not argue that point at all. I was arguing for abstract justice.
§ Sir W. ROBSONI quite realise the hon. Gentleman does not represent any sectional or class interest. If I can show that the proposal of the Government is in favour of the taxpayer, then I think I shall commend myself a little more to the favour of the House, and especially to the Opposition. The comparison on which we are going to collect the taxes is between the consideration on the transfer, as provided in Clause 2, and the original site value, as defined in Clause 14. We have already passed Clause 2, and we have said that the taxable value shall be the whole consideration on transfer. We have not there inserted the word "net" at all. When we come to taxation, we take the gross amount, and make no deduction for expenses. If the hon. Member's Amendment is accepted we shall, in the original site value, make a deduction for expenses, but the higher the original site value for the purposes of the Increment Value Duty the better it is for the taxpayer, because it is the amount of the original site value that is deducted from the consideration given on the transfer before you arrive at the amount it is desired to tax. The taxpayer, for the purposes of the Increment Value Duty, therefore obviously gains by a high original site value.
§ Mr. WATSON RUTHERFORDIt is just the opposite on the Undeveloped Land Duty.
§ Sir W. ROBSONI know, and I am coming to that. We do not want to put any fresh burden upon the taxpayer, and it is to the advantage of the taxpayer to have a high original site value. This Amendment would, for the purposes of the Increment Value Duty reduce the amount of the original site value without reducing the amount of the value under Clause 2 which comes to be taxed. That would be to the disadvantage of the taxpayer. Now I come to the Undeveloped Land Duty. There is on the Increment Value Duty a substantial disadvantage, and the Amendment would only tend in an extremely small degree to the advantage of the taxpayer on the Undeveloped Land Duty. It would only amount to a halfpenny in the £ upon £25 to take the figure mentioned by the hon. Member as being about the amount of the expenses. The amount gained by the taxpayer by the introduction of the word "net" is therefore really a negligible quantity. It is true that for the purposes of the Undeveloped Land Duty you reduce the value by £20 or £30, and therefore save 20 or 30 halfpennies, but that is a very small and unimportant saving. I therefore think the hon. Member's Amendment would be against the taxpayer, and we propose to let the clause stand as it is. It will be very inconvenient to have a deduction from the original site value which we have not provided for in Clause 2.
§ Mr. PRETYMANI appreciate the hon. and learned Member's answer, but there are two points which I think he has not covered. He has with regard to total value omitted one consideration. The Prime Minister yesterday informed us that the total value ascertained here was going to be the method on which the Death Duties are to be calculated. That is a very important consideration indeed. I think the Death Duties should be levied upon the net value and not upon the total value, and on that ground I shall certainly advise my hon. Friend to adhere to his Amendment.
§ Mr. WATSON RUTHERFORDThe Death Duties are now.
§ Mr. PRETYMANYes, but how will it affect agricultural land under the new clause?
§ Mr. HALDANEThere is no cost of conveyance in the case of Death Duties; that is the point.
§ Mr. PRETYMANAt present I am not quite clear. The Death Duties is a very complicated subject. It may be right as the Death Duties are now calculated, but on agricultural land and land generally they are calculated upon so many years' purchased under Schedule A. It is now proposed to substitute for that the value as ascertained here We shall, therefore, require the word "net." Is not that so?
§ Sir W. ROBSONI think the hon. and gallant Member is not quite correct in what he ascribes to the Prime Minister. I rather understood that all the right hon. Gentleman said was that the new process of valuation would assist in the case of the Death Duties. He did not say there was going to be any difference in the mode of assessment.
§ Mr. PRETYMANI was not relying upon what the Prime Minister said, but upon Clause 44, which definitely proposes to abolish the persent method of the assessment of the Death Duty. Taking that, together with the Prime Minister's statement, I do not know whether the learned Atorney-General or the Secretary of State for War will suggest any method other than that proposed in this Clause 14. I have felt ever since I saw Clause 44 that it imported—and the Prime Minister's words strengthened that feeling—that this Clause 14 was going to form the basis for the Death Duties on all land in future, and in that case we do require the word "net." I do not see, as at present advised, what other basis is available than Clause 14, Section (1). There may be some other basis, but I do not know what it is, and, unless we receive a satisfactory answer on that point, I hope my hon. Friend will press his Amendment in regard to total value. With regard to site value, it appears to me that the most satisfactory arrangement would be to introduce the word "net" in Clause 2 on Report. We shall then have the advantage of what is the real proper basis of valuation in both cases for comparison. We shall have a fair and proper comparison between net and site values.
§ Mr. HALDANEI cannot see how the introduction of the word "net" makes any difference to the point which the hon. Member has put forward. When you value the Death Duties the word is used in the manner suggested in the Amendment, but there is no such question here. I am not quite sure whether the words in which the hon. and gallant Member (Mr. Pretyman) introduced the subject were intended—
§ Mr. PRETYMANThey were only general words.
§ Mr. HALDANEThe hon. and gallant Member was comparing the general systems of valuation, but that would not affect the principle on which the value of the property in this case is assessed, and which is defined in the Finance Act of 1884 and followed in Clause 44 of this Bill. The hon. and gallant Gentleman made a suggestion in regard to site value, but I would point out that you get the site value by making certain deductions, and the question of the cost of conveyance does not come in there.
§ Mr. PRETYMANPerhaps I did not explain myself properly. There is no question of net site value; such a thing could not exist. I did not mean that. We do not propose to introduce the word "net" before the word "site."
§ Mr. JAMES HOPEThis Clause 10 affects three taxes—the Increment Duty, the Reversion Duty, and the Undeveloped Land Duty. How far it has a bearing on the Death Duties it is very difficult to argue, but the other three duties certainly have a direct bearing on it, and I should like to point out the effect of the word "net" in each of those cases. The Attorney-General told us we might put the Reversion Duty out of account. I cannot really see why he suggests that. When we get back to the Reversion Duty the words are these: "Reversion Duty shall be recoverable from any lessor to whom any benefit accrues from the determination of a lease as a debt due to His Majesty. Every lessor shall, on the determination of a lease on the determination of which Reversion Duty is payable under this section, deliver an account to the Commissioners setting forth the particulars of the land and the value of the benefit accruing to the lessor by the determination of the lease." On what basis, then, ought it to be calculated for the purposes of this section? The benefit accruing to the lessor is to be the amount by which the total value of the land exceeds the capital value on consideration of the lease. It is quite obvious that the lower total value of the land will be the difference between that and the consideration for the lease. Therefore it will tell in favour of the taxpayer. In the case of undeveloped land, that has been admitted by the Attorney-General. It is for the benefit of the taxpayer that the word "net" should be inserted here. I think it is clear that in 743 two out of three cases it will be to the advantage of the taxpayer to have this word inserted. But now I come to the Increment Duty. You will find that the basis of the Increment Duty is not the same as that of the site value as denned by Section 10. The latter is ascertained on the basis of capital value. This is a very intricate point. It arises between Clauses 2 and 14, and although it has been several times raised, it has never been satisfactorily cleared up. If you look at Section (2) of Clause 2, you will find provided that the site value of the land shall be taken on the occasion on which Increment Value Duty becomes due. In each case you first take the capital value, which, I think is the same as the total value, and then you proceed to make certain deductions, and from that basis you argue what is the capital value. If you want to get the total value as low as possible, that will be the basis from which you make the deduction in order to arrive at the site value on the occasion on which the Increment Duty is due. It is doubtful whether the introduction of the word "net" here would not be to the advantage of the taxpayer also. I believe it is to the advantage of the taxpayer that you should have the total value, and, in the second instance, because it is from the total value that you arrive at the net value under Clause 2. Another consideration must be taken into consideration. If the Committee will look at Clause 12 they will see the difference. Clause 4, in case of the Increment Value Duty refers to what I believe is an established principle at present. The purchaser pays the Stamp Duty, but under Clause 4 it is the vendor or lessor who has to pay. The first section of Clause 4 provides that "On any transfer on sale of any land or interest in land, or on the grant of any lease of any land, Increment Value Duty shall be collected on the instrument by means of which the transfer or the lease is effected or agreed to be effected, and shall be assessed by the Commissioners and paid by the transferor or lessor, as the case may be." So here again there is a difference. Whether you put in the word "net" or not the difference will be in favour of the taxpayer, and if you put in the word "net" it is because the transferor or lessor pays the Stamp Duty. I admit the point is difficult and somewhat obscure, but it certainly does want clearing up. As regards undeveloped land it certainly is in the interests of the taxpayers that the word 744 "net" should be put in. It is equally clear that it is desirable in the case of Reversion Duty. As regards the increment, the point wants clearing up, but I think from the taxpayer's point of view there also the word "net" should be inserted. I would ask the learned Attorney-General to clear up, if he would, the doubtful point of Increment Value Duty which I have raised, and which is a doubtful point.
§ Sir W. ROBSONI do not think I can add anything to what I have already said. I think that what the hon. Member says about the Reversion Duty is probably correct, but on the other parts of the case I have nothing to add, but I do not want to come under the accusation of not giving an answer.
§ Mr. RAWLINSONOn the Reversion Duty it is a very clear matter indeed.
§ Sir W. ROBSONI have said so; but I do not think it is very material.
§ Mr. RAWLINSONI do not think it is very material, but in dealing with the land it will make a considerable difference, as we are dealing with the amount of the consideration in the particular instance. If the Government see no real objection, is there any harm in allowing this Amendment, in the first place, of the net amount. For myself, I think it makes a great difference, although the Secretary for War says it will make a small one. If so, he could, one would think, make the concession. I have a wholesome dread that the first 28 clauses of this Bill are not a part of the Finance Bill of this year, but set up a standard for many other purposes and constitute a valuation which will be available at any future time. Therefore we, on this side of the House, attach great importance to this Amendment, and I venture to press that if it is such a small sum, as the Government think it is, there could be no harm in introducing it, especially if it is the important matter which I think it is.
§ Sir W. ROBSONIt is a small sum, so far as amount is concerned, either to the taxpayer or the Revenue, but I think it would be a troublesome matter to the Commissioners, and that is why I do not like inserting it.
§ Mr. JAMES HOPEI hope I shall not be charged with vain repetition in rather pressing my point as to Clause 2. Surely it is in the interest of the taxpayer that increment value in Clause 2 should be net. The increment value there is based upon 745 the total value after certain deductions. You have to get the total capital value first, and then make these deductions before you arrive at the site value for the purposes of increment value under Section (2). Therefore it is in the interest of the taxpayer that the total from which you make your deduction should be low. Then, as to Clause 4, this Stamp Duty being charged upon the vendor, that ought to be taken into account, and if it is taken into account it will make the value low. I do not say it is of great importance, but it does come in there, and, therefore I submit to the hon. and learned Gentleman that his contention that the word "net" inserted here would for the purpose of the increment value be against the taxpayer, is really not sound, because if he reads Clause 2 he will see it is in the interest of the taxpayer that the total value, which is based on ascertaining the site value on which the Increment Duty is to be charged is low, and it would be made lower by inserting the word "net." The Stamp Duty is, of course, an additional point, which, I believe, tends in the same direction, although it is somewhat different.
§ Sir W. ROBSONI think the hon. Member is quite wrong when he spoke of the value. The value given in the clause is the consideration for the transfer. That makes the difference.
§ Mr. JAMES HOPEWhat is the meaning of Sub-section (b) in reference to the value of the fee simple of the land calcu-
§ lated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest. That must refer to some totally different value to that in Clause 14.
§ Sir W. ROBSONAgain it is the value of the consideration both in Sub-sections (a) and (b) of Clause 2.
§ Mr. PRETYMANWhat my hon. Friend suggests is that there should be the net value of the consideration.
§ Mr. JAMES HOPEI know that the relations between Clauses 2 and 14 are very difficult for any man to really understand, but if the hon. and learned Gentleman looks at Sub-section (d) of Clause 2 he will find it runs, "Where the occasion is a periodical occasion on which the duty is due in respect of land held by a body corporate or unincomporate, the value of the fee simple of the land as ascertained for the purposes of the assessment of duty under this Act." Surely that is the same as the total value under this section. If it is not so, then what is the difference; but if it is so, you want it low, and inserting the word "net" will make it low. Therefore the argument of the Attorney-General on the subject of increment falls to the ground, and he has already given way on the other two duties.
§ Question put, "That the word 'net' be there inserted."
§ The Committee divided: Ayes, 54; Noes, 182.
747| Division No. 441.] | AYES. | [9.15 p.m. |
| Ashley, W. W. | Guinness, Hon. W. E. (B. S. Edmunds) | Pease, Herbert Pike (Darlington) |
| Barrie, H. T. (Londonderry, N.) | Hermon-Hodge, Sir Robert | Peel, Hon. W. R. W. |
| Beach, Hon. Michael Hugh Hicks | Hills, J. W. | Pretyman, E. G. |
| Bull, sir William James | Joynson-Hicks, William | Randles, Sir John Scurrah |
| Carlile, E. Hildred | King, Sir Henry Seymour (Hull) | Rawlinson, John Frederick Peel |
| Cecil, Evelyn (Aston Manor) | Lambton, Hon. Frederick William | Renwick, George |
| Clive, Percy Archer | Lane-Fox, G. R. | Ropner, Colonel Sir Robert |
| Clyde, J. Avon | Law, Andrew Bonar (Dulwich) | Salter, Arthur Clavell |
| Corbett, T. L. (Down, North) | Lee, Arthur H. (Hants, Fareham) | Stone, Sir Benjamin |
| Courthope, G. Loyd | Lockwood, Rt. Hon. Lt.-Col. A. R. | Talbot, Lord E. (Chichester) |
| Craig, Captain James (Down, E.) | Lonsdale, John Brownlee | Tuke, Sir John Batty |
| Doughty, Sir George | Lowe, Sir Francis William | Walker, Col. W. H. (Lancashire) |
| Douglas, Rt. Hon. A. Akers- | MacCaw, Win. J. MacGeagh | Warond, Hon. Lionel |
| Du Cros, Arthur | Magnus, Sir Philip | Warde, Col. C. E. (Kent, Mid) |
| Faber, George Denison (York) | Marks, H. H. (Kent) | Winterton, Earl |
| Fell, Arthur | Moore, William | |
| Fletcher, J. S. | Morpeth, Viscount | TELLERS FOR THE AYES.—Mr. Watson Rutherford and Mr. James |
| Forster, Henry William | Morrison-Bell, Captain | |
| Gardner, Ernest | Parkes, Ebenezer | Hope. |
| Gordon, J. | ||
| NOES. | ||
| Acland, Francis Dyke | Baring, Godfroy (Isle of Wight) | Beauchamp, E. |
| Adkins, W. Ryland D. | Barker, Sir John | Bellairs, Carlyon |
| Ainsworth, John Stirling | Barnard, E. B. | Berridge, T. H. D. |
| Armitage, R. | Barnes, G. N. | Bethel), Sir J. H. (Essex, Romford) |
| Atherley-Jones, L. | Barran, Rowland Hirst | Bethell, T. R. (Essex, Maldon) |
| Baker, Joseph A. (Finsbury, E.) | Barry, Redmond J. (Tyrone, N.) | Bowerman, C. W. |
| Balfour, Robert (Lanark) | Beale, W. P | Brace, William |
| Branch, James | Herbert, T. Arnold (Wycombe) | Richardson, A. |
| Bright, J. A. | Higham, John Sharp | Ridsdare, E. A. |
| Brocklehurst, W. B. | Hodge, John | Roberts, Charles H. (Lincoln) |
| Brooke, Stopford | Hudson, waiter | Roberts, G. H. (Norwich) |
| Br yet, J. Annan | Hyde, Clarendon G. | Robertson, Sir G. Scott (Bradford) |
| Burns, Rt. Hon. John | Illingworth, Percy H. | Robinson, S. |
| Byles, William Pollard | Jenkins, J. | Robson, Sir William Snowdon |
| Causton, Rt. Hon. Richard Knight | Johnson, John (Gateshead) | Rogers, F. E. Newman |
| Cawley, Sir Frederick | Jones, Leif (Appleby) | Russell, Rt. Hon. T. W. |
| Chance, Frederick William | King, Alfred John (Knutsford) | Rutherford, V. H. (Brentford) |
| Channing, Sir Francis Allston | Laidlaw, Robert | Samuel, Rt. Hon. H. L. (Cleveland) |
| Cherry, Rt. Hon. R. R. | Lamb, Ernest H. (Rochester) | Samuel, S. M. (Whitechapel) |
| Clough, William | Lambert, George | Sears, J. E. |
| Compton-Rickett, Sir J. | Lamont, Norman | Seely, Colonel |
| Corbett, A. Cameron (Glasgow) | Lehmann, R. C. | Shackieton, David James |
| Corbett, C. H. (Sussex, E. Grinstead) | Lever, A. Levy (Essex, Harwich) | Sherwell, Arthur James |
| Crooks, William | Levy, Sir Maurice | Shipman, Dr. John G. |
| Davies, Ellis William (Eifion) | Lewis, John Herbert | Silcock, Thomas Ball |
| Dewar, Arthur (Edinburgh, S.) | Lupton, Arnold | Snowden, p. |
| Dlike, Rt. Hon. Sir Charles | Luttrell, Hugh Fownes | Soares, Ernest J. |
| Duncan, C. (Barrow-in-Furness) | Lynch, H. B. | Stanger, H. Y. |
| Dunn, A. Edward (Camborne) | Macdonald, J. R. (Leicester) | Stanley, Albert (Staffs, N. W.) |
| Elibank, Master of | Macdonald, J. M. (Falkirk Burghs) | Stanley, Hon. A. Lyulph (Cheshire) |
| Erskine, David C. | Maclean, Donald | Steadman, W. C. |
| Everett, R. Lacey | Macnamara, Dr. Thomas J. | Stewart, Halley (Greenock) |
| Ferens, T. R | Macpherson, J. T. | Strauss, E. A. (Abingdon) |
| Ferguson, R. C. Munro | M'Callum, John M. | Summerbell, T. |
| Findlay, Alexander | M'Laren, H. D. (Stafford, W.) | Taylor, John W. (Durham) |
| Fuller, John Michael F. | Massie, J. | Taylor, Theodore C. (Radcliffe) |
| Gibb, James (Harrow) | Menzies, Sir Walter | Tennant, H. J. (Berwickshire) |
| Gill, A. H. | Micklem, Nathaniel | Thomas, Sir A. (Glamorgan, E.) |
| Gladstone, Rt. Hon. Herbert John | Molteno, Percy Alport | Thempson, J. W, K. (Somerset, E.) |
| Glover, Thomas | Montgomery, H. G. | Thorne, G. R. (Wolverhampton) |
| Goddard, Sir Daniel Ford | Morgan, G. Hay (Cornwall) | Verney, F. W. |
| Greenwood, G. (Peterborough) | Morgan, J. Lloyd (Carmarthen) | Walsh, Stephen |
| Griffith, Ellis J. | Worse, L. L. | Warner, Thomas Courtenay T. |
| Gulland, John W. | Morton, Alpheus Cleophas | Wason, John Cathcart (Orkney) |
| Haldane, Rt. Hon. Richard B. | Murray, Capt. Hon. A. C. (Kincard.) | Waterlow, D. S. |
| Hall, Frederick | Myer, Horatio | White, J. Dundas (Dumbartonshire) |
| Hancock, J. G. | Napier, T. B. | White, Sir Luke (York, E. R.) |
| Harcourt, Rt. Hon. L. (Rossendale) | Newnes, F. (Notts, Bassetlaw) | Whitehead, Rowland |
| Harcourt, Robert V. (Montrose) | Nicholls, George | Wilkie, Alexander |
| Hardy, George A. (Suffolk) | Nicholson, Charles N. (Doncaster) | Williams, J. (Glamorgan) |
| Harmsworth, Cecil B. (Worcester) | Norman, Sir Henry | Wills, Arthur Walters |
| Harvey, W. E. (Derbyshire, N. E.) | O'Kelly, Conor (Mayo, N.) | Wilson, Hon. G. G. (Hull, W.) |
| Harwood, George | Partington, Oswald | Wilson, John (Durham, Mid) |
| Haslam, James (Derbyshire) | Pearce, Robert (Staffs, Leek) | Wilson, J. W. (Worcestershire, N.) |
| Haworth, Arthur A. | scarce, William (Limehouse) | Wilson, P. W. (St. Pancras, S.) |
| Hazel, Dr. A. E. W. | Perks, Sir Robert William | Wilson, W. T. (Westhoughton) |
| Hedges, A. Paget | Pickersgill, Edward Hare | Wood, T. M'Kinnon |
| Helme, Norval Watson | Price, Sir Robert J. (Norfolk, E.) | Yoxall, Sir James Henry |
| Hemmerde, Edward George | Priestley, Arthur (Grantham) | |
| Henderson, Arthur (Durham) | Rainy, A. Rolland | TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey. |
| Henderson, I. McD. (Aberdeen, W.) | Richards, T. F. (Wolverhampton, W.) | |
| Henry, Charles S. | Richards, Thomas (W. Monmouth) |
§ Mr. WATSON RUTHERFORD moved, in Section (1), after the word "sold," to insert the words, "subject to such reasonable conditions of sale and restrictions (if any) as the Chancery Division of the High Court would in such case authorise and impose."
