§ Increment Value Duty.
§ CLAUSE 1.—(1) Subject to the provisions of this part of this Act, there shall be charged, levied and paid on the increment value of any land a duty, called Increment Value Duty, at the rate of one pound for every full five pounds of that value, and the duty or a proportionate part thereof shall become due—
- (a) on the occasion of any transfer on sale of the land or any interest in the land, or the grant of any lease (not being a lease for a term of years less than seven years) of the land; and
- (b) on the occasion of the death of any person dying after the commencement of this Act, where the land or any interest in the land is comprised in the property passing on the death of the deceased within the meaning of sections one and two of the Finance Act, 1894, as amended by any subsequent enactment; and
- (c) where the land or any interest in the land is held by any body corporate or by any body unincorporate is defined by section 12 of the Customs and Inland Revenue Act, 1885, on such periodical occasions as are provided in this Act;
§ The first Amendment on the Paper, standing in the name of Mr. JAMES HOPE, was as follows:—After "sale" ["on the occasion of any transfer on sale"] insert "after the twenty-ninth day of April, nineteen hundred and thirty."
May I ask whether the hon. Member desires to move the first Amendment on the Paper in his name? It seems to me that the point raised was covered to a large extent in the discussion the other day on an Amendment moved by the hon. Baronet the Member for the City of London.
§ Mr. JAMES HOPE
I do not intend to argue the matter on the rather broader aspect which was put before the Commit- 38 tee the other evening. I wish to invite the attention of the Chancellor of the Exchequer to a somewhat narrower aspect of the Question. What effect will the clause is drawn, it may not be possible for are going on at the present moment? That is the point I would respectfully put to him. At the present moment, as the clause is drawn, it may not be possible for a vendor of land to have a clear conveyance, and for this reason. You propose to make out the original site value under this Bill. The site value is to be taken as from the 30th day of April this year. Suppose a sale takes place now, and next year the original site value is ascertained retrospectively as on the 30th of April this year the increment is dated from the 30th of April. Even now in the two months, owing to some cause, such as parcelling out for a new railway, a considerable rise in price may have taken place since the 30th of April, from which the original site value dates. Will not the authorities be able to come down and claim Increment Duty meantime, and if they can, how can a present conveyance be a clear one? The point is no doubt a narrow one, and I do not wish to argue the broad aspects of the Question; but I would ask the Government to explain whether this fear entertained by myself and others on this point is well-grounded, and in order to do so, I move the Amendment.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)
On a point of order, that seems to me a point that would have been quite relevant on the Amendment moved by the hon. Baronet the Member for the City of London (Sir F. Banbury) postponing the operation of this clause until 1911. It is purely a suggestion for the postponement of that clause until 1930; but the Committee has already refused to postpone it until 1911.
§ Mr. AUSTEN CHAMBERLAIN
On a point of order, the Amendment which has been referred to proposed to postpone the operation of the section in all its subsections, (a), (b) and (c). This is an Amendment limited to sub-section (a) alone. The Amendment moved by the Member for the City of London raised the question that it was impossible to set up the machinery and make the valuation in the time allowed by the Bill. This Amendment raises a distinct point, that it is impossible if this subsection (a) passes in its present form without such a guarded wording for anyone to give a clear conveyance at the present moment.
§ Sir FRANCIS LOWE
On a point of order, I think it would be very much for the convenience of the House in a matter of the kind if the Chancellor of the Exchequer would give some little reply as to what his views are.
That point is not a point of order, but of merits. The other question which has been raised is a difficult question to decide. The reason why I allowed the hon. Member to move it is to see whether he had some different object and different purpose from that which was discussed the other day on the Amendment moved by the hon. Baronet the Member for the City of London. This Amendment now applies only to paragraph (a), and applies not even to the whole of paragraph (a), but only to the occasion of the transfer on sale. The point made in the hon. Member's speech is somewhat different from that which was discussed the other day, and, therefore, I shall allow it. I am rather confirmed in this because when I come to paragraph (b) there is a date put in which obviously can be moved to be omitted. Therefore, on the whole, I think I must allow the Amendment. But I do ask the Committee not to traverse the same ground as has been traversed already.
§ Mr. RAMSAY MACDONALD
I would submit the further point that this Amendment fixing the date 1930 is so obviously outside the scope and intention of this Bill, which has been brought in for the purpose of providing financial arrangements for this year, that it must, obviously be out of order.
I do not think I can rule it out of order on that ground, because, in levying a tax of a permanent character of this kind, I do not think that one can say it must be of necessity collected in the course of the year.
§ Mr. LLOYD-GEORGE
It is quite obvious that the Increment Duty can only apply after the passing of the Act, but if there is any doubt about that I shall have no objection to insert that. There is no difficulty at all about it, because full provision is made in section 4, sub-section (b): "with a stamp denoting that all particulars have been delivered to the Commissioners, which, in their opinion, are necessary for the purpose of enabling them to assess the duty, and that security has been given for the payment of duty in any case where the Commissioners have re- 40 quired security; but where an instrument is so stamped it shall, notwithstanding any objection relating to the Increment Value Duty, be deemed to be duly stamped so far as respects that duty." The provision will be made in section 4, which will make it perfectly clear that the document is adequately stamped, and I do not see what the hon. Gentleman gains by putting off the transaction for 20 years. It has been a complaint by others that this is a Bill for raising revenue next year instead of this year. The Amendment seems to be one for raising revenue for 20 years hence. If there is any reason for it at all, it should come into operation now.
§ Mr. PRETYMAN
I think that the explanation of the Chancellor of the Exchequer gives away his own case. He begins by saying he is quite willing that the duty should not be charged unless the sale occurred after the passing of this Act. If so, it is obvious that the words must be inserted.
§ Mr. PRETYMAN
From our point of view it is obvious that they must be inserted. If my hon. Friend's Amendment is defeated I shall propose to move an Amendment to this effect: To insert after "sale" the words "after the commencement of this Act," as set down in subsection (b) already. It does appear to me that there is a great deal more justification for postponement than the right hon. Gentleman makes out, because it is quite clear that postponement does not mean loss of revenue. I understand the principle of this to be that as the increment accrues due 20 per cent, is to be taken by the State, and on each valuation you take your departure from the last previous valuation. If, therefore, you wait for 10 years you get just as much at one bite as you would have had in two bites for the first five years and the second five years later. The Chancellor of the Exchequer wants as many small bites as possible. The consequence is on every sale, on every transfer, at the most frequent intervals, as shortly as possible, every owner of land or an interest in land is to be put to the expense of a fresh valuation. I would point out what may have escaped the notice of the Chancellor of the Exchequer, that, it seems to me, if this clause becomes law in its present form, no single sale, no lease, no transfer of land, or interest in 41 land of any sort or description, however small, will be valid without a valuation having been submitted to the Commissioners to see whether there is any increment value or not. Out of tens of thousands of transactions in realty it is possible in the case of 1 per cent, or less there may be an increment value, and in all the remaining 99 cases, every owner, every person who is engaged in any land transaction whatever, will be put to the expense of obtaining a valuation and of getting the Commissioners' seal to the fact that no duty is payable. Surely the right hon. Gentleman does not contemplate putting a block upon all transactions in realty throughout the country. Is it suggested that in the event of any transfer of interest in land in future the Commissioners are to have the land valued in order to ascertain whether or not there is any increment value? I think my hon. Friend would have been justified in putting down the year 1960 instead of 1930. It is obvious that in 99 per cent, of the cases the Exchequer will not get a penny, and yet the parties are to be put to expense, trouble, inconvenience, and delay in obtaining the valuation. It seems to me that there is very great carelessness in the drafting of this measure, and I hope we shall have some further explanation from the other side of the House beyond what the Chancellor of the Exchequer has given. Why should it be necessary within a few months of the commencement of this Act to have another valuation? Does the right hon. Gentleman desire, after having taken the original valuation on 30th April, within a few months or even a year afterwards a further valuation in order to ascertain whether there has been any increment in the meantime? Surely it would be reasonable to put some limit in the Bill, say, five or ten years.
§ Sir FRANCIS LOWE
I should be glad if the Chancellor of the Exchequer will give us a little more explicit information with regard to pending transactions. Supposing an agreement has been commenced for the sale of freehold property, and has not been concluded and completed before the passing of this Act, is it necessary—before that transaction can be concluded —for all particulars and returns to the Inland Revenue authorities to be made in order to see whether Increment Tax is plausible or not, and whether it would not be valid unless a stamp had been affixed upon it to show that a return had been made?
§ Mr. W. W. RUTHERFORD
Clearly something must be put in this clause, and it should be made clear whether the date applies to the word "sale" or whether it applies to the word "transfer." There are innumerable transactions pending where contracts have been entered into for the sale of large properties which have been taken up in small conveyances, and it is not an unusual thing for these conveyances to be delayed five, six, seven, eight, and even, sometimes, ten years. Therefore, anything put in as to the date of sale is one thing, and anything as to date of transfer is quite a different thing. As the clause reads at present, it is impossible to say exactly what is meant; but I take it if no words are put in, then, a day after the passing of this Act, when a sale and transfer were executed, it would be the duty—it would be, in fact, an obligation on the part of the purchaser in order to see that he obtained a good title—to insist upon seeing the stamp on the deed denoting whether any duty or all the duty had absolutely been paid. The word "charged" occurs in this clause. It is not clear what is to be charged. If you look at the clause as it stands, grammatically it would be the increment that would be charged. Is it the intention of the right hon. Gentleman to charge the land? If it is legally charged on the increment, and there is an increment in land, then it will be a legal charge upon the land, and, if so, no purchaser would be in a position to accept any conveyance which was dated a day after the passing of this Act, unless it had got that denoting stamp upon it. Also, it would necessitate the transfer of every piece of land being submitted for the adjudication of the Commissioners of Inland Revenue in order to have the denoting stamp affixed stating there had been so much duty paid or that a valuation had been made, and there was no duty to pay. Whilst I am not prepared to suggest that 1930 would be a reasonable date, yet there must be a date unless you mean the date of the passing of this Act, and you must also state whether it is the date of the transfer or the date of the sale, because they may be very wide apart.
§ Sir EDWARD CARSON
There is a good deal of apprehension among those who are concerned in the transfer of land as to what is exactly to happen under the Bill as it at present stands. The right hon. Gentleman has admitted that the Increment Duty will not be payable on any 43 transfer that takes place before the commencement of the Act. That is not in the text of the Bill, but I understand he will put it in. I think even that much is of some importance to those who are engaged in the business of the legal transfer of land. Unless you are to stop the transfer of land for a considerable time after the passing of the Act, the measure will be really unworkable. Supposing the day after the passing of the Act I proceed to sell a house in London or elsewhere—it must be delayed until the various operations under this Bill take place. First, I have to proceed to get the original site valued, and then I have to come to terms with the Commissioners in regard to it. If I do not come to terms with the Commissioners, I have to appeal to the Referee, and if any question of law arises, which is not improbable under this Bill, it may have to go to the Court of Appeal. When all that is done, then my purchaser would not take the conveyance until he is satisfied with regard to the Increment Duty from 30th April of the present year. I have then to come back to 30th April of the present year, and will have to get it assessed again by another valuer and by the Commissioners in order to ascertain the increment value that has arisen. The right hon. Gentleman knows perfectly well that sales of a small character are going on, and will go on, all through the passing of this Bill, and most of these valuations to be made will be really so extensive that I doubt very much whether even the very eminent and hardworking gentlemen of the Inland Revenue will be able to cope with the work. So what would happen in the meantime would be that the whole of this Bill would be hung up. In the case of corporate and un-incorporate bodies who have to make a return under the Customs Act, the period is every fifteen years, if I remember aright. I cannot see what the difference is between corporate and unincorporate bodies and individuals. I find that Clause 6 of the Bill says:—"Where land or any interest in land is held by any body corporate or by any body unincorporate as defined by section 12 of the Customs Act and Inland Revenue Act, 1885, the occasions on which increment value is due shall be the 5th day of April, 1914." Why not fix the year 1914? I cannot myself see why the indulgence which is extended to corporations should not also be extended to individuals. I urge the right 44 hon. Gentleman to make a clear and definite statement for the benefit of those who are engaged in this kind of business, and who are very much perplexed at the present time as to how the Act is to work when it is passed.
§ Mr. JOYNSON-HICKS
The difficulty comes before me in my practice at the present time. I have to do with these transactions day by day, and I cannot help thinking that the greatest difficulty will be experienced by lawyers and by clients—and clients are just as much interested as lawyers in properly carrying out the administration of the law—as to how we are to get these transactions through, having regard to this Increment Tax which comes into effect immediately after the passing of the Act, as I take it. I may suggest this actual concrete case, a case with which I am now dealing; it is a case for the splitting of some land for the purpose of small holdings, so that working men may buy them cheaply and be enabled to buy their own house's. My clients have arranged that the purchase money for those plots may be spread over a period extending possibly in some cases to ten years. I mention this case because I am afraid the rich man's land has not such attraction as the poor man's land for the right hon. Gentleman, and, as it affects working men, it is a very important point. We have arranged that the purchase money shall be payable in monthly instalments. Large numbers of working men are actually taking those pieces of land, and are going to build houses on the particular terms I have mentioned. The whole money may be paid in five years or spread over a period extending to ten years, and I want to know if the Increment Duty is to accrue there. The man purchases his land before the passing of this Act, the land is split up, and the various plots are practically all bespoke. The transfer may take one or two years, or even up to ten years. Is each of those working men buying a small bit of land, costing £20 or £30, when he takes his actual conveyance out in five or ten years afterwards, to be at once made to pay Increment Duty, or is the vendor to be responsible for seeing that the Increment Duty is to be paid? I quite conceive it possible that in ten years there will be an Increment Duty, but I venture to suggest there will be no Increment Duty, or a very small increment, so small as to be uncol-lectable in the first few years. While I do not propose the year 1930, as suggested in the Amendment, I do think that the 45 Chancellor might meet this class of case by saying that there will be no increment for a period of five years to allow of those very numerous cases, which are hanging in the balance, to be completed without the payment of any Increment Duty.
§ Mr. HENRY CHAPLIN
There is no doubt the probable cost of these valuations of which we have heard so much is exciting the gravest possible apprehension amongst a vast number of owners of land in the country. Within the last few days I have been engaged in trying to get an answer from the Chancellor in reference to this particular question. Perhaps he will give me a clear answer to it now. The question is to this effect: "To ask the Chancellor of the Exchequer if the Government have formed any estimate of the approximate cost to the owner of the land——"
The question of valuation certainly does not arise here. I stated at the beginning that it would not be a fair or proper thing to go back on the discussion of last Monday, and that this question which we are now discussing is one bearing on a different point, that is the question of a difficulty as to the transfer of land soon after the passing of the Act. I do not think we ought to go back on the question of valuation, which was very fully discussed on Monday.
§ Mr. LLOYD-GEORGE
That specific point as to valuations has been raised by several Amendments, and the Government cannot possibly shirk full discussion on it. It is obviously one of those points we must discuss fully. I am afraid with every desire to be courteous to the right hon. Gentleman (Mr. Chaplin) I could not possibly give an answer to him at this stage. Since I spoke before on this Amendment, if I may say so, I think the Debate has rather taken more practical form. The first suggestion was really impossible. It was a suggestion which would render absolutely futile the whole of the Increment Duties. The hon. Member's object was possibly to do that. I am not complaining.
§ Mr. JAMES HOPE
When I put this Amendment down, mentioning the year 1930, I hoped to be able to argue it on more general considerations. Those have been ruled out of order. I have no special interest in the year 1930. I shall be glad if the Chancellor sees his way to accept the year 1914.
§ Mr. LLOYD-GEORGE
The hon. and gallant Gentleman (Mr. Pretyman) who supported the Amendment took the general line that we might as well make it. 1930, and he did not see why it should not be 1960, and that we would get the same money in the end. I do not see why we should not act on the same principle with regard to all our taxes, and let the people pay the arrears in 1930. It could be argued that the State would get exactly the same money. In the meantime no doubt the State would be bankrupt, and we should not have any cash except by borrowing. Really, you cannot argue on those lines. Although I have no doubt the hon. and gallant Member was perfectly bonâ fide in advancing the argument, I do not think it is altogether a practical consideration for the Committee. I come to the point raised by the right hon. Gentleman the Member for Dublin University (Sir E. Carson). I think he will find we have met this point. Let us assume for the moment that the Bill is through on 1st November. Any date will do, and that on 1st November there is a contract for the sale of land. In our Bill the Increment Duty comes into operation on that day, but there is no site value fixed, and you have got first of all to go through the whole procedure of fixing the site value before you can arrive at an increment. The answer to that is in Clause 4, sub-sub-section B. What would happen would be, there could be no increment value, as there was no site value. The increment value could not begin until there is a site value.
§ Mr. LLOYD-GEORGE
As the site value has not been fixed it would be obviously impossible to charge Increment Duty. They send in particulars to the Commissioners, and the Commissioners impress the document with a denoting stamp, which will indicate the whole particulars have been given. They can if they like demand security. I assume there will be provision of that sort, but that unless some great increment had occurred since 30th April there would be no charge at all. There would be no difficulty in getting the denoting stamp from the Commissioners, though arrangements might be made if there had been a very considerable increment in the meantime. Conceivably there might be a case of that kind where a neighbourhood had sprung up in the course of a single 47 year from absolute agricultural value to great building value by a discovery or by the starting of a new industry, but there will be no difficulty in having a denoting stamp which will make the document an absolute title-deed without any further stamp being impressed upon it. That is exactly what sub-sub-section B of Clause 4 is meant for. The right hon. Gentleman also asked why do you not deal with individuals as with corporations? Corporations are not exempt under section A, and they have got to pay an Increment Duty although it be within the current year if there is really an increment. The Increment Duty in Clause 6 pointed out by the right hon. Gentleman is a substitute for the Death Duties on corporations. Obviously you cannot charge a Death Duty on a corporation.
§ Sir E. CARSON
But you have the date 1914, whereas in the case of an individual the Death Duties arise on death at any time.
§ Mr. LLOYD-GEORGE
For the reason the right hon. Gentleman will see that we have got to fix some date for the corporation, whether it shall be 1914 or 1915 is a question for Debate, but it is obvious that the Government must fix some date. That is the reason why we take 1914 in that case. As to the question put to me by the hon. Member for North-West Manchester (Mr. Joynson-Hicks) and the hon. Member for Edgbaston (Sir Francis Lowe) whether we propose that duty shall be charged on the actual signature of the conveyance or the date of the contract. The intention of this clause is that it shall be on the sale. It is only to be charged when the contract takes place after the passing of the Act, and not on the actual conveyance. I quite see what has been pointed out by the hon. Member for North-West Manchester that you may have a contract this year which may not be completed for a year or two. The real transaction in that case is the contract. In order to make that perfectly clear I shall be glad to insert words after the word "sale" to make it clear that it is on the contract after the commencement of this Act.
§ Mr. AUSTEN CHAMBERLAIN
I do not propose now to discuss the second point dealt with by the Chancellor of the Exchequer, namely, the relevancy of the proceeding under Clause 4 to this clause, as we shall have to raise the same question on sub-sub-section B. I desire to go back 48 to the point with which the Chancellor of the Exchequer dealt, namely, the effect of sub-section A on current transactions unless he consents to insert some words which are not now in this sub-section. What is it the sub-section says? It says that, subject to the provisions of this part of the Act, this Increment Duty is to be charged on the occasion of any transfer on sale of land or of any interest in land, or the grant of any lease, without any date fixed for its coming into operation. The Chancellor of the Exchequer says that it is the intention that it should come into operation on the passing of the Act, and that it should not have retrospective effect. But that is not in the Bill as it stands, and to carry that out it is essential that new words should be added, because the right hon. Gentleman will see in sub-section (b) that the words "after the commencement of this Act" are expressly inserted. Their insertion in subsection (b) and their omission from subsection (a) will be a very potent argument with the Commissioners or referees, or even with the Court of Appeal, to say that if they were put in in sub-section (b) and not in sub-section (a), it is clear that Parliament did not intend them to apply to sub-section (a). Therefore, to carry out the intention of the right hon. Gentleman new words must be added, and those words must apply to the whole sub-section—not merely to transfer on sale, but equally to the granting of leases.
§ Mr. AUSTEN CHAMBERLAIN
The Chancellor of the Exchequer agrees to that. Can we carry our agreement a little further? Will that satisfy the necessities of the case? The Chancellor of the Exchequer thinks it will. He says that a vendor will furnish the particulars which the Commissioners require, that the Commissioners will then, under Clause 4, give a stamp denoting that the particulars which they regard as necessary have been furnished, and that thereupon a valid conveyance can be given. But how is the vendor to arrive at his price when he has not yet made the valuation which subjects him to a tax the amount of which, therefore, he cannot calculate? Heretofore, when he made a transaction at a certain price, he knew whether he was making a profit or not, whether he was getting the money he required or not; but now he will not know that, because he will not know how much of the purchase price will be taken from him under the name 49 of Increment Value Duty. I submit on these grounds that the right hon. Gentleman's explanation has not removed the difficulty which the words in the Bill raise, and that he must go beyond anything he has yet promised before it will be possible for these transactions to continue easily and without obstruction.
§ Mr. HAROLD COX
The very conciliatory reply of the Chancellor of the Exchequer dealt only with the legal aspect of the point raised. There is also a very serious economic aspect, namely, the cost to which the nation and private individuals will be put by these repeated valuations. The right hon. Gentleman took the case of an estate coming into the market immediately after the passing of the Act, before a valuation has been made. Let him take an estate, say six months after the passing of the Act, after a valuation has been made. In that six months there will be very little increment—practically nothing—to tax; but there will have to be the cost of the new valuation for the purpose of getting whatever tax there is. I think the Chancellor of the Exchequer is under a misapprehension on this point. He seemed to argue as if the mere fact that the sale took place would register the value to be taxed. That is not the case; because the tax is not imposed upon the real thing which is sold, but on some imaginary thing which Mr. Henry George invented. Therefore, there must be a valuation to ascertain what is that imaginary thing. In the case of the German tax it is quite different. There the increment duty is levied between two real sales of real things, whether land or houses. Here we have to begin with a primary valuation of something which is imaginary, and then within six months, when the sale of the real thing takes place, you have to have a second valuation to get that imaginary value again. That would mean considerable cost. Therefore, I think the Chancellor of the Exchequer, in the permanent interest of the Exchequer, might consider the advantage of levying this duty only at periodical intervals, say once in five years, so that there will be something substantial to deal with.
§ Mr. A. J. BALFOUR
I do not think the Chancellor of the Exchequer has really appreciated the importance of the practical issue now before us. We are not now discussing whether this is a righteous or an unrighteous tax, a proper or an improper tax; we are discussing what effect the tax will have on the transfer of land in this 50 country. I remember the Lord Advocate told us that one reason why these Land Taxes were very convenient was that land could not run away. That is true; but the Government appear to be anxious not merely that land should remain where it is, but that it should remain always in the hands of the existing owners. They are doing everything they can to make it impossible, expensive, difficult, disagreeable, or risky for an existing owner of land to-transfer any portion of that land to a willing purchaser. It is not merely the question of the cost of the original valuation, which you, Sir, I think most properly, have ruled out of order, or, at all events, inconvenient of discussion at this point. What the Government are doing is to insist upon an inconvenient and costly process, for the purpose of getting money, being gone through by an enormous number of people who have not got to pay the money and will not have to pay the money after the process has been gone through. The right hon. Gentleman is, I think, under a complete misapprehension as to the meaning of Clause 4, sub-section (3) b. He says that all that is required under that subsection for a transfer of land is not that everything should be settled, but only that the Commissioners of Inland Revenue should have all the facts put before them which will enable them to settle. The words are,"…a stamp denoting that all the particulars have been delivered to the Commissioners which, in their opinion, are necessary for the purpose of enabling them to assess the duty…"What are those particulars. They must and do involve the original valuation and the new valuation, otherwise the Commissioners evidently cannot have before them the particulars required to enable them to assess the value. Therefore, there will never be a transaction again in this country in the way of a sale of land, no matter how small the parcel, or of any interest in land, however small, provided it comes within the terms of this definition, in which the transferor will not have to go through the double operation of a revaluaton and a comparison with the old valuation—and that whether he has got to pay anything or not, whether there has been any increase in value or not. There may have been a decrement of so notorious a character as to be known to everybody in the neighbourhood; it makes no difference. Before the Commissioners can give this stamp he has got to furnish the particulars which will enable them, whether they do it or not, to 51 fix the amount of duty, if any, which he will have to pay. Could any contrivance more absurd and more contrary to the public interest be conceived as regards dealing with land in this country? You are going to tax a few people, and you throw upon an enormous number of people the burden of that tax, or some incidental or collateral burdens which cannot be avoided in connection with the tax. It has been a cry, almost a parrot cry, of the party to which the right hon. Gentleman belongs, that the laws of this country have made the transfer of land, especially in small parcels, a difficult operation. Whatever may be the difficulties of our traditional system, they are not comparable with the difficulties and embarrassments which the Government are deliberately putting upon these transactions by their legislative proposals. This vitally important part of the question the right hon. Gentleman has not touched. He dealt with certain legal aspects; he made certain references, one of them entirely mistaken, to subsequent sub-sections of the Bill; but, on the broad, practical aspect, with which men of all sides are deeply concerned, and which is the really important aspect, the Government so far have not vouchsafed a single answer to the objections which have been so clearly put before the Committee. I am sure the Chancellor of the Exchequer will feel that I am not making these observations in any discourteous spirit. It is really necessary for us, before we part with these words, to know how the Government mean to justify a proposal which hampers every transaction in land in order to extract a mere pittance from some small fraction of the land so transferred.
