§ (1) For the purposes of this part of this Act the increment value of any land shall be deemed to be the amount (if any) by which the site value of the land, on the occasion on which Increment Value Duty becomes due, exceeds the original site value of the land.1206
§ (2) The site value of the land on the occasion on which Increment Value Duty becomes due shall be taken to be:—
- (a) Where the occasion is a transfer on sale of the fee simple of the land, the value of the consideration for the transfer; and
- (b) where the occasion is the grant of any lease of the land, or the transfer on sale of any interest in the land, the value of the fee simple of the land calculated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest; and
- (c) where the occasion is the death of any person and the fee simple of the land is property passing on that death, the principal value of the land as ascertained for the purposes of Part I. of the Finance Act,]894, and where any interest in the land is property passing on that death the value of the fee simple of the land calculated on the basis of the principal value of the interest as so ascertained; and
- (d) where the occasion is a periodical occasion on which the duty is due in respect of land held by a body corporate or unincorporate, the value of the fee simple of the land is ascertained for the purposes of the assessment of duty under this Act;
§ (3) Where, on any occasion on which Increment Value Duty is due in respect of any land, it becomes necessary, for the purpose of ascertaining the original site value of the land on which the duty is to be assessed, to apportion any original site 1207 value as first adopted for the purposes of this part of this Act, that value shall be apportioned between that part of the land on which duty is to be assessed and the remaining part of the land in such proportions as the Commissioners think just, and the value attributed on any such apportionment to each part of the land shall for the purposes of this part of this Act, be treated as the original site value of that part of the land.
§ (4) Where the owner of any land proves to the satisfaction of the Commissioners that he, or any of his predecessors in title, has purchased the land within twenty years before the thirtieth day of April, nineteen hundred and nine, and that the amount then paid by him for the purchase of the land exceeds the total value of the land as first adopted for the purposes of this part of this Act, such sum shall be substituted for the purposes of Increment Value Duty for the original site value of the land as the Commissioners consider, having regard to the amount so paid for the purchase of the land, was at the time of the purchase the site value of the land.
§ Mr. WATSON RUTHERFORD moved, after the word "value" ["for the purpose of ascertaining the site value"] to insert the words, "or to the owner's expenditure on any adjoining property or property in the neighbourhood."
§ I venture to think this is an extremely important Amendment, not merely in itself as an Amendment, but as a test of the bona fides of the Government and the bona fides as well as practicability of these land taxes in the way the Government propose to levy them. The proposed tax which we are considering is this: that, owing to various causes, there may be an increment of the site value of a piece of land, and the Bill suggests that where increment takes place after 1909 the State should take 20 per cent. of that increment. The Bill very properly makes certain allowances and concessions. These allowances, deductions and concessions are dealt with partly in Clause 2, which is now under discussion, and partly under Clause 14. Substantially, they may be summarised as follows: that all buildings are to be deducted when it is clear they are buildings on a particular piece of land under consideration at the moment, all structures, all good-will are to be deducted, and then there is an extraordinary sentence in the Bill, "Any matter personal to the occupier," not to the owner, "Personal to the occupier or 1208 other person interested." The other person interested is not the owner, because it is clear from the words, not only in this part of the Bill, but in other parts, and, therefore, there is a distinction. By subsection (4) of Clause 14 that clause is brought into connection with Clause 2 by reference where the words are used with regard to works and expenditure upon property which the Commissioners are to allow "works of a permanent character..…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." We also find on examining section (16) that each piece of land has got to be separately treated without reference to any other piece. I have read the Bill many times over in this respect, and I have come to the conclusion that there would be no option on the part of the Commissioners or anybody else to deal jointly or collectively with different pieces of land that were in different occupation. There is the option reserved to the owner to require the Commissioners to treat separately parts of the same piece of land, but there again that is cut down to the condition that they must be separately occupied. The conclusion to which we are forced is this, that the unit which is to be taken in fixing the duty and making the allowances is separate pieces of land in separate occupation. I have mentioned there are to be deductions for works of a permanent character with regard to particular pieces of land, and my Amendment is that where there has been increment of value caused on a piece of land by reason of similar works of a permanent character made by the same owner upon an adjoining piece of land the owner should get the benefit of that with regard to the first piece of land, also, in so far as it improved the value of the joint pieces of land. The effect of the Amendment is that the owner should not be restricted in getting the benefit of his increment caused by his own outlay, merely to one bit of land, but that all the land in the same district owned by the same man, who has created an actual increase of value on a given piece of land, should derive the benefit of it when these duties come to be calculated. To illustrate this position more clearly I will take a concrete case, and one which happened in my own experience in the last two years. The development company buys 40 acres of land in the suburbs at £500 per acre, and they pay £20,000 for them. The part which is furthest away from the city is 1209 farmed, part of it is let to football clubs or for grazing, in two or three separate tenancies, and part of it is occupied as a nursery garden. There were 20 different pieces of land or fields, with from eight to ten different occupations or separate tenancies. If you apply the Bill to that condition of affairs you will find that each one of those separate pieces of land, so far as it was in a separate tenancy or occupation, would have to be treated by itself for the purpose of this duty, and no credit or allowance of any kind would be given on one piece of land for anything which had been done on another. What does the development company do? This is the ordinary case which happens every day. The company start by laying out 10 acres of this land for building purposes, and they select the 10 acres nearest the town. They construct roads, passages, and sewers; they lay down lanes for electricity, gas, or water, either at their own expense or by guaranteeing the money for this work. They lay out an open square or garden upon this 10-acre plot. The result is that two acres out of the 10 go in roads, streets, and passages, and the company has ceased to own those two acres because they have been dedicated to the public. The whole of the original cost must now be charged against the remaining eight acres. Two acres are set out as a garden or open square, therefore the whole of the original cost of the 10 acres and all the expenses of the works I have referred to have to be charged against the six acres of land which are left.
§ This is the ordinary case we have to deal with. The company has given £500 an acre for the land, and therefore the 10 acres have cost £5,000. They spend £3,000 upon the land, and that makes a total of £8,000. The company is out of its money for two years, therefore you have to add £800 for the loss of interest, and this makes the total cost in the company's books £8,800, against six acres of land. If you divide £8,800 by six, you will find that the actual cost to the company is £1,460 per acre, whereas the original price paid was £500 per acre, or very nearly three times the money. Upon the basis of the Bill as it stands, I gather that if these 10 acres were in two or three fields and separately let, it is very doubtful whether the actual expenditure on some parts of those 10 acres would even be allowed against the other part of the six acres that are left. Surely this cannot be the intention of the Government. I take it for granted that some arrangement will 1210 be made under which, in the case of the setting up of 10 acres like this, it would not be open to the Commissioners to say, "Your expenditure of money has been on that part of the 10 acres which was a separate field, and separately let, and we cannot allow it against that part." Surely it would not be open to the Commissioners to say, "We shall not allow the £3,000 because you have not spent it on the land, but on the streets which have been taken out of the land; therefore you cannot Drove that the money has been actually spent upon those six acres." The great bulk of the expenditure has been on the streets which have become public property. I take it for granted it has not been suggested that 10 acres like this would be dealt with as a whole, although that is contrary to the provision of the Bill if it is strictly construed. Supposing this point is put right in the Bill, and those six acres are now sold by the company at £1,000 an acre. That plot has cost £1,460 per acre net and it has been sold at £1,000 per acre. If this transaction stood alone it is obvious the company could not do this, because it could not go on making losses in this way. Why does the company do this? Simply because it has got 30 acres left upon which they have established a building value by development, and although there has not been a penny spent on those 30 acres they have been brought within the range of practical development by other building operations. Subsequently the company sell those 30 acres at £700 per acre as they stand, and on the whole transaction they make a very decent profit.
§ Let us see how this works out in regard to the payment of the duty. If the company sold these 30 acres for £700 per acre, as they actually did, there would be a profit of £6,000 on the 30 acres which they bought at £5,000 per acre. If that is a separate transaction the Commissioners turn round and say, "We want one-fifth of the profit you have made on those 30 acres." That would mean £1,200 Increment Duty. Having regard to the figures of the expenditure which I have already given, it will be seen that instead of the company making a profit of £6,000, they have actually made a net profit of only £2,760, because you have to deduct the loss made on selling at a cheap rate to get a market, and other expenditure necessary to bring the land up to a point of active development. If this Amendment is not adopted the result will be that those 30 acres will have to pay 1211 £1,200 duty, or one-fifth of the profit which the owners did not make; whereas if my Amendment is adopted they would pay £648, which is actually one-fifth of the net profit they made on the whole of the 40 acres. I think it would be conceded by anybody who took the trouble to look at the facts I have given that at all events I have made out a case for this position and these considerations being dealt with. It the allowance of expenditure is to be restricted to the one piece of land of which it directly improves the value, and the same ownership in another piece is not to be allowed for, the immediate effect will be the strongest possible discouragement to any company to go on with this very desirable method of developing land and relieving the overcrowding of the slums of our great cities; and it will furnish at once the strongest possible reason why every landowner should be careful not to do anything whatever to develop a small portion of his property, because, if he begins with any development of his property, he will create an Increment Tax for himself upon his surrounding property. He would not only have to pay that, but he would not be able to get allowance in respect of expenditure on the first piece. The result would be that, if the Bill passes in its present shape, it would be an obstacle to public improvement. A tax on chance profit, which the Bill is supposed to impose, is one thing, but if it is going to be a tax on energy, on enterprise, on improvement, and on expenditure, then it is most objectionable, and contrary to public policy. I have tried to imagine what could be the possible objections to the adoption of my Amendment. I will deal with them very shortly: The first answer that might be made is that land cannot rise in value in consequence of expenditure on adjacent property. I think I have shown by the illustrations I have given that any such contention would be futile. There is nothing in the world so sensitive to fluctuations in value up and down as land. The caprice of fashion may alter the value of a piece of land. Any of us could go to-day in a hansom in ten minutes to two different squares where the property has cost practically the same, but where one house in one square is exceedingly valuable, and another house in the other square is not worth half as much. That is the mere caprice of fashion. It has nothing whatever to do with the houses; they may be 1212 exactly the same. In Liverpool, as soon as they have finished a row of houses, the builders put a foreman in the end house with neat curtains and neat blinds in the windows, and a family Bible on the table to give an air of respectability to the whole, and within a few days people looking for a new house with visions of connubial bliss are so impressed with the curtains, the blinds, and the family Bible that they take the house. The next answer may be that somewhere in the Bill the difficulty I have mentioned is provided for. I am prepared for the Chancellor of the Exchequer to get up and tell me about his precious 10 per cent. It has been announced on almost every Amendment and concession which have asked for. I should not be surprised if it bobbed up again, and if it is going to cover all the expenditure a man spends on his adjoining property I do not think that will be any answer. The right hon. Gentleman may go a little further down Clause 2 and say it is a personal matter to the occupier. Of course it is not, because the occupier of one piece of land may be a football club and the occupier of another a market gardener. It has nothing whatever to do with a person having a small subsidiary interest in the land. I cannot find that it is covered by the Bill anywhere. The Chancellor of the Exchequer might say he ought not to have this allowance, and that he ought to pay. There are other pieces of land in the neighbourhood, and they also have an increment of value. They do not belong to the same owner, and that is where the hardship comes in. Other pieces of land in the neighbourhood, which belong to different owners, have had as increment of value owing to the building development being set up by this company. That is exactly the increment which the Chancellor of the Exchequer takes, and to which, for the purpose of the Amendment I am prepared to concede, he is entitled, because the owners of the adjoining property have done nothing to bring about this increment of value. They have benefited by somebody else's expenditure. Of course, that is no answer where the expenditure has been made by the man himself. There is another answer which may be given, and that is the answer I expect the Chancellor will probably make. He may say that he is going to put in a new clause. He has told us several times he is going to put in new clauses. I have little doubt he has been going to put in a new clause on this subject from the time the Bill was printed or even before; but, in 1213 moving this Amendment and making this criticism, we are entitled to say that at all events up to the present we have heard nothing of the new clause. We may be told, and this is important, that the Chancellor of the Exchequer cannot do this, because, if he did, subsequent owners of the same property would not have the increment all paid for upon the property, and there would be an injustice to them because they would find themselves with a larger increment to pay. I can understand that that answer might be a very important one, and I think the Chancellor will find that in order to meet that objection allowance must be made on subsequent occasions, the tenth or eleventh, of collecting the modicum of this duty, not merely for the actual duty which has been paid, but for the allowances which have been properly made to those people who have paid those instalments of duty. Otherwise, when the duty came to be collected on the five or six pieces of land, say, 30 years hence, one piece of land which had paid the whole of the duty would be relieved, and another piece adjoining, on which all kinds of allowances had been made to the owners for the time being, would be in a worse position owing to it only having had a portion of the Increment Duty paid for it. In this Amendment we had, at all events, a test of the sincerity of the Government. If they are really prepared to deal with the difficulties which practical people meet with in the course of the development of building property, then they will meet the objection we have raised here in a fair way; but if these first clauses are mere window-dressing, like the Welsh Disestablishment Bill, intended to influence the votes of certain interested classes of the community, then we shall know what to think. I beg to move.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)
The hon. Member in his very able speech has told us that this is a test of the sincerity of the Government, and if we answer the question satisfactorily from his point of view he will give us a certificate of absolute sincerity. I think, after he has heard what I have to say, he will be able to give that certificate at once. I agree with every word of his speech, except his interpretation of the Bill. What has he done? He has established a grievance, he has searched out every conceivable motive why we should not redress it, and he has given all sorts of explanations. But all 1214 these are purely imaginary, because in the first place the grievance does not exist. What is the position? The hon. Gentleman says, quite truly, it will be grossly unfair for a land-owner in developing his estate to spend enormous sums of money on drains, roads, and many other things, and not to get any allowance in respect of such expenditure. I may be able to give him presently an even more startling illustration of the expenditure of money on land in order to fit it for building purposes. He has said that there may be one piece of land on which there is neither a drain nor a road, and in that case there will be no allowance in respect of the expenditure referred to. If that were the case I could well understand the fears and indignation expressed by hon. Members. But hon. Members do not understand the Bill. It would be monstrous if such a case existed. It does not. On the contrary, we make every allowance for expenditure by the owner of the particular property, although it may not have been on that particular lot. I will give a case still more remote than that quoted by the hon. Member. Take the case of a piece of land near a town, but situated on the other side of the river. Unless a bridge was thrown across the river that land would probably not be developed for at least a century. But the owner comes to the conclusion it is worth his while to build a bridge, and by erecting it he makes that land fit for building purposes. I say that the value which that bridge creates in the building land ought to be taken into account before you charge the increment. I should think the hon. Member will be satisfied with that statement, and will give the Government the certificate of sincerity which he promised. It is obvious if this is done it ought to be done, not in Clause 2, but in the original site valuation, because the original site valuation covers all cases. It is not merely increment, but it is also undeveloped land, and it would be unfair to charge even one halfpenny until the expenditure had been taken into account. The place where we have inserted this provision is in Clause 14, which deals with the valuation of the land. Clause 14 section (4), sub-section (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." Therefore anything spent on fitting the land 1215 for building purposes must be taken into account, although the money may not have been spent on that particular yard of land. You may make a bridge and an embankment; you may have reclamation works, but everything that is done in order to fit the whole piece of land for use for building purposes must be taken into account in fixing the site value.
§ Mr. WATSON RUTHERFORD
The whole difficulty arises because of the fixing of the unit. That is in Clause 16.
§ Mr. LLOYD-GEORGE
The hon. Gentleman is wrong. It has nothing whatever to do with the unit. We do not say in Clause 14 (a) that the money must be spent on a particular unit, and if there is the slightest doubt about that—I do not think there can be—I am perfectly willing to make it absolutely clear. So long as the money has been spent at any point for the purpose of converting land into building land—and a bridge is a very strong case in illustration—all the works, including those of a permanent character, which tend towards that conversion, must be taken into account. I know a case in which 10 or 20 square miles of land was converted. The expenditure was taken into account for the whole area. I agree with the hon. Member that this is a real test of the sincerity of the Government, and I think the hon. Member may at once proceed to fill up his certificate. Everything that is deducted for the purpose of ascertaining the original site value must also be taken into account for the purpose of ascertaining any increment which may occur between the original site valuation and the transaction which involves the charge for increment. Clause 16 raises a wholly different point.
§ Mr. LLOYD-GEORGE
The unit has nothing to do with it. We are not charging on the unit. We deduct all sums of money wherever spent for the purpose of converting land into good building land.
§ Mr. WATSON RUTHERFORD
I am sure the right hon. Gentleman does not wish to burke discussion on this point. My difficulty is this. We assume that each of the pieces of land in separate ownership must be dealt with separately for the whole purposes of the Act. In Clause 16 we are told exactly how each piece of land is to be dealt with not only for the purpose 1216 of the original return, but also for the purpose of site valuation. Section (1) of Clause 16 is as follows:—
"(1) The Commissioners shall, as soon as may be after the passing of this Act, cause returns in such form and containing such particulars as the Commissioners may require to be obtained from all owners of land, declaring the total value and the site value respectively of their land as estimated in each case by the owners, that value being declared separately as respects each piece of the land which is under separate occupation, and if the owner if thinks fit, as respects any part of any land which is under separate occupation, and being estimated as on the thirtieth day of April nineteen hundred and nine."
§ Mr. LLOYD-GEORGE
The hon. Member is under a quite needless misapprehension. There might be 200 units, and you would deduct from each and every one of them a proportion of the expense incurred by the owner for the purposes of creating the building value. The whole point is already covered.
§ Mr. A. J. BALFOUR
I do not know whether, after the speech of the right horn Gentleman the Chancellor of the Exchequer, my hon. Friend behind me (Mr. Watson Rutherford) is going to give the certificate of sincerity which, in a rash moment, he offered to the Government. I confess I am a good deal puzzled by the speech of the Chancellor of the Exchequer. I quite agree with the clause in the Bill as he interprets it, and he should know his own intentions, but the point is does it carry out his intention. Within certain limits I think it is quite clear that, irrespective of the places where an improvement is carried out, the cost to the owner will be taken into account, and therefore the object of the hon. Gentleman will, I think, be attained when the increment value of the land comes to be determined. But that is not the main point raised by my hon. Friend. My hon. Friend has quoted an example which came under his own cognisance, drawn from the operations of a particular building company. That building company, if I understood him rightly, was the owner of 40 acres. They spent a great deal of money in order to improve ten of the acres The total transaction of the company was a success, although they actually lost money on the 10 acres improved, and if I follow my hon. Friend accurately not a single shilling that this company had spent on the 10 acres improved the 30 acres which 1217 they subsequently sold. None of the roads built upon that 10 acres necessarily benefited at all the 30 acres. That is my hon. Friend's point. If my hon. Friend will correct me if I am wrong when I have finished this exposition of his case, I understood him to say that what the company had done was not to improve the 30 acres, which they had not touched at all by their expenditure on the 10 acres, but what they had done was to increase the demand for that 30 acres by bringing a good-class building centre close to it, and by getting there a good class of building property and obtaining a desirable class of tenants to live near the 10 acres which they had improved at a loss. You cannot by any forcing of language say that that is improving the 30 acres in the sense that a bridge improves, or an embankment or a railway improves. It is quite a different thing. This is a case, not of improving the property, but of increasing the demand for it. The property, in other words, is not improved, although the desire for it is increased owing to your bringing in a good class of tenant into the immediate neighbourhood. I do not think there is anything in this Bill which really covers that point at all. Whether it will be possible by amendment of Clause 14 to make it cover it I do not know, nor do I know whether the Government mean to cover it. That is not the only difficulty that I see. If I understood my hon. Friend, he rightly counted into his profit and loss estimate of the transactions of this company the amount of interest during the years which were occupied with the building, and it is perfectly clear if you are going to treat these things in a commercial spirit you must take into account the interest which runs upon money expended upon improvements until those improvements fructify into a marketable commodity, but I think the Government have refused to take interest into account at any point. Is not that so? I gathered that the Government absolutely refused to take it into account, but if you are dealing with a company such as that referred to by my hon. Friend, it is absurd to exclude interest; you ought to treat it as a business transaction carried through by a company, and you ought to estimate the profit and loss to that company upon ordinary business principles. If that is so, you must take into account the amount of interest, and in my opinion, if you do, you absolutely stultify two of your previous decisions. The first is one in which you said, you would not take into consideration the 1218 interest on capital and take into account the balance of profit and loss, and treat the property of one owner as one, although the owner himself regarded the management of that property as a single business affair. You would not treat that on the balance of profit and loss, and you have laid down a most monstrous proposition, that you are going to tax all the profits made by a company and will not make any allowance for any of the losses. If that is the principle laid down in previous Debates, how are you going to reverse that now and say to my hon. Friend, when he brings the case of his company forward: "We are quite ready to treat it as a going concern, and we are quite ready to tax it on 10 per cent. of its increment on all these transactions." That is what you now say you are going to do, but that is exactly the reverse of what you said you were going to do two days ago.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman is now raising the question of increment and interest, which we have discussed already, but that is not the point which was raised by the Amendment of the hon. Member for Liverpool (Mr. Watson Rtherford).
§ Mr. BALFOUR
I beg the right hon. Gentleman's pardon. It is quite true that the question of increment was not raised in the sense in which it was raised and disposed of a few days ago, but the case of my hon. Friend was this. He said you have 40 acres to deal with, and 10 acres have been improved and 30 sold on account of that improvement. Is it not monstrous that you should tax the gain and make no allowance for the loss? The Government agree that it is monstrous, and the right hon. Gentleman says to my hon. Friend, "Now give us a certificate of sincerity, we meet your views in every respect." But the Government do not meet his views, and in so far as they do, it is by stultifying the decision they come to in a previous Debate on an issue which, although different in some respects, in this respect is substantially the same. Is not the whole case of the Government, as explained by the Chancellor of the Exchequer to-day, a case which depends upon taking the whole of the property of a single owner and treating it as the subject of a business transaction. That is the whole of his point, and I say that the Government must extend it, in the case of interest, in regard to a bad transaction as well as a good transaction. Then they will be consistent, but as long as they 1219 neither meet the case which my hon. Friend gives, nor carry out consistently the principle he advocated, it seems to me that the Government have still to seek for that certificate of sincerity which I for my part, as at present advised, am not at all prepared to give them.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman has made a characteristically ungenerous speech, and has tried to get his hon. Friend out of a difficulty But what is the real point? I think it is really absurd the trouble that is made. The hon. Gentleman sitting behind him made a very long and elaborate speech, pointing out the injustice of the Bill on the assumption that we were not making allowances for roads and bridges and drains and other matters. That was the case which he put. The right hon. Gentleman admits it is in the Bill, and how does he treat if? He talks about increment and decrement, which we disposed of long ago, and which have nothing whatever to do with this Amendment, I think he made a great mistake in referring to a certificate of sincerity, because it was the hon. Gentleman behind him who mentioned that and said this is the real test. We have answered that test. The right hon Gentleman has narrowed it down to a very small issue. He said, "What about the case of 40 acres, 10 developed and 30 not?" but that entirely depends upon the way in which the owner submits his deductions to the Commissioners. He can submit them in such a way that he shows that the money which he has spent is spread over the whole of his property, and it is a matter for the Commissioners, and if he can prove that the expenditure on the 10 acres, spread over the whole of 40 acres, then it is in the Bill. I think the right hon. Gentleman ought to have said, "we were under a misapprehension; we thought you were going to do a great injustice we had never seen Clause 14, section (4), sub-section (a), which contains the whole principle of the valuation; we thought you inflicted a great wrong and now see that you do not; we are very sorry." But instead of saying that, he began to talk about Amendments which we disposed of a week ago.
§ Mr. BALFOUR
The right hon. Gentleman has accused me of two things which I have not done in the slightest degree. One is an unfair presentation of the argument to which I replied, and with which I was dealing, and the other is a want of 1220 generosity. It so happens that I pride myself on the accuracy with which I deal with the arguments which are presented, and I am not conscious of any lack of generosity. I have fully acknowledged that the Bill does carry out what the right hon. Gentleman says it carries out, viz., that if the owner spends either on the property or off the property money on permanent improvements which add to the value of the property—which improve it—allowance is to be made. I believe the Bill is intended to carry that out, and I suspect that it does carry it out. When we come to the Bill we can argue on the policy of the Government, which I am sure they will not withdraw from, and will accept any Amendment which carries it out. There are two points put by my hon. Friend which are not covered by the clause. The one is the case of interest. The right hon. Gentleman seems to think that I misquoted my hon. Friend. I listened most attentively to his speech, and one of the points he made was that £800 of interest would be lost which were expended by this company and which they desired to recoup by selling 30 acres of land which they had left unimproved. The right hon. Gentleman will, I hope, admit on his side, as he asked me to make so many admissions, that he does not meet that part of my hon. Friend's case. The second part of my hon. Friend's case which the Chancellor of the Exchequer fails to meet is that my hon. Friend did not so much assert that the roads and open spaces in the 10 improved acres had any actual effect upon the building amenity of the 30 acres; but he said that the roads and open spaces in the 10 acres brought a class of tenant there which induced another class of people to offer for the 30 acres. It was not an improvement, but an advertisement—it increased, in other words, the popularity and fashion of the neighbourhood. The point is, is any increase in the popularity and fashion of the neighbourhood an improvement within Clause 14 of this Bill. If it is within the intention of the Government I am quite sure the wording of Clause 14 will have to be modified. I am quite sure there is nothing in that which contemplates that increase—this advertising side of the work of a company engaged in building operations. I cannot for the life of me see that that is at all analogous to the case of a bridge, an embankment, or a railway. These are the two points I made, and I think as the right hon. Gentleman piques himself so much upon perfectly accurate 1221 presentation of the arguments of his op-ponents—I think he might have made some reference to that argument. I ask any impartial auditor whether the Chancellor of the Exchequer has really met the case which my hon. Friend presented?
§ Mr. RAMSAY MACDONALD
We in this corner have been watching since the Debate began a very deft attempt to lay a snare for the Chancellor of the Exchequer, but the situation created by this Amendment is really a very simple one if the Committee will confine its attention to it. One case in point was given by the hon. Member who moved it. The case that has been given is the case of a business conducted under the existing state of the law. As soon as 20 per cent. is imposed upon the increment value of the land this company will readjust its business operations to the new condition of things, and all these things will be things of the past. How hon. Members can say "no profit either," when it is only a question between 100 per cent. and 80 per cent., passes my comprehension. Let us argue the question upon the facts. If you have 80 per cent. remaining, or if you have only 10 per cent. remaining, if the tax was 90 per cent. instead of 20 per cent., you would still have your 10 per cent. available for profit. The effect of that would not necessarily be to limit the operations of these companies. If hon. Members cannot follow that argument it is no use arguing with them at all. You would limit the operations of the companies only to this extent, that the business of the companies would be the same as before, but instead of covering a field of 100 per cent. they would cover a field of 10 per cent. of unearned increment. If hon. Members will carefully work the thing out in detail they will discover that the difference will be exceedingly small, and it would be easy to readjust the burdens so that the 90 per cent. that I assume would be taken instead of 20 per cent. would find its distribution in different ways—they would discover that business in building operations would be very little affected. There would be certain changes necessary, we all admit that if you put another 1d. upon the Income Tax.
§ Mr. RAMSAY MACDONALD
Perhaps I was led away from my point by interruptions. The point from which I departed was that the instances given show- 1222 ing the iniquity of the clause without the Amendment was an instance of business under existing operations, and my reply to that is that no injustice really is done even in this instance beyond an injustice which may be done by increasing the Income Tax, and that, so far as building operations are concerned, what really would happen after the Bill came into operation would be, that a certain readjustment would be made and the businesses would go on as before. How far is this Amendment a necessary Amendment? The Amendment is that the owner's expenditure may affect adjoining property or property in the neighbourhood. The idea is that if a certain expenditure is undertaken in order to improve 10 acres of land, another 10 acres of land adjoining the first may become more available for building purposes than they were before without any further money being spent. The contention is that the unearned increment on the second 10 acres of land, being created by the money spent on the first 10 acres, should be regarded as belonging to the first expenditure, and, therefore, should not be subject to the full taxation. Supposing the second 10 acres belonged to a different proprietor from the first, is the contention that the first proprietor ought to be able to claim property in the unearned increment of the second? No one would suggest it for a moment. If that is so, the property created on the second 10 acres is not regarded as belonging in any way to the expenditure on the first 10 acres. That is a totally different property, and must be dealt with separately consequently all that the Government has to do, and I hope they will rigidly make up their minds to do it, is to consider whether the expenditure on the first 10 acres was made for the purpose of developing those 10 acres only. If it is, it does not matter what the indirect effect in increasing unearned increment is upon the adjoining property. That is an indirect effect which has nothing to do with the original expenditure, which was not contemplated by the original expenditure, and it is simply a natural consequence that it creates value attached to the second property and not attached in any respect to the first. As a matter of fact, if it is contemplated, you are dealing with a unit of an estate which is dealt with most adequately in the sub-section referred to by the Chancellor of the Exchequer.
But the whole point of the Amendment, I take it, is to widen the contemplation of the Commissioners so that they may be 1223 instructed, so to speak, not merely to deal with one estate but to deal with adjoining estates when you get a second estate being increased in its unearned increment value by the development of a first estate. The position, I think, is perfectly clear, that where the expenditure of money upon an estate fructifies itself, brings its own interest and its own revenue, and develops the estate itself, no secondary consequence ought to be taken into account by the Commissioners in deciding whether the unearned increment created on the second estate ought or ought not to be taxed. I hope when we come to Clause 14 the Chancellor of the Exchequer will be very careful not to agree to any extension of his intention, which will really mean that large masses of unearned increment which ought to be taxed will escape the tax in accordance with the intention of the Mover of the Amendment.
§ Mr. JAMES MASON (Windsor)
The hon. Member for Leicester (Mr. Ramsay Macdonald), in the two criticisms which he made upon the proposal of the Amendment seemed rather to miss the whole point of it. He suggested first that in the case given by my hon. Friend, so long as the company had a profit at all it should be satisfied. I understood him to say the company was now carrying out transactions which were satisfactory under the existing law. Supposing the company to make 10 per cent. on its total operation, there is something to be said for the argument; but the point here is that the company loses on one part of the property and gains on another, and the total operation is not satisfactory to the extent suggested in the Bill. The second part of the hon. Gentleman's criticism was that the proprietor develops 10 acres. If the adjoining plot belongs to him he may gain an advantage from the development of the first plot without any further expenditure. If, on the other hand, the second plot belongs to someone else, of course that someone else has no right to participate at the expense of the first. But the question is whether, only having one plot, he would have developed it in the same way as he would if he had two plots, from the second of which he expected to get an advantage after an expenditure on the first. The Chancellor of the Exchequer, in the answer which he gave first to the Mover of the Amendment, seemed to base his argument on the assumption that the Bill provided for a 1224 case where the owner expended something which was necessary to the development of his building land, and he quoted, as instances of that, a bank by which a large area of land was reclaimed, and he said of course that bank stands outside the building area, and the case of the bank must be spread over the development of the whole land. He went on to quote the case of a bridge which was absolutely necessary to the development of land on the other side of the river. But I think the Amendment goes rather beyond that, and contemplates the case where the owner of a certain area of land spends something not absolutely necessary to the development, but which adds to the amenities of it. You have a typical case in most of our seaside watering-places, where for instance the owner of the land has built esplanades or piers in order to make the place more attractive and draw people to it, and in that way to increase his interest in the land. It is suggested in the Amendment that whore development of that kind has taken place, not only in necessaries but in amenities, all those amenities should be allowed for as deductions.
I pass from that, because, as far as I can see, the right hon. Gentleman is desirous of including these conditions and of meeting the proposal of the Amendment. But he seems to think that is done in Clause 14, and that it is covered in the case of Clause 2 by the words inserted yesterday on the suggestion of the Attorney-General, "or other things." But I am not clear whether that, even with the alteration which may be further carried out in Clause 14, will have the effect contemplated, because the words seem to me now to read "attributable to the value of buildings or structures or other things of which the land is deemed to be divested under this Act for the purpose of ascertaining the site value." I fail to see how the land could be deemed to be divested of piers which stand in the sea or of bridges.
§ Mr. HAROLD COX
The hon. Member for Leicester (Mr. Ramsay Macdonald) seems to be advancing a very curious proposition. He said the owner of the land would be able to adjust the burden of the Increment Tax. I take him to mean that he would shift it on to the man who is going to buy the land. Is that what he means?
§ Mr. COX
If a man is carrying on the business of buying and selling land, and we are told he is to readjust matters because he is being taxed on his profit, he can only do it by buying at a lower price or selling at a higher. I take the first alternative, that he buys at a lower price. That would be all right if he were only starting business now; but, supposing he has land on his hands, then he can only readjust matters by selling at a higher price. If the hon. Member for Leicester (Mr. Ramsay Macdonald) thinks that can be done, that means that he believes the tax, which is a burden on the landlord, will pass on to the consumer, in which case these Land Taxes, which have been represented as taking money out of the pockets of the landlords, will be a burden on the people who are using the land.
§ Mr. COX
I want to ask the Chancellor of the Exchequer a question which, I am sure, he will see is quite relevant. I will instance a case which has been given to me by an actual land-owner. He says he had a lot of agricultural land near the sea-side; he spent a great deal of money in developing the sea-front; and he sold a great deal of that. As a consequence, the land at the back is now worth very much more than it was worth before. He has made the value of that land. It has not been made by the State. It would never have been given its increased value if he had not spent his capital in developing the land. I wish to know whether he will receive any allowance for developing the land on the sea-front. The whole theory of this tax is that we are entitled to claim the tax because the State has improved the land. Where it can be proved that the value has been made, not by the State, but by the individual, surely that individual has a right to a deduction.
§ Mr. W. JOYNSON-HICKS
The hon. Member for Preston (Mr. Cox), the hon. Member for Leicester (Mr. Ramsay Macdonald), and the Chancellor of the Exchequer have spoken on this Amendment, 1226 but they are not agreed about it. So far as I could gather, the hon. Member for Leicester argued that every increment which arises on a piece of land on which the land-owner has made no expenditure is unearned, and that, therefore, the State should put a tax upon it. That does not seem to be the view of the Chancellor of the Exchequer, who, according to his speech this afternoon, is prepared to admit that there may be an increment in the value of land upon which no money has been spent by the land-owner in consequence of building development by the land-owner of adjoining land. The hon. Member for Leicester is supposed to have had something to do with the promulgation of this particular Budget. [Laughter.] If the hon. Member has had nothing to do with it, I do not wish to press the point, as the Attorney-General seems rather to object to the statement. The hon. Member stated in answer to the hon Member for Liverpool (Mr. Watson Rutherford) that Clause 14, sub-section (4) (a) gives him all he wants. I think the provision in Clause 14 is totally distinct from what is desired by the hon. Member for Liverpool. I wish to put a case which would be covered by my hon. Friend's Amendment, but not by Clause 14. Clause 14 says that a deduction will be allowed from the site value of any land in respect of "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 … for the purpose of fitting the land for use as building land." The Chancellor of the Exchequer referred to a bridge and a bank, both of them being directly connected with the development of building land. My hon. Friend's Amendment asks that a deduction should be allowed in respect of the "reduction of the available area of the land by reason of some part thereof being appropriated for streets or passages, or for open space of any kind, and the expenditure thereon," but it does not say what the expenditure is to be.
I want to put some cases which are entirely apart from the development of land for building purposes. They are cases within my own knowledge. A friend of mine, the owner of a considerable estate of absolutely no value whatever, desired to develop it. He built some roads, but the land did not go off. Then he had an inspiration. It was a fine place to play golf, and he expended £6,000 in laying down links. The adjoining land began to 1227 go off for building purposes on account of the expenditure by the owner of the £6,000 on golf links. That would come under my hon. Friend's Amendment, but it would not be covered by the words quoted by the right hon. Gentleman in Clause 14. I wish to ask the Chancellor of the Exchequer whether expenditure of that kind is to be allowed to be deducted from the increment value. It is necessary that we should know. There are a vast number of cases of that kind. I was engaged to-day in arranging for the laying down of some more golf links by the owner of a considerable estate. He is laying out £5,000 on the work. Is the improvement brought about by the money so laid out due to the community who may come to reside on the adjoining land? Not at all. The owner is a business man, and he is incurring this expenditure because he is advised by me or others that by increasing the amenities of the neighbourhood people will be attracted, and that land which today is worth nothing may be worth £400 or £500 per acre later on. The hon. Member for Leicester would argue that that is unearned increment, and that it was the community that changed the value from £10 to the higher figure. I would suggest that it is not the community that makes the value. The land-owner makes the value. The land-owner produced the community. He takes the community there. [Laughter.] I should like when the Government have recovered from their temporary hilarity to put one or two other cases. Where a land-owner has added to the amenities of the locality he, in so doing, adds to the value of his own land. I am not now speaking of a trading company; I am speaking of a large land-owner. The first thing he does when developing his land, after he has laid out the roads, is to give a site and, generally speaking, a large donation for the building of a church or chapel. You may say that that is to a certain extent a charitable donation, but it is the kind of charitable donation which will be cut off if the expected result in the increment of the land in that neighbourhood does not appear. [Laughter.] Hon. Members may be amused at anybody giving money to build churches or chapels, but I can assure them it is done. I will give another instance, and perhaps hon. Members may laugh when it is suggested that it is likely to create an increment in the value of land. I have known a land-owner to build a Radical club. I am not at all sure that that would be 1228 likely to cause an increment. It might be more likely to cause a decrement. There are golf links, tennis courts, recreation grounds, and the hundred and one other matters dealt with by large land-owners which must necessarily increase the amenities of a district. I want to know whether the expenditure on these things will be included among the subjects in respect of which deductions will be made in estimating the site value of the adjoining land. What is the result of a landowner's action in spending a large sum of money on golf links or the laying out of public parks? He sets so much land aside, and spends so much money in forming a park, with the inevitable result that the value of the adjoining land is sent up. Are landlords to be taxed on that, or is expenditure of that nature to be deducted? The Chancellor of the Exchequer says that under Clause 14 the laying down of golf links or the erection of a school is not among the purposes regarded as fitting the land for building. I entirely agree that it would not come within the provisions of Clause 14 of this Bill, but I should like to point out that this Amendment would cover these things. If the Chancellor of the Exchequer is sincere in his intention, as expressed this afternoon, to deal fairly with all increments on land created by the land-owner, and which are not the creation of the community—if he is going to deal with all increments which come from reasonable and logical expenditure by the land-owner, then he must agree to the Amendment, because it goes far enough to cover those matters. Clause 14 would not cover those things, but merely the expenditure of money for the purpose of improving the building capacity of the land.
§ Sir J. DICKSON-POYNDER
I think hon. Gentlemen opposite, and especially the Leader of the Opposition, in their desire to protect the owners of land against the Increment Tax, are going to a very extreme corner in moving and supporting the Amendment now before the Committee. As a supporter of the principle of the Increment Tax I cannot accept the axiom laid down by hon. Gentlemen opposite that the owner of land is exclusively responsible for the increment in value. I do not think you will find it in any instance. There must always be the element of the community which creates the increment. The Chancellor of the Exchequer has stated that as regards outgoing expenses for the improvement of land to fit it for building full compensa- 1229 tion is going to be allowed. The hon. Gentleman who moved the Amendment gave us an interesting instance of a company which possessed 40 acres of land. He pointed out that 10 acres had been developed, but that the Increment Duty upon the remaining 30 would be charged. The hon. Member told the Committee that the 10 acres had been developed at a loss to the company. That seems an extraordinary instance of land development. An area of 10 acres would comprise a considerable number of houses. If you take the usual development at the rate of 19 houses to an acre and multiply that by 10 it gives 190 houses. Put against it all the cost of roads and sewers, and everything incidental to the development of the estate, all I can say is that if at the end of that operation the company's accounts show an adverse balance, it is a very exceptional case of development, and if there were many of the kind in the country we should rarely hear of land improvement taking place at all.
I am bound to say myself, in all these cases where development takes place, whore it can be shown that energy and capital have been expended by the owner, the full allowance should be made for the charges incurred. In cases where, incident to that development, the adjoining property is improved in value thereby, and the owner enjoys that additional profit there when the time comes either for a sale or development, provided a similar compensation is allowed for outgoings, the enjoyment of these profits might well be put against the 20 per cent. charge which the State might ask for that increase in the property. The case given by the hon. Gentleman opposite, the Member for Stratford, was, in my judgment, a very exaggerated one—taking 90 per cent. for the State and only leaving 10 per cent. to the company. Undoubtedly such an inordinate charge as that would probably discourage companies from developing land in the country, but there is a very wide gulf fixed between 90 per cent. and the proposal of the Government, which is 20 per cent.; and if because of an increment or a profit the owners or the companies are going to be reduced by nearly 20 per cent., so that instead of being £100 profit on that property there will be only £80, I cannot for the life of me see that there will be any discouragement to that property being developed which happens to be adjacent to the property which has enjoyed the benefit. I hope, under these circumstances, that this proposal of the 1230 hon. Gentleman will be rejected by the Government, because, in my judgment, this is one of the instances where a legitimate Income Tax can be charged and a reliable revenue can be derived by the State. As my right hon. Friend knows, I take very strong exception to many of the occasions on which this Increment Tax is to be applied. I believe it to be unworkable, and I believe that it will only produce vast expense to the State with very little return; but this particular case of reversion of building property, provided that all proper allowances are made for capital outlay, is a legitimate case and is one which will give a certain and reliable return of revenue to the State.
§ Mr. PRETYMAN
I think it is due to the Chancellor of the Exchequer to say that I entirely accept the statement which he has made this day as an indication of the desire of the Government to allow an owner the benefit of any expenditure actually incurred anywhere in the improvement in the value of other parts of his property or of part of the property on which the expenditure is incurred, and also, of course, where the expense is incurred on permanent works and for the purpose of clearing the land for building; and provided we can come to an agreement between the two sides of the House as to exactly what allowance should be made, the construction of the Bill would be better settled by including those allowances in the original site valuation under Clause 14 and then by including them by reference in this Clause 2 in the manner which is actually done. But I think the right hon. Gentleman (Mr. Lloyd-George) will agree with me that unless we are satisfied that Clause 14 does actually give us those allowances, which I think right, and unless we can arrive at an agreement that those allowances are fair, we are obliged to press these Amendments in Clause 2. I am bound to say that looking with the most favourable eye I can at sub-section (4) (a) of Clause 14, it does require a very great deal of strengthening before it meets our case, and it would require strengthening in three or four directions which it would be out of order to refer to now. In one particular with regard to using the expression "permanent works," there, I am bound to say, I think the right hon. Gentleman will see the force of the Amendment of my hon. Friend (Mr. Rutherford), because there really is no valid distinction that might be between the different kinds of expenditure. What 1231 possible moral distinction can be drawn between expenditure which a man incurs with the object of improving his property and increasing its value, whether he incurs it for what are called permanent works or an some other way? Can the right hon. Gentleman draw any valid distinction? He has admitted the principle that expenditure applying to permanent works should be deducted. If it does not happen to be on permanent works, if it happens to be, for instance, as my hon. Friend pointed out, that the owner has been willing to incur loss on one part of the land in order to get an advantage on the other, it is expenditure just the same. There is no distinction in any sense in the mind of the man who incurs it. In each case he spends a certain amount of money with the object of making a total profit on the whole transaction. Whether he spends that money on building a bridge or a railway, or on developing one part of the land at a loss in order to make a profit on the whole transaction, or by being willing to forego interest on part of his capital expenditure in order in time to get that interest back with further increment, there can be no possible moral distinction. Therefore my hon. Friend is absolutely justified in pointing out that the Government, after resisting expenditure in one direction and refusing amendment, admit that expenditure now, and come forward and claim from us a certificate of virtue because they are willing to allow expenditure in another direction. At any rate, we cannot give the Government a certificate of consistency. What we desire to press for is a bare allowance for all expenditure. There are several further Amendments on the Paper dealing with other allowances, and this Amendment we are obliged to press for the reason I have given. I hope the Chancellor of the Exchequer will not think we are ignoring the concession which he has pointed out exists in the Bill. I was perfectly aware of the concession myself, but I did not think it went far enough. It does not go to the point to which this Amendment goes, and therefore we are obliged to press this Amendment to a Division.
§ Mr. LLOYD-GEORGE
The hon. Member (Mr. Pretyman) has admitted that it was far better that we should make these deductions, when they are to be made, in both cases, and the way to do it is rather by making a deduction here by reference to the deductions to be made later on. 1232 We cannot enumerate the deductions in both cases. All we can say is, whatever deduction is made in Clause 14, (4) (a), may also be made here. If we were to discuss in, because if we had not got the deduction sarily prejudice the discussion of the same issue when we come to it later on. Why deduct here and not deduct later on? You would be deciding complications that you must necessarily decide later on. All the matters that have been referred to you must consider when you come to Clause 14. It is quite impossible to go on discussing Clause 14, (4) (a), at this stage. It would be a very dangerous thing. Therefore I would ask the hon. and learned Gentleman (Mr. Rutherford) in charge of this particular matter not to press it.
