§ Postponed Proceeding resumed on Amendment [Sir W. Robson],o leave out the words having regard to," and to insert the words after giving credit for."
§ Mr. JAMES HOPEWhen we were interrupted [at a quarter-past eight o'clock] I was putting a question to the Attorney-General as to the need of the words either as they stood in the Bill or as he proposes to amend them. At the end of the first clause these words are found: "And on each of those occasions the duty, or proportionate part of the 1947 duty, due, so far as it has not been paid on any previous occasion, shall be collected in accordance with the provisions of this Act." Then when we come to the present Amendment on the first sub-section of Clause 3: "On each occasion on which Increment Value Duty is collected on the increment value of any land, such an amount of duty shall be deemed to be due as the Commissioners determine, having regard to the amount of duty paid on previous occasions." I should have thought on the face of it that the words at the end of Clause 1 covered this point, and that neither the words of the Bill nor the Amendment were necessary.
§ Sir W. ROBSONThe words in Clause 1 deal simply with the levying of the duty. The words of section 1 of Clause 3 deal with the duty of the Commissioners in fixing the amount of the duty, and it is necessary in this case, precisely as it was in Clause 1, to have regard to the amount of duty paid on the previous occasion. This is not repeating what was in Clause 1, but giving the same direction in relation to a different matter.
§ Mr. PRETYMANI think there is a good deal to be said for the Attorney-General's words, and, from the point of view of those who have spoken from this side of the House, "giving credit for" is a more distinct direction than "having regard to," which may mean anything; but at the same time it again raises the same difficulty of the extraordinary results which will follow to people who own exactly the same kind of property, because what this enacts now clearly and distinctly, when these words are inserted, is that whenever Increment Value Duty becomes due any amounts previously paid on the same property will be deducted and credit will be given for them. Then Increment Value Duty is not always paid by the same person or by the same interest. Where you have a building lease granted on the property, and the two interests run concurrently, one waxing and the other waning you will have a tenant liable to pay the Increment Value Duty on a part of the interest, and then eventually that part of the interest on which the tenant has paid will pass to the owner, and the owner will then have to pay the balance of the duty. Therefore, the owner in fee simple of property of that description will, when the lease falls in, find that the Increment Value Duty which he has to pay not only depends upon whether 1948 there has been an increase in the value of the property during the currency of the lease, but will depend even more largely upon whether the leasehold interest of the property has happened to pass from hand to hand once or more than once during the currency of the lease, circumstances over which he can have no possible control, because an ordinary condition of such a lease is that the consent of the owner has to be obtained to any transfer, but that such consent shall not be unreasonably withheld. That being so the lease can be transferred from hand to hand without any action on the part of the landlord. He cannot prevent it. Yet these transfers are going in some cases to entirely absolve him, and in those cases where there has not been a transfer the whole duty will fall to be paid on the termination of the lease. That will involve very great inequality in the levying of the duty upon persons who are exactly similarly circumstanced as regards their relation to their own property and to the State. By the action of a third party, who is in no way concerned as between the State and the owner of the land, the amount of duty payable is going to be very largely affected, and I think we ought to have some further information and some statement from the Attorney-General as to what line the Government propose to take about it.
§ Sir W. ROBSONI think the difficulty is not really germane to this Amendment. I quite appreciate the point which was put that conceivably it may arise, and I have already dealt with the point. I have stated that what the hon. Gentleman calls an inequality will arise in the circumstances to which he refers, but I do not regard it as an inequality in the sense of its being an inequity. It seems to me a natural and not an unreasonable consequence, that where a lessee transfers his interest several times he pays whatever Increment Duty arises in respect of his interest. We have decided that that Increment Duty shall be credited against the Increment Duty which may arise in respect of any interest in the land, that is to say, it shall go to frank the fee simple to that extent. I thought this was a proper and rather a generous thing to do, that we would not take the duty in respect to the same increment on both interests, and we adopted what we thought the more merciful and certainly the more generous alternative. But I do not think that gives rise to any inequity, because after all a reversioner when 1949 he comes into the increment does not take charge of the unearned amount which another reversioner would enjoy owing to the frequent changes of transfer on the part of the leaseholder. That is an inequality, but not in the sense of its being a hardship. It simply means that one leaseholder has mad3 many changes of interest, and on each change has paid quite justly and properly upon his increment. That has gone on for years, to the benefit not only of the leaseholder but of all other interests, and therefore he is exceptionally fortunate in the matter. There is no injustice to the reversioner. I need scarcely tell the Committee, what I have always been anxious to explain, that there is not the same exact incidence in all these cases, because in some cases, according to the circumstances, the reversioner is able to escape the full burden of the increment. A question arises which I do not think is germane to this Amendment at all. It is to be raised afterwards by the hon. Member for Windsor (Mr. Mason), and I think when that Amendment is reached will be the proper time to deal with certain observations as to how the division is to be made.
§ Amendment agreed to.
§ Mr. J. F. MASONI desire to move the insertion at the end of section (1) of the words "and where apportionment of site value is necessary after Increment Duty has already been paid on any land as a whole, then the increment upon which duty has been already paid shall be apportioned in the same manner, but not necessarily in the same proportions, as the original site value." he point raised in this Amendment is one which I think it is certainly necessary to bring forward, because it follows upon something which is practically admitted by the Chancellor of the Exchequer, and which I think has received some consideration. I am not at all sure whether the deduction is adequately met by the words which have been inserted. I think I can best explain the meaning of the Amendment on the Paper by taking an imaginary case. In that way it will be easily demonstrated that the apportionment of the increment is not provided for in any part of the Bill. Suppose the owner of four acres of land of which the original site value has been declared to be £2,000; he leaves that land in exactly the same condition, and a few years later dies. Owing to various causes that land has increased in value, and on his death is declared to have an increment value 1950 beyond the £2,000 or £1,000, so that it is worth at the date of his death £3,000. Increment Duty will be paid on £1,000, that is to say, £200 will be paid. His successor holds the land for some time, and after that develops it. He begins by selling one acre, presumably the most favourable acre, for £l,000. It is clear, therefore, that the £l,000 again shows an increment on that one acre, and the duty has again to be paid on the sale—that is to say, duty is paid for the second time, duty having already been once paid on the death of the owner. The question arises how much Increment Duty is due? Sub-section (3) of Clause 2 provides that in a case of this kind original site value will be apportioned to various parts of the original four acres, so that one acre will be given an apportionment of the original site value, but not necessarily one-fourth. The sub-section (1) of Clause 3 provides that credit is to be given for duty paid on previous occasions. But how much is the duty paid on previous occasions on this particular acre? It is true that £200 has been paid in respect of the four acres, but it is natural to suppose that the acre, which has now been developed, has an advantage over the other three acres, and it is quite evident that it would not be fair to say that that acre had merely appreciated by one-fourth of £l,000. That is to say, the acre in question, which is now sold, will have accounted for more than one-fourth of the first increment of £1,000, and consequently, if that is so, it is absolutely necessary to apportion the first increment of £1,000 between the three acres, which are left in somewhat the same manner in which you apportioned the original site value over the various parts of the total area. I think this is a case which shows beyond doubt that some apportionment of the first increment is absolutely necessary where land is subdivided after one Increment Duty or two Increment Duties have already been paid. I am aware that in Clause 19 there is an occasion mentioned of apportionment, and a great deal of that clause would deal with cases of this kind, but I think it is necessary to point out that arrangement is made for apportionment only where it is necessary for purposes of assessment. Under Clause 2, as it now stands, after the alterations of yesterday and the Amendment of the Chancellor of the Exchequer, the owner has a right to ask for an apportionment of the original site value, for the purpose, as I gather from the speech of the Chancellor of the Exchequer, of 1951 getting some indication, for himself to guide him in the policy of development. That is to say, the owner under Clause 2 has the right to ask for an apportionment before he begins to work his land, in order to see bow much original site value is put on any particular plot, and it seems to me particularly important for the owner for the same reason also to know how much of the increment which already has been declared, and on which duty has been paid, has also been apportioned on plots and sub-divisions. To sum up: When sub-division of various lots of a given area is necessary after Increment Duty has already been paid once, or more than once, then that increment should be apportioned in the same manner, but not necessarily in the same proportion as the original site value had been apportioned.
§ Question proposed, "That those words be there inserted."
§ Sir W. ROBSONI am inclined to think, as a matter of fair construction, that the words just added, namely, "after giving credit for," would be construed by the court so as to have the effect desired by the hon. Member for Windsor (Mr. J. F. Mason), and which he seeks to achieve in this Amendment. But I quite agree after considering the hon. Member's Amendment that his words certainly make the matter more expressive. I think it is desirable not to leave to mere implication the apportionment of Increment Duty as well as the apportionment of increment value. That is what the hon. Member has brought out by his Amendment in his very useful point. But the words which he has chosen, I think he himself will agree, are not quite satisfactory. For instance, he said, "where apportionment of site value is necessary after Increment Duty has already been paid on any land as a whole": the words "as a whole" are not very convenient, and I am not very well satisfied with them, and I shall be glad if he will allow me to put in words indicating what both the hon. Member and myself are striving for, and to insert "where for the purpose of giving such credit," that is giving credit for the Increment Value Duty that has been paid "it becomes necessary to apportion any Increment Duty previously paid, the Commissioners shall make such apportionment of that duty as they may determine to be proper." The hon. Member has reached the same end by saying that the apportionment is to be made, of course, by 1952 the Commissioners, but it is not to be necessarily in the same proportion as the original site value. That is clear. The apportionment of the increment will, of course, not necessarily follow the apportionment of the site value; quite the reverse. So it should be left more or less in general terms. Personally, if the Committee desired the words to be inserted now, I should certainly do so, but I am bound to say that I think the better plan would be—and I shall be guided by the Committee in this matter—to leave the matter over until the Report stage, with an explicit pledge that the object sought to be achieved by the hon. Member shall be met by the Government in some well-considered form of words.
§ Mr. PRETYMANDo we or do we not vary the unit of valuation? You get the original unit of valuation of four acres. That is split up into a dozen different ownerships. You have got to go back in every case to the original unit of valuation, and you have a dozen different owners all at once of different parts of the property on which Increment Value Duty has been paid.
§ Sir W. ROBSONI do not think it touches the unit of valuation. The case was put by the hon. Member for Windsor (Mr. Mason) where you have an increment value of one particular acre, that acre has to have allocated to it not merely its proportion of the original site value, but its proportion of the Increment Duty which has already been paid. That would be entirely a question of value. If it is paid as one interest there is no difficulty at all. Anyhow, the hon. and gallant Gentleman's warning shall not be lost sight of. It is quite understood that words are to be brought up at the Report stage which are to give effect to the hon. Member's Amendment, and also to take into consideration the suggestion of the hon. and gallant Gentleman.
§ Mr. WATSON RUTHERFORDOn the question of apportionment I venture to point out that if they had in the previous clause inserted words to say that upon each occasion upon which Increment Duty became payable such apportionment should be made as the Commissioners might determine and in the manner in which they might determine, then there would have been an end of these difficulties. That opportunity was lost, and we passed the clause in the shape in which it now appears 1953 on the Paper. The consequence is in dealing with the present clause we have been, by the Amendment we have passed a few moments ago, placed in the difficulty of having to consider these words of apportionment. I think it the most desirable course to leave the whole of these difficult words over to the Report stage, because it would be undesirable to frame in. a hurry or without mature consideration the words which are intended for all times to guide the Commissioners in this very difficult question, when two or three Increment Duties have already been paid on a piece of land in which all sorts of interests arise. The astounding difficulty of dealing with that question would be brought home to the Government more if they sat down to try to draft sensible words which would adequately meet the various occasions that may arise. Not only will they require to apportion the original value—that obviously must be apportioned to the new site—but they will require to apportion that original site value again when it is part of a piece that has already been apportioned, and, where anything has happened, they will require to do that over again to apportion the site value of a piece perhaps in quite a different way——
§ The DEPUTY-CHAIRMAN (Mr. Caldwell)If the Amendment is to be withdrawn, I do not see any need for going into this discussion.
§ Mr. WATSON RUTHERFORDThen we should oppose the Amendment being withdrawn. I am prepared to say that unless we are to have some intelligible machinery to carry out this. Bill, it would be our duty to stop at this point and insist on knowing how this is going to be done. At all events, I think we are entitled to insist upon trying to find out whether the Government have realised the astounding difficulties which may arise in almost the most simple transaction, and to meet which they are not making the faintest effort. It is all very fine to come here and alter this clause at the last moment with manuscript Amendments, while they actually tell us that they are not satisfied with those Amendments, and propose, therefore, to get rid of the difficulty for perhaps twelve months until this clause is taken on Report. I do not think that is a satisfactory position for the Government to take up. Whilst I for one would be prepared to admit that the wisest course the Government could take 5s to adjourn this difficulty as long as they 1954 possibly can in the hope that people will have forgotten it when it comes to be dealt with again, at the same time I think it is not treating this Committee fairly to put this most important question of machinery off to a remote date, and not to deal with it in Committee in some practical shape.
§ Mr. J. F. MASONIn view of what the hon. and learned Gentleman has said, I think it well to ask leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Viscount HELMSLEY moved to add at the end of section (1) the words "and after giving credit for the amount of Death Duties and Income Tax paid in respect of such amount." I think that is a very important point to bring before the notice of the Government, and I am supported in my view on this subject by a speech the Prime Minister made not long ago, in which he argued about the Increment Tax and the allegation made against it that it was a tax imposed on a particular kind of increment and not on other kinds of increment. He said that other kinds of increment were undoubtedly subject to Estate Duty and Income Tax. The object of this Amendment is to bring this class of increment into the same category, and, therefore, no more increment should be taken in the case of land than would be taken in the case of other increment—that is, allowing for the amount of the Death Duties and Income Tax which may have already been paid. I am sure it is perfectly obvious that this is a fair proposal. It cannot be justified by any argument whatever that you could tax a man twice upon the same increment. I maintain there are a great many cases where this Increment Duty is to be imposed, in which, as a matter of fact, the increment has already been taxed in the shape of either Death Duties or Income Tax. We have never had any argument whatever to show up to now why there should be this exceptional taxation, this Increment Duty, over and above those two taxes. Hon. Members opposite say: "This is all very well, but land is in a different category from other kinds of property." Granting for a moment that may be so, it may still be an argument for putting on an Increment Tax over and above the existing taxes, but it is not an argument for putting on an Increment Tax and not making any allowance for the existing taxes that have been paid. It is a well-estab- 1955 lished principle of our taxation that we do not tax a man over and over again on the same property. Indeed, some of the exemptions and Amendments carried on this Bill already show that it is not intended by the Government to tax a man more than once on the same property. Therefore, I cannot help thinking that the Government will be inclined favourably to consider this Amendment. Look at the position. In the case of Increment Duty being payable at death. Nobody will deny that if an estate has gone up in value when it passes at death, the person who succeeds will have it valued on the basis of that improvement in value, and he will pay Estate Duty on it. Therefore, it seems to me that whatever he pays in the shape of Estate Duty should be set off against what he may be asked to pay in the shape of Increment Duty, because, otherwise, it would be asking him to pay twice on the same description of property. I suppose, even if this Amendment were carried, there would still be other cases where Increment Duty would be payable when no Death Duties or Income Tax had been paid on that particular income. From the Government point of view I understand that is a case which they are anxious to tax, but I do not see that it is in the least fair to tax the whole increment again when it has already been tapped in the shape of Death Duties or Income Tax. I hope the Government will seriously consider this Amendment, and see whether they cannot accept it either in this form or some other, because I am quite certain that if they want to do anything approaching justice in this matter they are bound to make this allowance for what has been paid.
§ Sir W. ROBSONThe Noble Lord must see that this is a deduction not from the increment value, but from the Increment Duty itself. Death Duties are paid on the whole estate, and Increment Tax is paid on the increment, so that when it comes to making deductions in respect of the Death Duties and the Increment Taxes——
§ Viscount HELMSLEYIn respect of that land.
§ Sir W. ROBSONThe Noble Lord has drafted this Amendment rather hastily, but when you come to deduct all those sums Increment Value Duty has disappeared. When you have got to the end of your deductions you have entirely disposed 1956 of it, that is the consequence. On the merits itself there is no reason why, granting this to be a fair tax—and that is the assumption on which the Committee is proceeding—for deducting Estate Duties. There is one point which I think might fairly be considered, and we shall consider it. I think it arises on some later Amendment. We ought not undoubtedly to aggregate for the purposes of Estate Duty until we have deducted the amount of Increment Duty before we begin the aggregation of Estate Duties.
§ Viscount HELMSLEYThat is obvious.
§ Sir W. ROBSONEstate Duties are paid on the whole value, the capital value and Increment Value Duty is taxed on a particular value for the reasons that have been urged so often in the course of this Committee stage This is a tax no doubt additional to the other taxes already existing on land and upon land-owners, just in the same way as you have Settlement Estate Duty, a tax which is additional to the ordinary Death Duty, and Succession Duties, which are additional to the Estate Duties. You have a great many taxes which are on different interests in land, and it would not be fair to say you are taxing the same thing twice over. You are taxing different interests in the same thing, but not twice over. We are adding Increment Value Duty to the burdens which fall on the land.
§ Mr. JOHN GRETTONAs far as I can make out the argument of the right hon Gentleman, it is that the Government, by existing taxation, are going to already appropriate the increment value and then for the purposes of this clause they are going to tax the estate for the money which has been already extracted from it. It appears to me that any proceedings of that kind is a complete condemnation of the whole process of taxation which they propose on the occasion of the death of the owner. I may have misunderstood the argument, but it occurs to me we really want some further explanation. A more amazing and astonishing argument from those benches opposite on the whole collection of arguments we have heard against the proposals we have made to improve the Bill we have not heard than that we have just listened to. It is an abominable injustice in many cases to tax the same property over and over again, and again on death, with an accumulation of taxes. I could understand that argument if it were urged by hon. Members sitting below 1957 the Gangway on this side, but advanced by the Government it amounts to a complete revolution of the whole policy which has hitherto directed taxation in this country. It is so remarkable that I think we should have a more clear and definite explanation than that given by the hon. and learned Gentleman (Sir W. Robson).
