§ (1) No duty under this Part of this Act shall be charged in respect of any land or interest in land held by a rating authority, and any Increment Value Duty in respect of any such land which would have been collected from the authority shall, for the purposes of the provisions of this Act as to the collection of Increment Value Duty, be deemed to have been paid.
§ (2) For the purposes of this section the expression "rating authority" means anybody who have power to raise a rate or administer money raised by a rate, and the expression "rate" means a rate, the proceeds of which are applicable to public local purposes, and which is leviable on the basis of an assessment in respect of the yearly value of property, and includes any sum which, though obtained in the first instance by a precept, certificate, or other instrument requiring payment from some authority or officer, is or can be ultimately raised out of a rate as before defined.
§ Mr. HARMOOD-BANNER moved, in Section (1) to leave out the word "rating" ["held by a rating authority"], and to insert instead thereof the word "local."
§ Mr. PRETYMAN
As to the word "local," it might refer to various bodies, such as the parish council or other local authorities.
§ Mr. RAWLINSON
I rather understood the suggestion was to exclude such persons as Commissioners of Rivers and so forth with power of levying rates. As the Bill stands it would include all such bodies as those. If the word "rating" were struck out and the word "local" put in, such bodies would come within the purview of the Bill.
§ Mr. WATSON RUTHERFORD
This Amendment was put down by the President and Vice-President of the Municipal Corporations Association, who are not in the House, for the purpose of excluding rating authorities.
§ Mr. HARMOOD-BANNER
I accept the Amendment in that form, and ask leave to withdraw my own Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. HARMOOD-BANNER
I move to insert the words "local or" before the word "rating," making the section read, "held by a local or rating authority."
§ Mr. HOLT moved to insert after the words "local or rating authority" the words "and situated within the area in which the authority has power to raise a rate."
§ I move this Amendment with the object of getting a certain amount of information. The Committee must be aware that there are certain local authorities who have landed estates entirely outside their own boundaries. It is obvious therefore that they are going to be relieved entirely from the payment of this tax in respect of land outside their own boundaries. I should like to understand first of all on what principle the rating authorities have been relieved from the tax, as I understand it, in respect of land inside their own boun- 1463 daries, and is it quite fair that in regard to land which they hold outside their boundaries that they should be entirely relieved from this taxation?
§ Mr. LLOYD-GEORGE
If this were a rating proposition I could well understand the Amendment, but it is a question of Imperial taxation for Imperial purposes, and I really cannot see that there is any distinction between rating and taxation. [An HON. Member: "Part goes to the rates."] Part has to go to the rates, but not to the rates of the particular locality in which the land is situated. I think it would be very undesirable if you are going to exclude the property of local authorities at all, that the provision should not be made as complete as possible.
§ Mr. WATSON RUTHERFORD
I hope the hon. Member will not press his Amendment for this reason, which immediately occurs to any of us who have made a study of this Bill. There are a great many cases in which the rating authorities own very large properties which are necessarily outside their own boundaries. Take the Corporation of Liverpool, for instance. That city has one of the finest water supplies in the world. It owns a very large property in Wales, and a very large property in Lancashire, where there are immense watersheds, and where hundreds of thousands and millions of money have been sunk in order to secure a water supply, not only for Liverpool but for certain towns on the way lying between the watersheds and that city. It is a right thing that the rating authorities should be relieved from paying this special form of taxation, which is more or less in its nature punitive, and from which I think they ought to be relieved, because no case has been made out why rating authorities, which represent the aggregate public, should pay any such taxes as are proposed by this Bill. If they are to be relieved in respect of lands within their own boundaries, there seems to be no logical reason whatever why they should not be also relieved in respect of those properties which, for public purposes, they are obliged to own outside their own area. It would be impossible, within the boundaries of a city like Manchester, to have a water supply, and so they have to go to the lakes and have an immense estate in which they have to spend large sums of money. I think those properties should be free from such a tax as the Increment Tax and the other 1464 Land Taxes. I think the hon. Member's Amendment, in which he seeks to bring those properties within the purview of the Bill is ill-conceived, and I hope he will take the hint he has had from the Chancellor of the Exchequer, and withdraw it.
§ Sir ROBERT PERKS
I think there is something more to be said for this case than what has been suggested. Let me put the case of the City of London, the case of a large number of houses in Bond-street. The Corporation of London has no power to levy rates in Bond-street, and yet it has a number of most valuable shops, which, because they belong to the Corporation of the City of London, will be exempt under this Clause from Increment Taxes. [An HON. Member: "Why not?"] I am only putting that case as it seems to me. I do not believe in the principle, and I have said so at the beginning. I am only pointing out the importance, if you are going to deal this blow all round, deal it fairly, and do not exempt some of the richest corporations in the world, simply because it is convenient perhaps to make these concessions to them. It seems to me that the case of the Corporation of the City of London, where they hold shops on leases renewable every few years on payment of fines is, if any case is indefensible at all, just the sort of case where die Increment Tax would be fairly chargeable. I do not know what the Corporation do with them and whether they use them for the purpose of entertaining foreign potentates or for perhaps a variety of purposes better known to the hon. Baronet the Member for the City of London (Sir F. Banbury) than to me. No doubt those uses may be most important and most useful to the community, but, at the same time, I do think that, if this tax is going to be equitably levied and if you do not charge this duty on shops belonging to the City of London, then the inference is that the taxation of the adjacent men will rise. Consequently, if you are going to charge the duty, you want to have as few exemptions as possible, either for charitable institutions, and I mentioned the case of the Ecclesiastical Commission the other day, or of various corporations that I could quote. I think the illustration I have given is germane to the subject, and I think there is a great deal to be said for the Amendment suggested by my hon. Friend.