§ Sir W. ROBSON
The point that we are discussing is not one that I think ought to take us over the whole scope of the Bill. Arguments have been adduced which would be equally applicable to other portions of the Bill; but, to keep to this particular clause, is it necessary to delay the coming into force of the provisions of the Act for any of the reasons which have been alleged? These reasons have given, somewhat inadvertently and unintentionally, exaggerated views of the provisions of the Act. For instance, my right hon. Friend the Member for the University of Dublin (Sir E. Carson) drew quite a doleful picture of what would take place upon each transaction, and actually, the right hon. 52 Gentleman the Leader of the Opposition went on to say how awful it would be if all this sort of thing were to take place on every sale of real property or transfer of any interest in real property. Let us take the alarming view presented by the hon. and learned Gentleman the Member for Dublin University, and the argument put forward by the right hon. Gentleman the Leader of the Opposition. He said: "First of all, upon every sale hereafter, the vendor must get the original site value." Well, the original site value will have to be taken for all the land in England as upon a particular date after the passing of the Act. Nobody denies that that will be an important and difficult operation. That is ground common to both sides of the House, but when you are talking of impossibility I think I am entitled to say that it will be easily done. There may be time and cost, but the thing will be done, at all events, adequately and properly for the purpose. The original site value will be ascertained. My right hon. Friend imagines a vendor selling——
§ Sir E. CARSON
The hon. and learned Gentleman is mistaken about my argument. I was putting a case to the Chancellor of the Exchequer immediately after the passing of the Act. I said that in that case you first have to go through a process. The right hon. Gentleman said: "Because you would have first to get that (the site value) before you can find out the increment since 30th April last up to the passing of the Act." I did not suggest that you would always have to have the original site value valued again.
§ Sir W. ROBSON
Then it was said that the purchaser would not take the title till he is satisfied that the Increment Duty is paid, and then the right hon. Gentleman asked if the whole business was to be hung up while these costly, difficult, and lengthy proceedings had been brought to a determination? Certainly not! If the right hon. Gentleman would just follow the section a little more closely he would have seen that this is adequately provided for. The specified section provides that a denoting stamp may be taken which denotes to the purchaser that the vendor has given all particulars that are necessary to the Commissioners. It is the vendor that pays the duty, not the purchaser, so that the moment the purchaser sees that the denoting stamp has been given, he is satisfied, and so far as he is concerned there is no reason for delay. The section goes on to say: "Where the instrument is so stamped 53 it shall, notwithstanding any objection relating to the Increment Value Duty, be deemed to be duly stamped so far as respects that duty." So that the purchaser, without waiting for any of those operations referred to by my right hon. Friend the Member for Dublin, having got his denoting stamp, knows that the vendor has given the proper particulars to the Commissioners and the transaction goes on the same as now. There is always a little delay in getting the stamp, but there is no reason to suppose it will be more serious than at present.
I am assuming that we have got the register complete for the land and its original site value. [Some cries of dissent.] I am dealing with a normal transaction. I quite agree that until you have got your register there may be a little delay, not in the completion of purchase, but a little delay after the purchase is completed on the part of the vendor in establishing the original site value and the new site value indicated by the land which is being sold. But let me take a normal transaction, because the right hon. Gentleman the Leader of the Opposition confined himself to transactions that were likely to come into operation on the passing of the Act. He said, with great force, that never again in this country will you have a transaction without these difficutlties. But once I have got my register then the vendor has no difficulty at all, because the original site value is a public fact. There is on the register not merely the first site value, but it is in a two-fold form. It is there as the total value and as the site value. Now we come to what is called the new value. My hon. Friend the Member for Preston (Mr. H. Cox) said:—"Now, here you have to get a new valuation." But is there going to be a new valuation? Technically you may so describe it, but in most cases it will not be a new valuation at all. Your real difficulty there, and it is a difficulty in which the vendor will take pleasure, is to ascertain his deductions. That is a matter within his own knowledge. The value of the buildings will not be a deduction which will trouble him. Having got his original site value, and having got his price, he will have to consider whether he should make a claim for deductions in respect of anything personal to himself having given value to the land. He may sell some particular commodity, or some insect powder, and he may claim deduction in respect of that.
§ Sir W. ROBSON
I do not think that the bricks and mortar of licensed premises rise in value. Of course, there may be a rise in value, and if there is the vendor will be very glad indeed to draw attention to it. In the meantime the purchaser is not being delayed, but may sit cheerfully at his own fireside. But if the building has risen in value it will be due to some general or special cause known to the vendor. So that the transaction will not be a very outrageous one. I quite agree when you are introducing any novelty into a business of any sort you may very easily and sincerely imagine all kinds of contingencies and possibilities. But after all let us bear continually in mind that the thing we propose to do is being done without any very great difficulty——
§ Sir W. ROBSON
Well, I cannot read all the published reports. There are, I think, 250 to 340 municipalities in Germany who have adopted this tax, so that you get the same tax which introduces the same class of difficulty as this Act does. Hence you have some basis of experience. The question is whether the difficulties in analagous cases will prove to be as serious as hon. Gentlemen now expect.
The right hon. Gentleman the Member for East Worcestershire (Mr. A. Chamberlain) said:—The vendor will be in a difficulty in not knowing what price he has to charge, because he will not know how much of his profit is going to be taken by the Tax Commissioners.Looking at the matter as economists and as business men, I think we may say that the vendor will put on as large a price as he can.
I think we may safely assume that there are already sufficient inducements thrown upon a man not to omit anything in making his calculations. It does not matter how much to him the figure may be, he will say to himself the State are going to take so much, and therefore I desire to make that income as large as I can. The vendor will do his best to get a good price for the land, and, having got all he can for the land, he knows he will have to pay one-fifth of this particuar profit to the State. He is certainly not going to charge either less or more because some- 55 thing is going to be done in relation to his property which he cannot help. My hon. Friend the Member for Preston talked about the danger of new valuations. I think I have answered that argument. What he called a new valuation will simply amount to giving particulars which are well within the public knowledge or well within the private knowledge of the particular vendor, and is in no sense a valuation at all. It is a valuation by calculation rather than by direct valuation.
§ Lord ROBERT CECIL
I observe that whenever the Government get into any difficulty, which happens always upon Amendments under discussion, they think their one and all-sufficient reply is that this tax has been tried in Germany, and that no difficulty has been found there. As a matter of fact, and merely to reduce the argument to actual fact, I do not understand that this tax has ever been tried in Germany. The tax in Germany is a wholly different tax, and one that does not raise any of these difficulties in reference to valuation. Although I dislike having the name of a foreign country perpetually occurring in our Debates in this House, I must say that the actual example which Germany furnishes in this instance does not appear to me to apply in any way. The Attorney-General, in his very interesting speech, must feel that he has not grappled with the difficulties put to him. In the first place he began saying that there was no impossibility in carrying out the original site value. I am not aware of anyone having suggested that it was impossible, but the point has constantly been asserted, and has never been disproved, that it would be an exceedingly costly matter to carry out, and such a valuation is going to impose a very heavy burden upon a certain section of the inhabitants of this country.
I must point out to the Noble Lord that it is not a question of the cost of valuation which is now under discussion, but it is whether the occasion of any transfer on sale should be postponed until 1930 or some other year.
§ Mr. BALFOUR
May I ask your ruling upon this subject? One of the objections I personally feel most strongly to the arrangements of the Bill is that as they stand whenever any transaction in land takes place there is something, which the Attorney-General does not call valuation but 56 calculation—at any rate, a transaction of some kind—which, as it appears to us will be a very great hamper on land transfer. We think the case will be very largely met if you had a tax levied only at certain intervals; and, therefore, I ask if you do not think it relevant to the issue that we should suggest that the date should be postponed in order that in the intervals-all this land transaction might go on unhampered and unimpeded?
Supposing the argument is made relevant to the date, I shall not interfere; but in entering the caveat which I put in at the beginning I did so because I did not want to go again into the time of valuation and the cost of valuation. If the argument is applied to difficulties arising on the stamp question, it will be in order.
§ Lord ROBERT CECIL
I apologise. I fully recognise it is a little difficult, but I was trying to deal with what the Attorney-General said in reference to this particular matter. I will not pursue the point any further. The Attorney-General appeared to consider that the vendor was the person on whom the duty of getting this-valuation was thrown, and that therefore there will be no impediment in the transaction because, as he said, the purchaser will sit quietly in his study at home, having got the property waiting for the vendor to complete the transaction. But that is not in any way in the provisions of the Bill. If the Attorney-General will look at Clause 4, sub-section 3, he will see that it reads: "Any such instrument shall not, for the purposes of section 14 of the Stamp Act, 1891, and notwithstanding anything in section 12 of that Act, be deemed to be duly stamped unless it is stamped (a) either with a stamp denoting that the Increment Value Duty has been assessed by the Commissioners or paid in accordance with the assessment or (b) with a stamp denoting that all particulars have been delivered to the Commissioners which, in their opinion, are necessary for the purpose of enabling them to assess the duty, and that security has been given for the payment of duty in any case where the Commissioners have required security." Therefore, the title of the purchaser will not be complete until the Commissioners have been satisfied that all the inquiries which are necessary for them to ascertain the duty have been carried out. It is a mistake to suppose that the purchase will be all right. He has got 57 to get the instrument stamped, and until it is stamped he has no title to the property. That is to say, first he has got to see that the original site valuation is ascertained, and, secondly, that there has been a fresh valuation or calculation in order to show whether or not Increment Duty is payable. I submit my hon. Friends were perfectly justified in saying that this involves a direct hindrance upon the transfer of land. It is not merely a burden upon the vendor; it is a burden on the transfer itself. The Attorney-General said until you have your register there may be some little delay, but that is one of the topics we are discussing. Until you have your register there will be not a little, but a very great delay.
The obvious object of this Amendment is to show that the operations of the Bill should be postponed until at any rate your register is complete. That is the first object, and the Attorney-General does not answer it at all by simply passing it by with the remark that there must be some delay until the register is complete. The Attorney-General admits it cannot be done without serious delay, but he contends that it can be carried out in six months after the passing of this Act, but that without serious delay it cannot be done. He is in error, as I venture to think, in saying that the delay will cease even in respect of the next transaction; you have to carry on further inquiry with regard to every transaction which takes place. You have to sec what is the site value at the time of each transaction, and what is its relation to the previous site value of the property. In other words, it is quite plain you have got to first of all have a complete valuation of the land all over this country, and, having had that at the outset, you have then got the subsidiary valuations every time that land changes hands. And all that has to be done in order to secure a very small return. I think that is a very serious matter in reference to ordinary transactions. Let me call attention to one particular class of transaction which it seems to me will be killed and destroyed by this Bill. I mean transactions in which land is bought for the purpose of being resold, a very important matter in itself. I hope this matter will be discussed upon this Amendment. Transactions in the buying and reselling of land which is largely used in connection with the creation of small holdings will be very seriously hampered by this clause unless some such Amendment as this is introduced. Finally let me say that if it is really true that the object of this Bill 58 is valuation and not taxation, a very serious constitutional question arises, of which I think the Committee is not quite sufficiently seized. I hope the Bill will be modified, and that its dangers and its hardships will be somewhat lessened by the insertion of Amendments which my hon. Friends on this side of the House have moved, and which the Government will be well advised to accept.
§ Mr. J. M. ASTBURY
The Amendment we are discussing might be limited to the question whether the calculation of the tax referred to in sub-section A, section 1, of the Bill, that is whether the action on the sale of land should be postponed for one or more years. The House has already determined this. The other day the Government accepted an Amendment after the word "value" on line 18 to insert the words "accruing on 30th April of this present year." The Committee, therefore, have already decided that there shall be an Increment Duty on land, and that it shall be the duty from 30th April in this present year. I would like to point out in the case of duty so payable, and as from the said date, by this Amendment, the actual date to begin is to be postponed for several years, which would only make the difficulties which hon. and right hon. Gentlemen on the other side of the House pointed out far greater than they are. Everybody realises that there must be a great deal of trouble and expense and difficulty in starting a new tax of this kind, but I venture to suggest that the difficulties have been greatly exaggerated by hon. Gentlemen opposite. We have already decided that there shall be an Increment Tax on land. We all know what an Increment Tax is. It is to be an unearned Increment Tax.
§ Mr. ASTBURY
The right hon. Gentleman says it was rejected. The addition of the word "unearned" was rejected for very obvious reasons, namely that the definition of the term "unearned" is dealt with in Clause 2 of the Bill, and it would be perfectly absurd to put the word "unearned," which is a popular- expression, but by no means a legal expression, into a clause of an Act of Parliament before you come to your definition as to what Increment Tax shall and shall not apply. It is by no means accurate to say that the House has rejected the fact that the tax is to be paid on unearned increment 59 only. What it has done is to reject the putting of this word into the first section of the Bill. I will proceed on the assumption that there is to be an Increment Tax. For the purpose of starting this tax everybody knows there will have to be a valuation. I do not care whether it is expensive or difficult——[OPPOSITION cheers.] When hon. Members opposite have finished cheering I would like to complete my sentence. I do not care in the least whether it is expensive or difficult in its operation in regard to the Amendment we are now discussing, because we are dealing with a specific Amendment. We have already decided that there shall be an Increment Duty upon land, and the question is whether it shall come into operation substantially as from the date of the Act or whether it is to be postponed for a certain number of years. Hon. Members opposite seem to think that the original valuation will be a lengthy or an expensive one, but I do not agree with them. [An HON. MEMBER: "Why?"] Because the House has already decided that we are to have an Increment Tax, and it is obvious that there must be a valuation upon which the tax shall be levied. The Bill is a great deal simpler than hon. Members opposite give credit for.
Clause 16 provides that there shall be an original site valuation of the land of this country dating from April of the present year. I submit that it is not relevant to what we are now discussing whether that sale in some cases be a difficult operation or in other cases a more or less expensive operation. For the purpose of having an Increment Duty Tax you must have a basis to act upon. We have decided that there shall be this tax, and we must have as a complement an original valuation based upon it. The hon. and learned Gentleman the Member for Dublin University, and certainly the Leader of the Opposition, suggested that there would be all kinds of duties on subsequent transactions, and that they would be removed or palliated by postponing the operation to this particular date. I submit that that is not so at all. The original valuation will have to be made whatever date the duty is payable from. The question raised by hon. Gentlemen opposite is whether there ought not to be some delay because there may be pending contracts, and it has also been said that there may be contracts between the passing of this Act and the commencement of the next financial year. I say the Act entails nothing 60 of the kind, and I will take two concrete cases. Supposing the Act passes on the 1st of November. If the words agreed to by the Chancellor of the Exchequer are inserted in section A of Clause 1, providing that the occasion shall only be occasions arising under contracts made after the date of the Act, we may take it that we are discussing this question on the assumption that the Government have accepted words to make it clear that it means on the occasion of any transfer on sale of the land in pursuance of a contract made after the date of the passing of the Act. I submit that in 99 cases out of 100 there cannot be any difficulty. Before the stamp operation can be completed the original site value will have to be made as from last April. I have had a little experience in the transfer of land, and I suggest that in 99 cases out of every 100 that valuation will be an extremely simple and inexpensive matter. I know scores of cases where people could make this valuation without the assistance of any valuer with the greatest ease in a few hours. Take cases where people have bought small plots of land within the last three or four years. Does anybody suggest there can be the least difficulty in putting the value upon the land in such cases? Take the case of the contract made next December. The valuation of the land will be as in April of this year, and that has got to be ascertained. [An HON. MEMBER: "When?"] As soon as possible. When the Act comes into operation is not relevant, because the valuation has got to be made, and the sooner it is made the better. In the case of a contract made in December the valuation in the land as in April last will either have been made or it will not have been made. If it has been made, does anybody suppose that there can be the slightest difficulty in carrying out the transaction? I will assume that the calculation has been made, and placed at £5,000. I am dealing now with freehold land. The Bill provides that the consideration on the sale is to be taken as that which is to be set against the original valuation——
§ Mr. J. M. ASTBURY
I suggest that there is no difference, and there is no difficulty about it. Take a hypothetical case where the site value of land is valued in April at a particular sum, and the land is sold next December. Unless the land is sold at a price which obviously shows an increment on the site value it is subject 61 to the deductions in Clause 2, which are far more generous than the deductions taken into consideration in arriving at the original site value. Unless there is some substantial reason to suppose from the consideration on the contract that there may be any increment, and there will not be in 999 cases out of 1,000——[OPPOSITION cheers.] I think hon. Members opposite are cheering entirely without appreciating my point. In the case of a valuation made in April this year it is unlikely that in December there will be any increment of any sort or kind. The words in Clause 2 of the Bill, sub-section (2), are, "Where the occasion is a transfer on sale of the fee simple of the land the value of the consideration for the transfer." The consideration for the transfer will be on the contract, and the valuation will have to be made before the completion of the stamping operation, and, therefore, I suggest to the Committee that in 99 cases out of 100 in all contracts made within a reasonable time of the passing of the Act there will be no difficulty in appreciating whether there is any possibility of increment or not.
In certain contracts made a little later it is possible there may be on the face of the document sufficient reason to suppose that there may be an increment, although it is hardly likely within a few months after the valuation. If so, I submit there is very little difficulty there. If we agree to the tax I should have thought it far better to discuss it on the question of the generality of the occasions when the operations will arise than on the few exceptional cases where there may be some difficulty in assessing the value. A right hon. Gentleman opposite said there would be all manner of doubt as to the validity of the transfer to the purchaser, but I cannot understand that argument. We all know that the ascertaining of the stamp has no effect whatever upon the validity of the transfer to the purchaser. The stamp has to be paid for, it is true, and if it is not paid within a certain date there may be a penalty attaching for its non-payment, but the validity of the conveyance to the purchaser does not in any way depend upon the payment of the right stamp. There is careful provision made in clause 4 in regard to earlier cases, and there must always be earlier cases when starting a new tax. In cases where the exact value of the stamp duty cannot be ascertained this provisional stamp may be put upon the document which, as the Attorney-General has pointed out, will completely 62 protect the purchaser of the property. There may be difficulties—in fact, there must be in regard to a number of these valuations—but they will always arise whatever date is fixed for the operation of the Act, and the sooner those difficulties are faced the better. Postponing the date of the collection of the tax of transfer on sale will in no way get us out of these difficulties, which are inherent to the collection of an Increment Duty Tax. The Committee have already decided that there shall be this tax, and we have now to see that the provisions of the Act are made of such a character as will raise the least possible difficulties.
§ Mr. BONAR LAW
The hon. and learned Member relieved my mind very much when he said that this Bill was, in. his opinion, more complicated than he had expected. In all his remarks he failed to understand the principle of the Amendment. The principle of the Amendment is that even from the point of view of the Government nothing can be more foolish than to have this tax imposed on the greatest possible number of people, and that nothing could be wiser than to get the same amount of money with the smallest amount of inconvenience from those who have to pay the tax. He told us that in 999 cases out of 1,000 there will be no duty to pay.
§ Mr. ASTBURY
I am sure the hon. Gentleman does not wish to misrepresent me. I never said anything so absurd. What I. said was that in a proportion of cases where the contract is made within a few months of the original valuation the collections will have to be made.
§ Mr. BONAR LAW
The hon. and learned Gentleman said that in 999 cases out of 1,000 the Increment Duty would not have to be paid.
§ Mr. ASTBURY
I do not often take part in these Debates. My point is that in the enormous number of cases that take place within a few months of the original valuation where there is no Increment Duty this Bill is not for the purpose of dealing with those transactions, but that the original valuation is to enable the same land to be dealt with in subsequent transactions.
§ Mr. BONAR LAW
The hon. and learned Gentleman has not dealt with the point raised by the Leader of the Opposition. My right hon. Friend asked what is your objection to periodical valuation with 63 the result that no transfer of any kind can take place without all the inconvenience that is involved in one valuation? No speech could have been more in favour of the Amendment than that which was delivered by the Attorney-General. The hon. and learned Gentleman, who has just sat down, said that the valuation could be made in five minutes. So said the Attorney-General, but if I were a party to a transaction, I should not like to have my valuation made in five minutes. Mr. Emmott, we have not had given us one single reason why it would not be better to have these valuations taken periodically than once for all.
§ Mr. JULIUS BERTRAM
I rise to support the Amendment, which does not involve all the inconveniences to which the hon. and learned Member for Southport (Mr. Astbury) refers. It makes no difference whatever in the incidence of the tax. I do not believe that the Government have considered the effect of this clause upon Somerset House. If this clause is passed without some modification you will have Somerset House in a state of chaos. I know the time it takes to deal there with such a simple matter as a marriage settlement. I. know the time it takes to deal with Stock Exchange matters; and I am satisfied that no machinery exists now to deal with the documents of the Chancellor of the Exchequer. I hope that the Government will accept some words which will not put Somerset House in a state of chaos within 10 years.
§ Mr. LAURENCE HARDY
I should like to move an Amendment to the Amendment. Some date must be fixed, and I move that the date be 1914. Some people think that 1930 a misconceived date. If that date be adopted it may be a reasonable period within which to get an actual registration.
§ Question, "That the word 'thirty' stand part of the proposed Amendment," put, and agreed to.
§ Mr. J. F. HOPE
The vendor will be put to enormous trouble and expense even where there is no increment value. In any case he cannot tell until the valuation is made whether at some date, quite uncertain, it may be years hence, he will 64 not be dropped upon for an increment which he could not have contemplated when he made the original bargain, and the result of being in this state of uncertainty will be that he will have to ask a price sufficient to provide a margin for any sum that may have to be deducted. That may certainly prejudice the sale. I shall press my Amendment to a division.
§ Mr. W. W. RUTHERFORD
The object of this Amendment is that there may be ample time to carry out the various provisions of the Act. I listened with very great interest to the speech of the hon. Member for the Southport Division (Mr. Astbury), because I have very great respect for his opinion upon any subject, but I confess that, in the coarse of his remarks, I found greater difficulty with almost every sentence in understanding either his hypothetical case or the deduction which he was endeavouring to make from it. We are getting in a greater confusion as we go on with this Bill. This question of the duty and its date is a very important one. I understand from the Chancellor of the Exchequer that this duty is to arise not on a transfer on sale, for we are going to have that altered, but on the contract. Rut if we look at Clause 4 we find it is not to be on the contract, but on some instrument which is described in that clause, and the interest is to run from the date of that instrument. Therefore it would appear as if this duty is to accrue due and to be paid on the date of an instrument which is to be the instrument constituting transfer on sale. If that is so, it is entirely inconsistent with the explanation given a few moments ago by the Chancellor of the Exchequer when he said the duty would arise on the contract. I put it to the Chancellor of the Exchequer and to the Government that they ought to make up their mind which it is going to be. They must submit something intelligible. At the present moment their proposition is not intelligible for a number of reasons, of which this is one. Again, it is not intelligible because it does not make it clear who exactly is to pay the duty. If it is to be a Stamp Duty every stamp is paid by the purchaser only, but when we turn over four or five pages of the Bill we suddenly discover that it is not the purchaser but the transferor who is to pay the duty. Moreover, the duty is to be assessed by a denoted stamp on the instrument of transfer, but the transferor has not the instrument of transfer. The purchaser has to prepare the instrument of 65 transfer, and has to submit it to the transferor, but he does not do that until he is satisfied with the title. The question of Increment Duty will be one of the points of that title. Then when he has submitted it to the transferor, who, we will say, has approved of it, it goes back to the transferee, the purchaser, who has to engross it and send it for execution to the vendor. For the first time, then, the vendor has in his possession this wonderful instrument which has to bear a denoted stamp, and for the first time, at the end of that business, the vendor—the transferor who has to pay the duty—gets hold of the instrument which he has to stamp. The Attorney-General has said that he has not got to have the document stamped, but he has only to fill up certain particulars under Clauses 2, 4, and 14, and to send in those particulars, and then he will get a provisional stamp. That seems to me to be too ridiculous, and not in confirmation of remarks which fell from the hon. Member for the Hitchin Division of Hertfordshire (Mr. Bertram). I might give the Committee a case which has come within my own personal experience. I have had before the Commissioners of Inland Revenue a matter where a perfectly clear course has to be taken, but I have not been able, for a period of 12 months, to get them to attend to it. I am very sorry to impute in this House anything against the conduct of gentlemen who are not present, and are, therefore, unable to defend themselves. Indeed, I do not impute anything to them. I do not impute either negligence or delay. I only impute those things which are incidental to any public office of that description. But as these arguments go on, and as we get more and more explanations from the Government of what is in their minds with regard to the Bill, the more any practical person must fail to see the purpose of collecting this 2s. or 3s.—and it will only be 2s. or 3s. during the first five or six years—in view of all the annoyance, difficulty, bother and expense which it will entail. I do not think, indeed, it will be worth imposing at all, and certainly it should be delayed for a number of years until——
I hope the hon. Member will confine himself to the question of date. We are not discussing the principle of the duty.
§ Mr. W. W. RUTHERFORD
I am afraid I have been straying from the point, but I am just coming to it. I wish these difficulties to be borne in mind as applying to 66 every transaction from the very first one that will arise under the Act. They will occur in relation to every transaction during the first few years after the passing of the Act. If you are going to impose these duties I do suggest the operation should be delayed a certain number of years until sufficient steps have been taken to prepare for its proper working. For that reason I will support any Amendment that will give any reasonable extension of time before this most astonishing proposal is put into operation with regard to transfers on sales.