§ Mr. G. R. LANE-FOXIt is obvious this Amendment has been drafted rather hastily, but my Noble Friend did not ask the Attorney-General to accept the absolute words, but to accept the principle. It was not quite fair of the right hon. Gentleman in reply to say that the Amendment as drafted would not carry out the purpose. The argument of my Noble Friend was that, as the Prime Minister said that the reason for not taxing other increments was that they were already taxed in another form, then land should be treated exactly with the same degree of fairness as all the other forms of property. The answer of the learned Attorney-General is what does it matter; we have already two or three forms of Death Duties, and therefore why should we not put on another? If the Prime Minister's words are to be carried out, then some such Amendment as this should be accepted, and the Government ought to give the matter consideration.
§ Mr. PRETYMANI moved an Amendment to Clause 2 on this particular point, and there is a rather curious disagreement between hon. Gentlemen on the Front Bench, because the Chancellor of the Exchequer agreed to accept my Amendment, but in this form, that he would make the deduction in Part III. of the Bill, and that he would allow Increment Value Duty to be deducted first. The Chancellor of the Exchequer on July 7th said ["Official Report"]:—
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.The point on which the right hon. Gentleman said that he was more favourable to the owner was a mathematical point, and on looking into the matter I find it makes absolutely no difference which you take first. I proposed, as does this Amendment, that the Death Duties should be taken first, and that Increment Duty should only be levied on the residue. The hon. Gentleman must be aware that Death Duties are not now levied on the same 1958 sum. There is, first, Estate Duty on settlement on the residue, and Succession Duty on the residue. It is obviously just that you cannot levy Increment Value Duty which is paid from the estate in Death Duties. It is quite immaterial, mathematically and financially, which you deduct first. The Chancellor of the Exchequer having given his definite undertaking that he would accept that principle, and that he would make the deduction when we come to Part III. of the Bill, and as he prefers to let the Increment Value Duty be paid first and the Death Duty afterwards, we shall raise no objection to that course. I regret I did not observe this sooner, and ask my hon. Friend to withdraw his Amendment, as the point is met by the Chancellor of the Exchequer.
§ Viscount HELMSLEYI am not certain that the point is quite the same; but if it is, of course I will withdraw my Amendment.
§ Mr. PRETYMANNot Increment Tax?
§ Viscount HELMSLEYThere is that point in addition, and there is also the question whether it is the same to deduct the amount paid in Death Duties from the amount to be paid in Increment Duty as to deduct the amount paid in Increment Duty from the amount to be paid in Death Duties. It seems to me that my Amendment would produce a rather greater deduction than the Amendment which the Chancellor of the Exchequer has promised to accept. We have also had from the Attorney-General to-night the admission that he was prepared to deduct from the amount payable in Death Duties the amount paid in Increment Duty. I do not quite see that that is the same as I am proposing, and I should like some explanation as to what the Government really propose to do before I withdraw the Amendment. The criticism of the Attorney-General that my Amendment was too widely drawn has a certain amount of weight. It does cover rather more ground than I intended. I did not mean to deduct the amount of Death Duties payable over the whole estate, but the additional amount due to the increment; and if the Government can see their way to adopt the principle, there will be no difficulty whatever in adjusting the words.
§ The SOLICITOR-GENERAL for SCOTLAND (Mr. A. Dewar)I am afraid that all the information I can give the Noble 1959 Lord, and all that he can possibly expect from me is this. If it be that his Amendment comes within the promise made by the Chancellor of the Exchequer, it will be given effect to. On the other hand, if it does not, for the reasons stated by the Attorney-General, it will not be given effect to.
§ Mr. WATSON RUTHERFORDI think we ought to be deeply grateful to the Solicitor-General for Scotland for the exceedingly logical method in which he has discharged the trust reposed in him during his temporary occupancy of that illustrious Bench. The Attorney-General has three methods of dealing with Amendments. The first is to give us a highly technical legal disquisition. He has spared us that on this occasion. His second method is to give us a paternal lecture as to how we ought to read the Bill, and where we shall find things, which, when we look into the clauses referred to, we are unable to discover. No doubt they are really there if only we could see them. His third method is, in a speech altogether apart from the real object of the Amendment, to make on behalf of the Government a most damaging admission. That is the method he has adopted on this occasion. This Amendment says that on the payment of Increment Duty there shall be deducted an allowance for the payment of Death Duties and for the payment of Income Tax. I cannot follow my Noble Friend in regard to an allowance for Income Tax, because I do not see that Income Tax has anything whatever to do with Increment Duty. But the Attorney-General made the astonishing admission that if the Government allowed Death Duties and Income Tax to be deducted there would be no Increment Duty to pay. That is a most damaging admission, because it means that the Government, in asking for this Increment Duty, are asking for a tax which they have already collected under other names. I do not think that is what they intended, but that is what the Attorney-General actually said and gave as his reason for rejecting the Amendment. I listened very carefully to the Chancellor of the Exchequer last week upon an Amendment to the same effect as this, and if I understood him aright he distinctly promised that there should be a deduction with respect to the two duties where they fell upon the same object. That is to say, if increment accrued to a property and Increment Duty became payable, no Death 1960 Duties should be collected in respect of that increment or in respect of that duty—I am not quite certain which. My Noble Friend has explained that he does not wish to go quite so far as the actual words of his Amendment. If the Amendment were carried so as to say that the same property should not pay two taxes it would be absurd; I think my Noble Friend would have to modify the words in some way so as to make them reasonable under the circumstances; but what he really desires is, I think, perfectly just.
§ Viscount HELMSLEYI understand from the hon. and gallant Member below me (Mr. Pretyman) that the substance of this Amendment has been promised by the Chancellor of the Exchequer.
§ Mr. LLOYD-GEORGEI gave a very definite promise to deal with it, and my recollection is that I gave a promise much more favourable than the hon. and gallant Member was trying to extract from me.
§ Mr. PRETYMANTake a pencil and a piece of paper; the two sums work out exactly the same. Take off 20 per cent., and afterwards 10 per cent. on the residue, and it is exactly the same as if you took off 10 per cent. and 20 per cent. off the residue. [HON. MEMBERS: "No, no."] I should not make a statement to the Committee if I had not tried it. Therefore that underlies the fact of our insistence on the point. This Debate has arisen because the Attorney-General, on behalf of the Government, has been refusing this suggestion.
§ Mr. PRETYMANI stated so, and asked the Noble Lord to withdraw his Amendment.
§ Viscount HELMSLEYThere still remains the question of the Income Tax, which is not covered. I maintain that if Income Tax has been paid in respect of this particular increment this ought to be adopted. It is obviously fair, and it is putting into formal words the argument which was raised by the Prime Minister at Southport. I hope the Chancellor of the Exchequer will consider that point of view as well. As I understand from the Government there is a pledge that really the substance of this Amendment will be met—although no one would have gathered so from the Attorney-General—I withdraw the Amendment.
§ Amendment, by leave, withdrawn.
1961§ Mr. J. F. MASON moved to leave out "transfer or" ["of the transfer or passing on death of the fee simple"]. The reason I have put this Amendment on the Paper is that section (2) states that in certain cases, namely, the transfer or the passing on death, the whole amount of the duty shall be collected, which I take to mean shall be collected at once, and in one sum. On the other hand, section (3) dealing with another class of cases says "such proportionate part of the amount of the duty which is due shall be collected as may be determined by the Commissioners." The point is that in a certain category of cases you propose to collect the whole sum at once, and in another category of cases you give facilities for collecting the money, presumably by instalments. The case of the transfer of land is not always one on which there is any reason to demand summary payment of the whole duty. I think it has been put forward in the course of the earlier parts of our Debates that the sale of land is a particularly opportune moment to collect the whole of the duty, because there is a certain sum of money which can be taken for the purpose. What I particularly want to call attention to is that in many cases land may be mortgaged, and, as under this part of the Bill there, is no allowance for disregarding mortgages or encumbrances, it is quite possible that a piece of land may be sold for only just sufficient to pay off the mortgage. In that case, presuming there is no other property, there is no sum from which the whole of the duty can be easily paid, so that the object of the Amendment, as in the case of transfer or the sale of land. is that the facilities of payment by instalment shall be given the same as in the other category in section (3). Of course, in the case of the Death Duties you have the deduction on the mortgage, but also in the case of Death Duties you have facilities for payment by instalment. I think it will be worth comparing sections (2) and (3) to see whether the division can be fairly dealt with between the kind of occasions named in section (2), which enjoins summary payment, against the sub-section where payment is by easier methods. In the meantime, I beg to move.
§ Question proposed, "That the words 'transfer or' stand part of the Clause."
§ Mr. A. DEWARWe have made arrangements on the lines suggested by the hon. Gentleman for the collection of the debt. What the hon. Member intends 1962 will be a fact. It is a short point, and I do not think I need go into it further.
§ Mr. CLYDEAs the hon. Member puts it the purpose of section (2) and even of section (3), but particularly section (2) is to provide the machinery for collection, but there is not a single bit of machinery either in section (2) or (3). It has got nothing to do with machinery. I admit that the hon. and learned Gentleman will find that in section (4) but section (3) has to do with something else altogether. Accordingly it would not do to say that there is no inconsistency in the words proposed under section (2), and what the Committee have determined in the preceding section. On the contrary it seems to me that if the analogy to which appeal has been made so frequently is of any value at all, the exact analogous position of the Act of 1S94 is section (6). After all what section (6) was dealing with was the duty, and a heavy duty moreover, payable on death. So is this. I submit that if the analogy of 1894 has any value, it ought to be followed. My answer is it is nothing to do with machinery at all; it relates to the case of the passing on death, as under the Act of 1904. Surely it would be reasonable to treat them both in the same way? I agree you cannot confound the case of sales with that of passing at death, and therefore I submit that the reasons advanced for not accepting this Amendment are wholly insufficient, and that the Amendment is fully justified.
§ Mr. LANE-FOXThe answer given by the hon. and learned Gentleman does not meet the point at all. The whole point of my hon. Friend's argument was that in the clause as it stands it does not provide for mortgages. I submit to the Government that they ought to give some answer to these points, raised very clearly and very properly. It is quite obvious that the hon. and learned Gentleman the Solicitor-General for Scotland did not appreciate the point that was made.
§ Mr. LLOYD-GEORGEAfter listening very carefully to the speech of the hon. and learned Gentleman (Mr. Clyde), I would like him to explain what payment by instalments has to do with the omission of these words. I confess I am unable to follow his arguments so far.
§ Mr. CLYDEAs I understand, the present Amendment involves as a sequel to 1963 it the Amendment lower down on the Paper, which seeks to insert "at such times and in such instalments as the Commissioners may think fit."
§ Mr. LLOYD-GEORGEYou mean a consequential Amendment?
§ Mr. CLYDEYes. I am sure the Chancellor of the Exchequer sees that that could not be applied to sale, and therefore could not be applied to transfer.
§ Mr. J. F. MASONThere seems to be some difficulty about the meaning of these words. The reason for desiring to remove the words "transfer or" is that in the case of mortgage which amounts to the whole of the amount of the sale there would be some difficulty in paying the whole of the duty at once, and I desire to get transfer put into the same category in sub-section (3). It seems to me that my object might be equally met by my other Amendment, and if at the end of sub-section (2) you put in the words "at such times and in such instalments as the Commissioners may think fit," I would withdraw my Amendment for the omission of the words "transfer or," the object being that the duty should be paid in instalments instead of at once. I might point out in case of land passing on death it is only reasonable that it should be paid in instalments, because already the duty at death is paid in instalments.
§ Mr. LLOYD-GEORGEI think the hon. Member will find this is provided for by the Act. This Amendment is only the first of a series by the hon. Gentleman opposite
§ which would provide payment by instalments. That is provided for in section 5 already.
§ Mr. J. F. MASONI do not think the right hon. Gentleman has been dealing with the same point. I propose these two Amendments as one alternative to the other, and my hon. Friend (Mr. Clyde) took them as consequential one on the other.
§ Mr. RAWLINSONMy hon. Friend was not dealing with Death Duties at all, but with the question of transfer on sale. The Amendment is to leave out "transfer or." The proposition is to exclude the occasion of the sale of land from section (2), which makes the duty collectable in one lump sum. The case given in support of this Amendment has not been dealt with at all. The point was that in the case of a mortgage which had exhausted the whole value of the estate, it would be exceedingly inconvenient for the person liable to find the whole of that duty at that particular moment, and it is only fair that it should come under section (3). That point has not been answered by the Solicitor-General for Scotland.
§ Mr. JAMES HOPEThe Chancellor of the Exchequer has referred the Committee to Clause 5. Is it not a fact that in that case the payment would be spread over eight years?
§ Question put, "That the words 'transfer or' stand part of the Clause."
§ The Committee divided: Ayes. 259; Noes, 86.