§ Sir FREDERICK BANBURY
The hon. Baronet, who has just spoken, has said 1465 that the principle of the Bill, as I gather, is inequitable, and with that I quite agree. But because the principle is inequitable I am charitable enough to exempt all those people from the inequitable principle that I can manage to do. Therefore, I am opposed to the Amendment. May I point cut to the hon. Baronet that his speech is hardly logical. If he had moved an Amendment, which said that every body or corporations or societies, charitable or otherwise, should be included in the Bill, and that there should be no exemptions, I am not at all sure I should not agree with them.
§ Sir F. BANBURY
That is not the Amendment. The Amendment is quite different. It is to the effect that certain corporations shall be exempted for certain property, but that they shall not be exempted for other property. That seems to me to be absolutely unfair. Corporations may hold property outside their own area, and the hon. Baronet asked what the City of London did with the property which they held outside their area. I can tell him some of the usages to which they put the property outside their area. Take the Bridgehouse estates of the Corporation of the City of London. They were given to the City of London as far back as 1274, and they have been used ever since that year in building the bridges, the four bridges—Blackfriars, Southwark, London Bridge, and Tower Bridge—not only for the benefit of the City of London, but for the benefit of the citizens of the whole of what is called London. The consequence of that is that those bridges have been managed in a perfect system of efficiency, and have been freed from all tolls, and have been used not only by the City, but by everybody who comes to London from all parts of the world. Why should that particular property which has been put to that use be excluded from the exemptions which apply to some small corporation which happens to have a little land in its own area, and which is used for some small local purpose. I fail to see any reason in the defence of the hon. Baronet, who generally is a very good debater. I must say I agree with the attitude he has taken up on this Bill, but I fail to see any reason for supporting the Amendment of the hon. Member. It is an invidious Amendment, which is aimed to strike at the larger corporations where they happen to have property outside their own area, and which property they use for the good 1466 of the community, and if the Amendment is pressed I shall vote against it.
§ Mr. PEEL rose.
§ Mr. LLOYD-GEORGE
On a point of order, I understand my hon. Friend has asked leave to withdraw his Amendment.
§ Leave to withdraw the Amendment being withheld,
§ Mr. PEEL
I want to get an answer from the Chancellor of the Exchequer on a particular point on this matter. No doubt a great deal may be said on the general question as to whether property in the hands of the municipalities should or should not be charged with those duties. On that point there might be a considerable amount of argument; but whether you should draw a distinction between property of the municipality inside and outside their area is a matter which does not bear much argument. It is perfectly well known that under the Housing Act municipal authorities have power to acquire land outside their area as well as inside. It is the whole tendency and policy of municipal activity nowadays to carry people for housing purposes, if they can, to areas outside the towns, and is it really suggested that they should be penalised for trying to follow that enlightened policy? It would be absurd to do so; it would have the effect of confining housing operations to inside the municipality. The Chancellor of the Exchequer made a reference to the allocation of these grants to municipalities. That raises a very important point. I should like to know whether the statement of the Prime Minister as to the net amount of these taxes—
§ Mr. LANE-FOX
The Chancellor of the Exchequer stated that this was not a rating question, but a question of giving 1467 general assistance to municipal authorities. Are we to understand that this money is not to be allocated to the various local authorities in proportion to the amounts received from them? I should like to know what the principle of allocation is to be.
§ Mr. CAVE
One of the arguments urged in favour of the Amendment was that it is very hard to deprive an authority in whose district there is situate property belonging to another authority of its share of the tax from that property. The answer given was that that would not arise, because it was not proposed to give to each authority a moiety of the tax arising within its own borders. Are we to understand that that is the proposal of the Government? Or is it proposed to divide, on some other principle, the whole of the land taxes arising under this part of the Bill among the authorities generally throughout the country?
§ Mr. LLOYD-GEORGE
I simply referred to the intention of the Government as stated by me on an earlier occasion. I said that, in my judgment, when we came to the distribution, I did not think the money ought to be allocated merely to the district in which the money was raised.
§ Amendment negatived.
§ Mr. HARMOOD-BANNER moved, in Section (1), after the word "authority" ["in respect of such land which would have been collected from the authority"], the words, ("whether on the occasion of the transfer on sale of the land, or any interest in the land, or the grant of a lease of the land, or on the periodical occasions provided in this Act").
§ Amendment agreed to.
§ Mr. PEEL moved, at the end of Subsection (1), to add the words, "No Reversion Duty under this Part of this Act shall be chargeable in respect of the period during which any land is held by a rating authority and is not so held at the determination of the lease of such land, and in such event the value of the benefit accruing to the lessor shall for the purposes of this Part of this Act be deemed to be the amount (if any) by which the total value 1468 of the land at the time the lease determines exceeds the amount of the consideration paid to the rating authority for their interest in the reversion."