§ Mr. WATSON RUTHERFORD
I simply desire to point out that if you can possibly construe 14, (4) (a), in the way that the Chancellor of the Exchequer explained that he himself construed it, it appears to me that this is the proper place to put it in, because if we had not got the deduction now taking the site value for the purpose of duty, if we had said nothing about it at the present stage in the Bill, it would have been too late to have said anything about getting such deductions later on. I think myself that the Chancellor has met the point very fairly on the Amendment. He has told us he has no design or intention of preventing the owner of two estates in the same neighbourhood, if I understand him aright, or the owner of two different pieces of property in different occupation in the same neighbourhood, getting the benefit of expenditure upon one of them. Whatever the expenditure is—it may be on a church or it may be on doing anything—which has the effect of actually increasing the site value of the property, the Chancellor has, as I understand it, said that he does not wish to deprive a man of the benefit of the allowance for that which he himself is creating.
§ Mr. LLOYD-GEORGE
What I said is that any expenditure is covered by Clause 14, section (4), sub-section (a), expenditure for fitting the land for building purposes, and I included all the different items of expense which the hon. Gentleman himself detailed. Roads, bridges, and things of that kind, and all work which is set up for the purpose of clearing the land for building operations, certainly ought to be deducted; but supposing that the hon. Gentleman is not satisfied with my category of expenditure, this is not the stage at which it can most usefully be enlarged.
§ Mr. WATSON RUTHERFORD
I am glad I understand that the Chancellor does not intend to give a promise, at all events in anything like the words of the Amendment, the terms of which the Government do not accept, though they may accept when they come to consider Clause 14. But if, as I understand, we are going to have boná fide an opportunity of going into this really very important question as to these deductions under Clause 14, and if that is the most convenient place for discussing this point, then, of course, I shall ask leave to withdraw this Amendment, because I have no desire to inflict a double discussion on the Committee, but I must be allowed to say in doing so that I did not read Clause 14 as doing anything of the sort.
§ Mr. STEWART BOWLES
In reference to the suggestion of the right hon. Gentleman (Mr. Lloyd-George), which I quite appreciate, I desire to ask a question for the guidance of the Committee. The purpose of my hon. Friend (Mr. Watson Rutherford) is to add to the deductions which are to be made in valuing the site value for the purpose of the Increment Duty. The right hon. Gentleman has pointed out that that can be more properly dealt with when we come to Clause 14 (4) (a). What I desire to ask is, inasmuch as that Clause 14 (4) (a) refers not alone to Increment Value Duties, but to all lands, would it be competent for us on that clause to make an Amendment referring merely to the valuation to be taken in respect merely of this Increment Value Duty, and, if not, then would not this occasion be the only opportunity on which it can be done?
§ Mr. LLOYD-GEORGE
Our theory is that we ought not to charge a man in respect of what he creates by his own labour and expenditure, but rather in respect of something which is due to the action of the community. So that the deduction ought to be made in both, if it is made at all. I should have thought that that was obvious.
Probably the actual question put to me will not arise, but if it does arise I do not think it will be out of order to make a special exception in regard to one of the taxes.
§ Mr. JAMES HOPE
There is a difference between the structure of this part of the Bill and Clause 14, because here the deduction is what I might call a voluntary one; the Commissioners may or may not allow it. My hon. Friend seeks to add 1234 another deduction to the list of deductions which the Commissioners may allow, whereas in Clause 14 absolute deductions have to be allowed in any case. We could not prejudge the question of compulsory deduction.
You can put deductions in Clause 2 which you do not put in Clause 14, that is perfectly clear. On the other hand, it seems to me, in regard to this particular matter, it is a subject of general agreement that deductions which ought to be made both with regard to the original valuation and the later valuation, and which arise under a subsequent Amendment dealing with deductions, ought to be dealt with on Clause 14.
§ Amendment, by leave, withdrawn.
The hon. Member is entitled to move it if he confines it to Clause 2, for this again is one of the deductions both as regards original site value and later site value.
§ Mr. WATSON RUTHERFORD
This is one of the deductions which I simply wish to apply to the later stage of the imposition of the duty. I do not think it has anything to do with Clause 14.
It is a question of whether this is to be a deduction made under Clause 2 on the later valuation, and not made on the original valuation. Under those circumstances, of course, it may be moved here, and, although the hon. Member discussed the point on the previous Amendment, which has been withdrawn, and does not prevent his moving it here provided that he confines it to Clause 2. If, however, he wishes to apply it to both original and later valuations, then he ought to wait until that clause is reached.
§ Mr. LLOYD-GEORGE
This is one of the deductions which would come in 14 (4) (a) because it has an element which puts it under that provision.
§ Mr. WATSON RUTHERFORD
My point is this. This is not expenditure at all, and it is very difficult to see how it could be dealt with either under Clause 14 or under Clause 2, or anywhere else in the Bill. It is a case where you have got to deduct the addition to the value of a given quantity of land, or in consequence of a certain portion of the area having dis- 1235 appeared for public purposes—streets, or roads, or parks. If the Chancellor of the Exchequer is going to give us an assurance that this is one of the matters which he will take into consideration on both classes of valuation, then I will not move my Amendment at all.
§ Question proposed, after the words "ascertain the site value," to insert the words "or to the reduction of the available area of the land by reason of some part thereof being appropriated for streets or passages or for open space of any kind and the expenditure thereon."
§ Mr. PRETYMAN
I entirely agree with what the right hon. Gentleman has said, that it is far better to make these deductions under Clause 14, where they will cover both duties. If they are inserted in Clause 14 they will ipso facto find their way into Clause 2. That is perfectly understood. The provision 4 (a) of Clause 14, although it includes the costs of works of a permanent character, is quite capable of being enlarged to cover the point raised by the Amendment moved by my hon. Friend and by other Amendments on the Paper. I think there can be no question that it is capable of enlargement, but we must be thoroughly satisfied on that point.
§ Mr. LLOYD-GEORGE
I should have thought that on Clause 14, 4 (a), any Amendment could be moved which refers to deductions in respect of any large cost to the owner.
I am certain that the words "of a permanent character" could be moved out of Clause 14. I see nothing to prevent the Amendments of the hon. Gentleman being moved on Clause 14.
§ Mr. WEDGWOOD
No. We have debated for the last four hours Amendments that have been withdrawn, and we can go on indefinitely with Amendments to this Clause that are withdrawn. If these Amendments are moved they ought to be divided upon.
§ Mr. LLOYD-GEORGE
May I appeal to my hon. Friend? It is quite true that the last Amendment was debated for two hours, but I suggest that it really would be a convenience to the whole House that we should have a Debate on these very important business matters, which have got to be fairly considered. Therefore I hope my hon. Friend will not insist upon a Division which would preclude the discussion of these matters.
§ Mr. WEDGWOOD
I only wanted to preclude further Amendments being moved to this clause, but after what the right hon. Gentleman has said, I will not press the Amendment to a division.
§ Amendment, by leave, withdrawn.
§ Mr. J. A. CLYDE (for Mr. Clavell Salter) moved, after the words "ascertaining the site value," to insert, "being in no case less than the cost of constructing such buildings or structures as at the date of valuation, but subject to an allowance for depreciation (if any) in respect of their state of repair."
§ The matter which I bring before the attention of the Committee is immediately connected with what took place yesterday on the Amendment which was made on the Motion of the Attorney-General. The Committee will remember that the Amendment yesterday was in reference to the deduction to be made from the sale price of land and buildings sold together. Certain words, namely, "value of," were taken out, making the clause read "subject to such deduction (if any) as the Commissioners allow in each case in respect to any part of the value which is proved to their satisfaction to be attributable to the buildings." I purposely stop there. The deduction is to be any part of the value which is proved to be attributable to buildings or other things of which the land is deemed to be divested under the Act for the purpose of ascertaining site value. I agree that the Motion of the Attorney-General was made with the intention and desire, as he himself and as the Chancellor of the Exchequer put it, to make a concession to what might be regarded as fair from the point of view of Members on this side of the House. I plead on behalf of this Amendment that it is absolutely necessary if the principles upon which hon. and right hon. Gentlemen opposite base increment value are to be adhered to. I think I shall be able to prove that, without this Amendment, these principles could not be carried out, and that something will be done which is 1237 inconsistent with them. This Amendment is absolutely necessary not only to do justice, but to do justice on the basis which hon. and right hon. Gentlemen opposite support as the basis of this particular form of taxation. The result of it, as will be seen, would be to place a certain limit below which the deduction in respect of buildings would not go—a fixed limit, namely, the cost of construction less depreciation. That deduction would require always to be made if the Amendment were agreed to. I quite agree that the Attorney-General's Amendment made last night was made with a view to preventing any rigid limitation of the deduction so far as represented by the value of the buildings. I quite appreciate the concession, and I quite understand his view, namely, that there may be cases in which the value of the whole property, the complex subject, was really increased by the building to an extent which would not be adequately represented by the mere value of the building itself, that is, of course, construction cost less depreciation. My Amendment means that in no case shall the deduction go below that. I want to make good my point. Not only is this the least that can be done in the interests of justice, but it is the only way in which the principles on which this tax is based can be carried out. Anything else means infringing it. Let me state as shortly and as fairly as I can what I understand those principles are, not for the purpose of discussing them. The basis, I understand, of these proposals is the proposition that increases in the value of capital which is invested in land may fairly be made the subjects of special taxation in a way which would not apply, or to an extent that would not apply to the case of capital invested in buildings or in improvements. That I understand to be the doctrine. I am not discussing or traversing the reasons for it, and I am not consciously stating it unfairly. I understand it is claimed that one of those advantages is that you avoid any risk of discouraging building or discouraging improvements, because, though you may place a very heavy burden on the bare land, you place no burden, but, on the contrary, you leave free the capital that is invested in buildings and in improvements. It is for that reason, as I understand it, that the Increment Duty is placed on the increment value in the site, and that hon. and right hon. Gentlemen are anxious, as I understand they are, to avoid putting any increment duty upon buildings or improvements.1238
§ Now, what is the capital that is invested at any given moment of time in buildings and improvements? How would you state that in your books? What is the capital invested at any moment in certain buildings or certain improvements? Why, of course, it is the cost which it took to erect those buildings and to make those improvements, less the depreciation which that capital, like every other form of capital, has suffered through the lapse of time. I have ventured to put the matter, as I think, not unfairly. Did anybody ever know of books kept by a business man, or a business company, which represented capital in buildings or improvements in any other way than what they cost, less the depreciation which time had entailed upon them? Some hon. Members opposite disagree, but, so far as one's experience goes in connection with these things, of course from a professional point of view, that is how I at least am familiar with the statement of those things.
§ Mr. WEDGWOOD
In case the buildings are not suitable for the site, naturally you would make special depreciation in your tax in such a case?
§ Mr. CLYDE
The hon. Member will find that, so far from omitting that case from my view, that case is precisely the one on which my appeal is going to be based. Therefore, quite admitting that there may be varying rates of depreciation in various circumstances, I venture to think my proposition was not unfairly put. At all events, I would like to see business books kept in any other way. If it is fairly said that that represents the capital invested in the buildings and improvements, what is it that you would do if this Amendment, which I am going to submit, is not accepted? What you would do is this—you are going to take the gross price for the subject, and then you are going to make a certain deduction that may be less than the cost of those buildings after allowing for depreciation. And the difference you are going to treat, as the site value, for the purposes of estimating the increment value. Just take the position of any investor in any land on any buildings or improvements. He has put up his building and spent his money on it—it may be 20, 30, or 35 years ago, a building perfectly well adapted, from a commercial point of view, to the development of the bit of land on which it is placed. His capital was duly entered in his books, and has been 1239 duly depreciated since. But the Commissioners, under this Bill, when they come along, are of the mind that, as things are now, 30 or 35 years afterwards, the capital invested in those buildings might have been better invested, that is, might be better invested if you pulled the buildings down to-day and rebuilt them to-morrow; that, in other words, if the man had been an all-wise speculator—in which case speculation would cease—he would have made his buildings 30 or 35 years ago something different from what they are. Unfortunately, the assumption under which a great deal of what seems to some of us false economics, is based as though people always know their best economic interests; second, that they can always follow their best economic interests; and third, always do follow their best economic interests. All those assumptions are equally unfounded.
I take the case of somebody 30 or 35 years ago investing his capital under what was the best advice obtainable, and the best wisdom of the day; but it now turns out that if he had been all-foreseeing, he might have made some change, and he might have been able to get at the present day a fuller value out of those buildings, or rather, a fuller value out of the complex subject than in their actual condition he actually gets. Because of this, the Government proposes not to allow a deduction of the whole capital invested in the buildings, but only of a part of it, with the result that the other part goes to swell site value and becomes subject to the tax. What is it I ask you to do? I ask the right hon. Gentleman, by accepting this Amendment, to free from taxation precisely that part of the capital, honestly and wisely invested in those buildings 30 and 35 years ago—to free from taxation that part of the capital invested in those buildings and improvements, which, in the judgment of the Commissioners, they might think in the light of to-day might have been better invested otherwise. I am not asking any consideration for the owner of the site. I am asking consideration only for the man who invested his capital in the improvements which it might quite well be turn out not to have been as wise with reference to the events of to-day as of five-and-twenty years ago. Do hon. Gentlemen opposite think that that is arguing anything more than is just? What is the justification for not allowing him the full deduction for the investment in build- 1240 ings and improvements which he had with perfect wisdom effected 20 or 30 years ago, and about which there has been no holding up, no unreasonableness, none of the taint of selfishness which the hon. Member for Leicester (Mr. Ramsay Macdonald) thinks of such importance, but which are, in fact, in the light of to-day, not exactly the kind of building if you had tabula rasa it might be wise to build.
I make my appeal, and I do it not for any argumentative purpose, but on the plea that it is both reasonable and just. If you do not make this deduction in full, you are going to take the total price, of the complex subject—my argument applies only in cases in which the Commissioners give less than the construction cost—and you are going to make a deduction from the total price of the complex subject less than the amount which the man who owns them to day spent on those buildings and improvements. What is the result of that? You make the deduction from the total price so much less, and you make the balance so much bigger, and you use that as a basis for charging increment duty. So that you are going to charge increment duty on the decrement value of the buildings and improvements. You are going to charge under the name of increment duty on the site and nothing but the site, part of that duty on that portion of the capital invested in the buildings and improvements which somebody with the wisdom of to-day says might be invested at the present moment better than it has been. I am conceding, for the purposes of my argument, the legitimacy of treating the unhappy owner of the land, as a bare site, in the way proposed by the Bill. But hon. Gentlemen opposite all agree it is not fair so to treat the owner of capital invested in other things—at least, so I understand—they say they do not propose to tax him, and particularly say it is not fair to tax the owner of capital which is invested in buildings and improvements. I only ask the right hon. Gentleman to be consistent, if not to be fair and reasonable; to be consistent he surely must avoid the inconsistency of including under the name of increment value part of that which is due exclusively to decrement of capital invested in buildings and improvements. If the right hon. Gentleman had said that the proposal of this Bill was to tax a man who had invested money in buildings and improvements, on that part of his capital which turned out in the result of the speculation of 20 or 30 years ago to be the least 1241 profitable part, what would have been said of such a proposal? Yet, that is absolutely what is going to be done, unless this limitation is made.
So far I have appealed to reason and to justice; I now wish to appeal to expediency. We have been assured over and over again that one of the virtues of this system of exceptional taxation is that it will encourage the development of land. How will it do that? We are told that it is going to do it by placing the burden on the bare land, and by enfranchising the buildings and improvements. Are you going to encourage the investment of capital in buildings and improvements by telling everybody who does so that if he makes any mistake as to what is the best economic development of his land at the moment; or if his foresight into the future—over the next 20 or 30 years—as to what will be the best economic development of his land, turns out not to be quite accurate; if, like all the rest of us, he is fallible and does not speculate in the most profitable way, or what turns out in the changed conditions of to-day to be the most profitable way; to the extent to which his capital invested in buildings and improvements turns out to be ill-spent or lost, you are going to use that portion of the loss to increase the taxation on his land? That will be exactly the result. I admit that it is a defect of the system; I am not sure that it is not an inherent defect; but the system is to take the market price of the subject and deduct the value of the buildings and improvements. If you do not make that deduction as big as the actual cost of the buildings and improvements, it follows by inevitable logic that you are going to include in the difference between the buildings and the total price precisely that part of the capital represented by the buildings and improvements in regard to which, in their wisdom to-day, the Commissioners are able to say, "You might have invested that part better, or in the changed conditions that part turns out to be ill-invested altogether." When one comes to the question of expediency, does the right hon. Gentleman think he is going to encourage anybody to invest capital in land and buildings by saying to him, "Do it at your peril. If your speculation turns out in the future to be sound and well justified, you will Be happy and escape; but if you make any error, if conditions change so that before your buildings are worn out and your capital is obliterated by depreciation, it turns out that a different kind of building would 1242 have suited the land better, take warning, for your site value taxation will increase." I submit that that is the last kind of inducement to hold out to a builder or speculator. It is the most discouraging prospect you can possibly put before him. I beg to move.
§ Question proposed: "That those words be there inserted."
§ The ATTORNEY-GENERAL (Sir William Robson)
I do not think the hon. and learned Gentleman (Mr. Clyde) has done full justice to what he has described as the principle of the tax. This is a tax on site value. He has again and again spoken as if this were a tax on buildings. Really the value of a building, that is to say, the cost of a building, whether it be great or small, whether it was a wise or a foolish expenditure, docs not affect the value of the site as a site. That is all we are taxing. First of all, we ascertain what is the site value as on 30th April, 1909. Having ascertained that, we compare with it the site value when the tax comes to be assessed. For the purpose of making that comparison we make certain deductions. First of all, with regard to the original site value, we assume that the buildings are off the land. We deduct, not merely what the buildings may have cost, if the cost has been well expended, but something further. I pointed out last night that, as the Bill originally stood, there was some reason to believe that the deduction in respect of buildings might be limited to their mere cost. That appeared to us not to be a fair and full deduction. If a builder buys a site and proceeds to put buildings upon it, it would not be correct to say that the total value of the composite hereditament thus called into existence is represented by the cost of the site added to the cost of the buildings. The union of the two brings into existence another value, which is really the product of the builder's ingenuity, enterprise, and energy. Therefore it is not enough merely to take away the cost of the Buildings; there is also the value which the buildings have given to the site. Therefore I moved words las night which made that perfectly clear. Hon. Members opposite now want something more than that. They say that there may be cases where buildings have depreciated, and they want not merely to deduct the full value in cases where the building is standing, but to have the option of deducting the cost of the building. I submit that the taxpayer ought not to have it both ways. If hon. 1243 Members are content with deducting the value of the buildings, well and good. If they do not want the value of the buildings, they may take the cost of the buildings. They certainly do not want that. But to have the option of either the value or the cost would be more than the taxpayer is entitled to. We have got the original site value. The hon. and learned Gentleman proposes to deal only with the taxable value, which is to be ascertained under Clause 2. Now, he says, "Having buildings upon a valuable site which add nothing to the value of the site, I want, not only to be allowed in Clause 14 for hypo-thetically clearing the site"—because if, in order to realise the full value of the site, it is desirable that the buildings should be taken off, Clause 14 says that an allowance shall be made in respect of that. But the hon. and learned Gentleman wants more than that. He says, "I want to deduct not only the original site value, but to take from the taxable site value the whole cost of the buildings." Why should that be done? We are taxing the site. We are comparing one site with another, and it is not in the least logical or even fair that you should allow the value of the site to be whittled away because the builder may have made a loss or a miscalculation. If he has chosen to put a skating rink on a very valuable site which might be better used for warehouses, we allow him in estimating the amount which he will pay in respect of that site whatever is proper for clearing the skating-rink off the ground. But the hon. and learned Member wants to calculate the cost and deduct that entirely. In other words, his proposal will give the owners of slum property an advantage and boon which it is not suggested should be given to the owners of any other class of property. You are to allow them to make this deduction when the tax comes to be paid, whereas, those who have made a wiser speculation and have invested in buildings which really add to the value of the site, are to have no corresponding right. We adhere to the plain principle of our tax, which is that we are taxing a site, and all we have to do is to ascertain the value of that site. For that purpose we deduct anything which has been added to the value by the industry or ingenuity of the builder, as long as it is an, addition to the value. If it is not an addition to the value, all we can do is to allow something more for clearing it off the land alto- 1244 gether. But it would not be either in accordance with the principle of our tax, or logical and fair to go further, and say, "Where you have no value to deduct we will allow you to make a deduction of something which represents a mistake or miscalculation, and does not in any way add to the value of the site."
§ Mr. BALFOUR
This is one of the most difficult parts of the Bill thoroughly to appreciate, and I am not absolutely certain, but I think I am right when I say that the two site values which are to be compared, the difference between which is to become the subject of taxation, we arrive at by quite different methods. If I understand the Bill aright, the original site value is arrived at by an estimate of what the land would be worth if there were no buildings upon it at all. Therefore the value which the buildings might have had has clearly no relation to the estimate. You do not consider what the buildings are, and then imagine them to be removed. You do not consider the buildings at all. Then when you come to the second site value you do not simply imagine the buildings to be removed, and say what the bare plot of land would sell for. On the contrary, you proceed to arrive at the site value by considering what the value of the buildings is, and deducting it from the consideration. Do the Government agree with me that they are adopting two different ways of arriving at the site values, because I think it is clear that they are? Do they also agree with me that the two methods may have very different results? In the same case the methods by which you arrive at the original site value, and the methods by which you arrive at the occasional site value may not be on all fours, and the difference between the two may be really due to the taxable corpus of which we are taking one-fifth of the increment. Before we discuss the propriety of my learned Friend's Amendment, I am most anxious to obtain from the Government what I think they have never yet given, namely, a clear statement as to whether they consider the method of obtaining the first site value is applicable also to obtaining the second or occasional site value. It may be that the Government think their methods more generous to the owners of buildings. I would like to have an explicit answer from the Government as to the question I put. I say there are two methods of valuing site value; the site value as originally estimated, and the site value as estimated on the various occasions 1245 afterwards. I say the difference consists in this: that when you estimate your original site value you consider it as bare building land, and do not consider in the least whether it did, or has, or might have, a very expensive building put on it. On the other hand, when you come to consider the site value on the occasion when the tax has to be paid, then you arrive at the site value, not by considering bare building land merely, but by considering the value of the house which happens to be upon it as it now stands, free of the whole consideration that is paid for the building land. In many cases that must lead to two different results. I wish to know how the Government can compare the two properties arrived at by different methods, and which do not really represent any common principle between them?
§ Sir W. ROBSON
Our contention is that we bring the value in both under Clause 14 and under Clause 2, so as to deal with the value under both of these clauses, and so to make them exactly comparable. We do not by any means agree that we have adopted primitive methods of valuation. The right hon. Gentleman has stated correctly the way we value under Clause 14. We estimate that the land is divested of buildings, so as to get the land as being absolutely bare land. When we come to Clause 2, what do we do? We do not there, as the right hon. Gentleman said, take the total value and deduct the cost of the building. If we did that his criticism would be exactly right. We do not even take the total value and deduct the value of the building. That also would lay us open to his criticism. That is what we did before last night, but by the Amendment I moved last night what we shall do under Clause 2 is to take the total value and deduct from it, not the cost of the buildings, not value of the buildings, but any value attributable to the buildings, so that we get straight back to our land with which we started in Clause 14. The alteration that I made last night is a small one, but it was an important one. It brings, I think, Clauses 14 and 2 into line. I objected to an hon. Member opposite, who desired to make some verbal Amendment, because I desired to make the matter clear by choosing appropriate words that we are trying to make our valuation under Clause 2 into a comparable valuation under Clause 14. I am obliged to the right hon. Gentleman for pointing this out, because I believe it removes a very important element of ambiguity and doubt. If we had not made 1246 the change we might have found ourselves taxing as Increment Duty that which is really the builder's property. We assume, therefore, under Clause 2, that we have got back to the bare site value, hypothetically divested of buildings, and the value which these buildings may have brought with them, in order to get our site value to exactly the valuation under Clause 14.
§ Mr. LEVERTON HARRIS
In view of what the right hon. Gentleman has said, I want to ask him what the position will be in the following case? Take a property which I assume, for the sake of argument, has an original site value of £10,000. Deductions on account of the building amount to £5,000, leaving the balance of the site value at £5,000. That property, say, is in the suburbs of London. By no action of the owner of the site, or the owner of the buildings, the value of land increases. A new neighbourhood springs up, and the total value of the whole property increases by some action of the community, while the value of the house as a residence depreciates. You have an increment in the value of the whole property attributable to the community; you have a decrement in the value of the mansion also attributable to the community. Twenty years afterwards the value of the whole property has increased to £12,000, and owing to small villas springing up round about the value of the mansion on the property has depreciated by £1,000. The balance is £11,000. What is the position? You are taking that £12,000 as the value, less £5,000, and on it you are going to charge increment. You are not taking into consideration at all the decrement on the house. Therefore the increment which you are collecting is altogether on a false footing. I hope the right hon. Gentleman follows what I say.
§ Mr. L. HARRIS
The whole property has increased from £10,000 to £12,000. Your increment amounts to no less than £6,000. If the house had been valued less depreciation the deduction, instead of being £1,000, might have been £4,000. In that case the increment would have been £3,000 less. Therefore, simply by the action of the community surrounding this particular property, the total increment which has been paid amounts to no less than £3,000 more than it should.
§ Mr. J. TUDOR WALTERS
The hon. Member who has just sat down overlooked 1247 one very important consideration in the illustration he submitted to the Committee. He forgets that he has two alternatives before him. If the house remaining as it is with the adjacent land as ground is worth a larger sum than the land would be worth for a development of smaller property he can still retain it for his purpose or sell it for a higher market price upon that basis. If, on the other hand, it is more advantageous to pull down the house and sell the land to be cut up into small holdings, if he gets a higher price he still gets the advantage.
I venture to submit to the Committee that the system of valuation suggested by this Amendment is altogether a novel one, and one that can never be accepted in any commercial undertaking. Fancy a valuer going for the purpose of a mortgage to value a property, and going on the assumption and taking as the bed-rock principle for his valuation the cost of the property erected upon the land. If he did that he would run a considerable risk of involving his client in very considerable losses.
I fancy myself on his residence he would find an actual loss. A common experience when a man builds a residence for himself is that he puts all sorts of hobbies and fancies into it, and when he comes to sell the house he generally finds he realises a very substantial loss. It is impossible to value upon any basis of that kind. The only equitable way to value is to take the market value of the house and land as they stand. To talk about artificial elements which would cause to the building loss or depreciation is to involve chaos and confusion of the worst kind. I have in my mind the case of a man who bought the value of a site and put up a special factory upon it, in which he intended to carry on a special business, not local, but which he thought he could introduce. He put up a factory not suitable to local industries, and he was not successful in his enterprise. He eventually sold the property at a loss, and the man who bought it had to spend a good deal of money on it, adapting it for local industries. The Amendment of the hon. Member opposite, if adopted and applied to this very sale, would lead to a transaction in which the sale price obtained for the land would have to be deducted before considering any increment of site value and the cost of the erection of this special factory, plus the cost of adapting it to 1248 local industries. The net result would be that the deduction would be more than the total amount. As I understand the principle of this Bill it is this: A man purchases a piece of land for a fixed price. He erects upon it a house or business premises of some kind. He then sells the house and the building for a lump sum. You have to ascertain what Increment Duty he has to pay. Surely the proper way of ascertaining that is to take the present market value of the buildings erected upon the site? By doing that you arrive at the real site value in the second sale, and you contrast that with the site value in the purchase and you arrive at a reasonable and fair deduction.
I have one other objection to this Amendment. It would take away at one end the important concession the Attorney-General made last night. I feel apprehensive lest the builder should be penalised. I am not much concerned about the original owner of the land or the speculator in land. They can take care of themselves, but the builder ought not to be subjected to Increment Duty on reasonable profit, and I was afraid the fallacy which this Amendment introduces might fall upon the builder. I was afraid if a man purchased a piece of ground and built a house upon it and sold it at a certain price that he would not be allowed the actual value of the building and would have to pay increment upon the improved value of the site by reason of the house which he had erected upon it. A concession has been made that removed that injustice. It is common knowledge that you may buy a piece of land at a certain price and build a house upon it, and adding together the actual cost of the building and the actual builder's profits qua builder the figure at which you arrive is not the actual value of the house, because the fact that you have carried on the business enterprise gives an additional value to the site. You take two sets of materials used in manufacture—two sets of raw materials. The cost of the finished article is more than the added cost of these sets of raw materials together plus the cost of the labour. The Amendment which has been introduced by the Attorney-General allows a man to retain what is the enhanced price of the site plus the cost of the building as a fair and reasonable profit. If you were to give a man the advantage of building an unsuitable house you will also have to give the advantage of building upon an unsuitable site. I think the Amendment is a vicious one. It will be 1249 destructive of the advantages which the Attorney-General's Amendment gives, and where it would give an advantage it would be an unfair advantage. Imagine some successful business man or speculator who does what most successful speculators do, that is, builds a house—an unsuitable residence, some monstrous mansion, which is of neither use nor ornament. He gets into difficulties, and he wants to sell the property. Do you suggest when he comes to sell his 20 or 30 acres upon which this hideous, unsuitable residence stands that he is to be allowed the advantage of the deduction for any decrease in the site on which he erected this monstrous residence. Why, if you made such allowance it would simply be putting a premium on the erection of hideous and unsuitable buildings. On the other hand, you would be depriving the builder who puts up a suitable building of what is the fair and just reward of his successful labours. I hope the Committee will reject the Amendment.
§ Sir EDWARD CARSON
I confess I find myself somewhat more in agreement with the Attorney-General in the observations he has made upon this Amendment than I have done with regard to any other statements he has made so far during the discussion of this Bill. I am not at all sure that there is a great deal of difference as to which we mean between both sides of the House in regard to this matter, assuming that you have the facts clearly and sufficiently expressed so as to prevent any doubt of danger of the matter not being carried out. Before I come to deal with the observations of the Attorney-General may I make one remark in reply to the speech of the hon. Gentleman who has just addressed us? He alluded to the kind of house referred to by my hon. Friend behind me as a building which he described as "monstrous," and he evidently makes his judgment the test as to whether a man shall exercise his own rights over his own property.
It certainly does seem to me a hardship that if the site value increment is brought about by the decrement of the house value that you should put a tax upon the site value increment without making any allowance for the decrement which has brought about the very increment on which a man is being taxed. But I do not think that that is a matter which arises with reference to this Amendment or with reference to the way in which the matter is now stated in the Bill. I think it is 1250 one of the injustices of an Increment Tax. But we are arguing this Amendment upon the assumption that there is to be an Increment Tax. As I understand the Attorney-General, he said in both cases—both when the owner gives the value of the site to the Commissioners for original site value and upon the occasion of any other transaction on which increment becomes payable—are valuing practically the same thing.
§ Sir WILLIAM ROBSON
There are certain deductions in the second case which are not allowed in the first case.
§ Sir EDWARD CARSON
Yes; but you are valuing the same site. Well, I cannot understand, if that is the object of the Government, why they did not say so clearly in the Bill and why they used different words as regards the two things. That is really the difficulty which is operating with me at the present moment. In the case where the owner comes to send in his valuation of the site value, he is to value the site as if divested of buildings. Why could you not have said that in regard to the other case? I cannot see any difficulty. It is quite true you have to deal with composite value, namely, the consideration paid, and other matters of that kind, but I cannot see why, in apportioning the consideration of the joint value of the house and the site, you should not have been able simply to use words that would bring the two parts of the Bill into absolute harmony: "So much consideration as is to be attributed to the value as if divested of buildings." If you had said that, you would have had absolutely the same words as regards both. But you put it in exactly the other way. In one case you said you are to value the site value as if divested of buildings, and in the other case you take the buildings first, and you have to value what is attributable to the buildings. I doubt very much when the valuer comes to value them that these two processes will bring about the same result.
There is one other thing I have never been able to understand since I read this section. If, as the Attorney-General said, you are dealing exactly with the same thing, why do you not use exactly the same language? It may be that there was a different intention at one time on the part of the Government, and from the use of the words "value of the buildings" it would apear there was a different intention. I think the Government intended to count what was the value of the buildings, but the Attorney-General has made the 1251 matter very much clearer by striking out the words "the value of." As I understand his argument, we are to have no value of the buildings at all, whether they are old or new. Otherwise it would lead, I think, to most absurd results. If you are not to value the buildings, and if there is to be no value except the site value in each case, why you put up the surveyor to estimate what is attributable to the buildings, and make an entirely different calculation from the calculation in the first case, I fail entirely to understand. I suggest to the Attorney-General that it would be well worth while, in order to simplify a very complex matter, if we are at one with regard to the principle, to see whether an alteration could not be made in this part of the Bill, so as to put in very simple words "so much of the consideration as is to be attributed to the site value if divested of buildings." I do not say that these are the exact words. We want site value as if divested of buildings. Take a concrete case. Supposing some of the owners of the Houses of Parliament sent in a site value when this Bill became law. Supposing afterwards they sold for a considerable sum. Why should not the words be "you are to value the value of the site"? That is a simple proposition. Do not let us have to take the vast buildings of the Houses of Parliament into consideration at all, but go out and say, If this was uncovered land in the market, how much would it bring in? In which case you will arrive at a certain sum. Why, if it can be done in that simple way, are you not doing it in a simple way in the first instance, instead of employing a skilled surveyor to make an estimate as to what is attributable to the buildings in the other instance? I suggest to the Attorney-General that it would be well that this matter should be further considered to see if we cannot get absolute harmony.
§ Mr. GEORGE WYNDHAM
May I give a reason for adopting this Amendment? Hitherto we have been considering mostly the owner of a class of buildings which I may describe as the rich man's house. Let the Committee consider for a moment the owner of a Rowton House. I think the man who built a Rowton House would suffer. Take the original site value of a plot of ground owned by A and plots owned by other persons. If we adopt the method of my right hon. and learned Friend, then the owner of the plot of ground who keeps on it houses suitable for 1252 the working classes, or for a Rowton House will not suffer; but, if you adopt the view of the Government, he will suffer. I think my right hon. Friend's view may be urged upon the Committee in order to foster the building of that type of houses needed by the artisan classes.
§ Mr. GEORGE CAVE
I wish to put before the Committee the case of a building which has a special value, not to the whole world, but only to a limited number of people. Supposing that house is sold to one of that limited number, and he gives a fancy price for it because it has that building upon it. On that sale, when you come to assess the taxable site value, you are to deduct from his fancy price the value of the building, which must mean the value of the building to the general purchaser. The effect is that you attribute the fancy price, or the extra element that makes up that price, not to the building but to the site, which has no special value to him. You assume quite wrongly that he has given this high price not because the building is there, but because he wants the site, whereas, as a matter of fact, he gave the fancy price because he wanted the building. Therefore you ought either to deduct from the basis of taxation the price he has given for the building or, what comes to the same thing, assess the taxable value at the amount which the site would fetch if the building had been taken off altogether. I could never understand why a difference is made in this matter between Clause 2 and Clause 14. The Attorney-General said that it is not unreasonable if you want to find the value of the site to deduct the value of the buildings, but I think you ought to do the same thing in both cases. It is not right to adopt one scheme in Clause 2 and a totally different scheme in Clause 14. I hope this matter will be considered so that in one way or the other we shall have the same basis of computation in Clause 2 and Clause 14.
§ Mr. J. M. ASTBURY
The suggestion now made is that, instead of the words in Clause 2, the words should be "so much of the consideration as is attributable to the site value divested of the buildings." Of course, the original value under section (14) is made without a basis to start with, and there is no consideration basis. The Bill says it must be valued in a particular way in order to obtain the site value, and for the purpose of arriving at that value the land is valued as if it were divested from 1253 buildings and other things. At the commencement of Clause 2 it says that "The increment value of any land shall be deemed to be the amount by which the site value of the land on the occasion on which Increment Value Duty becomes due exceeds the original site value of land." That brings in section (14). The direction to the Commissioners, or to the valuer, or to anyone who has to deal with the occasional value, is that he has to get under Clause 2 the value which, in fact, will be the site value within the meaning of Clause 14.
The direction as to the method in which he has to get it is totally different. First of all, he has to take as his basis or starting point the consideration for the grant or the consideration for the lease, or whatever the interest is that passes. Having got that consideration, he has then from that to calculate the value of the fee simple, having regard to the deductions mentioned in Clause 14. I know hon. Gentlemen opposite think not, but as the deduction clause has been altered, it reads in the way I have suggested. If you are going to take the consideration as the basis of the valuation, you cannot start at the site value, as you did on the original occasion. You must start with a consideration basis, and by that means you get the value of the total thing. Having done that, it is necessary to make all the deductions to bring it upon the same footing as the site value which is to be obtained under Clause 14. Having got the total value based on the consideration, the clause will read as now amended, "Subject to the deduction attributable to the buildings, structures, and other things of which the land is deemed to be divested under this Act for the purposes of the site value." That is in the same terms as the deductions referred to in Clause 14 for the purpose of getting at the original value. I suggest that the words of the right hon. and learned Gentleman opposite would effect exactly the same purpose as the Bill now effects if it could be carried out, but it would be extremely difficult for any valuer who had to take as his basis the total consideration to be asked to say how much of that consideration was attributable to the site value divested of the buildings. This seems to me putting it the wrong way on. If you get the total value based upon the consideration, what the valuer has got to do is quite irrespective of the then valuer of the buildings, and having got the total value of the composite whole he has to assume that everything 1254 has to be deducted. I suggest that there is really no difference between the right hon. Gentleman opposite and the Attorney-General, and it is only a matter of words.
§ Mr. BALFOUR
I believe it is a fact that in the first instance the Government meant to have two different systems of valuation for the original and the occasional site value. The drafting of this Bill justifies that view from the point of view of those who will have to interpret this Act. I think it is advisable that the same phraseology, the same words, and the same definition should be used when dealing with the original site value and the occasional site value. Otherwise I think the misconception most of us laboured under before the Attorney-General made his explanation will certainly attach to those who have to administer the Act, and they will think that something different is meant. It is quite a different thing to imagine a site stripped of the building.
§ Sir W. ROBSON
The right hon. Gentleman has initiated a very useful discussion, and all I can say is that between this and the Report stage the drafting of these words will be very carefully considered.
§ Mr. JAMES HOPE
How is the Attorney-General going to reconcile the phraseology here with the method adopted in Clause 14 in dealing with the question of the interest in the land? I do not know whether the Attorney-General could see that that is done when we get to Clause 14. The point was raised by an Amendment by the hon. Member for St. Pancras, which was not discussed, but if you are to do it on Clause 14 you will have to have an original site value, so far as the interest is concerned, as well as an original site value under this clause.
§ Question, "That those words be there inserted," put and negatived.
§ Mr. PRETYMAN moved "after value" ["in estimating the site value"] to insert the words "or to the expenditure of money on any redemption of Land Tax, or of any rent-charge as defined in this Act effected after the thirtieth day of April, nineteen hundred and nine." I understand the Chancellor of the Exchequer will accept this Amendment. If, subsequent to the original site value having been ascertained, the owner redeems his Land Tax or tithe, that would be a deduction allowed under the Act. I need not enlarge on that, but I wish to ask 1255 whether anywhere in the Bill provision is made in regard to the enfranchisement of copyhold. That is an important point of the same character. If a copyhold is enfranchised, and it becomes a freehold. I do not know how it would stand under the Bill. It is quite obvious the point is exactly similar in character.
§ Mr. LLOYD-GEORGE
As I have already indicated, I think this is a perfectly fair Amendment, but I thought it would come in better at this stage and in this form. I shall, therefore, accept it. With regard to copyholds, I should like to consider the point. I would not like to give an answer on the spur of the moment, but I do not think it is quite the same kind of point as is raised here. I will consider it.
§ Mr. PRETYMAN
I only raised it because I am doubtful whether it is covered by the Bill, and how it should be covered. It is obvious it must be dealt with, and perhaps the right hon. Gentleman will bear it in mind.
§ Question, "That those words be there inserted," put, and agreed to.
§ Mr. JAMES HOPE moved after "the," ["which is personal to the"] to insert the word "owner." I think this is a very natural Amendment, and I cannot see that the Government can have any objection to it. If the owner is a person interested in the land, the clause covers him at present, and the Amendment, no doubt, is unnecessary; but, surely, if you refer to the occupier explicitly, you ought also to refer explicitly to the owner. Land often gets a value from the fact that a landlord is a good landlord, and I cannot understand at all why the value, which may be attributable in one case to the occupier should be deducted and not the value, which in another case might be attributable to the owner. I should have thought the two would naturally go together.
§ Mr. LLOYD-GEORGE
The occupier is put in to make it perfectly clear that he also is to be counted. I have no objection at all to the word "owner" being inserted if the hon. Gentleman thinks it makes it clearer.
§ Question, "That the word 'owner' be there inserted," put and agreed to.
§ Mr. PRETYMAN moved after the word "or" ["personal to the occupier or"] to insert the words "to any."
§ The Amendment is in two parts, and the effect of it is that it refers to any other matter which is personal to the owner occupier, or to any other person, instead of to any person interested in the land. I move this Amendment to make it clear that increment is only to be taken where it is due to the action of the community and the effect of this Amendment would be that where property obtains an additional value clearly from the action of some individual, even when that individual is not the owner, the tax would not be taken. Supposing the owner of a property gives up a considerable amount of land for a garden. The property adjoining is benefited, but it is not benefited by the action of the community, and the community has no particular right to that increment on the principle on which the Bill is introduced. Therefore, in the deductions which are to be made in assessing the value of any land to arrive at that part of the increment which is due to the community, we should not only consider that part of the increment which is due to the expenditure of any persons interested in the land, but also that part which is clearly due to the expenditure of some other private individual which has benefited the property around, and in which the community has no share. A deduction ought to be allowed in respect of that expenditure, and that is the point of this Amendment.
§ Mr. MASTERMAN
I think the hon. and gallant Gentleman has misunderstood the conception of the tax. It is a tax on unearned increment. A suggestion was made from the other side of the House that the word "unearned" should be definitely put in in order that it should be a tax upon unearned increment. The hon. and gallant gentleman now wishes to exclude from the tax increment which, from his own confession, is distinctly unearned by the person who is paying the tax. What is the community'? It is a matter of definition. Take, as an illustration, the case already raised by the Chancellor of the Exchequer this afternoon. Supposing an embankment is made, reclaiming a considerable amount of land, by a man with a certain interest in part of the land. We have definitely exempted the land of the man who has made the 1257 embankment from the increase in value which is attributable to that embankment, and we did right by agreement on all sides. The hon. and gallant Gentleman wishes to exempt also that increment value of the land of the man who has not made the embankment, who may have been asked to contribute and have refused. Is he to reap all the benefit of the increment without contributing a penny towards the work? I find the most enthusiasm for this Increment Duty among those who might benefit from works of that kind, and I think, of all cases in which Increment Value Duty is due, that is perhaps the one which might be most easily justified.