§ Mr. JOYNSON-HICKS
I should like to press on the Attorney-General what was said by the hon. and learned Gentleman who last spoke, and to back up what was said by the Member for Southport (Mr. Astbury), who has some knowledge of these transactions. I would like the Attorney-General to bear in mind that all experienced in these matters who have joined in this Debate have concurred in the plea that there should be some little further time given in order that this tax may be worked satisfactorily. The object of the Amendment is to postpone it until such time as the original valuation has been finished. You cannot in any way work this tax until the original site valuation has been completed. It may be all very well to say that it is only necessary to send certain particulars under Clause 4 to Somerset House in order to get a denoting stamp duty, but unless full particulars are sent you may be sure that Somerset House will not send the denoting stamp duty. Take the case of a man who buys a portion of land. Having bought it, he builds a house upon it. He leases it to mortgagees, and there follow all kinds of transactions, although the original site value will not have been fixed. It is not fixable by any succeeding purchaser, by the lessee, or by the mortgagee; it is fixable only by the original landlord under the provisions of this Bill. The Commissioners have immediately after the Bill has been passed to send the owner of the land a return asking him to fill up the site value on 13th April, 1909. It may be an intending purchaser comes along. Say I have bought the land, and I want to sell it to the Attorney-General. He and I have agreed upon a price. We come together in order to complete the transaction. But the Attorney-General's solicitor says to me, "Have you paid the duty, which is a clog upon the land? Have you got it stamped?" The hon. and learned Gen- 67 tleman for Southport seemed to think that stamping was not a very important matter. I quite agree that, as a matter of law, stamping does not affect the validity of a document, but the Attorney-General knows that his solicitor would not take the document from me unstamped, because he could not produce it in a court of law without paying a penalty, and throughout the whole life of that deed the fact that it is unstamped would be a blot on the title. Whenever he came to sell the land he would have to disclose to the purchaser that he had an unstamped deed, and he would have to give an undertaking not only to pay the penalty, but to get it stamped within a certain number of years. I do not think any ordinary client would complete a sale under such circumstances. Remember, there is no power in the intermediate purchaser or the lessee to make the valuation. It must be done by the original owner of the land. Neither can you compel Somerset House to hurry up the matter. All we are asking for in this Amendment—I am not concerned with the right or wrong of the tax—is a practical scheme by which the duty can be worked. I venture to assert that we cannot work it properly unless its operation is postponed for a reasonable number of years in order to enable the original site valuation to be completely finished throughout the country. When that is done everybody will be able to know, when they are going to sell land, what the site value is, and they will be able to fix a price accordingly. I am sorry the Government have not shown their willingness to fix a reasonable number of years in order to enable the provisions of the Act to be carried out in a proper manner. The learned Attorney-General seems to think that, under these circumstances, the purchaser of a property will sit down in his house and enjoy it in domestic felicity, but I do not think any vendor will venture to take the purchase money away with him so long as the stamp duty is hanging over his head, because he will not know how much he will be called upon to pay back to Somerset House. But it is not how much he will be called upon to pay, but the fact that the vendor will be constantly worried by the unfortunate solicitor saying, "When are you going to complete that transaction? You have got the money from the purchaser. When are you going to complete or when is Somerset House going to complete?" If the Committee only knew of some of the complaints which we have now from 68 clients as to the delays of Somerset House I think they would seriously deal with those who have to carry out this law, and state what time shall be given to Somerset House to complete this valuation, and then we shall be able to work the Act with some degree of certainty.
§ Mr. PRETYMAN
I do think the Government should give us some indication of what they are prepared to do, because this is not a case of carrying some point in the Bill through the Committee by a great majority. It is a case of imposing—I am not speaking of the burden of taxation, but a burden of trouble and difficulty upon the whole community, and the Committee have a real responsibility in the matter. I do not wish to repeat a single argument used before, but I want to concentrate, if I can, what is the real point upon which the Government is asked to give an answer. The Committee has decided that increment value is to be paid on property when it passes by sale or lease. That has been decided. But it has been pointed out that in the very early stages of the conduct of this duty there will be practically no duty to collect, and that there will be great difficulty in the early stages in obtaining the figures upon which a valuation ought to be taken. Therefore, when you have two owners, you have at an early stage an increased difficulty in obtaining the figures on which the duty is to be calculated, and, secondly, the duty itself, when it is calculated, will hardly be worth collecting. These two points, both from the point of view of saving trouble to the community and collecting the tax at the most convenient time, show that it is necessary that there should be some reasonable delay in the time when you collect this duty. The Government have never given us any answer on that point, and they have never attempted to give us any answer. They have gone so far only as to say that there must be some delay. I would venture to point out, however, that the Government have a responsibility to the House of Commons and to the country. It is not the country which has introduced this Bill. It is the Government who have done so, and have the responsibility of showing how it is to be enforced, and it is obvious from this discussion that there must be as a matter of business some delay. Will the Government tell us what they think a reasonable delay? If they think 30 years is too long, what do they think is a reasonable period? We are entitled before we 69 divide to have information on that subject. There are honourable Members on both sides who wish to treat this as a serious business matter, and until the Government have told us what their view is, we are bound to vote for the Amendment. We wish to know how do the Government propose to meet this difficulty if they will not accept the Amendment?
§ Sir WILLIAM ROBSON
The hon. Member has said that he desires that this Amendment should be dealt with as a serious business matter. He had an excellent opportunity a few moments ago of displaying that serious and businesslike spirit when it was proposed to amend this Amendment by substituting for the year 1930 the year 1914. Hon. Members opposed and refused to accept that, and they voted that the words stand part of the Amendment. I do not think hon. Members opposite need hesitate to accept responsibility for their own Amendment. We think that both 1914 and 1930 are wrong, but when hon. Members were asked to bring this within the limits of a business Amendment, and within a reasonable limit, they declined; and the Amendment upon which they ask the House to vote is not an Amendment dealing with some reasonable period of delay, in order that certain difficulties may be got rid of before the Act comes into force, but an Amendment which gives an unreasonable period. It is a wrecking Amendment; it is an Amendment carefully framed, so that if passed, it would be utterly destructive of the Bill. Under these circumstances I do not think that the hon. and gallant Gentleman is entitled to call upon us to repeat arguments which we have already put forward, showing that in our view the Bill may come into operation as soon as it is passed. In regard to the difficulties which they have put forward, they have gained nothing by the discussion, and we do not take their view on the nature of those difficulties. Undoubtedly the process of valuation, and of finding the original site value should begin at once. It is well that it should begin at once, and it is not desirable that it should be delayed; but we cannot help recognising, and I hope the Committee will recognise, that this Amendment
§ does not turn upon a mere question of a year's delay here and there, but it is kept by its supporters at a figure, which, if it means anything at all, means the wrecking of the Bill.
§ Sir EDWARD CARSON
I think the speech of the Attorney-General is a very regrettable one, for, after all, it is not mere temporary charges in this House that are of importance in relation to this Bill, it is what people will think outside—those people who are professionally engaged in carrying out a matter of this kind—and I do not think, because another Amendment was not supported, or not suggested from this side of the House, as the hon. and learned Member has said, is any reason why the Bill should be left in an unworkable condition. The Attorney-General is quite wrong in trying to throw responsibility upon us because an Amendment was not accepted or suggested on this side of the House. I spoke very early in the Debate, and I suggested myself taking a date from the Bill, namely, that of 1914, which is the first time that corporate or uncorporate associations will make a return under this Bill. I threw that out as a suggestion, and it was absolutely refused by the Chancellor of the Exchequer, and no alternative since then has been suggested by the Government, although the Attorney-General said, when he replied to me, that he admitted that in the cases that I gave of transactions which arose upon the commencement of the Bill, it would be impossible to have what he has called the original site valuations, and, therefore, you must have delay. Now the Attorney-General says: "Let the delay be there; what do we care? We have no consideration for the transactions that take place immediately after the Bill. We announce to the public that there will be no consideration, and let there be chaos and confusion when the Bill passes; all we care for is to set up our tax and to pass it as we propose."
§ Question put: "That the words, 'after the twenty-ninth day of April, nineteen hundred and thirty,' be inserted."
§ The Committee divided: Ayes, 119, Noes, 289.73
|Division No. 201.]||AYES.||[6.10 p.m.|
|Anson, Sir William Reynell||Balfour, Rt. Hon. A. J. (City, Lond.)||Bowles, G. Stewart|
|Anstruther-Gray, Major||Banbury, Sir Frederick George||Bridgeman, W. Clive|
|Arkwright, John Stanhope||Barrie, K. T. (Londonderry, N.)||Burdett-Coutts, W.|
|Ashley, W. W.||Beckett, Hon. Gervase||Butcher, Samuel Henry|
|Balcarres, Lord||Bertram, Julius||Campbell, Rt. Hon. J. H. M.|
|Baldwin, Stanley||Bignold, Sir Arthur||Carlile, E. Hildred|
|Carson, Rt. Hon. Sir Edward H.||Hay, Hon. Claude George||Peel, Hon. W. R. W.|
|Castlereagh, Viscount||Heaton, John Henniker||Percy, Earl|
|Cave, George||Hermon-Hodge, Sir Robert||Pretyman, E. G.|
|Cecil, Evelyn (Aston Manor)||Hill, Sir Clement||Randles, Sir John Scurrah|
|Cecil, Lord R. (Marylebone, E.)||Hills, J. W.||Remnant, James Farquharson|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Hope, James Fitzalan (Sheffield)||Renton, Leslie|
|Chaplin, Rt. Hon. Henry||Houston, Robert Paterson||Roberts, S. (Sheffield, Ecclesall)|
|Clive, Percy Archer||Joynson-Hicks, William||Ronaldshay, Earl of|
|Clyde, J. Avon||Kennaway, Rt. Hon. Sir John H.||Ropner, Colonel Sir Robert|
|Cochrane, Hon. Thomas H. A. E.||Kerry, Earl of||Rutherford, W. W. (Liverpool)|
|Craig, Charles Curtis (Antrim, S.)||Keswick, William||Scott, Sir S. (Marylebone, W.)|
|Craig, Captain James (Down, E.)||Kimber, Sir Henry||Sheffield, Sir Berkeley George D.|
|Craik, Sir Henry||King, Sir Henry Seymour (Hull)||Smith, Abel H. (Hertford, East)|
|Cross, Alexander||Lambton, Hon. Frederick William||Smith, F. E. (Liverpool, Walton)|
|Dalrymple, Viscount||Lane-Fox, G. R||Smith, Hon W. F. D. (Strand)|
|Dickson, Rt. Hon. C. Scott-||Law, Andrew Bonar (Dulwich)||Stanier, Beville|
|Dixon-Hartland, Sir Frederick Dixon||Lee, Arthur H. (Hants, Fareham)||Staveley-Hill, Henry (Staffordshire)|
|Doughty, Sir George||Lockwood, Rt. Hon. Lt.-Col. A. R.||Stone, Sir Benjamin|
|Douglas, Rt. Hon. A. Akers-||Long, Col. Charles W. (Evesham)||Thomson, W. Mitchell- (Lanark)|
|Duncan, Robert (Lanark, Govan)||Long, Rt. Hon. Walter (Dublin, S.)||Thornton, Percy M.|
|Faber, George Denison (York)||Lonsdale, John Brownlee||Valentia, Viscount|
|Faber, Capt. W. V. (Hants, W.)||Lowe, Sir Francis William||Walker, Col. W. H. (Lancashire)|
|Fardell, Sir T. George||Lyttelton, Rt. Hon. Alfred||Walrond, Hon. Lionel|
|Fell, Arthur||M'Arthur, Charles||Warde, Col. C. E. (Kent, Mid)|
|Fletcher, J. S.||M'Calmont, Colonel James||Williams, Col. R. (Dorset, W.)|
|Foster, P. S.||Magnus, Sir Philip||Willoughby de Eresby, Lord|
|Gardner, Ernest||Mason, James F. (Windsor)||Wilson, A. Stanley (York, E. R.)|
|Gibbs, G. A. (Bristol, West)||Meysey-Thompson, E. C.||Winterton, Earl|
|Gooch, Henry Cubitt (Peckham)||Middlemore, John Throgmorton||Wolff, Gustav Wilhelm|
|Goulding, Edward Alfred||Mildmay, Francis Bingham||Wyndham, Rt Hon. George|
|Guinness, W. E. (Bury St. Edmunds)||Moore, William||Younger, George|
|Hamilton, Marquess of||Morpeth, Viscount|
|Hardy, Laurence (Kent, Ashford)||Newdegate, F. A.||TELLERS FOR THE AYES.—Sir|
|Harris, Frederick Leverton||Nicholson, Wm. G. (Petersfield)||A. Acland-Hood and Mr. H. W.|
|Harrison-Broadley, H. B.||Pease, Herbert Pike (Darlington)||Forster.|
|Abraham, W. (Cork, N.E.)||Buxton, Rt. Hon. Sydney Charles||Fullerton, Hugh|
|Acland, Francis Dyke||Byles, William Pollard||Gibb, James (Harrow)|
|Agar-Robartes, Hon. T. C. R.||Cameron, Robert||Gill, A. H.|
|Agnew, George William||Carr-Gomm, H. W.||Fullerton, Hugh|
|Ainsworth, John Stirling||Causton, Rt. Hon. Richard Knight||Gibb, James (Harrow)|
|Alden, Percy||Cawley, Sir Frederick||Gill, A. H.|
|Allen, A. Acland (Christchurch)||Channing, Sir Francis Allston||Ginnell, L.|
|Allen, Charles P. (Stroud)||Cheetham, John Frederick||Gladstone, Rt. Hon. Herbert John|
|Ambrose, Robert||Cherry, Rt. Hon. R. R.||Glen-Coats, Sir T. (Renfrew, W.)|
|Ashton, Thomas Gair||Cleland, J. W.||Goddard, Sir Daniel Ford|
|Asquith, Rt. Hon. Herbert Henry||Clough, William||Gooch, George Peabody (Bath)|
|Astbury, John Meir||Cobbold, Felix Thornley||Greenwood, G. (Peterborough)|
|Atherley, Jones, L.||Condon, Thomas Joseph||Gulland, John W.|
|Baker, Sir John (Portsmouth)||Cooper, G. J||Gwynn, Stephen Lucius|
|Baker, Joseph A. (Finsbury, E.)||Corbett, C. H. (Sussex, E. Grinstead)||Harcourt, Rt. Hon. L. (Rossendale)|
|Balfour, Robert (Lanark)||Cornwall, Sir Edwin A.||Harcourt, Robert V. (Montrose)|
|Baring, Godfrey (Isle of Wight)||Cotton, Sir H. J. S.||Hardie, J. Keir (Merthyr Tydvil)|
|Barker, Sir John||Cowan, W. H.||Harmsworth Cecil B. (Worcester)|
|Barlow, Sir John E. (Somerset)||Craig, Herbert J. (Tynemouth)||Hart-Davies, T.|
|Barlow, Percy (Bedford)||Crooks, William||Harvey, W. E. (Derbyshire, N.E.)|
|Barnard, E. B.||Crosfield, A. H.||Haslam, James (Derbyshire)|
|Barnes, G. N.||Davies, M. Vaughan- (Cardigan)||Haslam, Lewis (Monmouth)|
|Barran, Rowland Hirst||Davies, Sir W. Howell (Bristol, S.)||Haworth, Arthur A.|
|Barry, Redmond J. (Tyrone, N.)||Delany, William||Hayden, John Patrick|
|Beauchamp, E.||Dewar, Arthur (Edinburgh, S.)||Hazel, Dr. A. E. W.|
|Beck, A. Cecil||Dickinson, W. H. (St. Pancras, N.)||Hodges, A. Paget|
|Bell, Richard||Dickson-Poynder, Sir John P.||Henderson, J. McD. (Aberdeen, W.)|
|Benn, W. (Tower Hamlets, St. Geo.)||Dilke, Rt. Hon. Sir Charles||Henry, Charles S.|
|Bennett, E. N.||Dobson, Thomas W.||Herbert, T. Arnold (Wycombe)|
|Bethell, Sir J. H. (Essex, Romford)||Donelan, Captain A.||Higham, John Sharp|
|Bethell, T. R. (Essex, Maldon)||Duckworth, Sir James||Hobhouse, Charles E. H.|
|Black, Arthur W.||Duncan, C. (Barrow-in-Furness)||Hogan, Michael|
|Boland, John||Duncan, J. Hastings (York, Otley)||Holland, Sir William Henry|
|Bowerman, C. W.||Dunn, A. Edward (Camborne)||Holt, Richard Durning|
|Branch, James||Dunne, Major E. Martin (Walsall)||Hooper, A. G.|
|Brocklehurst, W. B.||Elibank, Master of||Hope, John Deans (Fife, West)|
|Brooke, Stopford||Erskine, David C.||Hope, W. H. B. (Somerset, N.)|
|Brunner. J. F. L. (Lancs., Leigh)||Essex, R. W.||Horniman, Emslie John|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Evans, Sir S. T.||Hudson, Walter|
|Bryce, J. Annan||Everett, R. Lacey||Idris, T. H. W.|
|Buckmaster, Stanley O.||Ferens, T. R.||Jackson, R. S.|
|Burke, E. Haviland-||Ferguson, R. C. Munro||Jones, Sir D. Brynmor (Swansea)|
|Burns, Rt. Hon. John||Fiennes, Hon. Eustace||Jones, Leif (Appleby)|
|Burnyeat, W. J. D.||Findlay, Alexander||Jones, William (Carnarvonshire)|
|Burt, Rt. Hon. Thomas||Flynn, James Christopher||Jowett, F. W.|
|Joyce, Michael||Nicholls, George||Sheehy, David|
|Kavanagh, Walter M.||Nicholson, Charles N. (Doncaster)||Sherwell, Arthur James|
|Kekewich, Sir George||Nolan, Joseph||Shipman, Dr. John G.|
|Kennedy, Vincent Paul||Norton, Captain Cecil William||Sloan, Thomas Henry|
|King, Alfred John (Knutsford)||Nuttall, Harry||Smeaton, Donald Mackenzie|
|Laidlaw, Robert||O'Brien, K. (Tipperary, Mid)||Snowden, P.|
|Lamb, Edmund G. (Leominster)||O'Brien, Patrick (Kilkenny)||Soames, Arthur Wellesley|
|Lamb, Ernest H. (Rochester)||O'Connor, James (Wicklow, W.)||Soares, Ernest J.|
|Lambert, George||O'Connor, John (Kildare, N.)||Spicer, Sir Albert|
|Lamont, Norman||O'Doherty, Philip||Stanger, H. Y.|
|Law, Hugh A. (Donegal, W.)||O'Grady, J.||Stanley, Hon A. Lyulph (Cheshire)|
|Leese, Sir Joseph F. (Accrington)||O'Kelly, Conor (Mayo, N.)||Steadman, W. C.|
|Lehmann, R. C.||O'Kelly, James (Roscommon, N.)||Stewart, Halley (Greenock)|
|Lloyd-George, Rt. Hon. David||O'Malley, William||Strachey, Sir Edward|
|Lundon, T.||O'Shaughnessy, P. J.||Straus, B. S. (Mile End)|
|Luttrell, Hugh Fownes||Parker, James (Halifax)||Summerbell, T.|
|Lyell, Charles Henry||Partington, Oswald||Taylor, Austin (East Toxteth)|
|Lynch, H. B.||Pearce, Robert (Staffs, Leek)||Taylor, John W. (Durham)|
|Macdonald, J. R. (Leicester)||Pearce, William (Limehouse)||Thomasson, Franklin|
|Macdonald, J. M. (Falkirk Burghs)||Pearson, W. H. M. (Suffolk, Eye)||Thorne, G. R. (Wolverhampton)|
|Mackarness, Frederic C.||Philips, John (Longford, S.)||Toulmin, George|
|Maclean, Donald||Pointer, J.||Trevelyan, Charles Philips|
|Macnamara, Dr. Thomas J.||Pollard, Dr. G. H.||Vivian, Henry|
|MacVeagh, Jeremiah (Down, S.)||Ponsonby, Arthur A. W. H.||Walton, Joseph|
|MacVeigh, Charles (Donegal, E.)||Power, Patrick Joseph||Wardle, George J.|
|M'Callum, John W.||Price, C. E. (Edinburgh, Central)||Waring, Walter|
|M'Kean, John||Price, Sir Robert J. (Norfolk, E.)||Warner, Thomas Courtenay T.|
|McKenna, Rt. Hon. Reginald||Radford, G. H.||Wason, Rt. Hon. E. (Clackmannan)|
|M'Laren, H. D. (Stafford, W.)||Raphael, Herbert H.||Wason, John Cathcart (Orkney)|
|M'Micking, Major G.||Rea, Russell, (Gloucester)||Waterlow, D. S.|
|Maddison, Frederick||Rea, Walter Russell (Scarborough)||Watt, Henry A.|
|Mallet, Charles E.||Reddy, M.||Wedgwood, Josiah C.|
|Marks, G. Croydon (Launceston)||Redmond, John E. (Waterford)||Weir, James Galloway|
|Marnham, F. J.||Redmond, William (Clare)||White, J. Dundas (Dumbartonshire)|
|Mason, A. E. W. (Coventry)||Rees, J. D.||White, Sir Luke (York, E. R.)|
|Massie, J.||Richards, T. F. (Wolverhampton, W.)||Whitehead (Rowland)|
|Masterman, C. F. G.||Ridsdale, E. A.||Whitley, John Henry (Halifax)|
|Meagher, Michael||Roberts, Charles H. (Lincoln)||Whittaker, Rt. Hon. Sir Thomas P.|
|Meehan, Francis E. (Leitrim, N.)||Roberts, G. H. (Norwich)||Wiles, Thomas|
|Menzies, Walter||Robinson, S.||Wilkie, Alexander|
|Molteno, Percy Alport||Robson, Sir William Snowdon||Williams, W. Llewelyn (Carmarthen)|
|Mond, A.||Roch, Walter F. (Pembroke)||Williamson, A.|
|Money, L. G. Chiozza||Roche, John (Galway, East)||Wills, Arthur Walters|
|Mooney, J. J.||Rogers, F. E. Newman||Wilson, Hon. G. G. (Hull, W.)|
|Morgan, G. Hay (Cornwall)||Runciman, Rt. Hon. Walter||Wilson, J. W. (Worcestershire, N.)|
|Morrell, Philip||Rutherford, V. H. (Brentford)||Wilson, P. W. (St. Pancras, S.)|
|Morton, Alpheus Claophas||Schwann, C. Duncan (Hyde)||Wood, T. M'Kinnon|
|Murphy, John (Kerry, East)||Schwann, Sir C. E. (Manchester)||Yoxall, James Henry|
|Murphy, N. J. (Kilkenny, S.)||Scott, A. H. (Ashton-under-Lyne)|
|Murray, Capt. Hon. A. C. (Kincard.)||Sears, J. E.||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. J. Herbert Lewis.|
|Murray, James (Aberdeen, E.)||Seaverns, J. H.|
|Nannetti, Joseph P.||Seddon, J.|
|Napier, T. B.||Shaw, Sir Charles E. (Stafford)|
§ Mr. A. J. BALFOUR
May I ask the Chancellor of the Exchequer at what place he proposes to put in the Amendment which he indicated the desire to accept? The words were, "After the passing of this Act."
§ Mr. LLOYD-GEORGE
I propose two Amendments — first, after the word "land" to move to insert "in pursuance of any contract made after the commencement of this Act," and after "grant," "in pursuance of any contract made after the commencement of this Act."
§ Sir FRANCIS LOWE
moved to leave out the words "or any interest in the land."
The object I have in view is to emphasise some of the difficulties and inconveniences, and the endless complications, which are likely to arise if the 74 words of this sub-section are retained entire. As the sub-section now stands, the elaborate returns and the valuation alluded to in Clause 4, and the very difficult investigations which they will involve, would have to be undertaken whenever there was any dealing with any interest of any description in real property, excepting only a lease for less than seven years. I had an Amendment down by which I sought to confine the operation of the section to land which was vacant and unbuilt upon. Unfortunately, I was prevented from moving it by the somewhat arbitrary action of the Chancellor of the Exchequer in moving the closure.
It is quite out of order to reflect upon the action of the Committee in carrying the closure.
§ Sir F. LOWE
I did not mean to make any reflection upon the Committee. I 75 was only coming round to the point that although I considered the Amendment of importance, it has been excluded, and, therefore, it seems to me that this clause will now apply to every bit of land in the country, whether it is large or small, or whether built upon or unbuilt upon. Just see what that means. Not only will people be precluded from selling and transferring property outright without making all these elaborate returns to Somerset House, but no lease can be granted except for less than seven years. It cannot be assigned or otherwise dealt with, no life interest can be created, no joint tenancy can be severed, no reversionary interest can be disposed of, in fact no interest whatsoever in land of any sort can be dealt with without all this complicated and cumbersome process having to be gone through. Just take a concrete case as an instance of the effect that that would have. Let us assume that a man is the owner of a row of six freehold cottages which he has purchased for £1,200, and he wishes to grant a lease of one of these for 14 years at a rental of £20 a year. Before he can carry out the transaction he has to return all particulars to the Commissioners, and they have to go through all this elaborate investigation. First of all they have to find out what portion of the purchase money is attributable to the value of the land and what to the value of the buildings, then what portion of it attaches to the one house when separated from the six houses which were purchased altogether. When he has found this I suppose it will be the original site value of the land. Next they have to determine what is the value of a rental of £20 a year on the one house for 14 years, and, having ascertained that, they have to say whether or not there is any increment value attaching to the original site value of the land. It makes one's head almost reel to think of it. I should be very glad if the Chancellor of the Exchequer would give some idea what his opinion is as to how the operation could be carried out. I cannot understand it. The same process, I presume, would have to be gone through whenever the lease was assigned or dealt with, or the whole or part of the property sold subject to the lease.