§ The object of this Amendment is to apply to local authorities as regards the Reversion Duty the same principle as is to be applied in regard to the Increment Duty. It is perfectly clear, if the Reversion Duty-is to run against the property of local authorities, that when they wish to sell it they will get less than they otherwise would because the purchaser will have to consider in the price he gives the amount that will have to be paid for Reversion Duty. Therefore the effect of the Amendment is that, as in the case of Increment Duty, no Reversion Duty should be deemed to have been paid or should not run through the period during which the property is owned by the municipality. This is by no means an academic Motion on behalf of municipalities. May I give one or two instances of what would happen in the case of the London County Council, on whose behalf the Amendment is chiefly moved, although, no doubt, it applies to other municipalities as well. The London County Council owns a great deal of property and some large ground rents. Under the present law those ground rents have to be sold, some by 1929, others by 1941, others by 1949, and all within periods of 60 years from the date of the Act authoising the improvements in connection with which they were acquired, as the lands are held as assets for a sinking fund and the Council's authorised stocks redeemable at the dates mentioned. It is perfectly clear, therefore, that if these lands have to be sold their value as assets will be considerably diminished by the fact that the purchaser will have to take into consideration the amount of the Reversion Duty which will become payable. I submit, therefore, that the Chancellor of the Exchequer, as he proposes to exempt from these taxes the local authorities, is bound almost to accept an Amendment of this kind, which places the property of the municipalities on the same basis as regards the Reversion Duty as the section does with regard to the Increment Value Duty. It protects their property from any diminution from the fact that the duty may be levied on the property.
§ Mr. W. PEEL
The matter is a perfectly simple operation. You simply take the 1469 difference between the time the lease was granted and the value of the land when the reversion falls in, if it has belonged to the municipality some time. It is exceedingly easy to calculate the value by which it has increased. It is certainly easy in the case of ground rents created by the municipalities, because at a certain
§ date they are sold; and they can be valued; and the duty runs from that date.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 67; Noes, 201.1471
|Division No. 482.]||AYES.||[9.40 p.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Gooch, Henry Cubitt (Peckham)||Pease, Herbert Pike (Darlington)|
|Ashley, W. W.||Gordon, J.||Powell, Sir Francis Sharp|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Gretton, John||Pretyman, E. G.|
|Banbury, Sir Frederick George||Hamilton, Marquess of||Randies, Sir John Scurrah|
|Baring, Captain Hon. G. (Winchester;||Hardy, Laurence (Kent, Ashford)||Rawlinson, John Frederick Peel|
|Bowles, G. Stewart||Harris, Frederick Leverton||Renwick, George|
|Bridgeman W. Clive||Hay, Hon. Claude George||Roberts, S. (Sheffield, Ecclesall)|
|Bull, Sir William James||Hermon-Hodge, Sir Robert||Ronaldshay, Earl of|
|Carson, Rt. Hon. Sir Edward H.||Hill Sir Clement||Smith, Abel H. (Hertford, East)|
|Cave, George||Hope, James Fitzalan (Sheffield)||Smith, F. E. (Liverpool, Walton)|
|Cecil, Evelyn (Aston Manor)||Idris, T. H. W.||Stanier, Beville|
|Cecil, Lord R. (Marylebone, E.)||Kennaway, Rt. Hon. Sir John H.||Staveley-Hill, Henry (Staffordshire)|
|Clive, Percy Archer||King, Sir Henry Seymour (Hull)||Talbot, Lord E. (Chichester)|
|Clyde, J. Avon||Lambton, Hon. Frederick William||Talbot, Rt. Hon. J. G. (Oxford Univ.)|