§ Mr. BALFOUR
We have already seen that this Increment Tax will strike the small owner, and not the large owner, and now we understand that that is not only the effect of the tax, but the intention of the Government. Evidently, the sort of case to which the hon. Gentleman referred is a great improvement, which can only be carried out by a wealthy owner, or a wealthy corporation, or by a company financially strong. They, no doubt, would be able to carry out these big works, and they would be excused; but, if they have a small neighbour, who could not do the work himself, but whose land is benefited by these large operations, he is to pay the
§ full taxation, although it cannot be said that the community has benefited him at all. He has been benefited by his wealthy neighbour. This clearly hits the small man, and it is absurd to call a big man the community. I quite agree with the hon. Gentleman that it is a question what is the community. He was much more skilful in putting that question than in answering it. I have pointed out long ago in these Debates that civilised communities are mutually dependent one upon another, and that the community extends over the whole habitable globe within which there are commercial transactions. That is the extreme case on one side, and we are now told that the extreme case on the other is the action of a single individual. I think that is a most absurd use of the word "community," and I trust, whenever we hear that this tax is to be justified by the circumstance that communal value has been added to property by the community, we shall remember that what is meant by community is not the community but the neighbouring millionaire.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 100; Noes, 305.1261
|Division No. 251.]||AYES.||[6.59 p.m.|
|Anstruther-Gray, Major||Fell, Arthur||Nicholson, Wm. G. (Petersfield)|
|Arkwright, John Stanhope||Gordon, J.||Oddy, John James|
|Ashley, W. W.||Goulding, Edward Alfred||Peel, Hon. W. R. W.|
|Balcarres, Lord||Gretton, John||Percy, Earl|
|Baldwin, Stanley||Guinness, Hon. R. (Haggerston)||Pretyman, E. G.|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Hamilton, Marquess of||Randles, Sir John Scurrah|
|Banbury, Sir Frederick George||Hardy, Laurence (Kent, Ashford)||Ratcliffe, Major R. F.|
|Banner, John S. Harmood-||Harris, Frederick Leverton||Rawlinson, John Frederick Peel|
|Baring, Capt. Hon. G. (Winchester)||Heaton, John Henniker||Remnant, James Farquharson|
|Barrie, H. T. (Londonderry, N.)||Hermon-Hodge, Sir Robert||Renton, Leslie|
|Beckett, Hon. Gervase||Hill, Sir Clement||Renwick, George|
|Bertram, Julius||Hills, J. W.||Roberts, S. (Sheffield, Ecclesall)|
|Bignold, Sir Arthur||Hope, James Fitzalen (Sheffield)||Ronaldshay, Earl of|
|Bowles, G. Stewart||Joynson-Hicks, William||Rutherford, W. W. (Liverpool)|
|Burdett-Coutts, W.||Kennaway, Rt. Hon. Sir John H.||Scott, Sir S. (Marylebone, W.)|
|Butcher, Samuel Henry||Kerry, Earl of||Sheffield, Sir Berkeley George D.|
|Campbell, Rt. Hon. J. H. M.||Keswick, William||Smith, Abel H. (Hertford, E.)|
|Carlile, E. Hildred||Kimber, Sir Henry||Stanier, Beville|
|Carson, Rt. Hon. Sir Edward H.||King, Sir Henry Seymour (Hull)||Starkey, John R.|
|Castlereagh, Viscount||Lambton, Hon. Frederick William||Tabot, Lord E. (Chichester)|
|Cave, George||Lane-Fox, G. R.||Talbot, Rt. Hon. J. G. (Oxford Univ.)|
|Cecil, Lord R. (Marylebone, E.)||Law, Andrew Bonar (Dulwich)||Thornton, Percy M.|
|Chaplin, Rt. Hon. Henry||Lee, Arthur H. (Hants, Fareham)||Tuke, Sir John Batty|
|Clive, Percy Archer||Lockwood, Rt. Hon. Lt.-Col. A. R.||Walker, Col. W. H. (Lancashire)|
|Clyde, J. Avon||Long, Col. Charles W. (Evesham)||Walrond, Hon. Lionel|
|Cochrane, Hon. Thomas H. A. E.||Lonsdale, John Brownlee||Warde, Col. C. E. (Kent, Mid)|
|Corbett, T. L. (Down, North)||Lyttelton, Rt. Hon. Alfred||Williams, Col. R. (Dorset, W.)|
|Craig, Charles Curtis (Antrim, S.)||MacCaw, William J. MacGeagh||Wortley, Rt. Hon. C. B. Stuart-|
|Craig, Captain James (Down, E.)||M'Arthur, Charles||Wyndham, Rt. Hon. George|
|Craik, Sir Henry||Magnus, Sir Philip||Younger, George|
|Dalrymple, Viscount||Marks, H. H. (Kent)|
|Doughty, Sir George||Mason, James F. (Windsor)||TELLERS FOR THE AYES.—Sir A. Acland-Hood and Viscount Valentia.|
|Douglas, Rt. Hon. A. Akers-||Mildmay, Francis Bingham|
|Faber, George Denison (York)||Morrison-Bell, Captain|
|Faber, Capt. W. V. (Hants, W.)||Newdegate, F. A.|
|Abraham, W. (Cork, N.E.)||Evans, Sir S. T.||Mackarness, Frederic C.|
|Acland, Francis Dyke||Everett, R. Lacey||Macnamara, Dr. Thomas J.|
|Agar-Robartes, Hon. T. C. R.||Falconer, J.||Macpherson, J. T.|
|Agnew, George William||Ferguson, R. C. Munro||MacVeagh, Jeremiah (Down, S.)|
|Ainsworth, John Stirling||Fiennes, Hon. Eustace||MacVeigh, Charles (Donegal, E.)|
|Alden, Percy||Flynn, James Christopher||M'Kean, John|
|Allen, A. Acland (Christchurch)||Fuller, John Michael F.||M'Laren, Sir C. B. (Leicester)|
|Allen, Charles P. (Stroud)||Fullerton, Hugh||M'Laren, H. D. (Stafford, W.)|
|Ashton, Thomas Gair||Gibb, James (Harrow)||Maddison, Frederick|
|Asquith, Rt. Hon. Herbert Henry||Gill, A. H.||Mallet, Charles E.|
|Astbury, John Meir||Ginnell, L.||Manfield, Harry (Northants)|
|Baker, Sir John (Portsmouth)||Gladstone, Rt. Hon. Herbert John||Marks, G. Croydon (Launceston)|
|Balfour, Robert (Lanark)||Glen-Coats, Sir T. (Renfrew, W.)||Marnham, F. J.|
|Baring, Godfrey (Isle of Wight)||Glendinning, R. G.||Massie, J.|
|Barker, Sir John||Goddard, Sir Daniel Ford||Masterman, C. F. G.|
|Barlow, Sir John E. (Somerset)||Gooch, George Peabody (Bath)||Meagher, Michael|
|Barlow, Percy (Bedford)||Greenwood, G. (Peterborough)||Meehan, Francis E. (Leitrim, N.)|
|Barnard, E. B.||Greenwood, Hamar (York)||Micklem, Nathaniel|
|Barnes, G. N.||Grey, Rt. Hon. Sir Edward||Middlebrook, William|
|Barran, Rowland Hirst||Griffith, Ellis J.||Molteno, Percy Alport|
|Barry, Redmond J. (Tyrone, N.)||Guest, Hon. Ivor Churchill||Mond, A.|
|Beale, W. P.||Gwynn, Stephen Lucius||Money, L. G. Chiozza|
|Beauchamp, E.||Hall, Frederick||Montagu, Hon. E. S.|
|Bell, Richard||Halpin, J.||Mooney, J. J.|
|Benn, W. (Tower Hamlets, St. Geo.)||Harcourt, Rt. Hon. L. (Rossendale)||Morgan, G. Hay (Cornwall|
|Bennett, E. H.||Harcourt, Robert V. (Montrose)||Morrell, Philip|
|Bethell, Sir J. H. (Essex, Romford)||Hardie, J. Keir (Merthyr Tydvil)||Morton, Alpheus Cleophas|
|Bethell, T. R. (Essex, Maldon)||Hardy, George A. (Suffolk)||Murray, Capt. Hon. A. C. (Kincard.)|
|Black, Arthur W.||Harmsworth, R. L. (Caithness-sh.)||Murray, James (Aberdeen, E.)|
|Boland, John||Hart-Davies, T.||Nicholson, Charles N. (Doncaster)|
|Boulton, A. C. F.||Harvey, A. G. C. (Rochdale)||Nolan, Joseph|
|Bowerman, C. W.||Harwood, George||Norton, Captain Cecil William|
|Branch, James||Haworth, Arthur A.||Nussey, Sir Willans|
|Brigg, John||Hazel, Dr. A. E. W.||Nuttall, Harry|
|Brocklehurst, W. B.||Healy, Timothy Michael||O'Brien, K. (Tipperary, Mid)|
|Brooke, Stopford||Helme, Norval Watson||O'Brien, Patrick (Kilkenny)|
|Brunner, J. F. L. (Lancs., Leigh)||Henderson, Arthur (Durham)||O'Connor, John (Kildare, N.)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Henderson, J. McD. (Aberdeen, W.)||O'Connor, T. P. (Liverpool)|
|Bryce, J. Annan||Henry, Charles S.||O'Doherty, Philip|
|Buckmaster, Stanley O.||Herbert, Col. Sir Ivor (Mon. S.)||O'Donnell, C. J. (Walworth)|
|Burns, Rt. Hon. John||Herbert, T. Arnold (Wycombe)||O'Kelly, Conor (Mayo, N.)|
|Burnyeat, W. J. D.||Higham, John Sharp||O'Kelly, James (Roscommon, N.)|
|Burt, Rt. Hon. Thomas||Hobhouse, Rt. Hon. Charles E. H.||O'Shaughnessy, P. J.|
|Buxton, Rt. Hon. Sydney Charles||Hodge, John||Parker, James (Halifax)|
|Byles, William Pollard||Hogan, Michael||Paulton, James Mellor|
|Cameron, Robert||Holland, Sir William Henry||Pearce, Robert (Staffs, Leek)|
|Causton, Rt. Hon. Richard Knight||Holt, Richard Durning||Pearce, William (Limehouse)|
|Cawley, Sir Frederick||Hooper, A. G.||Pearson, W. H. M. (Suffolk, Eye)|
|Chance, Frederick William||Hope, John Deans (Fife, West)||Philipps, Col. Ivor (Southamoton)|
|Cheetham, John Frederick||Hope, W. H. B. (Somerset, N.)||Philipps, Owen C. (Pembroke)|
|Cherry, Rt. Hon. R. R.||Horniman, Emslie John||Philips, John (Longford, E.)|
|Churchill, Rt. Hon. Winston S.||Horridge, Thomas Gardner||Pickersgill, Edward Hare|
|Clancy, John Joseph||Howard, Hon. Geoffrey||Pointer, J.|
|Cleland, J. W.||Hudson, Walter||Pollard, Dr. G. H.|
|Clough, William||Hutton, Alfred Eddison||Power, Patrick Joseph|
|Clynes, J. R.||Hyde, Clarendon G.||Price, C. E. (Edinburgh, Central)|
|Cobbold, Felix Thornley||Illingworth, Percy H.||Price, Sir Robert J. (Norfolk, E.)|
|Collins, Stephen (Lambeth)||Isaacs, Rufus Daniel||Priestley, Sir W. E. B. (Bradford, E.)|
|Compton-Rickett, Sir J.||Jenkins, J.||Radford, G. H.|
|Corbett, C. H. (Sussex, E. Grinstead)||Johnson, John (Gateshead)||Rainy, A. Rolland|
|Cornwall, Sir Edwin A.||Jones, Sir D. Brynmor (Swansea)||Raphael, Herbert H.|
|Cory, Sir Clifford John||Jones, Leif (Appleby)||Rea, Rt. Hon. Russell (Gloucester)|
|Crooks, William||Jones, William (Carnarvonshire)||Redmond, William (Clare)|
|Crossfield, A. H.||Jowett, F. W.||Rendall, Athelstan|
|Cross, Alexander||Joyce, Michael||Richards, T. F. (Wolverhampton, W.)|
|Crossley, William J.||Kavanagh, Walter M.||Richardson, A.|
|Davies, David (Montgomery Co.)||Kennedy, Vincent Paul||Ridsdale, E. A.|
|Davies, Ellis William (Eifion)||Laidlaw, Robert||Roberts, Charles H. (Lincoln)|
|Davies, M. Vaughan- (Cardigan)||Lamb, Ernest H. (Rochester)||Roberts, G. H. (Norwich)|
|Davies, Timothy (Fulham)||Lambert, George||Robertson, Sir G. Scott (Bradford)|
|Davies, Sir W. Howell (Bristol, S.)||Lamont, Norman||Robinson, S.|
|Dewar, Sir J. A. (Inverness-sh.)||Law, Hugh A. (Donegal, W.)||Robson, Sir William Snowdon|
|Dickinson, W. H. (St. Pancras, N.)||Layland-Barrett, Sir Francis||Roch, Walter F. (Pembroke)|
|Dickson-Poynder, Sir John P.||Leese, Sir Joseph F. (Accrington)||Runciman, Rt. Hon. Walter|
|Dilke, Rt. Hon. Sir Charles||Lever, A. Levy (Essex, Harwich)||Rutherford, V. H. (Brentford)|
|Dillon, John||Levy, Sir Maurice||Scarisbrick, Sir T. T. L.|
|Duncan, C. (Barrow-in-Furness)||Lloyd-George, Rt. Hon. David||Schwann, C. Duncan (Hyde)|
|Duncan, J. Hastings (York, Otley)||Lough, Rt. Hon. Thomas||Schwann, Sir C. E. (Manchester)|
|Dunne, Major E. Martin (Walsall)||Lundon, T.||Scott, A. H. (Ashton-under-Lyne)|
|Elibank, Master of||Lynch, H. B.||Seaverns, J. H.|
|Essex, R. W.||Macdonald, J. R. (Leicester)||Seddon, J.|
|Esslemont, George Birnie||Macdonald, J. M. (Falkirk Burghs)||Seely, Colonel|
|Shackleton, David James||Thomas, Abel (Carmarthen, E.)||Weir, James Galloway|
|Shaw, Sir Charles E. (Stafford)||Thomas, Sir A. (Glamorgan, E.)||White, Sir George (Norfolk)|
|Sheehan, Daniel Daniel||Thompson, J. W. H. (Somerset, E.)||White, J. Dundas (Dumbartonshire)|
|Silcock, Thomas Ball||Thorne, G. R. (Wolverhampton)||White, Sir Luke (York, E.R.)|
|Simon, John Allsebrook||Thorne, William (West Ham)||Whitehead, Rowland|
|Sloan, Thomas Henry||Tillet, Louis John||Whitley, John Henry (Halifax)|
|Soames, Arthur Wellesley||Tomkinson, James||Whittaker, Rt. Hon. Sir Thomas P|
|Soares, Ernest J.||Toulmin, George||Wiles, Thomas|
|Spicer, Sir Albert||Trevelyan, Charles Philips||Wilkie, Alexander|
|Stanger, H. Y.||Ure, Rt. Hon. Alexander||Williams, W. Llewelyn (Carmarthen)|
|Stanley, Hon. A. Lyulph (Cheshire)||Walters, John Tudor||Williamson, Sir A.|
|Steadman, W. C.||Walton, Joseph||Wills, Arthur Walters|
|Stewart-Smith, D. (Kendal)||Ward, John (Stoke-upon-Trent)||Wilson, John (Durham, Mid)|
|Strachey, Sir Edward||Wardle, George J.||Wilson, P. W. (St. Pancras, S.)|
|Straus, B. S. (Mile End)||Waring, Walter||Wilson, W. T. (Westhoughton)|
|Summerbell, T.||Warner, Thomas Courtenay T.||Wood T. M'Kinnon|
|Sutherland, J. E.||Wason, Rt. Hon. E. (Clackmannan)||Yoxall, Sir James Henry|
|Taylor, John W. (Durham)||Wason, John Cathcart (Orkney)|
|Taylor, Theodore C. (Radcliffe)||Waterlow, D. S.||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Tennant, Sir Edward (Salisbury)||Watt, Henry A.|
|Tennant, H. J. (Berwickshire)||Wedgwood, Josiah C.|
§ Mr. PRETYMAN moved a further Amendment to insert, after "occupier or other person interested for the time being in the land," the words "and where the occasion is the death of any person in respect of any sums paid or payable as Estate Duty, Settlement Estate Duty, and Succession Duty."
§ This is an Amendment of some substance, and I feel sure the right hon. Gentleman will accept it. In the case of the Death Duties each duty is charged successively. Dealing with land, there are three Death Duties. The Estate Duty is charged on the full corpus; the Settlement and Estate Duty is charged on the residue after the Estate Duty has been deducted; and the Succession Duty is charged on what is actually taken by the successor. We are now to have on the same property a fourth duty imposed in the form of an Increment Value Duty. What I wish to bring about by this Amendment is that that fourth duty shall be treated on the same principle as the other three duties which are already in existence and shall not be levied in addition to the others, but shall be payable after the others have been paid. It is obvious that if this Amendment is not carried what will happen will be that the successor will actually have to pay the new Increment Duty on the very sum he pays in Death Duties. I think it can hardly be the wish of the Government that where a man pays a large sum first as Estate Duty, secondly as Settlement and Estate Duty, and thirdly as Succession Duty, he shall be charged in addition an Increment Value Duty on the sum which he is actually paying as a whole to the State.
§ Mr. LLOYD-GEORGE
I think the object of the hon. and gallant Member's amendment is this: he wants to safe- 1262 guard the owner against having to pay Death Duties in respect of what is claimed in the form of Increment Duty.
§ Mr. LLOYD-GEORGE
Say there is on an estate an increment of £2,000; the charge for Increment Duty is £400. The hon. Gentleman says it is not fair to charge a 10 per cent. Death Duty in respect of that £400 which has already been paid to the State.
§ Mr. PRETYMAN
No, I put it the other way. We are not dealing with deductions from Death Duties, we are dealing with deductions from Increment Value Duties. I suggest that, in a case of this kind, where there is in an estate an increment of £2,000 which is subject to the Increment Value Duty, that £2,000 is included with the rest of the estate for the payment of the Estate, Estate and Settlement, and Succession Duties. These duties are successively levied on the whole estate in the first instance. I do not desire to interfere with the present arrangement, but I wish to point out that that £2,000 forms an integral part of the estate. My point is that those have been already dealt with, and, being already leviable, the Increment Duty should not be levied on the whole £2,000, but only on that part of the £2,000 which has not been paid in Death Duties, and if any part of the £2,000, say £200, has been paid to the state in the form of Settlement, Estate, and Succession Duties, that £200 should not pay £40 Increment Estate Duty, but the Increment Estate Duty in that case should be reduced by that £40, and, instead of duty being paid on £400, Increment Value Duty on only £360 should be paid.
§ Mr. LLOYD-GEORGE
It is curious that this difference should arise between the hon. Gentleman and myself, because I was putting the case of the £400 in the opposite way, which was much more favourable to the owner. It is a case which I have been looking into, and it is one which I have to deal with, and I frankly admit that I am more favourable, in a sense, to the owner in my view than the hon. Gentleman himself. But I think he had better leave it to me, and I propose to deal with it on Part III. of the Bill, and I give him a promise that I will deal with it there.
§ Mr. PRETYMAN
Under those circumstances I will ask leave to withdraw the Amendment. My only point is that these duties should not be levied successively.
§ Amendment, by leave, withdrawn.
The next Amendment, in the name of the hon. Member for Taunton (Mr. W. Peel), seems to practically traverse the matter which has been decided; but, independently of that, it is not in the right place here. ["And, in the case of agricultural land the value of which is due solely to its capacity for agricultural purposes."] The hon. Member proposes to leave out from "land" to "purchases," and to insert "but no Increment Duty shall be chargeable on agricultural land of a value less that £120 per acre freehold, and land above that value used for agriculture shall be subject to a deduction amounting to its value for agricultural."
§ Mr. PEEL
This comes in here in order to give certain special exemptions in the case of agricultural land—to allow certain special deductions in regard to the way in which you arrive at the Increment Duty on the site valuation. I understand that agricultural land is really going to be exempted from this Increment Duty, and in that case surely it is not necessary to elaborately discuss the nature of the special exemptions which are to be made in the case of agricultural land. If that is to be done we should be simply wasting time by discussing the matter later on, and therefore it is simply proposed to put in here an Amendment, which is not a complete exemption of agricultural land, but certainly does exempt agricultural land up to a certain point. I submit that if that exemption is going to be granted at all it is better that it should be done here, and save the Committee a discussion and an elaborate examination.
This Amendment cannot come in here, nor indeed in this clause. It is a sub-section stating that site value shall be taken to be such and such a thing on such and such an occasion, subject to such and such deductions, and the hon. Member wants to strike out before we can insert it.
§ Mr. GEORGE CAVE moved, to leave out the words "in the case of agricultural land the value of which is due solely to its capacity for agricultural purposes."
§ Before we part with this, I should like to move this part of the Amendment, standing in the name of the hon. Member for Sheffield (Mr. James Hope), as I want to know what the effect of the Bill will be. I move it in order to get an answer to this question. Suppose a case of this kind. Suppose that after the original site value has been ascertained this year the owner spends money on works of permanent improvement, not for business purposes, but for occupation purposes. It may, of course, be a large sum, and supposing that after that expenditure he sells his property. Of course the price will be enhanced by the improvement which he has made, and as I read it, as the Bill stands, he will have to pay Increment Value Duty on that improvement—that is a duty on the man's own expenditure. I should like to know why the last words of this clause are confined to agricultural land, because then in the case of other land you would pay duty on the value of your own improvement—that is a duty on your own expenditure. In this clause there is a provision that we are to deduct the value in respect of any matter in respect to which a deduction may be allowed under Clause 14, and that would bring in the deduction of the value of any work of permanent improvement executed for business purposes only, but the owner might pay the cost of a work of permanent improvement, for other than business purposes, say for occupation purposes. Then I believe I am right in saying, that the effect of the Bill as it stands, is this that you could not in ascertaining the taxable site value, deduct from your taxable value, the cost or value of that permanent improvement. The effect, therefore, will be that a man will actually be asked to pay duty on the value of an improvement effected at his own expense. This result is brought about by the limitation of the permanent works referred to in Clause 14, section (4), sub-section (a), which deals only with 1265 improvements for business purposes; and, therefore, you cannot under that sub-section deduct the value of improvements for other than business purposes.
§ Mr. CAVE
I want to deal with an improvement for occupation purposes, and I cannot suggest many off-hand, although there may be many. But take, for instance, the case of making a lake in private grounds or sinking a well. These are neither "buildings" nor "structures" within the meaning of the clause. Or take the laying down of a lawn. There are a hundred things, which in a little time I could think of, which would be improvements, and very often costly improvements; and surely it is not fair to treat them as part of the site value, and include them in the increment as improved value of the site. The improvement is not outside the action of the owner, it is due to the owner's own work and expenditure, and it would be grossly unfair to levy duty on improvements made at the owner's expense. I think this is a point which has not been fully considered, and in order that the right hon. Gentleman may deal with it, I beg to move the Amendment.
§ Mr. LLOYD-GEORGE
I was anxious to know from the hon. and learned Gentleman the sort of case he has in his mind, and although he is acquainted with all these cases, he found it rather difficult to give an illustration of the improvements he meant. Everything really turns upon the interpretation of Clause 14, section (4), sub-section (a), as the hon. and learned Gentleman has said. In the case of a well, I should have thought that that was an expenditure which would have been useful for business purposes; but, at any rate, if I may say so, the hon. and learned Gentleman was not here in the course of the afternoon when we decided, I think by common consent, that all these questions ought to be settled upon Clause 14, section (4), sub-section (a) There were several cases of this character, and it is quite clear that, if they are adopted here, they should be adopted at that part of the Bill. But I should like further enlightenment from the hon. and learned Gentleman after he has had time to consider on what sort of cases he thinks are not covered by Clause 14, section (4), sub-section (a), I wish to cover every case of legitimate expenditure, which is not included; and if 1266 he thinks that the cases he has in mind are not covered by the words, I should be very glad to deal with them; but I should like to have some information from the hon. and learned Gentleman, and if he will defer his Amendment till we come to Clause 14, we can then consider the matter.
§ Mr. PRETYMAN
I should like the right hon. Gentleman to explain why, in the construction of this Bill in Clause 14, section (4), sub-section (a), an exception is made to agricultural land on which the original site value is calculated, and then the words are put into Clause 2 bringing exactly the same considerations to bear in regard to exactly the same deductions in the case of agricultural land, from which agricultural land is exempted in Clause 14, section (4), sub-section (a). I think that is what has caused confusion, and I hope the Chancellor will explain why the Bill is constructed in that form, and why the same deductions are excluded in one case and included in the other.
§ Mr. LLOYD-GEORGE
The real object of that was to confer a special boon upon agriculture, and that, undoubtedly, is the effect of it. The effect of it is that whereas in every other case permanent improvements are deducted from the original value, in the case of agriculture they are not deducted from the original site value, but they are deducted when you come to the increment, and, therefore, it is to that extent a boon to agriculture.
§ Amendment, by leave, withdrawn.
§ Mr. PRETYMAN moved to leave out from "in the case of" to the end of section 2, and to insert "land used for agricultural purposes, also in respect of any part of that value which is proved to be agricultural value." This Amendment would have the effect which the Government desire to give to the Bill, namely, that there would not be charged any Increment Value Duty upon agriculture. We have on record a very definite statement from the Patronage Secretary to the Treasury (Mr. Joseph Pease) that no charge whatever falls upon agriculture under this particular tax at any rate, and the Amendment merely makes that point good. I moved an Amendment at an earlier stage exempting all agricultural land from Increment Value Duty, and the Chancellor of the Exchequer resisted it on the ground that had it been carried all land used for agricultural purposes, even although it 1267 might have a very high value for building or for some industrial purpose, would have been altogether exempted from Increment Value Duty. This Amendment takes a totally different ground, and its effect would be that where land is valued for the purposes of this Bill and the land is being used for agricultural purposes, its agricultural value would be a deduction in estimating the value on which Increment Duty is paid, and the effect would be this. It is a common and ordinary case that, near a town, land is occupied for agricultural purposes which has also a building value, and which is gradually coming into building value, and it is obviously to the advantage of the community and of the occupiers of the land that they should be able to carry on their agricultural business even on land which has a building value without being put to a disadvantage or without being subjected to a penalty. If the Amendment were carried it would exempt their particular trade from being burdened with Increment Value Duty. The only possible objection which has been urged against the principle was that where land acquired an additional agricultural value, which is called accommodation land, from its propinquity to a large town, that particular value ought to be subjected to Increment Value Duty. I hardly think the Chancellor of the Exchequer will really wish, on consideration, to adhere to that opinion, and I do not think hon. Gentlemen opposite, if they consider it, will desire to support any such contention as that. You have a growing town, and you have outside it a market gardener who owns a piece of land, and is working it for agricultural purposes, and the land is at the same time acquiring a building value. The whole groundwork of the Bill is that the building value is accruing, without exertion of his, by the growth of the community, and therefore he has to pay an Increment Value Duty upon it, and his property to that extent is differentiated from other property because it is owing to its particular situation that the building value is accruing. He is doing nothing himself to add to the value, it is not connected with his particular trade, and it is merely accident that he happens to own the land which is putting increment into his pocket.
§ In regard to the market gardener the case is different. He is exercising his industry and his time and his labour upon that land, and he is in no way different 1268 from the butcher or the baker who is keeping an adjoining shop, and who necessarily benefits by the growth of the community and sells more meat or bread. The element of competition is in no way different, because where you have intensive culture, such as you have in market gardening, there is no question whatever that there is always ample land round any town where that industry can be spread, and there is always an opportunity for any other market gardener or small cultivator who wishes to enter into competition with this particular individual to get a piece of land and to compete with him in the market. There are a good many cases where he does not only have to meet with the ordinary competition which he would meet with from other individuals engaged in the same industry, but they have also to meet with rate-aided and State-aided competition from labour colonies, where that particular kind of culture is invariably carried on at very grave loss, and where the product is sent in to compete in the town with the product of market gardeners and others engaged in the same industry. I can give instances where men have suffered very much indeed from the State having, in the interests of the community, expended money upon a, labour colony and competed with them. Is this House to impose upon them an Increment Value Duty on the ground that they are not exposed to competition? I cannot think that the Chancellor of the Exchequer will seriously maintain a position which is wholly separate and wholly different in every point of view from the growth which accrues from the building value. He cannot maintain that the improvement in the value of a market garden or of cultivated land in any form upon which a man's industry is expended in the neighbourhood of a growing town can by any possibility be reasonably subjected to the Increment Value Duty which is imposed by this Bill. The Chancellor of the Exchequer can make the undertaking of the Government good, and I cannot see that there can be any other way in which it can be made good. I think the Chancellor of the Exchequer will agree that this Amendment, unlike the other Amendment, gives no colour for suggesting that this Amendment could free from Increment Value Duty any interest in land of any kind which is not purely agricultural. You have a man who has a piece of land upon which he is bestowing his labour and his industry, and you have a community which is growing. Each is helping the other. 1269 The man is gaining by the growth of the community, and he is, through his labour, helping the community, and these two beneficent forces are acting and re-acting the one upon the other, and it is absolutely impossible to say how much each owes to the other, and if these two begin to quarrel as to whether the State is entitled to a certain part of that increment as between the community and the different industrial elements which are working in and around the community, we are entering a field which is infinitely larger than any which this Bill suggests, and if the Amendment is carried it will go a long way to simplify the issue and make it perfectly clear that the House does not intend to put any heavy burden upon the agricultural industry, whether near towns or anywhere else.
§ Mr. LLOYD-GEORGE
This is a very important issue. We have already had one long discussion on it, and it was clearly understood that when we came to Clause 2 we should have another Debate upon the question of what the deductions in Clause 2 really meant in the way of creating a margin. We have no intention of charging any increment upon agricultural land which is due merely to the fluctuation of prices—what was then called the recovery from the agricultural depression from which it has suffered. This is the case put to us. Land is only beginning to rise from the very lowest point which it has reached for probably 50 years. You have barely ascended two or three rungs of the ladder. Prices are improving, and will probably continue to improve, but they can go on improving by another 20 per cent. or 30 per cent. before they come to anything like the prices which obtained in 1879. It is therefore unfair to take agricultural land at its present valuation, and treat the mere recovery as if it were increment. That position the Government absolutely accepted. We also say that in our judgment we have provided against that by the terms of our Bill, and I said that if it was not clear I would accept any Amendment which would make it clearer.
What is the effect of the Bill as drawn? It is that first of all you value agricultural land without the structure. You do not take into account any permanent improvement. In fixing the site value the whole of the permanent improvements, the hedges, drains, roads, all the improvements which have been effected on the farm apart from buildings are not 1270 included in the original site value. But when you come to the increment you then deduct the whole of these improvements, and, therefore, the margin which is allowed is the value of these improvements. What are they? These improvements are 40, 50, 60, or 70 per cent. of the value of the farm. That is the margin which we allow, and I do not suppose that anyone here imagines that agricultural rents in 10, 20, or 30 years are likely to rise 40 per cent. That allows, at any rate, a margin for what is known as recovery in prices.
It has been represented to me that it is rather too complicated a sum for the agricultural mind to work up, and that it is, therefore, rather misleading. It is said that you cannot go to a farmer or a freeholder and say we allow you a margin by such a complicated sum as that. It is said they would be puzzled and befogged by it, and would come to the conclusion that this is simply a lawyer's dodge to do him out of his increment. It has been represented to me that it would be far better to translate it into terms of percentage, and that if we mean to give 40 per cent., then make it 40 per cent. It does not matter to the revenue whether you put it in the form of percentage or in the present form. Let me point out to the Committee the argument for the Bill as drawn. It means that the better the landlord the greater the margin. A landlord who has not spent much money on drains, roads and improvements will find that the margin given to him is very much smaller than that given to the landlord who has spent a large percentage in improving his farms. I think it is an ingenious arrangement to encourage landlords to improve their farms. Those who have, as many of them have, spent 60 or 70 per cent. will have an enormously good bargain, and landlords who do not put up rents by 20 or 30 per cent. will be absolutely secure against any rise in prices which can be contemplated in the next century. That is the argument in favour of leaving it as it is in the Bill. The argument in favour of percentage is that it is something which everybody can understand. I should like to leave that to the Committee. That deals with practically the whole of the agricultural land of the country. But I agree that there is a margin which is not covered. What is that margin? It is a very narrow one, but it is the case of land where the increment is not due to a change in prices, but due entirely to that increase of value which is made by the community. For instance, 1271 you may have a town spreading in a certain direction, and land which is worth about £1 an acre at the present moment may suddenly have a value of £5 or £6 per acre, even for agricultural purposes. That is clearly increment of a kind which we are entitled to tax. That is not real agricultural increment at all. That is increment due to the action of the community. The hon. and gallant Member opposite (Mr. Pretyman) takes the ordinary case of the market gardener, and he treats the tax as if it were a charge on the market gardener. What happens in that case is that the man who takes a plot, of ground near a town——
§ Mr. LLOYD-GEORGE
If the hon. and gallant Member would not mind, I will take the usual case where he does not own the garden. An overwhelming majority of market gardeners in this country are people who rent their land. I have no hesitation in saying so. I will come to the other case in a minute. Let us take the case of the man who starts a market garden near a town which is stretching in a certain direction. He sees a piece of land, for which £1 or £2 per acre is being received by the landlord. He says he wants it, and he pays £5, £6, and even up to £10 per acre very often. That is done not only near great towns like London, but in the case of land near small towns the rent runs up to £10 per acre for market gardens. I could give you specific cases. I have been a market gardener myself, and I have paid something like a rate of £10 per acre near a very small town. But there are cases in the neighbourhood of London where there are charges of that kind. If you raise the rent from £2 to £10, the State comes in and says to the land-owner, "You have an increment here, and you must pay something to us." What does it matter to the market gardener? He has got to pay a sum of money as rent, and he would naturally prefer that the State should get some part of it. At any rate, he will get his old age pension secured, and he will get "Dreadnoughts" to secure his garden from being trampled upon by the German artillery. The market gardener in a case of that kind, on the whole, would prefer that a portion of the rent should go to the State rather than that the whole should go to the land-owner. The hon. and gallant Member opposite may take it that the land- 1272 owner is extorting the highest rent he can get. If he raises the rent from £2 to £10, does anyone suggest that he is not taking the biggest rent he can possibly get? If he has to stop short at £10 an acre it is because he cannot get more. The hon. and gallant Member talks as if this was a tax on a market gardener. It is not a tax on the market gardener at all, but a tax on the person who taxes the market gardener. The hon. and gallant Member asks, "Why should the market gardener pay and the butcher not?" But the butcher does pay.
§ Mr. PRETYMAN indicated dissent.
§ Mr. LLOYD-GEORGE
The hon. and gallant Member is absolutely wrong there. He suggested later on that there was something created by the man's own labour. Not at all. In order to see really how the hon. and gallant Member confuses the whole thing, let me point out that the rent is put on before the market gardener puts in a strawberry plant. It is a bare field, and a rent of £5 an acre is exacted by the landlord. There is no labour there by the market gardener or the land-owner. The value has been created before he spends anything. The same rule applies to the owner of a butcher's shop. If the site of a butcher's shop goes up owing to a rise in the value of land in that district—owing to something he has not done himself—he has to pay 20 per cent. of the increment to the State. Why should he not? The hon. and gallant Gentleman only wants the same treatment for the butcher and the land-owner. We are giving the landowner exactly butcher's treatment in that respect. That is all the hon. and gallant Member asks, and he has got it. We are carving out 20 per cent. of the increment. The hon. and gallant Member says: "Why should you charge on something which is due to the work of the man himself?" That is exactly what we are not doing. Then he says: "What of a small holder?" The hon. and gallant Member is always fighting for the rights of small holders. I am disposed to consider that the small holder has a claim for special consideration, but do not let the Committee confuse the issue. If the hon. and gallant Member says to the Government, "All I am concerned for is the small holder, and if you protect him I have no further objection," I will close with him at this moment. The small holder has a case for consideration which stands by itself. I do not want to discuss it at this stage, for it does not 1273 arise here. We are not now considering the small holder at all. We are dealing with a totally different consideration, which has been dealt with in the Colonies and wherever these land proposals have been made. This is a question whether the increment in the value of land is due to the action of the community and not owing to recovery in prices—whether it is due to a great industry being opened up in the district. A case was brought to my notice the other day where a man bought land at £70 per acre, and founded a great industry. That land became worth £1,500 per acre. That is not agricultural value, and yet it was open farm land. Does the hon. and gallant Member mean to say that the whole of that increment of value ought to be excluded from duty?
§ Mr. PRETYMAN
That would not be affected by the Amendment at all. The difference between £70 and £1,500 would be subject to Increment Duty in respect of such part as is not purely agricultural.
§ Mr. LLOYD-GEORGE
In that case the value of the farm for agricultural purposes went up enormously. I could give instances to the hon. and gallant Member where the increment was absolutely owing to the springing up of seaside resorts in the neighbourhood. I should not be surprised if the hon. and gallant Member knew of cases of that sort. If it is a purely commercial transaction, and if land is worth ten times more in the immediate vicinity of a seaside resort that is not agricultural value. That is an increment created by the community. I want the Committee clearly to understand what the Government are prepared to do. The Government say that there is an adequate safeguard for agricultural land in the provisions of this clause, and that where the improvement is a valuable one there is a margin of 50, 60, or 70 per cent., while in the average case it amounts to 40 per cent. If the Committee say, "That is too complicated an arrangement, and you cannot get the agricultural community altogether to appreciate it. We would rather deal with absolutely clearly-defined percentages." Very well, the Government are perfectly prepared to insert a definite percentage of 40 per cent., which would, of course, in addition to the 10 per cent. given in all cases, really mean a margin of 50 per cent., given in the case of land which is purely agricultural, and which is not building land. The distinction between agricultural land and build- 1274 ing land is clearly drawn at the present moment. It is distinctly drawn in the Finance Act, and has been in operation for 15 years. The recovery of prices does not affect building land. Quite the reverse. The higher the prices the greater the value of agricultural land. The higher the prices the lower the value of building land. Therefore recovery of prices does not affect building land in the same way as agricultural land. But in the case of agricultural land we are prepared to substitute for the present arrangement a definite percentage of 40 per cent., which, in addition to the 10 per cent. which has been given in all cases, will mean 50 per cent. as a margin for recovery in the case of agricultural land. In the case of building land the margin of 10 per cent. alone applies. That is the proposal that we make to the Committee, and if the Committee prefer that we are perfectly prepared to move an Amendment at the end of the sub-section to carry out that intention.
§ Mr. HENRY CHAPLIN
The right hon. Gentleman (Mr. Lloyd-George) has repeated what he told us many times before, that the Government have no intention whatever of taxing even to the smallest extent agricultural land. He says it would be unfair to take advantage of an appreciation of agriculture in good times, and after enumerating the losses which have been suffered, and the terrible fall in the value of agricultural land he gave us to understand that the Government would be most reluctant to take any step of that nature which could by any possibility retard its recovery in the future. The Government accepted that position he told us. And then he proceeded to enumerate all that the Government were going to do for agriculture to aid it in its position, and by the deductions which are already provided in this Bill. He spoke of landlords who had spent 60 or 70 per cent. out of their income on the improvements they had made on the land, and that I believe to be perfectly true. Then he went on to point out this, that there is land in the neighbourhood of towns and even of very small towns which is worth at least £5 or £6 an acre, and under these circumstances he held out to the Committee that it was hardly fair or right or possible to expect the Government to exclude from Increment Duty land which possessed value of this kind, which it did not derive from its agricultural value alone, but which had been given to it by 1275 what he called the efforts and the work of the community. The right hon. Gentleman surprised me I confess for the second time quite recently in the course of these Debates. He told us he himself was also a bit of a market gardener. A few days ago we were told he was a bit of a land agent. True, and in his experience as a market gardener, the right hon. Gentleman has had the misfortune to be charged the rent of £10 an acre for his market garden which was quite close to what he described as a very small town indeed. And his rent in that case was created by nothing whatever in the land; it might have been a piece of barren bad land according to him for anything we know to the contrary. The right hon. Gentleman with the courage which is so distinctly a part of his character embarked on this enterprise apparently with a light heart, though he did not tell us whether or not it was a very successful enterprise.
§ Mr. CHAPLIN
I do not think he should advance his own case in support of the argument before the Committee, because I was going to point out that no one really acquainted with the cultivation of market gardens, or with agriculture in any degree whatever would ever dream of giving a very high rent for market garden purposes, even £5 or £6 an acre, unless there was something very good in the land itself. And for this very simple reason that unless you begin upon land which has good qualities and good capacity of its own, for those particular purposes, it would not grow the stuff that you want. It would not grow the things for which you would have a market, even though the market may be, as the right hon. Gentleman says, at his very door. The position is really this as regards market gardens. If the land increases so highly in value as the right hon. Gentleman contemplates, from other causes altogether independent of agriculture, then it will very soon cease to be cultivated as a market garden. It will cease to be agricultural land, and will become naturally subject under the Bill; and, according to the views of the right hon. Gentleman, properly and justly subject to the Increment Duty, because it will not pay to cultivate it as a market garden for one thing, and for another thing, the loss to the owner of the land leaving it for years in that condition, when its value has enormously increased, will be so great that 1276 he is not likely to leave it in that position. The right hon. Gentleman tells us that the Government are determined to exempt agricultural land from this Increment Duty. If they are so determined, why on earth do not they accept the proposal of my hon. Friend Why did they not draw the Bill in the way in which the first Amendment was moved, and make it an Increment Duty of which agricultural land was altogether independent, and then, if they found it necessary from their point of view to tax market gardens or things of that kind, introduce later in the Bill the provisions which would have been necessary and effectual for the purpose? But they have done nothing of the kind. Although they tell us agricultural land is to be exempted, the first thing they do is to include agricultural land in the clause which enacts the imposition of an Increment Duty upon any land, upon all kinds of land, whatsoever. I think I understand the reason why the Bill was drawn in this way, and why the right hon. Gentleman has refused all Amendments upon it. There has been so much tall talk among the Members of the Liberal party for a very long time about their anxiety to promote small cultivation, small holdings, to provide allotments, market gardens, and other things of this kind, that these gentlemen of this great party, who have been preaching as their political cry "Back to the land," for I do not know how many years, dare not for the sake of their own constituency exclude agricultural land as a whole, and then move other clauses in the Bill directly to impose taxation on market gardens and small holdings and other things near the towns in this country, which ultimately may possess, or do possess, at the present time, some possible building value. That is the reason why we find ourselves placed in this extraordinary position. We have a Government declaring that under no circumstances will they allow agricultural land to be taxed, giving all sorts of good reasons in support of that view, and at the same time insisting on retaining in the Bill the provisions which make it, as a matter of fact, liable to this Increment Duty, and to all the other duties which are at present detailed in the Bill, unless there are specific clauses made on purpose to exempt them. I am delighted that my hon. Friend has raised this question again, and for my part I will give it every support in my power with all my heart.
§ Mr. PRETYMAN
I do not think we can debate this question with advantage until the Chancellor of the Exchequer has been good enough to answer this question. We understand, from what he says, that under Clause 14, section (4), sub-section (a), the owner of the land will be able to deduct all the permanent works which he erected upon the farm. It would not be deducted in the original site value; it would be deducted afterwards. That is the point. I want to make this perfectly clear, because the permanent works to be under sub-section (a) would only be such permanent works of which the land is not deemed to be divested under Clause 14. The original site value was to be arrived at under Clause 14, section (2), in the first instance, by divesting the land of buildings, structures, trees, and bushes, and anything which represents improvements which are not structures, trees, and bushes which come in under Clause 14, section (4), sub-section (a). The right hon. Gentleman says he is going to give us a great concession in this, but what permanent improvements are there which can be expected for agricultural property of which the original site value is not already divested under Clause 14, section (2), so that is no concession whatever.
§ Mr. LLOYD-GEORGE
I am rather surprised that the hon. and gallant Gentleman (Mr. Pretyman) should have overlooked the enormous expenditure on farms which has nothing to do with buildings at all, for instance, main roads and drains and fences. We are not deducting drains, roads, and fences. But I have made quite a business offer to the hon. and gallant Member. If he does not think that those represent 40 or 50 per cent.—I think that they represent that in a great many more cases—but if he says not, though I am certain in some cases they represent far more of the value of the farm than even 50 per cent., yet if the hon. and gallant Member says they do not, and it is purely an illusory move, I ask them would he prefer 40 per cent. plus 10 per cent.? If he says these are purely illusory, I will, if he prefers it, convert it into a percentage.
§ Lord WILLOUGHBY de ERESBY
I would like to ask one question on a very important matter. It may be that I misunderstood it, but it is not very easy to understand the effects of increment on agricultural land. Take the case of an ordinary farm of fair land let at £1 an acre, with very good buildings, hedges, 1278 and everything else. To get the original site value of the land you have got to divest the land of everything upon it, and if you divest it of the cottages and farmhouses, hedges, roads, and all the improvements, you will put the site value at nil—or we will say £2 an acre—while the total value will be only £25 an acre. If somebody comes along and wishes to build a residence or something else the effect may be to increase the value of the land to, say, altogther to £30 an acre. Will you have to pay Increment Duty on the difference between the £2 which is the original site value and the £25, or on the difference between the £25 and the £30?
§ Mr. LLOYD-GEORGE
The Noble Lord has quite misapprehended the whole position, if I may say so. He is assuming the case of land worth £25 an acre. The first operation under this Bill is to deduct the value of the structures. When that is done you deduct the buildings. If he says it is a point of drafting, and that the intention of the Government is not carried out, that is very easily remedied. It is admitted that fences shall not be considered in the first operation, but you simply deduct the buildings, as is done under the Agricultural Rating Act. Take the buildings as worth £7 an acre, that brings the original site value down to £18. You come to sell that farm at £30. The increment there is £5 on the total, because you deduct the buildings a second time, and then you arrive at £23. The Noble Lord wants to know whether we charge that £5. No, it would not be charged under this plan. Why? The second time we make another deduction. We deduct the second time the whole of the permanent improvement, roads, fences, drains—everything in the nature of permanent improvement on the farm—and these are certainly worth more than £5 an acre. I should be very much surprised if they were not worth, at any rate, £10 an acre.
§ Mr. LLOYD-GEORGE
The hon. and gallant Member says they are not. Then he had better take the 40 per cent.
§ Mr. LLOYD-GEORGE
On the original site value. It would be 50 per cent., with 10 per cent. Added. That would leave £9, which would be taken off. If you take the 1279 £9 off that would be £14. If you compare that £14 with £18, instead of an increment there would be a decrement. There is an ample margin there.
§ Mr. ABEL H. SMITH
I think it would facilitate matters if the right hon. Gentleman could give us a form of words which we could discuss. This is a very complicated subject. Many hon. Members on this side of the House are really seriously anxious to understand it, but it appears to be a very difficult business owing to the fact that the words by which the Chancellor of the Excequer would carry out his intention do not appear upon the Paper.
§ Mr. LLOYD-GEORGE
I will not pledge myself at present to the actual form of words. I would like first of all to submit for discussion the words something on this line. If the Committee prefer the actual percentage, then I should insert, after the "thirtieth day of April, 1909," at the end of the sub-section, the following:—
"In the case of any land which was agricultural land on the 30th day of April, 1909, and the value of which at that date was due solely to its capacity for agricultural purposes, a sum equal to 40 per cent. of the original site value shall be added to the original site value for the purpose of the ascertainment of the increment value."