I think the clause will apply with particular hardship to the owner of a reversionary interest in freehod property, because under the clause he would have to pay the Increment Duty, although under 76 Clause 22 he is called upon to pay what is called Reversionary Duty as representing the whole increment which has taken place in the value of the property during the currency of the lease. We can imagine the enormous amount of extra work which all this will cast upon the officials of the Inland Revenue and the immense amount of expenditure which will be involved in establishing and maintaining a staff which shall be adequate to deal with all these difficult and complicated transactions. All who have had any experience of the manner in which the Inland Revenue officials now deal with matters brought before them will know that they will not be too expeditious in carrying out this business, and there will in all probability be very considerable delay. Also consider the extra trouble and expense which will be thrown upon everyone who has had to take part in any dealings in land. They cannot possibly complete any transaction of that kind until they have made this return, and got, at all events, a denoting stamp impressed on the conveyance which has been lodged for the purpose at Somerset House. When we also bear in mind that under Clause 52 the Stamp Duties which are already chargeable on instruments of this kind are doubled, we can form some little idea of the injurious effect which this new imposition is likely to have upon the property market. I have always thought one of the doctrines of the Liberal party was to cheapen and facilitate the transfer of land and property, but provisions of this kind will make the sale and transfer of property more difficult and more costly. It is extremely unfortunate that the Government should have chosen the present time to inflict a new imposition of this kind, because there can be no doubt that the property market was never in a more depressed and stagnant condition than now, and these new provisions must make it a great deal more depressed than it already is.
§ Sir W. ROBSON
A great many interesting and important questions may arise in connection with the taxation of increment value, but I do not think that these questions need be dealt with in detail on this Amendment. This Amendment raises the broad general question—are we to apply Increment Value Duty to any interest in land except the full fee simple of the land? We have decided that Increment Value Duty shall be paid on the sale of land. Are we, nevertheless, to 77 exempt any of the minor interests in land which very often are very considerable interests? There may be a great many problems and difficulties connected with the taxation of particular interests, but I shall for the present confine myself to the question raised by the Amendment as to whether we are to tax minor interests or not. I think when the Committee look at the question thus put they will see that if we are to have increment value at all it must extend beyond the fee simple value, so as to include minor interests. You may divide the fee simple into minor interests, which may be put under separate owners or kept as distinctly legal entities in the hands of the fee simple owner. A man may be a life tenant and have a reversion in the various intervening interests, so that if you are to tax increment value at all on the fee simple value you cannot properly do so unless you try to exclude such means of evasion.
§ Sir W. ROBSON
The right hon. Gentlemen may see exactly what is included by looking at Clause 27 (Definitions). He will see how it is possible to divide interests in land. When we turn to the definition of "interest" in any particular clause we have not got more than one interest expectant on the expiry of a lease. No other expectant interest is included by this. I am only illustrating the general proposition. Take, for instance, a leaseholder; he may have the whole value of the land under a long leasehold. A 99 years' lease covers practically the whole value of the land. If you calculate it on a per cent. basis the value of the reversion after 100 years is only ½ per cent. You may, therefore, treat the value of the reversion as negative, and yet it is the only interest in the land, and if you omitted these words you might exclude a lease for 99 years, with the result that it would escape the whole Increment Duty. There are cases in London of 999 years leases, and they would escape the duty if these words were omitted. If we mean what we. have already decided, namely, to put an Increment Value Duty on land, we must go on to put that duty, not necessarily on all interests, but certainly on substantial interests into which an estate may be divided. A landlord mortgages his land, and in the popular phraseology he is still the owner, but he has given the land to a subtenant. Well, in strict legal phraseology, 78 he has only an interest in the land and a nominal right to redeem it. If we omit these words from the clause, he would escape the Increment Duty. The mortgage might be a small nominal sum, and his equity of redemption might represent 99 hundredths of the value, and yet, unless we include these words, he might escape the Increment Duty altogether. If we are to stand by the decision come to by the Committee that an Increment Value Duty shall be imposed, we must cover the minor interests. May I respectfully ask the House to treat the Amendment in that broad way? It is no good now to raise questions as to the inadvisability of taxing particular interests. That may come later on when we are dealing with the more particular proposals in connection with the duty, but it is not germane to the question whether you are to tax any interests or not. No doubt further questions will be raised whether this, that, or the other interest ought to be included, but I respectfully submit to the Committee that that is not the question we are now discussing. We are now discussing! whether any interests other than the fee simple shall be brought in.
§ Sir E. CARSON
I must say I am rather astonished at the limitation which the Attorney-General puts on the words in his own Bill. I think the Committee will see that the words "any interest in the land" have very much more significance than the Attorney-General says. The hon. and learned Gentleman says, rightly, that where we are going to collect this Increment Tax on the transfer of the fee simple we must take care that something equivalent to that is brought in. I quite agree with him; but I do not think he has given us any instance in which it will escape even if these words are left out. First of all, he gave us the case of reversions. He admits now that reversions are not meant to come in.
§ Sir E. CARSON
Reversions under leases are to come in, but no other reversions. It is a curious thing, when you come to the next sub-section, all reversions come in. This Bill is so scientific in its framing that on transfer when you get money you are not to collect your tax on sale or reversion, but on the occasion of death and reversion when land passes to another and no money is got, then you are to collect it. If that is the true meaning of the sub-section——
§ Sir W. ROBSON
I wish the right hon. Gentleman to understand that if you do not collect at one time the increment goes on accruing, and you may collect it at another time. You are undoubtedly collecting at death, though not necessarily on the occasion of transfer.
§ Sir E. CARSON
I am very sorry the Attorney-General did not put forward that view when we were discussing the last Amendment. I still say that it is somewhat curious that you should collect your tax, not when money is falling in, but at a time when no money is falling in. That is the difference between sub-section (a) and sub-section (b). I pass from reversions. There will probably have to be a good deal said about them before this clause is disposed of. The hon. and learned Gentleman next said that if you do not keep in the words, "any interest in the land," 999 years' leases would escape the duty. Why so? The very next words of the section are, "or the grant of any lease."
§ Sir E. CARSON
I will come to transfers in a moment, for that is an important matter that arises here. Under the words which I have quoted 999 years' leases would come in. The only other instance which the hon. and learned Gentleman gave was the case of an outstanding mortgage. Does anybody ever think that when you are dealing with an estate subject to an outstanding; mortgage you are not transferring the land? The land may be transferred subject to the obligation, and, therefore, that instance given by the Attorney-General does not support his contention. The words are absolutely unnecessary in the case of transfer of land. These words bring you very far afield from anything in connection with the transfer of land. I do not think it was ever contemplated by whoever drafted and is responsible for this Bill that you ought to go so far afield as these words would mean, but that they do go far afield I will demonstrate in a moment. Take the case of a man owning a lease of, say, 66 years. He transfers that land on sale. Does that come within this sub-section? We ought surely to know that, because my view of the meaning of the section, according to its wording, is that every single transfer and every lease comes within the sub-section. The words are: "On the occasion of any transfer on sale of the land or any interest in the land." I do not think anybody can con- 80 tend otherwise. The Chancellor of the Exchequer says so. Why does the Attorney-General attempt to restrict the discussion upon these words in the sub-section? Look at the importance of the question. Every transfer of every lease in the whole country comes under this section. There is to be a new valuation, if it is only a lease of a house in a town. On the occasion of the transfer of every lease in London and anywhere else you will have to have an estimate made for this increment value. Do you intend that or do you not? If you look forward a little in your Bill you will see the great importance of this, because you have made no provision whatever for valuing the interests, as I understand, except this, so far as I can see. If you transfer the interest in a lease with five years to run or 50 years to run, the increment value to be collected is the value of the freehold under your Bill, having regard to the freehold value to be fixed by what you can gather out of the consideration payable at that time. Is not that leading us into an absolute absurdity? If you mean to include any interest in the land on the transfer of the lessee's interest, what provision have you made for the apportionment of the original site value in relation to that particular interest as compared with the particular value of the fee simple? It is a very nice little calculation, even if you give directions, but without directions you would find some difficulties in knowing how the Commissioners are to value it. The Committee will want to know in the case of these transactions, which are going on by thousands everyday, is each of these occasions to give rise to the increment value being assessed by the Commissioners and being paid? You do not even stop there. Does this relate to the sub-leases? Suppose a man who has taken a lease of a considerable amount of land then sub-leases it, every time a sub-lessor transfers his interest he transfers an interest on sale in land. Are you to have a valuation again there, not merely when the lessor transfers, but when the sub-lessor transfers? I take no other meaning out of the whole section than those words, and I am only elaborating one single instance of an interest in land. I think if the Attorney-General would show the Chancellor of the Exchequer the number of decisions as to what is an interest in land under the Statute of Frauds it would open his eyes. I have no doubt he has forgotten he was once a lawyer, and the number of cases which will come under 81 those words, "Transfer of interest in land." I want to point out a matter of very grave importance under the Bill which seems to me to be a reductio ad absurdum.
As I understand the Bill, upon the passing of this Bill every owner will have to send in a return to the Commissioners of the original site value, the total site value and the site value. That will mean that every owner of a lease, just as well as the owner of the fee, will have to send in the original site value. I take it there is no question whatsoever about that. The owner is defined as any person who has a lease which has over 50 years to run. Therefore, if it is under 50 years, he is not the owner. Look what follows from that. If I am the owner of a lease which has 49 years to run I do not send in any return. If I go to transfer my interest, the increment value has to be ascertained against me, and I have to pay it upon a valuation with which I had nothing to say, but which was sent in by the owner of the reversion. Is that fair? Is that workable? What is more, the unfortunate owner of the reversion has to value my interests of which he may know nothing and with which he will not be concerned for 40 years. Take another case. If I am the owner of a lease of which 50 years is still to run I must send in the valuation, but upon the next return in five years I shall not be the owner at all. I have still 45 years to run. The owner will be the freeholder, and he is to send in another valuation, and if I transfer my interest then it will be valued, not upon the original valuation I sent in myself, but upon a subsequent valuation sent in by the owner. I take another point in reference to these transfers of leases. A lease will be, of course, a perishing security. Where have you the provisions in the Bill as to the way in which you are to value the decrease in the security, having regard to the supposed increment on the decrease? I fail to see any provision. All I have risen for now is to point out the result if you are going to keep in these words. I have no doubt other Members will deal with a number of other cases which are on the same lines. What I am pointing out is that these words have a most serious import in the Bill, and you cannot get away from them by simply saying "Oh, we only mean to hit long interests." What they were exactly I did not gather from the Attorney-General. You have specific words here creating a grave liability on the owners of partial interests, and I gather from the Chancellor 82 of the Exchequer that no doubt you do mean to collect these Increment Duties on the occasion of the transfer of any interest such as I have pointed out. If you do, you must meet these various objections to them. On the other hand, if you do not mean to do so then you will have to put in words very carefully limiting the cases to which they apply. Therefore I suggest to the Committee that we are now on an Amendment which is of vital importance in the construction of this series of Increment Taxes, and which, unless carefully watched, will very gravely interfere with the transfer of small interests which are taking place in thousands every day, and will greatly harass the ordinary business of land transfer in the very smallest matters of that kind.
§ Mr. LAURENCE HARDY
I should like to get from the Government a clear explanation as to the exact position that minerals occupy in connection with being an interest in land. I think it is really necessary to know exactly how any interest in land is constituted in reference to the question of minerals, especially after what was said by the right hon. Gentleman the Chancellor of the Exchequer last week in reply to a deputation. He distinctly said so far as he was concerned he did not desire to lay any further charge upon the colliery proprietors in the Finance Act; he only wanted to hit at the royalty owners. If that is so, it seems to me clear that you. must have some further words introduced, excluding, at all events, certain interest in minerals from the application of these words. We have only just had quoted the fact that colliery proprietors were working their own mines very often. On them the increment falls. Therefore, if there is to be a charge, in that case it is clearly an interest in land which would make the colliery proprietor responsible for the increment. The right hon. Gentleman says he desires in every case they would be relieved from any charge. It is very desirable at this early stage of the discussion to have a clear statement from the Government as to how far they do intend minerals to be included in these words and how far they do feel it necessary to amend these words in order to carry out what is evidently the intention of the Government, as to which the right hon. Gentleman has stated that no burdens in connection with this Bill so far as minerals are concerned are to fall on the colliery proprietors in this country.
§ Mr. G. CAVE
After the speech of my right hon. Friend (Sir E. Carson), the Chancellor of the Exchequer will hardly describe to us, as he did on last Wednesday evening, this Amendment as a mere formal Amendment.
§ Mr. LLOYD-GEORGE
I certainly did not mean this one. It was one that was on the Notice Paper in the name of the hon. and learned Member for Edinburgh.
§ Mr. CAVE
I certainly thought that the right hon. Gentleman intended by his remarks on the Motion to report Progress to include the Amendment which you have now put from the chair. I want to point out for a few moments how very important this Amendment is. The Motion that you put from the chair is that the words "or any interest in land" stand part of the clause. What is an interest in land? I quite agree with what the learned Attorney-General says. If the intention of the Amendment were to exclude such things as long leases and equities of redemption, it would be to some extent inconsistent with the object of the Bill, but I venture to say that those are already included in the word "land." If there is any doubt on the point, a very small Amendment in Clause 27 will make it perfectly clear that those particular interests are land within the meaning of the Bill. Apart from that, what are interests in land? First, there are leases for over seven and under 50 years; secondly, mere are such things as yearly tenancies. Again, there are sporting rights. A mere assignment of sporting rights would be an assignment of an interest in land. On that small transaction you would have to have a valuation of the interest in land—a valuation of the site value of land over which you have sporting rights on the basis of the consideration for the sporting rights. Even in smaller matters it would be the same. Take the sale of a seat to view a procession. Such sales were very numerous a few years ago on the occasion of the Coronation. Nobody denies that that is an interest in land. Therefore, if these words remained, on every small sale—and there were thousands on that occasion—of an interest of that kind you would have to ascertain the old site value, the increase in, the appreciated amount of the old site value, the new site value, and all the rest of it. Until you had done that you could not furnish the proper particulars enabling the Commissioners to stamp the document. It is the same with other matters, such as fixtures, or trees and 84 crops growing on the land. Therefore on the sale of timber or the sale of a small crop you would have the whole of these questions arising. If you leave these words in you create endless trouble and confusion. I am not suggesting for a moment that you should exclude from duty long leases or equities of redemption, but I do suggest that before the words are allowed to remain in some little thought should be given as to what will be the effect of them, and how much trouble you will really cause. The words which we are now discussing lead up to words in other clauses. Take, for instance, Clause 2, subsection (b). On the sale of an interest in land you have to ascertain the increment, and the basis is to be the consideration given on the sale of the interest. How can you do that fairly on the occasions to which we are now referring? A short lease may have a special value for special and temporary reasons. So, of course, a seat at a procession has a special value for temporary reasons. How can you fairly ascertain, on that basis, the value of the freehold? Take sporting rights. How can the price given for sporting rights have relation to the value of the freehold? Everybody knows that the value of sporting rights depends on the manner in which the game has been preserved. To fix the value of the freehold on the basis of that purely temporary value would be most absurd and unjust to the owner of the land. Therefore, you cannot pass these words without considering how you are to deal with Clause 2, subsection(b). Again, these words lead up to Clause 3, sub-section 3, which provides that on the sale of an interest in land the amount of duty shall be such proportion of the duty as the Commissioners may determine to be payable in respect of the interest in the land purchased. There is no kind of guide to the Commissioners as to how they are to make that very important decision. It does not say, that when the interest in the land is sold the vendor is to pay duty upon a sum bearing the same proportion to the value of the freehold as the interest which is sold bears to the freehold. There is no guide of that kind. It simply says that you are to pay on such a sum as the Commissioners think fit. The right hon. Gentleman seems to challenge what I say, but I submit there is nothing in the sub-clause or elsewhere enabling the vendor to know on what value he will have to pay duty in case the duty is payable, I insist very strongly 85 upon the point as to the gross unfairness of the provisions of the Bill in another respect. The original site value is to be fixed by the owner of the land, and the owner of an interest in the land, with a less than 50 years' lease, will not have a word to say in fixing the original site value, and the owner of the land may fix it as low as he pleases; yet when the owner of the interest in the land comes to sell it, the duty which he pays will be assessed with reference to a valuation on which he himself has not had a word to say. That is a provision which nobody can defend, and I am rather surprised that we have not already had an answer to the point made in that respect. This is no formal Amendment at all, for it raises a matter of very great importance, and I hope we shall have a reply accordingly.
§ Mr. PHILIP MORRELL
On a point of Order. Is it possible on this Amendment to discuss particular interests in land, or is it necessary for the Opposition who support this Amendment to show the kinds of interest which must be left out altogether? The hon. and learned Member (Mr. Cave) admitted that there must obviously be interests which must be subject to the Increment Tax.
I understand the hon. Member to ask whether those who object to these words being in, while acknowledging that some form of words were required, were entitled to support this Amendment. There is no reason whatever why the hon. Member should not acknowledge that a form of words is necessary, and why he should not point out that if a form of words is wanted for one case, still you should not have it because it would enable you to tax unjustly in another.
§ Mr. MORRELL
Unless the hon. Member is prepared to object to any tax on an interest in land is he entitled to support this Amendment?
§ Mr. R. WHITEHEAD
So far as I understand the discussion of this Amendment both sides of the House are agreed that if you have this Increment Tax upon land you must take some steps to prevent evasion of the tax by a sub- 86 division of interests or by the creation of long terms or other forms of conveyance. As I understand the argument of the hon. and learned Gentleman the Member for Kingston (Mr. Cave) and the right hon. Gentleman the Member for Dublin University (Sir E. Carson) this is common ground. Some form of words is required, and the substance of the objection taken on the other side is that the words of the sub-section are too wide, but go beyond what is reasonable. That seems to me to be a perfectly good ground for moving to amend the definition which comes in Clause 27 as to the interest in land. But it is not a ground for striking out altogether from this sub-section any words at all which cover other interest of a freehold character. I think there is little doubt on this side of the House that there ought to be some words of this kind. I agree that the definition of an interest in land requires most careful scrutiny, but this is not the right stage at which such an objection should be raised. We should have words of a general character preventing evasion of the tax, and modifications may be made later to prevent the unfair operation of those words. Sub-section (a) deals merely with the transfer on sale, and it is then that the money would be realised by the person having the interest in the land. Therefore, it seems to me to be a perfectly proper occasion for levying the tax.
§ Sir E. CARSON
The hon. and learned Gentleman misapprehends what I said. I was dealing with the transfer of reversions, not the transfer on the sale of land, and I was calling attention to the fact that it is excluded under sub-section (a), and not under sub-section (b). Under subsection (a) the money would be paid for it, and in the other case merely the property would pass.
§ Mr. WHITEHEAD
I said that the subsection dealt with the transfer on sale, and was covered by the transfer on sale when it passed.
§ Mr. WHITEHEAD
The right hon. Gentleman took a lease of 60 years, and he said: "Whereas you are proposing an Increment Duty here, there is no provision in the Bill itself by which there should be a valuation made of the interest being obtained. The hon. Member for Kingston (Mr. Cave) showed, I think, conclusively to the Committee that this was an 87 entirely erroneous view to take of the Bill, because he pointed out to us that not only in Clause 2, paragraph (b), is the mode laid down by which the value should be ascertained, but he went on to point out that, under sub-section (3) of Clause 3 the duty is to be collected in respect of any interest in land. I think the objection taken on the other side of the House really has no value, because the insertion of words at this stage is necessary, and I most heartily support them.
§ Mr. MITCHELL-THOMSON
I notice that when hon. Members opposite have to deal with details they are always in what may be called a post futuro mood. The Attorney-General, in his speech, mentioned long and short leases. I want a little further information on both those points, and I should like first to take a long lease. The learned Attorney-General probably knows that in Scotland there is something even longer than a long lease. There is what is known as an estate in feu, in which land is held by one man on the payment of a sort of perpetual ground rent by another. If I understand Clause 28 of the Bill correctly, the man who sets the land pays duty on the creation of the feu. I remember that the gentlemen who represent the Law Department in Scotland spent a great deal of time in arguing that when a man created a feu of that kind he was not divesting himself of any property in the land at all. In the case of a feu of that kind who is to pay duty, or suppose a man is in the position of a perpetual tenant, so to speak, and that that man sells his interest, then in sale of a tenant feu of that kind who is going to pay the Increment Duty, or is there going to be any Increment Duty at all? Take the case of the shortest lease and the smallest interest of all—that of tenements, which are frequently owned by a considerable number of owners, each of whom has got a certain amount of right in the land or in the site value. If one of those owners lets a room or rooms apparently Increment Duty becomes due, and if the tenant sub-lets two of the rooms to another tenant there again apparently Increment Duty becomes due, and so on ad infinitum. I hope we shall not be asked to go to a Division without information on those points.
§ Mr. S. ROBERTS (Sheffield, Ecclesall)
I should like to know if it is the intention to charge minerals Increment Duty under this clause? On account of the deputation 88 to the Chancellor the other day on the question of minerals, we thought the Chancellor's mind was undergoing some change in regard to this matter, and it would be an easement to our minds if we had some assurance from him on the point, because apparently minerals are included in the word "land." If that is so, then they will be liable, not only to Mineral Rights Duties under Clause 12, but liable to Increment Duty under this clause, to Reversion Duty, to the increase of Death Duty, increase of Settlement Duty, and Succession Duty payable by lineal descendants, as well as the duties under the clause now under consideration. I contend they ought not to be taxed more than once under this Bill. A great deal has been said about the difficulty of getting valuations in a short time, but in the case of minerals that difficulty will be double or three times the value of the surface land, for the reason that it is all guesswork in many cases whether minerals are in the land or not. In the large coal fields of Yorkshire and Nottinghamshire, for instance, it will be utterly impossible to get any approach to a proper estimate of the ungotten minerals within the short space of time in which it would be necessary to do so, from sales which take place almost immediately after the passing of the Bill. Supposing the valuation was too low, through a mistake perhaps. Then when the period came to collect the Increment Duty, the Commissioners would drop down on the miserable owner and would say: "We claim Increment Duty, not because the value has gone up, but because your valuation was wrong; we are taxing you for a wrong valuation, and not because the estate has gone up in value." The value may have remained the same.
§ Mr. JAMES HOPE
I should like to call attention to the drafting of this clause with reference to this particular Amendment. It runs in this way: "The duty or proportionate part thereof, shall become due—(a) on the occasion of any transfer on sale of the land or any interest in the land"—and then reads at the end, "On each of those occasions the duty, or proportionate part of the 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." It is not at all plain from this who will be responsible for the tax. I take it it is the intention of the Government that it shall be the person who transfers the interest, but it is not plain from those words. If that were 89 their intention, I do not quite undertand why they did not put in "In the case of an interest in land, the proportionate part, or the value which it bears to the site value of the land." As the words stand, it is not quite clear that the owner of the fee simple might not be called upon to pay something on the transfer of the interest. I do not think that can be meant, but I submit the words want to be made clear. When we turn to a later clause, that is, Clause 3, sub-section 3, where some light is thrown on the matter, we find that "When Increment Value Duty is collected on the occasion of the grant of a lease, or on the transfer or passing on death of any interest in land, … such proportionate part of the amount of the duty which is due shall be collected as may be determined by the Commissioners to be payable in respect of the interest in land created, transferred, passing on death, or held, in accordance with rules made by them for the purpose." It is extremely obscure who, on those occasions, will really have to pay. I am not at all sure that in a case like that, of distinguishing between different interests, there will be any appeal from what the Commissioners find.
I do not lay very great stress on that point, but what I do lay more stress on is that the owner of the fee simple, when any interest is transferred, will be valued, although he may not have to pay any part of the duty. Let A be an owner of a quantity of land. He takes a lease of land with buildings and sub-lets to C, who, after four years have expired of a total lease of fourteen years, sells his interest in part of the premises for the remaining ten years. There is the head lease, and the lease, and the sublease of part of the property. That is quite a possible case. What processes have to be gone through? You have to see that duty was paid on the grant of the first lease, then if it was paid on the sub-lease, and then on the sale of the interest. When you come to the sale of part of the interest you must see how much of the increment of the first and second was due to that particular part of the premises. Until all that has been ascertained the transaction must wait for the stamp to be put on, and the result is most vexatious delay. The owner will have to turn up all his papers of all his back transactions, and even then he will not be able to rest content with the determinations the Commissioners will arrive at He must look into the whole thing himself, otherwise on any fresh transac- 90 tion he would be told the amount of duty assessed on the particular plot was so much and, therefore, they concluded the neighbouring plot must be assessed on the same basis. Thus an immense amount of worry and inconvenience will take place in the transfer of the land.
