HC Deb 17 August 1909 vol 9 cc1313-26

For the purpose of obtaining a periodical valuation of undeveloped land and minerals, the Commissioners shall in the year nineteen hundred and fourteen and in every subsequent fifth year cause returns to be obtained from all owners of undeveloped land and minerals, declaring the site value of the land or the capital value of the minerals as on the thirtieth day of April in that year, and for the purpose of ascertaining the value at that time the provisions of this Act as to the obligation to make a return and the ascertainment of value shall apply for the purpose of ascertaining value on any such periodical valuation as they apply for the purpose of ascertaining value on any such periodical valuation as they apply for the purpose of Ascertaining the original value:

Provided that if on any such periodical valuation any undeveloped land or minerals which are liable to undeveloped land duty or minerals right duty are for any reason not included in the valuation, the Commissioners may determine the value at any time for the assessment of duty, subject to an appeal under this Act to the Referee.

Question proposed, "That the Clause stand part of the Bill."

Mr. LLOYD-GEORGE moved to omit the words "and minerals" ["For the purpose of obtaining a periodical valuation of undeveloped land 'and minerals' the Commissioners shall"].

Amendment agreed to.

Mr. LANE-FOX (for Lord Castlereagh) moved to leave out the word "fourteen" ["the Commissioners shall in the year nineteen hundred and 'fourteen' and in every subsequent fifth year cause returns to be obtained"], and to insert "nineteen." Ten years is a much more suitable time than five for making these returns. I think it would be for the general convenience of the community, and to the saving of cost if the Amendment were adopted.


This Amendment does not raise any question of principle. It would be much better I think in the interests of the owners themselves—and in regard to this clause, as amended, I may say that it is very much fairer for the owners of property—that returns as to undeveloped land should be furnished every five instead of every ten years, whereas if you take ten years as the period it may have a very injurious effect upon them.

6.0 A.M.


The Solicitor-General's statement is a curious one when we bear in mind expressions which have fallen from the Prime Minister. The Prime Minister said, "The rise in the value of land is normal, continuous, and progressive," and, though he used the term widely, that must apply to all the land that would come under the Undeveloped Land Tax. It is specially applicable in this case, and the basis on which he made the tax was that the rise in the value of the thing taxed was "normal, continuous, and progressive." But then the Solicitor-General comes in and says, in effect, "Oh, but the land may have been assessed as being undeveloped but as developable land; it may fall back instead of showing a progressive advance, and it may become not merely undeveloped but undevelopable. It shows us that much of this business which is at other times spoken of by the Government as producing a steady profit is of a highly speculative character, and sometimes results very badly. Well, I am not going to dispute what the Solicitor-General said with regard to the ten years' period, nor, for the matter of that, what has been said as to the five years' period. Some land that is thought to be developable, and, therefore, subject to this tax, maybe clearly shown not to be developable. Therefore you have a tax wrongly imposed or wrongly continued. That might be easily met by giving by another provision a right to the aggrieved person in such a case to obtain a fresh consideration of his case by the Commissioners when the new circumstances arose. If the Government are prepared to do that it would only be doing for the taxpayer what they have done against him in the new section. If the land was not included in the valuation the Commissioners are not obliged to wait and the tax-gatherer is not obliged to wait for the next five years in order to-include it. They may come down at any time and say, "This land was not included as undeveloped land at the last quinquennial valuation, but it became so two years afterwards and we shall tax it." You ought to give a similar power to the taxpayer to secure a rectification of an error made against him. Consider what would be the position-if we insisted, as the learned Solicitor-General does, on considering each Amendment the Government put down without any regard to other Amendments they have moved in connection with other parts of the Bill. Of course it would reduce their proposals in many cases to nonsense. The Solicitor-General ought to be prepared to deal with this question on its merits, and not on the ground that the particular Amendment before the Committee does not contain all the provisions which would be necessary if it were adopted. It would be easy to meet the case, and do it in a manner analagous to that in which we dealt with the Commissioners. As a choice of evils I would rather have the Amendment moved as it stands than the Bill as it stands. The Amendment lengthens the period over which the Bill may do injustice to some individual. The Bill as it stands doubles the amount of injustice in point of expense it imposes on everybody who can conceivably be liable to the tax, and probably many people who are not liable to it will have to disprove the liability which the Commissioners suppose to exist. The balance of the hardship will be much less under the Amendment than under the Bill, and I shall, therefore, support it.