|Craig, Captain James (Down, E.)||Lane-Fox, G. R.||Thomson, W. Mitchell- (Lanark)|
|Craik, Sir Henry||Law, Andrew Bonar (Dulwich)||Tuke, Sir John Batty|
|Dickson, Rt. Hon. C. Scott-||Lockwood, Rt. Hon. Lt.-Col. A. R.||Walker, Colonel W. H. (Lancashire)|
|Douglas, Rt. Hon. A. Akers.||Long, Col. Charles W. (Evesham)||Warde, Col. C. E. (Kent, Mid.)|
|Du Cros, Arthur||Lowe, Sir Francis William||Williams, Col. R. (Dorset, W.)|
|Faber, George Denison (York)||MacCaw, Wm. J. MacGeagh|
|Fell, Arthur||Magnus, Sir Philip|
|Fletcher, J. S.||Mason, James F. (Windsor)||TELLERS FOR THE AYES.—Mr. W. Peel and Mr. J. W. Hills.|
|Forster, Henry William||Morrison-Bell, Captain|
|Gardner, Ernest||Newdegate, F. A.|
|Abraham, William (Rhondda)||Curran, Peter Francis||Hooper, A. G.|
|Acland, Francis Dyke||Davies, M. Vaughan- (Cardigan)||Hope, John Deans (Fife, West)|
|Ainsworth, John Stirling||Davies, Timothy (Fulham)||Hope, W. H. B. (Somerset, N.)|
|Armitage, R.||Dewar, Arthur (Edinburgh, S.)||Horniman, Emslie John|
|Atherley-Jones, L.||Duckworth, Sir James||Howard, Hon. Geoffrey|
|Baker, Joseph A. (Finsbury, E.)||Duncan, C. (Barrow-in-Furness)||Hudson, Walter|
|Balfour, Robert (Lanark)||Dunn, A. Edward (Camborne)||Hyde, Clarendon G.|
|Baring, Godfrey (Isle of Wight)||Elibank, Master of||Jardine, Sir J.|
|Barnard, E. B.||Essex, R. W.||Jenkins, J.|
|Barnes, G. N.||Esslemont, George Birnie||Johnson, John (Gateshead)|
|Barran, Sir John Nicholson||Evans, Sir S. T.||Jones, William (Carnarvonshire).|
|Beauchamp, E.||Everett, R. Lacey||Jowett, F. W.|
|Beck, A Cecil||Ferens, T. R.||Kekewich, Sir George|
|Bell, Richard||Ferguson, R. C. Munro||Laldlaw, Robert|
|Benn, W. (Tower Hamlets, St. Geo.)||Fiennes, Hon. Eustace||Lamont, Norman|
|Berridge, T. H. D.||Foster, Rt. Hon. Sir Walter||Levy, Sir Maurice|
|Bethell, Sir J. H. (Essex, Romford)||Fuller, John Michael F.||Lewis, John Herbert|
|Bethell, T. R. (Essex, Maldon)||Gill, A. H.||Lloyd-George, Rt. Hon. David|
|Brace, William||Glendinning, R. G.||Lupton, Arnold|
|Brigg, John||Glover, Thomas||Luttrell, Hugh Fownes|
|Bright, J. A.||Goddard, Sir Daniel Ford||Macdonald, J. R. (Leicester)|
|Brooke, Stopford||Gooch, George Peabody (Bath)||Macdonald, J. M. (Falkirk Burghs)|
|Brunner, J. F. L. (Lanes., Leigh)||Greenwood, G. (Peterborough)||Macnamara, Dr. Thomas J.|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Hancock, J. G.||Macpherson, J. T.|
|Bryce, J. Annan||Harcourt, Rt. Hon. L. (Rossendale)||M'Callum, John M.|
|Buckmaster, Stanley O.||Harcourt, Robert V. (Montrose)||M'Laren, H. D. (Stafford, W.)|
|Burns, Rt. Hon. John||Hardie, J. Keir (Merthyr Tydvil)||M'Micking, Major G.|
|Byles, William Pollard||Harvey, A. G. C. (Rochdale)||Maddison, Frederick|
|Cawley, Sir Frederick||Harvey, W. E. (Derbyshire, N.E.)||Mallet, Charles E.|
|Channing, Sir Francis Allston||Harwood, George||Markham, Arthur Basil|
|Cherry, Rt. Hon. R. R.||Haslam, James (Derbyshire)||Maraham, F. J.|
|Cleland, J. W.||Haworth, Arthur A.||Masterman, C. F. G.|
|Clough, William||Hazel, Dr. A. E. W.||Middlebrook, William|
|Clynes, J. R.||Helme, Norval Watson||Molteno, Percy Alport|
|Cobbold, Felix Thornley||Hemmerde, Edward George||Montagu, Hon. E. S.|
|Collins, Stephen (Lambeth)||Henderson, Arthur (Durham)||Worrell, Philip|
|Collins, Sir Wm. J. (St. Pancras, W.)||Henderson, J. McD. (Aberdeen, W.)||Morton, Alpheus Cleophas|
|Corbett, A. Cameron (Glasgow)||Henry, Charles S.||Murray, Capt. Hon. A. C. (Kincard.)|
|Corbett, C. H. (Sussex, E. Grinstead)||Higham, John Sharp||Myer, Horatio|
|Crooks, William||Hobhouse, Rt. Hon. Charles E. H.||Napier, T. B.|
|Crosfield, A. H.||Hodge, John||Newnes, F. (Notts, Bassetlaw)|
|Crossley, William J.||Holt, Richard Durning||Nicholls, George|
|Nicholson, Charles N. (Doncaster)||Samuel, Rt. Hon. H. L. (Cleveland)||Ure, Rt. Hon. Alexander|
|Norman, Sir Henry||Samuel, S. M. (Whitechapel)||Verney, F. W.|
|O'Connor, John (Kildare, N.)||Scarisbrick, Sir T. T. L.||Vivian, Henry|