What is an interest in land? I know by the definition mortgages, incumbrances, and other things are excluded, but certain things are included. I take it among the many things included are tenancies, in common with reversion leases, ground rents, and lifeholds. On the sale of any one of those duty would have to be paid on the increment value, which, according to Clause 2, is the difference between the original site value and the site value. I say that the basis of calculation is fallacious, and that in the cases of many of those interests the value of the consideration, which is the basis for the duty, may have little or no relation either to the site value or the fee simple. It may be more in some cases and in others less. Take a tenancy in common of four brothers, who are joint owners of an estate worth £20,000. One of them sells his interest, and gets probably much less than £5,000. No one will give him the full value if he has to deal with all the other partners. The basis in this case would work out too low, and in other cases it might be quite the other way. Take the case of a reversion, which may be no guide to the site value, because a man may buy the reversion to get possession of the ground to turn it to some new use, or to get possession of the buildings, or of the timber, which would have to be deducted before you got the site value. Therefore, the consideration paid for the reversion might very likely not be a sure guide to the site value at all. If that is so in the case of a reversion, it is much more so in the case of the fag-end of a lease. The consideration paid in such a case has very little to do with the site value. When a man buys the ten years' fag-end of a lease he does not buy it for what he can do with the site, because on purchasing he is promptly bound by some covenant preventing him from doing anything except keeping up the house in its present condition, and perhaps laying out money upon it.
Then there is the question of sporting rights. The consideration paid for sporting rights would have no relation either to the fee simple value or to the site value of the land; it would be simply and solely the amount which the right of sporting 91 was worth to that particular man. Further, there is no relation at all between the two things in the case of ground rent. It is axiomatic amongst surveyors that the value of a ground rent has no relation at all to the fee simple, much less to the site value of the ground. The value depends upon the buildings far more than upon the site. The ground rent upon uncovered ground is worth much less than when the ground is covered. Here, again, the basis is an entirely fallacious one. The value of a ground rent depends upon the general money conditions and the general price of securities. It is no more a sure guide to the fee simple or site value than if you took a block of property on which there were certain debentures, and argued that because so much was the interest on the debentures therefore the value of the fee simple was so much. It is nothing of the kind. The capitalised value of the ground rent no doubt shows that the property is not worth less than so much, but it may be worth a great deal more. On the other hand, it may be quite the other way; because, if it is dependent upon the buildings, the buildings may be worth very much more than the land, and the result would work out far too high. A tenancy on lives is not very common, but it does exist in certain parts of the country—generally on three lives. But how can the value of the consideration paid for a life-hold be any guide whatever to the value of land? A friend of mine bought a life-hold interest in a property; there was only one life left—an old lady 70 years of age. Will the Attorney-General state a formula whereby one may arrive at the exact relation between the life of this old lady and the value of the land? Many other instances could be given, but I would ask the Government to say, in regard to the five interests to which I have referred, how the principle of Increment Duty on land can possibly be applied? The value in those cases must be calculated on absolutely different bases, and I should like to have an explanation on the point.
§ Mr. AUSTEN CHAMBERLAIN
I rise rather reluctantly to ask whether we are not to have even an attempt on the part of the Government to reply to some of the questions or criticisms which have been addressed to them?
§ Mr. AUSTEN CHAMBERLAIN
On that understanding I will say no more on that subject. Let me add a case to those which have already been given. Suppose I take a lease of a flat in London for a term of years, and subsequently transfer that lease to somebody else. Thereupon you have to arrive at the value of the fee simple of the land from the consideration paid to me for the transfer of the lease. How on earth you are to do it I do not know. But as the Commissioners need follow no rule, obey no principles, and are allowed to make the law exactly what they please, no doubt it can be done after a fashion. Assume, then, that it is done, and that the Commissioners have deduced the increment value payable. What happens under these words? The transferor of the lease of a flat is to pay Increment Duty on the value of the fee simple. Is that so, or is it not? If it is not, what is there in the Bill to prevent it? I have taken some legal advice on the subject, but I have been unable to find anything in the Bill to prevent that being the law if this measure passes. Then take another point. In agricultural districts you constantly have sales-of growing crops—cherries on the trees, apples in the orchard, or, most common of all, a hay crop. That is an interest in the land, and, if these words are left in, every time a man sells a growing crop there will be an interest in land passing which is nowhere excluded under this Bill. Did the Government mean to include it, or did they not? If they mean to exclude it, why have they nowhere introduced words to do so? They tell us that the proper place to deal with the point is on the Definition clause. It is always some point in the Bill we have not reached. There might be something to be said for that if they had dealt with the matter in the Definition clause; but they have not. They have left it undealt with altogether, and therefore we are bound to raise it at the earliest possible moment. The hon. and learned Member for Essex (Mr. Whitehead), who attempted a reply on behalf of the silent Government, said, "Put in these general words, and then provide for your exceptions afterwards by inserting qualifications elsewhere." I do not think that is the way to deal with a taxing Bill. It is very dangerous in such a Bill to insert wide words, and then rely on making exceptions afterwards. Your taxing words ought to be strictly limited to what you want to do, and then if you want to bring in something additional you can do I hat by other words afterwards. I hope the Government will 93 give us some reply soon to the many points which have been addressed to them.
§ Lord ROBERT CECIL
I think the Government will be very well advised to accept this Amendment, even in the interests of their own Bill. They have made a double answer to this Amendment. They have said, in effect, "We all agree that, if this tax is imposed we want to include certain interests beyond the freehold interest, that is to say, long leases and equities of redemption. As for the lesser interests which ought not to be dealt with, they can be specified when we come to the definition." I agree with what has been said in criticism of that attitude, which does not appear to me to be sound as it stands. The expression "land" is already defined by the Interpretation Act, 1889. It is there defined as including messuages, tenements, hereditaments, houses, and buildings of any tenure. Therefore, it is quite plain that it includes long leaseholds. Surely a leaseholder is a tenant of land; therefore, a leasehold is land on a tenure, and is included in the expression "land." As to an equity of redemption, I do not think the Attorney-General can be serious in suggesting that that is is not included in the expression "land." It is land subject to a mortgage, and I cannot conceive anything more clearly land. What is left that the Government wish to include in the expression? We are really entitled to an authoritative answer. The only answer so far has been made by the hon. Member for Essex (Mr. Whitehead), who said that it is necessary to have these words in order to include such things as long leaseholds and equities of redemption; and he is quite clear that the criticisms passed by the Members for Kingston (Mr. Cave) and Dublin University (Sir E. Carson) are well justified. Nobody can possibly maintain that this tax ought to be made applicable to growing fruit trees or crops. We do not imagine that the Government, even in their most predatory moments, wish to impose a duty on things of that description. They ought really to consider what is left out of the definition of land in the Interpretation Act, 1889, that they wish to include. It is no answer to say that there must be something, and that when we come to the definition clause they will see if the proper definition is given, unless they can show there is something excluded from the legal meaning of land which ought to be included in this tax. I earnestly hope the Government will not unnecessarily burden this extremely burdensome Bill with words which are absolutely indefensible.
§ Sir W. ROBSON
The Noble Lord may take it that the fact that the words referred to are in the clause shows that, at all events, that they have been given some consideration. They are considered necessary for the purpose of the Bill. That consideration is honest, because no one will put words into any part of a Bill that has to run the gauntlet of any Committee if he can do without them. I do not agree with the Noble Lord in saying that the definition given in the Interpretation Act prevents us from including interest in land within the scope of this clause. The simple fact is that they are intended to apply to the sale of transfer of land—"any transfer on sale of land"—without referring to "sales of interest in land." But the court would undoubtedly give the narrow limitation to our text which would defeat the object of the Bill. I think we must refer not merely to land which is land to be bought, but we must refer to the interests of the ownership in the land—one being the leasehold interest—and not merely the land as a whole.
§ Sir W. ROBSON
I am not contending that the Interpretation Act does not apply to the Finance Act. I am dealing with a text here, a text in the Act very strictly stated. If there is the slightest excuse for exemption and the subject claims a right to receive it, the Law Courts grant him that right. Again and again it has been my unpleasant duty to argue cases on behalf of the Crown, and to be reminded of that fact. It is in view of such instances that we are obliged to take extreme care that the intention of the Act to put a particular tax upon a particular person or interest is made absolutely explicit. I think, therefore, that it is necessary not merely to say "what land," but "a tax upon a particular interest in the land." The House may judge of the value of that argument. Hon. Members opposite seem to be very anxious that everything should be dealt with in the immediate clause under discussion. There are such things as Amendments to be put in their proper place. For instance, the question may arise as to whether sporting rights are covered by the exemption. At all events it is a matter to be subsequently discussed. We are here only dealing with the occasions that may arise 95 when duty may be taken. In considering these occasions you are not considering cases in which totally new taxes are being put on. If, instead of waiting for death, you take the profit inter vivos, you do not take it twice over. You begin on the 30th April, 1909. You have increment, say, five years hence, and the increment is then taken. Occasions for taking it may arise again and again, but unless there is any further increment these particular occasions are not hampered by a fresh burden. One must not get into the way, as I rather suspect some hon. Members are doing, of taking each of these occasions as though some new imposition were laid on continually. There is no new imposition unless there is a new income. Under these circumstances it is a mere matter of convenience as to when this increment is best taken. Can it or can it not be taken in the case of a charge of interest as in the case of a sale? Nobody doubts you can take an increment when you are making a transfer on sale. Hon. Members opposite think it is impossible. Why? When dealing with the transfer of a leasehold interest you are dealing with only part of some larger value. There are no difficulties in dealing with it. This Act provides for it. When you are transferring leasehold property in England with 60 or 70 years to run there is not the slightest difficulty in ascertaining the site value. You have your original site value—what I prefer to call the standard value. Five or six years hence the holder of the leasehold sells his interest for £2,000, £3,000, or £4,000. It is a matter of ascertaining on the tables what is the value of the reversion. Having got the capital value, and the original site value, you ascertain what increment ought to be appropriated. You have to ascertain also what is the leaseholders' interest, and the total value of the site, and then the proportion of the increment value. These are matters which, I daresay, when they are put to the House, are laughed at as though they were matters of some great complexity. There may be complexity in them to us. There is no complexity to those dealing with them as matters of daily routine. It is very difficult to imagine a case in which you are dealing with an ordinary leasehold interest where you have the slightest difficulty once you have got the original site value. For after that you will not have the slightest difficulty in ascertaining what proportion of increment is to be associated 96 with a particular transaction which concerns the sale of leasehold interest. You ascertain what you want to do, and leave the experienced man to do it.
The right hon. Gentleman the Member for the University of Dublin indicated what has been already present to our minds as a matter that will require some amendment. For instance, he referred to the question of who is to be taken as the owner. Take the case of a leasehold with 50 years of the interest to run. On the table you will find the value of the reversion, although, of course, it exists all the way down from 100 years to 50; but it only comes into a very important and substantian consideration when you get to about 50 or 60 years. Up to that time the leaseholder may fairly, without any great disadvantage, be treated as the owner. But when once the leaseholder's interest begins to get less than 50 years then the interest of the owner begins to be more substantial. His reversion gets increment value every year, and it is not unreasonable, therefore, that he should be the person who should declare the value. At the same time, I think we ought to make a provision for giving the leaseholder a reasonable voice in the declaration of the land. The matter is one of some importance, because after all the Commissioners will have to decide the worth. [Laughter.] Hon. Gentlemen opposite always appear to be making some astounding discovery. They appear to be under the impression that the owner is to be left unchecked. The Commissioners win fix the value. Whatever may be the opinion of the holder of the reversion or the leaseholder, these two opinions will go before the Commissioners, or others who act for the Commissioners, and they will be subjected to a certain vigilant oversight. I should think that probably when the right of representation has been given to either the leaseholder or to the holder of the reversionary interest, as the case may be, he will say: "I will give you my opinion if you like, but I am quite content to be judged in the matter of the site value on the basis as all my neighbours in the same street." That is the way it will work. One owner will get anxious to make his own return, and put in his own valuation. He may desire a high site value. Another owner may not be quite so anxious to put in his own valuation, or he may say, "I do not want a high site value." You will have various classes of owners anxious to put in their own valuations, but the great bulk of the owners will not trouble 97 about it, being satisfied that a fair valuation of the district is being given by the owners.
The hon. Member for Sheffield raised the question of minerals. There is no reason at all why minerals as part of the land should not be subjected to Increment Duty, like anything else that affects the value of the land. Another Member for Sheffield raised the question as to what was meant by "proportionate parts" at the end of Clause 2, where it speaks of proportionate parts of duties. That is explained in some words referring to subsection 3 of Clause 3. It shows the proportionate part will be estimated by those conducting the valuation, and a clear proportion will be allocated to it. You may say the words ought to be made clearer; perhaps they might be more explicit, but if any improvement be suggested it ought to come at the end of Clause 2 of sub-section 3, where they will be more appropriate. The hon. Gentleman also raised the point about leases of life. There is nothing remarkable or exceptional on leases of life as the basis of value. These are not matters of great mystery; people are accustomed to dealing with them day after day. The right hon. Gentleman opposite spoke of the growing of hay. I do not know about the growing of hay, but certainly the growing of wheat is not an interest in value. I do not think the growing of hay is an interest, but wheat certainly is not. Such things as these would all be met by way of exception in some other place in the Bill. [Cries of, "Why not now?"] Hon. Members opposite will see that this paragraph lays down the general scope of the tax, and that that is not the place to insert exceptions. If we approach the matter in a businesslike spirit, as hon. Members opposite are anxious to do, surely they might extend their business spirit so far as to see this is not the place in which to insert paragraphs about the growing of hay or the growing of wheat.
§ Mr. BALFOUR
I really am amazed at the view of the right hon. and learned Gentleman that this is not the place at which to discuss the meaning of the words by which the whole operation of this Bill is to be controlled. The right hon. Gentleman tells us that this is not the occasion for the discussion of innumerable and trivial matters. He says, "Do it at some other place." I ask what other place? You say that the tax is to be paid on the occasion of any transfer or sale of land or 98 of any interest in land. We point out if you use the words "interest in the land" with its legal and proper significance you will have every kind of trivial and vexatious occasion used for acquiring a portion of the tax, and innumerable are the occasions on which the Inland Revenue will be called in, and innumerable will be the delays and vexations under such procedure. I cannot understand why the Government do not give us some idea of what they do mean by the occasions on which this tax ought to be paid. The right hon. and learned Gentleman has desired to shorten the Debate by discussing not the occasion of the tax, but the persons and the interests that are to pay it. It is quite a different matter, and, in substance though not in form, a more important matter. The right hon. Gentleman told us it is quite true that you not merely talk of a person having an interest in the land, you talk of a person who has a freehold. That may be true, but what has that to do with the occasion of paying the tax? It has to do with the persons who are to pay the tax.
§ Mr. BALFOUR
It was an answer which appeared in the very first speech of the right hon. and learned Gentleman, and it reappeared in the second speech. The right hon. and learned Gentleman has also foreshadowed that the Government are beginning to discover that their Bill requires Amendment in many important degrees. That is some consolation to us, who ventured to think-that our criticisms had weight, so far, not accorded to them by the Government. Any signs of repentance on their part we gladly accept. We now know they recognise this phrase, "interest in land," is not a phrase that can stand without long and elaborate definition excluding what the lawyers said they would mean. I do not know where these qualifications and limitations are going to be put in, or whether he is going to redefine what the lawyers mean by interest in land in the definition clause. All that he has told us so far is that these words are wrong, and that they require to be amended, but that we are in error in objecting to them here. Without going the length of asking in what respects he means to amend the clause, may I put a more moderate question: In what clause or sub-section does he mean to carry out his intention? It really is preposterous to cut short a discussion clearly relevant 99 to the issue before us without telling us where he would like us to raise the question, and how he intends to deal with it. That is the first matter in which the right hon. Gentleman has admitted that this Bill requires considerable amendment. There is another that fills me with interest. The Government have now discovered that while in a long lease a leaseholder may be regarded as the owner of the land, and while in a short lease the reversionary may be regarded as the owner, there is a time when both may be so regarded, and when both the leaseholder and the owner are to come before the tribunal which the Government are setting up, each to represent his own view. It occurred to the right hon. Gentleman by this that that would be a rather unsatisfactory proceeding, leading to considerate trouble, delay, and complication. Is there no remedy for all these things? Quite true, says the right hon. and learned Gentleman, the owner will come forward with one view as to what his land is worth, and the long leaseholder or the middling long leaseholder will come forward with another view of what his interest in the land is worth, but if they do not, there is always the Board of Inland Revenue. They will settle everything, and every one will be happy. Of all the many statements which the right hon. and learned Gentleman made in the course of his speech, I am quite sure that is what startled me most. He said every one will then be happy. A man will say: "I do not want to trouble about the valuation of my land; value it as you value my neighbour's on this side or the other; I am quite happy to pay the tax on that condition." All I can say is that if these taxpayers are going to look on this with a spirit of contented enjoyment at the verdict of a tribunal from which there is no appeal, simply because that tribunal has dealt more or less satisfactorily with their neighbour upon either side, I think the right hon. Gentleman must regard the owners of land as being the most contented sheep going to the shearers that the history of taxation shows in the whole course of the world's record. When I think of the problems that have to be decided, which are going to be accepted in this contented spirit, my amazement increases. It seems to the right hon. Gentleman that nothing in the world could be simpler than to decide what portion of the value of land is due, say, to a middling long lease, a lease in which everybody is to be consulted, 100 when the lessor has a long lease in the top story in, let us say, an Edinburgh or a Glasgow building. In these buildings, as my Scotch Friends know, the land belongs to the superior, who is not in this Bill. The person who is in it is the feuar, and under him there are people who have long leases from the feuar. It is quite a common thing to have a long lease of a flat on a third, fourth or fifth story.
§ Mr. BALFOUR
Yes, that is so; they are the actual owners. Is it really so obvious and simple a problem to decide how much of the ground value is owned by the occupier of the top story of a four-storied mansion as the right hon. and learned Gentleman says it is? He says it is a thing about which there can be no difficulty. The Inland Revenue will decide it. I come from these excursions of the right hon. and learned Gentleman to what I conceive to be the real subject of this sub-section, and that is, not the amount of the tax, not the person who has to pay the tax, but the occasion on which the tax has to be paid, and I say as the Bill stands now these occasions are so frequent, so trifling and absurd that the tax, which I think intrinsically unjust, and which will cause, if passed, most profound discontent. You make it as onerous, as irritating, and as annoying to the persons who have to pay it as your legislative ingenuity enables you to do. We are not really discussing who has to pay the tax, but when it is to be paid. I really do not know why the Government put in this subsection at all. I cannot conceive why they should not have said, "on death or on some more simple occasion" the tax should be paid. They have chosen to use the words which they do not pretend to defend, which they will not let us amend, and which, as far as I can see, will make the tax as unjust and onerous, as ridiculous and impossible as it can be.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman thinks we want to get away from the discussion of the occasions mentioned in the course of the Debate for the raising of the tax, and whether we think they ought to be included in the Bill or not. Our position is that the first thing you have to decide is whether you are going to take this tax upon the transfer of the land; secondly, whether you are going to take it on transfer of the interest in the land. Our position is that the de- 101 finition both of land and interest in land is a matter entirely for Clause 27. The right hon. Gentleman asked, "If you are not to take the discussion now, when are you going to take it?" The Question is raised specifically on page 18 of the Bill, when we come to the interpretation of the word "interest." Then I agree all these questions will not merely be legitimate for discussion, but for the moving of Amendments specifically raising this matter. The Question now before the Committee is, "Are you going to tax any interest in land at all or are you going to raise the tax when the interest is transferred in the freehold as a whole?" If you do that there will be every inducement to evade the tax by the creation of smaller interests. All you have to do is to take out a lease for 999 years, and the tax will be evaded. Therefore, it must be obvious that unless you have a tax on the sale not merely of the land, but on the interest in the land, you will not get the Increment Tax at all in a large number of cases. I agree that some of the cases suggested may not be legitimate cases for charging this particular tax. The right hon. Gentleman seems to imagine that up to the present we are not prepared to give way to the criticisms directed against the minute details of this Bill, but that certainly never has been my attitude during the whole of the discussions, and it has not been my attitude towards hon. Members during the Committee stage or towards the various interests who have approached me. Anybody must realise who has had any experience in debates of this kind the enormous complexities of any sort of measure that deals with land in any shape or form. It is very complicated and full of difficulties and complexities. I do not care what measure it is dealing with this question; it may be a Conveyancing Act, a Settled Lands Act, or the Finance Bill, it is bound to be full of difficulties from beginning to end. To say that the Government have the advantage of very experienced draftsmen does not meet the difficulty because even they cannot foresee every possible contingency. I do not make any pretence on behalf of the Government that the draftsmen can do this. Even very able lawyers like the hon. and learned Member for Kingston (Mr. Cave), who is especially qualified not merely to criticise, but also to construct as well, with all his experience, will be quite unable to see every possible contingency in the working out of this Bill. When any hon. Member who is technically "learned" gets up and 102 points out any case which the Government may have overlooked in drafting the Bill, and we say we shall endeavour to meet those cases, I know what we are open to. We shall be told, "Here they are; they have not considered even this point." But that does not matter. After all, the House of Commons ought to have a share in moulding this Bill. I took that view when I sat below the Gangway, and I still take it. In the House of Commons we have 670 Members, all having experience in different walks of life, and if they can draw some instances which have been overlooked by the Government then I think it is their business to do so, and it is our duty to try and meet them. I agree with my hon. and learned Friend that the leaseholder ought to have a voice in the determination of the valuation. There are also one or two other points which have been raised in the course of the discussion which are very legitimate subjects for Debate, and possibly for Amendment, when we come down to the question, "Interest in the land." There are Amendments on the Papers dealing with this very question by hon. Members who know the rules of procedure, and who know that is a point they ought to raise. If I indicated now which I would accept we should at once have a Debate upon Clause 27, and that is obviously impossible. The point now is whether we ought to safeguard ourselves against the possibility, I will not say of fraud, but of evasion, by providing that the transfer of land as well as the interest in it are things upon which we ought to raise the Increment Duty.
§ Mr. YOUNGER
I have put the same question three times, and I have never had an answer. As the Solicitor-General for Scotland is here, perhaps he will answer my question.
§ Mr. LLOYD-GEORGE
I would rather not answer a question upon Scotch law. It is difficult enough for me to deal with the English law, and I would rather my hon. and learned Friend the Solicitor-General for Scotland should deal with that point. With regard to what my hon. and learned Friend has said about minerals, undoubtedly this tax is applicable to the extent to which the minerals under the land are an element in its value. To that extent they must come in, for that reason they must be included.
§ Mr. A. DEWAR
I was in the House when the hon. Member for Lanark asked 103 a question regarding Scotch law, and I understand that the hon. Member for Ayr Burghs desires to have the Scotch law explained with regard to feu duties.
§ Mr. YOUNGER
The question was the position of the feuar in regard to this matter, and how far he would be affected, and whether he is to be regarded as the owner or not.
§ Mr. A. DEWAR
Perhaps the House will permit me to explain what a Scotch feu is. A feu is one means of disposing of land in Scotland, but it is not a sale outright. A man who had a park in the neighbourhood of a town, instead of selling his land outright, would feu it at, say, £10, £20, or £30 per acre, according to the value of the land. The land would not be disposed of outright, but the feuar who takes the land on that tenure has the absolute right to the use of the land so long as he pays the feu duty. It is really a lease in perpetuity. The right of the superior is to have his feus, or what is practically the rent, punctually paid, and if it is two years in. arrear he can take his land back again. The Committee will notice that this not a sale or transfer of land, because it is the owner's interest in the land that is sold, and unless we insert in this clause the words "interest in the land" feus would escape altogether.
§ Mr. BALFOUR
As I read this sub-section it has nothing whatever to do with determining the subjects of taxation. Whether it be the feu duty or any other subject, as far as I can understand, this sub-section has nothing to do with that at all. All it has to do with is the occasion imposed by section 1, that is the occasion on which the tax is to be levied. Therefore, when the hon. and learned Gentleman tells us that if it was not for this sub-section somebody would escape that must be wrong, because it has nothing to do with the subject of taxation, but the occasion for taxation.
§ Mr. A. DEWAR
The granting of a feu is not disposing of the land. The owner still retains some right to the land. He is still the superior, and the land is still his. That land is not transferred, but the interest in it is transferred, and the feuar has the right for ever to use the land. The right hon. Gentleman opposite will see that unless the words, "interest in the land" were there the superior would escape, although there might be an enormous increment in the value.
§ Mr. BALFOUR
What I am anxious about is whether you need sub-section A, which deals with the area and the subjects of taxation at all, or do you simply say in the first paragraph, such and such things pay Increment Duty, and in paragraph A you proceed to define the occasions on which that tax is to be paid. If that is so, the hon. Gentleman has no right to say that the feuar will escape.
§ Mr. A. DEWAR
When the feuar has fixed his price that is the occasion on which increment falls due. In my own Constituency there was a park. In 1876 it was leased to a farmer, and the rent was £450 per annum. To-day it has been feud, a great many houses have been built upon it, and the feu duties or rental is now £12,000 per annum. There is an enormous increment there. As each feu is let off that is what you lay your tax on. You might have a sub-feu, and there might be increment there. A builder may take a plot and make a profit, and immediately he does that the tax is due. When a man by disposing of land makes a profit which he did not work for and has done nothing to create, then the duty is due upon that increment or increase in the property. The feu is a typical case of an increment, and very often it is a very large increment. Another question has been put to me in reference to flats, where you have six or seven storeys, with flats on the top storey. I have been asked how we are going to get our increment there. All the houses may not be on the ground floor. They may be one on the top of the other, but the feu is recognised, and the feu is apportioned among all the houses. The owner knows exactly where he is. The buildings are as much a house as if they stood on their own ground. I can assure the hon. Member that in Scotch law there will be no difficulty in cases of that kind.