A quinquennial valuation is an easy thing to talk about, but there are many members of the Committee who have had practical acquaintance with the London quinquennial valuation who must regard with a great deal of anxiety this proposal to have a complete quinquennial valuation, not merely of London, but of all land throughout the country. The London quinquennial valuation is no slight matter. It is a perfect orgy of valuation. It goes on for a very long time. The money expended upon it is enormous, and the money spent in costs and fees is, I am told, quite a small matter compared with the loss entailed through the dislocation of business. It is a serious thing for London business men. Here you are to have a quinquennial valuation for the whole country. It is quite true that every foot of land will not be valued in the strict sense, but it will be inspected to see whether in the interim it has come within the liability to Undeveloped Land Duty, and all land which has been liable to the duty will have to be valued under the machinery of the Bill. What is the ground put forward by the learned Solicitor-General in objecting to the ten years instead of five years? The only ground was that five years was a very convenient period, and that the Government had considered the matter. I do not agree with my right hon. Friend (Mr. A. Chamberlain) that the matter would be completely adjusted by the power given in the latter part of this section. That only applies to those hereditaments which were liable to the tax at the last quinquennial valuation and not to those which have become liable in the interim. Assuming that it could be said that something would be lost by the State because land would enter the tax-paying class a year or two before the decennial valuation came about, whatever was lost in that way would be saved in the other. Land would continue to pay the tax after it really became exempt from it. The State would gain as much as it would lose, and lose as much as it would gain. The point is a trifling one when you contrast it with the disadvantages of quinquennial valuation. I hope for these reasons the Government will favourably reconsider the matter.


I desire to add my testimony to that of my hon. and learned Friend (Mr. Clavell Salter), especially in regard to the quinquennial valuations in London. Everybody who has had experience of them and the disturbances they create will appreciate what has been said with regard to them. They are a very great nuisance and disturbance of business throughout London. I hope the Government will agree to what the Amendment asks for. The learned Solicitor-General has forgotten that the year for commencing the valuation is 1914. I understood the Prime Minister to say that the valuation would take at the lowest four years to complete. That is a very sanguine estimate indeed. It is an estimate that no experience will bear out. The few cases we have had before us show that the original estimates have been falsified by an enormous number of years. In the case of the London County Council they endeavoured to make a great valuation of London. They began in 1892. In 1909–17 years afterwards—they still had one-third of the work to do, and they have not finished that yet. The expense was enormous compared with the original estimate. In the Amendment moved by my hon. Friend he seeks to put the clock on to 1919. That is a very reasonable request, and if the valuation were completed by 1919 I think it would be a truly wonderful piece of business, considering the great complexity of the matter.


This section, I would point out, only deals with undeveloped land. The hon. Member is arguing now from the point of view of valuing the whole of the land in the country. The Prime Minister has stated, however, that the valuation of undeveloped land will be proceeded with first and determined first.


If you are to finish the valuation of all the undeveloped land in the country in ten years, I can only say that it will be a very good piece of business. You cannot get sufficient experienced valuers; that is to say, men possessed of all the knowledge requisite for the work, and able to carry out the duty to the satisfaction of all parties. You are to proceed to set up a huge new staff of valuers comprising 500 or 600 men, but I am certain there are not 500 men equipped with the knowledge or experience necessary to enable them to carry out the valuation proposed under the Bill. If the Committee require another instance of the difficulties of this task let them go to Glasgow. It was found in Glasgow that they could not make even a proper register of the streets in anything like that time. Having all the circumstances in mind, I think that to put the first periodical valuation ten years hence is a very moderate request. My own view is that if the Solicitor-General were allowed to use his unfettered discretion he would think that this would be not an unreasonable thing to do.

Question put, "That the word 'fourteen' stand part of the Clause."