To that there would be 10 per cent. additional, and therefore it would be 50 per cent.
§ Mr. PRETYMAN
That means nothing. There are tens of thousands of acres of which, under this process of arriving at the site value, when you have obtained the full capital value, the site value is practically nil. On two or three pounds an acre, what would be the value of the 40 or 50 per cent? The right hon. Gentleman does not understand agricultural site value.
§ Sir R. PERKS
The point suggested by the right hon. Gentleman opposite, to put in a plain and express exemption of agricultural land, would certainly be more intelligible to the rural holder than this complex calculation as to 40 per cent., or than even the provisions of the Bill. What we have now to discuss is whether the Chancellor of the Exchequer's offer is an improvement upon the Bill as it stands. I leave aside for a moment, if I may be allowed, the market gardener. Except on the outskirts of Lincoln, Boston, Spalding, and one or two other places, the question 1280 as regards the market gardener is certainly not a practical issue at all, because, for all practical purposes, the market gardener does not exist in the county to which I am alluding. But there is a class of man who does exist in very large numbers. I refer to the small freeholders, just on the outskirts, perhaps, of the village—the little shopkeeper who has taken some small holding outside the village. He has bought possibly at the time when the land was worth £70 or £80 per acre. He has put upon it his house and some outbuildings. He is now face to face with an agricultural value of about £30 per acre. If that man is told that he is to be charged Increment Duty on everything over 40 per cent. of the present site value—it would be about £30—he is not very well satisfied with the prospect of being charged the increment value on everything in excess of £42 an acre. If I understand the Chancellor of the Exchequer rightly, he is prepared to consider the case of small holders, who exist in enormous numbers in the surrounding districts of our little rural towns. I think if I were put to the election, which I trust I shall not be put to, between the offer of the Chancellor of the Exchequer and the Bill as it now stands, complex and unsatisfactory as the Bill is in its present provision, I should be disposed to say I would rather take that subject to some Amendments which might be possibly introduced than to accept this arbitrary figure of 40 per cent., which I am sure can-not possibly cover the various items to which the Chancellor alluded. I would infinitely prefer to put this in plain English and to accept the distinct pledge which I understood was given by the Government some few weeks ago that agricultural land should not come within the purview of this clause at all. The difficulty I apprehend arises because there is a certain class of agricultural land on the outskirts of these little country towns which is said to possess something more than the bare agricultural value. I greatly doubt whether that exists to any considerable degree. I differ from the Chancellor of the Exchequer as to that, and it is certainly not the case in Lincoln, of which I have absolute knowledge, with the exception of eight or nine towns. Outside that ambit you will find there is very little land which combines the characteristics of agricultural and building land, and certainly not to an extent that it is worth exposing the owners of these small holdings to the great difficulty which 1281 would arise if they are compelled to set out on the task of distinguishing with reference to these properties as to what is agricultural and what is building. I earnestly beg the Chancellor of the Exchequer to at all events consider the proposal which he has now made on behalf of the Government. The proposition is one which would require careful attention of Members whose duty it is especially to represent rural districts, but at present I would rather accept the provisions of the Bill than this arbitrary figure of 40 per cent. It would be more satisfactory to the small rural freeholder for whom I am now particularly speaking, and of whom there are many thousands in our agricultural districts, if we were to say quite clearly, and in plain language that the agricultural owners were not to be brought, as the Government has pledged, within the scope of the increment clauses of this Bill.
§ Mr. G. R. LANE-FOX
I am quite sure the Chancellor of the Exchequer has meant to make a perfectly fair offer to the agricultural community. I can assure him, as far as I can see, that some of his calculations are wrong. I believe he is wrong as to the large amount of land in the neighbourhood of towns which is let at an exorbitant rent, and that market gardens at £10 per acre are by no means universal. The concession of 40 per cent. on the original site value may mean absolutely nothing, because, in a great many cases, it is truly said by the hon. Member for Chelmsford (Mr. Pretyman), the value of the buildings practically represents the fee simple of the farm in many cases all over the country. I shall, I think, be corroborated by anybody who has farmed land. I agree with the hon. Member who spoke last, and I would far rather have what is in the Bill, but I would far rather have the Amendment of the hon. Member for Chelmsford. There we do get a practical and definite issue. Whereas the so-called concession of the Chancellor of the Exchequer in many would mean absolutely nothing. The Chancellor again makes a mistake when he says that up to £60 or £70 is spent on improvements other than structures and repairs of buildings, by which he only means roads, drains, and he says he only intends to include fences. He has recently had a considerable amount of figures placed before him, and he has taken a great deal of trouble in meeting land-owners and looking into those figures. I think he will find he has made a miscalculation, and that he has 1282 mixed up the amount spent on the repair of buildings with the amount spent on roads.
§ Mr. LLOYD-GEORGE
I am thinking of the original cost of the laying down of all those original improvements.
§ Mr. LANE-FOX
I am not quite sure that I understand the Chancellor. I should like to know what those are exclusive of repairs to buildings.
§ Mr. LLOYD-GEORGE
They are not repairs at all. It is a question of deducting for the second time in order to arrive at increment the whole cost of those roads, fences, and drains.
§ Mr. LANE-FOX
I should be the last person to belittle the amount spent in many cases, but these improvements cannot come to the amount mentioned, exclusive of buildings. In the case of farm roads, in many cases they are of an elementary character, and cannot cost a very great deal, either in making or repairing. In the same way as to drains. A very large amount might have to be spent on one farm, but the average would not amount to the sum stated. He cannot expect those large amounts to be spent on land anywhere in the neighbourhood of towns, because there will always be the uncertainty on the part of the men as to whether he will be able to get it back or not. The right hon. Gentleman rather scoffed about troubling ourselves about market gardeners. I quite admit there are not so many small owners as if the right hon. Gentleman had allowed ownership under the small holdings scheme. I know in my own district a good many small holders of this class; and, even if they are few, if you are going to put a manifest injustice on them, it is a question which ought to be considered. I think he will find on inquiry that this is a more considerable grievance on a large number of persons than he believes now.
§ Mr. LANE-FOX
The right hon. Gentleman has displayed a very conciliatory spirit, but I believe his announcement was based on a misapprehension, and I hope he will consider the matter very carefully before he comes to a final decision.
§ Mr. LLOYD-GEORGE
The hon. Member is putting to me the case of the small occupying owner. I am not arguing that 1283 this Amendment meets his case; that is not my point. I will deal with him separately later on. That is a different matter altogether.
§ Mr. LANE-FOX
We shall be obliged for any action the right hon. Gentleman may take in this matter. When I spoke of a misapprehension, I was referring more to the early part of my speech.
§ Mr. MUNRO FERGUSON
I agree generally with the views expressed by the hon. Member for Louth (Sir R. Perks), and for reasons which I have given before I am in favour of the Amendment under consideration. At the same time, I do not think the question with regard to either the Inland Revenue or the agriculturist is a very large one, because, as I understand it, agriculture will be virtually excluded from the Increment Tax by the Bill as it stands. I am speaking of agriculture as distinct from market gardening. It is a mistake to suppose that agriculture is dependent upon its returns in respect of its proximity to populous places. The great rises in value have been where agricultural land has been turned from agriculture to intensive cultivation. In districts remote from centres of population, like Wisbech or Blairgowrie, the rise in price was in no sense created by the community, but by the suitability of the soil for certain forms of intensive cultivation. The mere fact of a colliery being sunk has practically no effect upon the value of agricultural land. I have a few thousand acres in Fife, which is now the chief coalfield in Scotland. It has become a great coalfield within the last 30 years, and during that period, although the increase of population has been enormous, the rents of my farms there have gone down 35 per cent. You get a little more for the land by reason of the demand for milk, but the cost of transferring your steadings into milk farms really makes up the difference. Therefore, I do not think it can be said that population has much effect upon the value of agricultural land.
I must say that I prefer the Bill as it stands to the 40 per cent. proposal. What the tax really means is that land transferred from agricultural land to market gardens will be taxed. Whether that is expedient or not I have not yet considered, but I should have thought it was not. On the other hand, the Chancellor of the Exchequer has certainly given reasons why when land takes a jump from 20s. in value, 1284 as in the case of Blairgowrie, to £10 an acre for raspberry growing, if we are taking something for increment that may be considered a fair case in which to take it. On the other hand, it does not seem expedient to tax intensive cultivation or market gardening. Again, what the Chancellor of the Exchequer has said, that it may be possible to exclude small holdings from this tax, would remove a good deal of my objection to it, because I do not think that the management of large areas of market gardening upon an ordinary agricultural estate is a good system of tenure. The form of occupying ownership, although not fashionable everywhere, is really peculiarly suited to market gardening. Therefore, if small holdings were excluded, a good deal of my objection would be removed. Upon the whole I think it would have been better to have excluded agricultural land from this particular form of taxation, but I admit the force of the Chancellor's arguments, and that they form a very considerable modification of the objections which, on the whole, I maintain towards extending this tax to agricultural land.
§ Captain GUY BARING
I am unable entirely to follow the Chancellor of the Exchequer's view as to the value of agricultural land in the immediate vicinity of towns. If I understand the right hon. Gentleman aright, agricultural land in the vicinity of towns which has absolutely no building value whatever owing to natural circumstances, such as being hilly, is going to be taxed for Increment Duty. The difficulty the Chancellor of the Exchequer has not faced is where he is going to draw the line showing the point where the value coming from the town stops, and where the suburban nature of land comes to an end. In my county, in the valley of the Itchen and the Test, a great deal of the land is accommodation land of value for dairying purposes. You have a succession of towns, and under this Bill you will bring the whole of that land under the review of the Income Tax Commissioners. The right hon. Gentleman, as I understand, has only justified the tax on the ground that it is going to fall on the landlord, and not on the tenant. I do not think that that will be the case. The demand for land in that county is very considerable, and the land is to all intents and purposes a monopoly. It is one of the few cases where, in my opinion, land in this country is a monopoly, and the landlord will be able to exact the extra tax from the tenant. This point is 1285 particularly brought home to me, because a prominent supporter of the right hon. Gentleman in the country has written to our local paper assuring the tenants and people holding land of that description that they will not suffer by this tax. I am strongly of opinion that they will, and that the right hon. Gentleman cannot avoid it. I remember sitting on a Committee of this House where a farmer from the West of Ireland told us that he could get £40 a ton for potatoes if he were brought nearer to the London market. It is obvious that there would be an increment value, and yet that land is not going to be taxed. To discriminate between various owners or tenants in different parts of the country is most invidious and will rightly be an unpopular measure. I should like the right hon. Gentleman, if he replies in this Debate, to explain how he can justify his statement that this is only going to hit the landlords, and not the tenant; and also why agricultural land is supposed to be a more fit subject for taxation than that land which gains its value owing to other causes.
§ Mr. CHIOZZA MONEY
I rise to suggest in this exceedingly difficult issue what may prove to be a simple and business-like solution of the difficulty. May I call the right hon. Gentleman's attention to Clause 11? He has exactly the same difficulty there. He desires to exempt from Undeveloped Land Duty agricultural land. What course does he pursue? He takes the simple and obvious course of drawing an arbitrary line, and drawing an arbitrary line is the only way out of this difficulty which will be satisfactory to all parties. It seems to me that if the right hon. Gentleman adds to the clause under discussion a similar sub-section to that which appears in Clause 11 it will meet the case. That sub-section runs, "That Undeveloped Land Duty shall not be charged in respect of any land where the site value of the land does not exceed £50 per acre," and so on. By drawing that arbitrary line he will obviously exclude from the operation of the Increment Tax the whole, or very nearly the whole, of the agricultural land of the country, while he will retain the virtues of his Increment Tax in respect to building land, because it is rarely of less value than £100 per acre. I do not say the figure I suggest should be the one adopted by the Committee, but I do say the adoption of a feasible arbitrary line is the only way out of the difficulty. It is 1286 the course which the right hon. Gentleman has adopted with regard to undeveloped land, and it is also the course he should adopt upon the particular point under discussion by the Committee.
§ Mr. T. M. KETTLE
May I draw attention to two or three cases in view of the promise of the Chancellor of the Exchequer that later he would make special provision for the case of small occupying owners? Take the relation between the growth of the community and land values. In Ireland you have just carried out a radical change of land tenure. Land in Ireland has gone into grass. Agricultural land has not been prosperous. There is now hope of recovery. The case I want to put suggests the very worst of the land system which is now being gradually destroyed. How did it come about? The pressure of population was intense, and the inhabitants were so confined to this single industry of agriculture that you had to pay for tenant right in Ireland prices that were quite fictitious and arbitrary and that did not represent the productivity of the land. Might I remind the Committee that we in Ireland in the Rent-fixing Courts have had the experience since the year 1881 of endeavouring to separate the various kinds of value of agricultural land. I remember very well a case where the Courts found that if they went by the declared agricultural prices and prospects rents would have to fall. They therefore discovered a remedy, which was called "proximity value." In my own county of Dublin there was, seven or eight miles from the city, ordinary agricultural land used in the ordinary way—they were not market gardeners—and I have seen the Rent-fixing Courts set down, in addition to the, properly speaking, agricultural value of the land, another value, which was the proximity value that I referred to. I have seen them place proximity value, with so far I could see no reason, at from 40 per cent. to 60 per cent. These are the two special cases I wish to put before the Chancellor of the Exchequer. You will have to introduce in a later part of the Bill that which is apparently intended, and put this new Land Tax upon the basis of what was done in the Land-fixing Courts and apparently under the Budget Acts. I believe, at any rate, that it was stated that the Inland Revenue would have all the materials necessary at their disposal in Ireland, but that they would take declarations from those concerned to 1287 enable them to arrive at a settlement, and to calculate the increment value upon that basis. I think it is the desire and the intention of the Chancellor of the Exchequer to exclude agricultural land. When he has gone a considerable distance to meet us, I think the Amendment now before the House really gives a much safer guarantee than any other which may be suggested. At this stage of the Bill I must express my disappointment, which I think is shared by my Irish rural colleagues, that the Chancellor has not seen his way to accept this Amendment and so relieve the anxiety which I know is felt in a great many places in Ireland.
§ Mr. ABEL SMITH
I acknowledge the bona fides of the proposal put forward, and also the great difficulty that the Committee is now confronted with in regard to the position of agricultural land. But I must say that I do not like the proposal which is put forward by the Chancellor of the Exchequer, namely, that the 40 per cent. shall be added to the original site value in the case of agricultural land. I think a hard and fast rule in this matter will work very unequally. It will be too much in some cases, and much too little in other cases. As has already been said, there are a great many cases with which we are familiar in which the amount spent on buildings, even in recent times, exceeds the total of the present freehold value. I know a case myself a few miles from this House in which the land belonged to a very old yeoman family. In the good days of 30 years ago the then owners spent a very large sum putting up a very suitable modern farmhouse and other buildings. That family unfortunately came to grief in the bad times, as so many others did, and the whole farm was sold for less than the owners spent upon it. The matter I particularly wish to bring to the notice of the Chancellor of the Exchequer is the case of the market gardener. I have especial reason for doing that, because I represent a very large number of market gardeners who carry on their business within a few miles of London, and a considerable number of them are freeholders. It is extremely difficult to say whether the value of that land used for market gardening is due to agricultural capacities of the land, or whether any part of it is due to its proximity to a large centre of population. I think it is an extremely hard case for these 1288 men who are exposed to very severe competition in their business if they have to pay an Increment Duty upon the supposed capital value of their land. It is impossible for the market gardener who grows crops for the London market to carry on his business except within a few miles of London and in close proximity to a railway station. It makes no difference to him whether there is a large population close to his land, but he must be fairly near London and near a railway station. I think it will be very hard on these men if they have to pay Increment Value Duty.
There is also another class upon whom it will be hard, and that is the ordinary agricultural small holder, either near a town or remote from a town, and as it has been for some years past the policy of Parliament to encourage the creation and the increase of small holders throughout the country, whether as owners or occupiers. I think it is most unfortunate if the effect of this Bill should be to impose a new burden upon that branch of agriculture. On this ground I certainly prefer the proposals contained in the Amendment of my hon. and gallant Friend to those contained in the proposals of the Chancellor of the Exchequer. But I venture to think that neither of them, not even the Amendment of my hon. and gallant Friend, goes far enough. What we want to arrive at is this, that land, the value of which is due solely to its capacity for agricultural purposes, should be excluded altogether from the Bill. That, in fact, seems to me to be the only satisfactory way of dealing with this matter. I am not sure that there is not a good deal to be said for the proposal put forward by the hon. Member for North Paddington (Mr. Chiozza Money). That was that all land should be excluded until in the opinion of those responsible for the valuation it went up to the value of £100 an acre. Of course, we have not had much time to consider that, and it is not easy to form an opinion upon such a subject on the spur of the moment, but I am inclined to think that that would not be at all a bad way to attain the objects we all have in view on both sides of the House.
There is some agricultural land in this country which is extremely valuable for agricultural purposes. I think it is not the intention of His Majesty's Government to tax that land upon what is the real agricultural value, and, as was said just now some of the most valuable land is very remote from large centres of population. I know land in Lincolnshire which is very 1289 remote from population, but which is very valuable for fruit growing. I am acquainted with land in the neighbourhood of the Wash, which is the finest agricultural estate in this country, commanding a very high rent not for fruit growing, but for agricultural crops. I do not know what its agricultural value is. That is one of the most remote and dreary places I ever had the pleasure of visiting in my life, but that shows that the value of land, in some cases, at any rate, does not depend entirely upon its proximity to great centres of population. My conclusion is that giving the best consideration I can to this matter, and looking at it as far as I can from the practical view, having an acquaintance with many kinds of lands in a great many different parts of the country, I am inclined to prefer the Amendment of my hon. Friend to the proposals of the Government, though I must confess I do not think the Amendment is an entirely satisfactory solution of this question.
§ Mr. R. L. EVERETT
Like the hon. Gentleman who has just spoken, I think there is a great deal in the suggestion put forward by the hon. Member for North Paddington that a definite sum should be taken as the value under which agricultural land should be excluded from the operation of this Increment Tax. I think the amount should be put rather higher than what the hon. Member suggested, but that is a detail. It looks to my mind, after the discussion to which we have listened, that a solution upon these lines will be the simplest solution we can come to. As regards the Amendment, I certainly prefer it to the clause as it stands in the Bill. But I take this objection to it, that it would shut out some other Amendments which are clown upon the latter parts of this clause, and which I should very much like to see included in the clause. For in-stance, there is the Amendment down in the name of the hon. Baronet the Member For Northants, East (Sir Francis Channing), who, I am sorry to say, is too unwell to be present, and who asked me to; move his Amendment when it was reached. That Amendment is to insert the words "continuous good farming resulting in increased fertility, or to intensive or special cultivation of fruit or other crops, or to improvements and." These words would be exceedingly desirable to be introduced so as to ease the minds of those engaged in the skilful handling of land for special crops, and to assure them 1290 that increment will not be charged upon any additional value they may give to the land by the skilful use they are making of their knowledge in its cultivation. If the Amendment which we have now before us were passed, I suppose the Amendment of the hon. Baronet would be cut out. I have another Amendment down to add at the end of the paragraph the words "or to a general rise in agricultural prices." I am aware that the words moved by the hon. and gallant Member for Chelmsford really cover the ground, but I think it would be a distinct advantage to have the words suggested by the hon. Baronet the Member for East Northamptonshire as well as the words which I wish to add myself. I think they would very much improve the clause, and the Amendment in that form would be much better than the proposal which is now before us. I think the suggestion made by my hon. Friend is one which will be found to be the simplest solution of this very difficult question.
§ Mr. HUGH T. BARRIE (Londonderry, North)
I am rather disappointed that the Attorney-General cannot see his way to accept this Amendment. We have been repeatedly assured that it is not the intention of the Government to tax land used for purely agricultural purposes. The Leader of the Irish party said the other day that he had not only public but private assurances from the Chancellor of the Exchequer that agricultural land would be absolutely excluded from this new form of taxation. In view of these assurances I regret that the Chancellor of the Exchequer is still unwilling to accept an Amendment which would make his intention absolutely clear with regard to agricultural land. This Amendment affects my Constituency in two respects. In the first place, there is in my Division a large quantity of reclaimed land, and the offer made by the Chancellor of the Exchequer to exempt 40 per cent. of the site value would be of no use whatever to the unfortunate owners of reclaimed land. The cost of reclamation often exceeds the original value, with the result that to-day, if this Bill becomes an Act, and the valuation were to be made under this Bill, there would be nothing left to tax, so that in this respect the 40 per cent. which the Government seem to think is generous as a rebate would not appear in that light to the unfortunate owners of reclaimed land.
As regards the more highly cultivated parts of my Division, we have two very 1291 flourishing watering places and one important town practically within a triangle of about five miles. Of late years the tenants there have become the owners. They have all paid something, not very much perhaps, but it has always been an increasing something for the purely agricultural value of the land, because of the hypothetical and ultimate building possibilities of that district. Higher prices have been obtained because of the development which is going on in close proximity to this land. Whenever one of these farms come into the market, a higher value is obtained every year on account of that proximity. The Chancellor of the Exchequer seems to think that there is no agricultural land worth more than £50 per acre. I know the hon. Member for Paddington (Mr. Chiozza Money) differs from the Chancellor of the Exchequer in that view. I know myself of cases in the area to which I am referring in which something like £70 per acre has been realised. Those farmers in my Constituency would have a very considerable Increment Tax to pay in case of death or by family changes whenever their farms change hands. I hope that even now it is possible for the Chancellor of the Exchequer to alter the minimum rate which he is at present proposing in regard to exemption. It is no doubt true that when from time to time one of these tenant proprietors finds a willing buyer who wishes to erect a villa on his farm, he may get a valuation up to £100, but that does not convey that the remainder of the farm can be disposed of to the same advantage. I think in these cases a very great hardship will be involved by this tax. I know the intention of the Government is to cheapen land, but the local view of the matter is that none of these tenant proprietors will feel disposed to sell even half an acre, because then they will have the value of the whole farm raised. Consequently, instead of land becoming more accessible for building purposes, there will be a great deal less land on the market. I hope in both these respects the House will feel the great importance of this Amendment, and I trust that if not now on this particular Amendment we very shortly shall have convinced the Government that we must have another clause clearly exempting land so far as it is used for agricultural purposes.
§ Mr. F. W. VERNEY
I desire to support the appeal which has been made that 1292 all land which can be shown to have a purely agricultural value should be exempted from this tax. I would ask the Attorney-General to bear in mind that all this intensive cultivation is really a great help in dealing with the question of Unemployment. The more intensive the cultivation, the more labour is put on each acre of land, and some of this market gardening land not only provides an immense amount of food for the population, but it also provides labour for those who would most certainly be without it if the land went out of cultivation or became less intensively cultivated. That is a very strong argument in favour of a careful consideration of the plea which is now put forward. You cannot distinguish between horticultural and agricultural land. One shades off into the other. The Chancellor of the Exchequer implied that he would give special consideration to small holdings. If that is to be so, every market garden which is 50 acres or under would come within the limit of a small holding as defined by the Small Holdings Act. I agree that if small holdings are really to receive that consideration from the Government which all of us who are interested in small holdings hope they will receive, it will be a great mitigation of the hardship which would otherwise fall upon the market gardener; but if the Government only intend to deal with those who are market gardeners in a very large way of business, and who own hundreds of acres of market gardens, as they do in certain counties of England, such as Essex and Kent, that is a different matter. The man who is a small market gardener and who very likely has created the market garden out of what was once a field, deserves every consideration from the Government, and I hope he will receive it. A great deal has been said about market gardens and land which is intensively cultivated in the immediate neighbourhood of large towns, but very often it is not so important that land in the immediate neighbourhood of large towns should be intensively cultivated as land in the immediate neighbourhood of of a railway station. There is many a bit of land in the immediate neighbourhood of a railway station which has a special value attaching to it, although it does not come within the suburban ambit of a large town. There are men who have created businesses which are not only valuable to themselves, but to those they employ. They confer the double benefit of providing an enormous amount of food out of a 1293 small amount of ground and of employing a very large amount of labour per acre. I do hope men of that kind will not have their ambitions clipped and their businesses injured. I think every encouragement ought to be given to agriculture in that sense, and the Government will be making a great mistake if they put such a tax upon men of that description that they feel they must either give up or materially decrease the business which is of such an immense advantage to them and everyone else concerned.
§ Sir LUKE WHITE (York, E.R., Buck-rose)
Up to the present the Government have not given any clear and distinct indication as to the meaning of the term "agricultural land," and, in considering the Amendment and the proposal in the Bill, I have no hesitation whatever in saying that as the clause stands I should be bound to support the Amendment. I do not, however, think that that is a solution of the difficulty. I admit that to place in the Bill words which would define when land ceases to be called or described as agricultural land is very difficult. Still, we have the promise of the Government that they do not intend to place the Increment Duty on agricultural land. I think that with regard to a great proportion of the agricultural land of this country the suggestion of the hon. Member below the Gangway would to a very large extent solve the difficulty. I do not say that it would be sufficient to describe land as being different from agricultural land if it exceeded £100 per acre, but I do say that it would to a very large extent relieve the minds of those who consider they might be brought within the provisions of the Bill, although their land is purely of an agricultural character, and that it would to a great extent solve the difficulty. I appeal, in the absence of the Chancellor of the Exchequer, to the Attorney-General to consider this particular point. It is a matter which is of great concern to the country. We have had it admitted on all sides of the House that agricultural land should not come within this particular tax, and I think the Government ought to tackle the difficulty and try and solve the problem, making it clear that under no conditions whatever shall land, whatever its value may be, which is used for agricultural purposes be liable to this Increment Duty.
§ Mr. JOHN DILLON
This Amendment and the great question raised by it undoubtedly affects in a particular degree 1294 the country from which I come, and it is a very remarkable instance, in my opinion, of the difficulty of dealing with affairs, particularly financial, for Ireland and England in the same Bill. I have listened to the Debate, and I noticed that the Chancellor of the Exchequer, in his reply, dwelt mainly on the point that this tax, in so far as it falls upon agricultural land, could not by any possibility fall upon small owners, but would fall upon the comparatively wealthy and large owners of land. No doubt that would be the normal incidence of the tax in this country, but it would be the abnormal incidence in Ireland. Ireland will in a few years become a land entirely of small owners, and we have therefore to look at this from a different point of view from that which presents itself to hon. Members representing constituencies in Great Britain. Having listened with the greatest possible attention to the statement of the Chancellor of the Exchequer, I am still somewhat in a fog as to the intentions of the Government on this question. With the best possible intentions and the utmost desire to follow them, I really do not know exactly what the Government proposals are. I understand the effect is, that in dealing with agricultural land there shall be no taxation of increment value, unless that increment value is more than 50 per cent. of the original so-called site value. In other words, the original value must be increased 50 per cent. before the Increment Tax will become payable. That does not, however, convey a clear impression to my mind. The whole subject is extremely complicated, but I will ask is that 50 per cent. to be over and above all deductions? Are we to understand that the 50 per cent. margin is in addition to all the buildings and improvements on the farm, or is that 50 per cent. a substitute for the deductions which would otherwise have been made in respect of those buildings and improvements? If it is only a substitute, then it is no concession at all; but if it is in addition to all the improvements on the farm, it is a concession well worth considering. I am in a state of uncertainty on that point. If I am to understand the Chancellor of the Exchequer has offered, in the case of all agricultural land, to undertake that there shall be no Increment Tax unless there is an increase on the value of 50 per cent. apart from all deductions provided for in the Act, valuable as that concession may be, it does not at all satisfy me, and I would urgently press upon the Government that it would 1295 be better to make it absolutely clear, both in this country as well as in Ireland, that this tax is not to be a tax upon agriculture. After all, the industry of agriculture in this country, as well as in Ireland, has been for many years a decaying industry. It is not a question of sentiment, neither is it a dispute about the contributions made by land-owners towards taxation in so far as land is used for agricultural purposes. But there is no doubt that the well-being of the nation—in this country in some respects even more than in Ireland—has been seriously injured by the decay of the agricultural industry, and therefore the Government should endeavour, in their own interest, to let the country understand clearly, beyond all power of dispute, that this is not a tax upon the agricultural industry.
I know the Government look at this matter from the point of view of revenue. But I would like to point out that the margin between a clear declaration put into the Bill that none of this taxation will fall upon bonâ fide agricultural land, and the promise indicated in the concession of the Chancellor of the Exchequer is exceedingly slight, and any attempt to capture agricultural land in England or Ireland for the purposes of this duty can only result in a trifling contribution to the revenue, for it could only be levied upon market gardens and land of that description, and I doubt if, when all the promised concessions have been put into the Bill, the whole result will come to £100,000 a year. Is it worth while for the Government to allow their opponents to go on to platforms in the country and denounce them for piling a fresh burden on agriculture for the sake of £100,000? It is all very well for the Chancellor of the Exchequer to prove with his great eloquence and his extraordinary gifts of speech that this tax will fall upon the great landowners and not on the occupying market gardeners or small working people. You will find the controversy in the country will proceed on broad general principles, and if you put this in you will enable the opponents of the Government to declare that this is a tax on the agricultural industry, and that cry will catch the public mind, in spite of all the explanations that may be offered. I think the Government will make a great mistake in their own interests and in the interests of their Bill if they leave it open to have that said about the measure. If any hon. Gentlemen hold the view that, for the sake of theory, they 1296 should not let off market gardeners and certain individuals who own land in the neighbourhood of towns, the value of which land is not due to the buildings upon it, but is simply an agricultural value which has been raised by the population round about, they are making a great mistake. It would be said on every platform in England that this Budget is going to throw a fresh burden on the agricultural industry. In the case of Ireland you have a totally different state of affairs, so different that I do not think the Chancellor of the Exchequer would for a single moment have dreamt of allowing this tax to fall upon bonâ fide agricultural lands if he had turned his attention more closely to that country. I quite recognise it was not possible for the right hon. Gentleman to accept the Amendment to the first clause, that all land used for agricultural purposes should be exempt for the purposes of taxation, because a man who holds up land, which ought to be building land, on the outskirts of a town, always uses it for agricultural purposes—as cabbage gardens or for purposes of that nature, and naturally he says it is agricultural land. If that Amendment had been passed it would have entirely defeated the purposes of the Bill. But that is a totally different question to the present Amendment, which only exempts from taxation that part of the value of the land which is entirely due to its agricultural character. If the land has a grazing value or a site value, apart from or in addition to its agricultural value, the tax will catch it, as this Amendment only exempts from taxation that portion of the value of the land which is due to its bonâ fide agricultural occupation; therefore, it raises an entirely different issue in the case of Ireland. Ireland is a country going through a period of transition, and in the course of the next ten years it will be a country in which no great land-owners will be left. It will be a peasant proprietary country. The land will have no large holders, and in this, as in many other respects, we shall set an example in civilisation to Great Britain, and show them how to conduct the affairs of a nation. Therefore, of course, this tax, in so far as it would affect agricultural land, would fall upon the Irish people in a totally different way from that in which it affects this country. But there is another aspect of the Question. Not only are we going to be a nation of small owners, but, practically speaking, agriculture is our only industry, and this Bill, in many other respects very hard and unjust 1297 upon Ireland, would bring about an intolerable aggravation of that injustice, if there was any attempt to put a tax upon the industry of agriculture in Ireland, which is the only industry of the country, and which is already staggering under its heavy burdens. And the tax will not fall in the way in which it will fall in this country. Not one single argument used by the Chancellor of the Exchequer in defence of this Act could be used in defence of its effects in Ireland, because it will not affect the large land-owners, whose lives are easy and who live without any exertion on their own part, seeing that their revenue is increased by the increase of the population, but it will fall upon the small and struggling men, who are the bone and sinew of the nation, and who have now hard work to make ends meet, and it would fall upon the one industry of Ireland by which the people live. Therefore, we are bound to take every possible means to secure that this House does not put a tax upon agriculture in Ireland, or upon land, or upon the value of land, so far as it arises from its agricultural use.
There is one other point in connection with its effect on Ireland, to which I should like to draw attention. It is a very interesting fact, and one which upon other occasions we have often brought before this House, that it is a peculiarity of a peasant country, which I am bound to confess I am rather pleased at, because it gives a security that no system of capitalism can overcome or drive out, but still, it has to be taken into account in connection with this tax, and it is this, that if you go to Ireland you will find this extraordinary phenomenon. Go to the West, to the poorest part, and you will find that the price of land is rising more rapidly than in the richer parts of Ireland. It is the small holdings, the poor holdings, the bog holdings, that are rising in value, and why? Because the poor peasants and sometimes rich Americans bid against each other for these holdings, without any reference whatever to their true value. I am speaking absolutely within the knowledge of everybody who knows Ireland, that the limit of the price they give for these holdings is not the value of the land but their own resources, and they bid up these holdings to sometimes upwards of three, four, or five times their value. As soon as the Land Purchase Act gives them the fee simple right, they look upon these holdings not as an instrument for the 1298 creation of wealth, but as a home; a great and wonderful principle that has its foundation in the creation of peasant holdings. They look upon these holdings as a home, and as a source of independence, and not so much as a means of making money, and the result is, that I have known dozens and hundreds of cases in the West of Ireland where, without any general cause for an improvement in the price of land, by the increase of the price of agricultural produce, such has been alluded to by the right hon. Gentleman, but simply by the operation of the unbounded greed of the peasant for land, provided for by money from America and other adventitious circumstances, the price of land has doubled and trebled since land purchase has increased. And may not this tax fall upon the poorest of the poor, and the very passion of these people, to secure homes in Ireland, may be used as an instrument to tax them, as I know entirely contrary to the intentions of the Government. But we have taxes framed here in England, without any reference to Ireland, and they have some extraordinary effects in Ireland, which the Government never contemplated when they drew up the Bills. The limits of the Bill will not protect the small men for whom I speak, and they may simply be taxed upon an increment, which is due not to the value but to the greed of the peasant to secure a home. This tax in Ireland would bring in very little revenue to the Chancellor of the Exchequer, although it would be intolerable and prove a check in regard to the improvement of Ireland under a system of land purchase. Therefore, I would appeal to the Government, both from the point of view of this country and, still more, from the point of view of Ireland, to make this question perfectly clear, and if they cannot accept the present Amendment, which I distinctly support, at some future stage of the Bill, put it beyond question that agricultural land, so far as its value may be due to bonâ fide agricultural use, shall not be made the subject of Increment Duty.
§ Mr. ELLIS DAVIES
I agree that such part of the value of agricultural land as is due to its general agricultural condition should be excluded from the operations of the Bill, but I cannot see how the Amendment will benefit the agricultural owners, nor do I see that any proposal which has been made from the other side of the House is in any way calculated to secure to the owner of agricultural land 1299 his exemption from the Increment Tax, because I find in the Bill the first thing to be ascertained is the original value of the land. That I take to be the value of the land, according to Clause 14, divested of all buildings—that is, the value of the land for what it would fetch in the open market for purely agricultural purposes. In ascertaining the value again for the purpose of Increment tax, there are two things to be excluded: the first is any value which is due solely to its capacity for agricultural purposes. That, I take it, means that any alteration in the method of agriculture, any improvement by the use of machinery, or the application of manures, or some similar measure, or whatever improvement takes place. If you exclude from the increased value of the land its increased agricultural capacity, and if you also exclude any increase which has taken place owing to any permanent erection upon the land, you go back again to your original site value, which must be the value for purely agricultural purposes.
Another suggestion which has been thrown out is that all land under a certain sum per acre should be excluded. The greater part of the agricultural land in this country is not worth anything like £100 an acre; but, on the other hand, there is always the danger that if you put into an Act of Parliament a certain limit of value, the presumption—and it is not an unfair presumption—is that land over and above that value would not be agricultural land. In that case it would work very hard indeed in the case of Ireland and Wales, because, as the hon. Member for East Mayo (Mr. Dillon) said, the price is really not in any way dependent upon the business value of the land for purely agricultural purposes. It is not uncommon in North Wales for small tenements of four, five, or ten acres to be sold at from £100 to £150 an acre. But still, I take it, that where tenements of that kind are held in the middle of the country, far from any large population, or from any special railway facilities, they would still under this Bill be deemed agricultural land. Then an hon. Member above the Gangway referred again to market gardens, and seemed to imagine that this Bill is going to cause considerable loss to the owners of market gardens; but I find that in the definition of the word "agriculture" market gardens are included. Again, it seems to me that, according to this Bill, the original site value is its present value for agricul- 1300 tural purposes. Its value for the ascertainment of the Increment Duty is that value plus some other value to be acquired, but having excluded from consideration two things, first of all any value which is due to increased agricultural capacity and any permanent improvement effected upon the land. The wording of the Bill as it at present stands is much better for the agricultural interest than anything which has been so far proposed to amend it.
§ Mr. B. STANIER
I have been a valuer, and have valued many places in many parts of the world, and I say that quality makes the value of land much more than the situation. In Worcestershire agricultural land goes up to £4 an acre, far away from any station, absolutely for its quality, and not for its situation at all. We were told by the Chancellor of the Exchequer that he valued land for market purposes at £10 an acre, straight out of the field. I doubt very much if that is in any other part of the world except Wales, and I should very much like to know where that particular land is. Agriculturists are watching all over the Empire to see how the Chancellor of the Exchequer is going to put this agricultural definition right. The percentage question that he brought forward is absolutely of no use at all. It is nothing but a premium for bad estate management. If you take large and well-managed estates, wherever you like, you will find it is far more than the 40 per cent. that is proposed, and I hope the House will not in any way take up the question of the 40 per cent. We have been told time after time that land is going up in value, but at Question Time to-day we had a very typical case of land being sold by the Government at half the value that it was originally bought for. Why is that, if land is going up in value? I hope we shall settle this Question, which is really not settled at all here, and absolutely define what is agricultural land, and not put a percentage value on it. I would rather put a money value on it, because money is the basis of quality rather than situation.
§ Mr. PHILIP MORRELL
I am rather surprised at the attitude taken up by hon. Gentlemen opposite in regard to the offer of the Chancellor of the Exchequer. If I understand the right hon. Gentleman's concession, it comes to this: In the case of agricultural land so long as the increment does not exceed 50 per cent. on the present value, no Increment Duty will be 1301 charged whatever. It is quite true that it will be charged on site value. As I understand, the same deductions will be made in estimating original site value and increment site value, so that 50 per cent. in the case of agricultural land will be franked altogether. It may come up to be worth half as much as it is now, but it will pay no Increment Value Duty at all. I should have thought that was a sufficient margin to cover anything that might be due to what is called agricultural recovery. In the special case of Ireland, I understand the Chancellor of the Exchequer is prepared to make even a further concession in regard to the small occupying owner. The small occupying owner will be relieved from paying Increment Duty at all. I cannot see how those who claim to represent the agricultural interest can complain in regard to this tax. I represent a Constituency which is mainly interested in agriculture, and I have been watching very closely to see what the Chancellor of the Exchequer would do in the way of freeing agricultural recovery from Increment Value Duty So far as I can see the offer now made by the Chancellor of the Exchequer is a much better one, because a much simpler one, than the terms contained in the Bill. I believe that it is an offer that will be readily understood by all those engaged in agriculture. Although I agree that agriculture is looking up, I do not myself anticipate that the value of agricultural land is going to rise so much that under the terms of the Chancellor's offer people will have to pay any duty whatever in regard to agricultural value. I think I am right in saying, in the name of my Constituents, that we will welcome very much the offer made by the Chancellor of the Exchequer.
§ Mr. PRETYMAN
I do not think that the constituents of the hon. Member opposite (Mr. Morrell), when they examine this concession rather closely, will be quite so grateful as he now thinks they will be. The offer made by the Chancellor of the Exchequer was, I quite admit, made in perfectly good faith, but it amounts in many cases to absolutely nothing at all. I will proceed to prove my statement. Fifty per cent. sounds very pleasant, but it depends on what the 50 per cent. is of. By looking at Clause 14 he will see that the 50 per cent. which is offered is 50 per cent. of the site value. What is site value? It is the fee simple value of the land, and from that is to be deducted, in order to arrive at site value, all the buildings, trees, shrubs, and other 1302 structures which are upon the land. The hon. Member will find that his Constituency there are thousands of acres of land divided into agricultural farms where the value is, as agricultural land, £10 to £15 per acre. Taking one of these farms of, say, 200 acres at £15 per acre, that represents a capital value of £3,000. You then have to take the houses, trees, shrubs, and other structures, and deduct from them the £3,000. In innumerable cases the resultant sum will be nothing, and I think the hon. Member will find it difficult to prove that 50 per cent. of nothing is a valuable concession.
§ Mr. MORRELL
The hon. and gallant Gentleman will observe that the same deduction is to be made in estimating increment value.
§ Mr. PRETYMAN
I do not observe anything of the sort. Site value of a farm in the hon. Member's Constituency is nothing as original site value under Clause 14. That farm is sold, or the owner of the farm dies. Those deductions are again made from the increased value, because we have to assume that there is a general rise in agricultural value. The value of the structures remains at £3,000, and that has to be deducted from the improved value, which is £25 per acre. The value of £25 per acre, instead of being £3,000, is £5,000. There is a £2,000 increment from which nothing is to be deducted. You have 10 per cent. off, which is general to all land, leaving £1,800 of increment on which one—fifth, or £360, will have to be paid to the Government. Will the hon. Gentleman's Constituents be grateful for that concession? I am not aware whether the hon. Member is himself interested in agriculture?
§ Mr. PRETYMAN
That strengthens my point. The hon. Member is not only acting in the interest of his Constituents, but in his own interest as well. I do not think he will consider it fair that he or his Constituents should be charged Increment Value on purely agricultural land, but it will be charged. I have given a concrete case.
§ Mr. MORRELL
I think the hon. and gallant Gentleman calculates the 50 per cent. at the wrong time. I understand that the proposal of the Government is to make the deduction from the original site 1303 value, and also on the increment on site value. They will then see whether the increment on the site value exceeds the original site value by more than 50 per cent.
§ Mr. PRETYMAN
I am very much obliged to the hon. Gentleman for the interruption. It shows me that there are hon. Gentlemen opposite who do not understand the proposal. That is not our fault; we did not draft the Bill. This is a most important point, and I want to make it perfectly clear. If my statement of the effect of the Bill is incorrect, I hope the Attorney-General or the Chancellor of the Exchequer will correct me. To get original site value you have to take, first of all, the capital value of the land, and you have to deduct the value of buildings and other structures. In innumerable cases the value of the buildings and structures is equal to the fee simple value of the land. That is common knowledge to all who are interested in agricultural districts. Therefore you arrive at the site value of nothing, or, it may be, in many cases, a little more than nothing, but very little. The site value is so low that it hardly counts in the first instance. Under what procedure do you arrive at the increment value under the Bill? You take the value on the first occasion when the duty is payable, say it is in five or ten years' time on a death or a sale. The improvement in price appreciates the value of land, and instead of being worth £15 an acre it is worth £25 an acre. You then have to arrive not at the site value under Clause 14, which I have previously shown to be nothing or very nearly nothing, but under Clause 2. For the purpose of comparison you make the same deduction, as the hon. Member truly said, as you made in the former case, and you take the same figure of £3,000, and you deduct that £3,000 in this case, not from the value of £15 an acre, but from a value of £25 an acre, that is, from £5,000 instead of £3,000, and having done that you then arrive at the increment; and the increment in that case will be £2,000. It is not denied that that is obviously the effect of the Bill, and I do not think that the Chancellor of the Exchequer or the learned Attorney-General denies that that is the effect of the Bill. You allow 10 per cent. off that, which reduces the taxable increment to £1,800; you are also to be allowed a further 50 per cent. off the site value. But the site 1304 value is nothing under Clause 14, and therefore the reduction, although very plausible, is of no practical value in that particular case, and that is the case of the poorest agricultural land. Now we come to the alternative concession offered by the Chancellor of the Exchequer. That is the concession which is already embodied in the Bill. It is this: that certain improvements, which are not to be deducted, are not to count as deductions, under Clause 14 in the original site value, are to count as deductions under Clause 2 when you come to the taxable site value, This point, when it comes to be examined, is exactly the same point as the other. What would be the real value of that concession?
If those improvements which were to be deducted in the first case from the original site value, and are not to be deducted in the second place, included buildings and structures it would be a concession of immense value. But it does not include buildings and structures, as I have already pointed out. They have to be deducted in the first instance to arrive at site value, and it is only such permanent improvements as are not buildings or structures of which the land is deemed to be divested under the second section of Clause 14 from which any benefit is to be derived. What are they? The Chancellor of the Exchequer has mentioned three, and I for myself think his account is pretty comprehensive. They are drains, fences, and roads. There may be cases in which drains, fences, and roads will supply some considerable figure. But there are a great number of cases in which there are no drains whatever. It is only on heavy land that drains are required. On a very large proportion of the agricultural land of this country there are no drains at all of any sort or description. There are thousands of farms all over the country of poor light agricultural land on which there is no drain, and on which, thank God, there never need be a drain. Then as to roads. How many farms in the country are there on which there need ever be any labour or expenditure from the landowner's point of view on making roads? What is the ordinary farm road? All that is required is a track, and all the owner has to do is to allow the tenant to extract gravel or stone from a pit on his holding to make up the road as required. There are cases where the owner has spent money on roads, but what we are now considering is not the great deductions in particular cases where there 1305 has been a large expenditure, but the point of view from which the right hon. Gentleman has given this concession is that this particular form of deduction is going to be a boon to all the poor agricultural land throughout the country, and there are hundreds of thousands in this country to which the deduction on expenditure on drains and roads is absolutely no value, because there has been no expenditure on drains or roads, although there will have been, and there has been, an expenditure equal to the whole fee simple of the land on improvements which are necessary for the cultivation of the land, of which the land is deemed to be divest, and therefore which would have no value whatever for the comparative purposes between the two clauses which the right hon. Gentleman offers to the Committee. These two concessions were offered in a manner which implied that the right hon. Gentleman was "cornering" the Opposition. They amount to nothing at all in innumerable cases, and the other concession was of equal value.