§ Mr. STEWART BOWLES
I understand that this duty is the duty to be chargeable on the increment value of the land. I do not think that in Scotch law or even in English law the insertion of these words can have reference to the duty itself, but to the occasion on which the duty is levied, which is a very different thing. The duty is a duty on the land, and not on the increment. It is a duty on the land. Whether in Scotland or in England that appears to be perfectly clear. I want to ask the Chancellor of the Exchequer whether he would not be acting in his own interest, and in the interests of the Bill if, he accepted this Amendment. The right hon. Gentleman 105 has admitted that the conveyance of land is accompanied by an enormous number of difficulties. Why should the Government insist upon retaining words which are unnecessary for the purpose which they have in view? The course which they are pursuing must give rise to interminable Debates on the definition clause. The Chancellor of the Exchequer dissents.
§ Mr. LLOYD-GEORGE
My contradiction is confined to the statement made by the hon. Member that my hon. and learned Friend admitted that it would, as at present decided, be applied to these cases.
§ Mr. BOWLES
That appears to make the insertion of these words more necessary than before, because, at any rate, the Attorney-General really indicated that there were other matters raised by Members on these Benches, which would require careful consideration when we came to the definition clause. All we ask is, "What are the interests referred to? What are the occasions you have in view by the insertion of these words?" The Attorney-General told us it would He proper to take this duty on the transfer of certain interests. I quite understand that the transfer of certain interests would be a proper occasion if the duty is to be levied at all; but what we want to know is what other intsrests the Government have in mind. Surely the right hon. Gentleman would be wise to make provision in the definition clause to include such interest as he desires. I do not understand why the Government, in these circumstances, knowing the complexity of this matter, insist in this resolute way on retaining words which appear to be quite unnecessary for the purposes they have in view, and which certainly, as they stand, must give rise to very serious doubt and interminable discussion on the Definition Clause. Why do they not indicate what it is desired to include? I hope that even at this last moment they will consider the desirability of agreeing with this Amendment.
§ Mr. JOYNSON-HICKS
There are several Amendments on the Paper which I agree would be more properly the subject of Amendments to the definition clause, and I am going to postpone certain of my Amendments to that stage, but I am not at all prepared to assent to the postponement of this particular matter to that clause. When in the spring we asked questions of the Chancellor of the Exchequer on various points connected with his finance proposals the only reply we got 106 was, "Wait till you get the Bill." Now we have got the Bill. It is full of absurdities, and when we seek to expose them we are told, "Wait till you come to the Definition Clause." I am not prepared to wait for the Definition Clause in order to strike out this very remarkable phrase—"interest in the land." I have listened to the speeches made by the learned Attorney-General as to what the Government really aim at by putting a tax on "the interest in the land." I am bound to say that, with every desire to understand the hon. and learned Gentleman, I have not been able to ascertain what it is the Government propose to cover by the words "interest in the land." If we pass those words the hon. and learned Gentleman will get the hon. Member for Southport to come down, when the De[...]ition Clause is under discussion, and to day, "the House has already passed these words." In that very illuminating speech which we had from the hon. and learned Gentleman, over and over again there was the phrase "the House has passed "such and such a thing, and therefore "it is out of order to discuss it." I do not want to pass these words "interest in the land," and I do not want to be told later on that it is no good trying to strike out anything because the House has already passed these words. I always understood the hon. Member for New-castle-under-Lyme (Mr. Wedgwood), who, I believe, is the father of this Land Tax scheme, to say that his object was to get at the unearned increment which falls to the great London land-owners because of the growth of the community——
§ Mr. JOYNSON-HICKS
If the hon. Member did not use them I certainly have heard such language used in this House, and I have always assumed that the desire of those who advocate this tax is to get at the unearned increment when it comes to fruition. But take the case of a lease of land on the Westminster estate. After five years it is sold; if there is an increment that increment is taxed; in ten years the Increment Tax is again paid if the property again changes hands; and this actually goes on until the end of the lease is reached in 99 years, so that the site value will have been taxed all the way through, and when the property falls into the hands of the ground landlord there will be no increment taxation which the ground landlord can be called upon to pay in re- 107 spect of the value to the community. There will be no tax payable by the ground landlord, because that particular piece of land throughout the whole 99 years will have been paying the tax through a succession of purchasers of the leasehold interest all along the line. I do not know that that was really the object of the Government in introducing this Land Tax; but, if it was, I think it desirable that all those who own leasehold houses in London should know that they really have got to pay this Increment Tax in order that the ground landlord should have to pay nothing at the end of 99 years. That is really not the object—surely that is not the object of those hon. Members who have pressed land taxation upon us so strenuously during the last two months.
I want to mention one or two other interests in land which have not been alluded to in the course of this afternoon's Debate. We know there is an interest in growing crops, in shooting and fishing, but there are other interests in land, and if this clause stands as it is drawn, when one of those interests changes hands, the increment value will be assessed and the Increment Duty paid. There is not merely the tenancy from year to year, but I dare say certain legal Members opposite have heard of a certain legal estate in land called dowry. There are cases in which a man leaves land without providing for his widow, without providing for a dowry, and there is—in England at all events—a right of dowry, that is, a right reserved to the widow of a man who owns land and who has not barred that right, and it is the right of a widow to have an interest in a certain portion of his land. That would be an interest in land, and if I assume for a moment that the hon. and learned Gentleman's father-in-law left him some land subject to the widow's right of dowry, it would be necessary, it might be necessary, that the hon. and learned Member should ascertain the site value of his mother-in-law in respect to that particular portion of the land. Hon. Members do not seem to think that is serious, but it is serious if the hon. and learned Member was dealing with his land. Here is an estate in land, and the site value of that estate in land would have to be ascertained. Then there are all those large interests in land which deal with common rights or easements. I may, for instance, have an interest in land—in the hon. Gentleman's property by having a right of way 108 over it, or I may have a right to light. One knows that in the City of London especially rights to light are exceedingly valuable rights, and all lights are conveyed by deed, and money is paid for the right of light, I have had the duty myself of drawing deeds of this nature, and every time the right to light passes by deed the transfer of the right to light would again be subjected to this extraordinary taxation. So it is with regard to the rights of common or the right of turbary. This I am quite sure the Chancellor of the Exchequer knows, if other Members do not, is the right to cut turf. That right has existed in land, and that right when passed would bring this law into operation. Perhaps a personal illustration may bring this question home to the Government. I have this week drawn a deed in regard to the right to cut turf—drawn a transfer of the right to cut turf. That is an interest in land, and if this deed had been drawn after this Bill had been passed Increment Duty would have arisen under the provisions of this section, and some kind of increment value would arise.
There is one perfectly easy way of getting over these difficulties on this question of interest in land. There are interests in land which have some correlation to site value. There are other interests in land which have no relation to site value, and I say it would be perfectly easy for the Government, if they desire to make this a workable Bill, not to tell us to wait till we get to Clause 27—the Definition Clause —but it is perfectly possible in this clause to define what they mean by interest in land, and to exempt from it all those interests which have no relation to site value, such as growing crops, dowries, and common rights, and so forth. Not one of these has anything to do with the site value. Again, the interest in minerals has nothing whatever to do with the site value of land, and it would so enormously simplify the procedure in working out this Bill if the Government were to realise in connection with this clause, and the words "interest in the land," the difficulty of arriving at site value when the site value of the freehold is owned by somebody else and the site which we transfer is owned by a different person altogether. I was drawing the transfer which I mentioned in regard to the right of common, but how can I get at the site value of the land out of which that common right arose if I am not the owner of it? Before I can get my deed properly stamped, before I 109 can get the denoting stamp put upon my deed, and before the purchaser will accept it, I have to get somebody else to ascertain the site value of the land, and I see no power for compelling to do so at all. I cannot find out how I, the owner of an interest in land, can compel the owner of the freehold to go to Somerset House and value his land in order that I may get my denoting stamp put upon my deed of sale of my interest in this land. For these reasons it would have been wiser for the Government to have eliminated the words "interest in the land," and it would have been perfectly easy for them, themselves to frame subsequent Amendments to include what they want to include.
§ Mr. YOUNGER
It is a very difficult thing for a layman to intervene in this discussion, but a remark made by the Solicitor-General for Scotland emboldens me to put a point to him. The point of his reply was that unless these words "interest in the land" were left in the Bill, the superior would escape, but I cannot for the life of me see how he makes that out. How would the superior be left out? What position does the superior occupy? He merely comes in when he grants the feu, and if he grants a feu he grants a transfer of the land.
§ Mr. YOUNGER
Oh yes he docs? I know we are now on the old story, as to whether a feu is rent, or whether it is a deferred payment. I am speaking of the heresy that a feu duty is a rent.
§ Mr. A. DEWAR
The creation of the feu does not transfer the whole land, the owner still retains a remainder. He transfers something less than the whole and anything less than the whole is only an interest, but it is a very substantial interest. It may be practically the whole that he transfers, but it is not the whole, and unless you add the word "interest" you cannot cover it.
§ Mr. YOUNGER
I cannot argue an intricate point like that with the hon. and learned Gentleman, but I do not agree with him. He is precisely in the same position as the real mortgagee of land. It is a debt on the lands—a burden on the lands—but it in no way interferes with the beneficial use of the lands which are absolutely transferred to the feuar, which he can do with as he pleases, subject to the covenants, and which the owner never has anything more to do with, 110 and which never revert to him in any circumstances except on non-payment of the deferred rent. I cannot see that my hon. and learned Friend's argument really bolstered up the case of the Government at all, and as far as Scotland is concerned I think the words are unnecessary. It answers the question which I put in the first speech which I made on this Budget when I asked what the position of Scotch feuars would be. It is perfectly clear in this case that he will be regarded as the owner. Is that so?
§ Mr. YOUNGER
This is the Report, to which the hon. Gentleman himself subscribed in 1906. He says:—It is in the opinion of your committee equally clearly established that the feu duty, which is the annual return from the vassal to the superior, is truly a rent for the land, and the superior's right to feu duty is preferable to the vassal's right to the land…If this be sound law, as your committee believe it to be, it is impossible to regard the feu duty in any other sense than as the rent of the land just as the superior must be regarded as the owner of the land.That is the point I have been driving at for ever so long, and I have tried very hard to get an answer.
§ Mr. YOUNGER
It may be quite consistent with all that the hon. and learned Gentleman has said. What I said was that his argument did not at all bolster up the inclusion of these words in the Bill. I do not think he has been inconsistent. I believe he still adheres to his heresy. That being so, if the superior is the owner of these feus, if he is the person to be regarded in law as the owner, if it is the Government's belief that he is the owner, who is to make all these returns? How is there to be a transfer at all from the feuar in a matter of this kind if he is not the owner? Where does he come in in paying Increment Duty? I do not see it at all. I believe myself that the feuar becomes the owner and will be the responsible person, and will have to pay on the increment that he himself has created, and not the community, and, as I understood at first, before we saw the Bill, and when we were dealing with the resolutions, it was merely the unearned increment got by someone who did not create it, which was to be taxed. I now find that what is to be taxed in Scotland, at all events, is the increment created by the man himself who 111 will have to pay, namely the feuar. Does the hon. and learned Gentleman suggest that if the feuar in Scotland sells his property, on which he has built certain houses at a considerably enhanced site value, that the superior will pay the tax? The feuar will pay it, he being the owner.
§ Mr. YOUNGER
I am talking of the transfer and sale, and not of sub-feus, of cases in which the feuar sells his interest outright. In that case, of course, he is the person who will pay. He is the only person who gets any advantage. That gives away the first point altogether, namely, that the man who creates the increment is the man who is going to pay it. A is a feuar who feus land for £10, and B builds houses on the land and so improves it that he ultimately sells it for £30. Who is to pay the increment of £20? Not A who feud the land, but B who created the increment which is in no sense of the word unearned, and which has come to him by his own exertions and by the expenditure of his own capital. I do not think the argument of the hon. and learned Gentleman at all supports the continued inclusion of these words from the Scottish point of view, and, therefore, as far as I can see the superior can never escape paying his proper burden under this tax when he transfers the land, and with regard to the feuar the Bill makes it perfectly clear what his position is.
§ Mr. ROBERT DUNCAN (Lanark, Govan)
These words are important, not only to those who have spent their money on buying land, as they thought, safely and legitimately, but to many other interests throughout the country. There are many trading companies, which employ labour and many people with great foresight, though not with the spirit of grasping cupidity which Socialists display, have put their money into the shares of some of these large industrial concerns. We know what the effect of the Bill will be. We have in engineering something which is called a ratchet wheel, which goes one way quite easily, and if you pull it the other way it carries round the wheel.
§ Mr. DUNCAN
I merely wish to show to some who may not yet have seen it that 112 this interest in land moves in far wider circles than many here know. I wish to show that this Bill really attacks all those who are earning wages in this country.
§ Mr. ROBERT DUNCAN
Yes, it is wide, and it is very wide in the Bill itself. I shall show that every one is interested in land. I can give an actual instance from my own Constituency.
§ Mr. ROBERT DUNCAN
I was just going to say that the appreciation in the value of land there has been due to the starting of large works by the late Mr. John Eldar and other shipbuilders. On this stage of the Bill I only wish to emphasise the need of considering the importance of the proposals it contains, and of not rushing headlong and ramstam into this new form of taxation.
§ Mr. G. N. BARNES
I have been pointedly referred to by the hon. Member for the Ayr Boroughs (Mr. Younger), and challenged, I suppose, to state who is to pay this Increment Tax. I desire to apply myself to the single point he raised. If anything could carry conviction to my mind as to the need of the retention of these words in the clause, it would be the speech of the hon. Member. He imagined a man who has leased a piece of land for £10, and he imagined circumstances arising under which that land has increased in value to £30. He asked who is going to pay the Increment Tax. Is it the original owner who gave the lease at £10, or is it the man who has created the increment, and who is now getting the value of £30? I deny absolutely that the man who has got the lease at £10 has created the increment which brings the value up to £30. The only man who will pay the Increment Tax is not the landlord who let the land for £10, but the man who at the time is getting £30. The increased value was not created by him; it does not come to him by virtue of anything he has done. He may have added to the value of the land as one of the community, and he will get the benefit of his share in the tax because of that; but the increment in value, I take it, has come to the land because of the needs of industry, and of the large number of people in the place. Therefore, not having created the increased value, he 113 is called upon to pay 20 per cent, of the difference between £10 and £30. It appears to me that that is a perfectly simple answer to the hon. Member for the Ayr Burghs, and a convincing argument why the Amendment should be rejected. The hon. Member for Govan (Mr. Robert Duncan) has tried to appeal to our sympathies in regard to the investments made by trade unionists, and I suppose he was going to expand his speech by referring to the number of people who have invested in land in Govan. He was going to point out that the interests of workmen are to some extent affected by the Bill. Why should they not be affected? What right have we as trade unionists or workmen to claim any exemption from the imposition of a tax which is proved to be for the benefit of the community? We claim no exemption; and if there are workmen in Govan or trade unionists in Govan that have invested in land there as the result of the prosperity and progress of the Fairfield shipbuilding yard and other shipbuilding yards, it seems to me that those who have invested their money in that way——
§ The DEPUTY-CHAIRMAN
We are only dealing now with the question of interest in land, and not with the persons who are to pay the duty. That will come under Clause 3.
§ Mr. BARNES
I was only giving this as an illustration of what I conceive to be the interest of people in land, apart from the original landowner who may have ganted a lease. I have said all I have to say in reply to the hon. Member for the Ayr Burghs.
§ Mr. W. W. RUTHERFORD
I think these words as they stand in the Bill have a very distinct and important meaning. Whilst it is true that if the value of all land could be relied upon to go steadily up for a long period of years, and if the occasions upon which 20 per cent, of the increased value was to be collected were defined, there might then be something in the contention that it would not matter whether you make the collections frequent or few, because you eventually get all your duty. It seems to me that that is not the case. Every man who has had dealings in land knows perfectly well from his own experience that there are plenty of pieces of land which do not rise steadily in value during a long period of years. As a matter of fact, the value fluctuates. Sometimes you can get £5,000 for a piece of 114 land; but if you were to offer it next year you would not be able to get £3,000. A number of years later it might bring £7,000.
§ The DEPUTY-CHAIRMAN
These remarks apply to the imposition of the duty which has already been discussed. We are dealing now with the question whether this duty should be levied on any interest in the land.
§ Mr. W. W. RUTHERFORD
I will take your ruling at once. When I receive the slightest intimation from the Chair, I immediately bow to the ruling, whether I think it is right or wrong. The importance of the words proposed to be left out depends on the word "any." The existence of that word in the clause makes it necessary that the question should be discussed now. When we come to Clause 27 (Definitions), if we pass the words "any interest," I am perfectly certain that a further discussion of this question will be ruled out of order. I think the Chancellor of the Exchequer and the Attorney-General lost sight of the extraordinary complications which in the most simple cases might result through leaving in these words, "any interest in land." I have taken the trouble to take a very short note of the complications arising from six transactions with one simple piece of land intended for building, showing the difficulty involved by retaining these words. The case is an exceedingly simple one. A owns, we will say, 40 acres of land. He dies in 1909. There would be of that land two valuations made if this Bill were passed. There would be the total valuation that is mentioned in the section and there would be the site valuation. A dies, leaving these 40 acres to his four sons, B, C, D, and E. Upon that death there would be a duty. The occasion would arise. It would not be one of the occasions arising under this sub-section. It would be an occasion arising under subsection (b). Immediately afterwards the four sons make a contract to sell this land to a limited company, who are developing land for building. The case which I am giving is one which happened during the past few years, and I am simply, for the purpose of illustration, projecting it forward ten years and presuming this Act to apply. The land company went into possession of the land under the contract, and went into liquidation three years afterwards, whereupon in an action of law the four sons succeeded in getting 115 back their property. If that had been ten years later a periodical date would have arrived, and this property at that date would have belonged to a limited company, and would have been taken entirely out of the one category and would have come into the periodical paying category. Then one of the sons died, and the Increment Duty became payable upon his interest, and the determination of that duty was made upon the interest of the one son who had died. Another son sells his interest. Upon the sale by the second son of his one-fourth interest in the undivided share in the land you get your increment payable upon one-fourth of the increment as on the date of that sale.
§ The DEPUTY-CHAIRMAN
This does not arise here. The question as to the payments to be made by the respective partners arises under Clause 3, but not here.
§ Mr. W. W. RUTHERFORD
I agree, but what I was coming to was this: Upon the sons or their representative joining to sell one-fourth of the property, which happened, and one of the sons afterwards buying out his brother and building two houses upon another piece, the astonishing result arises that by the retention of the words in the Bill, which the Amendment proposes to leave out, there would actually require upon the lease of one of these houses for 14 years to be 56 different and distinct valuations made, in order to arrive at the Increment Duty that would have to be paid upon the paltry occasion which is covered by the words sought to have omitted. I am sorry that according to your ruling I have been precluded from describing the accumulation of these occasions in six transactions which leads to this result. But I hope that as by your ruling I cannot prove the details, the Committee will kindly take from me that it is the case that there would be 56 different valuations required to be made. And the unjust feature of that is that in almost every one of those cases the man who would have to pay the duty would not be the person who would have to be responsible for the intermediate valuation. Thus we find it brought about that the enormous complications that would result from introducing on every small occasion any interest in the land, whether it is an undivided interest or an undivided part, as stated in this Bill, are such that if the Bill is passed with these words in it will not 116 take the community very long to find out that they have adopted an intolerable burden. If we strike the words out now, the only result I should fear would be that we should do something towards making this Bill a little bit welcome.
§ Sir FREDERICK BANBURY
I listened with very great interest to the hon. Member for the Blackfriars Division of Glasgow (Mr. Barnes) and my hon. Friend here (Mr. W. W. Rutherford). It may be, and I rather agree with my hon. Friend that if this Amendment is accepted we shall be freeing the community from a somewhat intolerable burden which this Bill will impose on them. I am not at all sure that I approve of the result, because the community have brought it upon themselves through having been foolish enough to put the present Government in office. One of the hon. Members who spoke commenced by saying that he had not intended to address the House because he thought it best to vote and not to speak on this question. I have been in the House nearly the whole of this evening, and I have not heard a speech in support of the Bill, which, from the point of view of the supporters of the measure, would not have been better left unsaid. With regard to the question of "any interest in the land," I support the Amendment, because "any interest" seems to me to be so vague that it would be impossible to define what those interests might be. The hon. and learned Gentleman the Member for Southport (Mr. Astbury) said he did not care how troublesome the Bill was. He is a lawyer, I believe, by profession, and it seems to me that the only people who are going to benefit by this Bill, and especially by these words which we propose to leave out, will be both branches of the legal profession. I have a great respect for that profession, but I do not want to transfer money from my pocket into theirs. I do not see why we should further complicate what is already a very complicated matter, namely, the transfer of land. Unless these words are left out it seems to me that no person will sell his land because of all the burdens put upon it; it would not be worth his while to dispose of it. I believe the effect of the Amendment will be absolutely the opposite of that which hon. Members below the Gangway think will be the result. I believe it is absolutely certain that no man will sell his land because of the risk which he will run of a probably lengthy law suit to ascertain what are the interests 117 affected. We all know that the case of land belonging to one man is very rare. There are all sorts of interests involved—the mortgagee, the mortgagor, the people who are interested under deeds of settlement, and all kinds of persons, and the result is that people will not run the risk of going into these complicated questions, and they will not sell their land. On the other hand the purchaser will want to know whether the title is good; he must know what interests are affected, and the consequence will be that he will offer a very low price in view of the complications that will arise, or probably no sale will be effected. After all, the fact remains that if you want to facilitate the operations in any kind of property——
§ The DEPUTY-CHAIRMAN
The hon. Baronet's remarks relate to the imposition of the tax, and are not in order in this Amendment, which deals with any interest in land.
§ Sir F. BANBURY
The object of my remarks is to show that if these words are retained it will retard the sale of land, which I understand to be one of the objects of the Bill. However, I will not pursue the subject further, but would point out to hon. Members below the Gangway that the effect of the Amendment would be the reverse of that which they anticipate, and that, instead of following the Government into the Lobby on every occasion they would do well sometimes to support proposals made from this side of the House.
§ Mr. W. PEEL
I have listened very impartially to the Debate, and I am bound to say I was very much impressed by two arguments used on this side, and to which no reply has been given from the other side. The right hon. Gentleman the Member for Dublin University (Sir E. Carson) showed very strongly how the case of leases and sub-leases would be affected, and how elaborate valuation would have to be gone through if this Increment Tax is to be levied. To that we have had no reply whatever from the Government. It is quite clear to me that the number of these leases and sub-leases in the course of two or three years, in London or in any great town, would be prodigious; yet you are going to cause enormous trouble in going through all these separate valuations to get perhaps a very small amount of Increment Duty. The process will cause such an amount of difficulty and trouble that I should say, in regard to leases and sub-leases, it is hardly worth while dealing 118 with them at all. The other point pressed very strongly by this side was that it would be exceedingly hard that a man should be taxed upon a valuation by somebody else, and in which he had no share or part whatever. The right hon. Gentleman the Chancellor of the Exchequer admitted that there was some sort of hardship in an operation of that kind. But after all, his remedy was rather an elaborate one, because all he said was "Yes, he thought it was rather hard in these cases, and that he might have an opportunity of appearing before the Commissioners in order to argue this difficult and elaborate question." What trouble you are bringing to leaseholders and sub-lessees if they know that beyond the ordinary operation of the transfer, and the possibility of this Increment Duty hanging over their heads, they are to appear, not before the courts, but before a secret tribunal of Commissioners appointed by the Government, who are to settle this matter precisely and exactly as they think fit. These two points have been absolutely undealt with by the other side. Yet surely they are very strong arguments against this proposal. The Member for one of the division of Oxfordshire suggested that these matters should not be discussed at all, because it was admitted by some hon. Members on this side of the House that if you are going to apply Increment Value Duty to land you must also apply it to all interest in land, and that, admitting it was to apply to some interest in land, therefore we could not contest this portion of the clause at all. But when we come to the interests in the land it has been shown so clearly that you cannot do it without the most intricate difficulties that that suggests that if you cannot raise this duty on sale of land without raising your duty on the transfer of those interests in land, and it has been shown that it is absolutely impossible to deal with the Increment Duty and those interests, then does not that suggest to throw away the application of the Increment Duty upon sales and transfers of land. That, I confess, is the conclusion brought in on my mind by listening to the Debate. I suggest to the Government, instead of saying wait until Clause 27 to deal with these difficulties, that the difficulties are on the face of them insuperable. I think the way to deal with them is to get rid of them altogether.