Division No. 471.] AYES. [6.15 a.m.
Acland, Francis Dyke Harcourt, Rt. Hon. L. (Rossendale) Pickersgill, Edward Hare
Ainsworth, John Stirling Harcourt, Robert V. (Montrose) Pointer, J.
Armitage, R. Harvey, A. G. C. (Rochdale) Ponsonby, Arthur A. W. H.
Baker, Joseph A. (Finsbury, E.) Harvey, W. E. (Derbyshire, N. E.) Price, Sir Robert J. (Norfolk, E.)
Baring, Godfrey (Isle of Wight) Haworth, Arthur A. Priestley, Arthur (Grantham)
Barnard, E. B. Hazel, Dr. A. E. W. Priestley, Sir W. E. B. (Bradford, E.)
Barran, Sir John Nicholson Helme, Norval Watson Raphael, Herbert H.
Beck, A. Cecil Henderson, Arthur (Durham) Rea, Walter Russell (Scarborough)
Benn, W. (Tower Hamlets, St Geo.) Henry, Charles S. Richards, T. F. (Wolverhampton, W.)
Bowerman, C. W. Herbert, Col. Sir Ivor (Mon. S.) Richardson, A.
Brace, William Higham, John Sharp Roberts, Charles H. (Lincoln)
Branch, James Hobart, Sir Robert Roberts, G. H. (Norwich)
Brooke, Stopford Hobhouse, Rt. Hon. Charles E. H. Rogers, F. E. Newman
Brunner, J. F. L. (Lancs., Leigh) Hodge, John Rowlands, J.
Brunner, Rt. Hon. Sir J. T. (Cheshire) Hooper, A. G Russell, Rt. Hon. T. W.
Buckmaster, Stanley O. Horniman, Emslie John Samuel, Rt. Hon. H. L. (Cleveland)
Burns, Rt. Hon. John Howard, Hon. Geoffrey Scarisbrick, Sir T. T. L.
Carr-Gomm, H. W. Hudson, Walter Seely, Colonel
Cherry, Rt. Hon. R. R. Jackson, R. S. Shackleton, David James
Cleland, J. W. Jenkins, J. Simon, John Allsebrook
Slough, William Johnson, John (Gateshead) Stanley, Hon. A. Lyulph (Cheshire)
Clynes, J. R. Jones, William (Carnarvonshire) Strachey, Sir Edward
Collins, Sir Wm. J. (St. Pancras, W.) Jowett, F. W. Strauss, E. A. (Abingdon)
Cooper, G. J. Lambert, George Summerbell, T.
Corbett, C. H. (Sussex, E. Grinstead) Lament, Norman Taylor, John W. (Durham)
Crosfield, A. H. Levy, Sir Maurice Tennant, H. J. (Berwickshire)
Crossley, William J. Lewis, John Herbert Thomas, Sir A. (Glamorgan, E.)
Davies, M. Vaughan- (Cardigan) Macdonald, J. R. (Leicester) Thorne, G. R. (Wolverhampton)
Davies, Timothy (Fulham) Maclean, Donald Tomkinson, James
Duckworth, Sir James Macnamara, Dr. Thomas J. Toulmin, George
Duncan, C. (Barrow-in-Furness) Macpherson, J. T. Trevelyan, Charles Philips
Dunn, A. Edward (Camborne) M'Laren, H. D. (Stafford, W.) Verney, F. W.
Edwards, Sir Francis (Radnor) Mallet, Charles E. Walsh, Stephen
Elibank, Master of Markham, Arthur Basil Wason, John Cathcart (Orkney)
Essex, R. W. Marnham, F. J. White, J. Dundas (Dumbartonshire)
Esslemont, George Birnie Masterman, C. F. G. Whitehead, Rowland
Evans. Sir S. T. Middlebrook, William Whitley, John Henry (Halifax)
Fenwick, Charles Montagu, Hon. E. S. Wilkie, Alexander
Ferens, T. R. Morrell, Philip Williams, Sir Osmond (Merioneth)
Fuller, John Michael F. Murray, Capt. Hon. A. C. (Kincard.) Wilson, J. W. (Worcestershire, N.)
Gladstone, Rt. Hon. Herbert John Myer, Horatio Wilson, W. T. (Westhoughton)
Glover, Thomas Nicholson, Charles N. (Doncaster) Wood, T. M'Kinnon
Goddard, Sir Daniel Ford Parker, James (Halifax)
Gooch, George Peabody (Bath) Partington, Oswald TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.
Hancock, J. G. Pearce, Robert (Staffs, Leek)
Baldwin, Stanley Gordon, J Salter, Arthur Clavell
Baring, Capt. Hon. G. (Winchester) Goulding, Edward Alfred Scott, Sir S. (Marylebone, W.)
Bridgeman, W. Clive Guinness, Hon. W. E. (B. S. Edmunds) Smith, Abel H. (Hertford, East)
Cecil, Evelyn (Aston Manor) Hermon-Hodge, Sir Robert Stanier, Beville
Chamberlain, Rt. Hon. J. A. (Worc'r.) Hill, Sir Clement Starkey, John R.
Clive, Percy Archer Hope, James Fitzalan (Sheffield) Talbot, Lord E. (Chichester)
Clyde, J. Avon Hunt, Rowland Thomson, W. Mitchell- (Lanark)
Coates, Major E. F. (Lewisham) Joynson-Hicks, William Walker, Col. W. H. (Lancashire)
Courthope, G. Loyd Law, Andrew Bonar (Dulwich) Walrond, Hon. Lionel
Craig, Captain James (Down, E.) Lockwood, Rt. Hon. Lt.-Col. A. R. Warde, Col. C. E. (Kent, Mid)
Craik, Sir Henry Long, Col. Charles W. (Evesham) Younger, George
Dickson, Rt. Hon. Charles Scott- Morpeth, Viscount
Douglas, Rt. Hon. A. Akers- Morrison-Bell, Captain
Forster, Henry William Nicholson, Wm. G. (Petersfield) TELLERS FOR THE NOES.—Mr. Remnant and Mr. Lane-Fox.
Gibbs, G. A. (Bristol, West) Pease, Herbert Pike (Darlington)
Gooch, Henry Cubitt (Peckham) Roberts, S. (Sheffield, Ecclesall)