1967| Division No. 277.] | AYES. | [10.25 P.m. |
| Abraham, William (Rhondda) | Bramsdon, Sir T. A. | Corbett, C. H. (Sussex, E. Grinstead) |
| Acland, Francis Dyke | Brigg, John | Cornwall, Sir Edwin A. |
| Adkins, W. Ryland D. | Bright, J. A. | Cory, Sir Clifford John |
| Agnew, George William | Brocklehurst, W. B. | Cotton, Sir H. J. S. |
| Ainsworth, John Stirling | Brooke, Stopford | Cowan, W. H. |
| Allen, A. Acland (Christchurch) | Brunner, J. F. L. (Lancs., Leigh) | Craig, Herbert J. (Tynemouth) |
| Allen, Charles P. (Stroud) | Bryce, J. Annan | Crosfield, A. H. |
| Armitage, R. | Buckmaster, Stanley O. | Cullinan, J. |
| Astbury, John Meir | Burke, E. Haviland- | Curran, Peter Francis |
| Atherley-Jones, L. | Burnyeat, W. J. D. | Davies, Ellis William (Eifion) |
| Balfour, Robert (Lanark) | Buxton, Rt. Hon. Sydney Charles | Davies, Sir W. Howell (Bristol, S.) |
| Baring, Godfrey (Isle of Wight) | Byles, William Pollard | Dewar, Arthur (Edinburgh, S.) |
| Barker, Sir John | Cameron, Robert | Dewar, Sir J. A. (Inverness-sh.) |
| Barlow, Sir John E. (Somerset) | Carr-Gomm, H. W. | Dickinson, W. H. (St. Pancras, N.) |
| Barlow, Percy (Bedford) | Causton, Rt. Hon. Richard Knight | Dilke, Rt. Hon. Sir Charles |
| Barnes, G. N. | Cawley, Sir Frederick | Dobson, Thomas W. |
| Barran, Rowland Hirst | Cherry, Rt. Hon. R. R. | Duncan, C. (Barrow-in-Furness) |
| Barry, Redmond J. (Tyrone, N.) | Clancy, John Joseph | Dunne, Major E. Martin (Walsall) |
| Beale, W. P. | Cleland, J. W. | Edwards, Sir Francis (Radnor) |
| Beck, A. Cecil | Clough, William | Elibank, Master of |
| Bell, Richard | Clynes, J. R. | Esslemont, George Birnie |
| Benn, W. (Tower Hamlets, St. Geo.) | Cobbold, Felix Thornley | Evans, Sir S. T. |
| Boulton, A. C. F. | Collins, Stephen (Lambeth) | Everett, R. Lacey |
| Bowerman, C. W. | Condon, Thomas Joseph | Fiennes, Hon. Eustace |
| Brace, William | Cooper, G. J. | Flynn, James Christopher |
| Foster, Rt. Hon. Sir Walter | Mackarness, Frederic C. | Rogers, F. E. Newman |
| Freeman-Thomas, Freeman | Macnamara, Dr. Thomas J. | Samuel, Rt. Hon. H. L. (Cleveland) |
| Fuller, John Michael F. | MacNeill, John Gordon Swift | Samuel, S. M. (Whitechapel) |
| Fullerton, Hugh | Macpherson, J. T. | Scarisbrick, Sir T. T. L. |
| Furness, Sir Christopher | MacVeagh, Jeremiah (Down, S.) | Schwann, C. Duncan (Hyde) |
| Gibb, James (Harrow) | MacVeigh, Charles (Donegal, E.) | Schwann, Sir C. E. (Manchester) |
| Gill, A. H. | McKenna, Rt. Hon. Reginald | Scott, A. H. (Ashton-under-Lyne) |
| Gladstone, Rt. Hon. Herbert John | M'Laren, H. D. (Stafford, W.) | Seaverns, J. H. |
| Glover, Thomas | M'Micking, Major G. | Seddon, J. |
| Goddard, Sir Daniel Ford | Mallet, Charles E. | Shaw, Sir Charles E. (Stafford) |
| Gooch, George Peabody (Bath) | Markham, Arthur Basil | Silcock, Thomas Ball |
| Greenwood, G. (Peterborough) | Marnham, F. J. | Simon, John Allsebrook |
| Greenwood, Hamar (York) | Massie, J. | Smeaton, Donald Mackenzie |
| Hall, Frederick | Masterman, C. F. G. | Snowden, P. |
| Harcourt, Rt. Hon. L. (Rossendale) | Meagher, Michael | Soamos, Arthur Wellesley |
| Harcourt, Bobert V. (Montrose) | Micklem, Nathaniel | Spicer, Sir Albert |
| Hardle, J. Keir (Merthyr Tydvil) | Molteno, Percy Alport | Stanger, H. Y. |
| Hardy, George A. (Suffolk) | Montgomery, H. G. | Stewart, Halley (Greenock) |
| Harmsworth, Cecil B. (Worcester) | Mooney, J. J. | Strachey, Sir Edward |
| Harmsworth, B. L. (Caithness-sh.) | Morgan, G. Hay (Cornwall) | Strauss, E. A. (Abingdon) |
| Harvey, A. G. C. (Rochdale) | Morgan, J. Lloyd (Carmarthen) | Summerbell, T. |
| Harwood, George | Morrell, Philip | Sutherland, J. E. |
| Haworth, Arthur A. | Morse, L. L. | Taylor, John W. (Durham) |
| Hayden, John Patrick | Morton, Alpheus Cleophas | Taylor, Theodore C. (Radcliffe) |
| Hazel, Dr. A. E. W. | Murphy, N. J. (Kilkenny, S.) | Tennant, H. J. (Berwickshire) |
| Hazleton, Richard | Myer, Horatio | Thomas, Abel (Carmarthen, E.) |
| Hedges, A. Paget | Napier, T. B. | Thomas, Sir A. (Glamorgan, E.) |
| Helme, Norval Watson | Newnes, F. (Notts, Bassetiaw) | Thomasson, Franklin |
| Henderson, J. McD. (Aberdeen, W.) | Nicholls, George | Thorne, G. R. (Wolverhampton) |
| Herbert, Col. Sir Ivor (Mon. S.) | Nicholson, Charles N. (Doncaster) | Trevelyan, Charles Philips |
| Herbert, T. Arnold (Wycombe) | Nolan, Joseph | Verney, F. W. |
| Higham, John Sharp | Nussey, Sir Willans | Walsh, Stephen |
| Hodge, John | Nuttall, Harry | Walters, John Tudor |
| Hogan, Michael | O'Brien, K. (Tipperary, Mid) | Ward, John (Stoke-upon-Trent) |
| Holt, Richard Durning | O'Brien, Patrick (Kilkenny) | Ward, W. Dudley (Southampton) |
| Hooper, A. G. | O'Connor, John (Kildare, N.) | Wardle, Gecrge J. |
| Hope, W. H. B. (Somerset, N.) | O'Dowd, John | Waring, Walter |
| Horniman, Emslie John | O'Grady, J. | Warner, Thomas Courtenay T. |
| Hudson, Walter | O'Kelly, Conor (Mayo, N.) | Wason, Rt. Hon. E. (Clackmannan) |
| Hyde, Clarendon G. | O'Malley, William | Wason, John Cathcart (Orkney) |
| Idris, T. H. W. | Parker, James (Halifax) | Waterlow, D. S. |
| Illingworth, Percy H. | Pearce, Robert (Staffs, Leek) | Watt, Henry A. |
| Jackson, B. S. | Pearce, William (Limehouse) | White, Sir George (Norfolk) |
| Jenkins, J | Pearson, Sir W. D. (Colchester) | White, J. Dundas (Dumbartonshire) |
| Jones, Leif (Appleby) | Pearson, W. H. M. (Suffolk, Eye) | White, Sir Luke (York, E.R.) |
| Jowett, F. W. | Pickersgill, Edward Hare | White, Patrick (Meath, North) |
| Joyce, Michael | Pirie, Duncan V. | Whitley, John Henry (Halifax) |
| Kavanagh, Walter M. | Pointer, J. | Wiles, Thomas |
| Laidlaw, Robert | Pollard, Dr. G. H. | Wilkie, Alexander |
| Lamb, Ernest H. (Rochester) | Ponsonby, Arthurr A. W. H. | Williams, J. (Glamorgan) |
| Lambert, George | Price, C. E. (Edinburgh, Central) | Wills, Arthur Walters |
| Lamont, Norman | Price, Sir Robert J. (Norfolk, E.) | Wilson, Henry J. (York, W.R.) |
| Layland-Barrett, Sir Francis | Priestley, Sir W. E. B. (Bradford, E.) | Wilson, John (Durham, Mid) |
| Lehmann, R. C. | Radford, G. H. | Wilson, J. W. (Worcestershire, N.) |
| Lever, A. Levy (Essex, Harwich) | Rea, Walter Russell (Scarborough) | Wilson, P. W. (St. Pancras, S.) |
| Levy, Sir Maurice | Richards, Thomas (W. Monmouth) | Wilson, W. T. (Westhoughton) |
| Lewis, John Herbert | Richards, T. F. (Wolverhampton, W.) | Winfrey, R. |
| Lloyd-George, Rt. Hon. David | Roberts, Charles H. (Lincoln) | Wood, T. M'Kinnon |
| Lough, Rt. Hon. Thomas | Roberts, G. H. (Norwich) | |
| Lundon, T. | Roberts, Sir J. H. (Denbighs) | |
| Lyell, Charles Henry | Robertson, Sir G. Scott (Bradford) | TELLERS FOB THE AYES.—Mr. Joseph Pease and Captain Norton. |
| Macdonald, J. R. (Leicester) | Robinson, S. | |
| Macdonald, J. M. (Falkirk Burghs) | Roch, Walter F. (Pembroke) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Castlereagh, Viscount | Goulding, Edward Alfred |
| Anson, Sir William Reynell | Cave, George | Gretton, John |
| Arstruther-Gray, Major | Cecil, Evelyn (Aston Manor) | Guinness, Hon. R. (Haggerston) |
| Arkwright, John Stanhope | Cecil, Lord B. (Marylebone, E.) | Hamilton, Marquess of |
| Balcarres, Lord | Chaplin, Rt. Hon. Henry | Hardy, Laurence (Kent, Ashford) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Clyde, J. Avon | Harris, Frederick Leverton |
| Banbury, Sir Frederick George | Courthope, G. Loyd | Harrison-Broadley, H. B. |
| Baring, Capt. Hon. G. (Winchester) | Craik, Sir Henry | Hay, Hon. Claude George |
| Beckett, Hon. Gervase | Dalrymple, Viscount | Helmsley, Viscount |
| Bignold, Sir Arthur | Douglas, Rt. Hon. A. Akers- | Hermon-Hodge, Sir Robert |
| Bowles, G. Stewart | Du Cros, Arthur | Hill, Sir Clement |
| Bridgeman, W. Clive | Faber, George Denison (York) | Hills, J. W. |
| Brotherton, Edward Allen | Faber, Capt. W. V. (Hants, W.) | Hope, James Fitzalan (Sheffield) |
| Bull, Sir William James | Fardell, Sir N. George | Joynson-Hicks, William |
| Burdett-Coutts, W. | Fell, Arthur | Kerry, Earl of |
| Butcher, Samuel Henry | Forster, Henry William | King, Sir Henry Seymour (Hull) |
| Carlile, E. Hildred | Gardner, Ernest | Law, Andrew Bonar (Dulwich) |
| Lockwood, Rt. Hon. Lt.-Col. A. R. | Powell, Sir Francis Sharp | Smith, Abel H. (Hertford, East) |
| Long, Col. Charles W. (Evesham) | Pretyman, E. G. | Smith, F. E. (Liverpool, Walton) |
| Lonsdale, John Brownlee | Randles, Sir John Scurrah | Stanier, Beville |
| Lyttelton, Rt. Hon. Alfred | Rawlinson, John Frederick Peel | Starkey, John R. |
| Marks, H. H. (Kent) | Renton, Leslie | Talbot, Lord E. (Chichester) |
| Mildmay, Francis Bingham | Renwick, George | Valentia, Viscount |
| Morpeth, Viscount | Roberts, S. (Sheffield, Ecclesall) | Walker, Col. W. H. (Lancashire) |
| Morrison-Bell, Captain | Ronaldshay, Earl of | Walrond, Hon. Lionel |
| Newdegate, F. A. | Ropner, Colonel Sir Robert | Warde, Col. C. E. (Kent, Mid) |
| Nicholson, Wm. G. (Petersfield) | Rutherford, John (Lancashire) | |
| Oddy, John James | Rutherford, Watson (Liverpool) | TELLERS FOR THE NOES.—Mr. J. F. Mason and Mr. Lane-Fox. |
| Parkes, Ebenezer | Sandys, Col. Thos. Myles | |
| Pease, Herbert Pike (Darlington) | Scott, Sir S. (Marylebone, W.) |
§ Mr. J. F. MASON moved to add at the end of section (2) the words "by the Commissioners in accordance with rules made by them for the purpose." This is an alternative suggestion.
§ Mr. J. F. HOPEOn a point of order: Do I understand you to rule the whole question of instalments out of order. I thought my hon. Friend the Member for Windsor (Mr. Mason) proposed first the omission of the words "transfer or" with the intention that, if that were rejected, the question of the instalment might be dealt with as a second alternative.
§ Mr. LLOYD-GEORGETwo or three speeches were delivered on that specific point during the discussion on the last Amendment.
§ The CHAIRMAN (Mr. Emmott)I certainly thought that point was disposed of.
§ Mr. J. F. MASONI think the difficulties likely to arise in the case of passing on death of the fee simple in land might to a certain extent be met if the Commissioners had power to make rules in the same way as is provided in section (3). It appears to me that it is necessary to do something to avoid having laid down hard and fast rules in these particular cases, that the whole amount of duty shall be collected in one sum. I fail to understand what objection there is to giving some facilities for paying in a more convenient manner. I take it if the Commissioners were able to make rules for the purpose it would include the power to make arrangements for payment by instalments, or otherwise, and such rules would to a certain extent facilitate the working of the section. I beg to move.
§ Sir W. ROBSONOf course rules are not so necessary in this case as they are in the following section (3), but at all events it may be desirable that the Commissioners should lay down any regulations which they may think necessary to deal with cases of death or sale.
§ Mr. JAMES HOPEI am not sure that my hon. Friend is altogether wise in moving this Amendment, because he is giving the Commissioners a very large discretion in admitting these rules, and when he spoke of the analogy of the next section I may say that I take very strong objection to it, because of the powers given to the Commissioners there, and Amendments have been put down providing that the rules to be framed by the Commissioners in that section shall not take effect until they have been reviewed by Parliament. I do not know that the occasion on this section is so important, but I view with some suspicion the readiness of the Attorney-General to accept this Amendment, and if these words are passed I would submit that very likely the same reference to Parliament, and hanging the rules up until the assent of Parliament has been given, will be necessary in this section, as we above the Gangway hold that it will be necessary in the section to come. Therefore I am not disposed to vote for the Amendment.
Mr. BALFOURWould not the objection of my hon. Friend be met if we understood from the Government that any qualification introduced in section (3) as to rules to be laid down by the Commissioners shall also be applied to section (2). I think it would be inconvenient to discuss this question of whether the rules should be laid on the Table, but if that Amendment is introduced in section (3) I have no doubt the Government will be prepared to introduce it on Report in this section.
§ Mr. LLOYD-GEORGEI quite accept the view taken by the Leader of the Opposition.
§ Sir F. BANBURYI object to leaving these powers to the Commissioners. Am I to understand that the right hon. Gentleman will limit the power of the Commissioners to make rules in a manner to be discussed later on?
§ Mr. LLOYD-GEORGEThat is not the point. That point is raised specifically, on 1969 the Amendment of the right hon. Gentleman, the Member for St. George's, Hanover Square (Mr. Lyttelton). The only undertaking is that whatever limitation there is would apply to these rules as well as to the others. That is the point put by the Leader of the Opposition, and to that I assented.
§ Amendment agreed to.
§ Mr. WATSON RUTHERFORD moved to omit section (3). In section (2) we have passed that where there is a transfer or passing on death of the fee simple, that is to create a case in which the money is to be paid in full. I do not understand why that clause was put in at all, unless it was to mark the occasion when the duty should not be paid by instalments, but should be paid in full. Section (3) goes on to say that there are to be certain occasions where duty may be paid by instalments. But we were referred just now by the Chancellor of the Exchequer to Clause 5, and when we get to Clause 5 we find that on every occasion of death, at any rate, the duty is to be collected exactly in the same way as if it were an Estate Duty. Then says the Chancellor of the Exchequer you can pay that by annual instalments. This is one of those points in which the soul of the Attorney-General delights, and which he will be able to dispose of in a few moments. Why put a clause in the Bill under which duty is not to be paid by instalments, but in full, and then refer to a subsequent clause under which it is provided that the duty need not be paid in full, but by instalments? Why not say at once that this duty may be paid on every possible occasion by instalments? On reading the sections two or three times over, with any little intelligence I have been able to bring to bear upon them, I have entirely failed to grasp the subtle distinctions involved in a position like this. I wish the Attorney-General to explain the inconsistency of the different clauses.
§ Sir W. ROBSONI think the hon. Member underrates his intelligence in dealing with the clause, and very much overrates my delight in explaining such a point as he has raised. I have difficulty in connecting the point raised by the hon. Gentleman with the Amendment in any shape or form.
§ Mr. WATSON RUTHERFORDI thought you would.
§ Sir W. ROBSONI will make some observations with the object of satisfying the 1970 hon. Gentleman on the question of payment by instalments. Under section (2) we have payment upon sale when the whole amount is being received by the vendor. Why should he not pay the whole amount subject to the Amendment which I have accepted as to rules which the Commissioners may make as to collection. In section (3) we are dealing with payments which will be of a periodical character For instance, the duty upon the grant of a lease will be assessed under this section. The consideration for a lease may well consist of periodical payments, and it is convenient therefore in such a case that there should be power given to the Commissioners to collect by instalments. That power is given by section (5) of Clause 4. When we come to deal with payments on death under Clause 5, we provide that the powers contained in the Finance Act of 1894 shall apply. I think I have made the point clear.
§ Mr. WATSON RUTHERFORDIt has been made so clear by the Attorney-General that the two clauses are inconsistent that if he wishes to put them in the Bill I think we had better consider it. I would therefore ask leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPE moved, in section (3), after "such" ["such proportionate"], to leave out "proportionate."
§ The object is to get rid of the arbitrary power of the Commissioners to make apportionments under this sub-section and to substitute for it the proper proportion payable, having reference to the site value of the land. The site value is the basis on which Increment Duty is to be assessed, and the occasions referred to in this subsection is the granting of a lease. That is covered by the words "interest in land on the transfer or passing by death of any interest in land." Therefore the duty payable would be proportionate to the whole of the Increment Duty on the whole site value, and the only way of getting the thing is to insert the proportion between the value of the interest and the whole of the site value. That having been once determined, the proportion between the whole of the Increment Duty and the duty payable under this will naturally be determined. I take it that it is the intention of the Government that this should be so. The words of the section are extremely vague and indeterminate, and I submit that the action of the Commissioners in 1971 the matter should be determined by the instructions of Parliament, and the definite instructions in this case should be to ascertain the exact proportion between the value of the interest and the site value of the land, which is the basis of all the duties under the first six clauses of this Act.
§ Sir W. ROBSONI gather that the intention of the hon. Member really is to introduce a suhstantive Amendment?
§ Mr. JAMES HOPEThat is so. I thought it necessary to omit the word in order to bring in the substantive Amendment.
§ Sir W. ROBSONThat hardly is a matter that arises subsequently.
§ The CHAIRMANAs I understand, the two arguments substantially arise now.
§ Sir W. ROBSONThe substantive Amendment is "to leave out from 'collected' to the end of section (3), and to insert (so far as it has not been paid on any previous occasion) 'as bears the same proportion to the whole amount of the Increment Value Duty on the land as the value of the interest bears to the site value of the land.'" That is the substance of the hon. Member's Amendment. I think it is founded upon a mistaken conception of how the duty will be calculated in such a case. The hon. Member denies that the increment shall be assessed in the same proportion as the value of the interest appears to be to the value of the land. I think there are instances where that will not be the case. Take a long leasehold interest at a time when the leaseholder's interest is five-sixths of the increment value and the reversioner's interest one-sixth. Let us suppose that the leaseholder makes a claim, there being then an interest. The leaseholder has then made up five-sixths of the interest, leaving one-sixth which has been allocated to the share of the reversioner. Later on—the increment not altering: I am keeping it at the same figures—the increment will remain stable when the leaseholder's interest is down to one-sixth and the reversioner's has become five-sixths, because the reversion may have fallen in. The result of the hon. Member's words if adopted would be that the leaseholder would pay the whole of the increment, appropriating his share when the sale would be brought into this fresh apportionment, because if the reversioner sold when his interest was only one-sixth 1972 of the increment he would claim under the hon. Member's words an allocation of part of that one-sixth of the increment in the leaseholder's interest. He would say, "You are only to put against me exactly the proportion of the value of the increment which, in my case one-sixth, it bears to the site value of the land," the truth being that there ought to be put against him the whole of the one-sixth increment which had been registered and appropriated as his share when the leaseholder's interest was five-sixth. I hope the hon. Gentleman will take my assurance that the words he desires to add would introduce a proportion into the case where no such proportion would be equitable as between the parties concerned. The proper sum to be paid by the reversioner when he ceases his interest towards the end of the lease, would be at least the proportion which he ought to have paid if he had paid at the time of the original appropriation.
§ Mr. JAMES HOPEI confess I have not absolutely followed every word the hon. and learned Gentleman has said with full appreciation. It arises from the extraordinary method of including the site value where the interest passes under Clause 2. The Amendment is perfectly logical as applied to Clause 2. It sheds a rather lurid light on the way in which increment value is computed under Clause 2. Under that clause the site value is got by certain deductions from the fee simple, and the fee simple is got at by calculating the value of the interest passing. It was argued then, and not disputed, that that was often an exceedingly fallacious way of calculating the value of the fee simple, and, consequently, a fallacious way of calculating the site value. If that method be adhered to, my Amendment follows logically. If my Amendment results in injustice it only follows from the extraordinary way in which the fee simple, and therefore the site value, is arrived at in Clause 2 (c) of the Bill, and that the whole method is entirely wrong.