§ Question put, "That the Question be now put."120
§ The Committee divided: Ayes, 221; Noes, 98.121
|Division No. 202.]||AYES.||[9.40 p.m.|
|Acland, Francis Dyke||Gooch, George Peabody (Bath)||Pointer, J.|
|Agnew, George William||Greenwood, G. (Peterborough)||Pollard, Dr. G. H.|
|Ainsworth, John Stirling||Greenwood, Hamar (York)||Ponsonby, Arthur A. W. H.|
|Allen, A. Acland (Christchurch)||Gulland, John W.||Price, C. E. (Edinburgh, Central)|
|Allen, Charles P. (Stroud)||Harcourt, Rt. Hon. L. (Rossendale)||Priestley, Arthur (Grantham)|
|Armstrong, W. C. Heaton||Harcourt, Robert V. (Montrose)||Radford, G. H.|
|Astbury, John Meir||Harvey, A. G. C. (Rochdale)||Raphael, Herbert H.|
|Atherley, Jones, L.||Harvey, W. E. (Derbyshire, N.E.)||Rea, Russell (Gloucester)|
|Baker, Joseph A. (Finsbury, E.)||Haslam, James (Derbyshire)||Rea, Walter Russell (Scarborough)|
|Baring, Godfrey (Isle of Wight)||Haslam, Lewis (Monmouth)||Rendall, Athelstan|
|Barker, Sir John||Haworth, Arthur A.||Richards, T. F. (Wolverhampton, W.)|
|Barlow, Percy (Bedford)||Hazel, Dr. A. E. W.||Roberts, Charles H. (Lincoln)|
|Barnard, E. B.||Hedges, A. Paget||Roberts, G. H. (Norwich)|
|Barnes, G. N.||Helme, Norval Watson||Robertson, Sir G. Scott (Bradford)|
|Barry, Redmond J. (Tyrone, N.)||Hemmerde, Edward George||Robertson, J. M. (Tyneside)|
|Beck, A. Cecil||Henderson, J. McD. (Aberdeen, W.)||Robinson, S.|
|Belloc, Hilaire Joseph Peter R.||Herbert, T. Arnold (Wycombe)||Robson, Sir William Snowdon|
|Benn, W. (Tower Hamlets, St. Geo.)||Hignam, John Sharp||Roch, Walter F. (Pembroke)|
|Bennett, E. N.||Hobhouse, Charles E. H.||Rogers, F. E. Newman|
|Bethell, Sir J. H. (Essex, Romford)||Holt, Richard Durning||Runciman, Rt. Hon. Walter|
|Bethell, T. R. (Essex, Maldon)||Hooper, A. G.||Rutherford, V. H. (Brentford)|
|Black, Arthur W.||Hope, W. H. B. (Somerset, N.)||Schwann, Sir C. E. (Manchester)|
|Bowerman, C. W.||Horniman, Emslie John||Scott, A. H. (Ashton-under-Lyne)|
|Bramsdon, T. A.||Horridge, Thomas Gardner||Sears, J. E.|
|Bright, J. A.||Hudson, Walter||Seaverns, J. H.|
|Brocklehurst, W. B.||Hutton, Alfred Eddison||Seddon, J.|
|Brooke, Stopford||Hyde, Clarendon G.||Seely, Colonel|
|Brunner, J. F. L. (Lancs., Leigh)||Idris, T. H. W.||Shaw, Sir Charles E. (Stafford)|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Illingworth, Percy H.||Shipman, Dr. John G.|
|Bryce, J. Annan||Jardine, Sir J.||Silcock, Thomas Ball|
|Buckmaster, Stanley O.||Johnson, John (Gateshead)||Smeaton, Donald Mackenzie|
|Burns, Rt. Hon. John||Jones, Sir D. Brynmor (Swansea)||Snowden, P.|
|Burnyeat, W. J. D.||Jones, Leif (Appleby)||Soames, Arthur Wellesley|
|Burt, Rt. Hon. Thomas||Jones, William (Carnarvonshire)||Soares, Ernest J.|
|Buxton, Rt. Hon. Sydney Charles||Jowett, F. W.||Spicer, Sir Albert|
|Byles, William Pollard||Kekewich, Sir George||Stanger, H. Y.|
|Cameron, Robert||Laidlaw, Robert||Steadman, W. C.|
|Causton, Rt. Hon. Richard Knight||Lamb, Edmund G. (Leominster)||Stewart Halley (Greenock)|
|Cawley, Sir Frederick||Lambert, George||Stewart-Smith, D. (Kendal)|
|Channing, Sir Francis Allston||Lament, Norman||Summerbell, T.|
|Cheetham, John Frederick||Layland-Barrett, Sir Francis||Taylor, John W. (Durham)|
|Cherry, Rt. Hon. R. R.||Leese, Sir Joseph F. (Accrington)||Tennant, H. J. (Berwickshire)|
|Clough, William||Lehmann, R. C.||Thomas, Sir A. (Glamorgan, E.)|
|Clynes, J. R.||Lever, A. Levy (Essex, Harwich)||Thomasson, Franklin|
|Compton-Rickett, Sir J.||Levy, Sir Maurice||Thompson, J. W. H. (Somerset, E.)|
|Corbett, C. H. (Sussex, E. Grinstead)||Lupton, Arnold||Thorne, G. R. (Wolverhampton)|
|Cornwall, Sir Edwin A.||Luttrell, Hugh Fownes||Tomkinson, James|
|Cory, Sir Clifford John||Macdonald, J. M. (Falkirk Burghs)||Toulmin, George|
|Cotton, Sir H. J. S.||Macnamara, Dr. Thomas J.||Trevelyan, Charles Philips|
|Craig, Herbert J. (Tynemouth)||M'Laren, H. D. (Stafford, W.)||Verney, F. W.|
|Crooks, William||M'Micking, Major G.||Vivian, Henry|
|Crosfield, A. H.||Maddison, Frederick||Walton, Joseph|
|Davies, Sir W. Howell (Bristol, S.)||Mallet, Charles E.||Wardle, George J.|
|Dewar, Arthur (Edinburgh, S.)||Marks, G. Croydon (Launceston)||Wason, Rt. Hon. E. (Clackmannan)|
|Dickinson, W. H. (St. Pancras, N.)||Marnham, F. J.||Wason, John Cathcart (Orkney)|
|Dickson-Poynder, St. John P.||Massie, J.||Waterlow, D. S.|
|Dilke, Rt. Hon. Sir Charles||Masterman, C. F. G.||Wedgwood, Josiah C.|
|Dobson, Thomas W.||Micklem, Nathaniel||Weir, James Galloway|
|Duckworth, Sir James||Middlebrook, William||White, J. Dundas (Dumbartonshire)|
|Duncan, C. (Barrow-in-Furness)||Molteno, Percy Alport||White, Sir Luke (York, E. R.)|
|Duncan, J. Hastings (York, Otley)||Mond, A.||Whitehead, Rowland|
|Dunne, Major E. Martin (Walsall)||Money, L. G. Chiozza||Whitley, John Henry (Halifax)|
|Edwards, Sir Francis (Radnor).||Montagu, Hon. E. S.||Wiles, Thomas|
|Elibank, Master of||Morse, L. L.||Wilkie, Alexander|
|Essex, R. W.||Morton, Alpheus Cleophas||Williamson, A.|
|Everett, R. Lacey||Murray, Capt. Hon. A. C. (Kincard.)||Wills, Arthur Walters|
|Ferens, T. R.||Myer, Horatio||Wilson, John (Durham, Mid)|
|Findlay, Alexander||Napier, T. B.||Wilson, J. W. (Worcestershire, N.)|
|Foster, Rt. Hon. Sir Walter||Nicholls, George||Wilson, P. W. (St. Pancras, S.)|
|Fuller, John Michael F.||O'Grady, J.||Wood, T. M'Kinnon|
|Fullerton, Hugh||Parker, James (Halifax)||Yoxall, James Henry|
|Gibb, James (Harrow)||Partington, Oswald|
|Gill, A. H.||Pearce, Robert (Staffs, Leek)||TELLERS FOR THE AYES.—Mr. J. H. Lewis and Capt. Norton.|
|Glen-Coats, Sir T. (Renfrew, W.)||Pearce, William (Limehouse)|
|Goddard, Sir Daniel Ford||Pearson, W. H. M. (Suffolk, Eye)|
|Arkwright, John Stanhope||Forster, Henry William||Oddy, John James|
|Ashley, W. W.||Foster, P. S.||Parkes, Ebenezer|
|Balcarres, Lord||Gardner, Ernest||Pease, Herbert Pike (Darlington)|
|Baldwin, Stanley||Gretton, John||Peel, Hon. W. R. W.|
|Banbury, Sir Frederick George||Hamilton, Marquess of||Randles, Sir John Scurrah|
|Banner, John S. Harmood-||Hardy, Laurence (Kent, Ashford)||Ratcliff, Major R. F.|
|Baring, Capt Hon. G. (Winchester)||Harrison Broadley, H. B.||Remnant, James Farquharson|
|Barrie, H. T. (Londonderry, N.)||Helmsley, Viscount||Renton, Leslie|
|Beckett, Hon. Gervase||Hills, J. W.||Ridsdale, E. A.|
|Bertram, Julius||Hope, James Fitzalan (Sheffield)||Roberts, S. (Sheffield, Ecclesall)|
|Bignold, Sir Arthur||Houston, Robert Paterson||Ronaldshay, Earl of|
|Bowles, G. Stewart||Hunt, Rowland||Ropner, Colonel Sir Robert|
|Bridgeman, W. Clive||Joynson-Hicks, William||Rutherford, W. W. (Liverpool)|
|Bull, Sir William James||Kimber, Sir Henry||Salter, Arthur Clavell|
|Burdett-Coutts, W.||King, Sir Henry Seymour (Hull)||Sheffield, Sir Berkeley George D.|
|Carlile, E. Hildred||Lambton, Hon. Frederick William||Smith, Abel H. (Hertford, East)|
|Carson, Rt. Hon. Sir Edward H.||Lane-Fox, G. R.||Smith, F. E. (Liverpool, Walton)|
|Castlereagh, Viscount||Law, Andrew Bonar (Dulwich)||Smith, Hon W. F. D. (Strand)|
|Cove, George||Lockwood, Rt. Hon. Lt.-Col. A. R.||Stanier, Beville|
|Cecil, Evelyn (Aston Manor)||Long, Rt. Hon. Walter (Dublin, S.)||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Lord R. (Marylebone, E.)||Lonsdale, John Brownlee||Talbot, Lord E. (Chichester)|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Lowe, Sir Francis William||Talbot, Rt. Hon. J. G. (Oxford Univ.)|
|Clyde, J. Avon||Lyttelton, Rt. Hon. Alfred||Thomson, W. Mitchell- (Lanark)|
|Coates. Major E. F. (Lewisham)||MacCaw, Wm. J. MacGeagh||Tuke, Sir John Batty|
|Cochrane, Hon. Thomas H. A. E.||M'Arthur, Charles||Walker, Col. W. H. (Lancashire)|
|Craig, Captain James (Down, E.)||M'Calmont, Colonel James||Walrond, Hon Lionel|
|Craik, Sir Henry||Mason, James F. (Windsor)||Warde, Col. C. E. (Kent, Mid)|
|Dalrymple, Viscount||Meysey-Thompson, E. C.||Winterton, Earl|
|Doughty, Sir George||Middlemore, John Throgmorton||Younger, George|
|Douglas, Rt. Hon. A. Akers-||Moore, William|
|Duncan, Robert (Lanark, Govan)||Morpeth, Viscount||TELLERS FOR THE NOES.—Sir A. Acland-Hood and Viscount Valentia.|
|Faber, George Denison (York)||Morrison-Bell, Captain|
|Fell, Arthur||Newdegate, F. A.|
|Fletcher, J. S.||Nicholson, Wm. G. (Petersfield)|
§ Question put accordingly, "That the words 'or any interest' stand part of the Clause."122
§ The Committee divided: Ayes, 268; Noes, 105.125
|Division No. 203.]||AYES.||9.47 p.m.|
|Abraham, W. (Cork, N.E.)||Burt, Rt. Hon. Thomas||Fuller, John Michael F.|
|Acland, Francis Dyke||Buxton, Rt. Hon. Sydney Charles||Fullerton, Hugh|
|Agnew, George William||Byles, William Pollard||Gibb, James (Harrow)|
|Ainsworth, John Stirling||Cameron, Robert||Gill, A. H.|
|Allen, A. Acland (Christchurch)||Causton, Rt. Hon. Richard Knight||Ginnell, L.|
|Allen, Charles P. (Stroud)||Cawley, Sir Frederick||Glen-Coats, Sir T. (Renfrew, W.)|
|Armstrong, W. C. Heaton||Channing, Sir Francis Allston||Goddard, Sir Daniel Ford|
|Asquith, Rt. Hon. Herbert Henry||Cheetham, John Frederick||Gooch, George Peabody (Bath)|
|Astbury, John Meir||Cherry, Rt. Hon. R. R.||Greenwood, G. Peterborough)|
|Atherley-Jones, L.||Clough, William||Greenwood, Hamar (York)|
|Baker, Joseph A. (Finsbury, E.)||Clynes, J. R.||Gulland, John W.|
|Baring, Godfrey (Isle of Wight)||Compton-Rickett, Sir J.||Gwynn, Stephen Lucius|
|Barker, Sir John||Condon, Thomas Joseph||Harcourt, Rt. Hon. L. (Rossendale)|
|Barlow, Percy (Bedford)||Corbett, C. H. (Sussex, E. Grinstead)||Harcourt, Robert V. (Montrose)|
|Barnard, E. B.||Cornwall, Sir Edwin A.||Hardie, J. Keir (Merthyr Tydvil)|
|Barnes, G. N.||Cotton, Sir H. J. S.||Harmsworth, R. L. (Caithness-sh.)|
|Barry, Redmond J. (Tyrone, N.)||Craig, Herbert J. (Tynemouth)||Harvey, A. G. C. (Rochdale)|
|Beauchamp, E.||Crooks, William||Harvey, W. E. (Derbyshire, N.E.)|
|Belloc, Hilaire Joseph Peter R.||Davies, Sir W. Howell (Bristol, S.)||Haslam, James (Derbyshire)|
|Benn, Sir J. Williams (Devonport)||Dewar, Arthur (Edinburgh, S.)||Haslam, Lewis (Monmouth)|
|Benn, W. (Tower Hamlets, St. Geo.)||Dickinson, W. H. (St. Pancras, N.)||Haworth, Arthur A.|
|Bennett, E. H.||Dickson-Poynder, Sir John P.||Hayden, John Patrick|
|Bethell, Sir J. H. (Essex, Romford)||Dilke, Rt. Hon. Sir Charles||Hazel, Dr. A. E. W.|
|Bethell, T. R. (Essex, Maldon)||Dobson, Thomas W.||Hedges, A. Paget|
|Black, Arthur W.||Donelan, Captain A.||Helme, Norval Watson|
|Boland, John||Duckworth, Sir James||Hemmerde, Edward George|
|Bowerman, C. W.||Duncan, C. (Barrow-in-Furness)||Henderson. J. McD. (Aberdeen, W.)|
|Bramsdon, T. A.||Duncan, J. Hastings (York, Otley)||Herbert, T. Arnold (Wycombe)|
|Bright, J. A.||Dunne, Major E. Martin (Walsall)||Higham, John Sharp|
|Brocklehurst, W. B.||Edwards, Sir Francis (Radnor)||Hobart, Sir Robert|
|Brooke, Stopford||Elibank, Master of||Hobhouse, Charles E. H.|
|Brunner, J. F. L. (Lancs., Leigh)||Erskine, David C.||Hogan, Michael|
|Brunner, Rt. Hon. Sir J. T. (Cheshire)||Essex, R. W.||Holt, Richard Durning|
|Bryce, J. Annan||Everett, R. Lacey||Hooper, A. G.|
|Buckmaster, Stanley O.||Ferens, T. R.||Hope, W. H. B. (Somerset, N.)|
|Burke, E. Haviland-||Findlay, Alexander||Horniman, Emslie John|
|Burns, Rt. Hon. John||Flynn, James Christopher||Horridge, Thomas Gardner|
|Burnyeat, W. J. D.||Foster, Rt. Hon. Sir Walter||Hudson, Walter|
|Hutton, Alfred Eddison||Murphy, John (Kerry, East)||Seddon, J.|
|Hyde, Clarendon, G.||Murphy, N. J. (Kilkenny, S.)||Seely, Colonel|
|Idris, T. H. W.||Murray, Capt. Hon. A. C. (Kincard.)||Shaw, Sir Charles E. (Stafford)|
|Illingworth, Percy H.||Myer, Horatio||Shipman, Dr. John G.|
|Isaacs, Rufus Daniel||Nannetti, Joseph P.||Silcock, Thomas Ball|
|Jardine, Sir J.||Napier, T. B.||Smeaton, Donald Mackenzie|
|Johnson, John (Gateshead)||Nicholls, George||Smyth, Thomas F. (Leitrim, S.)|
|Jones, Sir D. Brynmor (Swansea)||O'Brien, K. (Tipperary, Mid)||Snowden, P.|
|Jones, Leif (Appleby)||O'Brien, Patrick (Kilkenny)||Soames, Arthur Wellesley|
|Jones, William (Carnarvonshire)||O'Connor, John (Kildare, N.)||Soares, Ernest J.|
|Jowett, F. W.||O'Connor, T. P. (Liverpool)||Spicer, Sir Albert|
|Joyce, Michael||O'Doherty, Philip||Stanger, H. Y.|
|Kavanagh, Walter M.||O'Grady, J.||Steadman, W. C.|
|Kekewich, Sir George||O'Kelly, Conor (Mayo, N.)||Stewart, Halley (Greenock)|
|Kilbride, Denis||O'Malley, William||Stewart-Smith, D. (Kendal)|
|Laidlaw, Robert||O'Shaughnessy, P. J.||Strauss, E. A. (Abingdon)|
|Lamb, Edmund G. (Leominster)||Parker, James (Halifax)||Summerbell, T.|
|Lambert, George||Partington, Oswald||Taylor, John W. (Durham)|
|Lamont, Norman||Pearce, Robert (Staffs, Leek)||Tennant, H. J. (Berwickshire)|
|Law, Hugh A. (Donegal, W.)||Pearce, William (Limehouse)||Thomas, Sir A. (Glamorgan, E.)|
|Layland-Barrett, Sir Francis||Pearson, W. H. M. (Suffolk, Eye)||Thomasson, Franklin|
|Leese, Sir Joseph F. (Accrington)||Pease, Rt. Hon. J. A. (Saff. Wald.)||Thompson, J. W. H. (Somerset, E.)|
|Lehmann, R. C.||Pointer, J.||Thorne, G. R. (Wolverhampton)|
|Lever, A. Levy (Essex, Harwich)||Pollard, Dr. G. H.||Tomkinson, James|
|Levy, Sir Maurice||Ponsonby, Arthur A. W. H.||Toulmin, George|
|Lundon, T.||Power, Patrick Joseph||Trevelyan, Charles Philips|
|Lupton, Arnold||Price, C. E. (Edinburgh, Central)||Verney, F. W.|
|Luttrell, Hugh Fownes||Priestley, Arthur (Grantham)||Vivian, Henry|
|Macdonald, J. M (Falkirk Burghs)||Priestley, W. E. B. (Bradford, E.)||Walton, Joseph|
|Mackarness, Frederic C.||Radford, G. H.||Wardle, George J.|
|Maclean, Donald||Raphael, Herbert H.||Wason, Rt. Hon. E. (Clackmannan)|
|Macnamara, Dr. Thomas J.||Rea, Russell (Gloucester)||Wason, John Cathcart (Orkney)|
|MacVeigh, Charles (Donegal, E.)||Rea, Walter Russell (Scarborough)||Waterlow, D. S.|
|M'Laren, H. D. (Stafford, W.)||Redmond, John E. (Waterford)||Wedgwood, Josiah C.|
|M'Micking, Major G.||Redmond, William (Clare)||Weir, James Galloway|
|Maddison, Frederick||Rendall, Athelstan||White, J. Dundas (Dumbartonshire)|
|Mallet, Charles E.||Richards, T. F. (Wolverhampton, W.)||White, Sir Luke (York, E. R.)|
|Marks, G. Croydon (Launceston)||Ridsdale, E. A.||Whitehead, Rowland|
|Marnham, F. J.||Roberts, Charles H. (Lincoln)||Whitley, John Henry (Halifax)|
|Massie, J.||Roberts, G. H. (Norwich)||Wiles, Thomas|
|Masterman, C. F. G.||Robertson, Sir G. Scott (Bradford)||Wilkie, Alexander|
|Meagher, Michael||Robertson, J. M. (Tyneside)||Williamson, A.|
|Meehan, Francis E. (Leitrim, N.)||Robinson, S.||Wills, Arthur Walters|
|Micklem, Nathaniel||Robson, Sir William Snowdon||Wilson, John (Durham, Mid)|
|Middlebrook, William||Roch, Walter F. (Pembroke)||Wilson, J. W. (Worcestershire, N.)|
|Molteno, Percy Alport||Roche, John (Galway, East)||Wilson, P. W. (St. Pancras, S.)|
|Mond, A.||Rogers, F. E. Newman||Wood, T. M'Kinnon|
|Money, L. G. Chiozza||Runciman, Rt. Hon. Walter||Yoxall, James Henry|
|Montague, Hon. E. S.||Rutherford, V. H. (Brentford)|
|Mooney, J. J.||Schwann, Sir C. E. (Manchester)|
|Morrell, Philip||Scott, A. H. (Ashton-under-Lyne)||TELLERS FOR THE AYES.—Mr. J. H. Lewis and Capt. Norton.|
|Morse, L. L.||Sears, J. E.|
|Morton, Alpheus Cleophas||Seaverns, J. H.|
|Anson, Sir William Reynell||Craik, Sir Henry||Lane-Fox, G. R.|
|Arkwright, John Stanhope||Dalrymple, Viscount||Law, Andrew Bonar (Dulwich)|
|Ashley, W. W.||Dickson, Rt. Hon. C. Scott-||Lockwood, Rt. Hon. Lt.-Col. A. R.|
|Balcarres, Lord||Doughty, Sir George||Long, Rt. Hon. Walter (Dublin, S.)|
|Baldwin, Stanley||Douglas, Rt. Hon. A. Akers-||Lonsdale, John Brownlee|
|Banbury, Sir Frederick George||Duncan, Robert (Lanark, Govan)||Lowe, Sir Francis William|
|Banner, John S. Harmood-||Faber, George Denison (York)||Lyttelton, Rt. Hon. Alfred|
|Baring, Capt. Hon. G. (Winchester)||Fell, Arthur||MacCaw, Wm. J. MacGeagh|
|Barrie, H. T. (Londonderry, N.)||Fletcher, J. S.||M'Arthur, Charles|
|Beckett, Hon. Gervase||Forster, Henry William||M'Calmont, Colonel James|
|Bertram, Julius||Foster, P. S.||Magnus, Sir Philip|
|Bignold, Sir Arthur||Gardner, Ernest||Mason, James F. (Windsor)|
|Bowles, G. Stewart||Gibbs, G. A. (Bristol, West)||Meysey-Thompson, E. C.|
|Bridgeman, W. Clive||Gretton, John||Middlemore, John Throgmorton|
|Bull, Sir William James||Guinness, Hon. R. (Haggerston)||Moore, William|
|Burdett-Coutts, W.||Hamilton, Marquess of||Morpeth, Viscount|
|Carlile, E. Hildred||Hardy, Laurence (Kent, Ashford)||Morrison-Bell, Captain|
|Carson, Rt. Hon. Sir Edward H.||Harrison-Broadley, H. B.||Newdegate, F. A.|
|Castlereagh, Viscount||Helmsley, Viscount||Nicholson, Wm. G. (Petersfield)|
|Cave, George||Hills, J. W.||Oddy, John James|
|Cecil, Evelyn (Aston Manor)||Hope, James Fitzalan (Sheffield)||Parkes, Ebenezer|
|Cecil, Lord R. (Marylebone, E.)||Houston, Robert Paterson||Pease, Herbert Pike (Darlington)|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Hunt, Rowland||Peel, Hon. W. R. W.|
|Clyde, J. Avon||Joynson-Hicks, William||Percy, Earl|
|Coates, Major E. F. (Lewisham)||Kimber, Sir Henry||Pretyman, E. G.|
|Cochrane, Hon. Thomas H. A. E.||King, Sir Henry Seymour (Hull)||Randles, Sir John Scurrah|
|Craig, Captain James (Down, E.)||Lambton, Hon. Frederick Wm.||Ratcliff, Major R. F.|
|Remnant, James Farquharson||Stanier, Beville||Willoughby de Eresby, Lord|
|Renton, Leslie||Staveley-Hill, Henry (Staffordshire)||Winterton, Earl|
|Roberts, S. (Sheffield, Ecclesall)||Talbot, Lord E. (Chichester)||Wyndham, Rt. Hon. George|
|Ronaldshay, Earl of||Talbot, Rt. Hon. J. G. (Oxford Univ.)||Younger, George|
|Ropner, Colonel Sir Ropner||Thomson, W. Mitchell- (Lanark)|
|Rutherford, W. W. (Liverpool)||Thornton, Percy M.|
|Salter, Arthur Clavell||Tuke, Sir John Batty||TELLERS FOR THE NOES.—Sir A. Acland-Hood and Viscount Valentia.|
|Sheffield, Sir Berkeley George D.||Walker, Col. W. H. (Lancashire)|
|Smith, Abel H. (Hertford, East)||Walrond, Hon. Lionel|
|Smith, Hon. W. F. D. (Strand)||Warde, Col. C. E. (Kent, Mid)|
§ Sir EDWARD CARSON
had an Amendment on the paper, after "interest," in section 1, sub-section (a) ["any interest in the land, or the grant of any lease"], to insert "in possession."
§ The CHAIRMAN (Mr. Emmott)
I do not quite understand why the Amendment of the right hon. Gentleman should not come on under clause 27. Will he kindly explain it to me?
§ Sir E. CARSON
I did it for the purpose of trying to ascertain what was the occasion upon which we are to have this increment calculated, but I do not mind if it is put down under clause 27.
§ Mr. LLOYD-GEORGE
On a point of order, may I point out that under clause 27 the point is specifically raised. I do not say it covers it, but at any rate it does specifically raise the issue, and if it is to be inserted here it may be inconsistent with words later on.