There was one other point only of equal substance which the right hon. Gentleman made. He brought in his own case, and said he knew of his own experience of land near a town which was being used for agricultural purposes, and was let at a rent up to £10 an acre, and I think he said he was himself paying at that rate. For the moment that sounded rather convincing. Let us examine it a little more closely, and I would take the right hon. Gentleman's own case. If he is paying at the rate of £10 an acre for a piece of land I can only imagine his doing so because it is building land which he desires to keep under cultivation. Will the right hon. Gentleman tell me whether that piece of land for which he was paying at the rate of £10 an acre is not land which come up to a town, and which if he did not choose for his own private purpose to keep under cultivation as an amenity to his house would be built upon? If the right hon. Gentleman looks at my Amendment he will see that in that particular case and all analogous cases for any part of the value which is building value, there would not be any reduction. All I ask in this Amendment is that such part of the land as is purely agricultural shall be deducted before increment value is charged. And whatever rate is being paid for the land, even though it might have been used for agricultural purposes, the owner would not be able under this 1306 Amendment to say "I am cultivating a piece of land near my house as a garden or allotment, or for any other purpose, and I am paying at the rate of £10 an acre for this land, and using it for agricultural purposes, and therefore the agricultural value of this land is represented by a rent of £10 an acre, and its agricultural value would be £200 or £300, and there must be a reduction." He could not argue that under this Amendment: he would be only able to deduct that part which really is agricultural. It would follow that where he is paying £10 an acre for land which might be built upon, the real agricultural value of the land would only be the agricultural value pure and simple, some £2 or £3 at most. The rest would be building land. He would be cultivating it, but that is not agricultural value. I submit that the object, which has been referred to by several hon. Members on both sides of the House, that we should have something which our bucolic minds could understand, is served by this Amendment. We are told that the land is to be valued, and that we are to be subjected to the whole machinery of the tax. Under certain conditions they will put in action a great deal more machinery, by going through a further valuation, by considering percentages, and by a whole process which is irksome, expensive, tedious to all concerned, and which results in nothing whatever to the Exchequer. The right hon. Gentleman and his Friends are never tired of telling us that they do not want to tax agricultural land. Why do they not say so straight? My Amendment says straight—that is its merit—what the right hon. Gentleman and his Friends have always been saying. Why do they not translate that into the provisions of the Bill? The Patronage Secretary to the Treasury has just written a letter to one of his constituents, and when the Patronage Secretary writes a public letter it should carry some weight with the Government. He has definitely said that, under Part I. of this Bill—he did go further, but I will not press the point—no tax whatever is to be imposed on agricultural land. That is what this Amendment says—nothing more and nothing less. I claim that if you nominally put on a tax, and nominally take it off again, after using a great deal of machinery, that is not the same thing as not imposing a tax at all. I hope the Committee quite understands that only in the way suggested by this Amendment can we really clear 1307 agricultural land of Increment Value Duty. Further, under this Amendment there is no escape whatever afforded to any part of the value of any land which is not purely agricultural. If the Amendment be not carried in the form in which it stands on the Paper, it will be absolutely impossible for the Chancellor of the Exchequer or his Friends any longer to maintain that under Part I. of this Bill there is no tax on agricultural land.
§ Sir W. ROBSON
A question was put by the hon. Member opposite on which there should be as little misapprehension as possible. He asked whether the 50 per cent. was to be added to the original value before the increment value could be taxed? But the difficulty which the hon. Gentleman anticipated cannot arise. The 50 per cent. will be attached to the original site value, which is exempt from taxation, and it will therefore come within the exemption. When the tax comes to be assessed and imposed it will then be seen what remains of taxable value, so that the original site value deductions will still continue to benefit the taxpayer. The hon. and gallant Member for Chelmsford has raised very extreme precedents. When the Bill was first introduced it was so devised that it allowed deduction for all permanent works upon agricultural land. That is to say, they were not deducted from the original site value as exempt, but they were deducted from the taxable value when it came to be applied. That was a benefit which depended on the amount of permanent works to be found on any particular land that became the subject of taxation. We heard a great deal about the amount that was spent on drainage and fences all over the country, and we were proceeding upon what we learned from our agricultural Friends as to the amount spent on land the moment they get it. What do we hear? They tell us now there is a large amount of land which is practically worthless when once you take away the buildings, and that all this talk about fences and drains and permanent improvements of the kind is really not worth considering. The hon. and gallant Member put a case of perfectly worthless land where drains and fences are non-existent. You may have a good deal of land which is hypothetically worthless, but under the Agricultural Rates Act there is at present a sum of a million and a half in relief of rates, and 1308 with the buildings taken away that is a fairly substantial sum for agricultural interest.
§ Sir W. ROBSON
That is what they take. The hon. and gallant Member spoke of thousands of acres where, if you took away the bare structure, then you are to presume the rest of the land worthless. In fact, if anybody bought a piece of that land they would only be buying buildings. Really, that amounts to this, that they are only a kind of residential buildings. They are worth nothing further and could have no site value whatever. Apparently the moment this Bill comes into operation agricultural land will undergo a phenomenal rise in value. He gave us figures in which he spoke of land which was worth nothing, of no value whatever except for a farmhouse on it, and that it suddenly came to a value of £25 per acre from nothing.
§ Sir W. ROBSON
When we are dealing with extreme eases like that we are entitled to look at them somewhat suspiciously. How do we propose to deal with the general case of agricultural land? Finding that hon. Members do not approve of our original proposal, we have taken a fixed percentage, amounting to half the existing value of the land—because the existing value will be taken as the original site value. I put it to any fair-minded man: Does not that give a fairly ample margin to those who hold agricultural land against the imposition of Increment Value Duty? It means that you take the existing value and exempt it, and you say that no Increment Value Duty shall fall upon that land until it has risen by more than 50 per cent. of the existing value. I say that that is a fair and reasonable way to deal with it. I dare say you can conceive cases which approach the kind of illustration we have just had.
It is almost impossible to make any general rule, certainly relating to a fiscal matter, in regard to which you may not, by a little ingenuity, imagine some case of extreme personal hardship. When the party opposite come—as they may at some date, I do not know how distant or how near it may be—to apply a tariff, I wonder if they will stop themselves and say, "We must not put on this or that tax lest some hard- 1309 ship fall upon some person." We do not doubt—no one can—that where you have to deal with an immense variety of cases by a general rule, according to a fixed and artificial line, there must be cases which do not get the full benefit of the rule, and there may be cases which get scarcely any of the benefit. But, speaking generally, taking agricultural land as a whole, I am sure that agriculturists will approve of an exemption so fairly and generously given, amounting to no less than 50 per cent. of the original value. Suppose land goes beyond the 50 per cent. You are dealing there not with a value caused by improvements or fresh permanent works, because those are exempted. So far as you are increasing the value of the land by better cultivation or by more works of a permanent character, you are adding to your exemptions. But putting those aside, wherever you get an increase of more than 50 per cent. is it not a fair inference that here again communal value comes in—that the increased value is due not to the labour of a particular cultivator, but rather to the community as a whole, and therefore affords the same just ground for taxation?
§ Mr. WALTER LONG
Everybody who has listened clearly to the Debate which we have had to-night must be amazed at the speech of the Attorney-General. We have had from the commencement one of the most interesting and one of the most practical Debates to which I have listened since this Debate on the Finance Bill was inaugurated. What form has this Debate taken on the Amendment moved by my hon. and gallant Friend, whose knowledge of practical agriculture nobody will dispute? That amendment has found supporters, almost without exception, in every quarter of the House. Those who heard the speech of the hon. Member for Louth a little earlier in the evening saw that he supported the principle of the Amendment in a most convincing way on behalf of his own county. He addressed, too, a most pathetic appeal to the Chancellor of the Exchequer and the Government. Not only that, but he dwelt upon the fact that we have a promise from the Government that agricultural land is finally to be exempt. We have had speeches in support from below the Gangway; from the hon. Member for Mayo (Mr. John Dillon) for Ireland; we have had the case for agriculture from representatives of agriculture in different parts of the country put in the most convincing way. All agree, unless the Government can put 1310 in plain and simple language the exemptions which they have promised, that this Amendment of my hon. and gallant Friend holds the field. The speech which has been addressed to the Committee demanded, if nothing else, a plain argument showing some practical knowledge of the difficulties which have been laid before the Committee. What have we listened to? We have listened to a speech in which the Attorney-General, whose abilities and power of putting his argument nobody would question, has been forced, after the most extraordinary and misleading criticism of my hon. and gallant Friend, to fall back upon Tariff Reform and communal benefit by way of answer. It is not the first time during my experience of the business of this House that I have found an hon. Member driven to fall back upon some very threadbare argument in order to support his case. But I have never heard anything so threadbare as this!
What is the case which has been put, not only by my hon. and gallant Friend, but by everybody who has spoken except the hon. Member for Henley (Mr. P. Morrell) and perhaps one or two others? Practically every speaker who has taken part in this Debate has supported in the main the principle of the Amendment of my hon. Friend. What is the argument of the Attorney-General? He tells us that he has never heard of cases where land has been sold in this country for a price which, when you take off the amount which has been spent upon buildings and improvements on that land, has left practically nothing for the fee simple of the soil. May I respectfully ask the Attorney-General where he was hiding himself during the years 1881–92? Has he never read either the agricultural papers, or the papers which record the sales of agricultural estates in the West and East of England and in parts of the Midlands? He will find that it will not take up very much of his valuable time to read these, and he will find that there are a vast number of cases. Does he think that those of us connected with agricultural land, and those representing the case here do so for our own pleasure? Does he think we want to diminish the value of our own property, to cry "stinking fish" in regard to agricultural land? Does anybody believe that we should for nothing assert, as we do, that there are thousands of acres as we describe them? The Attorney-General tried to pour contempt upon the argument of my 1311 hon. and gallant Friend, but so far from succeeding, he only succeeded in demonstrating to the Committee beyond any question of doubt that he had a very limited knowledge of the past history of agricultural land. He asked us, in scathing accents, could it be possible that land had been sold for a price—after deducting the prices of building and improvements upon it—that left no value for the fee simple? I should be delighted, if he is anxious for some instruction upon the subject, to give him some localities where there are thousands and thousands of acres in the condition stated. And I say more, that there are many Members of Parliament sitting on that side of the House who will confirm the truth of what I am saying, and who will be able to give him from their own experience the same information that I now give him. The unhappy tale which my hon. and gallant Friend told of agricultural land in this country is only too well known to all those who have any experience on the subject. The way in which the Attorney-General dealt with this Question is unworthy of him and of the Government on whose behalf he spoke. The hon. Member for Henley sought to dispose of the agricultural case by taking an entirely mistaken view of the proposals of the Government. I am not going to quarrel with the hon. Member for the mistake he made. I do not think he is to be blamed. The arguments which the hon. Gentleman addressed to the Committee prove what we have over and over again contended, that the phraseology of the Bill in its application to the Land Taxes is so vague and difficult and indistinct that it leads those striving to understand it in a hopeless bog of confusion. We have been reminded that the Government told us they meant to exempt agricultural land. They have not done so; by common consent the language of the Bill does not exempt it. The hon. Member for East Mayo (Mr. Dillon) told us earlier in the evening that the application of these provisions of the Bill to Ireland, where you have special agricultural conditions, owing to the changes that have taken place under the Land Acts, and where you are going to make Ireland ultimately into a land of small agricultural holders, would be most oppressive and unjust. Why? Because the language of the Bill does not do what the Chancellor of the Exchequer told us it was the intention of the Government it should do. What is the proposal of the 1312 Government? They meet the Amendment with a counter suggestion. The Attorney-General poured contempt upon us because, he says, we ran away from our original argument. We did nothing of the kind. The Attorney-General entirely misdescribed the position. We disapprove entirely of your tax; but we disapprove of it still more when you apply it to agricultural land. We use the same argument as we use in regard to your general taxes. We say your system of taxation as applied to real estate is unjust, but when applied to agricultural estate it is doubly unjust. We say your Increment Tax is unjust, but we say your Increment Tax as applied to land is doubly unjust. Why will not the Government accept the Amendment of my hon. Friend and make the position perfectly clear? We have had a statement from the Chancellor of the Exchequer in the earlier portion of these Debates which was of extreme importance and which has been entirely ignored. The right hon. Gentleman told us that the land which is to come under these taxes is not only land which has a building value, but land which has an occupation value, land which would let because it is what he called accommodation land. That carries you far and away beyond the limitation suggested by hon. Members opposite as to the class of land to which these taxes would apply. The special value given to accommodation or occupation land has nothing to do with building, and has no connection with it. There are thousands of acres of land in this country let at special rents for special purposes which is described as special occupation land or accommodation land. If the Chancellor of the Exchequer is going to apply this principle he must apply it all round. He cannot have only those little bits which he wants to pick out, and he must take the whole. Unless the words moved by my hon. and gallant Friend are accepted, in order to tax an isolated bit of land here and there in the neighbourhood of towns you are going to drag in the whole of the agricultural land of the country, and you are going to expose the whole of it to a system of valuation which is provided for in subsequent clauses in this Bill; and then, after laying all these burdens on agricultural land, you are going to say there is this special exemption, which will enable you to get off. If that is the object of the Government, then all I have to say is that they are taking a most cumbersome and laborious way of obtaining that end, and they are exposing the agricultural land of the country to the 1313 greatest possible risk. We have been asked why we do not accept the suggestion of the right hon. Gentleman to allow 40 per cent. The reason is that it is impossible, if you take the agricultural land of this country, to take any figure of that kind and apply it with any prospect of it working fairly over the whole of the country. The real difficulty of applying this tax is that the circumstances and conditions applying to land vary so much not only in different parts of the country, but as between Wiltshire, Gloucestershire, Dorsetshire, and Oxfordshire; they often vary in the same district in the same county, and even in villages only separated by a mile or a mile and a-half. In the great labours which have fallen upon the Government in connection with this comprehensive measure they have not yet realised the complexity of the cases with which they have to deal, or the extraordinary difficulties with which those who will have to carry out these proposals will be confronted. The Government have stated distinctly that their intention is to exclude agricultural land. If we pass these words now and reject the Amendment moved by my hon. and gallant Friend, and wait until we reach a later period of the Bill, what is the Committee going to do? You are going to leave the language of the Bill—which has been described both by friend and foe of the Government alike as vague—so vague that in no sense will it exclude agricultural land, or else you will have to find some other definition of "agricultural land" at a later period of the Bill. You will depend entirely upon that. You put in the forefront of your Bill that it is the object of your legislation to exclude land of a particular character, and having made that perfectly clear you leave it a presumption that it is the intention of the Act of Parliament to exclude land of that particular kind. If you do not put that in you will depend entirely upon your definition. A definition will be the most unsatisfactory way of dealing with the question. Of course, if the Government adheres to its position and the Committee do not support them, the result would be a serious blow to the Government. Anybody who knows the ways and the traditions of this House knows how difficult it is to secure an expression of the views of the House in those circumstances, but I do believe that the majority of the Members of this House, in whatever quarter they sit, whether above or below the Gangway, on 1314 that side or on this, realise that we are confronted with a real difficulty. I am convinced that those who listened to the Attorney-General realise that he made no attempt to answer the speeches made in favour of this Amendment. He begged the whole question, and he did it in a way quite unworthy of the serious and practical issues raised. I believe the majority of the Members wish to see this question dealt with in a practical way. I regret that the suggestion made by the Chancellor of the Exchequer is one which it is impossible for those of us who realise what the difficulty is to accept. It would leave us in a worse position than we should be in even under the Bill. I do not like the language of the Bill. I think it is objectionable and dangerous, but I think the suggestion which comes from the Chancellor of the Exchequer would be still more dangerous, and I do press upon the Committee that the ground on which the Amendment has been advocated by my hon. and gallant Friend holds the field, and has not been disposed of in any way by the speech of the Attorney-General. Unless the Amendment is adopted, it is inevitable that agricultural land will be included, and that not only injustice but immense confusion and difficulty will be the result of passing the Bill in its present form.
§ Mr. LLOYD-GEORGE
Before the Committee comes to a decision, I think it would be desirable that the Government should restate their case. What is the position? Here is a Bill which proposes to tax the increment value of land. I want the Committee to start with that proposition. Hon. Members opposite are against this tax root and branch, and they are perfectly right in doing their best to support every Amendment which would have the effect of narrowing it down and whittling it away till at last the vanishing point appears. I do not, therefore, complain of their moving Amendments of this kind, but I want those who are in favour of the Increment Value Duty to realise what the position is. You start with the proposition that you value the land up to 30th April this year and charge a certain percentage upon all the increment from that date. All land would be subject to the tax were it not for exemptions of this kind. What have we done with agricultural land? Hon. Friends of mine and hon. Members opposite have said that we are unfair to agriculture, because we are taking agricultural land at a point where the valuation is lower than normal. It is not at its lowest point; it 1315 is perfectly true it is higher than it was. I noticed the right hon. Gentleman (Mr. Walter Long) was perfectly fair in his statement. I quite admit there may be extreme cases of the kind to which he referred, but there are very few cases of that description now. Land is going up, but it has not gone up to the price which agriculturists have a perfect right to expect it will, and they say you must protect us against being deprived of the benefit of that operation which we have a right to expect. We have suffered a good deal of loss, we have suffered from depreciation; do not you tax as increment what is purely a restitution of a normal value. Very well. We are perfectly prepared to meet you, and we are making proposals which will more than safeguard purely agricultural land against being taxed on the basis of an increment which is really a recovery of prices. There is another class of land which is not in the category of ordinary agricultural land—land which rises in value not owing to any improvement in the market, not owing to any recovery in the agricultural value, but purely and simply owing to the influence of the growth of the town and the opening up of new industries—owing, in fact, to the very operation we think we ought to get the benefit of—the action of the community as a whole. We say that in that case the community ought to get the same increment value as they would in the case of any other land. I do not think that anyone will challenge the fairness of that. The hon. and gallant Member (Mr. Pretyman) says his Amendment would exclude land of the character which I have described—land which used to be worth £2 and now lets at £10 per acre for purely horticultural purposes.
§ Mr. LLOYD-GEORGE
I was going to point out that the increase in value from £2 per acre to £10 was due to the development of that particular district as a seaside resort. That is not agricultural value in the ordinary sense of the term. It is a value created by circumstances happening in that particular town. That is a difference of £8 per acre in the value of the land, and why should not the community get, at any rate, the tax upon that increment which is entirely due to its own action and influence. The effect of this will be 1316 that the land-owner who wanted to sell building land would only have to put up the rent for horticultural purposes sufficiently high before he proceeds to cut it up in building plots, and then there would be no increment at all—absolutely not one penny. It may be charging an enormous value purely because it is in a town. He may be charging a most exaggerated rent, and by doing that a year or two before it is cut up for building the whole of the increment would vanish.
§ Mr. DILLON
I am strongly in favour of the Finance Bill, but I would point out that the Amendment proposes only to exempt from the Increment Tax that portion of the value which is caused by the agricultural character of the land. If any portion of the value is due to the fact that the land may be used for building, it would come under the tax if the Amendment were carried.
§ Mr. LLOYD-GEORGE
That shows that the hon. Gentleman does not understand the Amendment which he is supporting. This says that in regard to land used for agricultural purposes any part of the value which is proved to be of an agricultural nature shall not be charged. In that case the point which I put to the hon. Member is this, that if a landlord lets land of that kind for £10 an acre for agricultural purposes for a year before he sells it that will be taken as proof of its agricultural value and the whole of the building value vanishes, and you need not go into it at all. I agree that if you get some sort of test of what the real agricultural value of the land will be, that is a different matter, but this is a totally different Amendment, and I want the Committee to realise what it means, that you have simply to put the rent at agricultural valuation before the operation and there will be no building value at all. I think we have treated agriculture in a liberal and generous spirit. We have protected agriculture against charge from anything in the nature of increment which is due to the recovery of price, so that all purely agricultural land in the country will be exempted from a penny-piece of increment value. The only land which can possibly be charged by the proposal of the Government is that the value of which has been made by the exertions of the community through its contiguity to the towns. That itself is an increment which I think we are entitled to charge, whatever the land is used for.
§ Mr. JAMES TOMKINSON
What I am particularly anxious about is this, that 1317 there should be no tax placed upon any increment value which arises solely from improvement on agricultural values, and that nothing should be done in any way to penalise, to discourage, that great improvement in the agricultural condition of the country which I see coming, and I know from personal experience can be so much promoted, and which has been going on. I cannot accept for a moment the suggestion that a 50 per cent. margin upon the improvement in land for purely agricultural purposes is anything like sufficient to cover possibilities. I have had experience, and it is rather a hobby of mine. I have bought land in other counties—in Warwickshire—poor laud at £12 and £16 an acre, including buildings. I have put tenants on it, and the farms are carrying three times the stock, and, putting the buildings on one side, I should be very sorry to take double the price of the land to-day. I have thought all this was coming under the Bill. Perhaps I am mistaken. Clause 11 says nothing shall be charged on land which does not exceed £50 an acre, and in the case of agricultural land exceeding that value, Undeveloped Land Duty shall not be charged so far as the site value of the land is due to the value of the land for agricultural purposes. I may be mistaken, but I fully believe it is the intention of the right hon. Gentleman to exempt from all Increment Tax any in creased value of land which is purely and solely due to agriculture. There is nothing more remarkable than the way in which land varies in value. There is an hon. Member of the House whose father pays for a farm of 1,000 acres no less than £4,500 a year. He used to pay £5,000 a year, and when the lease fell in he was quite content to renew it at £4,500. It is in a little corner of Ayrshire into which the Gulf Stream comes and gives a peculiar climate. There is a great deal of land from which, when you take away the value of the building, there is no rent received at all. I am a Church Estates Commissioner, and have a wide experience all over England. There is a good farm in North Cambridge shire with good buildings—a glebe farm of 220 acres with a gross rent of £80 a year, or 7s. 6d. an acre—and the poor incumbent is liable for damages, fire insurance, and Land Tax, and gets about £60 a year for it, and he is liable for dilapidations. I should like to take that farm and put a good tenant on it, and improve it, and I hope in a very few years it will 1318 be worth double. I should like to impress upon my right hon. Friend the absolute necessity of making it clear that whatever increment value comes to agricultural land from agricultural causes, if the agriculturist improves the value of his land double or treble, shall not be subjected to taxation.
§ Mr. LLOYD-GEORGE
I am sorry I did not wait until my hon. Friend had spoken, because he has put a new point, and it is a very important point. My hon. Friend wants to be assured that the Government do not propose to tax as increment what is due really to good husbandry. They are acting on this principle in regard to ordinary land, and the whole principle of the Bill is that agricultural land should be specially treated. I should think that we have covered that in the Bill. The point is specifically raised by an Amendment, of which my hon. Friend the Member for Northamptonshire has given notice. That. Amendment is to provide for a deduction when the increased value is due to the good husbandry of any person interested in the land. I think it would be proper to raise the question when we reach that Amendment. It is necessary to make it clear in the Bill, and I am perfectly prepared to insert words to make it clear.
§ Mr. F. E. N. ROGERS
We must all feel that it is very difficult to discuss this matter, for the reason that Clause 14, sub-section (2) has not yet been discussed. Nearly every hon. Member seems to take a different view of Clause 14, sub-section (2). The hon. Member for the Chippenham Division thinks that the fee simple is practically the prairie value of the land, and that therefore it is worth nothing without the buildings and other structures upon it. My view is that that is not the case, and that the fee simple of the land, as referred to in that sub-section means the value of the land after excluding the value of buildings and timber, but that all the permanent work such as roads, hedges, walls, and drains, and any water supply there may be, are still included in the value of the fee simple. The advantage which, I understand, it is intended by the Bill to give to the owners of agricultural land is in the way of a deduction for permanent improvements made not on the original site value, but on the site value at the time the Increment Duty comes to be paid. I agree with my hon. Friend the Member for Crewe that the 50 per cent. allowance is not an adequate allowance if 1319 you really mean to allow for recovery in agricultural land to the value it possessed before the great agricultural depression. There has been an enormous fall in the value of land, and if you frank the increment value to 50 per cent. you will not get back to the value which obtained before that fall took place. If the 50 per cent. is to be taken in lieu of the deduction for work of a permanent character as well as to express the recovery value, I frankly say that the right hon. Gentleman should reconsider the point if he really desires to exclude purely agricultural improvements, because as matters stand at the present time it is undoubtedly uncertain whether that object has been secured either by the wording of the Bill or by the 50 per cent. that has been offered. The right hon. Gentleman is really sincere in his desire that any increase in the value of agricultural land which is due to causes relating to agriculture need not be taken for the purpose of Increment Duty. That, I believe, is the strong feeling on both sides of the House. The question is how it is to be done. Hon. and right hon. Gentlemen opposite say it should be done by the exclusion altogether of agricultural land of all increment which they consider to be of an agricultural character. As I understand, the position of my right hon. Friend is this: There is some increment which can be described as of an agricultural character which really is not of an agricultural character; because it has occurred in the case of land situate near a town, and it possesses a value over and above its agricultural value even when used for agricultural purposes. A farm some distance from a market will be of much less value than a farm close to a market, although the agricultural value of the land is practically the same in both cases. That is what I understood my right hon. Friend to mean from the speeches he has made in this House. If that is the case I venture to ask him to reconsider the point as to whether, by the steps he has taken up to now, he really has excluded from his Increment Duty the normal rise in agricultural value which there is reason now to hope will come not from any cause connected with the growth of the town or of the community, but simply owing to causes far removed from these islands in their operation, and which will give to agricultural interests in this country their reward after 30 years of depression.
§ Mr. BALFOUR
I do not propose to prolong this Debate, but I hope that 1320 every Member of the Committee will understand precisely the question at issue. The Government promised us, not once or twice, but every single time the agricultural question came before the House that they meant to exclude agricultural land. We now have for the first time an Amendment which, in the clearest and most explicit terms, carries out that view, and the expressed intentions of the Government. I understand that the Government propose to vote against it. Their only excuse, so far as I understand, is that they allege that under the Amendment of my hon. Friend, land which owes its value to something besides agricultural value has been included in the Amendment. The words of the Amendment deliberately exclude that possibility. It is impossible to conceive words more carefully drawn to exclude any value from the purview of the Amendment except value arising from agricultural causes, and every man therefore who votes against this Amendment is deliberately abetting the Government in breaking their pledges.
§ Mr. L. CHIOZZA MONEY
May I ask my right hon. Friend (Mr. Lloyd-George) to address himself for a moment to the alternative suggestion which I put before the Committee this evening, and which was received with some approval by Members on both sides of the House. The object of my right hon. Friend has been very clearly stated. It is of course to secure agricultural land, and that I understand to be the agreed object of both sides of the House. My suggestion was that the right hon. Gentleman should apply the same principle to this tax which he applies to Undeveloped Land Duty in Clause 11. In Clause 11 he sets up an arbitrary line of £50 an acre. Over and above that he says this tax shall not be paid by any land in so far as the value over and above the £50 per acre is due to agricultural causes. I ask him to apply that same principle to the Increment Value Duty, and that he should draw the line not necessarily at £50 an acre, but, say, £100 an acre. By that very simple and business-like process he will exclude from the operation of the Increment Value Tax practically the whole of the agricultural land of the country without endangering the application of his tax to building land, because it is really building land, as commonly understood, which is worth more than £100 an acre. I would ask my right hon. Friend to address himself to that which I venture to call a businesslike proposition.
§ Mr. LLOYD-GEORGE
I think my hon. Friend is raising really a different proposition. The question here is of a wholly different character. We contend that the Amendment would have the effect not merely of excluding purely agricultural land, but it will exclude from the operation of the tax land the increment value of which is due to the proximity of growing towns. We maintain that we have stood by our pledges despite what the right hon. Gentleman has said. By those pledges we mean to exclude the increment that is due to the recovery of prices of agricultural land. We have stood by those pledges, and we maintain that the propo-
§ sition of the Bill, or the alternative we have offered, covers this case. In addition to that, as already pointed out to my hon. Friend, we are prepared to make it absolutely clear that we are exempting all value which is due to good husbandry. The case which the hon. Member put so clearly and with such effect will be made absolutely clear by an Amendment which I shall propose to insert later on. These are the propositions which we are voting upon.
§ Question put, "That the words 'agricultural land' stand part of the clause."
§ The Committee divided: Ayes, 262; Noes, 149.1323
|Division No. 252.]||AYES.||[11.19 p.m.|
|Acland, Francis Dyke||Crossley, William J.||Hyde, Clarendon G.|
|Agnew, George William||Dalziel, Sir James Henry||Illingworth, Percy H.|
|Ainsworth, John Stirling||Davies, Ellis William (Eifion)||Jackson, R. S.|
|Alden, Percy||Davies, Timothy (Fulham)||Jenkins, J.|
|Allen, A. Acland (Christchurch)||Davies, Sir W. Howell (Bristol, S.)||Johnson, John (Gateshead)|
|Allen, Charles P. (Stroud)||Dickinson, W. H. (St. Pancras, N.)||Jones, Sir D. Brynmor (Swansea)|
|Armitage, R||Dilke, Rt. Hon. Sir Charles||Jones, Leif (Appleby)|
|Astbury, John Meir||Duncan, C. (Barrow-in-Furness)||Jones, William (Carnarvonshire)|
|Balfour, Robert (Lanark)||Duncan, J. Hastings (York, Otley)||Jowett, F. W.|
|Baring, Godfrey (Isle of Wight)||Dunne, Major E. Martin (Walsall)||Kekewich, Sir George|
|Barker, Sir John||Elibank, Master of||Kelley, George D.|
|Barlow, Sir John E. (Somerset)||Essex, R. W.||King, Alfred John (Knutsford)|
|Barlow, Percy (Bedford)||Esslemont, George Birnie||Laidlaw, Robert|
|Barnard, E. B.||Evans, Sir Samuel T.||Lamb, Ernest H. (Rochester)|
|Barnes, G. N.||Falconer, James||Lambert, George|
|Barran, Rowland Hirst||Foster, Rt. Hon. Sir Walter||Lamont, Norman|
|Barry, Redmond J. (Tyrone, N.)||Fuller, John Michael F.||Layland-Barrett, Sir Francis|
|Beale, W. P.||Fullerton, Hugh||Leese, Sir Joseph F. (Accrington)|
|Bell, Richard||Gibb, James (Harrow)||Lever, A. Levy (Essex, Harwich)|
|Benn, W. (Tower Hamlets, St. Geo.)||Gill, A. H.||Levy, Sir Maurice|
|Bennett, E. N.||Gladstone, Rt. Hon. Herbert John||Lloyd-George, Rt. Hon. David|
|Berridge, T. H. D.||Glen-Coats, sir T. (Renfrew, W.)||Lough, Rt. Hon. Thomas|
|Boulton, A. C. F.||Glendinning, R. G.||Lynch, H. B|
|Bowerman, C. W.||Glover, Thomas||Macdonald, J. R. (Leicester)|
|Bramsdon, Sir T. A.||Goddard, Sir Daniel Ford||Macdonald, J. M. (Falkirk Burghs)|
|Branch, James||Gooch, George Peabody (Bath)||Meckarness, Frederic C.|
|Brocklehurst, W. B.||Greenwood, G. (Peterborough)||Macnamara, Dr. Thomas J.|
|Brodie, H. C.||Grey, Rt. Hon. Sir Edward||Macpherson, J. T.|
|Brooke, Stopford||Haldane, Rt. Hon. Richard B.||M'Kenna, Rt. Hon. Reginald|
|Brunner, J. F. L. (Lancs., Leigh)||Hall, Frederick||M'Laren, H. D. (Stafford, W.)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Harcourt, Rt. Hon. L. (Rossendale)||M'Micking, Major G.|
|Bryce, J. Annan||Harcourt, Robert V. (Montrose)||Maddison, Frederick|
|Buckmaster, Stanley O.||Hardy, George A. (Suffolk)||Mallet, Charles E.|
|Burns, Rt. Hon. John||Harmsworth, R. L. (Caithness-sh.)||Manfield, Harry (Northants)|
|Burnyeat, W. J. D.||Harvey, A. G. C. (Rochdale)||Marks, G. Croydon (Launceston)|
|Burt, Rt. Hon. Thomas||Harwood, George||Marnham, F. J.|
|Byles, William Pollard||Haslam, Lewis (Monmouth)||Massie, J.|
|Cameron, Robert||Haworth, Arthur A,||Master man, C. F. G.|
|Carr-Gomm, H. W.||Hazel, Dr. A E. W.||Menzies, Sir Walter|
|Causton, Rt. Hon. Richard Knight||Hedges, A. Paget||Micklem, Nathaniel|
|Cheetham, John Frederick||Helme, Norval Watson||Middlebrook, William|
|Cherry, Rt. Hon. R. R.||Henderson, Arthur (Durham)||Molteno, Percy Alport|
|Churchill, Rt. Hon. Winston S.||Henderson, J. McD. (Aberdeen, W.)||Mond, A.|
|Cleland, J. W.||Henry, Charles S.||Money, L. G. Chiozza|
|Clough, William||Herbert, Col. Sir Ivor (Mon. S.)||Montagu, Hon. E. S.|
|Clynes, J. R||Herbert, T. Arnold (Wycombe)||Montgomery, H. G.|
|Cobbold, Felix Thornley||Higham, John Sharp||Morgan, G. Hay (Cornwall)|
|Collins, Stephen (Lambeth)||Hobart, Sir Robert||Worrell, Philip|
|Collins, Sir Wm. J. (S. Pancras, W.)||Hobhouse, Rt Hon. Charles E. H.||Morse, L. L.|
|Compton-Rickett, Sir J.||Hodge, John||Murray, Capt. Hon. A. C. (Kincard.)|
|Cooper, G. J||Holland, Sir William Henry||Newnes, F. (Notts, Bassetlaw)|
|Corbett, C. H. (Sussex, E. Grinstead)||Holt, Richard Durning||Norman, Sir Henry|
|Cornwall, Sir Edwin A.||Hooper, A. G.||Norton, Capt. Cecil William|
|Cowan, W. H.||Hope, W. H. B. (Somerset, N.)||Nussey, Sir Thomas Willans|
|Cox, Harold||Horniman, Emslie John||Nuttall, Harry|
|Craig, Herbert J. (Tynemouth)||Horridge, Thomas Gardner||O'Donnell, C. J. (Walworth)|
|Crooks, William||Howard, Hon. Geoffrey||O'Grady, J.|
|Crosfield, A. H.||Hudson, Walter||Parker, James (Halifax)|
|Cross, Alexander||Hutton, Alfred Eddison||Pearce, Robert (Staffs, Leek)|
|Pearson, Sir W. D. (Colchester)||Seddon, J.||Walsh, Stephen|
|Philipps, Col. Ivor (Southampton)||Seely, Colonel||Walters, John Tudor|
|Philipps, Owen, C. (Pembroke)||Shackleton, David James||Walton, Joseph|
|Pickersgill, Edward Hare||Shaw, Sir Charles E. (Stafford)||Ward, John (Stoke-upon-Trent)|
|Pointer, J.||Silcock, Thomas Ball||Wardle, George J.|
|Pollard, Dr. G. H.||Simon, John Allsebrook||Warner, Thomas Courtenay T.|
|Ponsonby, Arthur A. W. H.||Smeaton, Donald Mackenzie||Wason, Rt. Hon. E. (Clackmannan)|
|Price, C. E. (Edinburgh, Central)||Soames, Arthur Wellesley||Wason, John Cathcart (Orkney)|
|Price, Sir Robert J. (Norfolk, E.)||Spicer, Sir Albert||Waterlow, D. S.|
|Priestley, Sir W. E. B. (Bradford, E.)||Stanger, H. Y.||Watt, Henry A.|
|Radford, G. H.||Stewart, Halley (Greenock)||Wedgwood, Josiah C.|
|Raphael, Herbert H.||Stewart-Smith, D. (Kendal)||White, Sir George (Norfolk)|
|Rea, Rt. Hon. Russell (Gloucester)||Strachey, Sir Edward||White, J. Dundas (Dumbartonshire)|
|Rea, Walter Russell (Scarborough)||Straus, B. S. (Mile End)||Whitley, John Henry (Halifax)|
|Rendall, Athelstan||Strauss, E. A. (Abingdon)||Whittaker, Rt. Hon. Sir Thomas P.|
|Richards, T. F. (Wolverhampton, W.)||Summerbell, T.||Wiles, Thomas|
|Richardson, A.||Sutherland, J. E.||Wilkie, Alexander|
|Roberts, Charles H. (Lincoln)||Taylor, John W. (Durham)||Williams, W. Llewelyn (Carmarthen)|
|Roberts, G. H. (Norwich)||Taylor, Theodore C. (Radcliffe)||Williamson, Sir A.|
|Roberts, Sir J. H. (Denbighs.)||Tennant, H. J. (Berwickshire)||Wills, Arthur Walters|
|Robertson, Sir G. Scott (Bradford)||Thomas, Abel (Carmarthen, E.)||Wilson, Hon. G. G. (Hull, W.)|
|Robinson, S.||Thomas, Sir A. (Glamorgan, E.)||Wilson, P. W. (St. Pancras, S.)|
|Robson, Sir William Snowdon||Thompson, J W. H. (Somerset, E.)||Wilson, W. T. (Westhoughton)|
|Rose, Sir Charles Day||Thorne, G. R. (Wolverhampton)||Winfrey, R.|
|Runciman, Rt. Hon. Walter||Tomkinson, James||Wood, T. M'Kinnon|
|Rutherford, V. H. (Brentford)||Toulmin, George||Yoxall, Sir James Henry|
|Samuel, S. M. (Whitechapel)||Trevelyan, Charles Philips|
|Scarisbrick, Sir T. T. L.||Ure, Rt. Hon. Alexander||TELLERS FOR THE AYES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Schwann, C. Duncan (Hyde)||Verney, F. W.|
|Scott, A. H. (Ashton-under-Lyne)|
|Abraham, W. (Cork, N.E.)||Gardner, Ernest||O'Connor, T. P. (Liverpool)|
|Agar-Robartes, Hon. T. C. R.||Gordon, J.||Oddy, John James|
|Anson, Sir William Reynell||Goulding, Edward Alfred||O'Doherty, Philip|
|Arkwright, John Stanhope||Gretton, John||O'Kelly, Conor (Mayo, N.)|
|Ashley, W. W.||Guinness, Hon. R. (Haggerston)||O'Kelly, James (Roscommon, N.)|
|Balcarres, Lord||Guinness, Hon. W. E. (B. S. Edmunds)||O'Malley, William|
|Baldwin, Stanley||Gwynn, Stephen Lucius||O'Shaughnessy, P. J.|
|Balfour, Rt. Hon A. J. (City, Lond.)||Haddock, George B.||Peel, Hon. W. Robert Wellesley|
|Banbury, Sir Frederick George||Hamilton, Marquess of||Percy, Earl|
|Banner, John S. Harmood-||Hardy, Laurence (Kent, Ashford)||Perks, Sir Robert William|
|Baring, Capt. Hon. G. (Winchester)||Harris, Frederick Leverton||Philips, John (Longford, S.)|
|Barrie, H. T. (Londonderry, N.)||Harrison-Broadley, H. B||Power, Patrick Joseph|
|Beauchamp, E.||Hazleton, Richard||Pretyman, E. G.|
|Beck, A. Cecil||Hermon-Hodge, Sir Robert||Randles, Sir John Scurrah|
|Beckett, Hon. Gervase||Hogan, Michael||Ratcliff, Major R. F.|
|Bignold, Sir Arthur||Hope, James Fitzalan (Sheffield)||Rawlinson, John Frederick Peel|
|Bowles, G. Stewart||Joyce, Michael||Redmond, William (Clare)|
|Bridgeman, W Clive||Joynson-Hicks, William||Remnant, James Farquharson|
|Brotherton, Edward Allen||Kavanagh, Walter M.||Renton, Leslie|
|Bull, Sir William James||Kennedy, Vincent Paul||Renwick, George|
|Burdett-Coutts, W.||Kerry, Earl of||Ridsdale, E. A.|
|Campbell, Rt. Hon. J. H. M.||Keswick, William||Roberts, S. (Sheffield, Ecclesall)|
|Carlile, E. Hildred||Kettle, Thomas Michael||Roch, Walter F. (Pembroke)|
|Carson, Rt. Hon. Sir Edward H.||Lambton, Hon. Frederick Wm.||Ronaldshay, Earl of|
|Castlereagh, Viscount||Lane-Fox, G. R.||Rutherford, John (Lancashire)|
|Cave, George||Law, Andrew Bonar (Dulwich)||Rutherford, W. W. (Liverpool)|
|Cecil, Evelyn (Aston Manor)||Lee, Arthur H. (Hants, Fareham)||Scott, Sir S. (Marylebone, W.)|
|Cecil, Lord R. (Marylebone, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Sheehan, Daniel Daniel|
|Chance, Frederick William||Long, Col. Charles W. (Evesham)||Sheffield, Sir Berkeley George D.|
|Chaplin, Rt. Hon. Henry||Long, Rt. Hon. Walter (Dublin, S.)||Smith, Abel H. (Hertford, East)|
|Clancy, John Joseph||Lundon, T.||Smith, F. E. (Liverpool, Walton)|
|Clive, Percy Archer||MacCaw, William MacGeagh||Smyth, Thomas F. (Leitrim, S.)|
|Clyde, James Avon||MacVeagh, Jeremiah (Down, S.)||Stanier, Beville|
|Coates, Major E. F. (Lewisham)||MacVeigh, Charles (Donegal, E.)||Starkey, John R.|
|Cochrane, Hon. Thomas H. A. E.||Magnus, Sir Philip||Staveley-Hill, Henry (Staffordshire)|
|Cory, Sir Clifford John||Mason, A. E. W. (Coventry)||Talbot, Lord E. (Chichester)|
|Craig, Charles Curtis (Antrim, S.)||Mason, James F. (Windsor)||Tennant, Sir Edward (Salisbury)|
|Craig, Captain James (Down, E.)||Meagher, Michael||Thornton, Percy M.|
|Craik, Sir Henry||Meehan, Francis E. (Leitrim, N.)||Walker, Col. W. H. (Lancashire)|
|Dalrymple, Viscount||Mildmay, Francis Bingham||Walrond, Hon. Lionel|
|Davies, David (Montgomery Co.)||Mooney, J. J.||Warde, Col. C. E. (Kent, Mid)|
|Dillon, John||Morgan, J. Lloyd (Carmarthen)||Waring, Walter|
|Doughty, Sir George||Morpeth, Viscount||White, Sir Luke (York, E.R.)|
|Douglas, Rt. Hon. A. Akers-||Morrison-Bell, Captain||Willoughby de Eresby, Lord|
|Du Cros, Arthur||Murphy, John (Kerry, East)||Wolff, Gustay Wilhelm|
|Faber, George Denison (York)||Newdegate, F. A. N.||Wortley, Rt. Hon. C. B. Stuart-|
|Faber, Capt. W. V. (Hants, W.)||Nicholson, Wm. G. (Petersfield)||Wyndham, Rt. Hon. George|
|Fell, Arthur||Nolan, Joseph|
|Ferguson, R. C. Munro||O'Brien, K. (Tipperary, Mid)||TELLERS FOR THE NOES.—Sir A. Acland-Hood and Viscount Valentia.|
|Flynn, James Christopher||O'Brien, Patrick (Kilkenny)|
|Forster, Henry William||O'Connor, John (Kildare, N.)|
§ Mr. GEORGE CAVE moved to leave out the words "the value of which is due solely to its capacity for agricultural purposes."
§ It has been put as a special boon to agriculture that, whereas in ascertaining the original site value you do not deduct the value of agricultural improvements, in ascertaining the taxable value you do. That is, roughly speaking, true of land which is purely agricultural; but I want to put the case of land which has some value apart from its value for agriculture. It is very difficult to say of any land, certainly land anywhere near a town, that it has no value except its value for agricultural purposes, so that the point affects a great deal of land, sometimes of considerable value. The effect of the Bill as it stands is that if on land of that kind which is used for agriculture, but has some additional value, however small, you expend money on improvements for agricultural purposes, you cannot deduct the value of those improvements from the taxable site value. The effect, shortly, is that when the time comes to pay Increment Value Duty you will pay it on improvements made by the expenditure of your own money. If that is unjust, as it is, on agricultural land, it is equally unjust on land having some slight value apart from agriculture. It is a case in which, perhaps by accident, a great injustice will be done by the provisions of the Bill; therefore I move the omission of these words.
§ Question proposed, "That the words proposed to be left out stand part of the Clause."