§ The object of this sub-section is to find out the amount which a given property would realise. That is not such a simple proposition as at first glance anyone would think, because you have property under all sorts of varying conditions, and you have land the property of the same owner in the neighbourhood, and you have property that is held under all sorts of restrictions and all sorts of difficulties. The true test of what is the real value of any property at any time is what it could be sold for in the open market. The condi- 748 tions which you ought to consider are those reasonable and proper conditions which, if the court were to order the property to be sold, it would be referred to the Master to fix the conditions when he had considered all the circumstances of the case and fixed the conditions of sale, having regard to the best interests of the property and the proper conditions that ought to be imposed under the circumstances. It is a recognised rule that if you are selling property and want to realise the really proper and accurate and best conditions under which that property ought to be sold, having regard to all the circumstances, those conditions are ummarised in this expression, "subject to such reasonable conditions of sale and restrictions, if any, as the Chancery Division of the High Court would in such case 749 authorise and impose." There is no difficulty in finding out what those are, because they are recognised and laid down in a series of well-appreciated and well-rocognised regulations. It is not difficult to be advised as to what conditions, in nine cases out of ten, the Chancery Division would impose, and these are the proper conditions under which the property ought to be sold if you want to ascertain its real value. It is also equally important to say, "either as a whole or in such lots or parcels as would be reasonable under the circumstances of each case." I have no doubt at all that this is what the Government meant. I shall probably be told that this is what was implied. If that is the answer which I am going to get from the Government, then of course they can have really no vital objection to adopting the Amendment. But if there is some concealed difference in the words which I cannot at present imagine, I hope that they will tell us what the objection to the Amendment is.
§ Mr. HALDANEMy hon. Friend (Mr. Watson Rutherford) began by apologising to the Committee for speaking so often. I do not think he has any need to apologise. He always talks in a good-natured way, and shows great shrewdness, and we are always prepared to hear him on this side of the House. When I was practising at the Bar my hon. Friend and I had a great many conveyances to draw up, and I had frequent consultations with him. If he had brought this point to me for consideration I should have been very much ashamed of him. I have drawn a great many conveyances myself, and I have not the smallest notion of what are the "reasonable conditions of sale and restrictions (if any) as the Chancery Division of the High Court would, in such case, authorise and impose." Fifty years ago these words might have had some meaning, but nobody now cares very much what the conditions of sale are. That being so, and it being clear that there is really no such thing as any scale, or standard, or stereotyped conditions of sale imposed by the Court of Chancery, and still less any that will make a difference in the price realised on the sale, I think that all that the hon. Member wishes to attain is covered by the words as they stand in the Bill. The words are, "For the purposes of this Part of this Act, the total value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition might be expected to realise." If the hon. Member 750 wishes to introduce something bearing on the practice of the Chancery Division, the only result which would happen would be that everyone would reject it as having no possible ascertainable meaning.
§ Mr. PRETYMANI do not think we can ask for a higher authority than the Secretary of State for War when he refers to his old practice at the Bar. I should be sorry to enter into controversy with him on this point, which I do not profess to understand. I hardly think that my hon. Friend would be well advised in pressing this Amendment.
§ Mr. JAMES HOPEWould not in these circumstances the Chancery Division impose such restrictions as would prevent the first part of an estate, perhaps being sold at a high price, from being used for some noxious purpose or inferior class of buildings which would impair the value of the rest of the estate? Would they not impose such conditions as would perhaps lessen the value in the first instance in order to save the rest of the property from being injured by some more or less unsuitable and undesirable use to which the first part might be applied?
§ Mr. HALDANEThe words in the Bill cover the case put by the hon. Gentleman. "If sold at the time m the open market by a willing seller in its then condition might be expected to realise."
§ Mr. J. W. HILLSI venture to question the statement of the right hon. Gentleman. I think it is rather too wide to say that the conditions of sale do not affect the price. Surely it we have to ascertain the open market price we cannot get at that if you disregard the conditions of sale altogether. I agree that you cannot lay down a stereotyped form that will apply to all cases, but still, in each case, if on the sale of an estate certain conditions were imposed, these conditions would be taken into account in ascertaining the value. Surely that is a reasonable proposition.
§ Mr. WATSON RUTHERFORDThere is a complete answer to what the Secretary of State for War has stated, but if the Government do not want the Amendment passed, I will not waste the time of the Committee in pressing it to a Division. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPEI beg to move in Section (2) to leave out the words "in the 751 open market" ["if sold at the time in the open market by a willing seller"]. I move the Amendment with the view of ascertaining from the Government what is their construction of the words "in the open market." Do they mean in the open market under existing conditions? I think the question arises whether the open market means the open market under existing conditions or under the special conditions contemplated by the Bill. The difference will be considerable. If they mean the normal conditions as they existed before the passing of the Bill, of course, that would be very easily understood; but you would have to take the conditions as they would exist. Suppose this Bill were to pass, you would have each portion of land assessed for these valuations on the supposition that it would be sold. But if they were all put upon the market at the same time, obviously the price would very largely deteriorate. This is a point that has been alluded to, though not very definitely or closely, on former occasions, notably by the hon. Member for North Paddington (Mr. Chiozza Money), because obviously if all the land affected by these taxes were to be put on the market at once, the price would be very seriously reduced. There would be a considerable difference, supposing the market conditions of last year prevailed, from what there would be if all the land subject to these taxes were sold at once; and I wish to know which of these two conditions of affairs the Government contemplate by these words in the open market.
§ Sir W. ROBSONThe hon. Member says that he does not quite know what sort of a market there will be and whether the valuer is to assume that everyone will sell at once or whether he is to assume that the tax would make no difference. Certainly the valuer would be foolish to assume that everybody would sell at once or that the market could possibly be affected in that respect. I have to remind the hon. Member that, after, all, this is a tax of a halfpenny per annum in the £ on the capital value, and that it is £2 per annum on £1,000 of the capital value. Take the other tax, the Increment Tax. There again one would scarcely suppose that a great number of properties would be suddenly thrown on the market, because if there is a subsequent sale there is a liability to pay one-fifth of the increment 752 arising. So we do not anticipate by any means such a disturbance of the market as the hon. Member has indicated. The valuer will know what the market will be and he will deal with it, and the tax may be reduced in some cases; but he must exercise his judgment as to what the effect on the market will be. Certainly it is not for us to add any words of qualification to words in themselves quite simple and understood by all those who are interested in the valuation of land.
§ Mr. JOYNSON-HICKSThere is a consequential Amendment put down by the Noble Lord (Lord Robert Cecil) to leave out "Might be expected to" and insert "Would," and then follows a second consequential Amendment to insert "Provided that for the purpose of Undeveloped Land Duty land shall not be deemed to have a total value higher than could actually be obtained from a known buyer." We had some remarks on this subject from the right hon. Gentleman the Secretary for War the night before last in answer to remarks by myself. The Secretary for War told us that unless the land would realise in the market a certain price it would not pay the tax. I took the case of 800 acres of land at Trafford Park near Manchester, any one of which, if sold to-day, would realise £1,000, but it was quite impossible to realise £1,000 each for the whole of the 800 acres. You could not put up the whole lot for sale and realise £800,000. The right hon. Gentleman said that it they would not realise it in the estate market they would not pay a tax, and I asked him a further question, Is it really the case that this tax is not to be placed on any land that would not realise what the owners suggest is the market value? The right hon. Gentleman said it would be placed on the market value for the time being, the capital value of the site—that is, what it will get in the market. Now, it is very important with regard to this high-priced land to ascertain whether the halfpenny tax on undeveloped land is to be paid on what is really the value of the land; that is to say, what an individual acre of the land is worth for which you can find a purchaser—a £1,000—or whether it is to be placed upon the value which the whole of the land would realise if the whole of it was thrown into the market at once. I do not quite see any other part of the Bill where that point would be so reasonably raised and reasonably settled as at the present moment. If it is true, as the right hon. Gentleman said—and I am sure he meant what he said—that unless 800 acres of Traf- 753 ford Park would realise to-day in the market £800,000 it would not be right to value it for that amount so far as undeveloped land went. Then, on the other hand, there comes in the difficulty with regard to the Reversion Duty, because if one were to value the whole of the 800 acres in Trafford Park, say, at £300 an acre, the price which the whole would realise if the whole of it were placed on the market to-day, then if one acre of it were sold to-morrow morning for £1,000 there would be the very large Increment Duty to be paid on the difference between the value of the whole at £300 an acre and the value of the one acre sold at £1,000 for the acre. I cannot help feeling that there needs to be some difference in the mode of valuation between the value for Increment Duty and the value for Development Land Duty, because it is perfectly clear that while the value of one acre may be £1,000, the value of every single acre may be £1,000, but the value of the whole 800 acres would not be £800,000. One old master may be worth £10,000, but if you find 100 replicas of the same picture by the same artist it is perfectly certain that you could not get £10,000 for each of them, while if there was only one going to be put on the market you could realise the £10,000 at once. Therefore it would not be right if Increment Duty were payable upon an old master picture to charge the Increment Duty on the difference between £200, the value of one out of a hundred, and £10,000, the value of one particular picture if there were only one. I take it the right hon. Gentleman really meant that if it would not realise in the open market it would not pay the tax. Trafford Park is a very considerable estate, end it would not pay the tax unless the whole of it is realised to-morrow at the price at which any particular part of it might be worth if it were realised.
§ Mr. PRETYMANOne of the most difficult points to the ordinary mind, and it is one of extraordinary difficulty, is how you are going to value a piece of land in any part of the country on the supposition which is here stated in the Bill, unless the words of my Noble Friend's Amendments—I shall deal with the whole of them for convenience—are accepted. I would point out to the Government that they suppose a willing seller. It is obvious that they are entitled to suppose a willing seller, because every piece of land in the country which is to be valued has an owner, and therefore they may assume that the owner is willing 754 to sell. Where can you find the willing buyer? That is the weak point in the whole of this question of valuation—it must be pure imagination. You have got a willing seller. Where is the buyer? The willing buyer is conceivable in regard to certain portions of a piece of land, but is not conceivable in regard to the whole of the land. We get back here really to close quarters with the question in respect of the difference between the words "suitable" and "required." The whole basis on which the tax on land is to be established is that it is required for building. There is a part of the undeveloped land of this country which is required and which is ripe for building, and as to which we may be justified in assuming that there is a willing buyer; but our point is—and so far we have never had any attempt to answer it, though I do hope that the Secretary of State for War will really try to apply his mind to it, for nobody can do it better or give us a more clear answer—on what possible hypothesis can it be assumed that there is a willing buyer for the land which is not "required" for building, but which is only "suitable" for building.
That really governs the largest part of the land which has to suffer the weight of this tax. The land which is ripe for building, which is in the front line of "undeveloped land" in the sense of this Bill, we may assume will find a willing buyer; but in regard to the land which lies behind, and to a great proportion of which there is no access, how are you going to assume a willing buyer? And if you cannot assume a buyer and can only assume a seller, on what principle is your valuation going to be based? It does seem to me that to use the word "open market" assumes a buyer as well as a seller. Where is the buyer, how are the Government going to imagine a buyer, when it is perfectly obvious that the whole of the land' on which this tax is going to fall cannot possibly be sold, for no buyer will buy? Even at this moment, and largely on account of this Bill, I know that an hon. Friend of mine has got particulars of some value which, I think, are germane to this Amendment, and which I hope he will submit to the Committee in order to show how they affect the question of the willing; buyer. Certainly, if this Bill becomes law, there will be very few willing buyers for some time to come, and the value of the land will be very considerately affected. This is really a vital point, and it is one on which I want to get a clear explanation from the Government.
§ Mr. HALDANEWe do not assume, nor is there any necessity to assume, a willing buyer. Take a case which arises every day: A railway company serves notice to treat, and a contract is entered into subject to ascertainment of the price. The price is ascertained by a hypothetical sale with the hypothetical buyer and the hypothetical seller in the open market.
§ Mr. PRETYMANThe very first thing you do is to assume an actual buyer, and not a hypothetical one.
§ Mr. HALDANEWhen the notice to treat is served the railway company, who have compulsory powers, take the land, but the arbitrators determine the price from the point of view of a hypothetical sale in which there is a willing purchaser and a willing seller in the "open market." That is the very phrase used in the Bill. What do the arbitrators do? They call before the umpire expert witnesses and valuers, who state what the property would be sold for in the open market under normal conditions, and what they expect a willing buyer would give. Of course, there may be a state of things in which property is plainly affected by the congestion of the market arising from causes which are not really of a transitory nature. In such a case as that, the circumstances which affect the price are taken into account. But ordinarily it is assumed that the transaction takes place under normal conditions. A man has a large piece of ground, such as Trafford Park, to which the hon. and gallant Member referred. It is assumed that the Park has its value under conditions in which somebody wants to buy. You do not assume that the whole of the property is put into liquidation at once; that is never assumed. The hon. and learned Member for Edinburgh knows that. Normal conditions are taken. The case which the hon. and gallant Gentleman put to me is an abnormal one. In the case of Trafford Park he assumes a seller who wants to sell the enormous block of property under such conditions as would congest the market. Those are not the normal conditions usually taken. A part of that property would be valued and we take it that it would be dealt with like any normal transaction in the open market, where somebody is ready in the usual course of things to buy. The conundrums which have been put by hon. Members opposite are not such as would be dealt with by practical arbitrators who have to deal with these matters over and over again. We take things 756 in the normal in the case of a seller selling in the open market.
§ Mr. BONAR LAWI agree with my hon. and gallant Friend that this is the most convenient stage, and that this is the real crisis of how you are going to get a valuation which will be fair and just. I should like to take a point referred to by the hon. Member for Sheffield (Mr. James Hope), and to which, I think, the Secretary of State for War has not given an answer. An answer was attempted by the Attorney-General, but I do not think it was a satisfactory one. The point is: Are the Commissioners to assume in the valuation that the market is in the position on 1st April, before the effect this Bill had on the market, or are they to take the valuation after the effect of the Bill? Even the right hon. Gentleman the President of the Board of Trade, the other day in a speech in the country, made the statement that the Bill already had had the effect of making land cheap. I am sure that is absolutely true. A friend of mine who is engaged in this business in London gave me a list of the estates for building round London, which had been offered for sale in the open market by auction since this Budget was introduced. There were a good many, I forget how many, but not one single one of those properties was sold. There was no bidder. To show that that is not due to the fact that people who own those properties are asking exorbitant prices, I may mention that this gentleman told me that he had himself offered £25,000 last autumn for an estate which was put up at an upset price of £20,000, and there was no buyer at £20,000. That shows that already the Budget has had a great effect in lowering values, and for the sake of undeveloped land, I want to know if the valuation is to count from 1st April, before these effects have taken place. Are the Commissioners to take into account the effect of the Budget, or are they to value it as if no effect whatever had been produced by it? I think that is important.
10 P.M.
There is the other aspect, which has been dealt with by the right hon. Gentleman (Mr. Haldane). I am bound to say, if the explanation of the right hon. Gentleman is the real explanation of the way in which the Commissioners are going to act, there is going to be perpetrated a most extreme act of injustice in the way in which property is going to be valued. The right hon. Gentleman says that it is 757 precisely the same as what happens every day when a railway company buys a piece of land and an arbitrator deals with it. He omitted to notice the whole point of the speech of my hon. and gallant Friend (Mr. Pretyman). Under the Bill everybody is a seller presumably, because all land has to be valued. But you have to imagine your willing buyer, as you have not got him. In the case of the arbitration, the fact that it is to be an arbitration shows that there is a buyer who wants it for developing purposes. Undoubtedly that is the case; but in the case of all the land you have no evidence whatever that there are buyers for the whole of that land that is to be valued at anything above its agricultural value. In one case there is a buyer for development; in the other there is no one. What is the real vital difficulty in connection with this matter? If it were true that it is possible to value the land at the price which the owner could get for it, if he chose to sell it to-morrow, then I admit, though I would still think it to be a bad kind of tax, it would not be so utterly unjustifiable. If you can assume that the Commissioners can really arrive at the price at which the owner if he chose could sell, then the problem would be comparatively easy. How can that possibly be done? I admit that valuers will put a value on any property they are asked to value; but I say it is utterly impossible to put a valuation on the value of the building land of this country, which is even approximately just or correct. Take the case which the right hon. Gentleman the Secretary for War has not answered, the case of Trafford Park. There is an estate of about 800 acres, and they have taken 12 years to dispose of considerably less than half of the total estate. How long will they take to dispose of the balance? That is the essence of the present-day valuation of that property. The value from the point of view of the Government Bill as I understand it, is that you are going to tax on what you assume to be the price which the seller would get for it to-day if he chose to sell it. Is not that the assumption?
§ Mr. HALDANEI tried to make that clear. A hypothetical sale is the basis and not actual sale. The fallacy of the hon. Member if he will permit me to use the word, is that he is really assuming a sale. In the case of a railway company, there is no real transaction or voluntary contract—there is a compulsory relation, and it is a hypothetical sale which is brought in. In the Trafford Park case, he is really assuming a forced sale. The basis of the Bill is 758 a hypothetical sale in the open market with a willing buyer who is willing because he has got an ordinary seller.
§ Mr. BONAR LAWI do hope the view the right hon. Gentleman has expressed is not the real view of the Government. If his view is right, then the assumption is that in a case like Trafford Park the whole land is to be taxed at the value at which you could sell a single acre if the buyer came along. [HON. MEMBERS: "No! No!"] Is that the intention of the Government? They will not even answer that simple problem which is really of the essence of the question. What I understood was the intention of the Government—and I think the Chancellor of the Exchequer, who really knows what the intention of the Government is, will bear me out—is that the Government is not to have the land valued at the price which could be obtained for a single acre to-day if the owner chose to sell it. Am I right in saying that the intention of the Government is that the land shall be valued at a price which shall be obtained by the owner if he chose to sell it? Is that, or is it not, the intention of the Government in the system of valuation?
§ Mr. HALDANEindicated assent.