§ Mr. WATSON RUTHERFORDThe amendment is an attempt to introduce mathematical accuracy into the calculation where it is not possible, as the learned Attorney-General has explained for a variety of reasons, with any justice. When you come really to look at the, facts, to introduce any mathematical accuracy whatever, or to get any real sensible relation. As the learned Attorney-General has pointed out in certain cases of leases what 1973 is the position? The lessor and the lessee are the two persons interested in the property at the moment. Their respective interests as between one another are constantly changing from the very first year when the lease is made. Suppose the lease is for 75 years, from the very first year right down to the end of it the proportion of ownership as between the lessor and lessee is constantly changing. The lessee at the beginning especially has got a very considerable interest in the property. If the lessee dies or assigns his interest, there is a very large proportion of the Increment Duty payable at that moment. Supposing, after ten years passes along, the owner of the fee simple dies, there again his interest is quite a different proportion at that date from what it would have been if he happened to die two years earlier or if his life had been prolonged for three or four years more. There is not only that difficulty, but the uncertainty of the increment, which is also continually altering. The land may have risen in value owing to a variety of circumstances, which may affect one corner of the property and not the rest. I could give numerous illustrations showing this to be the case. Then, again, you have got almost every other factor in value and in increment which attached to the original site attaching to the new site, or proportionate part. It is practically impossible to draft any clause which would adequately describe the maze of calculations and of apportionments into which this Bill is bound inevitably to lead. Therefore the learned Attorney-General was perfectly right when he said it was not possible for him to accept an Amendment to make mathematical or arithmetical sense of the position. Even with regard to one illustration which he gave he very carefully guarded himself, and stipulated that you must not have any variation in any of the other interests affected, because, if you have, you would make confusion worse confounded. I do not think we could have a better illustration after all these days and nights of discussion on this Bill of the utter impracticability and impossibility of the machinery by which this Bill is sought to be carried out than the illustration we have brought about by this Amendment, and the admissions of the Attorney-General himself.
Mr. BALFOURI think the point is really an important one. My hon. Friend (Mr. Rutherford) seems to regard the case as so complicated that no simple arith- 1974 metical statement will do justice as between the parties. That may be true, though I am not sure, that it is. But if it is true, we ought, before we leave the section, to know on what principle the Commissioners are to act. The suggestion of my hon. Friend (Mr. James Hope) is that when, in the case of a property which belongs in part to the freeholder and in part to the lessor, Increment Duty has to be collected it should be collected in proportion to the interests of the various parties concerned in the property. That seems quite simple and, on the face of it, quite just. The Attorney-General made a speech, which I am sure he endeavoured to make clear, and tried to prove that to make each person pay in proportion to his interest in the property would not be fair. Did anybody in the House understand the Attorney-General's argument? I am sure he made it as clear as it could be made, but I did not understand it, and I do not believe a single Member who listened to him understood it. I do not believe the Chancellor of the Exchequer himself understood it. The Amendment we do understand, and it seems to be perfectly just. But the matter is so complicated, that I may be wrong. There may lurk behind this apparently simple and just Amendment some fallacy which at present I do not see. Does anybody see the fallacy? If it is unjust—as it may be; the matter is so complicated—we ought to be told why it is unjust, and to have from the Government some indication of how the unfortunate people concerned are to discover what they have to pay to the State on account of Increment Value. That should be explained by the Government, unless they plead guilty to having brought forward a Bill which, perhaps from the nature of the case, or through faulty drafting, is of so incomprehensible a character that the vast interests it affects will be as little able to understand what they have to do and why they have to do it, as this Committee is able to understand the provisions it is endeavouring to, and I suppose will, pass, without the smallest conception of upon what substantial grounds the policy is based.
§ Sir W. ROBSONLet me try, if I can to put in a somewhat simpler form, why I think the Amendment of the hon. Member is unnecessary. He says, that under his Amendment, whenever he comes to collect increment value you must collect it. You must, he says, collect it in such proportion 1975 as the value of the interest appears to the site value of the land. I take the ease of where there is a leaseholder who made a sale at an early period of his lease, when he had the greater part of the value. His value, of course, is a waning value; the reversioner's interest is a waxing value. The increment attached to the site value remains, in my hypothesis, the same. The leaseholder makes a sale of his interest, of which, at the time, he has five-sixths. The Commissioners say: "You have five-sixths of the interest at this moment, if you sell your land you will get five-sixths of the value and there will be one-sixth left for the reversioner." Years roll on. For the purpose of the illustration, the increment remains exactly the same, but the leaseholder's interest gradually diminishes. The reversioner's interest gradually increases. The reversioner still remains liable. Nothing has occurred to alter his liability for the one-sixth of the increment value. That is the way in which the increment value was understood: that was the proportion in which it was divided—five-sixths and one-sixth. Nothing has happened to alter the amount of the increment. But something has happened to increase the reversioner's interest. The reversioner sells. How much ought he to pay? On one-sixth, which is the interest against him all the time. The hon. Member says: "No; that one-sixth which is to be collected shall be collected in the proportion in which your interest appears to the complete site value of the land at the time of the collection." By this time the reversioner has got five-sixths interest, and so he will not pay the whole of it. Part of it will be turned over to the leaseholder, who has paid his full share a long time before. Under these circumstances it is not a wise plan which compels the Commissioners every time they collect the duty to have regard, not to the amount of duty which has actually accrued against each particular interest and ought to be paid as soon as the occasion arises, but to have regard only to the proportionate value of that particular interest to the whole site value at that time. It is right when you are taking the increment on a transfer or a sale to then treat the proportion between the interest and the site value as the amount which ought to be collected; but it is quite wrong to do it in this particular case. It is quite wrong to take the test as suggested by the hon. Member's Amendment, because it would 1976 put upon every leaseholder a part of the Increment Value Duty that he ought not to bear. He has paid the full five-sixths——
§ Sir W. ROBSONThe payment was made by the leaseholder. I am treating one person as representing the increment. It is clearly unfair to throw over the leaseholder's interest which has paid its full share of increment.
§ Mr. PRETYMANThe Attorney-General has left out one very important consideration, namely, that on the first occasion five-sixths of the Increment Value Duty would have been paid. That clears it to that extent upon the whole property. There are two separate occasions, and when the second occasion comes the five-sixths previously paid will be deducted from the amount upon the second occasion, and there will be only one-sixth payable. Under my hon. Friend's Amendment, whichever interest has to pay by transfer or by death, would pay its proportion not of the whole Increment Value Duty, but of the residue, which in that case would only be one-sixth, which appears to me to be perfectly fair and just. Upon every successive occasion that Increment Value Duty becomes due you have to make two calculations—first, to calculate which is the particular interest and what proportion of the duty is leviable, and secondly, what amount of the duty has previously been paid by other interests or any interest, but for that purpose the Increment Value Duty is treated as a whole. And whenever the Increment Value Duty on any unit falls due you have to deduct the duty previously paid by the owner on any interest whatever. That being deducted you arrive at a certain residue. This residue is chargeable to the whole property if it all passes. If it does not pass my hon. Friend contends the residue on that occasion should be deducted in proportion. That seems to be a reasonable proposal, and the only proposal upon which on equity you can possibly value. I cannot see how the explanation given by the Attorney-General alters our view upon that point.
§ Mr. STEWART BOWLESOne word in regard to the question raised by the Leader of the Opposition. We are dealing here with the amount of taxes which vast numbers of people and bodies in this country will have to pay. Everybody 1977 must agree that in such a matter it is of the first importance that they should be certain so far as possible as to the amount which will be due upon the incidence of this duty upon any occasion. The Government has chosen to say that this duty is to be charged upon all these enormously different and varying interests upon these particular occasions. How is that duty to be levied and assessed? It is not to be done haphazard. It is to be done according to rule, and the question is whether this Committee is justified in leaving these rules to be made by the Commissioners, or whether it is not clearly part of our duty to the taxpayers of this country, having chosen to say duties are to be levied upon these people, to lay down plainly upon the face of the Bill for the information of all persons who may be liable to this duty, what it really is they will have to pay, and the conditions under which they will have to pay it. It appears to me to be a most extraordinary thing that the House of Commons should say taxes are to be levied upon certain persons, but what the amount is to be or how the total is to be allocated as between different interests, are matters which we admit will have to be the subject of very careful rule under a great scheme of taxation, but that these rules are to be made by Commissioners of Inland Revenue in their discretion and judgment. That appears to me to be an abdication on the part of the Committee of their responsibility to the taxpayer in regard to the amount of this charge. It is another instance of what appears to me to be the usual manner in which this Government gets out of almost insoluble difficulties.
Mr. BALFOURI will put a question to the Attorney-General which will enable us to understand what the mind of the Government is if they have really thought this question out. The hon. and learned Gentleman took the case of a freehold let for a long term of years, and then took the occasion when the interest of the leaseholder was five-sixths of the whole and the owner one-sixth. He also suggested other hypotheses that might happen. I will stop at that point, and I ask the Government what proportion at that point is to be paid by the freeholder on the one side and the leaseholder on the other. According to the Attorney-General the leaseholder owns five-sixths and the freeholder one-sixth. One of them dies, or there is an occasion under this subsection when the duty has to be paid. In 1978 what proportion in that case has the increment value to be paid? That is a very simple question, and it would help us if we were given that information.
§ Sir W. ROBSONThe leaseholder would pay five-sixths and one-sixth would be left over, which would be appropriated to the share of the reversioner. Later, the reversioner sells, and he sells at a time when the lease is nearly up. Then there remains only one-sixth of the Increment Value Duty to pay, but he has by that time got five-sixths of the interest. Under those circumstances I say he should pay his one-sixth, but this Amendment says to the reversioner, "You have not to pay your one-sixth, but you have now to apply the proportion between the land owner's interest and the site value." That is not the proper occasion on which to apply that proportion, and he ought to pay one-sixth.
Mr. BALFOURYou have one principle on the first occasion and another principle on another occasion, and surely that cannot be right. It must be determined according to the relative interests of the various owners, leasehold or otherwise, in the property. The ratio must be the same throughout the whole of the lease. You cannot apply one principle at the beginning and another at the end.
§ Sir W. ROBSONThe only difficulty arises from our anxiety not to take the duty twice. That is really what we are endeavouring to avoid. When the leaseholder has paid the greater portion of the increment, we do, I dare say, what is illogical, but at all events it is not a matter of which hon. Members opposite should complain. We say that has franked the whole. Later on, when the reversioner comes to sell, you do not need the precaution suggested. There is only one-sixth to be paid, and that is the one-sixth attributable to his interest when the leaseholder sold. Assuming the increment has remained stable and his interest has not diminished, then he pays the whole one-sixth.
Mr. BALFOURTake two leases both of 50 years. In one case the leaseholder sells quite early in his lease. He has got five-sixths of the property, and he pays five-sixths of the tax. In the other case the leaseholder does not sell until the last few years. Again, I suppose he pays his proportion, one-sixth. The freeholder has been exactly in the same position all through. He has had nothing whatever 1979 to do with the selling of the lease, and yet in one case he has to pay a one-sixth, and in the other five-sixths. That is accepted by the Government. Are these things to be embodied in the rules of the Commissioners to be laid upon the Table? What principles are they going to embody? Is it going to be a rule of thumb? The owner who is unfortunate enough to choose a young leaseholder who sticks to his lease will pay everything, and the man who gets a tenant who is going to sell his leasehold in the next few years will pay nothing. No wonder the Government call their system illogical, though why they say we should not complain of it I do not know. If there is to be a competition in want of appreciation between the two sides of the House, it is not this side which will win.
§ Mr. BOWLESThe learned Gentleman has told us what in his view would happen in the case he has put before the Committee. What security has he that the Commissioners will take his view? It is all very well for the hon. Gentleman to tell us what he thinks the Commissioners will do, but he will have no control over them. This Committee will have no control over them. When the hon. Gentleman tells us that all that will remain will be one-sixth that is only his opinion, right or wrong, of the view the Commissioners may take, and the question for us is
§ whether the view of the hon. and learned Gentleman, or the view of my right hon. friend (Mr. Balfour), will accord with that the Commissioners will take. The question is whether the authority who is to make the rule is to be the Commissioners or the House of Commons. I say we are the people and not the Commissioners who ought to make these rules. The Attorney-General takes a particular case and says such and such will be the duties payable. What security has the Committee or any man in the country that the Attorney-General's views will be shared by the Commissioners when it comes to the point? If this section is passed as it stands, it will not be the Attorney-General or the Government, but those gentlemen of the Inland Revenue upon whom the decision will depend. I do not know whether the Committee is prepared, merely on the chance that the Commissioners will take the view of their duties which is foreshadowed by the Attorney-General, whether it is prepared on that security to rest the amount of taxes to be paid under that section. It seems to me a most extraordinary proceeding. The effect is to leave the taxation of the subject not to the interpretation of an Act of Parliament, but to the discretion of Commissioners.
§ Question put, "That the word 'proportionate' stand part of the Clause."
§ The Committee divided: Ayes, 251; Noes, 91.
1983| Division No. 278.] | AYES. | [11.30 p.m. |
| Abraham, William (Rhondda) | Brooke, Stopford | Curran, Peter Francis |
| Acland, Francis Dyke | Brunner, J. F. L. (Lancs., Leigh) | Dalziel, Sir James Henry |
| Adkins, W. Ryland D. | Bryce, J. Annan | Davies, Ellis William (Eifion) |
| Agnew, George William | Buckmaster, Stanley O. | Davies, Sir W. Howell (Bristol, S.) |
| Ainsworth, John Stirling | Burke, E. Haviland- | Dewar, Arthur (Edinbugh, S.) |
| Alden, Percy | Burns, Rt. Hon. John | Dewar, Sir J. A. (Inverness-sh.) |
| Allen, A. Acland (Christchurch) | Burnyeat, W. J. D. | Dickinson, W. H. (St. Pancras, N.) |
| Allen, Charles P. (Stroud) | Buxton, Rt. Hon. Sydney Charles | Dickson-Poynder, Sir John P. |
| Armitage, R. | Byles, William Pollard | Duncan, C. (Barrow-in-Furness) |
| Asquith, Rt. Hon. Herbert Henry | Carr-Gomm, H. W. | Duncan, J. H. (York, Otley) |
| Astbury, John Meir | Causton, Rt. Hon. Richard Knight | Dunne, Major E. Martin (Walsall) |
| Baker, Joseph A. (Finsbury, E.) | Chance, Frederick William | Edwards, Sir Francis (Radnor) |
| Balfour, Robert (Lanark) | Cherry, Rt. Hon. R. R. | Elibank, Master of |
| Baring, Godfrey (Isle of Wight) | Churchill, Rt. Hon. Winston S. | Esslemont, George Birnie |