Amendments made to leave out the words "returns to be obtained from all owners" ["in every subsequent fifth year cause returns to be obtained from all owners"] and to insert the words "a valuation to be made."—[Mr. Lloyd-George.]

To leave out the words "and minerals, declaring" ["all owners of undeveloped

The Committee divided; Noes, 43.

land and minerals, declaring"] and to insert the word "showing."—[Mr. Lloyd-George.]

To leave out the words "or the capital value of the minerals" ["site value of the land or the capital value of the minerals."]—[Mr. Lloyd-George.]

To leave out the words "the obligation to make a return and" ["provisions of this Act as to the obligations to make a return and"].—[Mr. Lloyd-George.]


I move to leave out the words, "Provided that if in any such periodical valuation any undeveloped land or minerals which are liable to Undeveloped Land Duty or Minerals Right Duty are for any reason not included in that valuation, the Commissioners may determine the value at any time for the assessment of duty, subject to an appeal under this Act to the Referee."

Here is a provision the unreason of which only has to be stated to become apparent. It is suggested that although there has been no fault on the part of the taxpayer, and although he has every reason to believe that his land is not subject to Undeveloped Land Duty, yet at any time a claim for duty may be thrown upon him, and he may be subject to that duty. He may have bought the land as being land which does not pay this duty. I think that some machinery of this kind may have to be inserted, but I do submit that when you are going to plunge the country into this valuation every five years the one compensation which business men may reasonably ask from this House as a return for that serious disadvantage, for the dislocation of business, for the losses imposed upon them every five years, the least the business community can ask is to be left in peace between those periods. If the recurring periods are to be at such short intervals as every five years there ought to be no possibility of these questions being opened up in the meantime.


This machinery is necessary. Obviously, everybody who is an owner of developed land or developable land ought to be treated upon the same footing, and the only object of this proviso is this. If for some reason or other, through no fault either of the Commissioners or of the owners of the land, the valuation is not complete within the year, this proviso makes it possible to make the developable land subject to the duty within the quinquennial valuation. It is obviously unfair that one owner should be left out by reason of some slip or oversight in the valuation of his land. This proviso does not affect the first valuation at all. It only affects the periodical valuations which come afterwards.


I think it is only fair that the owners who are liable to be shot at every five years should at least be left in peace in the intervals between, and should not always be expecting a visit and be called upon to open their books and disclose their figures at every moment. In the interests of security and of general peace and to save constant irritation, it is only fair that owners should be left alone in this very short interval. If the interval had been longer there would have been a good deal more to be said for this sub-section, but considering the period is only five years it seems to me most unfair.


This raises the point as to the difficulty of land being sold as land not subject to this tax quite innocently. The purchaser buys it with equal innocence, and both feel certain there is no undeveloped land. Then the unfortunate purchaser finds the assessors coming down and saying they did not include the land in the last quinquennial valuation and must include it now. If a man buys a piece of land which he believes to be free from the tax, and then, in the course of the next four years, he has to pay the tax, is that fair? That point has not been answered.


I pointed out that this was merely a question of machinery, and it is clearly shown by this proviso that it is only intended to cover undeveloped land liable to Undeveloped Land Duty. Every vendor would know perfectly well whether steps had been taken to value the land. The words, "Provided that if on any such periodical valuation any undeveloped land which is liable to Undeveloped Land Duty is for any reason not included in the valuation the Commissioners may determine the value at any time for the assessment of duty," simply mean that where the land has gone through various steps towards the valuation for the tax it is liable to the Undeveloped Land Duty, but if for some reason it has not been included in the valuation the necessary steps ought to be taken by the Commissioners to bring it within that quinquennial valuation like every other piece of land similarly situated.