§ Mr. LLOYD-GEORGE
The proposal of the hon. and learned Member, so far as I can see, goes further than even the Amendment of the hon. and gallant Member for Essex. Ho proposes that vast exemptions should extend to building land, or where there is contained in the land value of a building character. Certainly you ought not to have any deductions in respect of fluctuations of agricultural prices. For that reason the Amendment is impossible.
§ Mr. LANE-FOX
There are thousands of acres in this country which are not likely to have any building value, but which at the same time are accommodation land, either by proximity to a railway, or from several people desiring to get same, or other causes. Under the Bill as it stands now there will be a very strong inducement to any man who has anything to do with the ownership of land of that 1326 sort to stop repairs, or doing anything for it that he can avoid, for fear of raising his burdens.
§ Mr. E. G. PRETYMAN
Sporting values in acres are almost all agricultural land. What this Amendment would do is not to deduct the sporting value; but the mere fact of there being a few shillings an acre on the sporting rights suggests that its value will not be absolutely agricultural, and it would be debarred from this relief.
§ Mr. BALFOUR
Take the case—I hope the Committee will forgive me if I mention it—of golf courses. There are a great many golf courses in this country which no doubt add to the value of building land in the vicinity, but they do not derive any value from the building land. Rather the building land derives value from them. They are not purely agricultural. Have the Government really considered not merely the exceptions mentioned, but other exceptions which may have occurred in regard to this very important question?
§ Mr. LLOYD-GEORGE
I do not know whether the right hon. Gentleman considers golf a business, a trade, or an industry. It is, at any rate, perfectly clear that it has nothing to do with this clause, which is to protect land where the value is due solely to its capacity for agricultural purposes. All I want here is to eliminate purely building land. The distinction is very well known in the Finance Act of 1894.
§ Mr. BALFOUR
We fully accept that basis, and so far I am entirely with the right hon. Gentleman, but I want to make the position clearer. I want to put in words excluding land which is not building land. It is common ground, for the moment, that building land is to be taxed and non-building land is not to be taxed. The simple way to carry out that is by putting in words which will exclude land which is not building land.
§ Mr. JOYNSON-HICKS
I suggest that land cannot be divided into building land and agricultural land. There is a considerable amount of land which is used for agricultural purposes, but which is worth considerably more for its fee simple than ordinary agricultural land, not because it is building land but because it is what I call amenity land. I have in my 1327 mind some land five miles away from a railway station, no possibility of any population arising near it, but which, owing to its amenities, has a far higher value than agricultural land at 25 years' purchase at £1 per acre. I suggest that this Amend-
§ ment would allow land used for agricultural purposes, but not being building land, to escape.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided: Ayes, 265; Noes. 106.1329
|Division No. 253.]||AYES.||[11.40 p.m.|
|Abraham, W. (Cork, N.E.)||Ferguson, R. C. Munro||MacVeigh, Charles (Donegal, E.)|
|Acland, Francis Dyke||Flynn, James Christopher||McKenna, Rt. Hon. Reginald|
|Agnew George William||Fuller, John Michael F.||M'Micking, Major G.|
|Ainsworth, John Stirling||Fullerton, Hugh||Maddison, Frederick|
|Allen, A. Acland (Christchurch)||Gibb, James (Harrow)||Mallet, Charles E.|
|Allen, Charles P. (Stroud)||Gill, A. H.||Manfield, Harry (Northants)|
|Armitage, R.||Gladstone, Rt Hon. Herbert John||Marks, G. Croydon (Launceston)|
|Asquith, Rt. Hon. Herbert Henry||Glen-Coats, Sir T. (Renfrew, W.)||Marnham, F. J.|
|Astbury, John Meir||Glendinning, R. G.||Masterman, C. F. G.|
|Balfour, Robert (Lanark)||Glover, Thomas||Meagher, Michael|
|Baring, Godfrey (Isle of Wight)||Goddard, Sir Daniel Ford||Meehan, Francis E. (Leitrim, N.).|
|Barker, Sir John||Gooch, George Peabody (Bath)||Menzies, Sir Walter|
|Barlow, Percy (Bedford)||Greenwood, G. (Peterborough)||Micklem, Nathaniel|
|Barnard, E. B.||Grey, Rt. Hon. Sir Edward||Middlebrook, William|
|Barnes, G. N.||Gwynn, Stephen Lucius||Mond, A.|
|Barran, Rowland Hirst||Haldane, Rt. Hon. Richard B.||Montagu, Hon. E. S.|
|Barry, Redmond J. (Tyrone, N.)||Hall, Frederick||Montgomery, H. G.|
|Beale, W. P.||Harcourt, Rt. Hon. L. (Rossendale)||Morgan, G. Hay (Cornwall)|
|Benn, W. (Tower Hamlets, St. Geo.)||Harcourt, Robert V. (Montrose)||Worrell, Philip|
|Bennett, E. N.||Hardy, George A. (Suffolk)||Morse, L. L|
|Berridge, T. H. D.||Harmsworth, R. L. (Caithness-sh.)||Murray, Capt. Hon. A. C. (Kincard.)|
|Boulton, A. C. F.||Harvey, A. G. C. (Rochdale)||Newnes, F. (Notts, Bassetlaw)|
|Bowerman, C. W.||Harwood, George||Nolan, Joseph|
|Bramsdon, Sir T. A.||Haslam, Lewis (Monmouth)||Norman, Sir Henry|
|Brocklehurst, W. B.||Haworth, Arthur A.||Norton, Captain Cecil William|
|Brodie, H. C.||Hazel, Dr. A. E. W.||Nussey, Sir Willans|
|Brooke, Stopford||Hazleton, Richard||Nuttall, Harry|
|Brunner, J. F. L. (Lancs., Leigh)||Hedges, A. Paget||O'Brien, K. (Tipperary, Mid)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Helme, Norval Watson||O'Brien, Patrick (Kilkenny)|
|Bryce, J. Annan||Henderson, J. McD. (Aberdeen, W.)||O'Connor, John (Kildare, N.)|
|Burns, Rt. Hon. John||Henry, Charles S.||O'Connor, T. P. (Liverpool)|
|Burnyeat, W. J. D.||Herbert, Col. Sir Ivor (Mon. S.)||O'Doherty, Philip|
|Byles, William Pollard||Higham, John Sharp||O'Donnell C. J. (Walworth)|
|Carr-Gomm, H. W.||Hobart, Sir Robert||O'Grady, J.|
|Causton, Rt. Hon. Richard Knight||Hobhouse, Rt. Hon. Charles E. H.||O'Kelly, Conor (Mayo, N.)|
|Chance, Frederick William||Hodge, John||O'Kelly, James (Roscommon, N.)|
|Cheetham, John Frederick||Hogan, Michael||O'Malley, William|
|Cherry, Rt. Hon. R. R.||Holland, Sir William Henry||O'Shaughnessy, P. J.|
|Churchill, Rt. Hon. Winston S.||Holt, Richard Durning||Parker, James (Halifax)|
|Clancy, John Joseph||Hooper, A. G.||Pearce, Robert (Staffs, Leek)|
|Cleland, J. W.||Horniman, Emslie John||Philipps, Col. Ivor (Southampton)|
|Clough, William||Hudson, Walter||Philipps, Owen C. (Pembroke)|
|Clynes, J. R.||Illingworth, Percy H.||Philips, John (Longford, S.)|
|Cobbold, Felix Thornley||Isaacs, Rufus Daniel||Pointer, J.|
|Collins, Stephen (Lambeth)||Jackson, R. S||Pollard, Dr. G. H.|
|Collins, Sir Wm. J. (St. Pancras, W.)||Jenkins, J.||Ponsonby, Arthur A. W. H.|
|Compton-Rickett, Sir J.||Johnson, John (Gateshead)||Power, Patrick Joseph|
|Cooper, G. J.||Jones, Sir D. Brynmor (Swansea)||Price, C. E. (Edinburgh, Central)|
|Corbett, C. H. (Sussex, E. Grinstead)||Jones, William (Carnarvonshire)||Price, Sir Robert J. (Norfork, E.)|
|Cornwall, Sir Edwin A.||Jowett, F. W.||Priestley, Sir W. E. B. (Bradford, E.)|
|Cowan, W. H.||Joyce, Michael||Radford, G. H.|
|Craig, Herbert J. (Tynemouth)||Kelley, George D.||Raphael, Herbert H.|
|Crooks, William||King, Alfred John (Knutsford)||Rea, Rt. Hon. Russell (Gloucester)|
|Crosfield, A. H.||Laidlaw, Robert||Rea, Walter Russell (Scarborough)|
|Cross, Alexander||Lambert, George||Rendall, Athelstan|
|Crossley, William J.||Lamont, Norman||Richards, T. F. (Wolverhampton, W.)|
|Dalziel, Sir James Henry||Law, Hugh A. (Donegal, W.)||Richardson, A.|
|Davies, Ellis William (Eifion)||Leese, Sir Joseph F. (Accrington)||Ridsdale, E. A.|
|Davies, Timothy (Fulham)||Lever, A. Levy (Essex, Harwich)||Roberts, Charles H. (Lincoln)|
|Davies, Sir W. Howell (Bristol, S.)||Levy, Sir Maurice||Roberts, G. H. (Norwich)|
|Dickinson, W. H. (St. Pancras, N.)||Lloyd-George, Rt. Hon. David||Roberts, Sir J. H (Dengighs)|
|Dillon, John||Lough, Rt. Hon. Thomas||Robertson, Sir G. Scott (Bradford)|
|Duncan, c. (Barrow-in-Furness)||Lundon, T.||Robinson, S.|
|Duncan, J. Hastings (York, Otley)||Lyell, Charles Henry||Robson, Sir William Snowdon|
|Dunne, Major E. Martin (Walsall)||Macdonald, J. R. (Leicester)||Rogers, F. E. Newman|
|Elibank, Master of||Macdonald, J. M. (Falkirk Burghs)||Rose, Sir Charles Day|
|Essex, R. W.||Mackarness, Frederic C.||Runciman, Rt. Hon. Walter|
|Evans, Sir S. T.||Macnamara, Dr. Thomas J.||Rutherford, V. H. (Brentford)|
|Everett, R. Lacey||Macpherson, J. T.||Samuel, S. M. (Whitechapel)|
|Falconer, J.||MacVeagh, Jeremiah (Down, S.)||Scarisbrick, Sir T. T. L.|
|Schwann, C Duncan (Hyde)||Taylor, John W. (Durham)||Watt, Henry A.|
|Scott, A. H. (Ashton-under-Lyne)||Tennant, H. J. (Berwickshire)||Wedgwood, Josiah C.|
|Seddon, J.||Thomas, Abel (Carmarthen, E.)||White, Sir George (Norfolk)|
|Seely, Colonel||Thomas, Sir A. (Glamorgan, E.)||White, J. Dundas (Dumbartonshire)|
|Shackleton, David James||Thompson, J. W. H. (Somerset, E.)||White, Sir Luke (York, E. R.)|
|Shaw, Sir Charles E. (Stafford)||Thorne, G. R. (Wolverhampton)||White, Patrick (Meath, North)|
|Silcock, Thomas Ball||Tomkinson, James||Whitley, John Henry (Halifax)|
|Simon, John Allsebrook||Toulmin, George||Wittaker, Rt. Hon. Sir Thomas P.|
|Smeaton, Donald Mackenzie||Trevelyan, Charles Philips||Wiles, Thomas|
|Smyth, Thomas F. (Leitrim, S.)||Ure, Rt. Hon. Alexander||Wilkie, Alexander|
|Soames, Arthur Wellesley||Verney, F. W.||Williams, W. Llewelyn (Carmarthen)|
|Soares, Ernest J.||Walsh, Stephen||Williamson, Sir A.|
|Spicer, Sir Albert||Walters, John Tudor||Wilson, Hon. G. G. (Hull, W.)|
|Stanger, H. Y.||Wardle, George J.||Wilson, P. W. (St. Pancras, S.)|
|Strachey, Sir Edward||Waring, Walter||Wilson, W. T. (Westhoughton)|
|Straus, B. S. (Mile End)||Warner, Thomas Courtenay T.||Wood, T. M'Kinnon|
|Strauss, E, A. (Abingdon)||Wason, Rt. Hon. E. (Clackmannan)||TELLERS FOR THE AYES.—Mr. Joseph Pease and Mr. Herbert Lewis|
|Summerbell, T.||Wason, John Cathcart (Orkney)|
|Sutherland, J. E.||Waterlow, D. S.|
|Anson, Sir William Reynell||Du Cros, Arthur||Oddy, John James|
|Arkwright, John Stanhope||Faber, G. H. (Boston)||Paulton, James Mellor|
|Ashley, W. W.||Faber, Capt. W. V. (Hants, W.)||Peel, Hon. W. R. W.|
|Balcarres, Lord||Fell, Arthur||Percy, Earl|
|Baldwin, Stanley||Forster, Henry William||Pretyman, E. G.|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Gardner, Ernest||Randles, Sir John Scurrah|
|Banbury, Sir Frederick George||Gordon, J.||Ratcliff, Major R. F.|
|Banner, John S. Harmood-||Goulding, Edward Alfred||Rawlinson, John Frederick Peel|
|Baring, Capt. Hon. G. (Winchester)||Gretton, John||Remnant, James Farquharson|
|Barrie, H. T. (Londonderry, N.)||Guinness, Hon. R. (Haggerston)||Ronton, Leslie|
|Beck, A. Cecil||Guinness, Hon. W. E. (By St. Edm'ds)||Renwick, George|
|Beckett, Hon. Gervase||Haddock, George B.||Roberts, S. (Sheffield, Ecclesall)|
|Bignold, Sir Arthur||Hamilton, Marquess of||Roch, Walter F. (Pembroke)|
|Bowles, G. Stewart||Hardy, Laurence (Kent, Ashford)||Ronaldshay, Earl of|
|Bridgeman, W. Clive||Harrison-Broadley, H. B.||Rutherford, John (Lancashire)|
|Brotherton, Edward Allen||Hermon-Hodge, Sir Robert||Rutherford, W. W. (Liverpool)|
|Bull, Sir William James||Hope, James Fitzalan (Sheffield)||Scott, Sir S. (Marylebone, W.)|
|Burdett-Coutts, W.||Joynson-Hicks, William||Sheffield, Sir Berkeley George D.|
|Campbell, Rt. Hon. J. H. M.||Kerry, Earl of||Smith, Abel H. (Hertford, East)|
|Carlile, E. Hildred||Keswick, William||Smith, F. E. (Liverpool, Walton)|
|Carson, Rt. Hon. Sir Edward H.||Lambton, Hon. Frederick William||Stanier, Beville|
|Castlereagh, Viscount||Lane-Fox, G. R.||Starkey, John R.|
|Cave, George||Law, Andrew Bonar (Dulwich)||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Evelyn (Aston Manor)||Lee, Arthur H. (Hants, Fareham)||Talbot, Lord E. (Chichester)|
|Cecil, Lord R. (Marylebone, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Tennant, Sir Edward (Salisbury)|
|Clive, Percy Archer||Long, Col. Charles W. (Evesham)||Thornton, Percy M.|
|Clyde, J. Avon||Long, Rt. Hon. Walter (Dublin, S.)||Walker, Col. W. H. (Lancashire)|
|Coates, Major E. F. (Lewisham)||MacCaw, Wm. J. MacGeagh||Walrond, Hon. Lionel|
|Cochrane, Hon. Thomas H. A. E.||Magnus, Sir Philip||Warde, Col. C. E. (Kent, Mid)|
|Cory, Sir Clifford John||Mason, A. E. W. (Coventry)||Willoughby de Eresby, Lord|
|Craig, Charles Curtis (Antrim, S.)||Mason, James F. (Windsor)||Wortley, Rt. Hon. C. B. Stuart-|
|Craig, Captain James (Down, E.)||Mildmay, Francis Bingham||Wyndham, Rt. Hon. George|
|Craik, Sir Henry||Morgan, J. Lloyd (Carmarthen)|
|Dalrymple, Viscount||Morpeth, Viscount||TELLERS FOR THE NOES.—Sir|
|Davies, David (Montgomery Co.)||Morrison-Bell, Captain||A. Acland-Hood and Viscount|
|Doughty, Sir George||Newdegate, F. A.||Valentia.|
|Douglas, Rt. Hon. A. Akers-||Nicholson, Wm. G. (Petersfield)|
§ Sir E. CARSON moved to leave out the words "satisfaction of" ["proved to the satisfaction of"]
§ Question, "That those words stand part of the clause," put, and negatived.
§ The point I want to deal with is this. Supposing, after the original site value of agricultural land has been ascertained, improvements are 1330 made by the tenant, for which he is entitled to compensation under the Agricultural Holdings Acts. Of course, the result is that the owner of the land at the end of the tenancy must pay the tenant compensation for his improvements. Having paid for the improvements once, the owner ought not to have to pay for them again. He ought not to pay increment value duty on the improvement of the land. Let me put a very simple illustration. Take a list of the improvements in the schedule of the Agricultural Holdings Act, 1908. Suppose after the original site value is ascertained improvements are carried out, whether by the owner himself or by his tenant of the 1331 nature of laying down pasture, planting orchards or fruit trees, drainage, chalking of the land, liming, and matters of that kind. Of course, the effect of these improvements is to send up the value of the land, and when it is sold the price obtained must exceed the original site value by reason of that. I put it to the Committee it is not fair and cannot be intended that in a case like that the man who has paid for these improvements out of his own money shall by reason of his own expenditure pay a heavy tax to the State. The effect of the rejection of the last Amendment will be that land will in some cases be taxed 20 per cent. on the value of the owner's or tenant's own improvements. I would urge the Government when they are ascertaining the taxable site value to be extremely careful to shut out from that taxable site value anything due to the man's own work or expenditure.
§ Sir W. ROBSON
The deductions are limited to works of a permanent character which affect the value of the land. As I understand the suggestion of the hon. and learned Member (Mr. Cave), he would extend the deduction to works not of a permanent character—to temporary improvements such as are the subject matter of compensation between the outgoing and incoming tenant, and which have nothing to do with the capital value of the land. If any of these improvements do add to the capital value they are covered by the concession just announced by my right hon. Friend. I hope the hon. and learned Gentleman will see, therefore, that his Amendment is not necessary and will withdraw it.
§ Mr. W. LONG
I hope my hon. Friend will not withdraw his Amendment, and I sincerely hope that the Government will put it in, because from what we heard from the Attorney-General it appears that it expresses the object of the Government. We have some experience of the particular case with which they are dealing now, and unless the Amendment is adopted we may get more confused as we go on. The Attorney-General took an active part in passing through this House the Agricultural Holdings Act, and the view of the Government then was exactly the reverse of what it is now. Then they argued that there were two kinds of improvement effected by the tenant—the first temporary and ephemeral improvements, matters usually dealt with between the incoming 1332 and the outgoing tenant. Of course, the Attorney-General knows that for all practical purposes the incoming tenant is the landowner, the owner of the soil. But at that time the Government most carefully laid it down and directed that there is the widest difference between the different kinds of improvements, those before-mentioned and those which remain of permanent value to the holding. The Government declared in the Agricultural Holdings Act, and it was laid down, that for those the landlord must pay and not the tenant. And why? Because they add to the permanent value of the holding, and it is on that very ground that the Amendment is proposed. It is refused on two grounds: First, that they are only of passing value, which they are not; and, secondly, that they are covered by the new clause which is to be brought forward and in regard to which I wish the Government success.
§ Mr. LLOYD-GEORGE
It is not a new clause at all. I am waiting to get to the end of the sub-section, and I shall move these words.
§ Mr. W. LONG
I heard what passed, and the Attorney-General used those words. It was a mutual mistake, but I was taking the words of the Attorney-General. The right hon. Gentleman means the Amendment to which he has already referred, but I doubt very much whether these words "good husbandry" will do. We have tried times out of number to get a satisfactory definition of those words in the Agricultural Holdings Act, and if the Chancellor of the Exchequer is going to argue that those words are going to cover the whole series it is a suggestion which will have to be considered. What we want to know is, do the Government mean or not that where a tenant has executed improvements which are held by competent experts to be of a permanent character, and where the discharge of the debt falls upon the owner, do the Government mean that the landlord should be putting himself in a position to be charged Increment Duty? If they do not, do not let them be afraid to put a few more words in this Bill, making it understood of all men what is their object and what is the effect of the Bill. Let me remind them that intentions, however eloquently expressed, will have no effect upon the construing of an Act of Parliament. If the Government mean to exempt this kind of improvement they really must put words into the Bill now.
§ Mr. F. W. LAMBTON
I have a similar Amendment on the Paper, and I hope my hon. Friend will not withdraw his. In the Agricultural Holdings Act of 1908, "good husbandry" was used by the Government, and was defined in these very terms. If they cover improvements made by the landlord it is much better to put in the words now. They cannot possibly do any harm. If we are to be taxed on real improvements it is most unjust, and it is one of those cases, already far too numerous, in which we have to pay twice over.
§ Mr. LLOYD-GEORGE
We have no desire that the agricultural or any other community should depend upon mere verbal pledges given by Ministers. We are perfectly willing that those pledges should be decided by the actual words of the Bill. The words we propose to accept, "good husbandry," are far more comprehensive and effective than those proposed, which would not include the words as described by the hon. Member for Crewe, which had the effect of doubling the value of the land.
§ Mr. WALTER LONG
The words "good husbandry" cannot be made to cover alterations in houses and buildings, which are frequently effected by the tenant under arrangement with his landlord, and in respect of which it is held that the added value is given to the land. The landlord has paid for that. Is he to pay twice over?
§ Mr. LLOYD-GEORGE
Any alteration in the structure which increases the value of the structure will be deducted, of course, by the operation of the Bill as it stands. You do not require words for that beyond the words already in the Bill. It may be necessary to strengthen the Bill in respect of other matters, and that is why I propose to introduce these words "good husbandry." The words proposed by the Amendment really limit the operation. The real increase in the value is due to improved methods of agriculture and things of that sort which you could not detail in the schedule of a measure dealing with agricultural holdings, but which may treble the value of the land. Many of these things would not be included, and many of them might, whereas by the words of the Amendment which the hon. Member for Windsor, anticipating us, has put on the Paper, they would all be included.
§ Sir E. CARSON
We are going to fix the site value on the consideration for the 1334 transfer of the land, or on the consideration for the transfer of a lease, or of any interest in the land. I think the Chancellor of the Exchequer forgets that in the purchase money and the consideration there would be included every kind of improvement, whether it is ephemeral or otherwise. Before you can get at the site value of the land you must deduct every improvement, because every improvement is included in the consideration. That being so, I would suggest to the Chancellor of the Exchequer that the real way to meet the difficulty would be to put in words to the effect that a deduction should be allowed when the improvements are proved to the Commissioners to be attributable to the causes which the mover of the Amendment has indicated. You have already included improvements which are due to good husbandry in the consideration.
§ Sir E. CARSON
The Attorney-General must not say "No, no," because you have enacted it in the previous part of the section. It is not merely a question of good husbandry. Any improvement of any kind which has been made ought to be deducted if you want to get at the true site value.
§ Mr. LANE-FOX
The Amendment would deal only with those improvements which add to the permanent value of the land, and therefore no question arises as to whether ephemeral improvements would come in. It has been said that the words "good husbandry" will cover all these improvements. I think that is extremely doubtful. Without the words of the Amendment we have no guarantee that the owner of land will not be charged Increment Duty which he ought not to be called upon to pay.
§ Sir W. ROBSON
The right hon. Gentleman the Member for the University of Dublin says that all improvements, no matter whether permanent or ephemeral, will be included in this Bill for the purpose of Increment Value Duty. In answer to that I cannot do better than point to a schedule in the Agricultural Holdings Act, which indicates the kind of improvements which are to be regarded as of a permanent character. The hon. Member for Barkston Ash (Mr. Lane-Fox) says that the Amendment would only apply in cases where improvements added to the permanent value. That is not so. According to the wording of the Amendment improvements of a purely ephemeral 1335 character with which the landlords might have nothing whatever to do are nevertheless to be made the subject of a permanent reduction.
§ Mr. PRETYMAN
I cannot read it in that way. We arrive at site value for the purpose of Clause 2 by ascertaining the capital value, and then making certain deductions from it. The deductions are to be part of that value, that is, capital value, which is due to certain improvements. Whatever these improvements are, unless they have a permanent capital value, there will be no deduction whatever.
§ Sir W. ROBSON
But according to the Amendment the deductions may be made for some improvement which has nothing to do with capital value.
§ Mr. PRETYMAN
You deduct from the capital value only any portion that is due to these particular improvements, but you do not deduct the whole value of these improvements. Why I press on the Committee very strongly that they should insert this Amendment is that we have had sufficient vague provisions, and we want something definite so as to know where we stand. What is good husbandry? It is as vague as possible. The whole object of schedule 1 of the Agricultural Holdings Act is to bring such words as "good husbandry," which are a bone of contention between landlord and tenant, into a definite group and give them a definite name, so that both landlord and tenant may know where they stand. That is what we want to know under this Bill. If we have that schedule in the form in which it is proposed in this Amendment it will merely say that all improvements of whatever character which are entered in the schedule, so far as they affect capital value and only so far, will be entitled to become deductions for the purpose of arriving at taxable site value. That is the plain issue from which I think the Committee cannot be diverted, and I hope that hon. Members will give their vote on that issue.
Mr. A. LYULPH STANLEY
The Amendment as it stands, I think, does not include such a case as this. There is a farm of land, a dirty farm at a low rent. By good cultivation and cleaning it is able to be let at a considerable increase in rent. That would no doubt add to some extent to the capital value, but I do not think that that is included in the schedule. There- 1336 fore, I think it is desirable to accept the suggestion to leave out the Amendment, "described in the 1st Schedule of the Agricultural Holdings Act," and to adopt the suggestion due to any improvements, and I do not think I need emphasise that it is only the increase in capital value due to those causes which will be taken into consideration. That increase may be large or small. Whatever it is, I think it is a proper subject for deduction.
§ Lord ROBERT CECIL
We are now engaged in framing a Taxing Act; that is to say, we are framing a set of provisions which are to be applicable to Crown and subject. It is of the utmost importance to the subject that they should be as precise as possible. I agree that there is always a danger that if you draw a list you may exclude things you do not mean to exclude. Therefore it is necessary to add to that list general words to include things which may be overlooked. That is not the object of this Amendment at all. What is desired is to have a list of improvements which shall, at any rate, be deducted from the capital site value when you are estimating the increment value. Let us see how a Taxing Act works. The Government officially comes down and demands a tax. The subject has then to defend himself. He fights at an enormous disadvantage, and inevitably so. He has only got his own funds to support him, and he has to fight the whole forces of the Crown. Therefore it is of the utmost importance to him that he should have the thing as clear and as plain as it is possible to put it in the Act of Parliament. I should prefer personally to see the list of improvements actually included in this Act. In order to save time my hon. Friend suggests reference to a previous Act. Whatever is the objection to that? It is a great deal better than the Government proposal, which is simply confined to the words "good husbandry." It would be open to the Crown to contend on each occasion that a particular improvement is not "good husbandry," strictly speaking, but is an addition to the capital value of the farm. So it will be with any form of words you may devise. I do press upon the Committee the great desirability of this being as precise as possible. Although I sympathise greatly with the hon. Member who last spoke as to having general words, still I think you want a particular list in order to give the subject the undoubted right he claims in respect of that particular list.
§ Mr. JOYNSON-HICKS
Nobody suggests that any of these improvements are mentioned in the Schedule. There are certainly some included here which would be capital improvements, but which would not come under the words "good husbandry." For instance, there is the laying down of permanent pasture; that is not necessarily good husbandry. There is manuring, the making of water meadows, or the planting of hops. It may be desirable from the tenant's point of view to plant hops. It may be that the planting of hops may create a permanent improvement in the character of the holding, and the landlord is compelled, under the provision of the Agricultural Holdings Act, to compensate the tenant for the hops he has planted on his land. Supposing the Government merely put in the words "good husbandry," and a claim arose in Kent for the planting of hops: at once we would have to go to the Law Courts in order to ascertain whether the permanent improvement created in the planting of hops comes within the meaning of the term "good husbandry." The Attorney-General says he knows the list perfectly well, but I do suggest that these are not ephemeral improvements at all. They are permanent improvements. But even if they were merely ephemeral improvements in the value of the land, and in consequence there was an ephemeral increment in the value of the land, I can well understand that, by reason of the land having been thoroughly well manured, and a certain amount of hops planted, in consequence of these ephemeral improvements one might be prepared to give an increased value for the lease of that farm land. The landlord has been compelled, under the provisions of the Agricultural Holdings Act, to pay his tenant a capital sum in respect of those so-called ephemeral improvements. When the landlord sells or dies, this increment tax is to be taken from him, or his successors, in respect of those improvements for which he has had to pay the tenant. Clearly, that being the case, there should be an allowance for this payment out of capital fund. I agree that it would be very much better to include this schedule in the Act, in order to save recourse in numerous cases to the courts of law.
§ Mr. W. PEEL
We have had the alternative of these improvements to the words "good husbandry," but why should we not have both. That would meet the difficulty of the hon. Member opposite, 1338 who is afraid if we did have improvements as set out in this schedule, we should thereby be excluding certain things covered by that magnificent and general term of good husbandry. I would ask the Attorney-General what is the legal meaning or the exact technical meaning of "good husbandry." I know very well what the meaning of good husbandry is from a practical point of view.
That question can only arise in the examination of the proposition of the right hon. Gentleman, who proposes to bring an Amendment before the Committee. That will be the proper time to examine it.
§ Mr. PEEL
If anyone looks at a farm he sees whether it is well managed. There is the clearness of the land, weeds growing, whether the tillage is good, and other matters which, from the practical point of view, are worth looking at. I think a great many of those things are not included in the list. I believe the two propositions are not incompatible, and that we should lose nothing by accepting this particular Amendment.
§ Sir PHILIP MAGNUS
Would the words "good husbandry" cover such an improvement as might be due to the introduction or to some new application of science? to For instance, you might have poor land worth about £1 per acre, and, say, by the introduction of nitrogen it might be made worth £3 per acre. That could scarcely be called good husbandry, and under which of the words included in this Bill would that improvement come?
Mr. GEORGE FABER
Although I should certainly vote for the Amendment, I prefer the Amendment of the right hon. Member for Dublin University. Surely all that the Government intend to claim Increment Duty upon is the site. Every thing except the bare site is the work of man's hands, and is not due to the proximity of a town; therefore, if my right hon. Friend proposes to amend the Amendment in the way suggested, I think that in all the circumstances that would be better.
§ Mr. BALFOUR
I am absolutely astounded at the line the Government have taken in this matter. I do not know whether they want to delay the progress of the Bill, or what it is they are aiming at. Let the Committee consider what the Government are doing. They have protested day after day that they do not mean to tax anybody on anything that he does, on any improvement that he makes, on anything he is responsible for, irrespective of buildings. They now get a chance of carrying out their professions, and they refuse to do it in either respect. The Government profess to be anxious for the interests of agriculture; therefore, in order to show their interest in agriculture, they propose a Bill which by demonstration will tax twice over improvements made by the landlord in agricultural land. They refuse to make an exception dealing with improvements in agricultural land. The only answer is that of the Attorney-General, who says that the words of my hon. Friend are narrow, and that the Government prefer the words "good husbandry." The Attorney-General cannot have considered the question before he made that statement, and I think he might, without any loss of self-respect withdraw from a position which is absolutely untenable. Will he pretend that any court of law would say that "the formation of silos," or that "the making and planning of osier beds" was "good husbandry?" Does anybody know so little of husbandry as to say that either of those things would be described in common parlance or legal phraseology as "good husbandry?" Nobody pretends that they would, but they are things which add to the value of the land and are paid for by the owner of the land. Unless you accept the Amendment or the more general formula suggested by the right hon. Member for Dublin University, if you really mean to confine yourselves to the words "good husbandry," you will be deliberately sacrificing the interests of agriculture to the interests of your finance, and taxing men not for what the community has done, but for what the individual has done to improve the wealth of the land. The Government apparently do not want to get on with their Bill, judging by the way they receive perfectly rational Amendments, suggested in absolute conformity with their own policy; but putting that aside, if they had the smallest regard for their own pledges and policy, I should have thought they might have given a different reception 1340 to this Amendment than they have chosen to do.
§ Sir W. ROBSON
In answer to the right hon. Gentleman, let me say that there is already provision in the Bill for dealing with works of a permanent character. There are two categories under which such works as the making of a silo——
§ Mr. WALTER LONG
Does the Attorney-General say on his authority that the making of a silo is a work of permanent improvement?
§ Sir W. ROBSON
I cannot add to what I have said—that it is an advantage. I do not agree with hon. Gentlemen opposite, that it has not a great deal to do with improvement. Although they may know something about agriculture, they must not assume that they know everything about it. I venture to say that both osier beds and silos will be perfectly well protected in one or other of the categories construed by a good judge.
§ Mr. WALTER LONG
I assure the Attorney-General that I have not the smallest intention of claiming for myself a monopoly of agricultural knowledge. But I would impress upon him with all respect the desirability of giving a sincere answer to the question we put. He tells us that we may rely upon it that the words "good husbandry" cover the various implements that we have suggested. [Cries of "No. no."] Yes; the right hon. Gentleman was anxious that it should include the things to which we refer. The Attorney-General is really hurt at our suggestion that he is not a practical agriculturist. We never made any suggestion of that kind. I have no doubt he is a most successful farmer. In the course of these Debates we have been unsuccessful in not having the benefit of the right hon. and learned Gentleman's personal knowledge and experience, but the majority of practical men who have spoken upon this question base their arguments not merely upon what they believe to be their own experience, but upon the experience they gained when passing the Agricultural Holdings Act through this House. The arguments of hon. Members opposite then were entirely different from what they are now. The arguments in favour of the passage of that Bill through the House were based upon grounds entirely opposite to what the Attorney-General used to-night. If the Attorney-General means, as he tells us, what we mean, when he uses the words "good husbandry," what harm can there 1341 be in taking the words which we suggest, and which will make the matter perfectly clear? The Attorney-General says the making of a silo and the laying of osier beds is covered by the words "good husbandly," but if these things are to be made quite clear it can only be done by the acceptance of the Amendment which we suggest.
§ Colonel R. WILLIAMS
I should like to remind the Attorney-General that there are silos above ground as well as under ground. The distinction between the schedule to the Agricultural Holdings Act and "good husbandry" is this: "Good husbandry" means money spent out of income, while the schedule to the Small Holdings Act enables money to be spent by someone else out of capital. The Government, if they intend to carry out their own professions, should accept the Amendment.
§ Mr. F. W. LAMBTON
It seems a curious thing that the words "good husbandry" which, in the view of the Government, are good enough for the owners now, were not considered good enough for the tenants when the Agricultural Holdings Act was under discussion. I do not know whether that circumstance is due to the fact that the tenant farmers have more votes than the owners. There are no two people in the world who attach the same meaning to the use of the words "good husbandry." I think the right hon. Gentleman ought really to give way on this point in the interests of agriculture.
§ Amendment is covered by the words "works of a permanent character," or by the words "good husbandry." I am quite satisfied that there are improvements contained in the schedule which are not covered by either one or the other of those alternatives. [An HON. MEMBER: "Name one."] I feel sure there are improvements which a court might hold to be neither within the one or the other. If some of us disagree with the view taken by the Attorney-General it may be that some judge would accept our view and not his. At any rate, if there is any doubt about it, the fair thing is to accept the words which guard against this, which will not enlarge the Bill, but which will make it perfectly certain that all the improvements will be covered. The alternative of the right hon. Gentleman, the Member for the Dublin University is to take all improvements. I should be satisfied with that, because it would include my Amendment, and if the Government will accept those words I will withdraw my proposal. If not, I think I had better press my Amendment to get in a limited class of improvements, and for that reason I cannot withdraw my proposal.
Mr. STANLEY WILSON (seated)
Have you arranged it? [Referring to a conversation between the Chairman and Mr. Lloyd-George at the table.]
That is a most improper observation. There was no talk of the kind between us. It is an insult to the office I hold, and it is most unfair to me personally.
§ The Committee divided: Ayes, 104; Noes, 218.1345
|Division No. 254.]||AYES.||[12.45 a.m.|
|Agar-Robartes, Hon. T. C. R.||Cave, George||Goulding, Edward Alfred|
|Arkwright, John Stanhope||Cecil, Evelyn (Aston Manor)||Guinness, Hon. R. (Haggerston)|
|Ashley, W. W.||Cecil, Lord R. (Marylebone, E.)||Guinness, Hon. W. E. (B'y St. Edm'ds)|
|Balcarres, Lord||Clive, Percy Archer||Haddock, George B.|
|Baldwin, Stanley||Clyde, J. Avon||Hamilton, Marquess of|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Coates, Major E. F. (Lewisham)||Hardy, George A. (Suffolk)|
|Banner, John S. Harmood-||Cory, Sir Clifford John||Harrison-Broadley, H. B.|
|Baring, Capt. Hon. G. (Winchester)||Craig, Charles Curtis (Antrim, S.)||Hay, Hon. Claude George|
|Barrie, H. T (Londonderry, N.)||Craig, Captain James (Down, E.)||Hill, Sir Clement|
|Beaumont, Hon. Hubert||Craik, Sir Henry||Hills, J. W.|
|Beck, A. Cecil||Dalrymple, Viscount||Hope, James Fitzalan (Sheffield)|
|Beckett, Hon. Gervase||Davies, David (Montgomery Co.)||Joynson-Hicks, William|
|Bignold, Sir Arthur||Doughty, Sir George||Kerry, Earl of|
|Bowies, G. Stewart||Douglas, Rt. Hon. A. Akers-||Keswick, William|
|Bridgeman, W. Clive||Du Cross, Arthur||Lambton, Hon. Frederick William|
|Brotherton, Edward Allen||Faber, George Denison (York)||Lane-Fox, G. R.|
|Bull, Sir Wiliam James||Faber, Capt. W. V. (Hants, W.)||Law, Andrew Bonar (Dulwich)|
|Burdett-Coutts, W.||Fell, Arthur||Long, Col. Charles W. (Evesham)|
|Burnyeat, W. J. D.||Ferguson, R. C. Munro||Long, Rt. Hon. Walter (Dublin, S.)|
|Campbell, Rt Hon. J. H. M.||Forster, Henry William||MacCaw, William J. MacGeagh|
|Carlile, E. Mildred||Freeman-Thomas, Freeman||Magnus, Sir Philip|
|Carson, Rt. Hon. Sir Edward H.||Gardner, Ernest||Mason, A. E. W. (Coventry)|
|Castlereagh, Viscount||Gordon, J.||Mason, James F. (Windsor)|
|Mildmay, Francis Bingham||Ridsdale, E. A.||Walker, Col. W. H. (Lancashire)|
|Morpeth, Viscount||Roberts, S. (Sheffield, Ecclesall)||Walrond, Hon. Lionel|
|Morrison-Bell, Captain||Rutherford, W. W. (Liverpool)||Warde, Col. C. E. (Kent, Mid)|
|Newdegate, F. A.||Scott, Sir S. (Mrylebone, W.)||White, Sir Luke (York, E. R.)|
|Nicholson, Wm. G. (Petersfield)||Seddon, J.||Williams, Col. R. (Dorset, W.)|
|Paulton, James Mellor||Sheffield, Sir Berkeley George D.||Willoughby de Eresby, Lord|
|Peel, Hon. W. R. W.||Smith, Abel H. (Hertford, East)||Wilson, A. Stanley (York, E.R.)|
|Percy, Earl||Stanier, Beville||Wilson, Hon. G. G. (Hull, W.)|
|Pretyman, E. G.||Stanley, Hon. A. Lyulph (Cheshire)||Wortley, Rt. Hon. C. B. Stuart-|
|Handles, Sir John Scurrah||Starkey, John R.|
|Ratcliff, Major R. F.||Staveley-Hill, Henry (Staffordshire)||TELLERS FOR THE AYES.—Sir A. Acland-Hood and Viscount Valentia.|
|Remnant, James Farquharson||Talbot, Lord E. (Chichester)|
|Renton, Leslie||Tennant, Sir Edward (Salisbury)|
|Acland, Francis Dyke||Grey, Rt. Hon. Sir Edward||Newnes, F. (Notts, Bassetlaw)|
|Ainsworth, John Stirling||Guest, Hon. Ivor Churchill||Nolan, Joseph|
|Allen, A. Acland (Christchurch)||Gwynn, Stephen Lucius||Norman, Sir Henry|
|Allen, Charles P. (Stroud)||Haldane, Rt. Hon. Richard B.||Norton, Captain Cecil William|
|Armitage, R.||Hall, Frederick||Nussey, Sir Willans|
|Asquith, Rt. Hon. Herbert Henry||Harcourt, Rt. Hon. L. (Rossendale)||O'Brien, K. (Tipperary, Mid)|
|Balfour, Robert (Lanark)||Harcourt, Robert V. (Montrose)||O'Brien, Patrick (Kilkenny)|
|Baring, Godfrey (Isle of Wight)||Hardy, George A. (Suffolk)||O'Connor, John (Kildare, N.)|
|Barker, Sir John||Harmsworth, R. L. (Caithness-sh.)||O'Doherty, Philip|
|Barlow, Percy (Bedford)||Harvey, A. G. C. (Rochdale)||O'Donnell, C. J. (Walworth)|
|Barnard, E. B.||Harwood, George||O'Kelly, Conor (Mayo, N.)|
|Barran, Rowland Hirst||Haslam, Lewis (Monmouth)||O'Malley, William|
|Barry, Redmond J. (Tyrone, N.)||Haworth, Arthur A.||Parker, James (Halifax)|
|Beale, W. P.||Hazel, Dr. A. E. W.||Pearce, Robert (Staffs., Leek)|
|Bennett, E. N.||Hazleton, Richard||Philipps, Col. Ivor (Southampton)|
|Berridge, T. H. D.||Hedges, A. Paget||Philips, John (Longford, S.)|
|Birrell, Rt. Hon. Augustine||Helme, Nerval Watson||Pointer, J.|
|Bowerman, C. W.||Henderson, J. McD. (Aberdeen, W.)||Pollard, Dr. G. H.|
|Bramsdon, Sir T. A.||Henry, Charles S.||Ponsonby, Arthur A. W. H.|
|Brocklehurst, W. B.||Herbert, Col. Sir Ivor (Mon. S.)||Power, Patrick Joseph|
|Brodie, H. C.||Higham, John Sharp||Price, C. E. (Edinburgh, Central)|
|Brooke, Stopford||Hobart, Sir Robert||Price, Sir Robert J. (Norfolk, E.)|
|Brunner, J. F. L. (Lancs., Leigh)||Hobhouse, Rt. Hon. Charles E. H.||Priestley, Arthur (Grantham)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Hodge, John||Raphael, Herbert H.|
|Bryce, J. Annan||Hogan, Michael||Rea, Rt. Hon. Russell (Gloucester)|
|Burns, Rt. Hon. John||Holland, Sir William Henry||Rea, Walter Russell (Scarborough)|
|Byles, William Pollard||Holt, Richard Durning||Rendall, Athelstan|
|Carr-Gomm, H. W.||Hooper, A. G.||Richards, T. F. (Wolverhampton, W.)|
|Causton, Rt. Hon. Richard Knight||Horniman, Emslie John||Richardson, A.|
|Chance, Frederick William||Howard, Hon. Geoffrey||Roberts, Charles H. (Lincoln)|
|Cherry, Rt. Hon. R. R.||Hudson, Walter||Roberts, G. H. (Norwich)|
|Clancy, John Joseph||Illingworth, Percy H.||Robertson, Sir G. Scott (Bradford)|
|Cleland, J. W.||Jenkins, J.||Robinson, S|
|Clough, William||Johnson, John (Gateshead)||Robson, Sir William Snowdon|
|Clynes, J. R||Jones, Sir D. Brynmor (Swansea)||Rose, Sir Charles Day|
|Cobbold, Felix Thornley||Jowett, F. W.||Rutherford, V. H. (Brentford)|
|Collins, Stephen (Lambeth)||Lambert, George||Samuel, S. M. (Whitechapel)|
|Collins, Sir Wm. J. (St. Pancras, W.)||Lamont, Norman||Scarisbrick, Sir T. T. L.|
|Compton-Rickett, Sir J.||Law, Hugh A. (Donegal, W.)||Schwann, C. Duncan (Hyde)|
|Cooper, G. J.||Leese, Sir Joseph F. (Accrington)||Scott, A. H. (Ashton-under-Lyne)|
|Corbett. C. H. (Sussex, E. Grinstead)||Lever, A. Levy (Essex, Harwich)||Seely, Colonel|
|Cornwall, Sir Edwin A.||Levy, Sir Maurice||Shackleton, David James|
|Craig, Herbert J. (Tynemouth)||Lloyd-George, Rt. Hon. David||Shaw, Sir Charles E. (Stafford)|
|Crossley, William J.||Lundon, T.||Silcock, Thomas Ball|
|Dalziel, Sir James Henry||Macdonald, J. R. (Leicester)||Simon, John Allsebrook|
|Davies, Ellis William (Eifion)||Macdonald, J. M. (Falkirk Burghs)||Smeaton, Donald Mackenzie|
|Davies, Timothy (Fulham)||Mackarness, Frederic C.||Smyth, Thomas F. (Leitrim, S.)|
|Davies, Sir W. Howell (Bristol, S.)||Macnamara, Dr. Thomas J.||Soames, Arthur Wellesley|
|Dickinson, W. H. (St. Pancras, N.)||Macpherson, J. T.||Spicer, Sir Albert|
|Dillon, John||MacVeagh, Jeremiah (Down, S.)||Stanger, H. Y.|
|Duncan, C. (Barrow-in-Furness)||MacVeigh, Charles (Donegal, E.)||Strachey, Sir Edward|
|Elibank, Master of||M'Laren, H. D. (Stafford, W.)||Straus, B. S. (Mile End)|
|Essex, R. W.||Maddison, Frederick||Strauss, E. A. (Abingdon)|
|Evans, Sir S. T.||Mallet, Charles E.||Summebrbell, T.|
|Everett, H. Lacey||Manfield, Harry (Northants)||Sutherland, J. E.|
|Falconer, J.||Marks, G. Croydon (Launceston)||Taylor, John W. (Durham)|
|Ferens, T. R.||Marnham, F. J.||Tennant, H. J. (Berwickshire)|
|Fiennes, Hon. Eustace||Masterman, C. F. G.||Thomas, Abel (Carmarthen)|
|Flynn, James Christopher||Meehan, Francis E. (Leitrim, N.)||Thomas, Sir A. (Glamorgan, E.)|
|Fuller, John Michael F.||Menzies, Sir Walter||Thompson, J. W. H. (Somerset, E.)|
|Fullerton, Hugh||Middlebrook, William||Tomkinson, James|
|Gladstone, Rt. Hon. Herbert John||Mond, A.||Toulmin, George|
|Glen-Coats, Sir T. (Renfrew, W.)||Montgomery, H. G.||Trevelyan, Charles Philips|
|Glendinning, R. G.||Morgan, G. Hay (Cornwall)||Verney, F. W.|
|Glover, Thomas||Morrell, Philip||Walsh, Stephen|
|Goddard, Sir Daniel Ford||Morse, L. L.||Wardle, George J.|
|Gooch, George Peabody (Bath)||Murray, Capt. Hon. A. C. (Kincard.)||Waring, Walter|
|Wason, Rt. Hon. E. (Clackmannan)||White, J. Dundas (Dumbartonshire)||Wilson, W. T. (Westhoughton)|
|wason, John Cathcart (Orkney)||Whitley, John Henry (Halifax)||Wood, T. M'Kinnon|
|Waterlow, D. S.||Wiles, Thomas|
|Watt, Henry A.||Wilkie, Alexander||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Wedgwood, Josiah C.||Williams, W. Llewelyn (Carmarthen)|
|White, Sir George (Norfolk)||Wilson, P. W. (St. Pancras, S.)|
§ Mr. R. L. EVERETT, in the absence of the hon. Member for East Northants (Sir Francis Channing), moved after "attributable to," insert "continuous good farming resulting in increased fertility, or to intensive or special cultivation of fruit or other crops, or to improvements and." I regret that the hon. Baronet is too unwell to be in his place, but I do not think the Amendment which I am moving on his behalf needs much explanation. Its object is to protect from liability to this new charge those who go in for high farming and thereby add to the value of the land. The Chancellor of the Exchequer, we are told, considers that the clause as it stands affords the protection; but it is not obvious to plain men. We want to see encouragement given to this class of intensive cultivation by safeguarding those who carry it on against being subjected to an Increment Duty upon the skill and industry displayed in their special avocation.