| Barlow, Sir John E. (Somerset) | Cleland, J. W. | Evans, Sir Samuel T. |
| Barlow, Percy (Bedford) | Clough, William | Everett, R. Lacey |
| Barnes, G. N. | Clynes, J. R. | Ferens, T. R. |
| Barran, Rowland Hirst (Leeds, N.) | Cobbold, Felix Thornley | Fiennes, Hon. Eustace |
| Barry, Redmond J. (Tyrone, N.) | Collins, Stephen (Lambeth) | Fuller, John Michael F. |
| Beale, W. P. | Collins, Sir Wm. J. (St. Pancras, W.) | Fullerton, Hugh |
| Beauchamp, E. | Condon, Thomas Joseph | Gibb, James (Harrow) |
| Beck, A. Cecil | Cooper, G. J. | Gill, A. H. |
| Benn, W. (Tower Hamlets, St. Geo.) | Corbett, C. H. (Sussex, E. Grinstead) | Gladstone, Rt. Hon. Herbert John |
| Bennett, E. N. | Cornwall, Sir Edwin A. | Glover, Thomas |
| Boulton, A. C. F. | Cory, Sir Clifford John | Goddard, Sir Daniel Ford |
| Bowerman, C. W. | Cotton, Sir H. J. S. | Gooch, George Peabody (Bath) |
| Brace, William | Cowan, W. H. | Greenwood, G. (Peterborough) |
| Bramsdon, Sir Thomas A. | Craig, Herbert J. (Tynemouth) | Griffith, Ellis J. |
| Brigg, John | Crosfield, A. H. | Gwynn, Stephen Lucius |
| Bright, J. A. | Crossley, William J. | Hall, Frederick |
| Brocklehurst, W. B. | Cullinan, J. | Harcourt, Rt. Hon. L. (Rossendale) |
| Harcourt, Robert V. (Montrose) | Mason, A. E. W. (Coventry) | Silcock, Thomas Ball |
| Hardie, J. Keir (Merthyr Tydvil) | Massie, J. | Simon, John Allsebrook |
| Harmsworth, Cecil B. (Worc'r.) | Masterman, C. F. G. | Smeaton, Donald Mackenzie |
| Harmsworth, R. L. (Caithness-sh.) | Micklem, Nathaniel | Soames, Arthur Wellesley |
| Harvey, A. G. C. (Rochdale) | Montgomery, H. G. | Stanger, H. Y. |
| Harwood, George | Morgan, G. Hay (Cornwall) | Stanley, Hon. A. Lyulph (Cheshire) |
| Haworth, Arthur A. | Morgan, J. Lloyd (Carmarthen) | Stewart, Halley (Greenock) |
| Hazel, Dr. A. E. | Morrell, Philip | Stewart-Smith, D. (Kendal) |
| Hedges, A. Paget | Morse, L. L. | Strachey, Sir Edward |
| Helme, Norval Watson | Murphy, N. J. (Kilkenny, S.) | Straus, B. S. (Mile End) |
| Henderson, J. M. (Aberdeen, W.) | Murray, Capt. Hon. A. C. (Kincard.) | Strauss, E. A. (Abingdon) |
| Henry, Charles S. | Myer, Horatio | Summerbell, T. |
| Herbert, Col. Sir Ivor (Mon. S.) | Napier, T. B. | Sutherland, J. E. |
| Herbert, T. Arnold (Wycombe) | Newnes, F. (Notts, Bassetlaw) | Taylor, John W. (Durham) |
| Higham, John Sharp | Nicholls, George | Tennant, Sir Edward (Salisbury) |
| Hobhouse, Rt. Hon. Charles E. H. | Nolan, Joseph | Tennant, H. J. (Berwickshire) |
| Hodge, John | Norman, Sir Henry | Thomas, Abel (Carmarthen, E.) |
| Hogan, Michael | Nussey, Sir Willans | Thomas, Sir A. (Glamorgan, E.) |
| Holland, Sir William Henry | Nuttall, Harry | Thomasson, Franklin |
| Holt, Richard Durning | O'Connor, John (Kildare, N.) | Thompson, J. W. H. (Somerset, E.) |
| Hooper, A. G. | Parker, James (Halifax) | Thorne, G. R. (Wolverhampton) |
| Hope, W. Bateman (Somerset, N.) | Pearce, Robert (Staffs, Leek) | Tomkinson, James |
| Horniman, Emslie John | Pearson, W. H. M. (Suffolk, Eye) | Trevelyan, Charles Philips |
| Hudson, Walter | Pickersgill, Edward Hare | Ure, Rt. Hon. Alexander |
| Hyde, Clarendon | Pirie, Duncan V. | Verney, F. W. |
| Idris, T. H. W. | Pointer, Joseph. | Vivian, Henry |
| Illingworth, Percy H. | Pollard, Dr. | Waldron, Laurence Ambrose |
| Jackson, R. S. | Ponsonby, Arthur A. W. H. | Walsh, Stephen |
| Jenkins, J. | Price, C. E. (Edinburgh, Central) | Walters, John Tudor |
| Jones, Leif (Appleby) | Price, Sir Robert J. (Norfolk, E.) | Ward, John (Stoke-upon-Trent) |
| Jowett, F. W. | Radford, G. H. | Ward, W. Dudley (Southampton) |
| Joyce, Michael | Rea, Rt. Hon. Russell (Gloucester) | Waring, Walter |
| King, Alfred John (Knutsford) | Reddy, M. | Warner, Thomas Courtenay T. |
| Lamont, Norman | Rendall, Athelstan | Wason, John Cathcart (Orkney) |
| Layland-Barrett, Sir Francis | Richards, Thomas (W. Monmouth) | Waterlow, D. S. |
| Lehmann, R. C. | Richards, T. F. (Wolverhampton) | Watt, Henry A. |
| Lever, A. Levy (Essex, Harwich) | Ridsdale, E. A. | Whitbread, Howard |
| Levy, Sir Maurice | Roberts, Charles H. (Lincoln) | White, Sir George (Norfolk) |
| Lewis, John Herbert | Roberts, G. H. (Norwich) | White, J. Dundas (Dumbartonshire) |
| Lloyd-George, Rt. Hon. David | Roberts, Sir J. H. (Denbighs) | White, Sir Luke (York, E. R.) |
| Lundon, Thomas | Robinson, S. | Whitley, John Henry (Halifax) |
| Macdonald, J. R. (Leicester) | Robson, Sir William Snowdon | Wiles, Thomas |
| Macdonald, J. M. (Falkirk Burghs) | Roch, Walter F. (Pembroke) | Wilkie, Alexander |
| Mackarness, Frederic C. | Rogers, F. E. Newman | Wilson, Henry J. (York, W.R.) |
| MacNeill, John Gordon Swift. | Rose, Sir Charles Day | Wilson, J. W. (Worcestershire, N.) |
| Macpherson, J. T. | Rutherford, V. H. (Brentford) | Wilson, P. W. (St. Pancras, S.) |
| MacVeagh, Jeremiah (Down, S.) | Samuel, Rt. Hon. H. L. (Cleveland) | Wilson, W. T. (Westhoughton) |
| MacVeigh, Charles (Donegal, E.) | Samuel, S. M. (Whitechapel) | Winfrey, R. |
| M'Laren, Rt. Hon. Sir C. B. (Leices.) | Scarisbrick, Sir T. T. L. | Wood, T. M'Kinnon |
| M'Laren, H. D. (Stafford, W.) | Schwann, C. Duncan (Hyde) | |
| M'Micking, Major G. | Schwann, Sir C. E. (Manchester) | |
| Mallet, Charles E. | Scott, A. H. (Ashton-under-Lyne) | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| Markham, Arthur Basil | Seddon, J. | |
| Marnham, F. J. | Seely, Colonel | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Du Cros, Arthur Philip | Law, Andrew Bonar (Dulwich) |
| Anson, Sir William Renell | Faber, George Denison (York) | Lee, Arthur H. (Hants, Fareham) |
| Anstruther-Gray, Major | Faber, Capt. W. V. (Hants, W.) | Lockwood, Rt. Hon. Lt.-Col. A. R. |
| Arkwright, John Stanhope | Forster, Henry William | Long, Col. Charles W. (Evesham) |
| Balcarres, Lord | Foster, Philip S. (Warwick, S.W.) | Long, Rt Hon. Walter (Dublin, S.) |
| Balfour, Rt. Hon. A. J. (City Lond.) | Gardner, Ernest | Lonsdale, John Brown lee |
| Banbury, Sir Frederick George | Gibbs, G. A. (Bristol, West) | Lyttelton, Rt. Hon. Alfred |
| Baring, Capt. Hon. G. (Winchester) | Goulding, Edward Alfred | Marks, H. H. (Kent) |
| Beckett, Hon. Gervase | Gretton, John | Mason, James F. (Windsor) |
| Bignold, Sir Arthur | Guinness, Hon. R. (Haggerston) | Morrison-Bell, Captain |
| Bridgeman, W. Clive | Guinness, Hon. W. E. (Bury St. Edm.) | Newdegate, F. A. |
| Brotherton, Edward Allen | Hamilton, Marquess of | Nicholson, Wm. G. (Petersfield) |
| Burdett-Coutts, W. | Hardy, Laurence (Kent, Ashford) | Oddy, John James |
| Butcher, Samuel Henry | Harris, Frederick Leverton | Parkes, Ebenezer |
| Carlile, E. Hildred | Harrison-Broadley, H. B. | Pease, Herbert Pike (Darlington) |
| Castlereagh, Viscount | Hay, Hon. Claude George | Pretyman, Ernest George |
| Cecil, Evelyn (Aston Manor) | Helmsley, Viscount | Randles, Sir John Scurrah |
| Cecil, Lord R. (Marylebone, E.) | Hermon-Hodge, Sir Robert T. | Ratcliffe, Major R. F. |
| Chaplin, Rt. Hon. Henry | Hill, Sir Clement | Remnant, James Farquharson |
| Clive, Percy Archer | Hills, J. W. | Renton, Leslie |
| Clyde, James Avon | Hunt, Rowland | Renwick, George |
| Craik, Sir Henry | Joynson-Hicks, William | Roberts, S. (Sheffield, Ecclesall) |
| Dalrymple, Viscount | Kennaway, Rt. Hon. Sir John H. | Ropner, Colonel Sir Robert |
| Doughty, Sir George | Kerry, Earl of | Rutherford, John (Lancashire) |
| Douglas, Rt. Hon. A. Akers- | Lane-Fox, G. R. | Rutherford, W. W. (Liverpool) |
| Sassoon, Sir Edward Albert | Talbot, Rt. Hon. J. G. (Oxford Univ.) | Wortley, Rt. Hon. C. B. Stuart- |
| Scott, Sir S. (Marylebone, W.) | Valentia, Viscount | Younger, George |
| Smith, Abel H. (Hertford, East) | Walker, Col. W. H. (Lancashire) | |
| Smith, F. E. (Liverpool, Walton) | Walrond, Hon Lionel | |
| Stanier, Beville | Warde, Col. C. E. (Kent, Mid.) | TELLERS FOR THE NOES.—Mr. James Hope and Mr. Bowles. |
| Starkey, John R. | Williams Col. R. (Dorset, W.) | |
| Talbot, Lord E. (Chichester) | Willoughby de Eresby, Lord |
§ Amendments made, to leave out "of the Amount," and to leave out "which is due."—[Sir W. Robson.]
§ Mr. J. F. MASON moved, after "Commissioners" ["as may be determined by the Commissioners"] to insert "after hearing all reasonable evidence submitted to them in that behalf by or on behalf of the holder of the lease or of the interest in the land." This is designed with the object of giving anyone who is interested in the land a right of access to the Commissioners in case they have any evidence to lay before them which might influence their decision, and in order to save them the expense which would occur if the Commissioners were left first of all to make this apportionment and then afterwards the evidence had to be brought before the referee.
§ Sir W. ROBSONI think these words are unnecessary. I can scarcely believe it possible that the Commissioners would refuse to do under this Bill what they do under every other taxing Bill committed to their administration. They not only willingly hear but are careful to require information which will enable them to make a just assessment, and they will do so all the more when they are subject to appeal. Any refusal to receive information would be so much against them on appeal that they would be very unlikely to do so.
§ Mr. JOYNSON-HICKSI think the Government might accept these words. The speech of the Attorney-General seems to be in favour of the Amendment. I am bound to say that my experience of the Commissioners of Inland Revenue has not been quite on the line indicated by the hon. and learned Gentleman. It is sometimes difficult to get a hearing from them. They ask that cases to be put before them should be stated in writing. The point of the Amendment is that they should be required to hear all reasonable evidence. Without these words in the clause it will be possible for the Commissioners to say, "Send your statement in writing. We have no time to hear you personally." If you could get behind the closed door at Somerset House, you would be able in nine cases out of ten to settle matters without putting the persons concerned to the expense and worry of an appeal.
§ Mr. LANE-FOXThere can be no harm in putting in the words proposed in the Amendment. In view of the enormous amount of work which will be cast on the Commissioners, there will be great temptation not to give a hearing. If these words were inserted in the clause, the taxpayer would have an absolute right to have evidence heard by the Commissioners.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 84; Noes, 215.
1985| Division No. 279.] | AYES. | [11.50 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Douglas, Rt. Hon. A. Akers- | Kerry, Earl of |
| Anstruther-Gray, Major | Du Cros, Arthur | Lane-Fox, G. R. |
| Arkwright, John Stanhope | Faber, George Denison (York) | Law, Andrew Bonar (Dulwich) |
| Balcarres, Lord | Faber, Capt. W. V. (Hants, W.) | Lee, Arthur H. (Hants, Fareham) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Forster, Henry William | Lockwood, Rt. Hon. Lt.-Col. A. R. |
| Beckett, Hon. Gervase | Faster, P. S. | Long, Col. Charles W. (Evesham) |
| Bignold, Sir Arthur | Gardner, Ernest | Long, Rt. Hon. Walter (Dublin, S.) |
| Bowles, G. Stewart | Gibbs, G. A. (Bristol, West) | Lonsdale, John Brownlee |
| Bridgeman, W. Clive | Goulding, Edward Alfred | Lyttelton, Rt. Hon. Alfred |
| Brotherton, Edward Allen | Gretton, John | Marks, H. H. (Kent) |
| Burdett-Coutts, W. | Guinness, Hon. R. (Haggerston) | Morpeth, Viscount |
| Carlile, E. Hildred | Hamilton, Marquess of | Morrison-Bell, Captain |
| Castlereagh, Viscount | Hardy, Laurence (Kent, Ashford) | Newdegate, F. A. |
| Cecil, Evelyn (Aston Manor) | Harris, Frederick Leverton | Nicholson, Wm. G. (Petersfield) |
| Cecil, Lord R. (Marylebone, E.) | Harrison-Broadley, H. B. | Oddy, John James |
| Chaplin, Rt. Hon. Henry | Hay, Hon. Claude George | Parkes, Ebenezer |
| Clive, Percy Archer | Helmsley, Viscount | Percy, Earl |
| Clyde, J. Avon | Hermon-Hodge, Sir Robert | Ratcliff, Major R. F. |
| Coates, Major E. F. (Lewisham) | Hill, Sir Clement | Remnant, James Farquharson |
| Craik, Sir Henry | Hills, J. W. | Renton, Leslie |
| Dalrymple, Viscount | Hope, James Fitzalan (Sheffield) | Renwick, George |
| Doughty, Sir George | Hunt, Rowland | Roberts, S. (Sheffield, Ecclesall) |
| Rutherford, John (Lancashire) | Talbot, Lord E. (Chichester) | Wortley, Rt. Hon. C. B. Stuart- |
| Rutherford, W. W. (Liverpool) | Valentia, Viscount | Wyndham, Rt. Hon. George |
| Sassoon, Sir Edward Albert | Walker, Col. W. H. (Lancashire) | Younger, George |
| Scott, Sir S. (Marylebone, W.) | Walrond, Hon. Lionel | |
| Smith, Abel H. (Hertford, E.) | Warde, Col. C. E. (Kent, Mid) | TELLERS FOR THE AYES.—Mr. James Mason and Mr. Joynson-Hicks. |
| Smith, F. E. (Liverpool, Walton) | Williams, Col. R. (Dorset, W.) | |
| Stanier, Beville | Willoughby de Eresby, Lord | |
| Starkey, John R. | ||
| NOES. | ||
| Abraham, William (Rhondda) | Grey, Rt. Hon. Sir Edward | Pointer, J. |
| Acland, Francis Dyke | Griffith, Ellis J. | Pollard, Dr. G. H. |
| Agnew, George William | Gwynn, Stephen Lucius | Ponsonby, Arthur A. W. H. |
| Ainsworth, John Stirling | Hall, Frederick | Price, C. E. (Edinburgh, Central) |
| Allen, A. Acland (Christchurch) | Harcourt, Rt. Hon. L. (Rossendale) | Price, Sir Robert J. (Norfolk, E.) |
| Allen, Charles P. (Stroud) | Harcourt, Robert V. (Montrose) | Radford, G. H. |
| Armitage, R. | Hardie, J. Keir (Merthyr Tydvil) | Reddy, M. |
| Asquith, Rt. Hon. Herbert Henry | Harmsworth, Cecil B. (Worcester) | Rendall, Athelstan |
| Baker, Joseph A. (Finsbury, E.) | Harmsworth, R. L. (Caithness-sh.) | Richards, Thomas (W. Monmouth) |
| Balfour, Robert (Lanark) | Harwood, George | Richards, T. F. (Wolverhampton, W.) |
| Baring, Godfrey (Isle of Wight) | Haworth, Arthur A. | Ridsdale, E. A. |
| Barlow, Percy (Bedford) | Hazel, Dr. A. E. W. | Roberts, Charles H. (Lincoln) |
| Barnes, G. N. | Hedges, A. Paget | Roberts, G. H. (Norwich) |
| Barran, Rowland Hirst | Helme, Norval Watson | Roberts, Sir J. H. (Denbighs) |
| Barry, Redmond J. (Tyrone, N.) | Henderson, J. McD. (Aberdeen, W.) | Robson, Sir William Snowdon |
| Beale, W. P. | Henry, Charles S. | Roch, Walter F. (Pembroke) |
| Beauchamp, E. | Herbert, Col. Sir Ivor (Mon. S.) | Rogers, F. E. Newman |
| Benn, W. (Tower Hamlets, St. Geo.) | Higham, John Sharp | Rose, Sir Charles Day |
| Bennett, E. N. | Hobhouse, Rt Hon. Charles E. H. | Rutherford, V. H. (Brentford) |
| Bowerman, C. W. | Hodge, John | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brace, William | Hogan, Michael | Samuel, S. M. (Whitechapel) |
| Bramsdon, Sir T. A. | Holland, Sir William Henry | Scarisbrick, Sir T. T. L. |
| Brocklehurst, W. B. | Holt, Richard Durning | Scott, A. H. (Ashton-under-Lyne) |
| Brooke, Stopford | Hooper, A. G. | Seddon, J. |
| Brunner, J. F. L. (Lancs., Leigh) | Hope, W. H. B. (Somerset, N.) | Seely, Colonel |
| Bryce, J. Annan | Horniman, Emslie John | Silcock, Thomas Ball |
| Burke, E. Haviland- | Hudson, Walter | Simon, John Allsebrook |
| Burns, Rt. Hon. John | Hyde, Clarendon G. | Smeaton, Donald Mackenzie |
| Burnyeat, W. J. D. | Illingworth, Percy H. | Stanger, H. Y. |
| Buxton, Rt. Hon. Sydney Charles | Jenkins, J. | Stanley, Hon. A. Lyulph (Cheshire) |
| Byles, William Pollard | Jones, Leif (Appleby) | Stewart-Smith, D. (Kendal) |
| Carr-Gomm, H. W. | Jowett, F. W. | Strachey, Sir Edward |
| Causton, Rt. Hon. Richard Knight | Joyce, Michael | Straus, B. S. (Mile End) |
| Chance, Frederick William | Lamont, Norman | Strauss, E. A. (Abingdon) |
| Cherry, Rt. Hon. R. R. | Lehmann, R. C. | Summerbell, T. |
| Churchill, Rt. Hon. Winston S. | Lever, A. Levy (Essex, Harwich) | Sutherland, J. E. |
| Clough, William | Levy, Sir Maurice | Taylor, John W. (Durham) |
| Cobbold, Felix Thornley | Lewis, John Herbert | Tennant, Sir Edward (Salisbury) |
| Collins, Stephen (Lambeth) | Lloyd-George, Rt. Hon. David | Tennant, H. J. (Berwickshire) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Lundon, T. | Thomas, Abel (Carmarthen, E.) |
| Cooper, G. J. | Macdonald, J. R. (Leicester) | Thomas, Sir A. (Glamorgan, E.) |
| Corbett, C. H. (Sussex, E. Grinstead) | Mackarness, Frederic C. | Thomasson, Franklin |
| Cornwall, Sir Edwin A. | MacNeill, John Gordon Swift | Thompson, J. W. H. (Somerset, E.) |
| Cory, Sir Clifford John | Macpherson, J. T. | Thorne, G. R. (Wolverhampton) |
| Cowan, W. H. | MacVeagh, Jeremiah (Down, S.) | Tomkinson, James |
| Craig, Herbert J. (Tynemouth) | M'Laren, Sir C. B. (Leicester) | Trevelyan, Charles Philips |
| Crosfield, A. H. | M'Laren, H. D. (Stafford, W.J | Ure, Rt. Hon. Alexander |
| Crossley, William J. | M'Micking, Major G. | Verney, F. W. |
| Cullinan, J. | Mallet, Charles E. | Waldron, Laurence Ambrose |
| Dalziel, Sir James Henry | Markham, Arthur Basil | Walsh, Stephen |
| Davies, Ellis William (Eifion) | Marnham, F. J. | Walters, John Tudor |
| Davies, Sir W. Howell (Bristol, S.) | Massie, J. | Ward, John (Stoke-upon-Trent) |
| Dewar, Arthur (Edinburgh, S.) | Masterman, C. F. G. | Ward, W. Dudley (Southampton) |
| Dickinson, W. H. (St. Pancras, N.) | Meagher, Michael | Waring, Walter |
| Dickson-Poynder, Sir John P. | Micklem, Nathaniel | Warner, Thomas Courtenay T. |
| Duncan, C. (Barrow-in-Furness) | Montgomery, H. G. | Wason, John Cathcart (Orkney) |
| Dunne, Major E. Martin (Walsall) | Morgan, J. Lloyd (Carmarthen) | Waterlow, D. S. |
| Edwards, Sir Francis (Radnor) | Morrell, Philip | Watt, Henry A. |
| Elibank, Master of | Morse, L. L. | White, J. Dundas (Dumbartonshire) |
| Esslemont, George Birnie | Murphy, N. J. (Kilkenny, S.) | White, Sir Luke (York, E.R.) |
| Evans, Sir S. T. | Murray, Capt. Hon. A. C. (Kincard.) | White, Patrick (Meath, North) |
| Everett, R. Lacey | Myer, Horatio | Whitley, John Henry (Halifax) |
| Ferens, T. R. | Newnes, F. (Notts, Bassetlaw) | Wiles, Thomas |
| Fiennes, Hon. Eustace | Nicholls, George | Wilkie, Alexander |
| Fuller, John Michael F. | Nolan, Joseph | Wilson, H. J. (York, W.R.) |
| Fullerton, Hugh | Norman, Sir Henry | Wilson, P. W. (St. Pancras, S.) |
| Gibb, James (Harrow) | Nuttall, Harry | Wilson, W. T. (Westhoughton) |
| Gill, A. H. | O'Dowd, John | Winfrey, R. |
| Gladstone, Rt. Hon. Herbert John | O'Kelly, Conor (Mayo, N.) | Wood, T. M'Kinnon |
| Glover, Thomas | Parker, James (Halifax) | |
| Goddard, Sir Daniel Ford | Pearce, Robert (Staffs, Leek) | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Gooch, George Peabody (Bath) | Pearson, W. H. M. (Suffolk, Eye) | |
| Greenwood, G. (Peterborough) | Pirie, Duncan V. |
Question, "That the word 'duty' be there inserted," put, and agreed to.