If it were really a piece of machinery, as suggested, I should not rise to support the Amendment. What is intended by, the section as it stands is that if any land which is liable to Undeveloped Land Duty is overlooked in the valuation, then there is the possibility of going back on the owner and making him liable for the duty. I venture to say that the explanation which the Solicitor-General has given does not meet the case, and the real objection to leaving the section in as it stands is that anyone who deals in land which by any possibility might be liable to Undeveloped Land Duty cannot know whether it would be liable for such duty or not. The point seems to me so important that I think as a protest we ought certainly to divide the Committee.


Could you, Mr. Emmott, put the Question in such a way that we should be enabled, if the words are not struck out, to move the insertion of the word "final" before "valuation"?

Question put, "That the words 'Provided that if on any such periodical valuation any undeveloped land, or' stand part of the Clause.

The Committee divided: Ayes, 134; Noes, 43.

Pease, Herbert Pike (Darlington) Starkey, John R. Warde, Col. C. E. (Kent, Mid)
Remnant, James Farquharson Talbot, Lord E. (Chichester) Younger, George
Roberts, S. (Sheffield, Ecclesall) Thomson, W. Mitchell- (Lanark)
Scott, Sir S. (Marylebone, W.) Walker, Col. W. H. (Lancashire) TELLERS FOR THE NOES.—Mr. Clavell Salter and Mr. Lane-Fox.
Smith, Abel H. (Hertford, E.) Walrond, Hon. Lionel
Stanier, Beville

Mr. LLOYD-GEORGE moved to leave out the words "or minerals" ["Provided that if on any such periodical valuation any undeveloped land or minerals"].

Amendment agreed to.

Mr. LLOYD-GEORGE moved to leave out the word "are" ["undeveloped land, or minerals, which are "] and to insert the word "is."

Amendment agreed to.

Sir S. EVANS moved to leave out the words, "or Mineral Eights Duty are," and to insert the word "is."


I must take exception to the Amendment, as it would not read with an Amendment I wanted to move. If there were inserted in -connection with this clause the words "provided that if on any such periodical valuation any undeveloped land which has been practically valued but the valuation has not been completed, the Commissioners may determine the value at any time for the assessment of duty subject to an appeal to the Referee," that would exactly cover what the Solicitor-General says is the only case the Government want to cover. The words the Government are wanting to put in the Bill will have a very much wider effect.


I am afraid we cannot admit that Amendment now. What is intended is that where steps are being taken in the course of the year to value the land, and the valuation has not been completed, the completion of the valuation shall take place, although you may have gone beyond the period at which it ought to have been taken.

Amendment agreed to.

Mr. LLOYD-GEORGE moved to leave out at the end of the clause the words "to the Referee" ["the Commissioners may determine the value at any time for the assessment of duty, subject to an appeal under this Act to the Referee"].

Amendment agreed to.

Question proposed, "That the Clause, as amended, stand part of the Bill."


I should like to ask the Under-Secretary for the Home Department (Mr. Masterman) what he contemplates will be the extra cost in the present year of this valuation? It is obvious that there must be some extra cosit, and we should like to know what it is likely to be. It is not only the land already developed which the authorities will have to consider—they will have to cast their eyes about to see what land there is about which has just come into the development zone. They may require some special clerical assistance and extra inspectors, who will have to travel round the country and see what new land has come into the zone. There must be extra expense, and probably an extra staff. They will not be included in the 500 officials on the permanent staff. We ought to have some definite information on this point.


The estimate of £2,000,000 was for the complete first valuation. It has already been explained to the Committee that the permanent charge would be between £150,000 and £200,000 a year and not £600,000.


The Prime Minister told us that it would be £600,000.


What he said was that it would be between £150,000 and £200,000 a year. That permanent cost includes the cost of these quinquennial valuations of undeveloped land.


I am very sorry, but I really cannot make out the figures. The Prime Minister first of all stated £150,000. Then he said he would not commit himself and said £300,000 to £400,000. Some of us worked it out at £600.000 a year, and the Prime Minister said he used rough figures, but he hoped it would not be more than £400,000 a year. He said that of the £2,000,000 two-thirds would not recur; that leaves one-third recurring,, which is £600,000.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.