§ Mr. LLOYD-GEORGE
I have already stated in the course of the discussion we had upon the agricultural Amendment, moved from the opposite Benches, that in substance I accept this Amendment, but I do not think, after going into the matter very fully, with the assistance of such expert advisers as I have with regard to the legal interpretation of these words, that they are the best words to carry out the object of my hon. Friend. I think the best words for that purpose are those put down by the hon. Member for Windsor (Mr. J. F. Mason), and those will, I think, meet the wishes of my hon. Friend and save complications. For that reason I trust my hon. Friend will be satisfied with the words which I propose to add, "good husbandry of any person in occupation of the land." This will cover all the cases, and it is a much more comprehensive word.
§ Mr. COURTENAY WARNER
May I point out that there is one thing that "good husbandry" does not cover, and that is the planting of fruit trees. I am doubtful whether this is included in the words "good husbandry." It is not quite a permanent improvement, and is not called husbandry at all, and yet it would 1346 add very considerably to the site value if you calculate it upon the letting value. It would make a very great difference, and I think fruit trees ought to be included.
§ Mr. STEWART BOWLES
The right hon. Gentleman proposes to insert the words "good husbandry of any person in occupation of the land," but under that the owner would be excluded in cases where he is not the occupier, and the Mover of the Amendment will see that, unless the right hon. Gentleman's proposal is very seriously modified, the full effect of what he desires to produce will not be brought about by the alternative proposed.
§ Mr. JOYNSON-HICKS
Good husbandry means something which is done in accordance with the existing conditions of farming. It would be interpreted by the Court probably as meaning the keeping the farm under its then method of cultivation up to the highest point that good husbandry could go—keeping the permanent pastures in good heart, and keeping the land in good heart, and not such matters as the planting of fruit trees. I appeal to the Prime Minister to give us his opinion on this matter. If the right hon. Gentleman means to include the proposals made by his non-supporter, I submit to the Prime Minister that the words "good husbandry" are not wide enough, because they must be held to relate to the then condition of the farm.
§ Mr. J. F. MASON
The right hon. gentleman has said that he proposes to accept the Amendment which stands further down in my name on the Notice Paper, but I observe that he also proposes to move my words in at the end of the sub-section, and to add to them the words "by any person in occupation of the land." That very considerably alters the case from the point of view of my intention. The question whether the whole of the possible improvements on the land are covered by the words "of a permanent character," and the words "good husbandry" has been pretty fully discussed, and I think there remains considerable 1347 doubt on the point. The object I had in view was to cover points which are distinctly due to husbandry, such as drains, fences, fertility, and unexhausted improvements, and I had in mind especially that these unexhausted improvements were the subject of compensation under the Agricultural Holdings Act, 1908, and that they had to be paid for nominally by the incoming tenant, but practically by the landlord. The words which the right hon. Gentleman proposes to add, "by any person in occupation of the land," considerably alter the whole effect of the Amendment, because in many cases it is the landlord who pays the outgoing tenant compensation for unexhausted improvements, and he frequently gets it back in instalments by some increase of rent. If he does that he has to pay Increment Duty on the instalments which he gets back in the form of increase of rent, whereas he has paid a lump sum down to the outgoing tenant.
§ Mr. LLOYD-GEORGE
I did not intend to limit the meaning of the Amendment, and I quite agree with the hon. Member that if the husbandry is the result of any expenditure by the owner, then all the more ought he to be able to claim the benefit of that, because it is upon him that the increment will be charged. If the hon. Member thinks the words I read out will not effect that object, I should be prepared to alter the words to "any person interested in the land." That would cover the case mentioned by the hon. Member and my hon. Friend behind me (Mr. Everett).
§ Mr. PRETYMAN
Would it not be well to have both "either in occupation of" or "interested in the land"?
§ Mr. LANE-FOX
Is the right hon. Gentleman sure that the farming of fruit trees, the working of land, and the planting of osier beds would be included in the phrase "work of a permanent character," or in the term "good husbandry"? They are improvements that the owner will have to pay for, and not the tenant, under the Agricultural Holdings Act.
§ Mr. LLOYD-GEORGE
Fruit trees are specifically mentioned in Clause 14, section (2). I should not have thought there was the slightest doubt about the other things.
§ Mr. EVERETT
I would plead earnestly with the Chancellor of the Exchequer to accept the words of the hon. Baronet (Sir Francis Channing). If he thinks it necessary he can add further words at the end of the sub-section. The hon. Baronet has a great knowledge of agriculture and horticulture, and that sort of thing, and he drew up this Amendment with very great care. Those interested in these things feel that the Amendment would assure them protection.
§ Mr. LLOYD-GEORGE
I think my hon. Friend will be making a mistake if he insists upon having words of this kind negatived, and if he insists upon specifying cases of this kind, which will only have a limiting effect. If the hon. Baronet (Sir Francis Channing) were here himself and knew the words which I have proposed, I am certain he would consider them as being more comprehensive. If you start by specifying intensive culture and one or two things of that kind, you may very well exclude things like osier beds. There is a danger in specifying, because anybody acquainted with the interpretation of the law knows there is a rule which says that general words refer to something of the same kind.
§ Mr. BECK
It is rather difficult to follow what is happening. The word we are anxious to have in is "improvements," which I think covers all these difficulties. So far as I know, the Chancellor of the Exchequer has not put in that word. If that word is not put in my hon. Friend (Mr. Everett) would be wise to press the Amendment to a Division. Those of us who represent agricultural constituencies have some reason to feel grave disquietude after what has happened to-night.
§ Mr. ROGERS
Those of us who are very anxious to support the Government feel ourselves in considerable difficulty about this particular Amendment. We are told "good husbandry" will cover a number of things. To my mind good husbandry means the proper cultivation of a farm as it stands. There must be some things it does not cover, and further words should be put in. For instance, the owner of land has to spend considerable sums in putting in a water supply. That is not work 1349 of a permanent character, because it does not last for a permanent time and has to be renewed from time to time. Taking the commonsense view, a thing which wears out in twenty years is not a work of a permanent character. I am most anxious to support the Government, and I only want to be assured that all the different kinds of improvements are really covered by the words in the clause. If an assurance can be given that there is a reasonable supposition that the words "works of a permanent character" embrace works of the kind I have referred to, then I shall be
§ satisfied. But I confess I do not see how they can cover all the works which I have in mind.
§ Leave to withdraw being withheld,
§ Question put, "That those words be inserted."
§ The Committee divided: Ayes, 89; Noes, 204.1351
|Division No. 255.]||AYES.||[1.14 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Doughty, Sir George||Morpeth, Viscount|
|Arkwright, John Stanhope||Douglas, Rt. Hon. A. Akers-||Morrison-Bell, Captain|
|Ashley, W. W.||Du Cros, Arthur Philip||Newdegate, F. A.|
|Balcarres, Lord||Faber, George Denison (York)||Nicholson, Wm. G. (Petersfield)|
|Baldwin, Stanley||Faber, Captain W. V. (Hants, W.)||Peel, Hon. W. R. W.|
|Balfour, Rt. Hon. A. J. (City Lond.)||Fell, Arthur||Percy, Earl|
|Banner, John S. Harmood-||Ferguson, R. C. Munro||Randles, Sir John Scurrah|
|Baring, Capt. Hon. G. (Winchester)||Forster, Henry William||Ratcliff, Major R. F.|
|Barrie, H. T. (Londonderry, N.)||Freeman-Thomas, Freeman||Renton, Leslie|
|Beauchamp, E.||Gardner, Ernest||Roberts, S. (Sheffield, Ecclesall)|
|Beck, A. Cecil||Gordon, J.||Rutherford, W. W. (Liverpool)|
|Beckett, Hon. Gervase||Goulding, Edward Alfred||Scott, Sir S. (Marylebone, W.)|
|Bignold, Sir Arthur||Guinness, Hon. R. (Haggerston)||Sheffield, Sir Berkeley George D.|
|Bowles, G. Stewart||Guinness, Hon. W. E. (Bury St. Edm.)||Smith, Abel H. (Hertford, East)|
|Bridgeman, W. Clive||Haddock, George B.||Stanier, Beville|
|Brotherton, Edward Allen||Hamilton, Marquess of||Starkey, John R.|
|Bull, Sir William James||Hardy, Laurence (Kent, Ashford)||Staveley-Hill, Henry (Staffordshire)|
|Burdett-Coutts, W.||Harrison-Broadley, H. B.||Talbot, Lord E. (Chichester)|
|Campbell, Rt. Hon. J. H. M.||Hill, Sir Clement||Tennant, Sir Edward (Salisbury)|
|Carlile, E. Hildred||Hills, J. W.||Walker, Col. W. H. (Lancashire)|
|Carson, Rt. Hon. Sir Edward H.||Hope, James Fitzalan (Sheffield)||Walrond, Hon. Lionel|
|Castlereagh, Viscount||Kerry, Earl of||Warde, Col. C. E. (Kent, Mid)|
|Cave, George||Lambton, Hon. Frederick Wm.||White, Sir Luke (York, E.R.)|
|Cecil, Evelyn (Aston Manor)||Lane-Fox, G. R.||Williams, Col. R. (Dorset, W.)|
|Clive, Percy Archer||Law, Andrew Bonar (Dulwich)||Willoughby de Eresby, Lord|
|Coates, Major E. F. (Lewisham)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Wilson, A. Stanley (York, E.R.)|
|Craig, Charles Curtis (Antrim, S.)||Long, Col. Charles W. (Evesham)||Wortley, Rt. Hon. C. B. Stuart-|
|Craig, Captain James (Down, E.)||MacCaw, William J. MacGeagh|
|Craik, Sir Henry||Magnus, Sir Philip||TELLERS FOR THE AYES.—Mr. Joynton-Hicks and Mr. Remnant.|
|Dalrymple, Viscount||Mason, James F. (Windsor)|
|Davies, David (Montgomery Co.)||Mildmay, Francis Bingham|
|Acland, Francis Dyke||Causton, Rt. Hon. Richard Knight||Elibank, Master of|
|Agnew, George William||Cherry, Rt. Hon. R. R.||Evans, Sir S. T.|
|Ainsworth, John Stirling||Clancy, John Joseph||Falconer, James|
|Allen, A. Acland (Christchurch)||Cleland, J. W.||Ferens, T. R.|
|Armitage, R.||Clough, William||Fiennes, Hon. Eustace|
|Asquith, Rt. Hon. Herbert Henry||Clynes, J. R.||Flynn, James Christopher|
|Baring, Godfrey (Isle of Wight)||Cobbold, Felix Thornley||Fuller, John Michael F.|
|Barlow, Percy (Bedford)||Collins, Stephen (Lambeth)||Fullerton, Hugh|
|Barnard, E. B.||Collins, Sir Wm. J. (St. Pancras, W.)||Gibb, James (Harrow)|
|Barry, Redmond J. (Tyrone, N.)||Compton-Rickett, Sir J.||Gill, A. H.|
|Bennett, E. N.||Cooper, G. J.||Gladstone, Rt. Hon. Herbert John|
|Berridge, T. H. D.||Corbett, C. H. (Sussex, E. Grinstead)||Glen-Coats, Sir T. (Renfrew, W.)|
|Birrell, Rt. Hon. Augustine||Cornwall, Sir Edwin A.||Glendinning, R. G.|
|Bowerman, C. W.||Craig, Herbert J. (Tynemouth)||Glover, Thomas|
|Bramsdon, Sir Thomas A.||Crosfield, A. H.||Goddard, Sir Daniel Ford|
|Brocklehurst, W. B.||Crossley, William J.||Gooch, George Peabody (Bath)|
|Brodie, H. C.||Dalziel, Sir James Henry||Gwynn, Stephen Lucius|
|Brooke, Stopford||Davies, Ellis William (Eifion)||Hall, Frederick|
|Brunner, J. F. L. (Lancs., Leigh)||Davies, Timothy (Fulham)||Harcourt, Rt. Hon. L. (Rossendale)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Davies, Sir W. Howell (Bristol, S.)||Harcourt, Robert V. (Montrose)|
|Bryce, J. Annan||Dickinson, W. H. (St. Pancras, N.)||Hardy, George A. (Suffolk)|
|Burns, Rt. Hon. John||Dillon, John||Harmsworth, R. L. (Caithness-sh.)|
|Burnyeat, W. J. D.||Duncan, C. (Barrow-in-Furness)||Harvey, A. G. C. (Rochdale)|
|Byles, William Pollard||Duncan, J. H. (York, Otley)||Harwood, George|
|Carr-Gomm, H. W.||Dunne, Major E. Martin (Walsall)||Haslam, Lewis (Monmouth)|
|Haworth, Arthur A.||Menzies, Sir Waiter||Scott, A. H. (Ashton-under-Lyne)|
|Hazel, Dr. A. E.||Middlebrook, William||Seddon, J.|
|Hazleton, Richard||Mond, A.||Seely, Colonel|
|Hedges, A. Paget||Montagu, Hon. E. S.||Shackleton, David James|
|Helme, Norval Watson||Montgomery, H. G.||Shaw, Sir Charles Edward|
|Henry, Charles S.||Morgan, G. Hay (Cornwall)||Silcock, Thomas Ball|
|Herbert, Col. Sir Ivor (Mon., S.)||Morrell, Philip||Simon, John Allsebrook|
|Higham, John Sharp||Morse, L. L.||Smyth, Thomas F. (Leitrim, S.)|
|Hobart, Sir Robert||Murray, Capt. Hon. A. C. (Kincard.)||Soames, Arthur Wellesley|
|Hobhouse, Rt. Hon. Charles E. H.||Newnes, F. (Notts, Bassetlaw)||Spicer, Sir Albert|
|Hodge, John||Nolan, Joseph||Stanger, H. Y.|
|Hogan, Michael||Norman, Sir Henry||Stanley, Hon. A. Lyulph (Cheshire)|
|Holt, Richard Durning||Norton, Capt. Cecil William||Strachey, Sir Edward|
|Hooper, A. G.||Nussey, Sir Willans||Straus, B. S. (Mile End)|
|Horniman, Emslie John||O'Brien, Kendal (Tipperary, Mid)||Strauss, E. A. (Abingdon)|
|Howard, Hon. Geoffrey||O'Brien, Patrick (Kilkenny)||Summerbell, T.|
|Hudson, Walter||O'Connor, John (Kildare, N.)||Taylor, John W. (Durham)|
|Illingworth, Percy H.||O'Doherty, Philip||Tennant, H. J. (Berwickshire)|
|Jenkins, J.||O'Donnell, C. J. (Walworth)||Thomas, Abel (Carmarthen, E.)|
|Johnson, John (Gateshead)||O'Kelly, Conor (Mayo, N.)||Thomas, Sir A. (Glamorgan, E.)|
|Jones, Sir D. Brynmor (Swansea)||O'Malley, William||Thompson, J. W. H. (Somerset, E.)|
|Jowett, F. W.||Parker, James (Halifax)||Tomkinson, James|
|Lambert, George||Pearce, Robert (Staffs, Leek)||Trevelyan, Charles Philips|
|Lamont, Norman||Philipps, Col. Sir Ivor (Southampton)||Walsh, Stephen|
|Law, Andrew Bonar (Dulwich)||Philips, John (Longford, S.)||Ward, W. Dudley (Southampton)|
|Lever, A. Levy (Essex, Harwich)||Pointer, Joseph||Wardle, George J.|
|Levy, Sir Maurice||Pollard, Dr.||Warner, Thomas Courtenay T.|
|Lloyd-George, Rt. Hon. David||Ponsonby, Arthur A. W. H.||Wason, Rt. Hon. E. (Clackmannan)|
|Lundon, Thomas||Power, Patrick Joseph||Wason, John Cathcart (Orkney)|
|Lyell, Charles Henry||Price, Sir Robert J. (Norfolk, E.)||Waterlow, D. S.|
|Macdonald, J. R. (Leicester)||Priestley, Sir W. E. B. (Bradford, E.)||Wedgwood, Josiah C.|
|Macdonald, J. M. (Falkirk Burghs)||Raphael, Herbert H.||White, Sir George (Norfolk)|
|Mackarness, Frederic C.||Rea, Walter Russell (Scarboro')||White, J. Dundas (Dumbartonshire)|
|Macnamara, Dr. Thomas J.||Rendall, Athelstan||Whitley, John Henry (Halifax)|
|Macpherson, J. T.||Richardson, A.||Wilkie, Alexander|
|MacVeagh, Jeremiah (Down, S.)||Roberts, Charles H. (Lincoln)||Williams, Llewelyn (Carmarthen)|
|MacVeigh, Charles (Donegal, E.)||Roberts, G. H. (Norwich)||Wilson, Hon. G. G. (Hull, W.)|
|M'Laren, H. D. (Stafford, W.)||Robertson, Sir G. Scott (Bradford)||Wilson, P. W. (St. Pancras, S.)|
|Maddison, Frederick||Robinson, S.||Wilson, W. T. (Westhoughton)|
|Manfield, Harry (Northants)||Robson, Sir William Snowdon||Wood, T. M'Kinnon|
|Marks, G. Croydon (Launceston)||Rose, Sir Charles Day|
|Marnham, F. J.||Rutherford, V. H. (Brentford)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Masterman, C. F. G.||Samuel, S. M (Whitechapel)|
|Meehan, Francis E. (Leitrim, N.)||Scarisbrick, Sir T. T. L.|
§ Lord WILLOUGHBY de ERESBY
I have an Amendment to leave out the words "of a permanent character executed" ["works of a permanent character executed"] and to insert "executed, or expenditure made." I wish to point out that a man may spend a great deal of money on his property, but there may not be an improvement by it.
§ Lord WILLOUGHBY de ERESBY
On a point of order, I think there is more in this Amendment than may seem. Many men, in trying to make improvements on their land of an agricultural nature, may strike other things in that land which may cause their land to be otherwise improved, and consequently send up the value of the land. It may not be called a permanent improvement in agriculture.
The Noble Lord cannot move to omit the words "of a permanent character." If he wants to move 1352 "or expenditure made" after "executed" I do not say he cannot do so.
§ Lord WILLOUGHBY de ERESBY
I have a case in my mind. It is perfectly true that when we spend money on our land in erecting buildings, or fences, or hedges, we hope that it may result in an improvement, but it is not in all cases an improvement. Sometimes a man gets absolutely no improvement for the expenditure of his money. In my own Constituency there was a man who was filled with great ideas, one of which was that he was to restore prosperity to agricultural interests by building a town, founding? city, planting a forest, and finding coal. This man spent enormous sums of money, and put up—it stands to this day—a straggling street, which was to be the beginning of the town he was to found. Unfortunately it was no improvement and the land received no benefit from his expenditure. His next effort was to plant a forest, which he thought would improve the country, and at the present moment all that is left are three trees for a great tract of country. His third venture was to dive an enormous depth into 1353 the ground in order to find coal. Instead of that he spent all his money, but found no coal. But what happened? That hole which he dug in the ground has turned out an enormous improvement to that land. It has had the effect of raising the site value in the neighbourhood. At the bottom of this shaft which he sank there turned out to be most valuable water percolating through the different strata. The place I am speaking of is Woodhall Spa.
I must point out to the Noble Lord that he is moving now to insert "or expenditure made" after the word "executed." The Amendment of the hon. Member for North Cork should come first.
§ Mr. CLANCY
I wish to move after the word "character" ["works of a permanent character"] to insert the words "including drainage." As far as I know the words "works of a permanent character" will include most of the improvements with which an Irish tenant is concerned, but I do not believe that drainage, although very important work, is included in the words "works of a permanent character." Drainage may cost a great deal. Those who are acquainted with the fixing of rents in Ireland know that the matter which requires the greatest care and estimation is the existence and the making of drains. Sometimes it is found that these drains originally cost a good deal, and for a time they made the land really more valuable than it was. Still, it is well known that drainage will not last for ever, and I think any works of this character, if they add anything to the value of the land, as they often do for 10, 20, or 30 years, although they may not be permanent improvements, certainly ought to be allowed for in a matter of this kind.
§ The ATTORNEY-GENERAL for IRELAND (Mr. Cherry)
The hon. Member need not be under any uncertainty in this matter. I do not think there is any doubt that, for the purpose of this clause, at any rate, drainage will be considered to be a work of a permanent character. In one sense nothing is permanent. The word "permanent," used in an Act of Parliament, does not necessarily mean "lasting for all time," but it really means something which last for a very long period. [Cries of "How long?"] Well, we might say a hundred years. Undoubtedly, a house is a building of a permanent character and has always been treated so 1354 in every Act of Parliament I know that deals with this word "permanent." Drainage, when properly made, I think everyone will agree with me, would undoubtedly be held by any court to be a work of a permanent character. I would ask the hon. and learned Gentleman, therefore, not to press the Amendment.
§ Mr. ASHLEY
I should like to support the Amendment because I do not think we ought to do anything which would discourage the Irish tenant or land-owner from improving his land. In the past perhaps he has not been as anxious to make these improvements as we should wish them to be done, because there has been a great deal against him. But surely if the Government are desirous, as they say they are, that drainage works should be allowed for, there can be no possible objection to inserting these words. There may be a difference of opinion as to whether drainage is included in the term "works of a permanent character." A judge may not have the same opinion as the Attorney-General for Ireland, and, therefore, surely in a matter which affects a very large part of the United Kingdom and is of great moment to a number of people who are interested in the land of Ireland, the Government can see their way to insert the words of the Amendment, which can do no harm and may have a very important effect on legal decisions.
§ Mr. JOHN O'CONNOR
In rising to support the Amendment I desire to say it is impossible for us to accept with any degree of assurance or certainty the promises made or the assurances given by hon. and learned Gentlemen who represent the Government with regard to Irish measures. I say that because I have recollection of another Act of Parliament in which the word "improvement"occurs—the Land Act of 1881. By an interpretation of the Land Court in Ireland the word was altogether altered from the intention of Parliament. I allude to the decision in Adams v. Dunseath. I have heard it stated by the late Mr. Gladstone, by the mover of the Amendment, and by one of the judges that the decision was a wrong one, and having regard to the fact that this Act may go before judges of a similar character, and we know what they are in Ireland in dealing with land questions; it is absolutely necessary we should take every precaution that no damage shall be done to the tenant farmers of Ireland in the interpretation of this Act. With regard to drainage itself, 1355 the question is much more important than many hon. Members conceive. I remember well in the year 1879, when we were threatened with a famine in Ireland, the late Lord Beaconsfield took £1,000,000 from the Irish Church Surplus Fund, and it was spent on works of improvement consisting almost entirely of drainage. The works were not of a permanent character or it would not have been necessary to take £1,000,000 of the Irish Church Fund in order to improve them. Having regard to the nature of drainage works and having regard to the composition and judg-
§ ment of the Courts of Law in Ireland, I believe it is absolutely necessary that some such words as those moved by my hon. Friend should be inserted in this Bill. I, therefore, earnestly press upon the Attorney-General for Ireland that he should reconsider his opinion upon this matter.
§ Amendment proposed, after the words "works of a permanent character," to insert the words "including drainage."
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 108; Noes, 182.1357
|Division No. 256.]||AYES.||[1.42 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Gardner, Ernest||O'Brien, K. (Tipperary, Mid)|
|Arkwright, John Stanhope||Gordon, J.||O'Connor, John (Kildare, N.)|
|Ashley, W. W.||Goulding, Edward Alfred||O'Doherty, Philip|
|Balcarres, Lord||Guinness, Hon. R. (Haggerston)||O'Donnell, C. J (Walworth)|
|Baldwin, Stanley||Guinness, Hon. W. E. (B'y St. Edm'ds)||O'Kelly, Conor (Mayo, N.)|
|Banner, John S. Harmood-||Gwynn, Stephen Lucius||O'Malley, William|
|Baring, Capt. Hon. G. (Winchester)||Haddock, George B.||Peel, Hon. W. R. W.|
|Barrie, H. T. (Londonderry, N.)||Hamilton, Marquess of||Percy, Earl|
|Beckett, Hon, Gervase||Hardy, Laurence (Kent, Ashford)||Philips, John (Longford, S.)|
|Bignold, Sir Arthur||Harrison-Broadley, H. B.||Power, Patrick Joseph|
|Bowles, G. Stewart||Hazleton, Richard||Pretyman, E. G.|
|Bridgeman, W. Clive||Hill, Sir Clement||Randles, Sir John Scurrah|
|Brotherton, Edward Allen||Hills, J. W.||Ratcliff, Major R. F.|
|Bull, Sir William James||Hogan, Michael||Remnant, James Farquharson|
|Burdett-Coutts, W.||Hope, James Fitzalan (Sheffield)||Renton, Leslie|
|Campbell, Rt. Hon. J. H. M.||Joynson-Hicks, William||Roberts, S. (Sheffield, Ecclesall)|
|Carlile, E. Hildred||Kerry, Earl of||Rutherford, W. W. (Liverpool)|
|Carson, Rt. Hon. Sir Edward H.||Lambton, Hon. Frederick William||Scott, Sir S. (Marylebone, W.)|
|Castlereagh, Viscount||Lane-Fox, G. R.||Sheffield, Sir Berkeley George D.|
|Cave, George||Law, Andrew Bonar (Dulwich)||Smith, Abel H. (Hertford, E.)|
|Cecil, Evelyn (Aston Manor)||Law, Hugh A. (Donegal, W.)||Smyth, Thomas F. (Leitrim, S.)|
|Clive, Percy Archer||Lockwood, Rt. Hon. Lt.-Col. A. R.||Stanier, Beville|
|Clyde, J. Avon||Long, Col. Charles W. (Evesham)||Starkey, John R.|
|Coates, Major E. F. (Lewisham)||Long, Rt. Hon. Walter (Dublin, S.)||Staveley-Hill, Henry (Staffordshire)|
|Craig, Charles Curtis (Antrim, S.)||Lundon, T.||Talbot, Lord E. (Chichester)|
|Craig, Captain James (Down, E.)||MacCaw, William J. MacGeagh||Tennant, Sir Edward (Salisbury)|
|Craik, Sir Henry||MacVeagh, Jeremiah (Down, S.)||Valentia, Viscount|
|Dalrymple, Viscount||MacVeigh, Charles (Donegal, E.)||Walker, Col. W. H. (Lancashire)|
|Dillon, John||Magnus, Sir Philip||Walrond, Hon. Lionel|
|Doughty, Sir George||Mason, James F. (Windsor)||Warde, Col. C. E. (Kent, Mid.)|
|Douglas, Rt. Hon. A. Akers-||Meehan, Francis E. (Leitrim, H.)||Williams, Col. R. (Dorset, W.)|
|Faber, George Denison (York)||Mildmay, Francis Bingham||Willoughby de Eresby, Lord|
|Faber, Capt. W. V. (Hants, W.)||Morpeth, Viscount||Wilson, A. Stanley (York, E.R.)|
|Fell, Arthur||Morrison-Bell, Captain||Wortley, Rt. Hon. C. B. Stuart-|
|Ferguson, R. C. Munro||Newdegate, F. A.|
|Flynn, James Christopher||Nicholson, Wm. G. (Petersfield)||TELLERS FOR THE AYES.—Mr. Patrick O'Brien and Mr. Clancy.|
|Faster, Henry William||Nolan, Joseph|
|Acland, Francis Dyke||Brooke, Stopford||Cornwall, Sir Edwin A.|
|Ainsworth, John Stirling||Brunner, J. F. L. (Lancs., Leigh)||Craig, Herbert J. (Tynemouth)|
|Allen, A. Acland (Christchurch)||Brunner, Rt. Hon. Sir J. T. (Cheshire)||Crossley, William J.|
|Armitage, R.||Bryce, J. Annan||Dalziel, Sir James Henry|
|Asquith, Rt. Hon. Herbert Henry||Burnyeat, W. J. D.||Davies, David (Montgomery Co.)|
|Baring, Godfrey (Isle of Wight)||Byles, William Pollard||Davies, Ellis William (Eifion)|
|Barlow, Percy (Bedford)||Carr-Gomm, H. W.||Davies, Timothy (Fulham)|
|Barnard, E. B.||Causton, Rt. Hon. Richard Knight||Davies, Sir W. Howell (Bristol, S.)|
|Barry, Redmond J. (Tyrone, N.)||Cherry, Rt. Hon. R. R.||Dickinson, W. H. (St. Pancras, N.)|
|Beauchamp, E.||Cleland, J. W.||Duncan, C. (Barrow-in-Furness)|
|Bennett, E. N.||Clough, William||Duncan, J. Hastings (York, Otley)|
|Berridge, T. H. D.||Clynes, J. R.||Dunne, Major E. Martin (Walsall)|
|Birrell, Rt. Hon. Augustine||Cobbold, Felix Thornley||Elibank, Master of|
|Bowerman, C. W.||Collins, Stephen (Lambeth)||Essex, R. W.|
|Bramsdon, Sir T. A.||Compton-Rickett, Sir J.||Evans, Sir S. T.|
|Brocklehurst, W. B.||Cooper, G. J.||Everett, R. Lacey|
|Brodie, H. C.||Corbett, C. H. (Sussex, E. Grinstead)||Falconer, J.|
|Ferens, T. R.||Mackarness, Frederic C.||Scarisbrick, Sir T. T. L.|
|Fiennes, Hon. Eustace||Macpherson, J. T.||Scott, A. H. (Ashton-under-Lyne)|
|Fuller, John Michael F.||M'Laren, H. D. (Stafford, W.)||Seddon, J.|
|Fullerton, Hugh||Maddison, Frederick||Seely, Colonel|
|Gibb, James (Harrow)||Manfield, Harry (Northants)||Shackleton, David James|
|Gill, A. H.||Marks, G. Croydon (Launceston)||Shaw, Sir Charles E. (Stafford)|
|Gladstone, Rt. Hon. Herbert John||Marnham, F. J.||Silcock, Thomas Ball|
|Glendinning, R. G.||Masterman, C. F. G.||Soames, Arthur Wellesley|
|Glover, Thomas||Menzies, Sir Walter||Spicer, Sir Albert|
|Goddard, Sir Daniel Ford||Middlebrook, William||Stanger, H. Y.|
|Gooch, George Peabody (Bath)||Mend, A.||Stanley, Hon. A. Lyulph (Cheshire)|
|Hall, Frederick||Montagu, Hon. E. S.||Strachey, Sir Edward|
|Harcourt, Rt. Hon. L. (Rossendale)||Montgomery, H. G.||Straus, B. S. (Mile End)|
|Harcourt, Robert V. (Montrose)||Morgan, G. Hay (Cornwall)||Strauss, E. A. (Abingdon)|
|Hardy, George A. (Suffolk)||Morrell, Philip||Summerbell, T.|
|Harmsworth, R. L. (Caithness-sh.)||Morse, L. L.||Taylor, John W. (Durham)|
|Harvey, A. G. C. (Rochdale)||Murray, Capt. Hon. A. C. (Kincard.)||Tennant, H. J. (Berwickshire)|
|Harwood, George||Newnes, F. (Notts, Bassetlaw)||Thomas, Abel (Carmarthen, E.)|
|Haslam, Lewis (Monmouth)||Norman, Sir Henry||Thomas, Sir A. (Glamorgan, E.)|
|Haworth, Arthur A.||Norton, Capt. Cecil William||Thompson, J. W. H. (Somerset, E.)|
|Hazel, Dr. A. E. W.||Nussey, Sir Willans||Tomkinson, James|
|Hedges, A. Paget||Parker, James (Halifax)||Trevelyan, Charles Philips|
|Helme, Norval Watson||Pearce, Robert (Staffs, Leek)||Verney, F. W.|
|Henry, Charles S.||Philipps, Col. Ivor (Southampton)||Walsh, Stephen|
|Herbert, Col. Sir Ivor (Mon. S.)||Pointer, J.||Ward, W. Dudley (Southampton)|
|Higham, John Sharp||Pollard, Dr. G. H.||Wardle, George J.|
|Hobart, Sir Robert||Ponsonby, Arthur A. W. H.||Warner, Thomas Courtenay T.|
|Hobhouse, Rt. Hon. Charles E. H.||Price, Sir Robert J. (Norfolk, E.)||Wason, Rt. Hon. E. (Clackmannan)|
|Hodge, John||Priestley, Sir W. E. B. (Bradford, E.)||Wason, John Cathcart (Orkney)|
|Holt, Richard Durning||Raphael, Herbert H.||Waterlow, D. S.|
|Hooper, A. G.||Rea, Rt. Hon. Russell (Gloucester)||Wedgwood, Josiah C.|
|Horniman, Emslie John||Rea, Walter Russell (Scarborough)||White, Sir George (Norfolk)|
|Howard, Hon. Geoffrey||Rendall, Athelstan||White, J. Dundas (Dumbartonshire)|
|Hudson, Walter||Richardson, A.||White, Sir Luke (York, E.R.)|
|Illingworth, Percy H.||Ridsdale, E. A.||Whitley, John Henry (Halifax)|
|Jenkins, J.||Roberts, Charles H. (Lincoln)||Wilkie, Alexander|
|Johnson, John (Gateshead)||Roberts, G. H. (Norwich)||Williams, W. Llewelyn (Carmarthen)|
|Jowett, F. W.||Robertson, Sir G. Scott (Bradford)||Wilson, Hon. G. G. (Hull, W.)|
|Lamont, Norman||Robinson, S.||Wilson, P. W. (St. Pancras, S.)|
|Lever, A. Levy (Essex, Harwich)||Robson, Sir William Snowdon||Wilson, W. T. (Westhoughton)|
|Levy, Sir Maurice||Roch, Walter F. (Pembroke)||Wood, T. M'Kinnon|
|Lloyd-George, Rt. Hon. David||Rogers, F. E. Newman|
|Lyell, Charles Henry||Rose, Sir Charles Day||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Macdonald, J. M. (Falkirk Burghs)||Rutherford, V. H. (Brentford)|
|Macdonald, J. R. (Leicester)||Samuel, S. M. (Whitechapel)|
§ Captain J. CRAIG moved to insert after "character" ["attributable to works of a permanent character"] the words "including fencing."
§ I think the Committee will agree with me that fencing is not included under any Act of Parliament as being a permanent structure. I am glad to see the Attorney-General for Ireland (Mr. Cherry) in his place. He was able to tell us that drainage was classified in all the statutes relating to Irish Land Laws as works of a permanent character, but I do not think any of these statutes include fencing as being of a permanent character, and I think that in the interests of the tenant farmers any fencing put up should be allowed for. We in Ireland are in rather a different position from those in England or Scotland. The fences there are very frequently stone walls or ditches, and the permanency of stone walls depends to a large extent upon whether cattle driving is prevalent. It is true that when they are knocked down by these marauders the farmers are compensated by the county. Even if they are allowed to stand fences do not last more than 17 to 20 years, and 1358 have to be renewed. That class of fencing cannot be termed of a permanent character. A tenant farmer who has gone to the expense of putting up good fencing round his farm should be entitled to deduct the cost in arriving at the Increment Value of the farm. Many farmers in Ireland are not particularly well off, and the cost of fencing is of considerable importance to them. If this Amendment is not accepted some of them would hesitate before putting up better class fencing, and revert to the old system of ditches and stone walls. The better the fencing the more prosperous the country will become, and the more horses will be bred there and less damage will be done to young cattle. There are large cattle ranches and farms in which they specialise in the north of Ireland, where it would be felt to be a great advantage if this exception were inserted in the Bill.
§ Mr. LLOYD-GEORGE
There is no doubt at all that fencing is already included in the Bill. I have already indicated three things which are included, fencing, roads and drains.
§ Mr. LLOYD-GEORGE
In "works of a permanent character." One effect of excluding them specifically would be that you might exclude other things and do more harm to other things.
§ Question put, "That the words 'including fencing,' be inserted after the word 'character'" ["attributable to works of a permanent character"].
§ The Committee divided: Ayes, 82; Noes, 187.1361
|Division No. 257.]||AYES.||[2.0 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Douglas, Rt. Hon. A. Akers-||Morpeth, Viscount|
|Arkwright, John Stanhope||Faber, G. Denison (York)||Morrison-Bell, Captain|
|Ashley, W. W.||Faber, Capt. W. V. (Hants, W.)||Newdegate, F. A.|
|Balcarres, Lord||Fell, Arthur||Nicholson, Wm. G (Petersfield)|
|Baldwin, Stanley||Forster, Henry William||Peel, Hon. W. R. W.|
|Banner, John S. Harmood-||Gardner, Ernest||Percy, Earl|
|Baring, Capt. Hon. G. (Winchester)||Gordon, J.||Randles, Sir John Scurrah|
|Barrie, H. T. (Londonderry, N.)||Goulding, Edward Alfred||Ratcliff, Major R. F.|
|Beckett, Hon. Gervase||Guinness, Hon. R. (Haggerston)||Renton, Leslie|
|Bignold, Sir Arthur||Guinness, Hon. W. E. (B'y St. Edm'ds)||Roberts, S. (Sheffield, Ecclesall)|
|Bowles, G. Stewart||Haddock, George B.||Rutherford, W. W. (Liverpool)|
|Bridgeman, W. Clive||Hamilton, Marquess of||Scott, Sir S. (Marylebone, W.)|
|Brotherton, Edward Allen||Hardy, Laurence (Kent, Ashford)||Sheffield, Sir Berkeley George D.|
|Bull, Sir William James||Harrison-Broadley, H. B.||Smith, Abel H. (Hertford, East)|
|Burdett-Coutts, W.||Hill, Sir Clement||Stanier, Beville|
|Campbell, Rt. Hon. J. H. M.||Hills, J. W.||Starkey, John R.|
|Carlile, E. Hildred||Hope, James Fitzalan (Sheffield)||Staveley-Hill, Henry (Staffordshire)|
|Carson, Rt. Hon. Sir Edward H.||Kerry, Earl of||Talbot, Lord E. (Chichester)|
|Castlereagh, Viscount||Lambton, Hon. Frederick Wm.||Valentia, Viscount|
|Cave, George||Lane-Fox, G. R.||Walker, Col. W. H. (Lancashire)|
|Cecil, Evelyn (Aston Manor)||Law, Andrew Bonar (Dulwich)||Walrond, Hon. Lionel|
|Clive, Percy Archer||Lockwood, Rt. Hon. Lt.-Col. A. R.||Warde, Col. C. E. (Kent, Mid)|
|Clyde, J. Avon||Long, Col. Charles W. (Evesham)||Williams, Col. R. (Dorset, W.)|
|Coates, Major E. F. (Lewisham)||Long, Rt. Hon. Walter (Dublin, S.)||Willoughby de Eresby, Lord|
|Craig, Charles Curtis (Antrim, S.)||MacCaw, William J. MacGeagh||Wilson, A. Stanley (York, E.R.)|
|Craik, Sir Henry||Magnus, Sir Philip||Wortley, Rt. Hon. C. B. Stuart-|
|Dalrymple, Viscount||Mason, James F. (Windsor)||TELLERS FOR THE AYES.—Captain Craig and Mr. Remnant.|
|Doughty, Sir George||Mildmay, Francis Bingham|
|Acland, Francis Dyke||Davies, David (Montgomery Co.)||Higham, John Sharp|
|Agar-Robartes, Hon. T. C. R.||Davies, Ellis William (Eifion)||Hobart, Sir Robert|
|Ainsworth, John Stirling||Davies, M. Vaughan- (Cardigan)||Hobhouse, Rt. Hon. Charles E. H.|
|Allen, A. Acland (Christchurch)||Davies, Timothy (Fulham)||Hodge, John|
|Armitage, R.||Davies, Sir W. Howell (Bristol, S.)||Holt, Richard Durning|
|Baring, Godfrey (Isle of Wight)||Dickinson, W. H. (St. Pancras, N.)||Hooper, A. G|
|Barlow, Percy Bedford||Duncan, C. (Barrow-in-Furness)||Horniman, Emslie John|
|Barnard, E, B.||Duncan, J. Hastings (York, Otley)||Howard, Hon. Geoffrey|
|Barry, Redmond J. (Tyrone, N.)||Dunne, Major E. Martin (Walsall)||Hudson, Walter|
|Beauchamp, E.||Elibank, Master of||Illingworth, Percy H.|
|Beck, A. Cecil||Essex, R. W.||Jenkins, J.|
|Bennett, E. N.||Evans, Sir S. T.||Johnson, John (Gateshead)|
|Berridge, T. H. D.||Everett, R. Lacey||Jowett, F. W.|
|Birrell, Rt. Hon. Augustine||Falconer, James||Lamont, Norman|
|Bowerman, C. W.||Ferens, T. R.||Lever, A. Levy (Essex, Harwich)|
|Bramsdon, Sir T. A.||Ferguson, R. C. Munro||Levy, Sir Maurice|
|Brocklehurst, W. B.||Fiennes, Hon. Eustace||Lloyd-George, Rt. Hon. David|
|Brodie, H. C.||Fuller, John Michael F.||Lyell, Charles Henry|
|Brooke, Stopford||Fullerton, Hugh||Macdonald, J. R. (Leicester)|
|Brunner, J. F. L. (Lancs., Leigh)||Gibb, James (Harrow)||Macdonald, J. M. (Falkirk Burghs)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Gill, A. H.||Macpherson, J. T.|
|Bryce, J. Annan||Gladstone, Rt. Hon. Herbert John||M'Laren, H. D. (Stafford, W.)|
|Burns, Rt. Hon. John||Glendinning, R. G.||Maddison, Frederick|
|Burnyeat, W. J. D.||Glover, Thomas||Manfield, Harry (Northants)|
|Byles, William Pollard||Goddard, Sir Daniel Ford||Marks, G. Croydon (Launceston)|
|Carr-Gomm, H. W.||Gooch, George Peabody (Bath)||Marnham, F. J.|
|Causton, Rt. Hon. Richard Knight||Hall, Frederick||Masterman, C. F. G.|
|Cherry, Rt. Hon. R. R.||Harcourt, Rt. Hon. L. (Rossendale)||Menzies, Sir Walter|
|Cleland, J. W.||Harcourt, Robert V. (Montrose)||Middlebrook, William|
|Clough, William||Hardy, George A. (Suffolk)||Mond, A.|
|Clynes, J. R.||Harmsworth, R. L. (Caithness-shire)||Montagu, Hon. E. S.|
|Cobbold, Felix Thornley||Harvey, A. G. C. (Rochdale)||Montgomery, H. G|
|Collins, Stephen (Lambeth)||Harwood, George||Morgan, G. Hay (Cornwall)|
|Compton-Rickett, Sir J.||Haslam, Lewis (Monmouth)||Morrell, Philip|
|Cooper, G. J.||Haworth, Arthur A.||Morse, L. L.|
|Corbett, C. H. (Sussex, E. Grinstead)||Hazel, Dr. A E. W.||Murray, Capt. Hon. A. C. (Kincard.)|
|Cornwall, Sir Edwin A.||Hedges, A. Paget||Newnes, F. (Notts, Bassetlaw)|
|Craig, Herbert J. (Tynemouth)||Helme, Norval Watson||Norman, Sir Henry|
|Crossley, William J.||Henry, Charles S.||Norton, Captain Cecil William|
|Dalziel, Sir James Henry||Herbert, Col. Sir Ivor (Mon. S.)||Nussey, Sir Willans|
|Parkes, Ebenezer||Samuel, S. M. (Whitechapel)||Verney, F. W.|
|Paulton, James Mellor||Scarisbrick, Sir T. T. L.||Walsh, Stephen|
|Pearce, Robert (Staffs, Leek)||Scott, A. H. (Ashton-under-Lyne)||Ward, W. Dudley (Southampton)|
|Philipps, Col. Ivor (Southampton)||Seddon, J.||Wardle, George J.|
|Pointer, J.||Seely, Colonel||Waring, Walter|
|Pollard, Dr. G. H.||Shackleton, David James||Warner, Thomas Courtenay T.|
|Ponsonby, Arthur A. W. H.||Shaw, Sir Charles E. (Stafford)||Wason, Rt. Hon. E. (Clackmannan)|
|Price, Sir Robert J. (Norfolk, E.)||Silcock, Thomas Ball||Wason, John Cathcart (Orkney)|
|Priestley, Sir W. E. B. (Bradford, E.||Simon, John Allsebrook||Waterlow, D. S.|
|Raphael, Herbert H.||Soames, Arthur Wellesley||Wedgwood, Josiah C.|
|Rea, Rt. Hon. Russell (Gloucester)||Spicer, Sir Albert||White, Sir George (Norfolk)|
|Rea, Walter Russell (Scarborough)||Stanger, H. Y.||White, J. Dundas (Dumbartonshire)|
|Rendall, Athelstan||Stanley, Hon. A. Lyulph (Cheshire)||White, Sir Luke (York, E.R.)|
|Richardson, A.||Strachey, Sir Edward||Whitley, John Henry (Halifax)|
|Ridsdale, E. A.||Straus, B. S. (Mile End)||Wilkie, Alexander|
|Roberts, Charles H. (Lincoln)||Strauss, E. A. (Abingdon)||Williams, W. Llewelyn (Carmarthen)|
|Roberts, G. H. (Norwich)||Summerbell, T.||Wilson, Hon. G. G. (Hull, W.)|
|Robertson, Sir G. Scott (Bradford)||Taylor, John W. (Durham)||Wilson, P. W. (St. Pancras, S.)|
|Robinson, S||Tennant, H. J. (Berwickshire)||Wilson, W. T. (Westhoughton)|
|Robson, Sir William Snowdon||Thomas, Abel (Carmarthen, E.)||Wood, T. M'Kinnon|
|Roch, Waiter F. (Pembroke)||Thomas, Sir A. (Glamorgan, E.)|
|Rogers, P. E. Newman||Thompson, J. W. H. (Somerset, E.)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Rose, Sir Charles Day||Tomkinson, James|
|Rutherford, V. H. (Brentford)||Trevelyan, Charles Philips|
§ Lord WILLOUGHBY de ERESBY moved to insert, after the words "of a permanent character, executed," the words "or expenditure made."