§ Mr. LLOYD-GEORGE moved to insert, at the end of section (3), the following:—
§ "(4) For the purpose of the collection of duty on the increment value of any land under this section, the increment value shall be deemed to be reduced on the first occasion on which increment value becomes due under this Act by an amount equal to ten per cent, of the original site value of the land, and on any subsequent occasion by an amount equal to ten per cent, of the site value on the last preceding occasion on which Increment Value Duty has become due, and the amount of duty to be collected shall be remitted in whole or in part accordingly.
§ "Any duty which by reason of this provision is remitted on any occasion shall not be collected and shall be deemed to have been paid.
§ "Provided that no remission shall be given under this provision on any occasion which will make the amount of the increment value on which duty has been remitted during the preceding period of five years exceed twenty-five per cent of the site value of the land on the last occasion on which increment value became due prior to the commencement of that period or of the original site value if there has then been no such occasion."
§ I have already explained this Amendment to the House. It deals with the 10 per cent. instalment. The only part of the Amendment which I have not quite explained is this: I did indicate that it would be necessary to safeguard this exemption, otherwise it might be possible, with the 10 per cent. instalment, to get rid of the increment of 50 per cent. or even 100 per cent. I think this was pointed out on the discussion of the Amendment of the hon. Member for Stepney, on which first of all I promised this Amendment on the part of the Government. Therefore, it should be accompanied by a safeguard of this kind, otherwise it would be followed by transactions preventing an increment of 50 per cent. That obviously is not the intention, and therefore, I move this section.
Mr. BALFOURThe Chancellor of the Exchequer has stated perfectly accurately what he has already told us—exactly what it is he means to give, but he has not told us to this day the proviso by which he means to accompany it. This really shows, I think, how impossible it is to make any change in this tax without introducing every kind of absurdity and 1988 difficulty. Take the case, which certainly occurs, of a bit of land which is sold, and on which the increment value is just under ten per cent., and on which no duty is paid. Then it is sold again with the increment under ten per cent. and no duty is paid. Then there may be an increment of four per cent. again and no increment is paid. The land may then be held for a very long time and there may be a change with the increment over twenty-five per cent., and the last man who holds it has to pay the whole increment since the original site value. I think that is the case, I may have mistaken the purport of the last paragraph of the Amendment.
§ Mr. LLOYD-GEORGEThe idea is whatever is over twenty-five per cent. shall be liable to Increment Duty, but it certainly will not be liable for the whole twenty-five per cent.
Mr. BALFOURI am supposing a series of transactions and all the people engaged in the earlier transactions are franked up to 24 per cent. Then when the land is sold to the next person, if the land only increases one per cent., has the duty to be paid on the 25 per cent.? That is what puzzles me. I should have thought if land increased but one per cent., the man in whose possession the land was when that additional one per cent. increase occurred had to pay the whole of the increment value since the original site value was fixed.
§ Mr. LLOYD-GEORGENo.
§ Mr. LLOYD-GEORGEYes; it is franked up to 25 per cent., and it is what is over that.
§ Mr. LLOYD-GEORGEIt is franked up to 25 per cent.
Mr. BALFOURThen the last man only pays one per cent.? It seems to me quite clear either the Government will lose the whole of the Increment Duty when the transaction takes place, if there is less than 25 per cent.; or, if they do not lose the Increment Duty, then the whole of it must come on the last possessor at the end of the five years' period. I do not see any way out of it, and I am putting the question in all sincerity.
§ Mr. RAMSAY MACDONALDThis provision of the third Clause which is before us, does it really mean that Increment Value of 24½ per cent. can accrue within five years, and not a halfpenny to Toe paid to the Exchequer on it?
§ Mr. LLOYD-GEORGEIt means this, that the maximum which you can frank in five years is 25 per cent. That is to prevent a series of transactions of 9 or 10 per cent. running up to 100 per cent. It is really to prevent a method of eluding the tax and having a series of conveyances which, although representing increment of 9 per cent., would in the aggregate represent transactions totalling to 60 or 70 per cent. In order to prevent that it is provided by this sub-section that you can only frank 25 per cent. of increment within five years. Any excess over that will have to bear Increment Duty, whether it is great or small.
Mr. BALFOURSurely I am right in saying that land might have increased by 25 per cent. in five years during a series of five years—in other words, 100 per cent. in 20 years—and no duty would be paid at all.
§ Mr. LEVERTON HARRISShould not the word "duty" come in after the words "on the first occasion on which increment value"?
§ Mr. LLOYD-GEORGEYes.
§ Mr. LEVERTON HARRISThen we clearly understand that it is only when the increments on these various transactions aggregate 25 per cent. within five years, that any Increment Duty will be payable?
§ Mr. JOYNSON-HICKSSupposing in the course of five years there are four transmissions of property, with an increase of 6 per cent. on each occasion, those will all be franked. If a fifth person sells, and makes another increment of 6 per cent., is he to pay the tax?
§ Mr. LLOYD-GEORGEOn 5 per cent.
§ Mr. JOYNSON-HICKSWhat justification is there for taxing this man rather than the other four? What has he done that he should be taxed, while the other four men who have made exactly the same profit go scot free? Why in a series of years should the fifth man be taxed while the four preceding and perhaps the four succeeding him escape? There can be no justification for such an extraordinary method of taxation.
§ Lord ROBERT CECILI desire to move the omission of this proviso, which appears to have been somewhat ill-considered.
§ The CHAIRMANBefore the Noble Lord moves, I understand the word "duty" is to be inserted.
§ Mr. LLOYD-GEORGE moved, after the words "on which Increment Value," to insert the word "duty."
§ Lord ROBERT CECILI propose to move the omission of the proviso, for the purpose of understanding the matter. I do not desire to make any unnecessary complain against the Government, but it is rather hard that an Amendment of this character should be on the Paper for the first time to-day. This case was, as the Chancellor of the Exchequer will remember, raised more than a fortnight ago, and it was understood that an Amendment would be put on the Paper without delay. It appears to me very doubtful whether the wording of the proviso will carry out the stated intentions of the Government. Under this section the whole amount of the Increment Value Duty is to be paid only if you get beyond the 25 per cent. line. Even if the proviso does carry out the intentions of the Chancellor of the Exchequer, it seems to me a very clumsy way of carrying them out. The Government desire to prevent an evasion of this tax by colourable transactions that keep just within the margin allowed. I should have thought that words could be found to say that these transactions should be bonâ fide. I do not see any answer to the point put by the hon. Gentleman the Member for North-West Manchester. Why draw the line at 25 per cent.? All increment beyond that amount is to be taxed, whereas increment up to that amount has not to be taxed, however many transactions have taken place. The proviso appears to me to be indefensible, and I move its omission.
§ Mr. JEREMIAH MacVEAGHI would just like in one sentence to appeal to the right hon. Gentleman to accept the Amendment which has been proposed by the Noble Lord. It has been made abundantly clear by the speeches of the Leader of the Opposition, by the hon. Member for North-West Manchester, and by the Noble Lord who sits for Marylebone, that Members above the Gangway do not 1991 want the proviso. Nobody else wants it. The Chancellor of the Exchequer will, therefore, satisfy everyone by accepting the Amendment.
§ Mr. LLOYD-GEORGEIt might better meet the case of some if the whole of the Amendment was left out. It is quite possible for a series of colourable transactions to take place whereby the Revenue might be—I will not say defrauded—but deprived of increment. It is purely a matter of adjustment between the different parties. Therefore this proviso is absolutely necessary. As to the bona fides of the transactions, I think the Noble Lord will realise that it is wholly impossible for the Commissioners to enter into questions of that kind. At any rate, it is infinitely better to avoid it, if it can be done arbitrarily by a method of this kind. How can the Commissioners investigate each transaction and say this is a bonâ fide transaction and that is not. It is better to put in a proviso of this kind, which will safeguard the revenue against the possibility of anything in the nature of a fraud. I agree with the hon. Member for North-West Manchester it would have an apparently illogical effect. It franks the transaction in regard to the first three or four men, but it does not in regard to the fifth, but he knows perfectly well if he is going to sell he will have to bear that proportion of the Increment Duty. There is no unfairness. It is very rarely you get a series of bonâ fide transactions such as four or five sales in four or five years. There will be exceptional cases, but I am perfectly certain unless there is a proviso such as this it would be possible for the revenue to be defrauded.
§ Mr. JOYNSON-HICKSThe whole argument against leaving the proviso out appears to be the question of a colourable transaction taking place. But the Chancellor of the Exchequer has left it open; the whole of his argument cuts against the 25 per cent.
§ Mr. WATSON RUTHERFORDFor the Chancellor of the Exchequer or anybody else to presume that it would be possible in these transactions for a number of persons to conspire together to have conveyances drawn and stamped in order to make a transaction apparently bonâ fide is, to my mind, absurd. I cannot imagine that there is the slightest ground for supposing that the circumstances 1992 which this proviso is apparently designed to meet can possibly arise, and for that reason I join in the appeal to the Chancellor that if he is going to give relief to transactions where there only is a comparatively small increment in value, he would do well to leave the proviso out, because he is providing against a series of elaborate frauds which might possibly happen, but which really in practice could not take place.
§ Mr. KEIR HARDIEMay I point out to the right hon. Gentleman that this proviso does not safeguard the clause against frauds which have been mentioned. As soon as the value approaches 25 per cent. it can be sold and no duty is payable, but on the next occasion, when it is near 25 per cent., it can again be sold and no duty will be paid. The consequence is that in 20 years you may have four sales, one every five years, with an increment value of £96, on which not a single penny is payable. Therefore the proviso does not safeguard you against fraud. I hope the right hon. Gentleman will take warning by this concession, which has not been received with much grace. I would suggest that the right hon. Gentleman should leave the decision of this clause to the free choice of the House. There is no reason why the Government Whips should tell. If the proviso had been to the effect that 25 per cent. should be the limit of the concession upon all transactions it might have safeguarded the position, but to allow 25 per cent. on these transactions is simply no safeguard at all against fraud. I hope the whole clause will be left to the free decision of the House.
§ Mr. LANE-FOXThe proviso with which we are dealing in no way represents a concession. Under it fraud can be practised.
§ Mr. LLOYD-GEORGEOn this proviso the Government have given a distinct pledge, and we must stand by it.
§ Mr. RAMSAY MACDONALDThe pledge given was in connection with small transactions. With regard to this proviso, I wonder if the Chancellor of the Exchequer has thought out what its effect is going to be. Take the case of land which has passed from agricultural to building land within the last year or two. I know of a piece of land in Buckinghamshire which used to be part of an agricultural area where fields were under cultiva- 1993 tion in the ordinary way. That land has now become building land, and what was the process? The fields were sold in large areas to certain persons. They were sold, and within 12 months they had changed hands in smaller parcels with an added increment value. The other day certain sections of the property which had been subject to a second sale again changed hands. I know the property very intimately, and it has changed hands three times within the last three years, and with each transference an increment has been bought and sold. I do not know at what price these transferences have taken place, but I shrewdly suspect in every instance they would come within the proviso, and that increment the Chancellor of the Exchequer ought to put his hand on would altogether escape. A grave injustice will be done to the Exchequer by allowing this proviso to go through.
§ Mr. LLOYD-GEORGEThe hon. Member and some of his friends confuse the proviso with the Amendment. The proviso is to safeguard the Revenue, but the Amendment is a totally different matter, and the question is, given the Amendment, is there going to be this proviso to safeguard the Revenue?
§ Mr. RAMSAY MACDONALDThe proviso does not fulfil the object of the Chancellor of the Exchequer. His object is perfectly clear, and we are quite prepared to vote for a proviso which will do what he wants, but this proviso, as a matter of fact, will play into the hands of those who want to do the Exchequer.
§ Mr. YOUNGERIt seems to me that in each of these transactions there would be an expensive valuation, and there would not be very much chance of doing the Exchequer. The hon. Member below the Gangway (Mr. Ramsay Macdonald) in the case he put left us in doubt whether there was any profit or any increment at all.
§ Mr. RAMSAY MACDONALDI do not know the correct figure, but, as a matter of fact, the transfer on each occasion was accompanied by an extra increment.
§ Mr. STEWART BOWLESMight I ask one question as to the real meaning of this proviso? It is very definite and quite mandatory. It says no remission shall be given under this provision, that is not only under the proviso, but under the whole new section. Take the case of land 1994 worth £100 site value at the beginning and reaching £126 within five years. What would be the amount of duty payable on an occasion occurring within those five years. Would it be on the whole of the increment from the beginning or only on the increment from the last step?
§ Mr. KEIR HARDIEWill it be possible under this proviso for four sales to take place within 20 years, and for there to be an increment of 24 per cent. on each occasion, representing £96 altogether, without a penny being paid to the Exchequer?
§ Mr. LLOYD-GEORGEThe hon. Member is dealing with the proviso and not with the Amendment. The proviso is a limitation of the possibilities of the Amendment. It may not be adequate, but it is perfectly clear that no man would enter into a fraud which it would take 100 or even 20 years to bring to an issue, therefore it is a case that is not likely to arise.
§ Mr. KEIR HARDIEMy question is plain: Can there be four transactions in the course of 20 years, each sale showing an increment of 24 per cent., and will these escape duty under the proviso exempting all transactions under 25 per cent. for five years?
§ Mr. LLOYD-GEORGEThe transaction which is franked must be a 10 per cent. transaction and not more. A 25 per cent. transaction is not franked. It is only one aggregate transaction and that is dealt with in this manner.
§ Lord ROBERT CECILI quite recognise this is a concession, although I doubt if it is the best way of carrying out the object in view. I do not desire to put the Committee to the trouble of dividing, and will ask leave to withdraw my amendment.
§ Amendment, by leave, withdrawn.
§ Question put, "That at the end of section (3) the following words (as amended) be inserted:—?
§ "(4) For the purposes of the collection of duty on the increment value of any land under this section, the increment value shall be deemed to be reduced on the first occasion on which Increment Value Duty becomes due under this Act by an amount equal to 10 per cent of the original site value of the land, and on any subsequent occasion by an amount equal to 10 per cent. of the site value on the last preceding 1995 occasion on which Increment Value Duty has become due, and the amount of duty to be collected shall be remitted in whole or in part accordingly.
§ "Any duty which by reason of this provision is remitted on any occasion shall not be collected and shall be deemed to have been paid.
§ "Provided that no remission shall be given under this provision on any occasion which will make the amount of the incre-
1996§ ment value on which duty has been remitted during the preceding period of five years exceed 25 per cent of the site value of the land on the last occasion on which increment value became due prior to the commencement of that period or of the original site value if there has then been no such occasion."
§ The Committee divided: Ayes, 209; Noes, 36.