§ Mr. BONAR LAWIt is. Very well, that makes the case much easier, and the injustice is not nearly so great as the Secretary of State made it out to be. If it is to be valued in the same way as a piece of land taken by a railway company would be valued to-day, that obviously would be an injustice which would be intolerable, and which I am sure the Government do not intend. What they do intend is to take approximately the price which could be obtained for the land by the owner now, if he chose to realise it. How in the world can any system of valuation you choose to adopt find out what that price is? The case of Trafford Park is a very simple one compared with the whole land of the country. It is all there, ready to be built upon as soon as you find buyers. You have had experience how long it takes to dispose of a certain part of the land. It has taken 12 years to dispose of only a small part of the estate. You may assume, therefore, that it will take at least 20 years to dispose of the whole estate. On that assumption you are to take the mean date, that is to say, 10 years, as the equivalent of the value of the whole of the estate. No one, I think, will question that that is sound. That means that if the 759 price for a single acre to-day is £1,000, by taking the ordinary insurance tables for the 10 years you arrive at the value of the whole estate. That is comparatively simple. It simply means that the £1,000 per acre will be reduced by something like one-third. The only danger is that the valuer may assume that the estate will be disposed of in 20 years, while in reality it may take a great deal more. But the problem is utterly insoluble when you take the whole of the possible building land of the country and try to put a value to-day upon it. I will take a concrete case to show how utterly imposible it is to get a real and just basis of value. Glasgow was the city which moved first, as a corporation, in favour of this kind of tax. Within the area of the Corporation of the City of Glasgow itself there are 6,000 acres which are undoubtedly building land, and the Commissioners would certainly assess the whole of those 6,000 acres for the Development Tax. The matter is much more complicated if you take not only urban land, but land outside. Taking, however, the 6,000 acres, there is not a single acre which might not be built upon to-morrow; but the one certainty is that only a small fraction of the whole can possibly be built upon either to-morrow or in a reasonable number of years. The development of the city of the last 30 years has been only something like 60 acres a year; that is to say, it will take 100 years before the whole 6,000 acres are used. The Commissioners have to go down, and put to-day's value for building purposes upon the whole of those 6,000 acres. The only way in which that can fairly be done is to take the mean term of the period it will take for the whole quantity to be disposed of, and then use the insurance tables to find out what to-day's value of that would be deferred to the period when it will come into operation. Think what that means. The mean term of 100 years is 50 years. The assumption is, therefore, that the whole of the property has to-day a present value to come into force 50 years hence. What effect has that upon the total value of these 6,000 acres? The deferred interest table spread over 50 years has this effect—that if land to-day is worth £360 an acre if you can sell it, by applying the 4 per cent, tables it is worth at the end of 50 years not £360 but just over £50. I have not exaggerated the case in the least. I think the hon. Member for Sheffield (Mr. Tudor Walters), who has experience in these 760 matters, will agree that I am not stating the case wrongly.
§ Mr. TUDOR WALTERSI think you are stating it quite wrongly.
§ Mr. BONAR LAWLet me give my reasons for saying that I am not stating the case wrongly. Even in the case given by the Secretary of State for War, in which admittedly very full value is obtained, namely, the case of a compulsory purchase by a railway company, valuers take into account the length of time it may be before the land is disposed of. On what other system can you possibly value the whole of the building land, every acre of which might be taken to-morrow, but the whole of which cannot be taken for 100 years? On what other principle can you go than that which I have suggested? To put a value to-day on land which to the certain knowledge of everyone, if you take the whole of it, cannot be disposed of for a number of years stretching far into the future—that can only be done on the principle I have given. If it is not done on that principle it is bound to be done on a principle which will be unjust to some owners of property. The case is complicated still further where a number of owners are concerned. If the land were all in one hand, you could arrive at the value by taking into account the deferred system; but when it is owned by a great many different people, how can you possibly say that the land owned by one man hi one place is worth so much and by another in another place so much, on the assumption that both are going to sell and can sell, whereas, as a matter of fact, everybody knows that one could sell, but more than one could not? That is, I think, the crux of this question, from the point of view of getting a just valuation. You can perfectly well value any single acre of land if you have not only a willing seller but a willing buyer. You then take as the basis of your valuation the price which is being paid for similar land. But when you come to deal with thousands of acres, of which only a small fraction can possibly be used within a reasonable time, I say that it is utterly impossible by any system to get at a just valuation.
§ Mr. BEVILLE STANIERThe Minister for War asked us for a normal case. I think, with the data I have in my hands, I shall be able to give such a case, and thereby support the argument of the hon. Member for Dulwich (Mr. Bonar Law). I have here a catalogue of a sale which 761 should have taken place on Monday, at Church Stretton, in Shropshire. The land was fully ripe for building purposes, it was beautifully timbered; it had sites and plantations on the hillside; it was laid out for private residences, bungalows, and villas. There was a great demand for shops and cottages, and sites for these were provided There was also a large hotel to be built on the slope of the mountain. Here we have 75 plots. Surely there was enough for everyone to choose from. As I have said, there were sites for residences, for business premises, for shops, and for other purposes. This is what the salesmen write to me: "We enclose a copy of particulars relating to the large quantity of building land which was submitted to auction by us on Monday last. The sale was well advertised and everything done by our clients and ourselves to make it a success. Notwithstanding this, we regret to say that not one single lot changed hands. In fact, there was practically no reasonable bidding." Here we have a case with a hypothetical seller, but no buyer. How is the Minister of War going to value an estate of that sort? There are land sales all around. You cannot take it in any other way except by a normal sale. There was no normal sale. How can the Minister for War account for that? The whole thing was absolutely genuine and laid out for the purpose of sale. It was cut up for building sites, and there was not a large reserve price put on the land. I ask the Minister for War how is he going to value in a case like that?
§ Mr. TUDOR WALTERSThe hon. Gentleman the Member for Dulwicih (Mr. Bonar Law), who has just spoken, introduced several fallacies into his method of reasoning. He assumed, in the first place, in his concrete illustration of Glasgow, that the whole of the land comprising these thousands of acres around the city was taken at an equal value. Let me give him a concrete illustration from a town of which I am very familiar—Leicester. Suppose it fell to my lot—that I was the fortunate individual at a substantial fee—to value the undeveloped building land around Leicester. How should I go to work? In the first place, I should not find much difficulty in estimating, from the experience of past years, and from the present demand, what was the amount of land that could reasonably be expected to be sold in a given year round about Leicester. I should take my process of examination a step further than that, and I should be 762 able to divide the undeveloped land around the town into districts. Some parts would be suitable for large houses, for which there was a demand, some for factories and business premises, others for small houses, and some for working men's dwellings. I should carry my analysis even further. There would be some portions even of those various districts riper than others, not necessarily the pieces nearest the built-up area. There would be considerations of drainage, the subsoil, access, etc., affecting in a varying way different parts of the land. Then I should proceed to allot the number of acres of reasonable and probable demand in a given district. I should take the land available and should deal with it in strips I would take the belt of land immediately ripe and for which I might expect a present demand. I should then take the next attractive portions, not quite as ripe or useful for the purposes of that particular district, and for these I should take a lower price. I should then, having disposed of what was immediately available for the present demand of that suburb, go a step further, and, proceeding to the third and fourth belts, proceed in precisely the same way. If I found the first five or ten acres go off at a certain price and the next few acres of the particular belt at a lower figure, I should discount the value accordingly, till by the time I got to my third or fourth belt I should find that there was no present demand for land for building at all; and that it is not undeveloped building land. I apply my methods of valuation to each particular district of the town, and I do it in the same way. If I happen to be an iron or steel manufacturer, and went down to Leicester and tried to apply a pure arithmetical table, the result would be disastrous I believe, but if I understood the business and understood the relative value of the different belts, and what exactly the demand was, I fancy I could come, approximately, near to a reasonable result. I think that the assumption that the land is all to be sold at once is a perfectly fictitious one. To vary the illustration of my case, let me suppose, instead of valuing for the Undeveloped Land Tax I went down to value for the purpose of advising some client of mine what he could advance towards a development company on mortgage. I could not say I should not advise my client to advance any money, because the development company cannot sell all their land to-morrow. I would say, "Here is 20 acres, how long 763 will it take to develop this area, to complete the road-making, the drainage, to pay the lawyer's fees, etc." I should find that out, and I should make a careful arithmetical calculation as a result of knowledge and experience, and I should arrive at a figure which it would be safe for a reasonable man to lend on mortgage, a man who would expect to get his money back as the land was being developed. I do not for a moment contend that this method of valuation has no difficulties; it would be absurd and ludicrous to underestimate the difficulty. It will be an elaborate and a difficult process, and that is one of the reasons why I advocated a week or two ago that it should be undertaken by the State. But though difficult, I believe it is a reasonable, possible, and entirely practicable scheme for experienced men to proceed on the lines that I have briefly indicated to arrive at a value, and I believe that they can arrive at that value. Of course, they will have to make allowances for possible acceleration or diminution of the rate of building. These things do not proceed on the exact geometrical basis that certain tables indicate. AH these are matters of knowledge and experience, and I am satisfied the principle laid down in the Bill is fair and wise, and if intelligently applied, I see no reason why a fail value should not be arrived at. But I venture to say that, in order to get a fair valuation, the theory that you must have a man to buy the whole lot to-morrow is egregious and absurd, and therefore I shall oppose the Amendment.
Mr. BALFOURAnybody who has listened to the expert witness who has just made an admirable and most interesting speech will begin to wonder how many people there are who still think that the valuation of the land of this country, which is to cost £2,000,000, can be done by 500 gentlemen. At least we have now heard someone who really understands the practical work of valuation, and I do not think anybody who has listened to the hon. Member's remarks will attach the smallest value to the estimates made by the Government, either as to the cost of the valuation or the time it will take. I know that is not strictly relevant to the issue now before us, but there are other issues which are strictly relevant, and I will venture to call the attention of the Committee to two of them. What has the hon. Member opposite (Mr. Tudor Walters) pointed 764 out? He has pointed out, as must be evident to anybody who reflects upon it, that there are in the neighbourhood of any great central population a series of zones of varying amounts, all varying in value depending upon the length of time it will take before there is any reasonable prospect of them being practically developed as building land. The site value is estimated at so much, and then when the estimated 20 years has elapsed, and it has become building land, the owner will be taxed on the increment which has occurred between the time when the valuation is taken and the time the land becomes ripe for building, and on that income he will have to pay a tax. But the hon. Member says all this must be done according to actuarial tables, and the development value must be considered in view of all those calculations. But you do not count the development value in the increment value; the Increment Tax is an absolute thing, and that length of time in which a man has to earn the income does not come in at all. That is in itself a very strong argument against the Increment Tax. My hon. and learned Friend the Member for Dulwich (Mr. Bonar Law) pointed out that land of a given value would not always find a market at the same time, and that is surely the fact, however much you divide it up into zones. Take any zone you like. Take the whole of some particular zone. What is the simple process which the expert valuer has got to go through? Of all the land of equal value, only a fraction will be required and nobody can say what fraction. Let us say, for example, that at a given distance from Leicester there are 500 acres of land which the hon. Member opposite would value all at the same price.
§ Mr. TUDOR WALTERSNo.
Mr. BALFOURThat is the hypothesis, because he has divided the land round Leicester into zones of equal value.
§ Mr. TUDOR WALTERSThat would not be so, because even in the first strips there would be some land which would be much more saleable than other portions of the land. Even if you take a zone after a period of five years there would be different prices obtained in the same zone. I do not want to minimise the difficulty of valuation, because your zones have to be divided up into relative values.
Mr. BALFOURAnd this is what is called the simple process. I am obliged to the hon. Member for his interruption, 765 and, if he will allow me, I will now take the fraction of a zone which the hon. Gentleman opposite estimates as being of equal value, equal qualification, and equal merits as developable land. Let us say there is a block of 100 acres of land equally developable five years hence. Of that 100 acres only some will be developed five years hence. The market will not during those five years absorb the whole 100 acres, but only a fraction of them.
§ Mr. TUDOR WALTERSThe point is this. If you take a zone as requiring five years to absorb, you will then take the mean price of that as 2½ years' purchase.
Mr. BALFOURIt is a lottery, so to speak, which of the 100 acres is absorbed first and which last. The acre absorbed first will obviously be taxed at a different rate to the acre absorbed last. Its value is different. You cannot, in the eye of the valuer, distinguish between them; they are about the same. When the five years' period terminates some acres will be taken and some left, and no valuer can say which acres will be taken and which left. It is a mere matter of chance. Some acres will find a willing purchaser and some will not. The acre which finds a willing purchaser may, no doubt, be fairly treated, but what about the acre which does not find a willing purchaser? It is treated on a wholly different system and turns out at a wholly different value. Take two owners. They are going to be taxed exactly at the same rate. The moment arrives when a purchaser comes forward. Nobody can say whether he will go to A or B. If he goes to B, A. has to stand out of his money. If he goes to A, B has to stand out of his money. Therefore you are taxing properties at the same rate as if they were of the same value, when in fact they are not. If they belonged to the same owner, you could average them; but, belonging to different owners, you cannot average them. This is the fundamental difficulty which seems to me to lie at the root of this system of saying valuation of future values is to form the basis of taxation. It differentiates land from stocks, from things which are dealt in in small parcels on the Stock Exchange. I think of all forms of property land is the least susceptible of equitable taxation on its capital value, if in its capital value you include ail reasonable and prospective possibilities. In the 100 acres, only 10 acres can be taken in the first year and another 10 acres in the last of the series of years to which re- 766 ference has been made, and it is a gamble which of those acres is going to be taken first. You cannot avoid the gamble. That is the fundamental vice which lies at the root of this whole system of the taxation of land values. I think I may say, without contradiction, that the Government have never really attempted to get at the root of this matter, and have never met us face to face when we have brought this difficulty before the Committee. Now we have an opportunity of thrashing it out, I hope we shall hear what view the Government take of the system of valuation so admirably and instructively described by the hon. Member for the Brightside Division of Sheffield (Mr. Tudor Walters).
§ Mr. ROWLAND HUNTThe hon. Gentleman who last spoke on the opposite side of the House declared that unless a man knew the district he could not value the land properly. But are we to understand that the Commissioners to be appointed will know every district in their area? If they do not, according to the hon. Member they cannot value the property properly. The hon. Member said he would take the land and value it, knowing perfectly well that only a certain portion of it could be built upon. But according to the Government scheme you are going to tax it all, although you know perfectly well only a small amount will be built upon. You are thereby going to penalise the owner in respect of the remainder. I can cite a case within my own knowledge of land within a short distance of where I live; it is between a big village and a station and within eight miles of a county town. There are about 100 acres of building land. A great deal of the land has a main road facing it. It is quite close to the station, and under this Bill it will be put down as building land, although it is absolutely impossible it can be built upon for three or four years. Yet under this Rill you are going to tax the whole of this land as building land, knowing that only eight or ten out of the 100 acres can possibly be built upon under existing circumstances. You are going to tax 90 acres of agricultural land for something like 10 years, when you know that it cannot possibly be built upon, and thereby you are taxing the food, drink and clothing of the people, produced in this country for the people. And that is what the Liberal party call legislating for the benefit of the people.
§ Mr. HALDANEI beg to move, "That the Question be now put."
§ Mr. AUSTEN CHAMBERLAIN rose—
767§ Mr. HALDANEI beg to withdraw my Motion.
§ Mr. AUSTEN CHAMBERLAINFor the personal courtesy shown me I am indebted to the right hon. Gentleman. But that is a small matter between ourselves. The point at issue is of great importance. My right hon. Friend has put forward certain arguments, to which the Government have vouchsafed no reply whatever. I hope the Government are not going to rely entirely on the Closure for an answer to the arguments of their opponents. I hope that they will attempt to give a reasoned argument to reasonable arguments. I want to put another point before them. The hon. Member for Sheffield (Mr. Tudor Walters) made some observations which are very valuable, because he told us how a man appointed by the Government might be expected to proceed under certain circumstances in valuing the land. He chose for illustration land which had a building value in excess of agricultural value.
§ Mr. TUDOR WALTERSIt was a question of the position of the land, its value diminishing until it finally fell to agricultural value.
§ Mr. AUSTEN CHAMBERLAINI perfectly understood that that was the natural conclusion, but eventually it came to the point of further from or nearer to the town, whether it was a purely agricultural value and nothing else. I do not know whether the hon. Gentlman was dealing with the valuation of the nearer zone, where there was an existing building value in the land, but if I understood him rightly his method of arriving at the present value of that land was to say, "when it comes to be built upon it will be worth so much, having regard to all the circumstances which I have mentioned, the amount which you might reasonably expect the town to require for its development every year, the character of the districts, of the land, and of large portions of land within each district, and so forth. I anticipate that any given plot will take so many years before it is built upon, and, accordingly, I take its value when it is built upon, I discount that by the number of years that will pass before it is built upon, and the result is its present value." The hon. Gentleman is good enough to confirm that. That is the way in which he would proceed. The Government propose to take that present value as their starting point. That present value, as the hon. Gentleman said, is nothing but the future value 768 unrealised, discounted by the number of years, before you can realise it, yet when that future value is realised you treat it under the Increment Tax as a windfall and deduct one-fifth of it as being unexpected, unearned, and something on which a man could not count and upon which he had no right to count. That is something more than what the hon. Gentleman said, and my only excuse for saying it is that sometimes, when another man repeats an argument in another way it may bring the matter home to the Government, and they may give an answer. The Chancellor of the Exchequer shakes his head and dissents from my argument, and perhaps he he will show me where I am wrong. Let us look at it from the point of view not of the Increment Tax but of the Development Duty, because the Government ingeniously think that the owner of land should be hit both ways, on the present value, on which the right hon. Gentleman refuses to discount the future value by the number of years it would take before that future value is realised—on the present value, and he is going to be charged with Undeveloped Land Duty. On what basis? On a basis which is a direct negation of the hypothesis on which the expert valuer proceeds. The expert valuer proceeds upon the basis that all this land, not only must not be, but cannot be built upon at once. The Government proceed upon the basis that every plot, every square yard, every foot of land has a building value, in excess of the agricultural value, and ought to be built upon at once. [HON. Members: "No."] They do. It is no good saying "No." You must disprove it. What is the basis of the Undeveloped Land Duty as expounded by the Government? It is that land is not being put to its best economic use—that is, that we should derive the greatest revenue from it, and accordingly, if it has a higher value for building purposes than it has for agricultural purposes it should be built upon. They must go upon the assumption that it is possible to build upon it. There is an infinite amount of this land which has a present value because of its building possibilities in the future in excess of its agricultural value, which cannot be built upon, and, accordingly, setting aside the injustice of your methods of valuation under the Increment Tax, when you have taken from a man on the ground that it is a windfall what you have already calculated will come to him in a given number of years, here, under this tax, you tax him 769 for not building on land which your own valuers will assess, on the assumption that you cannot build upon it at the present time. We are fortified by experience of the way in which a practical man in a skilled manner will proceed in these matters, and we say it makes your valuation perfectly unjust, both for the purpose of the Increment Tax and for the purpose of the Undeveloped Land Duty, and we are entitled to some answer from the Government to the objections that we urge.
§ Mr. HALDANEWe have already put our case fully, and I think very simply. It was this. We ask people not to sell their property before they are ready to, but to pay the tax upon the actual value, and the actual value is what they could obtain under normal conditions in the open market. If you boil down the speech of the right hon. Gentleman (Mr. Austen Chamberlain) it is that that actual value is not ascertainable. It is an argument against the possibility of any valuation.
§ Mr. AUSTEN CHAMBERLAINNo, no.
§ Mr. HALDANEI said boiling it down.
§ Mr. AUSTEN CHAMBERLAINThat really was not my argument under either head. My argument was two-fold. Proceeding upon the data given us, I said that in the case of the Increment Tax you tax a man when he receives a value which you have anticipated and discounted in the valuation. In the case of the Undeveloped Land Duty you tax a man because he does not build on land which your valuers in their valuation tell you he cannot build upon.
§ Mr. HALDANEIt comes to the same thing. The right hon. Gentleman has not answered the speech of my hon. Friend (Mr. Tudor Walters). My hon. Friend said there is a case in which valuations are made every day in the year, which show that the very thing which the right hon. Gentleman is arguing cannot be done is done.
§ Mr. AUSTEN CHAMBERLAINI never said that you could not make a valuation. I accepted the right hon. Gentleman's statement as to how a valuation would be made. What I want to know is how the Government can argue that the result arrived at will be just?