|O'Grady, J.||Scott, A. H. (Ashton-under-Lyne)||Walsh, Stephen|
|Parker, James (Halifax)||Sears, J. E.||Wardie, George J.|
|Pearce, Robert (Staffs, Leek)||Seely, Colonel||Waring, Walter|
|Pearce, William (Limehouse)||Shackleton, David James||Warner, Thomas Courtenay T.|
|Perks, Sir Robert William||Shipman, Dr. John G.||Wason, John Cathcart (Orkney)|
|Pickersgill, Edward Hare||Sloan, Thomas Henry||Watt, Henry A.|
|Pointer, J.||Snowden, P.||White, J. Dundas (Dumbartonshire)|
|Ponsonby, Arthur A. W. H.||Stanley, Hon. A. Lyulph (Cheshire)||Whitley, John Henry (Halifax)|
|Price, Sir Robert J. (Norfolk, E.)||Steadman, W. C.||Wiles, Thomas|
|Priestley, Sir W. E. B. (Bradford, E.)||Stewart, Halley (Greenock)||Wilkie, Alexander|
|Radford, G. H.||Strachey, Sir Edward||Williams, J. (Glamorgan)|
|Raphael, Herbert H.||Summerbell, T.||Williams, Sir Osmond (Merioneth)|
|Rea, Rt. Hon. Russell (Gloucester)||Taylor, John W. (Durham)||Wilson, Hon. G. G. (Hull, W.)|
|Rees, J. D.||Taylor, Theodore C. (Radcliffe)||Wilson, John (Durham, Mid)|
|Richards, T. F. (Wolverhampton, W.)||Tennant, H. J. (Berwickshire)||Wilson, J. W. (Worcestershire, N.)|
|Richardson, A.||Thomas, Sir A. (Glamorgan, E.)||Wilson, P. W. (St. Pancras, S.)|
|Roberts, Charles H. (Lincoln)||Thomasson, Franklin||Wilson, W. T. (Westhoughton)|
|Robertson, Sir G. Scott (Bradford)||Thorne, G. R. (Wolverhampton)||Winfrey, R.|
|Robson, Sir William Snowdon||Thorne, William (West Ham)||Wood, T. M-Kinnon|
|Roch, Walter F. (Pembroke)||Tillet, Louis John||Yoxall, Sir James Henry|
|Rogers, F. E. Newman||Tomkinson, James|
|Rose, Sir Charles Day||Toulmin, George||TELLERS FOR THE NOES.— Mr. Joseph Pease and Captain Norton.|
|Rowlands, J.||Trevelyan, Charles Philips|
Question, "That the word 'means' be substituted for the word 'includes'" put, and agreed to.
§ Mr. HARMOOD-BANNER moved to leave out the word "rating" ["For the purposes of this section, the expression 'rating authority' means any body who have power to raise a rate"], and to insert the word "local."
§ Mr. PRETYMAN
Is this a consequential Amendment? I think it is a definition of rating, and, therefore, is not quite consequential. Here the words are "for the purpose of this section, the rating authority means any body." You cannot have a local or rating authority defined in this way. We have no definition of "local," and I should like to ask the learned Attorney-General: Is it necessary to have a definition? The Amendment we are now considering is to insert the word "local" for the word "rating." Clearly you cannot have local as a definition of rating. Can the right hon. Gentleman tell us whether the meaning of the word "local" is so clearly established that it is unnecessary to define it, and if it is not unnecessary, could he tell us where the definition is inserted?
§ Sir W. ROBSON
We have in the preceding sub-section called the rating authority the local authority.
§ Amendment, by leave, withdrawn.
§ Mr. HARMOOD-BANNER moved to leave out the word "means" ["For the purposes of this section, the expression rating authority means any body"] and to insert "includes the mayor, alderman and burgesses of a borough, the council of any county, urban or rural district, or parish, and." It is necessary to have some further definition; the mere word rating will not do, and although the words I propose may not be the best words, still I ask the Chancellor of the Exchequer to consider them.
§ Mr. LLOYD-GEORGE
I think the hon. Gentleman will find these words are quite unnecessary, but if they were necessary at all they would rather come in in the definition of the local authority. I will consider the question whether it is necessary to define the local authority, and if I find that such is the case I will consider the words of the Amendment.
§ Amendment, by leave, withdrawn.
§ Question proposed, "That the Clause, as amended, stand part of the Bill."