§ It is difficult to resume one's speech after incursions into matters connected with fencing and draining, but I will proceed with the case I was quoting. It will suffice to say that there was a land-owner who spent thousands of pounds in trying to improve his estate. He considered that there were three ways of doing it—building a town, planting a forest, and sinking a coal-mine. All these things turned out ghastly failures, and he lost thousands of pounds. What happened? A few years afterwards at the bottom of the shaft which was sunk in order to find coal there was discovered a valuable spring of water. The result is that this is bound to become one of the best spots for curing gout and rheumatism in the whole world. The effect on the neighbourhood has been very striking. Owing to the fact of the water being found at the bottom of the shaft all the land round this hole has become extraordinarily valuable. Before the water was discovered the land in the vicinity could have been bought, I suppose, for from £2 to £5 an acre—at any rate, for a very low price—but at this moment it is worth £200 or £300 an acre. My contention is that the present owner should not be compelled to pay an Increment Duty on that piece of land, because the value of the land has not gone up owing to the exertions of the community, the enterprise of the State, or anything of that sort, but entirely owing to the money which was spent by his predecessor. If ever there was a case where the expenditure which had been made should be deducted it is, I submit, a case of that cort. After all, 1362 the Committee should remember that if money expended in this way is not to be allowed for, the effect in the end will inevitably be to put a stop to many improvements. I confess that I fancy the man who did plan the improvements was a little queer in the head, but I may remind the Committee that if people were always wise a good many of the improvements which have taken place would never have been effected. Some of the greatest improvements and inventions for the benefit of mankind have been found out by cranks. I will give another case which, I think, will equally illustrate the point I desire the Committee to consider. Take the case of a man—he may be a crank perhaps—who comes to Parliament to ask for a Bill to construct a light railway or tramway to some spot on the coast. He applies to Parliament for authority to spend a great deal of money in trying to promote the construction of that railway in order to develop his land by the sea which he thinks would be a nice site for a fashionable and flourishing resort. Supposing that his Bill is not successful, it is quite possible that five or six years afterwards, owing to the exertions he has made, some man sharper than himself, who knows better how to conduct such matters through Parliament and make other arrangements, may manage to get a Bill passed. Then this second man constructs a railway, and the fashionable seaside resort which the pioneer had in mind becomes an actual fact. According to the Bill the man who first found the money for promoting the railway scheme would get absolutely nothing deducted when his land was developed for building purposes, but the other man, who, following in his footsteps, and profiting perhaps 1363 by his mistakes, was more successful, would get the whole of the money he had spent deducted. I have often heard it said that many useful Acts of Parliament passed by different Governments have been founded on the follies and mistakes of private Members who have introduced Bills in the House of Commons. Those men who are pioneers, and who try to promote the interests and the prosperity of the country by promoting railways and such matters, although they may not be successful, ought to be given some consideration, because other men may step into their shoes and reap the benefit of their efforts.
§ Mr. LLOYD-GEORGE
The Noble Lord who has just sat down has made not merely a very entertaining speech, but a very admirable speech. The only fault was that it has nothing whatever to do with the Amendment. The Noble Lord gave a very amusing account of an enterprising but rather eccentric friend of his, who has been spending a good deal of money upon one rather insane operation, and then improving upon that by doing something which was still more absurd, and at last stumbled into a hole which made his fortune. But that has nothing whatever to do with agricultural land. The question is one purely of improvements which are referable to improving agricultural quality. I do not think it would be suggested that the buildings referred to, or the digging of the hole, improved the agricultural quality. We are dialing with improvements purely of an agricultural character, and all this is irrelevant. All the things of which the Noble Lord has spoken are referable to works of a different character and not dealing with agriculture. I am afraid I cannot accept the Amendment.
§ Mr. F. B. MILDMAY
I wish to ask the right hon. Gentleman a question on this point. I believe the late Duke of Sutherland spent something like a million of money in trying to reclaim certain parts of waste land in Scotland for the purpose of creating on that land small farms. I wish to ask the right hon. Gentleman whether in his opinion such action as that could be set off against increment?
§ Mr. LLOYD-GEORGE
Certainly; reclamation of land would come in. The work would be referable to agricultural land.
§ Mr. WATSON RUTHERFORD
The Chancellor of the Exchequer has thought fit to make a special exception in favour of agricultural land with regard to the portion of the value which is proved to be attributable to works of a permanent character. I think it is perfectly obvious that an owner of agricultural land might increase the value of it, not merely by permanent works actually in the land, but by permanent expenditure in the shape, for instance, of such a thing as constructing a light railway. There are a number of things upon which expenditure might be incurred which would very vastly improve the value of agricultural land, but which would not necessarily be works of a permanent character in the land. I wish the right hon. Gentleman could see his way to accept the word "expenditure." I do not see he would be doing his clause any great harm, and it would give considerable satisfaction to a very large number of Members on this side of the House who fail entirely to see the need of making a distinction between works of a permanent character and works which may not be of a permanent character, but upon which money is laid down, bonâ fude, with the intention of improving the value of agricultural land. Why should not those who make such expenditure have the benefit of if? The Committee have been led over and over again by the Chancellor to believe that in all cases where the owner has actually laid out his money he is entitled to have the increment himself, and that the State is not going to take any portion of it. If I understand this Amendment aright, it is strictly within the meaning of the Bill, and I cannot see why, in a simple thing of this kind, the Chancellor should refuse to allow a man to have the benefit of his own expenditure upon his own land.
§ Mr. JOHN GORDON
It seems to me that this raises very much the same question as that suggested this evening by my right hon. Friend the Member for the University of Dublin (Sir E. Carson). You are dealing here with something which is to be deducted from that which you are to treat as increment. The idea of the Government, and which seems to have received a good deal of acceptance from Members sitting behind the Government, is that nothing should be charged against the owner as increment which is due to his own expenditure or improvement. What is sought here is to fix the deductions that are to be made from the in- 1365 creased price. Sub-section (2) says that "the site value of the land on the occasion on which increment value duty becomes due, shall be taken to be—(a) where the occasion is a transfer on sale of the fee simple of the land, the value of the consideration for the transfer." Take the case of a man who owns his land (which he farms) in fee simple, and that he sells. The consideration which he receives for that includes not only the fee simple value but also a price for the improvements he has made. It includes not only the permanent works but also any expenditure which has increased the value of the land. Therefore, if the right hon. Gentleman is sincere in saying that he does not want to treat as part of the increment anything which is due to a proper expenditure by the owner of the property himself, then I think he has no alternative but to accept the words of the Amendment or substitute some other words which will carry out the same object. If you take merely works
§ of a permanent character, you may exclude altogether what has added largely to the purchase price paid for the holding. The words sought to be inserted by the Noble Lord will not in any way cause the Commissioners to deduct anything which does not add to the value of the holding, and which, therefore, does not increase the purchase price for which the deduction is to be made. I would therefore suggest that if the Chancellor of the Exchequer cannot accept the Amendment in this particular form, he should accept other words which would carry out the desire not only of Members on this side, but of a very large number of Members on the other side.
§ Question put, that after the words "works of a permanent character executed," the words "or expenditure made" be there inserted.
§ The Committee divided: Ayes, 80; Noes, 204.1367
|Division No. 258.]||AYES.||[2.35 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Douglas, Rt. Hon. A. Akers-||Nicholson, Wm. G. (Petersfield)|
|Arkwright, John Stanhope||Faber, George Denison (York)||Peel, Hon. W. R. W.|
|Ashley, W. W.||Faber, Capt. W. V. (Hants, W.)||Percy. Earl|
|Balcarres, Lord||Forster, Henry William||Pretyman, E. G.|
|Baldwin, Stanley||Gordon, J.||Randles, Sir John Scurrah|
|Banner, John S. Harmood-||Goulding, Edward Alfred||Ratcliff, Major R. F.|
|Baring, Capt. Hon. G. (Winchester)||Guinness, Hon. R. (Haggerston)||Remnant, James Farquharson|
|Barrie, H. T. (Londonderry, N.)||Guinness, Hon. W. E. (B'y St. Edm'ds)||Renton, Leslie|
|Beckett, Hon. Gervase||Haddock, George B.||Roberts, S. (Sheffield, Ecclesall)|
|Bignold, Sir Arthur||Hamilton, Marquess of||Rutherford, Watson (Liverpool)|
|Bowles, G. Stewart||Hardy, Laurence (Kent, Ashford)||Scott, Sir S. (Marylebone, W.)|
|Bridgeman, W. Clive||Harrison-Broadley, H. B.||Sheffield, Sir Berkeley George D.|
|Brotherton, Edward Allen||Hills, J. W.||Smith, Abel H. (Hertford, East)|
|Burdett-Coutts, W.||Hope, James Fitzalan (Sheffield)||Stanier, Beville|
|Campbell, Rt. Hon. J. H. M.||Kerry, Earl of||Starkey, John R.|
|Carlile, E. Hildred||Lambton, Hon. Frederick William||Staveley-Hill, Henry (Staffordshire)|
|Carson, Rt. Hon. Sir Edward H.||Lane-Fox, G. R.||Talbot, Lord E. (Chichester)|
|Castlereagh, Viscount||Law, Andrew Bonar (Dulwich)||Valentia, Viscount|
|Cave, George||Lockwood, Rt. Hon. Lt.-Col. A. R.||Walker, Col. W. H. (Lancashire)|
|Cecil, Evelyn (Aston Manor)||Long, Col. Charles W. (Evesham)||Walrond, Hon. Lionel|
|Clive, Percy Archer||Long, Rt. Hon. Walter (Dublin, S.)||Warde, Col. C. E. (Kent, Mid)|
|Clyde, J. Avon||MacCaw, William J. MacGeagh||Williams, Col. R. (Dorset, W.)|
|Coates, Major E. F. (Lewisham)||Magnus, Sir Philip||Wilson, A. Stanley (York, E.R.)|
|Craig, Charles Curtis (Antrim, S.)||Mason, James F. (Windsor)||Wortley, Rt. Hon. C. B. Stuart-|
|Craig, Captain James (Down, E.)||Mildmay, Francis Bingham|
|Craik, Sir Henry||Morpeth, Viscount||TELLERS FOR THE AYES.—Lord|
|Dalrymple, Viscount||Morrison-Bell, Captain||Willoughby de Eresby and Sir|
|Doughty, Sir George||Newdegate, F. A.||William Bull.|
|Acland, Francis Dyke||Brodie, H. C.||Cooper, G. J.|
|Agar-Robartes, Hon. T. C. R.||Brooke, Stopford||Corbett, C. H. (Sussex, E. Grinstead)|
|Ainsworth, John Stirling||Brunner, J. F. L. (Lancs., Leigh)||Cornwall, Sir Edwin A.|
|Allen, A. Acland (Christchurch)||Brunner, Rt. Hon. Sir J. T. (Cheshire)||Craig, Herbert J. (Tynemouth)|
|Armitage, R.||Bryce, J. Annan||Crossley, William J.|
|Baring, Godfrey (Isle of Wight)||Burns, Rt. Hon. John||Dalziel, Sir James Henry|
|Barlow, Percy (Bedford)||Burnyeat, W. J. D.||Davies, David (Montgomery Co.)|
|Barnard, E. B.||Carr-Gomm, H. W.||Davies, Ellis William (Eifion)|
|Barry, Redmond J. (Tyrone, N.)||Causton, Rt. Hon. Richard Knight||Davies, Timothy (Fulham)|
|Beauchamp, E.||Cherry, Rt. Hon. R. R.||Davies, Sir W. Howell (Bristol, S.)|
|Beck, A. Cecil||Clancy, John Joseph||Dickinson, W. H. (St. Pancras, N.)|
|Bennett, E. N.||Cleland, J. W.||Dillon, John|
|Berridge, T. H. D.||Clough, William||Duncan, C. (Barrow-in-Furness)|
|Birrell, Rt. Hon. Augustine||Clynes, J. R.||Duncan, J. Hastings (York, Otley)|
|Bowerman, C. W.||Cobbold, Felix Thornley||Dunne, Major E. Martin (Walsall)|
|Bramsdon, Sir T. A.||Collins, Stephen (Lambeth)||Elibank, Master of|
|Brocklehurst, W. B.||Compton-Rickett, Sir J.||Essex, R. W.|
|Evans, Sir S. T.||Macdonald, J. R. (Leicester)||Rose, Sir Charles Day|
|Everett, R. Lacey||Macdonald, J. M. (Falkirk Burghs)||Rutherford, V. H. (Brentford)|
|Falconer, J.||Macpherson, J. T||Samuel, S. M. (Whitechapel)|
|Ferens, T. R||MacVeagh, Jeremiah (Down, S.)||Scarisbrick, Sir T. T. L.|
|Ferguson, R. C. Munro||MacVeigh, Charles (Donegal, E.)||Seddon, J.|
|Fiennes, Hon. Eustace||M'Laren, H. D. (Stafford, W.)||Seely, Colonel|
|Flynn, James Christopher||Maddison, Frederick||Shackleton, David James|
|Fuller, John Michael F.||Manfield, Harry (Northants)||Shaw, Sir Charles E. (Stafford)|
|Fullerton, Hugh||Marks, G. Croydon (Launceston)||Silcock, Thomas Ball|
|Gibb, James (Harrow)||Marnham, F. J.||Simon, John Allsebrook|
|Gill, A. H.||Masterman, C. F. G.||Smyth, Thomas F. (Leitrim, S.)|
|Gladstone, Rt. Hon. Herbert John||Meehan, Francis E. (Leitrim, N.)||Soames, Arthur Wellesley|
|Glendinning, R. G||Menzies, Sir Walter||Spicer, Sir Albert|
|Glover, Thomas||Middlebrook, William||Stanger, H. Y.|
|Gooch, George Peabody (Bath)||Mond, A.||Stanley, Hon. A. Lyulph (Cheshire)|
|Gwynn, Stephen Lucius||Montgomery, H. G.||Strachey, Sir Edward|
|Hall, Frederick||Morgan, G. Hay (Cornwall)||Straus, B. S. (Mile End)|
|Harcourt, Rt. Hon. L. (Rossendale)||Morrell, Philip||Strauss, E. A. (Abingdon)|
|Harcourt, Robert V. (Montrose)||Morse, L. L.||Summerbell, T.|
|Hardy, George A. (Suffolk)||Murray, Capt. Hon. A. C. (Kincard.)||Taylor, John W. (Durham)|
|Harmsworth, R. L. (Caithness-shire)||Newnes, F. (Notts, Bassetlaw)||Tennant, Sir Edward (Salisbury)|
|Harvey, A. G. C. (Rochdale)||Nolan, Joseph||Tennant, H. J. (Berwickshire)|
|Harwood, George||Norton, Captain Cecil William||Thomas, Abel (Carmarthen, E.)|
|Haslam, James (Derbyshire)||Nussey, Sir Willans||Thomas, Sir A. (Glamorgan, E.)|
|Haworth, Arthur A.||O'Brien, K. (Tipperary, Mid)||Thompson, J. W. H. (Somerset, E.)|
|Hazel, Dr. A. E. W.||O'Brien, Patrick (Kilkenny)||Tomkinson, James|
|Hazleton, Richard||O'Connor, John (Kildare, N.)||Trevelyan, Charles Philips|
|Hedges, A. Paget||O'Doherty, Philip||Verney, F. W.|
|Helme, Norval Watson||O'Kelly, Conor (Mayo, N.)||Walsh, Stephen|
|Henry, Charles S.||Parker, James (Halifax)||Ward, W. Dudley (Southampton)|
|Herbert, Col. Sir Ivor (Mon. S.)||Paulton, James Mellor||Wardle, George J.|
|Higham, John Sharp||Pearce, Robert (Staffs, Leek)||Waring, Walter|
|Hobart, Sir Robert||Philipps, Col. Ivor (Southampton)||Warner, Thomas Courtenay T.|
|Hobhouse, Rt. Hon. Charles E. H.||Pointer, J.||Wason, Rt. Hon. E. (Clackmannan)|
|Hodge, John||Pollard, Dr. G. H.||Wason, John Cathcart (Orkney)|
|Hogan, Michael||Ponsonby, Arthur A. W. H.||Waterlow, D. S.|
|Holt, Richard Durning||Power, Patrick Joseph||Wedgwood, Josiah C.|
|Hooper, A. G.||Price, Sir Robert J. (Norfolk, E.)||White, Sir George (Norfolk)|
|Horniman, Emslie John||Priestley, Sir W. E. B. (Bradford, E.)||White, J. Dundas (Dumbartonshire)|
|Howard, Hon. Geoffrey||Raphael, Herbert H.||White, Sir Luke (York, E.R.)|
|Hudson, Walter||Rea, Rt. Hon. Russell (Gloucester)||Whitley, John Henry (Halifax)|
|Illingworth, Percy H.||Rea, Walter Russell (Scarborough)||Wilkie, Alexander|
|Jenkins, J.||Rendall, Athelstan||Williams, W. Llewelyn (Carmarthen)|
|Johnson, John (Gateshead)||Richardson, A.||Wilson, Hon. G. G. (Hull, W.)|
|Jowett, F. W.||Ridsdale, E. A.||Wilson, P. W. (St. Pancras, S.)|
|Lamont, Norman||Roberts, Charles H. (Lincoln)||Wilson, W. T. (Westhoughton)|
|Law, Hugh A. (Donegal, W.)||Roberts, G. H. (Norwich)||Wood, T. M'Kinnon|
|Lever, A. Levy (Essex, Harwich)||Robertson, Sir G. Scott (Bradford)|
|Levy, Sir Maurice||Robinson, S.|
|Lloyd-George, Rt. Hon. David||Robson, Sir William Snowdon||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Lundon, T||Roch, Walter F. (Pembroke)|
|Lyell, Charles Henry||Rogers, F. E. Newman|
Question, "That the sub-section proposed be there inserted," put, and agreed to.
§ Mr. LLOYD-GEORGE moved, to insert after the word "executed" ["attributable to works of a permanent character, executed by or on behalf of any person interested in the land"], the words "after the 30th day of April, 1909."The object of this Amendment is to test the opinion of the Committee as to whether they prefer the deductions made in the form in which they appear here or whether they desire a definite percentage.
§ Mr. WATSON RUTHERFORD
On a point of order, Mr. Emmott. Do I understand that all other Amendments occurring on the Paper before this one being moved by the Chancellor of the Exchequer are ruled out of order?
§ Mr. WATSON RUTHERFORD
May I respectfully submit, Mr. Emmott, that we 1368 had finished the word "character," and all the Amendments which we have been considering for the last hour, whilst Mr. Caldwell was in the chair, were to come in after the word "character."
§ Mr. LLOYD-GEORGE
There are two ways of treating agricultural land. One is to make the deduction proportionate to the amount of improvement on the land; the other is to fix a definite percentage. As I pointed out earlier in the Debate, the percentage in the first case will fluctuate according to the value of the improvement on the land, whereas if you fix a definite percentage it will simplify the matter, and in addition to that agriculturists will know exactly what the deduction is, and it will obviate the necessity of a valuation of improvements. The proposed Amendment 1369 will have the effect of confining the improvements to after the date mentioned. I intend later to move that there shall be an addition of 50 per cent. to the value of agricultural land before the Increment Tax is levied.
§ Question proposed, "That the words proposed ["after the 30th day of April, 1909"] be there inserted."
§ Mr. PRETYMAN
This is really repudiating what has already been before the Committee. I have made it clear that the Amendment will, in the case of the poorest agricultural land—which most needs the protection of the Committee—amount to no concession at all, and there will be no deduction whatever, or in most cases the deduction will be so small as to be perfectly negligible. In regard to a very large proportion of the agricultural land in this country, the capital value is so low in proportion to the buildings and other improvements, of which the land is being divested, that after the land has been divested, what is left—what is called original site value—is little or nothing. That is the point. The proposal which the right hon. Gentleman has made shows that he does not appreciate that what I have indicated is all the allowance these people are going to get. If there is afterwards a rise in the value of the land the whole of that recovery will become the increment under the Bill with the exception of the 10 per cent., and all these people will get deducted is 50 per cent. of the original site value, which is so low that the deduction amounts to nothing at all. Therefore we cannot accept this Amendment. Really, I do think that the right hon. Gentleman is not treating agriculture fairly. We want a straight and fair deal, and I would like to ask on what possible hypothesis do the right hon. Gentleman and his colleagues say they do not desire to tax agricultural land at all? The right hon. Gentleman has repeated over and over again to the Committee that he does not desire, and that he will not, under the Bill, in any form, tax any increment value on agricultural land which is due to recovery. I have shown quite clearly that if this provision of his is given effect, whatever percentage he gives, in many cases it cannot amount to anything at all, and therefore there will be under this Bill a heavy Increment Value Duty, which will be paid by agricultural land upon its natural recovery. 1370 The right hon. Gentleman shakes his head, but it is so.
§ Mr. PRETYMAN
I have proved it over and over again. Does the right hon. Gentleman, and do hon. Gentlemen opposite, deny that there is any large area of agricultural land where the site value, calculated under the terms of Clause 14 of this Bill, will not amount to such a low figure as to practically amount to nothing? Is that denied?
§ Mr. PRETYMAN
I hope the agricultural interest understands that it is denied by the Chancellor of the Exchequer. This is the measure of the knowledge of the agricultural interest if this country in which the Government proceed to legislate for agricultural land. The Chancellor of the Exchequer denies to the Committee—and I wish this fact placed on record—that there is a large proportion of agricultural land in this country of which the site value, calculated under this Bill, will amount to a very low figure. If that is so, I have no more to say. Let the Chancellor of the Exchequer legislate in that hypothesis and he is going to do a grave, gross injustice, and, as representing an agricultural constituency, I tell him so. I tell every hon. Member who represents an agricultural constituency that they are going to vote for a gross injustice to agriculture. [Interruption.] I say so, and let them settle it with their constituents who do know something about it—those who have a farm and have to cultivate and live upon this poor land, and who find it very difficult to live. The poorer the land the less will be the relief, for the less the site value the less the percentage. To the poorest land there will be no relief at all. I hope the Chancellor of the Exchequer understanding that will see what he is really doing, and that the country will understand the issue put before them.
§ Mr. JOHN DILLON
I confess I do not even yet understand what is the proposal of the Chancellor of the Exchequer. I am still in the dark as to whether he is offering us an alternative or a concession in addition to that already made. If it be an alternative, I am afraid that neither in this country nor in Ireland especially, will the concession, which I fully recognise to be a substantial one, be sufficient to safeguard agricultural land from the incidence of this taxation. I think the Government are making a great mistake if they do not 1371 reconsider their position in this regard. I forgot when speaking before to recognise one hint or promise which the Chancellor of the Exchequer threw out. He said that the case of the small owner was one that had to be considered separately. I gather that it will have to be dealt with from an entirely different point of view. That would go a substantial way towards meeting us. But even admitting that the right hon. Gentleman does meet the case of the small owner, I think the concession of 50 per cent. does not meet the case if the Government do not intend that this taxation should apply to agricultural land or to its purely agricultural value. There is one question which is being considered from a wrong point of view. The Chancellor of the Exchequer admitted that he did contemplate taxing agricultural land on its agricultural value when that value increased owing to proximity to towns or the spread of population. That is a very serious mistake. The question of proximity to towns is one which has been made exceedingly familiar to us in Ireland, where public valuations have gone on for many years. Let me point out that all agricultural value depends upon proximity to markets and that it is a question of degree. What value is there in a farm except in so far that its produce can reach a market? If you had a farm in the Sahara Desert what would be its value? If you are 100 miles away from a market your proximity to London or any other great market is what constitutes the value of the farm. If 50 miles away, it is better; if 20 miles away, better still, and so on. The right hon. Gentleman talked of land being worth £10 an acre in the vicinity of small towns. I would ask him has he inquired into the case of the Aylesbury Dairy Company? Does he intend to apply this principle to dairy farms 100 miles away from London, whose value depends upon the abundance of a cheap supply of milk to this country? For all practical purposes they are land within the immediate vicinity of London. Are they to be taxed under this Bill because they take thi3 value for the community] If London and Manchester were not here, these great dairy farms would not have any value. If you are going to apply this doctrine of the increased value throughout the existence of towns, I say the general increase in the population in England tends to increase the value of all farms.
§ Mr. DILLON
But are you prepared to say that? Remember that is not what the Government have been saying. I know very well there is a group of hon. Gentlemen on those benches [pointing to the Ministerial side below the Gangway] who want to tax all agricultural farms. But that is not the policy of the Government. What we have understood all along, and what the Government have said, is that they did not intend to tax agricultural land under this Bill. Even in these Debates we have been given to understand, putting it at the lowest, that at all events a broad distinction was going to be drawn between agricultural land and building land. I certainly would not vote against this Amendment, which is a concession, and is meant to lead up to a larger concession. I go so far as to say that I do not see how anybody who wants to safeguard agricultural land could vote against the Amendment, but, at the same time, I do not think it is sufficient to deal with the exemption of agricultural land from the tax. And this being a reform admittedly intended to get at the site value of building land, the Government ought, in their own interests, to clear themselves altogether from what may possibly prove a most injurious suspicion, namely, that they are going by the Bill to tax the agricultural land of the country.
§ Mr. J. TOMKINSON
I understand the view of the Chancellor of the Exchequer is that if the concession is accepted now he can proceed to bring in an Amendment clearly and absolutely exempting from the Increment Tax any increase in the value of land due to good husbandry or improvements in agriculture. The position appears to be that he cannot bring that forward until this Amendment is out of the way. I am therefore content with what he has said, and am prepared to await the bringing in of that Amendment. I hope it will be made absolutely clear that all the increase of value in agricultural land due to good husbandry or to other causes, as distinct from increase of population, commercial development, or proximity to towns, will be duly exempted.
§ Captain CLIVE
I think the intention of the Chancellor of the Exchequer is something more than the hon. Member who has just spoken seemed to assume. The right hon. Gentleman's intention surely is not merely to relieve agricultural land of any tax on the increment due to good hus- 1373 bandry, but to relieve it of paying duty on any return to the park value which it used to enjoy. The Chancellor of the Exchequer has constantly reiterated his sympathy with those who have money invested in agricultural land, and they are to understand, I believe, that this Amendment is intended to carry into effect his expression of sympathy. It appears that the Chancellor of the Exchequer bases his proposal on the idea, which is very often accepted, that agricultural land has decreased in value by 50 per cent. since the best days. I do not know if the Chancellor of the Exchequer proposes not to put this tax on agricultural land until it returns to its original value, taking it on the basis of a decrement of 50 per cent., but if he does I would point out that he cannot carry out that intention by the proposal he has made, because if, for instance, land worth £100 in the best days has decreased 50 per cent. in value, that brings it down to £50, and an increment of 50 per cent. in value would not bring it back to its original high price, but would bring it back only £25 towards that figure. Therefore to bring the land back to the original high value, you want to allow for a 100 per cent. and not a 50 per cent. increase. Then there is the further point that the decrease in the value of agricultural land is not merely a decrease in the bare site value of the land. When you talk of agricultural land having decreased 50 per cent. in value it means that land, buildings, and everything connected with the land, have gone down. Therefore a percentage would have to be calculated, not only on bare site value, but, if it is to be in any way fair, it must be calculated on the full value, including the buildings. As the hon. Member for Chelmsford (Mr. Pretyman) has pointed out, the suggested basis is one that could hardly be acceptable to agriculturists, and it would not carry out the oft-repeated intention of the Chancellor of the Exchequer to exempt agricultural land from the operation of the tax.
§ Mr. LANE-FOX
We listened with interest to the hon. Gentleman the Member for Crewe (Mr. Tomkinson) when he said, earlier in the Debate, that in many cases the original site value of a farm must not be more than, or even equal to, the value of the buildings. Perhaps that assurance, coming from one of his own supporters, will be accepted by the Chancellor of the Exchequer. The hon Member, when he had absolutely corroborated everything which had been said on the point from this side of the House, 1374 went on to mention a case, when he was acting as an Ecclesiastical Commissioner, of a glebe farm let at a singularly low rent. That gave us a very apt illustration of the value of agricultural land at the present time.
§ Mr. TOMKINSON
I am afraid that unintentionally I must have misled the Committee in the statement I made. The glebe farm to which I alluded had nothing whatever to do with the Ecclesiastical Commissioners, and I should like that to be fully understood by the Committee. It was a private concern, and the Ecclesiastical Commissioners were not interested in the renting of the farm.
§ Mr. LANE-FOX
I can assure the hon. Gentleman that I had not the faintest notion of attacking his moral character, which everybody will agree, stands far above reproach. I should be the very last person to put forward any suggestion against the personal honour of the hon. Gentleman, and I hope that he will accept this full disclaimer which I make. The hon. Gentleman will not deny, however, that he corroborated the statement which we have made, that in a great many instances the original site value of the farm will not be greater than the value of the buildings upon it. I will not make them uncomfortable by alluding to them personally, but I may remind the Committee that several other hon. Gentlemen on the Ministerial side have also corroborated that statement, and if the Chancellor of the Exchequer does not accept what we say on the point, then he can appeal to agricultural opinion on his own side of the House.
It is because we feel and we know that that is the case that we view this so-called concession of the Chancellor as utterly inadequate. It is perfectly impossible to make an all-round scale of this sort which would be fair to all classes of agricultural land throughout the country. It is true it might be fair where the land is of a certain value, but in other cases it cannot be so and would be absolutely inadequate. That is why hon. Members on this side of the House cannot accept it.
§ Mr. W. CLIVE BRIDGEMAN
I feel the same difficulty as other hon. Members in knowing exactly what this concession means. It seems to me to be doubtful whether this concession would give to owners of agricultural land as much as they would get if the Clause stood as at present. I have never heard a clear answer to the question asked by the hon. 1375 Member for Mayo, as to whether this 50 per cent. is to be in substitution of, or in addition to, the deductions in the earlier part of this paragraph. Did I understand the Chancellor to indicate that it was in substitution?
§ Mr. LLOYD-GEORGE
Except in so far as the improvements are effected after the date of the completion of the site value.
§ Mr. BRIDGEMAN
That practically means the substitution. Earlier in the Debate, when the same hon. Member asked the same question, I think the Attorney-General gave him to understand that it was in addition, and he certainly gave me that impression. I fully believe that it is the desire of the Chancellor to do justice to agricultural land; to exempt it as far as possible from this Increment Duty. But I do wish he had been able to give some consideration to the proposal which came from the hon. Member for Paddington, that he should follow the same course in regard to this clause as is followed in Clause 2, and should say that no land under a certain capital value per acre should be charged with Increment Duty at all. I think the hon. Member for Paddington mentioned £100 as the value which would certainly exclude the large majority of agricultural land and would include all building site3. That seems to me the rough and ready way of doing justice, and making it clear what the intention of the Government really is. I do not think the suggestion which the hon. Member for Paddington made was sufficiently considered by the right hon. Gentleman. I certainly think, from the reception of the hon. Member's speech, that his proposal would have received a great deal of support from hon. Members on both sides of the House. I do not know if it is too late to ask the Chancellor of the Exchequer to consider that once more. I believe he would satisfy a large number of Members if he could allow that proposition to pass.
Mr. G. D. FABER (York)
This is really rather a serious matter. What I had hoped was that the Government would have allowed, at any rate, the alternative, and that they were not going to force this down our throats. The more one looks into this matter the clearer it becomes that what is in the clause as it stands is much more beneficial to the holders of agricultural land than is this delusive gift of 1376 the Chancellor of the Exchequer. I think the hon. Member for Mayo was somewhat misled by what had occurred earlier in the Debate. He thought that both the alternatives were to be introduced into the clause. I do not know whether he thought that both those advantages would be open to the holder of agricultural land, and that they could take their choice. It seems now that instead of the advantage which is in the Bill we are going to be presented with this Amendment. For my own part, after having had great experience in agricultural matters for many years past, I should be very slow indeed to accept the alternative presented to us, so I have no hesitation in voting against the Amendment.
§ Mr. WALTER LONG
Before we go to a Division I should like to ask the Chancellor of the Exchequer if he could explain exactly what is the position in which the Committee is now placed. I do not know for what reasons the Chancellor has made the proposal we are now considering—whether it is with the object of meeting criticisms from this side of the House or with the object of presenting a sort of viâ media which should meet with general acceptance from critics on both sides. For my part I prefer the words in the Bill to the Amendment. I object to this Amendment because I do not believe it is possible to adopt any formula such as is expressed in the Amendment which is applicable to the very varying conditions of agriculture throughout the country. Therefore I prefer the language of the Bill, which is vaguer and more likely to be fairer. I object to both. I regard this as a palliative offered to the outraged feelings of the hon. Member for Crewe and others, who have urged their objections in the course of the Debate, and an effort to find some solution in this Amendment. It is not for me to interfere between those Members and the Government, and if the Amendment is persisted in I shall not give a vote one side or the other, although I prefer the Bill. I think the Bill is dangerous, but I cannot regard the Amendment as any improvement. I fail to see that it is in any way a concession to those who urge that, by the Bill as it stands, you are doing the greatest injustice to the agricultural industry. That injustice will not be minimised by the Amendment.
§ Mr. LLOYD-GEORGE
I am sincerely desirous of meeting the case of agricultural land, and I put this forward in all sincerity as an attempt, at any rate, to make a 1377 really substantial concession. I would very earnestly press upon the agricultural community the desirability of accepting this method and this principle. If the Committee accept these words at this stage it does not commit them to the percentage. It commits them to the principle of percentage as a more definite and clear method of doing things. I do not press the Committee now to accept the 40 per cent. The words will come at the end of Clause 2, so that the agricultural community will have an opportunity of discussing them before we come to them again. At the same time the words would commit the Committee to the principle of percentage, but it would not preclude them from raising an Amendment to deal with cases, alleged to exist in large numbers by the hon. and gallant Member, so low that a percentage would amount to nothing. I say it is infinitely better, in the interests of the agricultural community, that they should accept a definite and a clear percentage to avoid all this doubt as to what the real value is. I agree that in some cases it might be very much higher, and in other cases it would be very much lower. All I invite the Committee to do at the present moment is to commit itself rather to the deduction in the form of percentage, and to leave the percentage to be discussed later on.
§ Mr. JOHN DILLON
I really find difficulty in knowing exactly where we stand. Would the effect of this Amendment be that when you are determining the original site value you deduct all works of a permanent character on the holding, but that when you are proceeding to value the holding for the purpose of increment you are not to deduct any works of a permanent character made before the 30th April this year? If that be the meaning of the Amendment, I am afraid that hon Members above the Gangway are quite right, and in many cases it would not be a concession at all, because there cannot be the slightest doubt that there are many farms in Ireland where the works of a permanent character are of far greater value than the value of the farms due to those works. Therefore, the Bill, if unaltered, would lead in these cases to deductions of a good deal more than 50 per cent. In a very large number of cases, therefore this would be no concession at all, though in other cases it might be a concession. This is a very complicated matter, and there ought to be further time to consider the question. It only makes me more deeply regret that the 1378 right hon. Gentleman could not see his way to accept some Amendment to clear out of his path all questions of taxing agriculturists.
§ Lord WILLOUGHBY de ERESBY
I think we are now faced with one of the difficulties which arise when you come to deal with agricultural land that, when you have classes of agricultural land so entirely different and introduce a system of percentages and deductions, you give greatest relief to the good land, which has not suffered from agricultural depression, whereas the bad or moderately bad land, where there has been agricultural depression, gets the least relief. The fact is clear that there is a large amount of land—I know hundreds of thousands of acres in the county in which I live—which in the seventies was good wheat-growing land, worth fully £1 or 25s. an acre annual value. At the present moment it is worth perhaps 4s. or 5s. an acre, and during the last 20 or 30 years, though not this year, it has not paid to plough and grow wheat on. That land has upon it a certain number of structures and permanent improvements which would be deducted for site value. We will take that land as let for 5s. an acre. At 20 years' purchase that would come out at £5 capital value. The site value, after deducting buildings, is worth, say, £4 an acre. If that land goes up in value from £4 to £6 you are going to allow a deduction of £2. It is a certainty that if wheat keeps its present price, or even falls 5s. or 6s., a large amount of that land, instead of being worth £4 or £5 per acre to buy, will be worth £15 or £20. On that very bad land you are going to charge a very heavy increment. Now take the case of the best class of land which is let at £3 or £4 an acre, and where there has never been any agricultural depression.
I know land of this description which always fetches £3 an acre rental and can always be bought and sold at from £60 to £80 an acre. You are going to allow for a rise of £30 or £40 an acre before you charge Increment Duty. In the other case you are only going to allow for a rise of £2 before taking Increment Duty. Though I should be sorry to say one word against any of the right hon. Gentlemen or hon. Gentlemen on the Front Bench below me, I believe exactly the same mistake was made over the Agricultural Rates Act. We are going to make the mistake again. If you had gone to the assessment and taken a general average of 10s. an acre, you would have knocked off the rates entirely from 1379 the poor land of which I have spoken, and the good land would have had a proportionate reduction. Land let at £3 per acre would be assessed at £2 10s. If we accept any compromise in this direction I believe that, instead of going in for percentages, we ought to have a fixed sum and allow for a recovery of £10, £15, or £20 an acre in value. Let us have some figure to go upon, and I am perfectly certain that it is much better for you to put down in your Bill the sum of money and let us discuss whether that sum is adequate or not. That will be better even than percentages. Under present proposals, parts where agricultural depression is unknown will receive the greatest relief. I cannot support the Chancellor of the Exchequer's proposal, which, I think, is a grossly unfair one.
§ Mr. LLOYD-GEORGE
I thought that before we incorporated these words in the Bill there should be something in the nature of a general agreement with regard to them. It is not my proposal at all; my proposal is the one in the Bill, but when we were discussing matters a fortnight ago I said that if the agricultural community preferred the other alternative, I should be perfectly prepared to accept it. I think it is now perfectly clear that they are not prepared to accept this Amendment. The solution of percentages does not commend itself to the Committee, and I shall, therefore, ask leave to withdraw the Amendment, and give further consideration to the matter under discussion.
§ Mr. WALTER LONG
I think everyone recognises that the Chancellor of the Exchequer has met us in a perfectly fair way, and that he has been animated by a desire to meet the difficulty. I am very glad that the Government do not ask the Committee to arrive at a decision upon this matter to-night. I confess I am inclined to adhere to the view I expressed earlier in the Debate as regards any fixed percentage; but, at the same time, I prefer a further consideration of the matter. As I understand now, the Chancellor of the Exchequer suggests that we should reserve consideration of the whole matter and when the question of percentages is raised it will be open for the Committee to consider it and to provide for certain cases. I gratefully acknowledge that the Chancellor of the Exchequer has done his best to meet what are the wishes of the Committee. Before I sit down, may ask the 1380 right hon. Gentleman that, seeing the hour is so late and that we have had a very full and not an acrimonious discussion, whether the happy moment has not arrived when we might adjourn the discussion and obtain the few hours' rest which public business allows for us?
§ Amendment, by leave, withdrawn.
§ Mr. LLOYD-GEORGE
In response to the last invitation of the right hon. Gentleman, I desire to say that I quite recognise that we have had on the whole a very useful discussion, conducted in the best of temper, and I do not wish to keep the Committee any further except that I think we might come to the end of the deduction part of the clause. If we could go straight on to sub-section (3) and come to the Amendment to leave out that subsection I think it would be well.
§ Mr. J. F. REMNANT
May I move an Amendment in the name of another hon. Member? It is one in manuscript—very short—and I hope the Chancellor of the Exchequer will except it. It is that, after the word "behalf" ["attributable to works of a permanent character, executed by or on behalf of any person"], there should be inserted "or at the expense."
§ Sir E. CARSON
I beg to move the Amendment, standing in my name, to come at the end of the section, namely, "Provided that when the Commissioners determine the total and site value under this section, the Commissioners shall ascertain and record in detail, in the form of a schedule, all allowances and deductions made in pursuance of the Act." I understand that the right hon. Gentleman, in effect, accepts this Amendment. Of course, the object of it is that parties may be furnished with the details of the deductions that have been allowed, so that they may see whether they have been fairly treated by the Commissioners.
§ Mr. LLOYD-GEORGE
I propose to accept the substance of the words, but I hope the right hon. and learned Gentleman will not press his Amendment just at this stage. I propose, after the word "land," at the end of the sub-section ["works.. executed by or on behalf of any person interested in the land"], to insert "or of the good husbandry of any person in the occupation of the land."
§ Mr. LLOYD-GEORGE
Now may I suggest to the right hon. and learned Gentleman that his Amendment should come as a separate sub-section in this form,—"Provided that the Commissioners shall record all allowances and deductions made under this section."
§ Sir E. CARSON concurred.
§ Captain CRAIG moved to omit subsection (3).
§ Question proposed, "That the word 'Where' stand part of the Clause."
§ Mr. LLOYD-GEORGE
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
§ Question put, and agreed to; Committee to sit again upon Monday.
§ Mr. JAMES HOPE
I wish to ask the Chancellor of the Exchequer whether we might have the Bill with the first two clauses printed as altered up to date, and circulated with the Votes?
§ Mr. LLOYD-GEORGE
I think that is a very reasonable request, and I shall be pleased to accede to it.
§ And, it being after Half-past Eleven of the clock on Wednesday evening, Mr. Deputy-Speaker adjourned the House without Question put, in pursuance of the Standing Order.
§ Adjourned at a Quarter before Four o'clock a.m. (Thursday).