§ Mr. HALDANEBecause the Government take it that the valuation arrived at is a true valuation. Take the case of the 770 development company to which my hon. Friend referred. It wants to raise money on mortgage, and not to sell or let. It advertises for money, and a set of trustees have money which they desire to lend. Now the law says that they may lend in a case of that sort provided that they lend no more than a certain proportion of the value, and that a proper valuation is made. They have a valuation made. What is the basis of the valuation? It has been described by my hon. Friend (Mr. Tudor Walters). It is valued in strips and zones. No doubt there is a great deal of the property which cannot be realised at once, but that does not prevent a particular piece of land from having a value which is realisable. It is assumed right through that the value of a particular piece would be different in a forced sale, say, in a liquidation, from what it would have if put in the market under normal conditions. My hon. Friend says that the surveyor who advised the trustees would look at the known conditions affecting the action of a willing seller of part of the property in the open market. Nobody is a willing seller who is forced to sell. In the case of the development company, the trustees advance money on the property. They can realise. Is it supposed that the law would allow trustees to lend money on securities which could not be realised when they could get such a security as Consols? The law allows them to put money in that security because it is a security which experience shows can be realised. You may have difficulties under abnormal conditions. You may get an excessive price under abnormal conditions, but the value of the property is whatever under known conditions will be realised. That is the footing on which valuations are made every day of the year, and that is the case which my hon. Friend the Member for Sheffield described. The money is lent to the development company because that company can under normal conditions, things being in their ordinary state, get that value for a particular piece of property. We assume that a person in that position has got a piece of property and could realise it. We say that having got it he ought to pay on it. We do not want him to sell. We say that he has got it, and that he may quite legitimately for his own purpose choose not to sell it. It seems to me to be a very simple thing.
§ Mr. F. W. LAMBTONUnless we have got a real buyer the valuations in hypothetical cases amount to nothing practical. 771 We have had an interesting explanation of the valuation of land by dividing it into strips and zones, and we have heard of strips around Leicester valued for £1,000 an acre. Development Duty would be charged on that £1,000. But if the owner put that land up for sale and advertised that it would be sold for £1,000 an acre, and no buyer were forthcoming, would the duty be charged on that value of £1,000 on that land, when it is plain that it has no real value of £1,000? That is a question to which I would like a plain answer.
§ Mr. LLOYD-GEORGEThat was a case raised by the hon. Member for Leicester the other day. It was discussed, and the right hon. Member for East Worcester (Mr. Austen Chamberlain) and the hon. and gallant Member for Chelmsford (Mr. Pretyman) took part in the discussion.
§ Mr. F. W. LAMBTONI want a simple answer.
§ Mr. LLOYD-GEORGEThe answer which I gave then is the answer which I repeat now. If a man can prove that he
§ has done his very best to sell land, advertised it, put up hoardings, and put it up for sale by auction, and he has had no bidder, there can be no better evidence of the absence of value as far as that land is concerned. In that case it would depend on whether the failure was because the reserve was too high or because there has been no bidding at all.
§ Mr. F. W. LAMBTONBut as regards the price put upon it by the Government valuer?
§ Mr. LLOYD-GEORGEThere can be no better evidence of the absence of value than a case of that kind. The owner could submit that as a very valuable piece of evidence.
§ Mr. HALDANE rose in his place and claimed to move, "That the Question be now put."
§ Question put, "That the Question be now put."
§ The Committee divided: Ayes, 197; Noes, 91.
773| Division No. 442.] | AYES. | [11.0 p.m. |
| Acland, Francis Dyke | Cornwall, Sir Edwin A. | Herbert, T. Arnold (Wycombe) |
| Adkins, w. Ryland D. | Crooks, William | Higham, John Sharp |
| Ainsworth, John Stirling | Dewar, Arthur (Edinburgh, S.) | Hobart, Sir Robert. |
| Armitage, R. | Dickson-Poynder, Sir John P. | Hodge, John |
| Atherley-Jones, L. | Duncan, C. (Barrow-in-Furness) | Holland, Sir William Henry |
| Baker, Joseph A. (Finsbury, E.) | Dunn, A. Edward (Camborne) | Hudson, Walter |
| Balfour, Robert (Lanark) | Dunne, Major E. Martin (Walsall) | Hyde, Clarendon G |
| Baring, Godfrey {Isle of Wight) | Ellbank, Master of | Illingworth, Percy H. |
| Barker, Sir John | Erskine, David C. | Jardine, Sir J. |
| Barnard, E. B | Evans, Sir S. T. | Jenkins, J. |
| Barnes, G. N | Everett, R. Lacey | Johnson, John (Gateshead) |
| Barran, Rowland Hirst | Ferens, T. R. | Jones, Leif (Appleby) |
| Barry, Redmond J. (Tyrone, N.) | Ferguson, R. C. Munro | Jones, William (Carnarvonshire) |
| Beale, W. P. | Findlay, Alexander | Kekewich, Sir George |
| Beauchamp, E. | Fuller, John Michael F. | Laidlaw, Robert |
| Beaumont, Hon. Hubert | Gibb, James (Harrow) | Lamb, Ernest H. (Rochester) |
| Beck, A. Cecil | Gill, A. H. | Lambert, George |
| Bellairs, Carlyon | Gladstone, Rt. Hon. Herbert John | Lamont, Norman |
| Berridge, T. H. D. | Glover, Thomas | Lehmann, R C. |
| Bowerman, C. W. | Goddard, Sir Daniel Ford | Lever, A. Levy (Essex, Harwich) |
| Brace, William | Greenwood, G. (Peterborough) | Levy, Sir Maurice |
| Branch, James | Grey, Rt. Hon. Sir Edward | Lewis, John Herbert |
| Bright, J. A. | Griffith, Ellis J. | Lloyd-George, Rt. Hon. David |
| Brocklehurst, W. B. | Gulland, John W. | Lough, Rt. Hon. Thomas |
| Bryce, J. Annan | Haldane, Rt. Hon. Richard B. | Lupton, Arnold |
| Burns, Rt. Hon. John | Hancock, J. G. | Luttrell, Hugh Fownes |
| Buxton, Rt. Hon. Sydney Charles | Harcourt, Rt. Hon. Lewis (Rossendale) | Lyell, Charles Henry |
| Byles, William Pollard | Harcourt, Robert V. (Montrose) | Lynch, H. B. |
| Carr-Gomm, H. W. | Hardie, J. Keir (Merthyr Tydvil) | Macdonald, J. R. (Leicester) |
| Causton, Rt. Hon. Richard Knight | Hardy, George A. (Suffolk) | Macnamara, Dr. Thomas J. |
| Cawley, Sir Frederick | Harmsworth, Cecil B. (Worcester) | M'Callum, John M. |
| Chance, Frederick William | Harvey, W. E. (Derbyshire, N.E.) | McKenna, Rt. Hon. Reginald |
| Channing, Sir Francis Allston | Harwood, George | M'Laren, H. D. (Stafford, W.) |
| Cherry, Rt. Hon. R. R. | Haworth, Arthur A. | M'Micking, Major G. |
| Clough, William | Hazel, Dr. A. E. W. | Marks, G. Croydon (Launceston) |
| Clynes, J. R. | Hedges, A. Paget | Mason, A. E. W. (Coventry) |
| Cobbold, Felix Thornley | Helme, Norval Watson | Massie, J. |
| Collins, Sir Wm. J. (St. Pancras, W.) | Hemmerde, Edward George | Masterman, C. F. G. |
| Compton-Rickett, Sir J. | Henderson, Arthur (Durham) | Miklem, Nathaniel |
| Cooper, G. J. | Henderson, J. McD. (Aberdeen, W.) | Mond, A. |
| Corbett, A. Cameron (Glasgow) | Henry, Charles S. | Morgan, G. Hay (Cornwall) |
| Corbett, C. H. (Sussex, E. Grinstead) | Herbert, Col. Sir Ivor (Mon. S.) | Morgan, J. Lloyd (Carmarthen) |
| Morse, L L. | Robson, Sir William Snowdon | Thorne, G. R. (Wolverhampton) |
| Morton, Alpheus Cleophas | Roch, Walter F. (Pembroke) | Verney, F. W. |
| Murray, Capt, Hon. A. C. (Kincard.) | Rogers, F. E. Newman | Walsh, Stephen |
| Myer, Horatio | Runciman, Rt. Hon. Walter | Walters, John Tudor |
| Napier, T. B. | Russell, Rt. Hon. T. W. | Warner, Thomas Courtenay T. |
| Newnes, F. (Notts, Bassetlaw) | Samuel, Rt. Hon. H. L. (Cleveland) | Wason, John Cathcart (Orkney) |
| Nicholls, George | Samuel, S. M. (Whitechapel) | Waterlow, D. S. |
| Nicholson, Charles N. (Doncaster) | Sears, J. E. | Wedgwood, Josiah C. |
| Norman, Sir Henry | Shackleton, David James | White, J. Dundas (Dumbartonshire) |
| Partington, Oswald | Sherwell, Arthur James | White, Sir Luke (York, E. R.) |
| Pearce, Robert (Staffs, Leek) | Shipman, Dr. John G. | Whitehead, Rowland |
| Pearce, William (Limehouse) | Silcock, Thomas Ball | Wilkie, Alexander |
| Perks, Sir Robert William | Simon, John Allsebrook | Willims, J. (Glamorgan) |
| Pickersgill, Edward Hare | Soames, Arthur Wellesley | Wills, Arthur Walters |
| Price, Sir Robert J. (Norfolk, E.) | Scares, Ernest J. | Wilson, Hon. G. G. (Hull, W.) |
| Priestley, Arthur (Grantham) | Stanley, Hon. A. Lyulph (Cheshire) | Wilson, John (Durham, Mid) |
| Rainy, A. Rolland | Steadman, W. C. | Wilson, J. W. (Worcestershire, N.) |
| Raphael, Herbert H. | Stewart, Halley (Greenock) | Wilson, P. W. (St. Pancras, S.) |
| Richards, Thomas (W. Monmouth) | Strauss, E. A. (Abingdon) | Wilson, W. T. (Westhoughton) |
| Richards, T. F. (Wolverhampton, W.) | Summerbell, T. | Wood, T. M'Kinnon |
| Richardson, A. | Taylor, John W. (Durham) | Yoxall, Sir James Henry |
| Roberts, Charles H. (Lincoln) | Taylor, Theodore C. (Radcliffe) | |
| Roberts, G. H. (Norwich) | Tennant, H. J. (Berwickshire) | TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey. |
| Robertson, Sir G. Scott (Bradford) | Thomas, Sir A. (Glamorgan, E.) | |
| Robinson, S. | Thompson, J. W. H. (Somerset, E.) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex, F. | Foster, P. S. | Pease, Herbert Pike (Darlington) |
| Anson, Sir William Reynell | Gardner, Ernest | Peel, Hon. W. R. W. |
| Anstruther-Gray, Major | Gibbs, G. A. (Bristol, West) | Percy, Earl |
| Arkwright, John Stanhope | Gordon, J. | Pretyman, E. G. |
| Ashley, W. W. | Guinness, Hon. R. (Haggerston) | Randles, Sir John Scurrah |
| Baldwin, Stanley | Guinness, Hon. W. E. (B. S. Edmunds) | Rawlinson, John Frederick peel |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Harrison-Broadley, H. B. | Renton, Leslie |
| Banbury, Sir Frederick George | Hay, Hon. Claude George | Renwick, George |
| Banner, John S. Harmood- | Hermon-Hodge, Sir Robert | Ronaldshay, Earl of |
| Barrie, H. T. (Londonderry, N.) | Hills, J. W. | Ropner, Colonel Sir Robert |
| Beach, Hon. Michael Hugh Hicks | Hope, James Fitzalan (Sheffield) | Rutherford, John (Lancashire) |
| Beckett, Hon. Gervase | Joynson-Hicks, William | Rutherford, Watson (Liverpool) |
| Bowles, G. Stewart | Kerry, Earl of | Salter, Arthur Clavell |
| Bull, Sir William James | Keswich, William | Smith, Hon. W. F. D. (Strand) |
| Butcher, Samuel Henry | King, Sir Henry Seymour (Hull) | Stanier, Seville |
| Carlile, E. Hildred | Lambton, Hon. Frederick William | Starkey, John B. |
| Cecil, Evelyn (Aston Manor) | Lane-Fox, G. R. | Staveley-Hill, Henry (Staffordshire) |
| Cecil, Lord R. (Marylebone, E.) | Law, Andrew Bonar (Dulwich) | Talbot, Lord E. (Chichester) |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Lee, Arthur H. (Hants, Fareham) | Thomson, W. Mitchell- (Lanark) |
| Chaplin, Rt. Hon. Henry | Lockwood, Rt. Hon. Lt.-Col. A. R. | Walker, Colonel W. H. (Lancashire) |
| Clyde, J. Avon | Long, Col. Charles W. (Evesham) | Walrond, Hon. Lionel |
| Coates, Major E. F. (Lewisham) | Lowe, Sir Francis William | Warde, Col. C. E. (Kent, Mid) |
| Corbett, T. L. (Down, North) | MacCaw, Wm. J. MacGeagh | Williams, Col. R. (Dorset, W.) |
| Courthope, G. Loyd | Marks, H. H. (Kent) | Willoughby de Eresby, Lord |
| Craig, Captain James (Down, E.) | Mildmay, Francis Bingham | Wilson, A. Stanley (York, E. R.) |
| 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. | |
| Faber, George Denison (York) | Nicholson, Wm. G. (Petersfield) | TELLERS FOR THE NOES.—Mr. Rowland Hunt and Captain Clive. |
| Fletcher, J. S. | Oddy, John James | |
| Forster, Henry William | Parkes, Ebenezer |
§ Question put accordingly, "That the words proposed to be left out stand part of the Clause."
774§ The Committee divided: Ayes, 196; Noes, 91.
777| Division No. 443.] | AYES. | [11.10 p.m. |
| Acland, Francis Dyke | Beauchamp, E. | Carr-Gomm, H. W. |
| Adkins, W. Ryland D. | Beaumont, Hon. Hubert | Causton, Rt. Hon. Richard Knight |
| Ainsworth, John Stirling | Bellairs, Carlyon | Cawley, Sir Frederick |
| Alden, Percy | Benn, W. (Tower Hamlets, St. Geo.) | Chance, Frederick William |
| Armitage, R. | Berridge, T. H. D. | Channing, Sir Francis Allston |
| Baker, Joseph A. (Finsbury, E.) | Bowerman, C. W. | Cherry, Rt. Hon. R. R. |
| Balfour, Robert (Lanark) | Brace, William | Clough, William |
| Baring, Godfrey (Isle of Wight) | Branch, James | Clynes, J. R. |
| Barker, Sir John | Bright, J. A. | Cobbold, Felix Thornley |
| Barnard, E B. | Brocklehurst, W. B. | Collins, Sir Wm. J. (St. Pancras, W.) |
| Barnes, G. N. | Bryce, J. Annan | Compton-Rickett, Sir J. |
| Barran, Rowland Hirst | Burns, Rt. Hon. John | Cooper, G. J. |
| Barry, Redmond J. (Tyrone, N.) | Buxton, Rt. Hon. Sydney Charles | Corbett, A. Cameron (Glasgow) |
| Beale, W. P. | Byles, William Pollard | Corbett, C. H. (Sussex, E. Grinstead) |
| Cornwall, Sir Edwin A. | Kekewich, Sir George | Robinson, S. |
| Crooks, William | Laidlaw, Robert | Robson, Sir William Snowdon |
| Dewar, Arthur (Edinburgh, S.) | Lamb, Ernest H. (Rochester) | Roch, Walter F. (Pembroke) |
| Dickson-Poynder, Sir John P. | Lambert, George | Rogers, F. E. Newman |
| Duncan, C. (Barrow-in-Furness) | Lamont, Norman | Runciman, Rt. Hon. Walter |
| Dunn, A. Edward (Camborne) | Lehmann, R. C. | Russell, Rt. Hon. T. W. |
| Dunne, Major E. Martin (Walsall) | Lever, A. Levy (Essex, Harwich) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Elibank, Master of | Levy, Sir Maurice | Samuel, S. M. (Whitechapel) |
| Evans, Sir S. T. | Lewis, John Herbert | Sears, J. E. |
| Everett, R. Lacey | Lloyd-George, Rt. Hon. David | Seely, Colonel |
| Ferens, T. R. | Lough, Rt. Hon. Thomas | Shackleton, David James |
| Ferguson, R. c. Munro | Lupton, Arnold | Sherwell, Arthur James |
| Findlay, Alexander | Luttrell, Hugh Fownes | Shipman, Dr. John G. |
| Fuller, John Michael F. | Lyell, Charles Henry | Silcock, Thomas Ball |
| Gibb, James (Harrow) | Lynch, H. B. | Simon, John Allsebrook |
| Gill, A. H. | Macdonald, J. R. (Leicester) | Soames, Arthur Wellesley |
| Gladstone, Rt. Hon. Herbert John | Macnamara, Dr. Thomas J. | Soares, Ernest J |
| Glover, Thomas | M'Callum, John M. | Stanley, Hon. A. Lyulph (Cheshire) |
| Goddard, Sir Daniel Ford | McKenna, Rt. Hon. Reginald | Steadman, W. C. |
| Greenwood, G. (Peterborough) | M'Laren, H. D. (Stafford, W.) | Stewart, Halley (Greenock) |
| Grey, Rt. Hon. Sir Edward | M'Micking, Major G. | Strauss, E. A. (Abingdon) |
| Griffith, Ellis J. | Marks, G. Croydon (Launceston) | Summerbell, T. |
| Gulland, John W. | Mason, A. E. W. (Coventry) | Taylor, John W. (Durham) |
| Haldane, Rt. Hon. Richard B. | Massie, J. | Taylor, Theodore C. (Radcliffe) |
| Hancock, J. G. | Masterman, C. F. G. | Tennant, H. J. (Berwickshire) |
| Harcourt, Rt. Hon. Lewis (Rossendale) | Micklem, Nathaniel | Thomas, Sir A. (Glamorgan, E.) |
| Harcourt, Robert V. (Montrose) | Mond, A. | Thompson, J. W. H. (Somerset, E.) |
| Hardie, J. Keir (Merthyr Tydvil) | Morgan, G. Hay (Cornwall) | Thorne, G. R. (Wolverhampton) |
| Hardy, George A. (Suffolk) | Morgan, J. Lloyd (Carmarthen) | Verney, F. W. |
| Harmsworth, Cecil B. (Worcester) | Morse, L. L | Walsh, Stephen |
| Harvey, W. E. (Derbyshire, N.E.) | Morton, Alpheus Cleophas | Walters, John Tudor |
| Harwood, George | Murray, Capt. Hon. A. C. (Kincard.) | Warner, Thomas Courtenay T. |
| Haworth, Arthur A. | Myer, Horatio | Wason, John Cathcart (Orkney) |
| Hazel, Dr. A. E. W. | Napier, T. B. | Waterlow, D. S. |
| Hedges, A. Paget | Newnes, F. (Notts, Bassetlaw) | Wedgwood, Josiah C. |
| Helme, Norval Watson | Nicholls, George | White, J. Dundas (Dumbartonshire) |
| Hemmerde, Edward George | Nicholson, Charles N. (Doncaster) | White, Sir Luke (York, E. R.) |
| Henderson, Arthur (Durham) | Norman, Sir Henry | Whitehead, Rowland |
| Henry, Charles S. | Partington, Oswald | Wilkie, Alexander |
| Herbert, Col. Sir Ivor (Mon. S.) | Pearce, Robert (Staffs, Leek) | Williams, J. (Glamorgan) |
| Herbert, T. Arnold (Wycombe) | Pearce, William (Limehouse) | Wills, Arthur Walters |
| Higham, John Sharp | Pickersgill, Edward Hare | Wilson, Hon. G. G. (Hull, W.) |
| Hobart, Sir Robert | Price, Sir Robert J. (Norfolk, E.) | Wilson, John (Durham, Mid) |
| Hodge, John | Priestley, Arthur (Grantham) | Wilson, J. W. (Worcestershire, N) |
| Holland, Sir William Henry | Rainy, A. Rolland | Wilson, P. W. (St. Pancras, S.) |
| Hudson, Walter | Raphael, Herbert H. | Wilson, W. T. (Westhoughton) |
| Hyde, Clarendon G. | Richards, Thomas (W. Monmouth) | Wood, T. M'Kinnon |
| Illingworth, Percy H. | Richards, T. F. (Wolverhampton, W.) | Yoxall, Sir James Henry |
| Jardine, Sir J. | Richardson, A. | |
| Jenkins, J. | Ridsdale, E. A. | |
| Johnson, John (Gateshead) | Roberts, Charles H. (Lincoln) | TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey. |
| Jones, Leif (Appleby) | Roberts, G. H. (Norwich) | |
| Jones, William (Carnarvonshire) | Robertson, Sir G. Scott (Bradford) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Doughty, Sir George | Lockwood, Rt. Hon. Lt.-Col. A. R. |
| Anson, Sir William Reynell | Douglas, Rt. Hon. A. Akers- | Long, Col. Charles W. (Evesham) |
| Anstruther-Gray, Major | Du Cros, Arthur | Lowe, Sir Francis William |
| Arkwright, John Stanhope | Faber, George Denison (York) | MacCaw, Wm J. MacGeagh |
| Ashley, W. W. | Fletcher, J. S. | Marks, H. H. (Kent) |
| Baldwin, Stanley | Forster, Henry William | Moore, William |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Foster, P. S. | Morpeth, Viscount |
| Banbury, Sir Frederick George | Gardner, Ernest | Morrison-Bell, Captain |
| Banner, John S. Harmood- | Gibbs, G. A. (Bristol, West) | Newdegate, F. A. |
| Barrie, H. T. (Londonderry, N.) | Gordon, J. | Nicholson, Wm. G. (Petersfield) |
| Beach, Hon. Michael Hugh Hicks | Guinness, Hon. R. (Haggerston) | Parkes, Ebenezer |
| Beckett, Hon. Gervase | Guinness, Hon. W. E. (B. S. Edmunds) | Pease, Herbert Pike (Darlington) |
| Bowles, G. Stewart | Harrison-Broadley, H. B. | Peel, Hon. W. R. W. |
| Bull, Sir William James | Hay, Hon. Claude George | Percy, Earl |
| Butcher, Samuel Henry | Hermon-Hodge, Sir Robert | Pretyman, E. G. |
| Carlile, E. Hildred | Hills, J. W. | Randles, Sir John Scurrah |
| Cecil, Evelyn (Aston Manor) | Hope, James Fitzalan (Sheffield) | Rawlinson, John Frederick Peel |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Hunt, Rowland | Renton, Leslie |
| Chaplin, Rt. Hon. Henry | Joynson-Hicks, William | Renwick, George |
| Clive, Percy Archer | Kerry, Earl of | Ronaldshay, Earl of |
| Clyde, J. Avon | Keswick, William | Ropner, Colonel Sir Robert |
| Coates, Major E. F. (Lewisham) | King, Sir Henry Seymour (Hull) | Rutherford, John (Lancashire) |
| Corkett, T. L. (Down, North) | Lambton, Hon. Frederick William | Rutherford, Watson (Liverpool) |
| Courthope S. Loyd | Lane-Fox, G. R | Salter, Arthur Clavell |
| Craig, Captain James (Down, E.) | Law, Andrew Bonar (Dulwich) | Smith, Hon. W. F. D. (Strand) |
| Dickson, Rt. Hon. C. Scott- | Lee, Arthur H. (Hants, Fareham) | Stanier, Beville |
| Starkey, John R. | Warde, Col. C. E. (Kent, Mid) | Wyndham, Rt. Hon. George |
| Staveley-Hill, Henry (Staffordshire) | Williams, Col. R. (Dorset, W.) | Younger, George |
| Talbot, Lord E. (Chichester) | Willoughby de Eresby, Lord | |
| Thompson, W. Mitchell- (Lanark) | Wilson, A. Stanley (York, E. R.) | TELLERS FOR THE NOES.—Lord |
| Walker, Colonel W. H. (Lancashire) | Winterton, Earl | R. Cecil and Mr. Mildmay. |
| Walrond, Hon. Lionel |
§ Mr. HALDANE moved "That in respect of the words of the Clause to the words in Section (3) 'but subject' ['shall be deemed to be sold free from incumbrances, but subject'], the Chair be
778§ empowered to select the Amendments to be proposed."