1997| Division No. 280.] | AYES. | [12.35 a.m. |
| Acland, Francis Dyke | Elibank, Master of | Morrell, Philip |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Evans, Sir S. T. | Newdegate, F. A. |
| Ainsworth, John Stirling | Everett, R. Lacey | Newnes, F. (Notts, Bassetlaw) |
| Allen, A. Acland (Christchurch) | Faber, G. Denison (York) | Nicholls, George |
| Anson, Sir William Reynell | Faber, Capt. W. V. (Hants, W.) | Nicholson, Wm. G. (Petersfield) |
| Arkwright, John Stanhope | Ferens, T. R. | Norman, Sir Henry |
| Armitage, R. | Fiennes, Hon. Eustace | Parkes, Ebenezer |
| Balcarres, Lord | Forster, Henry William | Pearce, Robert (Staffs, Leek) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Foster, P. S. | Pearson, W. H. M. (Suffolk, Eye) |
| Balfour, Robert (Lanark) | Fuller, John Michael F. | Pease, Herbert Pike (Darlington). |
| Baring, Godfrey (Isle of Wight) | Gardner, Ernest | Percy, Earl |
| Baring, Capt. Hon. G. (Winchester) | Gibb, James (Harrow) | Pirie, Duncan V. |
| Barlow, Percy Bedford | Gibbs, G. A. (Bristol, West) | Pollard, Dr. G. H. |
| Barran, Rowland Hirst | Gladstone, Rt. Hon. Herbert John | Pretyman, E. G. |
| Barry, Redmond J. (Tyrone, N.) | Goddard, Sir Daniel Ford | Price, C. E. (Edinburgh, Central) |
| Beale, W. P. | Gooch, George Peabody (Bath) | Price, Sir Robert J. (Norfolk, E.) |
| Beck, A. Cecil | Gretton, John | Radford, G. H. |
| Bennett, E. N. | Griffith, Ellis J. | Ratcliff, Major R. F. |
| Bignold, Sir Arthur | Guinness, Hon. R. (Haggerston) | Remnant, James Farquharson |
| Bowles, G. Stewart | Hamilton, Marquess of | Renton, Leslie |
| Brace, William | Harcourt, Rt. Hon. L. (Rossendale) | Renwick, George |
| Bramsdon, Sir T. A. | Harcourt, Robert V. (Montrose) | Richards, Thomas (W. Monmouth) |
| Bridgeman, W. Clive | Hardy, Laurence (Kent, Ashford) | Ridsdale, E. A. |
| Brocklehurst, W. B. | Harmsworth, Cecil B. (Worcester) | Roberts, Sir J. H. (Denbighs.) |
| Brooke, Stopford | Harmsworth, R. L. (Caithness-shire) | Robinson, S. |
| Brotherton, Edward Allen | Harris, Frederick Leverton | Robson, Sir William Snowdon |
| Brunner, J. F. L. (Lancs, Leigh) | Harrison-Broadley, H. B. | Roch, Walter F. (Pembroke) |
| Bryce, J. Annan | Haworth, Arthur A. | Rogers, F. E. Newman |
| Burnt, Rt. Hon. John | Hay, Hon. Claude George | Rose, Sir Charles Day |
| Burnyeat, W. J. D. | Hazel, Dr. A. E. W. | Rutherford, John (Lancashire) |
| Buxton, Rt. Hon. Sydney Charles | Hedges, A. Paget | Rutherford, V. H. (Brentford) |
| Byles, William Pollard | Helme, Norval Watson | Rutherford, Watson (Liverpool) |
| Carlile, E. Hildred | Helmsley, Viscount | Samuel, Rt. Hon. H. L. (Cleveland) |
| Carr-Gomm, H. W. | Herbert, Col. Sir Ivor (Mon. S.) | Scarisbrick, Sir T. T. L. |
| Castlereagh, Viscount | Higham, John Sharp | Scott, A. H. (Ashton-under-Lyne) |
| Causton, Rt. Hon. Richard Knight | Hill, Sir Clement | Scott, Sir S. (Marylebone, W.) |
| Cecil, Evelyn (Aston Manor) | Hobhouse, Rt. Hon. Charles E. H. | Seely, Colonel |
| Cecil, Lord R. (Marylebone, E.) | Hogan, Michael | Silcock, Thomas Ball |
| Chance, Frederick William | Holland, Sir William Henry | Simon, John Allsebrook |
| Chaplin, Rt. Hon. Henry | Holt, Richard Durning | Smeaton, Donald Mackenzie |
| Cherry, Rt. Hon. R. R. | Hooper, A. G. | Smith, Abel H. (Hertford, E.) |
| Clive, Percy Archer | Hope, James Fitzalan (Sheffield) | Stanger, H. Y. |
| Clough, William | Hope, W. Bateman (Somerset, N.) | Stanier, Beville |
| Clyde, J. Avon | Illingworth, Percy H. | Stanley, Hon. A. Lyulph (Cheshire) |
| Coates, Major E. F. (Lewisham) | Jones, Leif (Appleby) | Starkey, John R. |
| Cobbold, Felix Thornley | Joynson-Hicks, William | Strachey, Sir Edward |
| Collins, Stephen (Lambeth) | Kerry, Earl of | Straus, B. S. (Mile End) |
| Collins, Sir Wm. J. (St. Pancras, W.) | Lane-Fox, G. R. | Strauss, E. A. (Abingdon) |
| Corbett, C. H. (Sussex, E. Grinstead) | Law, Andrew Bonar (Dulwich) | Talbot, Lord E. (Chichester) |
| Cornwall, Sir Edwin A. | Lever, A. Levy (Essex, Harwich) | Tennant, Sir Edward (Salisbury) |
| Cory, Sir Clifford John | Levy, Sir Maurice | Tennant, H. J. (Berwickshire) |
| Cowan, W. H. | Lewis, John Herbert | Thomas, Sir A. (Glamorgan, E.) |
| Craik, Sir Henry | Lloyd-George, Rt. Hon. David | Thomasson, Franklin |
| Crosfield, A. H. | Lockwood, Rt. Hon. Lt.-Col. A. R. | Thompson, J. W. H. (Somerset, E.) |
| Crossley, William J. | Lyttelton, Rt. Hon. Alfred | Tomkinson, James |
| Dalrymple, Viscount | Mackarness, Frederic C. | Trevelyan, Charles Philips |
| Dalziel, Sir James Henry | M'Laren, H. D. (Stafford, W.) | Valentia, Viscount |
| Davies, Ellis William (Eifion) | Mallet, Charles E. | Verney, F. W. |
| Davies, Sir W. Howell (Bristol, S.) | Marnham, F. J. | Waldron, Laurence Ambrose |
| Dowar, Arthur (Edinburgh, S.) | Mason, A. E. W. (Coventry) | Walker, Col. W. H. (Lancashire) |
| Dickson-Poynder, Sir John P. | Mason, James F. (Windsor) | Walrond, Hon. Lionel |
| Douglas, Rt. Hon. A. Akers- | Massie, J. | Walters, John Tudor |
| Du Cros, Arthur Philip | Masterman, C. F. G. | Ward, W. Dudley (Southampton) |
| Dunne, Major E. Martin (Walsall) | Montgomery, H. G. | Warde, Col. C. E. (Kent, Mid) |
| Edwards, Sir Francis (Radnor) | Morpeth, Viscount | Waring, Walter |
| Warner, Thomas Courtenay T. | Williams, Col. R. (Dorset, W.) | Wyndham, Rt. Hon. George |
| Wason, John Cathcart (Orkney) | Willoughby de Eresby, Lord | Younger, George |
| Watt, Henry A. | Wilson, Henry J. (York, W.R.) | |
| White, Sir Luke (York, E. R.) | Wilson, P. W. (St. Pancras, S.) | TELLERS FOR THE AYES—Mr. Joseph Pease and Captain Norton. |
| Whitley, John Henry (Halifax) | Wood, T. M'Kinnon | |
| Wiles, Thomas | Wortley, Rt. Hon. C. B. Stuart- | |
| NOES. | ||
| Allen, Charles P. (Stroud) | Jenkins, J. | Richards, T. F. (Wolverhampton, W.) |
| Barnes, G. N. | Jowett, F. W. | Seddon, J. |
| Bowerman, C. W. | Kennedy, Vincent Paul | Summerbell, T. |
| Clynes, J. R. | Lamont, Norman | Sutherland, J. E. |
| Cooper, G. J. | Lardner, James Carrige Rushe | Taylor, John W. (Durham) |
| Fullerton, Hugh | Lundon, T. | Thorne, G. R. (Wolverhampton) |
| Gill, A. H. | Macdonald, J. R. (Leicester) | Walsh, Stephen |
| Glover, Thomas | Macpherson, J. T. | White, J. Dundas (Dumbartonshire) |
| Gwynn, Stephen Lucius | MacVeagh, Jeremiah (Down, S.) | Wilkie, Alexander |
| Hall, Frederick | Nolan, Joseph | Wilson, W. T. (Westhoughton) |
| Hardie, J. Keir (Merthyr Tydvil) | Parker, James (Halifax) | |
| Hodge, John | Pointer, J. | TELLERS FOR THE NOES—Mr. G. Roberts and Mr. C. Duncan. |
| Hudson, Walter | Rendall, Athelstan |
§ Mr. LYTTELTON moved to insert at the end of section (3):—"Provided that the rules made by the Commissioners under this section shall be laid before each House of Parliament for confirmation for a period of not less than thirty days during the Session of Parliament, and if neither of those Houses presents an Address to His Majesty within such period against the draft or any part thereof such rules shall be deemed to be confirmed, and prior to such confirmation of such rules no Increment Value Duty shall be charged."
§ I thought I had a very strong case for the Amendment before the discussion which took place an hour ago, and I entirely agree that the principle of the tax ought to be laid down on the face of the Act of Parliament, and the Commissioners ought to be instructed to act according to those principles. It is, however, very evident now that the Government were not able to set forth the principles upon which this tax should be paid. Taking the very simplest case which could be taken, the Attorney-General was occupied for some half hour in endeavouring to explain the incidence of the tax. It was not due to his fault, but to the complexity of the conundrums which arose under the section. The Government have treated the matter as insoluble, and have not unnaturally laid it upon the back of the Commissioners by a code of rules to do that which they have been unable to do themselves. It is quite manifest, I think, that you cannot give the Commissioners legislative power by a code of rules—power to do that which the Government have failed to do, namely, to state the principles on which the tax is to be levied. If the Chancellor of the Exchequer thinks for a moment of the concessions already made with regard to 1998 appeal, he will see that it would be vain to give an appeal from the Commissioners to the High Court on questions which might or might not be of importance, while at the same time leaving them legislative power by a code of rules to determine the nature of the tax to be levied. You cannot say that there should be the right of appeal to the High Court, and at the same time give to the Commissioners the power to legislate on their own behalf. I, therefore, submit that these rules should be laid on the Table for thirty days, and that they should be subject to review in either House of Parliament.
§ Mr. LLOYD-GEORGEI quite recognise the force of the right hon. Gentleman's contention that the Houses of Parliament ought to have an opportunity of criticising these rules and of altering and amending them, but I could not accept the Amendment in this form for a reason which he will realise is a very practical one. He proposes that the rules and regulations should not come into operation until they have lain on the Table of the House for thirty days and been confirmed by Parliament. The effect of that; would be that the Increment Duty would not come into operation at all within this financial year. That, at any rate, is not what the right hon. Gentleman has in view in moving the Amendment in this form. Are we to suppose that Parliament would sit for thirty days after the Finance Bill has been passed? I do not think it would be right to inflict that penalty on Parliament even for the purpose of discussing these rules and regulations, and as Parliament would not be asked to sit for thirty days they could not be discussed this Session. Next Session, if they were laid on the Table of the House immediately Parlia- 1999 ment meets, still they could not be confirmed for a whole month after the meeting of Parliament. Meanwhile nothing could be done with the view of bringing the Bill into operation. The end of the financial year would arrive and the tax would not be a tax at all for the present year. I propose, therefore, that the Amendment should take the alternative form, which is to be found in many Acts of Parliament, namely, that the rules shall be laid on the Table of the House, and that, if an Address is presented within thirty days praying that the rules should be annulled, that could be done by the method prescribed in such cases. That would enable Parliament to discuss the rules and even to amend and alter them.
§ Mr. GEORGE WYNDHAMIt is apparent from what the Chancellor of the Exchequer has said that Parliament is to have an opportunity of reviewing and revising these rules after these rules to which Parliament might take exception have been in operation. The only reason that could be urged for what the Chancellor of the Exchequer proposes is that the amount of money to be raised in the first year is a matter of real importance. That argument can hardly be urged by the Chancellor of the Exchequer. The Prime Minister, although he has not for reasons quite adequate taken a very great part in the Debates in this House, did last Friday, at Southport, give a general explanation of the whole of this Budget, and he said that by the very nature of the case no great revenue could be expected from these taxes for the first year, and even for the first few years, so that, according to the Prime Minister, there is no question of urgency from the financial aspect of the matter. And, since the proposal of the Government admits that revision by Parliament is a desirable object, it would be better that that revision should come into operation at the beginning rather than at a later stage. I cannot see what the Government have to gain by making what may be a false start. They are not in need of the money, and in their interests and in the interests of the proper working of the Act the review by Parliament should come into operation before and not after a serious mistake has been made.
§ Mr. G. H. RADFORDI wish to thank the Chancellor of the Exchequer for the concession which he has made a moment ago in the direction of allaying anxieties 2000 that might be felt as to the very large powers given to the Commissioners under this Bill. But there is one question which I wish to ask. Is the Address, which I understand it is suggested may be made on the subject of the rules submitted to Parliament to be an Address of this House, or is it also to be possible for the other House to present an Address? Because, while wishing to treat the other House with all respect and courtesy and to have the rules laid before them for their information, I do not wish to give them any opportunity of presenting an Address on the subject of taxation—a subject with which I think they have no concern, and as to which I think they make no claim to interfere with this House.
§ Mr. HENRY CHAPLINI do not understand why the Chancellor of the Exchequer has that right to depart from what, to the best of my recollection, has been the ordinary and regular practice in almost all legislation that I remember. This Bill was presented without any clause whatever requiring that the new rules to be made by the Commissioners should be laid on the table at all. It is strange that the ordinary practice was not observed in this case. No doubt there have been some exceptions for special reasons, but there are special reasons in this case why the ordinary practice should have been observed and why this Amendment should be accepted to-night. The first of them is this difficulty. We all perceived on the part of the Government, not an hour and a half ago, that they showed clearly they were not in a position to explain the course which ought to be pursued by the Commissioners, and they were still less able to insert anything in the nature of an Amendment in the Bill. That is one reason why I think we ought to be more careful than ever in inserting some provision in the nature of the Amendment of my right hon. Friend. It was pointed out only last night by my right hon. Friend, although not the smallest notice was taken of it by the Chancellor of the Exchequer or by any Member sitting on that side of the House—the only notice taken of it being to move the closure—it was pointed out by the Chancellor's predecessor in office, and by myself, that in two cases, two very remarkable cases, taken from the law reports of "The Times" only yesterday, the Commissioners had been guilty of making most serious errors. In one case the Court of Appeal said there was no 2001 shadow of foundation for the case of the Commissioners, and in the other the Court was absolutely unanimous against them. It may be very unfortunate that these discussions should be going on when we have two such remarkable cases in which—what shall I say?—there was want of sufficient care. That is the least I can say. The question arises, therefore, whether or not the rules to be made by the Commissioners should be laid on the Table of both Houses, and should not be valid until there has been thirty days' notice, and Parliament shall not have petitioned against them. I am bound to say that I am surprised, in a Bill of this extreme gravity, that what I believe to be the ordinary rule should not have been observed, still more that we should have had so unsatisfactory a reply from the right hon. Gentleman on the present occasion.
§ Mr. LLOYD-GEORGEThe right hon. Gentleman has forgotten the precedent which he himself set in the Agricultural Eating Act. I have followed exactly the form of that Act almost in so many words. That Act was for expending £2,000,000; this Bill is to raise money. At any rate, I followed exactly the precedent which the right hon. Gentleman now denounces as unequitable, unconstitutional, and every other form of iniquity which his very inexhaustible vocabulary can command.
§ Mr. CHAPLINThe difference between the two cases is, as the right hon. Gentleman said, that the Agricultural Rating Act dealt with two millions of money. This Bill deals with property amounting to something considerably over, I believe, four thousand millions of money.
§ Mr. ALFRED LYTTELTONI do not think the Chancellor of the Exchequer has met me as fully as I am entitled to be met in this matter. I put again to him this position, whether it is really possible to give appeal to the referees and then to the Courts on any point of valuation by the Commissioners, and in the same Act of Parliament give them power to set up a code of rules to make a subsequent precedent for taxation. The two things are absolutely inconsistent, and I would submit to him that it is an absurdity to grant such a power in one case, the present, and to withdraw it in another. There is, again, great force in the statement made that the Government anticipates no revenue, or scarcely any revenue, from this tax in the present year, and, therefore, they would be losing nothing by getting their code in 2002 proper shape before it finally becomes law. I understand that the Amendment which the right hon. Gentleman proposes is that these rules should only have effect until that time when, after review by the House of Commons, they shall be annulled, and that all proceedings shall be good up to that time, without prejudice. If these rules were afterwards annulled by the House of Commons as clearly wrong it would be a manifest injustice that the taxes that have been paid under them should be retained by the revenue. If the right hon. Gentleman will insert in his Amendment, provision as to the taxes which are paid under these rules that may since have been annulled, I would accept it.
§ Mr. LLOYD-GEORGEI quite see the justice of the point put by the right hon. Gentleman, and I will give the words favourable consideration.
§ Mr. LYTTELTONOn that understanding I will withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. LLOYD-GEORGEThe Amendment I propose to move will, I think, meet the points raised by hon. Members. It is as follows:—"That every rule under this section shall be laid before both Houses of Parliament as soon as may be, and if an address should be presented to His Majesty by both Houses of Parliament within the next subsequent thirty days during the Session of Parliament in which the rules are made, His Majesty may annul the rules, and it shall be void without prejudice to anything done under it."
§ Mr. R. D. HOLTAm I right in understanding that if this House wishes to annul the rules, and if the other House refuses to agree, then the rules will stand? In other words that under this Amendment it would be impossible for this House alone to disallow acts of which we disapprove, and that we should be in the power of the other House who could prevent us disallowing rules.