§ Mr. PRETYMAN
I think it is very desirable that a few words should be said upon this question. Some light was thrown upon this clause in the discussion which took place moved by the hon. Member for 1473 Hexham (Mr. It. D. Holt), and we now see what a curious position the Government find themselves in with regard to this duty. We have, first of all, the suggestion that local authorities are not chargeable with those duties in their own area, and then it becomes obvious that some local authorities have property outside their own area; then someone on the opposite side of the House discovered to his horror that the City of London was included among the rating authorities, and that the Corporation of the City of London owned property in Bond-street. From all that emerges this fact, that the local authority and the rating authority hold property exactly as other people do, and that they are in the estate market as competitors with private individuals. Let us consider for one moment what effect this duty will have upon both sides. First of all, its effect upon the private individual in competition with the local authority; and, secondly, what is going to be the effect upon the rating authority themselves, notwithstanding this exemption. The rating authority for the future is going to be a competitor in the open market with private owners. It is going to be given a great advantage, and the private owner is going to be handicapped because in the first place the local authority will have to pay none of those duties, in the second place it is exempt from the Death Duties, and in the third place it is going to receive from a half of the sum which is withdrawn by these three taxes from its private competitor. To that extent it is a great handicap to the private individual, and in favour of the local authority. It might appear that there is going to be given to the local authority a tremendous advantage and a great gain under the Bill. I very much doubt whether that result is going to come about, because, after all, the object which the Government have themselves stated, when they produced these proposals, is to cheapen land. How is that process to be brought about? Land is to be cheapened by reducing competition for it. You are by putting on these taxes reducing competition for land, and therefore you Eire going to reduce the price. If you succeed in that you are also going to affect the local authorities quite as much as the private individual. Take, for example, property in Bond-street, owned by the City of London. Is it conceivable that the City Corporation or the County Council of London, who own leases of property in various parts of the 1474 Metropolis, are going to continue to get a high price when the adjoining property, belonging to private individuals, is going to be lowered in price? The mere statement of that fact disproves it, and you cannot reduce the value of the property of private individuals by competition without reducing the value of the same class of property belonging to local authorities. But that argument carries us even further. Hon. Members below the Gangway may realise that the increment, which it is the object of this tax to obtain for the State, only accrues by private competition, and if you reduce that by taking the increment the more you take the more you will reduce private competition in property. When you have taken a certain amount of increment you will destroy all competition for the property, and then there will be no increment to take. That is what must happen. As long as you have sufficient inducement for private individuals in the hope of profit to purchase and lease this class of property, so long will these corporations engaged in exactly similar transactions have the advantage of the estates market mainly created by the exertions of private individuals. By attacking those private individuals as you do by this tax you reduce the value of property, and thus affect the market. In this matter the laws of supply and demand are too much for you, and you cannot raise the value of property in the hands of corporations and at the same time depress property which is in the hands of private individuals. The thing cannot be done. The measure of the injury to private individuals is exactly the measure of the injury to public authorities. I think that is rather important in view of this particular clause, which is an exemption of rating authorities. To that extent we are glad to see any property from the broadest standpoint, quite apart from the question who owns it, exempted, because the more property is brought within the purview of this tax the less you will depreciate the value of other property. Anything we can do to reduce the burden of this tax or reduce the area upon which it falls is going to be to the benefit of the community as a whole. From that point of view I think it is desirable that I should say these few words, because we cannot allow this occasion to pass without emphasising the facts which a clause like this brings out, and which show how impossible it is for a tax of this kind to carry out the object of the Government.
I do not intend to make a speech. All I want to do is to ask two 1475 or three questions. We all know that the object of these Land Clauses must be one of two things, either to bring revenue or improve the method by which the land affected is used by the owners. We all know it will not bring in revenue, because it is admitted by everybody that these taxes will bring in no revenue. We may, therefore, confine our attention to the supposed improvement in the manner in which the property is used. I would like to know what information have the Government at their disposal showing that property in the hands of corporations is used better than property in the hands of private individuals. Has it a different origin? Take a case where a local authority owns land in the region of some other local authority. Why should the ratepayers under the first local authority benefit by the social efforts of the ratepayers under the second authority? Why should the ratepayers of the second local authority, who have done all that has been done to increase the value of the land, contribute to the rates of the first authority? I would also like to ask whether there is any ground for believing that the sin of holding up land and preventing it coming into general use for building purposes is more exemplified by the private owner than the local authority? I know two local authorities which have been holding up land in their possession for a higher price for many years—the County Council of London is one, and the Corporation of Glasgow is the other. You could not find two greater or more public-spirited bodies representing greater communities than those two great local authorities. Do the Government deny that those two authorities have been holding up land? I am sure they cannot deny it. If holding up land be a crime against social order why are the local authorities which commit that crime not subjected to the same fine as private individuals? My third question relates to the manner in whch house property is dealt with when a lease comes to its end. Have the Government any ground for believing that the blackmailing practice of which private owners are accused is any the less practised by public authorities. I know for a fact that the Commissioners of Woods and Forests do exactly what every private owner does, and they do it with at least equal ardour for the gain which comes to an owner of property at the end of a long lease. Is there any ground for believing that a municipal authority does not act in this way? As far 1476 as I know they act in precisely the same manner.
They are, like private owners, blackmailers, and, being blackmailers like private owners, I suggest they should be treated like private owners, and that their crime should be visited upon their heads by the same fiscal machinery by which the Government mean to visit the crimes of private owners upon their heads. These are the main points upon which criticism has been directed against private owners of building property in this country. On every one of those points the course pursued by private owners is precisely the same course pursued by municipal owners, and I venture to suggest there is no justification in logic, equity, or utility for treating the one in a way different than you treat the other.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman put a series of interrogatories to me. I do not think he really asked for information; it was his method, and a very effective method, of criticism. He forgot one thing altogether. The main; object of these provisions is fiscal. These are proposals for raising revenue. That seems rather to amuse the right hon. Gentleman and his friends. Let us take the first point. The right hon. Gentleman, realising that, starts by saying very airily, "It is admitted by everybody that no revenue will be raised." Who is everybody? The Ministers in charge of the Bill have certainly never admitted that. On the contrary, I am Budgeting for £675,000, to be raised this year. That is not a mean revenue after all, and next year I venture to say it will certainly be more than double that amount, and it will grow year after year until I have not the slightest hesitation in saying it will amount to millions a year. I have not the slightest hesitation in declaring that. The main object, therefore, of these provisions is purely a fiscal one, and when the right hon. Gentleman says that everybody has admitted that no revenue is being raised, I challenge him to point out a single statement made by any responsible persons on this side of the House in which any admission of that kind has ever been made. Then the right hon. Gentleman went on to criticise the action of local authorities.