§ Question put.
§ The Committee divided: Ayes, 195; Noes, 91.
779| Division No. 444.] | AYES. | [11.20 p.m. |
| Acland, Francis Dyke | Harcourt, Rt. Hon. Lewis (Rossendale) | Norman, Sir Henry |
| Adkins, W. Ryland D. | Harcourt, Robert V. (Montrose) | Partington, Oswald |
| Ainsworth, John Stirling | Hardie, J. Keir (Merthyr Tydvil) | Paulton, James Mellor |
| Alden, Percy | Hardy, George A. (Suffolk) | Pearce, Robert (Staffs, Leek) |
| Armitage, R. | Harmsworth, Cecil B. (Worcester) | Pearce, William (Limehouse) |
| Atherley-Jones, L. | Harvey, W. E. (Derbyshire, N.E.) | Pickersgill, Edward Hare |
| Baker, Joseph A. (Finsbury, E.) | Harwood, George | Price, Sir Robert J. (Norfolk, E.) |
| Balfour, Robert (Lanark) | Haworth, Arthur A. | Priestley, Arthur (Grantham) |
| Baring, Godfrey (Isle of Wight) | Hazel, Dr. A. E. W. | Rainy, A. Rolland |
| Barnard, E. B. | Hedges, A. Paget | Raphael, Herbert H. |
| Barnes, G. N. | Helme, Norval Watson | Richards, Thomas (W. Monmouth) |
| Barran, Rowland Hirst | Hemmerde, Edward George | Richards, T. F. (Wolverhampton, W.) |
| Barry, Redmond J. (Tyrone, N.) | Henderson, Arthur (Durham) | Richardson, A. |
| Beale, W. P. | Henry, Charles S | Ridsdale, E. A. |
| Beauchamp, E. | Herbert, Col. Sir Ivor (Mon. S.) | Roberts, Charles H. (Lincoln) |
| Beaumont, Hon. Hubert | Herbert, T. Arnold (Wycombe) | Roberts, G. H. (Norwich) |
| Bellairs, Carlyon | Higham, John Sharp | Robertson, Sir G. Scott (Bradford) |
| Benn, W. (Tower Hamlets, St. Geo.) | Hobart, Sir Robert | Robinson, S. |
| Berridge, T. H. D. | Hobhouse, Rt. Hon. Charles E. H. | Robson, Sir William Snowdon |
| Bowerman, C. W. | Hodge, John | Roch, Walter F. (Pembroke) |
| Brace, William | Holland, Sir William Henry | Rogers, F. E. Newman |
| Branch, James | Hudson, Walter | Runciman, Rt. Hon. Walter |
| Bright, J. A. | Hyde, Clarendon G. | Russell, Rt. Hon. T. W. |
| Brocklehurst, W. B. | Illingworth, Percy H. | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bryce, J. Annan | Jardine, Sir J. | Samuel, S. M. (Whitechapel) |
| Burns, Rt. Hon. John | Jenkins, J. | Seely, Colonel |
| Buxton, Rt. Hon. Sydney Charles | Johnson, John (Gateshead) | Shackleton, David James |
| Byles, William Pollard | Jones, Leif (Appleby) | Sherwell, Arthur James |
| Carr-Gomm, H. W. | Jones, William (Carnarvonshire) | Shipman, Dr. John G. |
| Causton, Rt. Hon. Richard Knight | Kekewich, Sir George | Silcock, Thomas Ball |
| Cawley, Sir Frederick | Laidlaw, Robert | Simon, John Allsebrook |
| Chance, Frederick William | Lamb, Ernest H. (Rochester) | Soames, Arthur wellesley |
| Channing, Sir Francis Allston | Lambert, George | Soares, Ernest J. |
| Cherry, Rt. Hon. R. R. | Lamont, Norman | Stanley, Hon. A. Lyulph (Cheshire) |
| Clough, William | Lehmann, R. C. | Steadman, W. C. |
| Clynes, J. R | Lever, A. Levy (Essex, Harwich) | Stewart, Hailey (Greenock) |
| Cobbold, Felix Thornley | Levy, Sir Maurice | Strauss, E. A. (Abingdon) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Lewis, John Herbert | Summerbell, T. |
| Cooper, G. J. | Lloyd-George, Rt. Hon. David | Taylor, John W. (Durham) |
| Corbett, A. Cameron (Glasgow) | Lough, Rt. Hon. Thomas | Taylor, Theodore C. (Radcliffe) |
| Corbett, C. H. (Sussex, E. Grinstead) | Lupton, Arnold | Tennant, H. J. (Berwickshire) |
| Cornwall, Sir Edwin A. | Luttrell, Hugh Fownes | Thomas, Sir A. (Glamorgan, E.) |
| Crooks, William | Lyell, Charles Henry | Thompson, J. W. H. (Somerset, E.) |
| Dewar, Arthur (Edinburgh, S.) | Lynch, H. B. | Thorne, G. R. (Wolverhampton) |
| Dickson-Poynder, Sir John P. | Macdonald, J. R. (Leicester) | Verney, F. W. |
| Duncan, C. (Barrow-in-Furness) | Macnamara, Dr. Thomas J. | Walsh, Stephen |
| Dunn, A. Edward (Camborne) | M'Callum, John M. | Walters, John Tudor |
| Dunne, Major E. Martin (Walsall) | McKenna, Rt. Hon. Reginald | Warner, Thomas Courtenay T. |
| Elibank, Master of | M'Laren, H. D. (Stafford, W.) | Wason, John Cathcart (Orkney) |
| Evans, Sir S. T. | M'Micking, Major G. | Waterlow, D. S. |
| Everett, R. Lacey | Marks, G. Croydon (Launceston) | Wedgwood, Josiah C. |
| Ferens, T. R. | Mason, A. E. W. (Coventry) | White, J. Dundas (Dumbartonshire) |
| Ferguson, R. C. Munro | Massie, J. | White, Sir Luke (York, E. R.) |
| Findlay, Alexander | Masterman, C. F. G. | Wilkie, Alexander |
| Fuller, John Michael F. | Micklem, Nathaniel | Williams, J. (Glamorgan) |
| Gibb, James (Harrow) | Mond, A. | Wills, Arthur Walters |
| Gill, A. H. | Morgan, G. Hay (Cornwall) | Wilson, Hon. G. G. (Hall, W.) |
| Gladstone, Rt. Hon. Herbert John | Morgan, J. Lloyd (Carmarthen) | Wilson, John (Durham, Mid) |
| Glover, Thomas | Morse, L. L. | Wilson, J. W. (Worcestershire, N.) |
| Goddard, Sir Daniel Ford | Morton, Alpheus Cleophas | Wilson, P. W. (St. Pancras, S.) |
| Greenwood, G. (Peterborough) | Murray, Capt. Hon. A. C. (Kincard.) | Wilson, W. T. (Westhoughton) |
| Grey, Rt. Hon. Sir Edward | Myer, Horatio | Wood, T. M'Kinnon |
| Griffith, Ellis J. | Napier, T. B. | Yoxall, Sir James Henry |
| Gulland, John W. | Newnes, F. (Notts, Bassetlaw) | |
| Haldane, Rt. Hon. Richard B. | Nicholls, George | TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey. |
| Hancock, J. G. | Nicholson, Charles N. (Doncaster) | |
| NOES. | ||
| Anson, Sir William Reynell | Gardner, Ernest | Peel, Hon. W. R. W. |
| Anstruther-Gray, Major | Gibbs, G. A. (Bristol, West) | Percy, Earl |
| Arkwright, John Stanhope | Gordon, J. | Pretyman, E. G. |
| Ashley, W. W. | Guinness, Hon. R. (Haggerston) | Randles, Sir John Scurrah |
| Baldwin, Stanley | Guinness, Hon. W. E. (B. S. Edmunds) | Rawlinson, John Frederick Peel |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Harris, Frederick Leverton | Renton, Leslie |
| Banbury, Sir Frederick George | Harrison-Broadley, H. B. | Renwick, George |
| Banner, John S. Harmood- | Hay, Hon. Claude George | Ronaldshay, Earl of |
| Barrie, H. T. (Londonderry, N.) | Hermon-Hodge, Sir Robert | Ropner, Colonel Sir Robert |
| Beach, Hon. Michael Hugh Hicks | Hills, J. W. | Rutherford, John (Lancashire) |
| Beckett, Hon. Gervase | Hope, James Fitzalan (Sheffield) | Rutherford, Watson (Liverpool) |
| Bowles, G. Stewart | Hunt, Rowland | Salter, Arthur Clavell |
| Bull, Sir William James | Joynson-Hicks, William | Smith, Hon. W. F. D. (Strand) |
| Butcher, Samuel Henry | Kerry, Earl of | Stanier, Beville |
| Carlile, E. Hildred | Keswick, William | Starkey, John R. |
| Cecil, Evelyn (Aston Manor) | King, Sir Henry Seymour (Hull) | Staveley-Hill, Henry (Staffordshire) |
| Cecil, Lord R. (Marylebone, E.) | Lambton, Hon. Frederick William | Talbot, Lord E. (Chichester) |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Lane-Fox, G. R. | Thompson, W. Mitchell- (Lanark) |
| Chaplin, Rt. Hon. Henry | Lee, Arthur H. (Hants, Fareham) | Walker, Colonel W. H. (Lancashire) |
| Clive, Percy Archer | Lockwood, Rt. Hon. Lt.-Col. A. R. | Walrond, Hon. Lionel |
| Clyde, J. Avon | Long, Col. Charles W. (Evesham) | Warde, Col. C. E. (Kent, Mid) |
| Coates, Major E F. (Lewisham) | Lowe, Sir Francis William | Williams, Col. R. (Dorset, W.) |
| Corbett, T. L. (Down, North) | MacCaw, Wm. J. MacGeagh | Willoughby de Eresby, Lord |
| Courthope, G. Loyd | Marks, H. H. (Kent) | Wilson, A. Stanley (York, E. R.) |
| Craig, Captain James (Down, E.) | Mildmay, Francis Bingham | Winterton, Earl |
| Dickson, Rt. Hon. C. Scott- | Moore, William | Wyndham, Rt. Hon. George |
| Doughty, Sir George | Morpeth, Viscount | Younger, George |
| Douglas, Rt. Hon. A. Akers- | Morrison-Bell, Captain | |
| Du Cros, Arthur | Newdegate, F. A. | TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W. |
| Faber, George Denison (York) | Nicholson, Wm. G. (Petersfield) | |
| Fletcher, J. S. | Parkes, Ebenezer | Forster. |
| Foster, P. S | Pease, Herbert Pike (Darlington) |
The CHAIRMANI now call upon the hon. Member for Ayr Burghs to move his Amendment in its altered form.
§ Mr. GEORGE YOUNGER moved at the end of Section (2) to insert the words, "and of improvements of whatever nature on, in, or under the soil executed in order to prepare the land for the purpose for which it is actually used."
§ The object of altering my Amendment in that way is to leave out for the present the question of reclamation, levelling and so forth which more properly can be dealt with under Section (4). We are now considering from what improvements the land should be divested in order to arrive at the somewhat abstract valuation which is to be placed upon it, and it must be obvious that the section as it stands does not go nearly far enough in stating what this divesting should consist of. Section (2) provides that "the site value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller might be expected to realise." The words "by a willing seller" were introduced into the Scotch Land Bill by an Amendment of mine, which I do not think was a very good one. The section goes on to provide, "if the land were divested of any buildings, and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or 780 used in connection with any such buildings." That is a very limited divesting. It would include drains and all that sort of thing under the soil in so far as they were connected with the structure, but it would not include, as it certainly ought to include, arterial and the smaller tile drains which are necessary on those farms and which form a very large part of the expenditure in the equipment of a farm.
§ Therefore you want words of a much wider character, giving a much more clear definition of the strictures of which the land is to be divested, and there is sufficient width for this purpose in the words I have proposed. If we are to have an abstract valuation of this kind—which I am bound to say is the most nonsensical I ever heard of—we should at least have an accurate and not an inaccurate abstraction. Anyone who knows anything about this matter, and the expense which landlords have been put to preparing land for this purpose, know that the limiting words in Section (2) give absolutely no proper deduction for the expenditure which in most cases is necessary to bring that land into agricultural use.
§ When you consider that agricultural land in this country was raised, I believe, nearly one-third in value by fencing alone, it will be realised how very much depends upon a careful definition of structures and improvements which you include 781 in this particular clause if you are at be at all fair to those who have spent money in developing their land. I am bound to tell the Chancellor of the Exchequer quite honestly that if he thinks he wall have much value left after he has taken out this expenditure he is mightily mistaken. The actual cost of the structures and improvements of many farms in Scotland with which I am acquainted total to a great deal more than the fee simple of the farm. It was all right when rents were £3 per acre, but it is totally different now they are 19s. or £1. Apart altogether from the dishonesty which would be bound to result if you tax a thing more than its annual value, it is obvious there would be no basis of rating at all. We are concerned to see we are strictly fair in giving an allowance for all that large expenditure, and I do not think the Chancellor of the Exchequer, if he looks at this point carefully, will deny that it requires to be very much more widely expressed in order to give effect to what is obviously his own intention of giving full credit for all the expenditure which has been incurred to bring the land to agricultural use.
§ Mr. LLOYD-GEORGEThe hon. Member very frankly informed me that he has come to the conclusion that an Amendment which he moved last year to the Scotch Land Value Bill was a very bad one.
§ Mr. YOUNGERTwo years ago.
§ Mr. LLOYD-GEORGEI have no doubt if the hon. Member takes another two years he will come to exactly the same conclusion with regard to his present Amendment.
§ Mr. YOUNGERNo, I think it is an excellent one.
§ Mr. LLOYD-GEORGEAnd I do not despair of convincing the hon. Member in two minutes that is the case. As far as I can understand, this is a remnant of some controversy about Scotch land values.
§ Mr. YOUNGEROh, no.
§ Mr. LLOYD - GEORGEI rather gathered he was answering some argument of the Lord Advocate's two years ago.
§ Mr. YOUNGERThat would take me two hours.
§ Mr. LLOYD-GEORGEI could not follow the merits of the controversy, and I could not see that it had the slightest 782 reference to the proposal now under discussion. What is the proposal? As far as I can understand, the hon. Member proposes that improvements of whatever nature on, in, or under the soil, executed in order to prepare the land for the purpose for which it is actually used, shall be deducted in ascertaining the original site value. How does the hon. Member propose to distinguish between that and the deductions made in Section (4) Every improvement of a permanent character and, more than that, the value attributable to improvements of a permanent character are deducted there. He proposes here that the cost of all improvements of whatever character which fit the land for the time being shall be deducted.
§ Mr. YOUNGERThat is for any business other than agriculture. It is quite a different thing.
§ Mr. LLOYD-GEORGEI do not want to anticipate—
§ Mr. YOUNGERIt is the whole point.
§ Mr. LLOYD-GEORGEWhy does the hon. Gentleman want to raise the Debate here? Section (4) will have to be reconsidered. Why does he want to interpose these words here? How does he distinguish between words interposed here and those introduced in Section (4)? They seem to me to answer exactly the same purpose.
§ Mr. PRETYMANI think I can make this plain to the Chancellor of the Exchequer. The distinction between Section (2) and Section (4) is clear. The former divests the land of all the different improvements made in it as the result of expenditure upon it for the purpose of the original use, whereas Section (4) deducts from the value any expenditure for the purpose of fitting the land for its new use. The object of this Amendment is absolutely consistent with that.