§ Mr. LLOYD-GEORGEIf the House of Commons passes any rule of the kind, it has complete control of the Executive, and therefore the Executive would have to take steps to put the matter right. But I wish to make it perfectly clear that I am simply using the ordinary constitutional forms. I do not wish to raise any great constitutional issue merely upon a Motion of this kind dealing with rules, 2003 and I do not think it is desirable to do so. The interests of the House of Commons are amply safeguarded by this proposal. I put it in the form of an address by both Houses of Parliament, as otherwise it would be in the power of the House of Lords, by simply moving an address to His Majesty praying for an alteration, to make nugatory the whole of our taxation. Therefore, I make it perfectly clear that it must be by both Houses of Parliament, and therefore the privileges of the House of Commons are amply safeguarded. I put it in this form because I do not want to raise any embarrasing constitutional issues merely upon a Motion of this kind dealing with rules. I am following the course followed by the Government in regard to all their rules and regulations. This is the precedent invariably followed, and the only precedent that could possibly be followed in a matter dealing with taxation.
§ Lord BALCARRESI submit that it is not according to precedent to use the words "next subsequent thirty days." Thirty subsequent days means the next calendar month. If Parliament adjourned on the 1st and did not meet again until the 30th it would have no opportunity of discussing the matter, although technically it would have been laid on the Table thirty days.
§ Mr. LLOYD-GEORGEIt is the "subsequent thirty days during the Session of Parliament."
§ Lord BALCARRESLast year this House adjourned for three weeks and three days in the middle of the Session. It might have been four weeks and three days, and under those conditions it might easily happen, the rules having been deposited, that neither House would be able to discuss them. That would be "during the Session of Parliament." The words used are usually simply thirty or forty days, as the case may be, and not the "next subsequent" days. Will not the right hon. Gentleman call it 30 days, as he says he is acting according to precedent?
§ Mr. LLOYD-GEORGEThis is taken out of an Act of Parliament—the Old Age Pensions Act.
§ Lord BALCARRESThe precedent of the Old Age Pensions Act provides for the subsequent 21 days on which the House has sat. That vitiates the state- 2004 ment of the right hon. Gentleman. Will the right hon. Gentleman therefore reconsider the point and make the Amendment read: "The subsequent 30 days on which either House has sat"?
§ Mr. LYTTELTONI think in view of the objection that has been justly made by my Noble Friend we ought to see this Amendment on the Paper before we assent to it.
§ Mr. LLOYD-GEORGEIf the right hon. Gentleman does not like the Amendment I will withdraw it. I have offered two or three very substantial concessions to the Opposition to-night, and every concession has been made the occasion, not merely for a prolonged Debate but for something that is really of the nature of an acrimonious dispute. That is not very encouraging. If the precedent is not in the Old Age Pensions Act—the book was put into my hand—it was taken out of an Act of Parliament. I have gone as far as I can to meet the right hon. Gentleman, and have give him the opportunity he desires for Parliament to discuss these regulations. If he cannot see his way to accepting the Amendment I will withdraw it.
§ Mr. WYNDHAMThe right hon. Gentleman said that in discussing a Finance Bill we have to be careful, but he seems to limit that need to himself and his friends. I do not think I am going too far when I say that the constituencies who returned Members who sit on this side are also bound to exercise some care in discussing the provisions of a Finance Bill. How do we stand? The Chancellor of the Exchequer has made a concession, and my right hon. Friend raises an objection, in which the Chancellor of the Exchequer found so much substance that he at once said he would consider it at a later stage. Is it not difficult, without seeing an Amendment, to speculate on the chance of a further concession which the right hon. Gentleman will give to meet the objection raised by my right hon. Friend? It seems to me that the point of my right hon. Friend has not been met. This is a complicated matter, and the Government might just as well take the Amendment of my right hon. Friend and place the matter on a clear basis.
§ Mr. J F. REMNANTI do not understand where we are. My right hon. Friend (Mr. Lyttelton) withdrew his Amendment subject to being satisfied. I 2005 do not know what the present Amendment of the Chancellor of the Exchequer means. These manuscript Amendments are constantly being handed in——
§ Mr. LLOYD-GEORGEIt has been read from the Chair.
§ Mr. REMNANTI could not take it all in. I should like to know whether my right hon. Friend's Amendment is still before the Committee?
§ Mr. REMNANTIE my right hon. Friend is not satisfied surely his Amendment is now before the Committee?
§ The DEPUTY-CHAIRMANproceeded to put the Amendment.
§ Mr. REMNANTSurely, Mr. Caldwell, I am entitled to be satisfied on the point I have raised? May I ask you whether my right hon. Friend's Amendment is before the Committee now?
§ The DEPUTY-CHAIRMANNo. The Amendment of the right hon. Gentleman (Mr. Lyttelton) has been, by leave, withdrawn, and another Amendment is now before the Committee.
§ Sir H. CRAIKWe are bound as Members of this House to consider what is really in accordance with precedent. I have acquired considerable knowledge in drafting Acts of Parliament, and I say there is no precedent for this Address of both Houses of Parliament on such a Minute or Order in Council. If the right hon. Gentleman (the Chancellor of the Exchequer) is sure that his draftsmen tells him that there is such a precedent, I am bound to accept what he says. I know of none. We are establishing a precedent now which will limit the power of both Houses. An Address by the House of Commons, unless supported by the House of Lords, will now have no effect whatever. Orders in Council and Minutes of various Departments have to be laid upon the Table of the Houses of Parliament. An Address of either House of Parliament acts as a check to such an Order in Council. You are establishing now a precedent which is quite new, you are limiting not only the power of the House 'of Lords, but of this House also.
§ Mr. LYTTELTONI do not think the position is satisfactory. I have a suggestion to make. The Chancellor of the 2006 Exchequer asserted more than once that the purpose of my Amendment was an exceedingly reasonable one. I withdrew my Amendment on the face of his promise that he would insert an Amendment which would meet my case.
§ Mr. LLOYD-GEORGEWhich I read.
§ Mr. LYTTELTONI think the right hon. Gentleman must recognise that what I said bears upon the point, and I am sure the criticisms are worthy of consideration. My suggestion is that as, there are numerous other rules to be dealt with in this Bill, this matter should be adjourned till that subsequent stage in order that the rules may be dealt with at once. That, I think, is a reasonable suggestion. Meanwhile, we should see the Amendment of the Chancellor of the Exchequer upon the Paper, and have time to consider the validity of the criticism. At this hour of the night it is not fair to expect us——
§ Mr. LLOYD-GEORGEI simply offer this as a concession to the Opposition. If the Opposition tell me to withdraw it, I shall certainly do so [Cries of "No, no."]
§ Mr. LYTTELTONThat really is not a handsome way of getting over this matter. The Chancellor of the Exchequer has admitted that my Amendment is a reasonable one, and he has brought forward an Amendment which he says will meet the reasonableness of my case. It is not fair or just to us that he should refuse a reasonable time to examine his Amendment.
§ Mr. LLOYD-GEORGEI do not object to a reasonable time. I could do anything of this kind on Clause 3.
§ Mr. LYTTELTONBring your Amendment up again.
§ Mr. LLOYD-GEORGEThe right hon. Gentleman wants us to consider the whole rules and regulations. I could not give an answer as to the whole of these. We shall consider them later on.
§ Mr. LYTTELTONIf this subject is dealt with when the other rules come up for consideration it should do. The right hon. Gentleman could take the matter into consideration when he comes to other sections which deal with these rules.
§ Mr. LLOYD-GEORGECertainly.
§ Mr. H. W. FORSTERSupposing it is impossible for the right hon. Gentleman 2007 to produce the rules on the subsequent clause, he could, at any rate, bring up his rules again on the Report stage of the Bill in a form that was satisfactory to my right hon. friend and fully meet the case that he desires to be met.
§ Mr. LLOYD-GEORGEThere are regulations in the very next clause.
§ Mr. J. MacVEAGHI desire to ask whether there is any precedent for inserting a clause in the Finance Bill giving the House of Lords power to disapprove of the Finance Bill 1 I doubt whether, if the House of Lords adopted such action, it would not be considered as a breach of the privileges of the House of Commons.
§ Amendment, by leave, withdrawn.
§ Mr. WATSON RUTHERFORD moved to add after section (4). ["Increment Value Duty shall be a Stamp Duty collected and recovered in accordance with the provisions of this. Act,"] the words "but shall not be a charge on the land so as to affect any subsequent bonâ fide purchaser for value." I venture to think the sense of justice of the Chancellor of the Exchequer will lead him to think this Amendment should be adopted. If this Amendment were not accepted, the effect of leaving the Bill as it stands would be that every occasion on which the Increment Duty may become due would necessitate the production amongst the title deeds of a deed bearing a denoting stamp to show whether there was any duty payable and whether in fact the duty had been paid. If any death happened or any transfer of lease in connection with the property during the preceding 30 or 40 years, the fact of not producing the denoting stamp upon the document would be that there would be a blot upon the title,
2008§ which will create great difficulty in connection with the transfer of property and perhaps a difficulty which in many cases would cause the proposed transaction to go off entirely. The Amendment is that each occasion should be judged on its merits and that the duty is to be a sum collected in the way indicated in the Bill, but that is not to be a subsequent blot upon the title if it is found impossible to produce a deed bearing a denoting stamp for subsequent purposes. It is especially to relieve all conveyancing in the future that I move the Amendment.
§ The SOLICITOR-GENERAL for SCOTLAND (Mr. Arthur Dewar)Generally speaking, throughout the Act there is no kind of blot upon the title. As the hon. Member knows, it cannot arise except on two possible occasions by inference. One is in the transfer by death and in the case of a corporation if it is sold to a purchaser without notice. In no case where a purchaser has notice will he be liable. I do not think the hon. Member's Amendment. is necessary. When a purchaser has not notice he is not liable. When he has notice, of course, he is liable.
§ Mr. WATSON RUTHERFORDI only moved the Amendment to give the Government an opportunity of stating their views upon it. I understand they intend to insist upon leaving this very serious difficulty of a possible blot upon every subsequent transaction relating to land. I ask leave to withdraw the Amendment, and must leave them to stew in their own juice.
§ Amendment by leave withdrawn.
§ Question put, "That the Clause, as amended, stand part of the Bill."
§ The Committee divided: Ayes, 148; Noes, 57.
2009| Division No. 281.] | AYES. | [1.35 a.m. |
| Acland, Francis Dyke | Burnyeat, W. J. D. | Dewar, Arthur (Edinburgh, S.) |
| Ainsworth, John Stirling | Buxton, Rt. Hon. Sydney Charles | Dickinson, W. H. (St. Pancras, N.) |
| Allen, A. Acland (Christchurch) | Byles, William Pollard | Duncan, C. (Barrow-in-Furness) |
| Allen, Charles P. (Stroud) | Carr-Gomm, H. W. | Dunne, Major E. Martin (Walsall) |
| Armitage, R. | Chance, Frederick William | Edwards, Sir Francis (Radnor) |
| Balfour, Robert (Lanark) | Cherry, Rt. Hon. R. R. | Esslemont, George Birnie |
| Baring, Godfrey (Isle of Wight) | Clough, William | Evans, Sir S. T. |
| Barlow, Percy (Bedford) | Clynes, J. R. | Everett, R. Lacey |
| Barry, Redmond J. (Tyrone, N.) | Cobbold, Felix Thornley | Ferens, T. R. |
| Beale, W. P. | Collins, Sir Wm. J. (St. Pancras, W.) | Fiennes, Hon. Eustace |
| Bennett, E. N. | Cooper, G. J. | Fuller, John Michael F. |
| Bowerman, C. W. | Corbett, C. H. (Sussex, E. Grinstead) | Gibb, James (Harrow) |
| Brace, William | Cornwall, Sir Edwin A. | Gill, A. H. |
| Bramsdon, Sir T. A. | Cowan, W. H. | Glover, Thomas |
| Brocklehurst, W. B. | Crosfield, A. H. | Goddard, Sir Daniel Ford |
| Brooke, Stopford | Crossley, William J. | Gooch, George Peabody (Bath) |
| Brunner, J. F. L. (Lancs., Leigh) | Dalziel, Sir James Henry | Gwynn, Stephen Lucius |
| Bryce, J. Annan | Davies, Ellis William (Eifion) | Hall, Frederick |
| Burns, Rt. Hon. John | Davies, Sir W. Howell (Bristol, S.) | Harcourt, Rt. Hon. L. (Rossendale) |
| Harcourt, Robert V. (Montrose) | Montgomery, H. G. | Stanley, Hon. A. Lyulph (Cheshire) |
| Hardie, J. Keir (Merthyr Tydvil) | Morrell, Philip | Strachey, Sir Edward |
| Harmsworth, Cecil B. (Worcester) | Murray, Capt. Hon. A. C. (Kincard.) | Straus, B. S. (Mile End) |
| Harmsworth, R. L. (Caithness-shire) | Newnes, F. (Notts, Bassetlaw) | Strauss, E. A. (Abingdon) |
| Haworth, Arthur A. | Nicholls, George | Summerbell, T. |
| Hazel, Dr. A. E. W. | Norman, Sir Henry | Taylor, John W. (Durham) |
| Hedges, A. Paget | Parker, James (Halifax) | Tennant, H. J. (Berwickshire) |
| Helme, Norval Watson | Pearce, Robert (Staffs, Leek) | Thomas, Sir A. (Glamorgan, E.) |
| Henry, Charles S. | Pearson, W. H. M. (Suffolk, Eye) | Thomasson, Franklin |
| Herbert, Col. Sir Ivor (Mon. S.) | Pirie, Duncan V. | Thompson, J. W. H. (Somerset, E.) |
| Higham, John Sharp | Pointer, J. | Thorne, G. R. (Wolverhampton) |
| Hobhouse, Rt. Hon. Charles E. H. | Pollard, Dr. G. H. | Tomkinson, James |
| Hodge, John | Ponsonby, Arthur A. W. H. | Trevelyan, Charles Philips |
| Hogan, Michael | Price, C. E. (Edinburgh, Central) | Ure, Rt. Hon. Alexander |
| Holt, Richard Durning | Price, Sir Robert J. (Norfolk, E.) | Verney, F. W. |
| Hooper, A. G. | Rendall, Athelstan | Walsh, Stephen |
| Hope, W. Bateman (Somerset, N.) | Richards, Thomas (W. Monmouth) | Ward, W. Dudley (Southampton) |
| Hudson, Walter | Roberts, Charles H. (Lincoln) | Waring, Walter |
| Illingworth, Percy H. | Roberts, G. H. (Norwich) | Warner, Thomas Courtenay T. |
| Jenkins, J. | Robinson, S. | Wason, John Cathcart (Orkney) |
| Jones, Leif (Appleby) | Rogers, F. E. Newman | White, J. Dundas (Dumbartonshire) |
| Lamont, Norman | Rose, Sir Charles Day | White, Sir Luke (York, E.R.) |
| Lehmann, R. C. | Rutherford, V. H. (Brentford) | Whitley, John Henry (Halifax) |
| Levy, Sir Maurice | Scarisbrick, Sir T. T. L. | Wiles, Thomas |
| Lewis, John Herbert | Scott, A. H. (Ashton-under-Lyne) | Wilkie, Alexander |
| Lloyd-George, Rt. Hon. David | Seddon, J. | Wilson, P. W. (St. Pancras, S.) |
| Lundon, T. | Seely, Colonel | Wilson, W. T. (Westhoughton) |
| Macdonald, J. R. (Leicester) | Sheehy, David | Wood, T. M'Kinnon |
| Macpherson, J. T. | Silcock, Thomas Ball | |
| MacVeagh, Jeremiah (Down, S.) | Simon, John Allsebrook | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| M'Laren, H. D. (Stafford, W.) | Stanger, H. Y. | |
| Masterman, C. F. G. | ||
| NOES. | ||
| Arkwright, John Stanhope | Harrison-Broadley, H. B. | Renton, Leslie |
| Balcarres, Lord | Hay, Hon. Claude George | Renwick, George |
| Baring, Capt. Hon. G. (Winchester) | Helmsley, Viscount | Rutherford, W. W. (Liverpool) |
| Bignold, Sir Arthur | Hill, Sir Clement | Scott, Sir S. (Marylebone, W.) |
| Bowles, G. Stewart | Hope, James Fitzalan (Sheffield) | Smith, Abel H. (Hertford, East) |
| Bridgeman, W. Clive | Hunt, Rowland | Stanier, Beville |
| Carlile, E. Hildred | Joynson-Hicks, William | Starkey, John R. |
| Castlereagh, Viscount | Lane-Fox, G. R. | Talbot, Lord E. (Chichester) |
| Cecil, Evelyn (Aston Manor) | Lockwood, Rt. Hon. Lt.-Col. A. R. | Walker, Col. W. H. (Lancashire) |
| Clive, Percy Archer | Lyttelton, Rt. Hon. Alfred | Walrond, Hon. Lionel |
| Clyde, J. Avon | Mason, James F. (Windsor) | Warde, Col. C. E. (Kent, Mid) |
| Coates, Major E. F. (Lewisham) | Meysey-Thompson, E. C. | Williams, Col. R. (Dorset, W.) |
| Dalrymple, Viscount | Morpeth, Viscount | Willoughby de Eresby, Lord |
| Douglas, Rt. Hon. A. Akers- | Newdegate, F. A. | Wortley, Rt. Hon. C. B. Stuart- |
| Du Cros, Arthur | Nicholson, Wm. G. (Petersfield) | Wyndham, Rt. Hon. George |
| Forster, Henry William | Parkes, Ebenezer | Younger, George |
| Foster, P. S. | Pease, Herbert Pike (Darlington) | |
| Gardner, Ernest | Pretyman, E. G. | TELLERS FOR THE NOES— |
| Gibbs, G. A. (Bristol, West) | Ratcliff, Major R. F. | Sir Alexander Acland-Hood and |
| Guinness, Hon. R. (Haggerston) | Remnant, James Farquharson | Viscount Valentia. |
| Hamilton, Marquess of |
Question put, and agreed to.
§ Mr. LLOYD-GEORGEI beg to move, "That the Chairman do report Progress, and ask leave to sit again."
§ Committee report Progress; to sit again this day (Wednesday).
§ Adjournment,—Resolved, That this House do now adjourn.—[Mr. Joseph Pease.]
§ Adjourned accordingly at Seventeen minutes before Two o'clock.