§ Mr. LLOYD-GEORGE
He said they hold up land; but, after all, local authori- 1477 ties acquire land very often under the compulsion of the central authority for purely public purposes. I will tell the right hon. Gentleman another thing. They acquire land for which, as a rule, they are compelled by local landowners to pay five times its value. That is a considerable distinction. I recommend the right hon. Gentleman to follow some of the transactions. Local authorities are compelled to acquire land for public health, for water, and for the essential needs of the community. They pay for barren moorland as if every yard of it were most valuable land, although it is scores of miles away from any population. That is the condition of local authorities. They are not land speculators; they are people who simply acquire land because they are obliged to acquire it for public purposes. That is a very different thing. Then I come to the right hon. Gentleman's third point. I do not know whether the right hon. Gentleman thinks the Office of Woods and Forests a local authority. I am not sure it is relevant to this clause, but what is the position with regard to that? I quoted those cases, and let me remind him I am not the first person to use the word "blackmail." The charge of blackmail was brought in respect of one of these very transactions by one of the right hon. Gentleman's supporters, the proprietor of the "Daily Telegraph," the paper which has been more abusive of my use of the word than any other, who said transactions of that kind were blackmail. Therefore my adjective was a second-hand one. It had not even the merits of originality. I borrowed it from one of the supporters of the right hon. Gentleman, and I hope he will give his supporter a really good, sound talking to. Let me take that point: Every penny of the value of the land which comes to the Office of Woods and Forests goes to the Treasury, and the right hon. Gentleman would mete out the same treatment to the private owners. Would he really like us to mete out the same measure of justice, as he puts it, to the private owner? One hundred per cent, is what the Office of Woods and Forests contributes to the Treasury. The right hon. Gentleman says, "Treat private owners in the same way." I am a much more moderate man than he is. I am satisfied with 10 per cent. The right hon. Gentleman says, "No, I will have nothing but 100 per cent.; equality, that is what I am in for." His views are very extreme,' very revolutionary,' very confiscatory. I am here 1478 urging the acceptance of this moderate pittance of 10 per cent. The right hon. Gentleman says 100 per cent. I do not go quite so far. Those are the points raised by the right hon. Gentleman, and I claim to have answered every one of them, and to have dealt with them exhaustively, fairly, and, I think, in the spirit in which they were put to me. The only other point is with regard to the public authority. The same criticism applies as with regard to the Office of Woods and Forests. The hon. and gallant Gentleman (Mr. Pretyman) talked about the local authority as if they were a sort of rival landowner outside competing in the market. The local authority are the people of this country. Whatever advantage and profit they get, it is a profit we all get. It is not like the private local landowner, and therefore you cannot tax it. If you tax the local authority, it is merely taking money out of one pocket and putting it into another. That is why we are drawing the distinction which we have done. We have been asked why we give this favour to local authorities? My reply is that it is because they are public bodies, representing the bulk of the people, and doing work in the public interest.
§ Lord R. CECIL
The Chancellor of the Exchequer began what was a purely humorous conclusion to the Debate with a paradox which, I think, perhaps, rather went beyond the ordinary limits of a paradox. He said this was a purely fiscal proposal, and he proceeded to justify that by the statement that he Budgeted for a return of £675,000. But he did not Budget for that amount. He Budgeted for a return of £500,000, and he forgot to tell the Committee that from that £500,000 would have to be deducted the cost of collection, so that the net result could not be more than £200,000, because he has informed us that this year the cost of collection will be £300,000. Apart from that, since his Budget statement, considerable reductions have been made in the tax.
§ Mr. LLOYD-GEORGE
May I explain that the £300,000 is due to the fact that the burden of valuation has been undertaken by the State, and when the Government introduced their new valuation proposal they also introduced a new proviso which added to the tax, so as to make it produce £675,000.
§ Lord ROBERT CECIL
That makes it £370,000. A considerable deduction will also have to be made in respect of the 1479 Amendments the right hon. Gentleman has put into the proposal, and, as far as the Exchequer is concerned, not less than one-half of the result is to go, in some form or another, to local purposes.
§ Sir F. BANBURY
We have it on the authority of the Financial Secretary to the Treasury, given in answer to a question today, that the sum to go to local authorities this year is one-half of £675,000. Therefore the result is practically nothing.
§ Lord R. CECIL
I do not propose to go into the details of this question. It is quite plain that one fact emerges from the whole discussion, and that is that the morality of certain actions depends entirely upon whether they are done by private individuals or by local authorities. The right hon. Gentleman has wholly failed to meet this point. He has made in the country charges—I will not say of immorality—but of the gross misuse of private rights by private individuals, and it is folly for him to come to the House and deny that that is the meaning of those charges. Everybody knows that he meant that, and if he did not mean it, then the proper and straightforward course is for him to get up and say that he withdraws this charge, and is sorry for it, but if he adheres to the charge against private individuals—the charge of dealing with the land in an unconscionable way—it is equally a charge against the local authorities. It is perfectly immaterial what happens to the money, but it does matter that the money is obtained. Otherwise it might be said that you may steal for a good purpose. Let us probe this question. It is said that if you use the power you have as the owner of land to exact a large price for granting the renewal of a lease you are acting in a way which may fairly be called blackmailing to the future tenant. That is a charge that you are using your ownership of land in an improper and unconscionable way against the individual tenant. If it is a charge of blackmailing in the case of a private owner, how can it possibly not be a charge of blackmailing in the case of the local authority? As far as the individual is concerned, the person who is alleged to be blackmailed, it makes no difference to him at all; it is absolutely immaterial to that individual whether he is blackmailed by the local authority, or by the private individual. The truth is that blackmail, or any such expression, is utterly contrary to the facts.