§ Mr. LLOYD-GEORGEI want to be perfectly clear, but that seems to me to be deducting it twice over.
§ Mr. PRETYMANNot at all. If the right hon. Gentleman will look at the words of the Amendment he will see that it follows the exact scheme of the Bill. The words do not specially refer to agriculture only; they refer to the fact that the land may not necessarily be used for purely agricultural purposes. There may be changes on the land. This Amendment proposes that the land shall be divested 783 not only of the buildings which are upon it, but of anything else which has been put there in order to fit it for its original use—whatever that use may be. There may be some other use than agriculture which will not make the land fully developed land. If it is undeveloped land it is still being used for some purpose, and any expenditure which has been incurred upon that land to fit it for its original use, and anything which results from that expenditure on the land it shall be divested of. The Amendment only makes it perfectly clear that the land is to be deemed to be divested of anything put upon it for its original use. When we come to Section (4) we are dealing with something quite different. We are dealing with expenditure calculated to fit the land for its new use. The object of this Amendment is particularly in regard to the Undeveloped Land Duty, because you want to keep your site value low for the purpose of that duty. I am perfectly aware it acts to some extent against the Increment Value Duty. But the same deductions are allowed in both cases. My object when I speak in these Debates is not invariably to reduce the amount of the tax, and here I am simply pointing out that the hardship of this Undeveloped Land Duty is more inexcusable than in the case of the Increment Value Duty.
To create a site value which is not really there, and then charge Undeveloped Land Duty upon it, seems to me to be the most indefensible thing in the Bill. All this Amendment does is to carry out the scheme of Clause 2.
§ Mr. LLOYD-GEORGEI really am not quite clear how the hon. Gentleman reads this Amendment. He is going to separate the deductions in Section (2) from the deductions in Section (4). He says, in the first place, you must strip the land of all improvements made for its original use.
§ Mr. PRETYMANDivest it of all improvements for its original use.
§ Mr. LLOYD-GEORGESupposing the value before you start is £1,000, and you divest the land of improvements to the extent of £300, that leaves an original site value of £700. Then you deduct improvements of the character described m Section (4). Probably they are not exactly the same improvements, but some of them will be, and you will be deducting them twice over. It is quite open to the hon. Gentleman to say that the im- 784 provements mentioned in Section (4) are not wide enough, but that is a question of amending Section (4) rather than Section (2).
§ Mr. PRETYMANIf you wanted to amend Section (4) in that sense you will have to alter the whole scheme for it. These improvements are all limited for the purpose of fitting the land for its new use, and they cannot be deducted under the scheme of Section (4). Of course, if you are prepared to alter the whole scheme and amalgamate Section (4) and Section (2), it would be different, but whatever the improvements are under Section (4), the deductions are only those which are made for the purpose of fitting the land for its new use. Unless that it is so they cannot be deducted. I would suggest that this Amendment is the only form in which you could keep that distinction. Its object is perfectly obvious, and you do not do the same thing for the two separate purposes; you do not take it twice, and no valuer would do that; you have something which is done to fit the land for its original use, and you divest it of that, and something to fit it for its new use, and you deduct that; you cannot put the improvements referred to in this Amendment in Section (4) because they have not been made for the purpose of fitting the land for its new use.
§ Mr. LLOYD-GEORGEIt may not be a new use at all. It may be the same use. It is for fitting the land for the purpose for which it is actually used—that is the proposal of the hon. Gentleman—used at the time the estimate is made. The same class of improvement may be credited to the owner of the site under Section (4).
§ Mr. PRETYMANI am sure my hon. Friend would be prepared to put in Section (4) the words "exclusive of anything of which the land is to be divested" in Section (2). That would make it perfectly plain.
§ Mr. LLOYD-GEORGEBut what may happen in that case is this: You may spend money for the purpose of fitting a site in one case for one use, and you may in the second place deduct in respect of money expended for the purpose of fitting it for another use. You should not be allowed to deduct a thing twice over, because money spent upon the first case is money which is not of the slightest use when you deduct it in the second case. Here is another point. The money which is deducted in respect of im- 785 provements ought to be in respect of permanent improvements when you are dealing with site value, which is the foundation for all time of the increment as well as the ½d. tax. This will be money which could be spent on purely temporary improvements. You ought not to deduct for purely temporary improvements when you are dealing with the site value, which is the foundation for 10 or 50 years, or for all time.
§ Mr. PRETYMANSurely the Chancellor of the Exchequer is absolutely departing from his own principle in Section (2). On what principle can you defend the deduction of any buildings which are there now, which are merely temporary, and put there for the present use of the land? The whole principle, as we understand it, which he has suggested is that the land is to be deemed in the first instance to be the bare site, freed of everything which has been put upon it. He has embodied that principle in the section in regard to structures, and I cannot think he is either following his own principle or any principle at all in refusing this Amendment, which merely applies his own principle to all improvements as well as structures. Why should you do a thing for structures and buildings which you do not do for a drain? On what principle are you to divest the land of a structure, such as a shed, which has been put upon it for temporary use at the time at which the valuation is made, when you refuse to deduct for a drain? There is no difference whatever.
§ Mr. LLOYD-GEORGEThe reason is that you want to get at the value of the land apart from the structure. That is the principle on which you tax site values in every country in the world, and we are simply following the precedent which has been set whenever there is an attempt to separate site from structure. Drains may be a purely temporary improvement, and deducting them will not give you the site value. But stripping the land of buildings gives you the site value of the land, and that is what you want to get at. But when you come to deduct improvements, in my judgment you ought only to deduct such improvements as are of a permanent character and really contribute to the real value of the site.
§ Mr. YOUNGERMay I refer the right hon. Gentleman to his own Government's definition of "improvements" in the 786 Scotch Land Values Bill? This was a scientific clause, as I understand it, and it included the permanent improvements which are required to be deducted before you get site value. The clause provides for the inclusion of the value of drains at the time of the valuation. I am asking no more in my Amendment than the Government gave in their own Bill which twice passed this House. It was the subject of great and prolonged Debate, and I cannot understand on what possible ground the right hon. Gentleman can say that these improvements should be treated differently now.
§ Mr. AUSTEN CHAMBERLAINPossibly the Chancellor of the Exchequer would assist us if he would give an explanation of the difference between Sections (2) and (4). Why are certain things put in Section (2) and other things in Section (4)? My hon. Friend the Member for Chelmsford (Mr. Pretyman) has given his interpretation of the difference between the two sections, and if the right hon. Gentleman does not accept that interpretation, I should be very much obliged if he would tell us what is his own explanation. I do not understand why the Government have divided Sections (2) and (4) at all. Section (2) says that site value is so and so; then Section (4) says that from that site value there shall be allowed certain deductions. When you turn over the page you find that the site value so reduced shall be the site value for the purpose of the tax. What on earth is the meaning of draftsmanship of that kind? First you say that A is the site value, then you say that you may deduct B, and that A minus B shall be the site value. A learned Cambridge professor, in a letter to "The Times," has pointed out that you never can understand the principles of this taxation unless you explain them by means of algebra. The Solicitor-General says that A is the site value.
§ The SOLICITOR - GENERAL(Sir Samuel Evans)What I say is that if there are no deductions the site value remains A.
§ Mr. AUSTEN CHAMBERLAINI wonder whether that is as clear to other Members of the Committee as it is to the Solicitor-General. A minus B is the site value, but if there are no deductions A remains the site value. Would the hon. and learned Gentleman state it again.
§ Sir S. EVANSWhat I mean is this. You have to arrive at site value. You 787 may have site value which is not subject to any deduction at all. That is perfectly clear. But there may be a piece of land before you can arrive at the site value of which you must have some deduction if Section (4) is to form part of the scheme; that is to say, if you have some of these improvements which are of a permanent nature in accordance with the provisions of that section, they are to be deducted in arriving at the site value of that particular piece of land.
§ 12 A. M.
§ Mr. AUSTEN CHAMBERLAINWhat I want to know is why the Government drafted the Bill in this form, and what is the reason for putting certain deductions into Section (2) and other deductions into Section (4)? Section (2) says that a certain thing is the site value. Section (4) says that for the site value you must deduct something else. But Section (2) says that the site value is the total value when the land is divested of certain things. But that does not mean you are to make an allowance for divesting land of timber which is not growing any, or divesting it of structures which are not on it. Of course, you must assume that these things will only be deducted where they are there to deduct. The Bill says that the site value is the land divested of those things of which you may divest it under Section (2). Why then does Section (4) say that from that site value there shall be deductions? Obviously, when you have deducted something from the site value it is no longer the site value, but something different. But when you turn over a page and subtract something for the site value, you still have the site value. A minus B equals A; and that not merely when B equals nothing, which would be the ordinary solution of the problem, but when B equals any figure you like to put on it. Whether it is £100, £1,000, or £10,000, A minus B is still equal to what A was before. I think that the Chancellor of the Exchequer will see my difficulty. Obviously what the Bill says is a mathematical, algebraical absurdity in that respect. If what you get in Section (2) is the site value, then what you get in Section (4) is not the site value. If what you get in Section (4) is the site value, then what you get in Section (2) is not the site value. Why have the Government confused matters by dividing the thing up into two sections and why did they not state in a single section that the site value is the land 788 divested of everything that they have put into Section (2), and after making allowance for everything that they also deduct in Section (4)? That would have been logical and would have produced a sum which would work out in algebra and prove to be correct. I come back to the early part of the Debate. There is one observation I have to make on the Chancellor of the Exchequer's ground for refusing the Amendment. My hon. Friend is urging him to exempt purely temporary improvements which have lost their value. To do that is to ask twice over for the same thing; that is to say, you spend money on the land to prepare it for one purpose, and subsequently you spend money on the land to prepare it for another purpose. By reason of development the money spent first of all becomes idle. Does that bar the claim for an allowance on the second sum? You are not asking for the sum twice over; you are asking for two sums, each spent at the appointed time and in the appointed order for the development of the land. If the Chancellor of the Exchequer will kindly look at Section (2) he will see that he is labouring under a complete delusion when he supposes that the land is only to be divested of permanent improvements. Take the drains themselves as the substructures. These structures may be of a very temporary character. It is so difficult to argue with the Government, because the arguments they themselves use apparently have no reference to the facts of the case. A structure may be a temporary improvement, such as a shed run up to shelter cows. It may be that the drains connected with the structure are improvements of a temporary character, while the more permanent drains alongside will not be allowed for, because the Chancellor of the Exchequer says they are temporary. But we need not rest the case on drains or substructures. Does the right hon. Gentleman mean that fruit trees and fruit bushes and other things growing are permanent improvements? I know what it is, the Chancellor of the Exchequer has been misled by the expression, permanent pasture. I think if he will consult agriculturists he will find that these things are not so.
§ Mr. LLOYD-GEORGEThe difference between the two cases is this: We want to ascertain the basis of the tax on site value. If you look at Section (4) you will find that a deduction is made for the pur- 789 pose of ascertaining the site value, and what is the process? The first process, as I have already pointed out, is to divest the land of buildings and structures, of fruit trees and bushes, and so on. The next step is to deduct the value attributable to other improvements which may not be on that piece of land at all. It is perfectly true that the hon. Member has a later Amendment, but in substance he is moving exactly the same thing. For instance, there are the works of drainage and reclamation that may not be on that piece of land.
§ Mr. YOUNGERI have taken them out.
§ Mr. LLOYD-GEORGEI have pointed out that substantially it is the same Amendment. The only difference is that the hon. Gentleman is satisfied it is far better to have general comprehensive words, because he imagines he may have left out something else.
§ Mr. YOUNGERI do.
§ Mr. LLOYD-GEORGEAt any rate he does include works of reclamation. Therefore it is the same thing. I want to get some specific illustration to work on. The works of reclamation would not be on the building site, or say would be just inside or on that particular unit possibly. What the hon. Gentleman means, and I think wants, is to take the levelling and not the sea wall or the embankment, which cost the most money. The Government are infinitely fairer than the hon. Member. The hon. Member wants to take the levelling under Section (2), and the sea wall under Section (4). We deduct the whole of the value of your costs which created the whole of the value under Section (4). That is the real difference. We want to make it an improvement to which the value is attributable, even though it is not on the particular site. I think it is clear to the hon. Gentleman now what it is: The first is a simple separation of the site for the structures and everything that is growing upon it. The second is you take any value which is attributable to expenditure, even though it may be outside that particular plot. You give the land credit for that before you arrive at the taxable subject matter. That is the real difference between the two cases.
Mr. BALFOURI am not sure that there is any difference of substance or principle between the policy of my hon. Friend (Mr. Younger) and the policy which I understand to be the policy of the Government. 790 I think to begin with the Chancellor of the Exchequer has made one very fundamental mistake when he supposed that my hon. Friend uses the word "deduct" My hon. Friend uses the word "divest" Deduction comes in under Section (4), divesting is confined to Section (2). The policy of the Government, if I understand it rightly, is that they take everything off the bit of land, or the supposed acre of land, and there will be the site, the original thing given by Nature, before it was touched by man, an abstraction, but more or less an infinitesimal abstraction. He says when you have done that you may commence your deductions, because you will, or may have, done things outside that acre, the next acre, or somewhere else, which has increased the value of the land and certain premises, and from which it ought to have a deduction made before you fix a tax. That I believe to be the-policy of the Government.
§ Mr. LLOYD-GEORGEWould the right hon. Gentleman take the illustration of reclamation? I have just explained Dereference to reclamation the difference between the two.
Mr. BALFOURI should have said reclamation is not a perfectly precise term for the following reason, that reclamation of a given acre of land may be due to works done a mile away.
§ Mr. LLOYD-GEORGEI agree.
Mr. BALFOURIn that case you cannot divest the land of that. You may make deductions under Section (4). I think you ought to.
§ Mr. LLOYD-GEORGEI agree.
Mr. BALFOURYou cannot divest a given acre of something which is on another acre. As I understand the matter, we are supposed to divest the acre of land of everything that man has done, to put it back into its primeval condition as Nature gave it, and that you propose to do in Section (2). That is the process of divesting. Then, coming to Section (4), you say that it is not sufficient to imagine the land divested of everything, you must make deductions, in order to be fair to the landlord who has made improvements elsewhere by which that particular acre of land has been improved. I believe that to be the policy of the Government. This is what naturally puzzled my hon. Friend. You have this extraordinarily clumsy drafting, in which you have two 791 kinds of site value. In Section (2) you have a thing called "site value," and in Section (4) you have a thing called "site value ascertained for the purposes of this Act"—two different things. How anybody could draft a Bill with that sort of terminology and expect it to be, understood, I do not know. The confusion produced is endless. I am talking now not about deductions, but about divesting. If you want to bring your acre of land into the state in which God made it, you must divest it of everything, and my hon. Friend's Amendment is to turn the incomplete catalogue which the Government have given in Sub-section (2) into a complete catalogue, so that the divesting shall be a really complete and finished operation, after which in Sub-section (4) you can proceed to make what deductions you want, so as to get the second form of site value which you call "site value as ascertained for the purposes of this Act."
§ Mr. LLOYD-GEORGEI have no quarrel with the general proposition of the right hon. Gentleman. He has stated very fairly and, of course, very lucidly, the position of the matter. I take the case of reclamation, because I think it is a very fair test. What the right hon. Gentleman wants is this: that where a landlord has spent money for the purpose of improving land—very often creating land for either agricultural or building purposes—he should get full credit not merely for the expenditure, but for the value created thereby, and that that should be deducted before you come to the taxable subject-matter.
§ Mr. LLOYD-GEORGEStripped of all technical language, that is the proposition on which the right hon. Gentleman and I are agreed.
§ Mr. LLOYD-GEORGEYes. Not only that, but I think he also agrees that that is what you want to get at. I am assuming that we are to tax site value at all. I say that it is done better by the method adopted in the draft. I do not think there can be any doubt that it is done by the Bill. But there would be real doubt if we adopted the Amendment. Let us follow the case of reclamation. I put it to the right hon. Gentleman that you cannot possibly strip that particular 792 site of the works that may be executed five miles away. You therefore would have to resort to Section (4) in order to deduct the sea wall. Then, says the hon. Member for Ayr (Mr. Younger), the sea wall and the embankment is not the only obligation. You have the levelling up. Therefore, he said, you ought to divest the thing of the levelling-up and filling-in stuff, and you then deduct the sea wall. Surely that is the very worst way of doing it. I submit that it is far and away better that you should take the reclamation works as one operation, because you are not deducting the amount that you have spent, but the value which you have created. That is a much fairer thing; in most cases you will get more out of it. If you begin to split and divide in the way suggested by the hon. Member, you will undertake such a very complicated operation that you could not possibly arrive at a correct result. It is infinitely better that it should be done by deduction. I thoroughly support the way the clause has been drafted. I think it is a better and more business-like way of doing it. I do not think it leaves anyone in doubt for a moment that we arrive at the common purpose that we have in view—that is, to give the landlord the credit for the expenditure that he has made upon that land.
§ Mr. YOUNGERWill the right hon. Gentleman tell us whether he means to stick to the words in the last two lines of Section (4), Sub-section (a)? I An Amendment would possibly settle the whole thing. It is no good unless he makes changes in this clause.
§ Mr. LLOYD-GEORGEI do not think this is the time to discuss that.
§ Mr. YOUNGERI do not want to discuss it.
§ Mr. LLOYD-GEORGEIt is anticipating discussion that will come on at that particular stage.
§ Mr. YOUNGERI do not want to discuss it at all.
§ Mr. LLOYD-GEORGEAt any rate, I should like to hear what is said against leaving these words in. I am keeping a perfectly open mind. I stand by the Bill until I hear what arguments there are for altering it.
§ Mr. AUSTEN CHAMBERLAINAssuming that the man had reclaimed land for 793 the purpose of agriculture, and subsequently developed that land for building, could he claim any deduction under Section (4) or under Section (2)? I do not think he could.
§ Mr. MUNRO FERGUSONThe Solicitor-General for Scotland might be able to give the Government some valuable information with respect to the discussion on the Land Values Bill for Scotland which was taken upstairs a couple of years ago. In the case of that Bill I should be sorry to hazard the opinion as to whether these deductions should be under the head of the divesting clause, or under the head of the deduction clause. We had a similar clause in the Land Values Bill upstairs; the Government intended to get the fair value of the land by the deduction of the buildings. It was pointed out that the value of the land was often affected by operations other than building, and that drainage might be a very permanent improvement; I am merely clearing up the point the Chancellor of the Exchequer asked about. Under the proposals of the Government in the Scottish Land Values Bill you would have been entitled to deduct the expenditure of the water supply if given by a windmill, but not if given by gravitation. In one case the machinery might be worked by an oil engine or by steam, in other oases by a dam or water supply, which is a very expensive and permanent structure. All these have to be deducted, and under Section (2), if fruit bushes would have to be deducted stone walls and hedges would have to be deducted. I think the list might be made too complicated, bait it does require a very complete list if we are to have a pure site value. I think if the Government would take that into consideration they would have no difficulty in getting at the matter.
§ Mr. CLAVELL SALTERAs I understand it the Chancellor of the Exchequer makes no objection to the principle of the Amendment. He says he agrees with that which the Amendment desires to do, but his point is, it is already done in the Bill as it stands; and he says his way of doing it in the Bill is preferable to the way of the Amendment. I want to test the accuracy of that. I take the simplest possible case, that of the ordinary agricultural field. The valuer is instructed to ascertain this novelty, the site value of that field. He is to do so by first ascertaining the real value by making certain deduc- 794 tions. He finds in this field certain drains which are in fact permanent works, and which are technically described in many Acts of Parliament, such, for instance, as the Agricultural Holdings Act, as permanent works and permanent improvements. What is he to do about these drains that represent so much capital which is to be deducted under Section (2). We have finished with divestiture and reached the stage of deduction; we have got the site value, not the site value on which the owner is to be taxed, and he is, so far as we have gone, to be taxed upon the drainage which he may have put there with his own hands. Is that to come out under Section 4 as deduction? I hold in my hand a paper which the Government have circulated showing how Section 4 (a) will stand after it is amended as the Government propose to amend it. It says, "Any pant of the site value which is proved to the Commissioners to be directly attributable to works of a permanent character excluded, or to expenditure of capital incurred for the benefit or on behalf of any person interested in the land for the purpose of improving the value of the land as building land or for the purpose of any business, trade or industry other than agriculture."