1480 There is no such case, as the Leader of the Opposition said, and the Prime Minister himself pointed out. There is no ground for making such a charge, and in my humble opinion it never ought to have been made. Then the right hon. Gentleman went on to say that, at any rate, the local authority have paid for this land five times its real value, and that they have often paid for moorland the price of building land. I think the right hon. Gentleman will forgive me for saying that that is a very gross exaggeration, and I will give the reason why I think it is a very gross exaggeration. Everyone knows that some years ago in London the London County Council had a Betterment Scheme, but they abandoned it for reasons that satisfied them, and they adopted in its place a different scheme, which was to buy compulsorily under their private Act when they were carrying out an improvement a considerable section of land on both sides of the improvement, and the reason they did that was this—they bought the land at the fair market price, no doubt, with 10 per cent, added, according to the custom of surveyors for compulsory purchase—they bought the land at the same price as anyone who exercised compulsory powers, and they re-sold it, improved by the improvement they carried out, and made a profit sometimes more, sometimes less, upon the transaction which went towards the cost of the improvement. If they pay five times the value of the land it is quite inconceivable that they should always have resold it and made anything like a profit. As a matter of fact, though unquestionably there are cases in which, by the clauses of arbitration, very much too large a sum has been given in cases of compulsory purchase, on the whole compulsory purchase does not act anything like as unfairly as is constantly alleged. The Under-Secretary for Home Affairs has no doubt a much larger experience than I have.
§ The UNDER - SECRETARY for the HOME DEPARTMENT (Mr. Masterman)
I have been in the Local Government Board.
§ Lord ROBERT CECIL
Of course, I can only speak from my own experience, and I have seen something of these transactions, is not of that description. Sometimes too much is paid and sometimes too little, but on the whole, though there is a tendency, no doubt, to give an ample measure of compensation when land has been 1481 taken compulsorily, to say that five times the value is usually given is a grotesque exaggeration. It is true you may give a very much larger sum than the value of the land in its then condition. That is to say, you have to pay for its prospective value. I need not go into that, but there is no ground for the allegation of the right hon. Gentleman, and if there was I do not see what it has to do with the justification for these taxes. The right hon. Gentleman says after all these local authorities hold the land for public purposes, and that makes a distinction. One gross injustice arises from this very clause. The local authorities are in competition with private individuals in trading matters all over the country. You are going to say that in these very trading undertakings the local authority is to be free from taxes while the private individual is to pay them. Take the case of a gas company as one of many instances. It constantly happens that a gas company is in active competition with a municipality, yet the municipality is to be free from all taxes and the company is to pay them. There is no defence to that under this clause. In my judgment, though I entirely agree that any clause that diminishes the incidence of this tax is worthy of our support, who disapprove of it, I must say that the exemption of local authority appears to me to be absolutely unreasonable and absolutely indefensible on any theory of rating or taxation that has hitherto obtained in this country. Local authorities now pay rates, and there is no reason in the world that I can see why you should distinguish between rates and taxation. I shall certainly not vote against the Clause because it diminishes the amount of money which will be obtained by these taxes, but it appears to me to demonstrate that these taxes are based upon no real logical foundation and are absolutely indefensible in argument when it comes to the test.
§ Mr. JAMES MASON
The Chancellor of the Exchequer appeared to tell us that it did not very much matter how much he gave, either by way of the proportion of taxes raised or exemptions, to the local authority, because that is the same as giving money to the people. He went on to say, "Why did they give half of these taxes to the local authorities?" Because it was giving money to the people, whereas, of course, it is quite obvious that it was done to a very considerable extent to remove the opposition of local authorities all over the country to the way 1482 in which the taxes are levied. But the right hon. Gentleman went on, I understood, to rather dispute the statement that large local authorities held very large amounts of land for other than public purposes, but it is a fact that these local authorities hold large areas of land and hold them up. If there is holding up of land the local authorities are in a position of advantage over all private individuals, inasmuch as they can hold up land without paying this Undeveloped Land Tax, whereas a private individual has his land forced upon the market, and the local authority, by holding if- up, is able to gain a considerable advantage. These taxes have always been defended as being taxes on a windfall, which has come into the pocket of the private individual through the effort of the community. But I think we ought to pay attention to a case which certainly has occurred, and does occur in certain localities, where the exact converse is the case, and where the windfall is in the lap of the community by the expenditure and effort of private individuals in its immediate vicinity. There are several cases of towns in which the community, by the efforts and expenditure of private individuals—who own, of course, a large proportion of the land which has been developed—have derived enormous benefit. In these cases the windfall is entirely into the lap of the public authority, which has done nothing whatever to earn it, and yet they alone are to be exempt from any portion of the burden.