It is a matter of demonstration about which there cannot be any dispute, and with great respect I say that the Chancellor of the Exchequer is wrong when he says that the permanent improvements, the work of man, will come out under the Bill as it stands when this Amendment has been inserted. Whether my hon. Friend has put his Amendment too wide or not, he wants to meet such a case as this, and the point of his Amendment is that if the Committee carries it this drainage will come out, and it ought to come out. This ought to be done if the Government are sincere in their professions. The Government say that they do not wish to tax a man on that which is the work of human hands, and that they only wish to tax the bounty of nature. I wish to point out that we have never yet been told what this site value is. We have now reached what is undoubtedly the heart and the marrow of the first part of this Bill. The whole of this nex taxation is to be based upon this double abstraction, and in future years perhaps even more important taxation may be based upon it. Here is our system of taxation depending on this, and yet no Member of the Government has got up to tell us what site value is, or what they understand by it, in plain words or how it 795 should be arrived at. I wish somebody on the other side would have the courage to tell us in a few plain words how they think a valuer should go to work as a matter of principle, and what questions he ought to put to himself if he desires to ascertain the site value of an old pasture field of which the actual value is £100. What deductions ought he to make and how ought he to set about it?
§ Mr. SALTERI was perfectly aware that I was trespassing, but I regret that the action of the closure has shut out the Motion upon which we could have raised this question, an opportunity which I was looking forward to and which I regret has been denied us. Coming back to the Amendment, whatever you do you are taxing the work of the hands of man. Are you going to tax him on the work of drainage which he may have laid with his own hands? If so, you are not following out your professions. For these reasons I ask the Government to accept my Amendment.
§ Mr. ELLIS GRIFFITHI think the meaning of this proposal is perfectly clear, although the application of it is not so simple. I understand there are three processes. You have first to get the total value of the land by arriving at the market value. Having got at that figure, you thereupon, as I understand, divest it of certain value that is attributable to certain things upon the land. You thus get A minus B, which I understand is the site value in this clause. The Government, however, in its generosity, says: "We are not taxing A minus B. It is quite true that is the site value in the primary sense of the word, but we will not tax it; we are generous towards the landowner, and we will make a certain deduction C. We will take B and C in his favour, and we will tax the land on A, minus B and C." We are all practically united on that construction. The immediate question before the Commissioners, as I understand it, is whether the permanent drain mentioned in the Amendment is within either the deduction or the divestiture. It makes no difference whether it is a divestiture or a deduction; the owner is equally saved whether the value of the drain be divested or deducted. I do not know 796 whether the Government have quite clearly expressed their intention upon this point; I do not know whether it is intended to include or exclude it, but as I read the section I have at any rate considerable doubt whether a permanent drain of the kind is in the divestiture or deduction clause. I should have considerable difficulty in saying a permanent drain came within Section (2), and, although perhaps it may be arguable, I do not think it comes within the deduction. Under those conditions, I do not quite know what the intention of the Government is, whether it is to include or exclude it. If their intention is to exclude it, the clause, I think, ought to be as it stands; but, if their intention is to include it, I think some other words are necessary.
§ Mr. MITCHELL-THOMSONWe are really both desirous of arriving at the same result, but the great difficulty arises from the fact that the Government will not tell us what they mean to do with regard to the treatment of works of this character. Take a field of agricultural land with a sea wall somewhere outside, the field which has served the work of reclamation. On the field you have a sluice shutting out the sea—a very costly and valuable piece of work. The sea wall and the sea sluice have two totally different kinds of value; one is the structural value. That is the amount it has actually cost to make the sluice and put it there and to shovel the dirt to make the sea wall. There is another and quite a different value—the value resulting to the land from the fact that the sea wall and sea sluices are there. Section (4) is intended in general to apply to both of these values, but our fear is that in the case of agricultural land neither of these will be allowed for. All we say is that whereas Section (2) deals with the divestiture of structural value, you cannot always get at the structural value of a sea wall. What we suggest to the right hon. Gentleman is: "If you will not tell us what you are going to do in Section (4)— whether or not this value is to be deducted—the least we can do is to make sure that the cost of constructing the sea wall and sea sluices shall be deducted from the value of the land. "If the right hon. Gentleman will only tell us what the Government intend to do in section (4) without anticipating the Debate, I think it will not be necessary to prolong this discussion.
§ Sir FREDERICK CAWLEYIf the words in Section (2), which are pertinent to this, were left out there would be little use in the hon. Member's Amendment. Years ago in a great many parts of this country people were ruined by Government drainage schemes, but still a great deal of land was reclaimed, and I think this should be allowed for just as much as rushes and timber on an estate, is the drainage of land to be allowed for?
§ Mr. ROWLAND HUNTI want to put this question to the Chancellor of the Exchequer. Take the case of ten acres of arable land which it did not pay u> cultivate. The landlord made the land valuable, or, rather, he created a value for it by laying it down as permanent pasture. By spending £4 or £5 upon it he gave it an annual value of £2 or £3 per acre. This is a not uncommon thing. I want to know from the Chancellor of the Exchequer—is the landlord in this -case to be allowed the £4 or £5 he has spent in laying the land down as permanent pasture, and is he also to be allowed the value which he has created for the land of £2 or £3 per acre, seeing that, before he undertook this, the land was worth practically nothing. I submit that the permanent pasture should be treated as an improvement of the land, and that the landlord should be allowed to reap the benefit of his enterprise. That is a case which will certainly happen all over the country.
§ Mr. LEIF JONESI think we had better have a fair understanding on this matter, although I do not know that I can help it very much, because I have been puzzled over it very much myself. But I should like to put the conclusion I have arrived at before the House, although I think the hon. Member for Anglesey (Mr. Ellis Griffith) very nearly got it quite right. I think there is more logic in the drafting of the Bill than the right hon. Gentleman the Leader of the Opposition could find concealed in it.
Mr. BALFOURI thought it was extremely badly worded. The Government reasoning is in opposition to the logic of their own Bill.
§ Mr. LEIF JONESPerhaps the right hon. Gentleman will agree with what I am going to say. The total value is made up of two values, the site value and the value of what is upon the site, and the first thing we have to do is to separate these two values. It is a certainty that it 798 can be done, and that you can ascertain the value of the site by divesting it of what has been put upon the site. I think if hon. Members would leave for a moment the tax out of sight, they would see the difference between Section (2) and Section (4). In Section (2) we are engaged in ascertaining merely a matter of fact— a hypothetical fact—what in fact is the value of the site without considering in the least how that value is made up, and when you come to deduct from site value then you begin to enter into the merits of the case, and it seems to me that in Section (4) you state the deductions which you make in order that your tax will be a just tax. You must deduct under Section (4) therefore from your site value, reached as I have described under Section (2)—you must deduct whatever is necessary to fit the site for development purposes, that is to say, you must deduct any money spent for works of a permanent character, and contributing to its fitness, and you must also take into account the cost of stripping it, which makes it fit for building. From that point of view, you have a clear, logical distinction between Section (2) and Section (4), and there need be no anxiety on the part of those who are anxious that injustice should not be done to those who have spent money, inasmuch as it is not allowed on Section (2) because it is Section (4) which tells us what is subject to the deduction, and from what you make the deduction. [An HON. MEMBER: "Agricultural land."] Agricultural land is not the subject of the Development Tax but only of the Increment Tax, and on the subsequent site value you do make certain deductions which are a departure from the strict logic of the scheme; but, although it spoils the strict logic of the scheme, I do not think it is for us, who are interested in agriculture, to complain, as it is for the benefit of agricultural land that the Government have made this somewhat illogical distinction.
Mr. MILD MAYI hope the Chancellor of the Exchequer recognises that there are many of us who are honestly puzzled at the attitude taken up in this connection. The hon. Gentleman says the hon. Member (Mr. Ellis Griffith) had the matter quite straight. As I understood the hon. Member, he came to the conclusion that neither under Section (2) nor under Section (4) was land drainage taken into consideration? I think the Chancellor of the Exchequer scarcely realises what a large 799 expenditure there has been on this kind of drainage throughout the country, largely of a permanent character. I do not see how you can avoid making provision that this drainage shall be taken into consideration, especially as it can be done in a qualified way by the insertion of the words "unexhausted value" alluded to as being in the Scotch Act. If there is no value, no value would be taken into consideration.
§ Mr. LLOYD-GEORGEWith regard to any value which is attributable to drainage, that certainly would be deducted when you are ascertaining taxable site value. If the words are not clear they can be made absolutely clear in Section (4). Agricultural land is not taxed either for Undeveloped Duty nor for increment. It is only taxed When it becomes valuable for either a building or for an industrial purpose, and therefore drainage, which ought to be deducted, is drainage which makes it fit for the purpose for which it is taxed. For instance, if a swamp is drained it makes it better for agriculture, but also for industrial and building purposes, and that value ought to be deducted. The value created by reclamation can also be deducted under Section (4).
§ Mr. MITCHELL-THOMSONThere is also the other value, the actual structural value. That is a matter not for deduction, but for divesting. Ought the land not to be divested of this?
§ Mr. LLOYD-GEORGEThe hon. Gentleman is asking too much now. You want it twice over.
§ Mr. LLOYD-GEORGEI can well understand expenditure which the owner might regard as made for an improvement, and which added no value to the land, but which might even reduce the value of the land. I can also understand an improvement which cost twice more than the value added to the land, and another case where the value added to the land was not half the cost of the improvement. I can understand an improvement which has added to the value of the land twice more than the cost of the improvement. In all these cases the value added will be deducted and not the actual expenditure. I apply that to sluices, drains, and all works of a permanent character.
§ Mr. PRETYMANIt is perfectly clear that this limitation for the purpose of fit- 800 ting the land for any business, trade, or industry, can be amended. I do not think there is any question as to that not being clear. I think it is clear that if the land was drained or a reclamation carried out for a purpose which was originally agricultural, and if the land was used for a purpose, such as gardens or tennis grounds, which was not a business, trades or industry, the owner would not be able to deduct the cost under Section (2) or Section (4). It is perfectly plain that in that particular case no deduction would be allowed under these sections. If the right hon. Gentleman had told us earlier that he was prepared to make the alteration we would have saved a great deal of time. Now that he says he is prepared to make it I am perfectly satisfied.
§ Mr. YOUNGERI should like to say to the Chancellor of the Exchequer that if he had said at the beginning what he has said now, I would have been quite content. I do not care whether the deduction is made under Section (2) or Section (4), provided that it is made. I beg leave to withdraw the Amendment.
Mr. BALFOURI confess that I think this is most illogical. You are trying to lay down what the value of the land will be when what man has done to it has been deducted, and certain gentlemen wish to make that the basis of taxation. That ought to be laid down in Section (2). This is an attempt to imagine what land would be worth if man's hand had never come near it That can be done in the case of some land, but it cannot be done in the case of other land. You are trying to do what land nationalisers all want, namely, just to imagine what the land would be if man had not touched it at all. To do that you must extend all the provisions in Section (2), and make them exhaustive. I am content with that protest made in the interest of logic.
§ Amendment, by leave, withdrawn.
§ Mr. E. G. PRETYMAN moved to insert at the end of Section (2) the words: "Provided that, in the opinion of the owner, the original site value entered in the return required by Section 16 of this Act may be calculated by deductions from the total value according to the method prescribed by Sub-section (2) of Section (2) of this Act."
§ There are two distinct methods laid down, one in Clause 2 and the other in Clause 14 of arriving at site value. We have already debated at considerable 801 length the different methods by which those two valuations are arrived at. They are different, and they have to be compared in order to get the increment value. My lion, and learned Friend (Mr. Clyde), in whose name this Amendment stood, suggests that in arriving at site value the owner should have the option of calculating either by the method proposed in Clause 14, or the method proposed in Clause 2, Section (2).
§ Mr. LLOYD-GEORGEThis Amendment contains words which refer to Clause 16. This is anticipating a clause to which we have not come yet.
§ Mr. PRETYMANYes.
§ Sir W. ROBSONThis Amendment seems unnecessary after the discussion that has just taken place.
§ Mr. JAMES HOPEI understand that there is a change of policy on the part of the Government, because I think that the learned Attorney-General claimed credit for the statement that they were deliberately making a difference between the method of assessment under Section 2 and that under Section 14, and the result would be favourable to the taxpayer. I believe that it was really designed to meet the case of agricultural land, although in the form the Bill then took those words were not absolutely expressed. If that is still the intention of the Government, do they now maintain that the process under Clause 14 is the same process as that under Clause 2, or if it is not the same, do they intend to allow the Amendment which will make the process of arriving at site value absolutely identical? That is to say, the method of computing the original site value in Clause 14 should be exactly the same as computing the site value in Section 2. Certainly the form of expression is very different. But do I understand that the learned Attorney-General has abandoned his original idea of making the difference and that now things are to be in absolute harmony?
§ Sir W. ROBSONI think the hon. Gentleman is asking for a declaration of what may happen when we come to Section (4). What we have to say on that point will be said either to-night or to-morrow.
§ Mr. JAMES HOPEI do not ask for words. I was only asking for an interpretation. Do I understand the Attorney-General now to say that the intention of computing the site value under Clause 14 in Section (2) is exactly the same as the other?
§ Mr. J. A. CLYDEI am not certain from what fell from the Attorney-General whether he quite comprehended the purpose the Amendment fairly gives effect to. I think it will be within the recollection of the Committee that in connection with the discussion on the second section of the Bill, the difference between the two valuations which have to be brought into comparison with each other in order to arrive at the increment value, was pointed out, and I think it will be within the Attorney-General's recollection that he said that he would take care that at some later stage some alteration of one or other or of both of these sections would be made so as to bring these valuations on to parallel lines. If I am right in that, there is nothing that touches the real disparity at all. The first valuation is on the logical law of Clause 14. That valuation assumes that it is the subject of a divested piece of land. It is not accurate to say that a person under Clause 14 begins with the total value and then divests or deducts from that so as to arrive at the site value for the Act; because for the purposes of the site value you estimate that the land should be divested, and begin from that. The original site value, of course, depends upon the valuation of a subject assumed to be in a hypothetical condition.
Your datum in that case is the value of a subject in a hypothetical condition; but when you come to the valuation later, by means of which the increment is to be discovered, your datum is the total value as measured by the actual price got on a transaction. Everything depends upon the valuation wherever you introduce a different basis of valuation in order to arrive at the two figures you are going to compare, you inevitably and necessarily introduce a minimum which will make the increment value in the two cases exactly the same. Suppose if you are dealing with two houses in the same street, on the same side of the street, identical in plan and everything. One of the houses happens to be sold by a seller in a hurry, and the other by a seller not in a hurry, and the 803 latter gets a better price. The site value of the two places is exactly identical, but you come to the end of the affair, and you find that in the one case the seller was in a hurry and in the other he was not, and the datum of the figure is different, and therefore your site value is different. You apply the tax accordingly in each increment. We have been told over and over again in the course of these Debates that the real value, the actual value, of all these things is not what happens to be the value in the market, but what would be got on a valuation assuming a market for it. I think it is absurd to call the actual or real value what in fact is the mere estimated value. It is no good quarrelling about terms. For the purpose of comparison here we reach the basis of the tax.
§ Sir WILLIAM ROBSONdissented.
§ Sir WILLIAM ROBSONI am sure the hon. and learned Gentleman will forgive me for interrupting, but has this really anything to do with the Amendment?
§ Mr. CLYDEOf course it has. Let me make that plain. I admit I did not make the explanation earlier. Perhaps I ought to have done so, but let me make it now. The proposal here is that in the valuation to be made under Section 16 the proprietor shall have the option to require the datum to be taken to be the same datum as is taken under Section (2), to wit, the actual market value on the transaction, if there is any, in order that in the result the two values to be compared should now be based on actual market prices. Is that not plain, because it is the Amendment. I understand the learned Attorney-General does not think it is. Then let us look at it.
§ Sir W. ROBSONI am sorry I interrupted.
§ Mr. CLYDEI am very pleased. The Amendment says: "Provided that, in the option of the owner, the original site value may be calculated by deductions from the total value according to the method prescribed by Sub-section (2) of Section (2) of this Act on the occasion of the Increment Value Duty becoming payable, and the site value so ascertained may be substituted in the said return for the site value calculated according to the provisions of 804 this sub-section. "The object of it is that instead of making the two valuations on different bases you obtain the two valuations on identical bases so far as may be possible. You take in both cases the total value; in the case of Clause 14 the total value is to be estimated, because that is all we can get; and in the case of Section (2) the total value by the actual price ascertained on the transaction. I hope I have made the purpose of the Amendment perfectly clear. I think I am fairly entitled to say that I have shown the object is to start with a datum similar or as nearly the same as possible in both cases, in order that the comparison may fairly be made. It must be admitted at once by the learned Attorney-General that if you do not compare like with like your estimate of increment value is and must be unreliable. I have put this in the form only of an option. Why? Because I understand there may be cases in which it is inexpedient to adopt this course. But is it not fair that this method should be within the power of the landowner to insist upon? To sum up, the proposition is that the owner should be entitled to say: "I want both valuations made on the same basis. I want the total value taken in both cases, and the deductions made according to the same method in both cases." The Amendment is not a hostile one, but it is intended so far as possible to make the measure 'if the Increment Duty really reliable, and not to allow it to be disturbed by introducing into the methods of comparison elements accidental to the transaction which have nothing in the world to do with the transaction itself.
§ Sir W. ROBSONI must say I think that the hon. and learned Gentleman has not said anything to impugn or impeach the scheme adopted in the Bill. The scheme adopted in the Bill is at least as simple, indeed, it is much simpler than the scheme proposed by the hon. and learned Member. Our scheme is first of all to find out the original site value in the way we have so much discussed to-night. We take the, land as it is in a state of nature, hypothetically divesting it of all buildings and structures—in fact we take the total value which the hon. and learned Gentleman says is not considered by the clause at all—and the other matters catalogued in Clause 14. Then you arrive at the site value, afterwards reaching the actual taxable site value and certain further deductions under Section (4). That gives you your site 805 value. Afterwards when you go to collect your increment value and put on your tax you have to deal in a very different situation. You have to deal in an actual transfer or transaction, and you begin then with the consideration given in the transfer or transaction. You compare that with the site value. You have then to make deductions so as to bring it into comparison in your original site value, and you make those deductions under Section (2). The deductions, so far as the datum is concerned, are practically the same. They agree with the two subject matters put into exact comparison. That is what we do by the Bill. That is what the hon. and learned Gentleman says would be done by his Amendment. I dare
§ say it would. I am not sure that his Amendment would reach the same result. I am certain it would not reach it in plainer terms or by a method more easily explained than ours. He said that he took something which would represent the real market value just as on an actual transaction you take the market value. That is what we do, and then we proceed to make the deductions and collect the tax. I venture to say that no easier and no simpler plan could be adopted than that which we have adopted.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 60; Noes, 123.
807| Division No. 445.] | AYES. | [1.20 a.m. |
| Anson, Sir William Reynell | Gordon, J. | Peel, Hon. W. R. W. |
| Ashley, W. W. | Guinness, Hon. R. (Haggerston) | Pretyman, E. G. |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Guinness, Hon. W. E. (B'y St. Edm'ds) | Randles, Sir John Scurrah |
| Banner, John S. Harmood- | Harris, Frederick Leverton | Renton, Leslie |
| Barrie, H. T. (Londonderry, N.) | Harrison-Broadley, H. B. | Renwick, George |
| Beach, Hon. Michael Hugh Hicks | Hay, Hon. Claude George | Salter, Arthr Clavell |
| Beckett, Hon. Gervase | Hermon-Hodge, Sir Robert | Stanier, Beville |
| Bowles, G. Stewart | Hills, J. W. | Starkey, John R. |
| Butcher, Samuel Henry | Hope, James Fitzalan (Sheffield) | Staveley-Hill, Henry (Staffordshire) |
| Cecil, Evelyn (Aston Manor) | Hunt, Rowland | Talbot, Lord E. (Chichester) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | King, Sir Henry Seymour (Hull) | Thomson, W. Mitchell- (Lanark) |
| Clyde, J. Avon | Lambton, Hon. Frederick William | Walker, Col. W. H. (Lancashire) |
| Coates, Major E. F. (Lewisham) | Lane-Fox, G. R. | Warde, Col. C. E. (Kent, Mid.) |
| Courthope, G. Loyd | Lockwood, Rt. Hon. Lt.-Col. A. R. | Williams, Col. R. (Dorset, W) |
| Craig, Captain James (Down, E.) | Long, Col. Charles W. (Evesham) | Wilson, A. Stanley (York, E. R.) |
| Dickson, Rt. Hon. C. Scott- | Mildmay, Francis Bingham | Winterton, Earl |
| Doughty, Sir George | Moore, William | Younger, George |
| Douglas, Rt. Hon. A. Akers- | Morpeth, Viscount | |
| Faber, George Denison (York) | Newdegate, F. A. | TELLERS FOR THE AYES.—Sir A. Acland-Hood and Mr. H. W. |
| Foster, P. S. | Parkes, Ebenezer | |
| Gardner, Ernest | Pease, Herbert Pike (Darlington) | Forster. |
| Gibbs, G. A. (Bristol, West) | ||
| NOES. | ||
| Acland, Francis Dyke | Duncan, C. (Barrow-in-Furness) | Hudson, Walter |
| Ainsworth, John Stirling | Dunn, A. Edward (Camborne) | Johnson, John (Gateshead) |
| Balfour, Robert (Lanark) | Dunne, Major E. Martin (Walsall) | Jones, Leif (Appleby) |
| Baring, Godfrey (Isle of Wight) | Evans, Sir S. T. | Jowett, F. W. |
| Barnard, E. B. | Everett, R. Lacey | Laidlaw, Robert |
| Barnes, G. N. | Ferens, T. R. | Lambert, George |
| Barry, Redmond J. (Tyrone, N.) | Fuller, John Michael F. | Lamont, Norman |
| Beale, W. P. | Gill, A. H. | Lehmann, R. C. |
| Beauchamp, E. | Glover, Thomas | Lever, A. Levy (Essex, Harwich) |
| Beaumont, Hon. Hubert | Goddard, Sir Daniel Ford | Levy, Sir Maurice |
| Bellairs, Canyon | Greenwood, G (Peterborough) | Lewis, John Herbert |
| Berridge, T. H. D. | Griffith, Ellis J. | Lloyd-George, Rt. Hon. David |
| Bowerman, C. W. | Gulland, John W. | Lyell, Charles Henry |
| Branch, James | Hancock, J G. | McKenna, Rt. Hon. Reginald |
| Brocklehurst, W. B. | Harcourt, Rt. Hon. L. (Rossendale) | M'Laren, H. D. (Stafford, W.) |
| Bryce, J. Annan | Harcourt, Robert V. (Montrose) | Masterman, C. F. G. |
| Burns, Rt. Hon. John | Hardie, J. Keir (Merthyr Tydvil) | Micklem, Nathaniel |
| Carr-Gomm, H. W. | Hardy, George A. (Suffolk) | Mond, A. |
| Causton, Rt. Hon. Richard Knight | Harmsworth, Cecil B. (Worcester) | Morgan, G. Hay (Cornwall) |
| Cawley, Sir Frederick | Harvey, W. E. (Derbyshire, N.E.) | Murray, Capt. Hon. A. C. (Kincard.) |
| Chance, Frederick William | Haworth, Arthur A. | Newnes, F. (Notts, Bassetlaw) |
| Channing, Sir Francis Allston | Hazel, Dr. A. E. W. | Nicholls, George |
| Clough, William | hedges, A. Paget | Nicholson, Charles N. (Doncaster) |
| Clynes, J. R. | Helme, Norval Watson | Norman, Sir Henry |
| Collins. Sir Wm. J. (St. Pancras, W.) | Henry, Charles S. | Partington, Oswald |
| Corbett, C. H. (Sussex, E. Grinstead) | Herbert, Col. Sir Ivor (Mon. S.) | Pearce, Robert (Staffs, Leek) |
| Cornwall, Sir Edwin A. | Herbert, T. Arnold (Wycombe) | Pickersgill, Edward Hare |
| Dewar, Arthur (Edinburgh, S.) | Higham, John Sharp | Price, Sir Robert J. (Norfolk, E.) |
| Dickson-Poynder, Sir John P. | Hobart, Sir Robert | Priestley, Arthur (Grantham) |
| Rainy, A. Holland | Simon, John Allsebrook | White, J. Dundas (Dumbartonshire) |
| Rapnael, Herbert H. | Soares, Ernest J. | White, Sir Luke (York, E. R.) |
| Richards, Thomas (W. Monmouth) | Stanley, Hon. A. Lyulph (Cheshire) | Whitehead, Rowland |
| Richards. T. F. (Wolverhampton, W.) | Strauss, E. A. (Abingdon) | Wilkie, Alexander |
| Roberts, Charles H. (Lincoln) | Summerbell, T. | Williams, J. (Glamorgan) |
| Roberts, G. H. (Norwich) | Taylor, John W. (Durham) | Wilson, Hon. G. G. (Hull, W.) |
| Robinson, S | Tennant, H. J. (Berwickshire) | Wilson, J. W. (Worcestershire, N.) |
| Robson, Sir William Snowdon | Thomas, Sir A. (Glamorgan, E.) | Wilson, W. T. (Westhoughton) |
| Runclman, Rt. Hon. Walter | Thorne, G. R. (Wolverhampton) | |
| Russell, Rt. Hon. T. W. | Walsh, Stephen | |
| Samuel, Rt. Hon. H. L. (Cleveland) | Walters, John Tudor | TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir Edward |
| Seely, Colonel | Warner, Thomas Courtenay T. | |
| Shackleton, David James | Wason, John Cathcart (Orkney) | Strachey. |
| Silcock, Thomas Ball | Wedgwood, Joslah C. |
Question, "That those words be there inserted," put, and agreed to.
The CHAIRMANI should like to ask the hon. Member for the Central Division of Sheffield (Mr. James Hope) to explain the object of the Amendment standing in his name [to insert after "and other things growing thereon" the words, "Provided that in the case of land the value of which for purposes other than agricultural is greater than its value for agricultural purposes, regard shall be had, for the purpose of fixing the site value, to the amount of similar land within a radius of five miles and to the effect which would be produced on the market in the event of all such land being simultaneously offered for sale"]?
§ Mr. JAMES HOPEThe Amendment is in two parts, and I only propose to move the first part down to and including the word "miles" ["within a radius of five miles"]. I think the latter part of the Amendment was discussed on the Amendment of the hon. and learned Member for East Marylebone (Lord Robert Cecil). The object of my Amendment is simply this: that the valuer shall not only take into account the piece of land as if it existed only by itself, but shall take into account its value in conjunction with the neighbouring land of the same kind. I think the Chancellor of the Exchequer twice in the course of these Debates has said that ought to be done by the Commissioners or the valuers.
§ Mr. LLOYD-GEORGE moved in Section (3), after "subject" ["but subject to any easements"] to insert "to any rent-charge and to any burden, charge, or restriction arising by operation of law or imposed by any Act of Parliament, or in pursuance of the exercise of any powers or the performance of any duties under any such Act, and to any right of common, and"
Mr. DUNDAS WHITEI do not want to occupy the time of the Committee, and 808 I formally move the Amendment standing in my name, to leave out from the proposed Amendment the words "rent-charge and to any" ["to any rent-charge and to any burden."]
The CHAIRMANI think I have a right under the new Standing Order to select or refuse Amendments to Amendments. I do not think under the circumstances the hon. Member can move.
§ Mr. CLYDE moved to insert after the word "land" ["subject to any easements affecting the land"] the words "and subject to any public right of passage, user, or otherwise affecting the land, and to any statutory restriction affecting the land or limiting the user or disposal thereof, whether in the interests of the public or otherwise."
§ As the section stood it was merely "subject to any easements affecting the land, and to any covenant restricting the use of the land," provided always that "the restraint imposed by the covenant is reasonably necessary in the interests of the public." The point is really quite a short one. It seems to be quite clear that in considering what are the burdens imposed upon a piece of land and which affect it by way of diminution in its value, it is not reasonable to limit this merely to easements on the one hand which affect the land -private easements, no doubt—and, on the other hand, covenants restricting the use of the land entered into before a certain date, where, in the opinion of the Commissioners, the restrictions are reasonably necessary in the interests of the public in the neighbourhood. Surely the truth and the justice of the case is that if there exists over the land a public right of passage, or a public right of user, or any public right which affects the land, or if, on the other hand, there is any restriction by Statute or otherwise which affects the land or limits its use, that ought to form 809 the subject of consideration by the valuer by way of diminishing the total value of the subject so affected, whether in the interests of the public or otherwise. After all, what possible difference does it make to the influence on the value of the subject whether the restriction is in the interests of the public or anybody else? That cannot make any difference, and, therefore, without more ado, I respectfully ask the Chancellor of the Exchequer to consider whether it is not necessary to add to easements public rights no doubt of exactly the same character except that they are public and not private and which equally with the easements affect the value of the land.
§ Mr. LLOYD-GEORGEWith regard to the latter part of the Amendment, I think the hon. and learned Gentleman will see that it has practically been covered by the Amendment which I have moved and which has already been incorporated in the Bill. The hon. and learned Gentleman referred to public rights of passage. I should have thought they would have been covered by easements affecting the land. At any rate, I have no objection to that case being covered, but I would rather not have the words inserted at the present moment because they are rather covered by the Amendment which I have inserted. I should be prepared to accept the Amendment in so far as the first part of it relating to public rights of passage is concerned. Perhaps the hon. and learned Gentleman would withdraw his Amendment on the undertaking that the first part would be inserted on the Report stage?
§ Amendment, by leave, withdrawn.
§ Mr. SALTER moved after the word "covenant" ["and to any covenant restricting"] to insert the words "express or implied."
§ This Amendment ought not to take up any time at all. It is a mere drafting Amendment. I am not quite sure that it is necessary. A covenant is a covenant, whether express or implied. But in order to avoid any dispute on that point I propose to insert those words.
§ Mr. LLOYD-GEORGEWould the hon. and learned Gentleman mind giving any illustration he has in mind which would render it necessary for the insertion of these words.
§ Mr. SALTERSuch a case is where land has been sold as part of a building scheme. It is in such cases often held subject to restrictions for the benefit of the purchasers of similar plots of land. The Chancellor of the Exchequer and the Government desire that this land should be taxed upon its real value, and if the land is in fact subject to an existing condition which would limit its use and therefore diminish its value, it cannot in the least matter whether that covenant be express or implied. If there is a covenant it ought to be taken into account whether it be express or implied.
§ Sir W. ROBSONA covenant, as the hon. and learned Gentleman said, is a covenant whether it be express or implied. To add the words "or implied" would, I think, import some element of uncertainty. I do not think the words would strengthen the section in any way whatever. If really the agreement, clause or stipulation is of such a character as to be legally described as a covenant, it does not matter whether it is express or implied.
§ Mr. J. W. HILLSI quite agree that covenants include an express or implied covenant. But we are here giving directions to the valuer, who is a layman, and who might very well think a covenant was restricted to an express covenant. Surely there would be no harm in saying that, as all the real burdens that are upon the land are to be included here, implied covenants are as real burdens as express covenants.
§ Sir WILLIAM ROBSONI think the danger which the hon. Member for Durham anticipates—the want of sufficient direction to the valuer—is really met by the word "agreement" which we propose to insert.
§ Sir WILLIAM ROBSONIf it is neither an agreement nor a covenant I am afraid we can scarcely assent.
§ Mr. HILLSIn the case of land let in connection with the Exhibition of 1852, a note in the margin of a draft deed was held to import a covenant.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 55; Noes, 120.
811| Division No. 446.] | AYES. | [1.45 a.m. |
| Acland-Hood, Rt. Hon. Sir Alex, F. | Gibbs, G. A. (Bristol, West) | Pease, Herbert Pike (Darlington) |
| Anson, Sir William Reynell | Gordon, J. | Pretyman, E. G. |
| Ashley, W. W. | Guinness, Hon. R. (Haggerston) | Randles, Sir John Scurrah |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Guinness, Hon. W. E. (B. S. Edmunds) | Renton, Leslie |
| banner, John S. Harmood- | Harris, Frederick Leverton | Renwick, George |
| Beach, Hon. Michael Hugh Hicks | Harrison-Broadley, H. B. | Smith, Hon. W. F. D. (Strand) |
| Beckett, Hon. Gervase | Hay, Hon. Claude George | Stanier, Beville |
| Bowles, G. Stewart | Herbert, T. Arnold (Wycombe) | Starkey, John R. |
| Carlile, E. Hildred | Hermon-Hodge, Sir Robert T. | Staveley-Hill, Henry (Staffordshire) |
| Cecil, Evelyn (Aston Manor) | Hills, J. W. | Talbot, Lord E. (Chichester) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Hope, James Fitzalan (Sheffield) | Thomson, W. Mitchell- (Lanark) |
| Clyde, J. Avon | Hunt, Rowland | Walker, Col. W. H. (Lancashire) |
| Coates, Major E. F. (Lewisham) | Lambton, Hon. Frederick William | Warde, Col. C. E. (Kent, Mid.) |
| Courthope, G. Loyd | Lane-Fox, G. R. | Williams, Col. R. (Dorset, W.) |
| Craig, Captain James (Down, E.) | Long, Col. Charles W. (Evesham) | Winterton, Earl |
| Dickson, Rt. Hon. C. Scott- | Mildmay, Francis Bingham | Younger, George |
| Douglas, Rt. Hon. A. Akers- | Moore, William | |
| Forster, Henry William | Morpeth, Viscount | TELLERS FOR THE AYES.—Mr. Salter and Mr. Peel. |
| Foster, P. S. | Newdegate, F. A. | |
| Gardner, Ernest |
| NOES. | ||
| Acland, Francis Dyke | Hancock, J. G. | Price, Sir Robert J. (Norfolk, E.) |
| Ainsworth, John Stirling | Harcourt, Rt. Hon. L. (Rossendale) | Priestley, Arthur (Grantham) |
| Baring, Godfrey (Isle of Wight) | Harcourt, Robert V. (Montrose) | Rainy, A. Roiland |
| Barnard, E. B. | Hardie J. Keir (Merthyr Tydvil) | Raphael, Herbert H. |
| Barnes, G. N. | Hardy, George A. (Suffolk) | Richards, Thomas (W. Monmouth) |
| Barry, Redmond J. (Tyrone, N.) | Harmsworth, Cecil B. (Worcester) | Richards, T. F. (Wolverhampton, W.) |
| Beale, W. P. | Harvey, W. E. (Derbyshire, N.E.) | Roberts, Charles H. (Lincoln) |
| Beauchamp, E. | Haworth, Arthur A. | Roberts, G. H. (Norwich) |
| Beaumont, Hon. Hubert | Hazel, Dr. A. E. W. | Robinson, S. |
| Bellairs, Carlyon | Hedges, A. Paget | Robson, Sir William Snowdon |
| Berridge, T. H. D. | Helme, Norval Watson | Roch, Walter F. (Pembroke) |
| Bowerman, C. W. | Henry, Charles S. | Runciman, Rt. Hon. Walter |
| Branch, James | Herbert, Col. Sir Ivor (Mon. S.) | Russell, Rt. Hon. T. W. |
| Brocklehurst, W. B. | Higham, John Sharp | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bryce, J. Annan | Hobart, Sir Robert | Seeiy, Colonel |
| Bums, Rt. Hon. John | Hudson, Walter | Shackleton, David James |
| Carr-Gomm, H. W. | Johnson, John (Gateshed) | Silcock, Thomas Ball |
| Causton, Rt. Hon Richard Knight | Jones, Leif (Appleby) | Simon, John Allsebrook |
| Cawley, Sir Frederick | Jowett, F. W | Soares, Ernest J. |
| Chance, Frederick William | Laidlaw, Robert | Stanley, Hon. A. Lyulph (Cheshire) |
| Charming, Sir Francis Allston | Lambert, George | Strauss, E. A. (Abingdon) |
| Clough, William | Lament, Norman | Summerbell, T. |
| Clynes, J. R. | Lehmann, R. C. | Taylor, John W. (Durham) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Lever, A. Levy (Essex, Harwich) | Tennant, H. J. (Berwickshire) |
| Corbett, C. H. (Sussex, E. Grinstead) | Levy, Sir Maurice | Thomas, Sir A. (Glamorgan, E.) |
| Cornwall, Sir Edwin A. | Lewis, John Herbert | Thorne, G. R. (Wolverhampton) |
| Dewar, Arthur (Edinburgh, S.) | Lloyd-George, Rt. Hon. David | Walsh, Stephen |
| Dickson-Poynder, Sir John P. | Lyell, Charles Henry | Walters, John Tudor |
| Duncan, C. (Barrow-in-Furness) | McKenna, Rt. Hon. Reginald | Wason, John Catheart (Orkney) |
| Dunn, A. Edward (Camborne) | M'Laren, H. D. (Stafford, W.) | Wedgwood, Joseph C. |
| Dunne, Major E. Martin (Walsall) | Masterman, C. F. G. | White, J. Dundas (Dumbartonshire) |
| Evans, Sir S. T. | Micklem, Nathaniel | White, Sir Luke (York, E. R.) |
| Everett, R. Lacey | Mond, A. | Whitehead, Rowland |
| Ferens, T. R. | Morgan, G. Hay (Cornwall) | Wilkie, Alexander |
| Ferguson, R. C. Munro | Murray, Capt. Hon. A. C. (Kincard.) | Williams, J. (Glamorgan) |
| Fuller, John Michael F. | Newnes, F. (Noits, Bassetlaw) | Wilson, J. W. (Worcestershire, N.) |
| Gill, A. H. | Nicholls, George | Wilson, W. T. (Westhoughton) |
| Glover, Thomas | O'Kelly, Conor (Mayo, N.) | |
| Goddard, Sir Daniel Ford | Partington, Oswald | TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir Edward |
| Greenwood, G. (Peterborough) | Pearce, Robert (Staffs, Leek) | |
| Griffith, Ellis J. | Pickersgill, Edward Hare | Strachey. |
| Gulland, John W. |
§ Mr. LLOYD-GEORGE moved, in Section (3), after the word "covenant" ["For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any easements affecting the land, and to any covenant restricting the use of the land"] to insert the words "or agreement."
§ Question, "That the words 'or agreement' be there inserted," put, and agreed to.
812§ Further Amendment agreed to, ill Section (3) to leave out the words "entered into before the thirtieth day of April, Nineteen Hundred and Nine" ["and to any covenant or agreement restricting the use of the land entered into before the thirtieth day of April, Nineteen Hundred and Nine"].
§ Mr. SALTER moved to leave out of Section (3) the words "where, in the opinion of the Commissioners, the 813 restraint imposed by the covenant is reasonably necessary in the interests of the public, or in view of the character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final, and not subject to any appeal."
§ Mr. LLOYD-GEORGEI beg to move "That the Chairman do report Progress, and ask leave to sit again."
§ Question put, and agreed to.
§ Committee report Progress; to sit again this day (Friday).
§ And it being after half-past eleven of the clock on Thursday evening, Mr. Deputy-Speaker adjourned the House without Question put, in pursuance of the Standing Order.
§ Adjourned at Two minutes before Two a.m. Friday, 13th August.