§ Sir E. CARSON
On the distinct understanding that we will have an opportunity to discuss it on clause 27, I have no objection to it being placed there.
§ Amendment, by leave, withdrawn.
§ Mr. LLOYD-GEORGE
moved after the word "land," in section 1, sub-section (a) ["any interest in the land, or the grant of any lease"] to insert the words "in pursuance of any contract made after the passing of this Act."
§ Mr. AUSTEN CHAMBERLAIN
I do not wish to discuss the matter, but only to be satisfied that the Amendment does what the Chancellor thinks it does. Is it quite certain it covers the whole of the preceding words,"the transfer on sale "as well as" any interest in the land"? They are separated by "or." If the "or" disjoins the qualification, confining it to the later parts, I do not understand why the Chancellor of the Exchequer puts words in here at all, and not later, where one exception would cover the whole. It is a question of drafting, I admit.
§ Mr. LLOYD-GEORGE
We have endeavoured to get words that will cover both, and I will move it in both cases.
§ Amendment agreed to.
§ Sir J. DICKSON-POYNDER
moved to leave out in sub-section (a) the words "or the grant of any lease (not being a lease for a term of years less than seven years) of the land, and."
The Committee has already decided to charge Increment Duty upon the sale of land. We now proceed to the Increment Duty upon the granting of a lease. I would like to preface my remarks by repeating that I am in favour of the principle of Increment Duty, and that I am desirous, like I believe hon. Members on both sides of the House, that the Increment Duty should be imposed in the most effectual way, the least expensive way, and in a way which will cause the least friction and annoyance to that very large portion of the community which are interested in that class of property. The Bill proposes that the granting of leases of land for a period of seven years should be subjected to an Increment Duty of 20 per cent, on the capital value. I propose to omit the words in sub-section (a), and by way of maintaining the symmetry of the Bill to insert in. sub-clause (b) other provision which would confine the area of the Increment Duty to a more restrictive class of property than that which is imposed in the Bill. It is difficult to discuss the actual Amendment before a Committee without alluding to other and subsequent Amendments which will be proposed to be inserted in sub-clause (b). I propose to move that the Increment Duty should be confined to the original grant of any lease of land, agricultural or non-urban, when it is converted to building purposes. I venture to believe that it is upon that occasion, and upon that occasion alone, that the real increment is derived by the owner of the land, and it is upon that occasion that this tax can be collected with the least possible friction and trouble and the best possible results to the Revenue. The proposal in the Bill would impose this duty upon a variety of classes of people 127 who own this property. I venture to believe there are two main objections to its comprehensive form as it stands at present. In the first place, it will not produce the revenue to the State in any way commensurate with the cost which would be necessitated both as regards scrutiny and calculation. Secondly, it will cause a quite disproportionate amount of friction to a very large class of people who own this property. In the vast majority of instances owners of leasehold property will attempt to evade this tax altogether in future by letting the property for periods of less than seven years. Although perhaps 70 or 80 per cent. will do that, expensive machinery will have to be instituted upon the assumption that all classes of the community will come under this taxation. There are a large class of people in this country who are dependent for their trade prosperity on maintaining their residences in particular localities where they have lived for years, and it will be necessary in many of these instances for them to have leases longer than seven years—anyway, it will prove a great inconvenience to them to have to take their houses for a less period than that. I am alluding to tradespeople of all kinds, whose goodwill depends upon the houses in which they have lived for years, and whose prosperity depends upon that locality. Professional men of all classes will come under that category. Many private individuals would prefer to take a long lease of a house and to spend their capital in some other form than in investing it in the purchase of their own houses. This may be seen constantly whenever any attempt is made to alter the name of the title of the street of a locality where tradespeople reside. Knowing that it would be injurious to their business, the greatest possible hostility is offered to such a change. We saw it the other day in the case of the county council. These people are dependent upon these localities, and that security would be injuriously affected by the proposals in the Bill.
There are also the farming classes which the Chancellor of the Exchequer told us would be protected by subsequent clauses in the Bill, but I respectfully suggest they are by no means adequately protected under the present provisions. By these proposals you will not touch those who make leases under seven years, while you are liable to hit those to whom a longer lease is a necessity. Let me examine the class of people who own the kind of property to 128 which I have been alluding. They are not confined to the great landlords of the country. They are an innumerable class amongst the more modest of the people who have invested their money—people in trade and of the trading and professional classes. They are going to be liable in future upon the granting of a lease and upon their asking a higher rent for that lease to an Increment Tax of 20 per cent, upon the increment value. It is quite certain, human nature being what it is, that they will do their very utmost to extract as much as possible of the additional burden from the tenants to whom they let their houses, and if the tenants are of that class which I have been describing as dependent upon the locality for their business, undoubtedly they will in the end have to bear the burden of the increased taxation.
Before the Government decide to include all these classes of property and all these classes of people within the purview of this tax I would beg of them to consider the very large number of people who will be brought into this net. I ask is it worth while creating an amount of friction amongst this class of the community for a tax that will bring in such slender returns? I shall be told this tax is not intended to hit this class of the community, but it is imposed upon others who are deriving a much larger and handsomer value from their property. The Prime Minister the other day in a speech told us that the tendency of all land is to rise in value.
§ Sir JOHN DICKSON-POYNDER
The tendency of land—I leave out the word "all"—is to rise in value. I should like to examine that proposition. I think in some instances it may be said to be an over-statement of the ease. What land shows a tendency to rise in value to-day? Undoubtedly, and happily, in some portions of the country agricultural land has that tendency, but it has that tendency only after 30 years of steady decrease, and it will take a long time for that tendency to get to the upper grade when agricultural land enjoyed the position which it did 30 years ago. At any rate, we hope before the conclusion of these clauses dealing with land taxation that we shall have it in perfectly definite language that agricultural land is to be omitted. The next category is land upon which in large towns some large reconstruction has taken place. The old obsolete buildings have been removed, and 129 some more modern and convenient building has been erected in its place. There are thousands of instances of that, and undoubtedly in all these cases a very large enhancement is enjoyed by the owner of the land due to reconstruction, but I would point out that in all these cases the Reversionary Tax very adequately covers them. No reconstruction of that character can take place without one or two operations taking place—either the remainder of the lease is bought or the owner would wait until the termination of the lease. In either of these cases it would come under the purview of the Reversionary Tax. When we come to clause 7 we shall have to deal with the Reversionary Tax, and it is difficult at present to see to what extent owners will be liable to both taxes. There will be in certain circumstances a possibility of the owner having to pay the Reversionary Tax and a portion of the Increment Tax upon the granting of new leases. With all those instances the Reversionary Tax would be sufficient and adequate. I go further, and say that it would be most detrimental if an Increment Tax was charged upon the top of a Reversionary Tax. When a lease falls in, and the owner has paid the Reversionary Tax he will think twice before he pulls down the old buildings and goes to the expense of erecting new ones. The chances are that the owner will regrant the lease with the Antiquated buildings.
I come now to the third class, namely, the land on the outskirts of a town. I agree that there is a tendency of the value of land to rise. As land develops buildings are erected owing to the extension of the town, and there in my subsequent Amendment the Increment Tax will be charged when the realised increment of rent was secured to the owner. But what is the tendency of all other forms of property? This tax deals with all existing property. I think it will be found, whether you go to the West End, or the North, South, or East End of London, or in provincial towns, you will find the universal tendency is decrement rather than increment. There is hardly a town in England where there are not an enormous number of vacant houses, especially in the Metropolis. That being so, the tendency invariably is towards decrement rather than increment. The owner of this class of property is lucky if he can get a new tenant, and if he can he has to let for a less rent than formerly. Where do increases take place in this class of property? They are so insignificant that they would not be 130 worth the immense machinery which must be set up first to scrutinise and then to collect the tax.
The Debate this afternoon has shown that the process of valuation must be a very complicated one, and I believe will be found to be very expensive. It is for that reason as much as any other that I would suggest to the Government that they should confine the area of their taxation to this particular increment charge, in order that that charge may be made upon property which requires the least possible scrutiny on the part of the officials and the least expense of collection when it is realised. The very expense attached to this Increment Tax will, I believe, in most cases more than absorb the revenue that is derived from it. I press most strongly the Government to consider all these different classes of people who are going to be hit. I do not believe that the small owners of property and the small leaseholders realise that they are going shortly to have the honour of being marshalled in the same net with the great ground landlords. I know when they realise this they will appreciate these proposals to a greater extent than at the present time. This tax is bound to annoy a great many people, and a very much larger number than hon. Members on the Ministerial side believe. There might be something to be said for the annoyance if you are going to get a substantial revenue, but I do not believe the revenue to be obtained will be anything commensurate with the friction which will result. I have put, as shortly as I can, the reasons why I should like to see the area of this tax confined, and I repeat once more that I entirely endorse the principle of an Increment Tax, but it should be confined to those cases where land has matured in value by being converted from agricultural purposes to building purposes. You will then have three land taxes—a tax upon sale, a tax upon the conversion of agricultural land to building land, and then at the end you will have a tax upon reversion. There will, therefore, be three sources from which you can obtain revenue.
§ Mr. LLOYD-GEORGE
I can hardly believe that my hon. Friend will himself think that the Amendment which he moves is altogether defensible from his own point of view. He is a believer in an Increment Tax and I am certain that he is a very sincere believer. He has defended it as a fair way of raising revenue. He believes 131 that you should tax increment which is not due to the exertions of the owners of the land, but which is attributable to the energy and enterprise of the population of the towns. Such a proposal is constantly defended. But what will be the result of this Amendment? I will take it because it happens to be the first on the Paper. The question we are discussing is whether the tax should be raised on leases. Do I understand the hon. Member to say that the tax ought to be raised on leases of a limited character? If it is not raised on leases under any sort of condition the only effect will be that every owner of land who wanted to get rid of the Increment Tax would simply transfer by means of a lease, and, therefore, get rid of the tax altogether during his lifetime. I am not a believer in this sort of things. I have seen too much of these operations, and I have always thought it a thoroughly vicious system—[Cries of "Small Holdings!"]—I mean for building purposes.
§ Mr. LLOYD-GEORGE
That is my view with regard to the leasehold system, and I do not, therefore, think you ought to create bonuses upon it by taxation. I agree you ought not to tax the increments upon ground leases; it should be a tax upon leases in a certain form. It ought not to be done except that the lease is for building purposes. It amounts to this: the owner will say, "If I do not build, I shall avoid the Increment Tax; if I do, I shall have to pay it." The object is not to put a penalty upon using land for building purposes. We do not want to discriminate as against a man who is using land for the purposes of building, but that will be the inevitable operation of this Amendment. I do not think the hon. Member (Sir J. Dickson-Poynder) has realised that, and I know how keen he is as to affording every possible facility for the extension of building operations in the neighbourhood of towns. I come to the question of agricultural land. We have had many Debates on that. But the result is perfectly clear. We have not the slightest intention of raising any taxes—either an Undeveloped Land Tax or an Increment Tax—upon agricultural land to the extent of taxing what is purely the recovery value, owing to the fluctuation of prices. We have also made it perfectly clear that if the increased value is due to the proximity of a town, or to 132 the fact that a new industry is started in the neighbourhood of the land, a market being thereby brought to the very door, and raising the land from an agricultural value to a value of £7, £8, or £10 per acre, such an increment being not due to anything done by the owner of the land, not to normal operations, should pay the duty. Surely my hon. Friend cannot possibly claim that that ought not to come within the operation of the Increment Tax. It is an increment created by the community; it has nothing to do with the normal operation of agricultural prices, and, therefore, it is perfectly fair that we should in that case charge the increment. If we do not, under what circumstances does my hon. Friend suggest it shall be charged? Is it to be cut out in the case of leases, or in the case of death? Why, if in the case of leases we may have to wait 60 years before we get the increment.
§ Mr. LLOYD-GEORGE
I understand, but I do not want to discuss an Amendment which comes later on. But I understand that the proposal is to omit subsection (b) altogether. ["Yes."] Then, as I say, with regard to land of this kind, so long as a man does not build upon it, although there is the greatest and most urgent demand for building land—as long as the landlord keeps that land from being built on and keeps the land from being let for building purposes, then my right hon. Friend says you should do nothing for sixty years. If he knows anything of the housing of these towns, I am sure he cannot mean that, and I am sure he has not contemplated the effect of it.
§ Mr. BONAR LAW
The most interesting part of the speech of the right hon. Gentleman was the condemnation which he gave of the leasehold system. That is a system which has grown up in this country. It may have many merits or demerits, but it is difficult to get rid of, because it is an old growth. There is a new system of leaseholds growing up under the Small Holdings Act, and it is a great misfortune that the right hon. Gentleman had so little influence with his own Government as not to convince them of the viciousness of the system of leaseholds which he so strongly condemns. The right hon. Gentleman has fallen into a fundamental error as to the grounds of the Amendment. He says under the Amendment, unless the land is let for building the Government will not 133 get any increment at all. How in the world does he arrive at that conclusion? I understood that the main argument of this tax was to compel land which was being held up to be sold, and that was to be effected by an Increment Tax upon it if it was not sold for building purposes. If that is not so, the argument of the hon. Baronet falls to the ground, because the duty would not become payable. The right hon. Gentleman said that his proposal was to take the tax when it was available, but I venture to say he was entirely mistaken upon that. The principle upon which this particular tax is made is that you are going to capitalise the rent and take that as if it were the value of the land. By doing that you do not get the money, you only get an imaginary idea of what the money is. It is really with the idea of pointing out to the right hon. Gentleman that it is no enough to say that particular things will happen if this clause is not put in, he has also to consider what will happen if this clause is put in. I confess that I have found it very difficult to understand this Bill, but as I understand it I would like to point out what would be the actual working of this clause in those exceptional cases which might happen in the best form of tax, and which it may be impossible to guard against in the best form of taxation —the effect of this tax upon cases of business which are taking place to-day.
Take this case: Suppose I am a builder and I see a piece of land which I think is suitable for a particular kind of house, and I think if I build that house on that land it will be a profitable transaction. Let us assume that the site value of the land is put at £200, and I buy the land at that price. I immediately build a house upon it. Perhaps I spend upon it, including everything for which allowance is made under this Bill, the sum of £3,000. The house is ready for occupation; the buyer does not come forward, but I find someone who is willing to take it upon lease on what seems to me very good terms, and I let it on a lease for ten years at a rent of £250. What happens? The Commissioners come in, and before the lease is legal they have to decide whether or not Increment is due, and, if so, how much is due. I understand they have to capitalise the rent. Suppose they capitalise it at 15 years' purchase, which is usual. That amounts to £3,750. Then the Commissioners have to deduct from the capitalised value the value of the buildings and other things for which deduction is 134 permitted. The house has just been completed, and the value presumably is the amount which has been paid for the house. They deduct, therefore, £3,000 from the £3,750, the site value of which was £200 a year ago, and has suddenly become £750, an increment of £550, and the Government step in and take a fifth of the increment. I may not have understood the Bill, but it seems to me that the Commissioners are bound to arrive at the site value in that way. If they are not bound to take the method of the Bill, it simply means that the Commissioners are to assess individuals, not on any principle whatever, but they are to go to each man engaged in this particular kind of trade, and say: "You have so much increment, and I want a part of it," and to another man: "You have no increment, and I do not want any part of it." Of the two, I believe it would be far less evil that you should have the worst conceivable principle and have it clearly laid down, than that you should have the question left to the arbitrary decision of individuals in this way.
I was rather amazed to hear the hon. Member for Salford ask why should not the State get a fifth of that increment? It is not unearned increment in any sense of the word; it is simply the business profit which the man has made by good judgment in selecting a good place and building a suitable house upon it. It is an additional Income Tax of 4s. in the £, and with this further injustice, that though this seemed a big profit it is not a bigger profit than everyone who is engaged in trade makes occasionally on a transaction. But then he makes losses too. Under the Income Tax, if he makes losses, they are put against the profit. But here, if I made a profit on one transaction and a loss on a precisely similar transaction, the Government wants part of the profit in the one case, but will not give part of the loss in the other. If I have understood the meaning of the Bill this proposal is one which it is utterly impossible for any impartial man to defend or justify in any way.
I want to carry these reflections a little further. I think I have shown the absurdity of the proposal. Suppose when the end of this ten years' lease comes I am lucky enough to let the same property for another ten years at £250 again. What happens? The Commissioners come in again and I have got to satisfy them. They capitalise the £250, as they did before, and it comes to the same amount. They then look at the value and the deduction. The house is ten years old, and 135 even if I have kept it up in the best possible way there must be some depreciation. They take off 10 per cent, for depreciation. That reduces the amount from £3,000 to £2,700, and they deduct that from the capital value. What happens? There is another unearned increment of £300, on which I have to pay. That seems an absolutely ludicrous proposition. It remains to be seen if I have misjudged it. If I am wrong, then hon. Gentlemen opposite are on the other horn of the dilemma, for we will have no principle at all, and the Commissioners may do as they think fit. Let me point out another matter. Suppose a block of buildings is erected for offices. There are perhaps as many as 20 or 30 business firms in that block of buildings Most of the offices are let for five years, one is let for seven years, and one man who wants to carry on his business in that particular place takes an office for ten years. That is, perhaps, one-twentieth part of the whole building, and yet the whole thing has to be valued in order to grant this one man a lease of ten years. Does anyone say that that is a reasonable proposition? If it is, in judging of the amount of Increment Duty that is to be paid, will the Commissioners take into account that perhaps half of the offices are not let at all? They have to assess the profit on that particular part of the building which is let. Will they also take into account the parts that are not let? I think, as we all do on this side of the House, and as Sir William Harcourt thought twenty years ago, that the thing is so absurd that it is not worth arguing. But we have got to argue it. I say that this proposal to tax the increment value of leases, to assess imaginary capital value, and then to assume that that represents unearned increment, although it really represents the good judgment of a man, is in the last degree absurd.
§ Mr. J. C. WEDGWOOD
I do not know whether the whole of the speech of the hon. Member for Dulwich (Mr. Bonar Law) was absolutely applicable to the Amendment before the Committee, but I should like to point out that he cannot possibly have read the Bill if he supposes that site value is to be estimated in the case of leases by any sort of process such as he has described. There is not a word in the Bill about capitalising land at fifteen years' or any number of years' purchase.
§ Mr. BONAR LAW
In Clause 2, section 2, sub-section (b), you have "where the 136 occasion is the grant of any lease of the land with the transfer on sale of any interest in the land the value of the fee simple of the land, calculated on the basis of the value of the consideration for the grant of the lease," which must be the rent.
§ Mr. J. C. WEDGWOOD
But in any case, that is merely getting at the total value. When you come to get at the site value you will see under Clause 2 that in every case what is assessed is simply and solely the value of the site cleared of buildings, or less the value of any expenditure incurred in improving the value by the owner. The unimproved value is to be taken and these elaborate calculations of which we have heard entirely fall to the ground, and do not come within the purview of this Bill at all. That part of the question, I submit, lies entirely outside this particular Amendment. The Amendment of the hon. Baronet the Member for Chippenham Division is perfectly clear. He wishes to charge Increment Duty solely in three cases—when land is sold for development, when land is leased for development, and when land falls in at the end of a lease and is going to be redeveloped or leased again. Then he would charge an Increment Tax. I have no hesitation in saying that in all three cases it is a bad thing to charge taxation upon development. I prefer to charge Increment Tax solely in the case of death rather than solely in the case of sale or development, because I am quite confident that if the tax is based solely on development it must have a material effect in checking that development, and I emphasise that point because anyone who has the interests of the consumer at heart should oppose the hon. Baronet's Amendment. It is not a question of when it is convenient to pay, but of which is best for the country as a whole. I have no hesitation in saying that it is far better for the country as a whole that this tax should not be paid solely on those occasions when the land is going to be developed.
§ Mr. W. PEEL
I should like to say a word on this Amendment, because I put down the same Amendment myself. I do not propose to follow the Chancellor of the Exchequer into his examination of the whole question of earned increments, 137 because I think he dealt with that in the course of his reply, and it will be discussed on other Motions, but I was surprised to hear the Chancellor express himself in such unqualified language against long leases; because, after all, this tax on increment value is supposed to be certainly rising, and the Government take certain opportunities of taxing this rising increment. If you admit these leases altogether, you do not lose any increment, you get it all the same. But you levy it on certain occasions—either on death or on sale. It has been pointed out how difficult it will be to levy this tax, and, therefore, the less number of occasions on which you levy your Increment Duty the more Increment Duty you get. The duty, of course, has not increased, it remains exactly the same. If you levy it twice you get exactly the same amount in the same period of years as of you levied it three or four times. The Chancellor of the Exchequer may prefer short leases, because he wishes to levy this duty when there is an increment in value. The right hon. Gentleman gets the Increment Duty on leases in two different ways. First, there is the Reversion Duty, and then a great many leases will be granted immediately after the reversion of the previous lease, or within a short time after it has lapsed, in order that houses may be rebuilt or the land put into a proper position for regranting leases. Take the cases where leases are granted for the first time. These, of course, will be mainly cases where the land has been developed, where houses are being built and leases are being granted. That is a hard occasion on which to levy the tax. First of all, the owner has been put to a very large expense in laying out and developing the land; secondly, he has not realised or got back very much of his capital, because he can only let the houses as they come into letting, and probably he has spent a large sum of money in laying out a considerable property. That, again, is a very hard occasion on which to levy the Increment Duty. Further, this land, ex hypothesi, has been uncovered land, and we all know that in another part of the Bill there is a duty on undeveloped land. In this case you would be levying the tax twice over. On the grant of a lease there is the Increment Duty, and previous to that there is the duty on undeveloped land, with the object of forcing it into the market. I think there is another evil result I can foresee from levying at this particular time. It is the custom in some cases on 138 the grant of a lease to levy a fine of a lump sum, and then naturally a smaller amount of money is received as rent. But if the lessors are called upon to pay a considerable sum of money on account of the granting of the lease, it is quite obvious that it will be to their interest to get a larger sum by way of fine. If they do that it will be a great difficulty in the case of a number of small lessees with small capital who are able to pay a certain amount in payment of rent from year to year, but who would be placed in a position of great difficulty if they had to pay a larger sum down on the occasion of going into the house. The money must be paid by the lessor or the lessee. In the case of the lessor, it falls on him at a peculiarly unfortunate time, and, of course, so far as he can, he will be inclined to ask a larger rent owing to the larger amount of money he has got to pay the State. Whoever it falls upon the result is bound to be extremely unfortunate; to cause an increase in price, and so far tend to diminish the supply of houses. For all those reasons this particular occasion for levying this tax is about as unfortunate an occasion as could well be chosen.
I suppose this duty does apply to the grant of mining leases. The State is already charging undeveloped duty on minerals, so that on the grant of a mining lease there will be double revenue from the ungotten minerals. As soon as the unfortunate owner attempts to grant a mining lease he is mulcted, because when the minerals approach the workable period there is the presumption that there is a rise in the value of those minerals. The result is that the owner has a double tax to pay when he is going to do what the Ungotten Mineral Tax wants to do, that is, that the minerals may be worked. I cannot imagine a worse result that this tax will have. The last objection I have against the tax is this, that you are going to discourage long leases and to encourage people to make short leases of five or six-years. Surely it is a ludicrous thing that you can grant a lease for six years and renew it for six years, and no Increment Tax is payable at all, while if it is for ten or twenty years then the money becomes payable. The injustice and unfairness of that is obvious. It is also a stupid arrangement, because it is so very easy to evade, and a tax which is so obviously and easily evadable is surely not worth putting on at all. It falls with special severity just upon those places of business which need to have some 139 security of tenure, all classes of business with which a good-will is connected; which are carried on for a certain number of years in a particular place, and want to reap the benefit of that good-will, and not to have the rent raised against them. Yet, although it is absolutely necessary for the proper conduct of their business that they should have long leases, it is precisely upon those leases the Chancellor of the Exchequer levies this tax at the moment they are granted. The right hon. Gentleman could hardly have taken periods more unfortunate or more disastrous to business than those he has chosen for levying these taxes.
§ Sir SAMUEL SCOTT
It is not often I am able to agree on land questions with the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood), but his speech to-night was specially interesting in that he referred to one of the strongest objections to all these taxes, namely, that they will stop the development of land. I agree with my hon. Friend (Mr. Peel) that one of the chief objections to this taxation is the discouragement it will afford to long leases. Nobody will invest in building leases unless there is a prospect of a considerable term of years during which they may obtain a return for their money. The Chancellor of the Exchequer's main objection to the Amendment seemed to be that if it were carried, it would be possible for people to evade the tax. Surely the right hon. Gentleman, having some knowledge of human nature, must realise that when building land is ripe for de-development, people will let it on building lease and pay the increment. The argument that they would hold up their land will not hold water for a moment. The right hon. Gentleman also brought in his old argument that he desired to tax agricultural land in the neighbourhood of towns because the increase in the value of that land was due to the nearness of population. But from the definition of agricultural land in Clause 27, market gardens are specially exempted, and to what do they owe their value but to their proximity to towns? Not only does the right hon. Gentleman specially exempt market gardens; he also does not include arable land. That is surely a somewhat remarkable omission. But my chief reason for rising was to ask the Government one question. Can they give us any information at all as to whether this particular tax is in force in Frankfort? 140 We are told that the whole of this tax is based upon, and is copied from, Germany. Will the Government tell us, or lay on the Table some Paper, or give us an assurance that some Papers will be laid on the Table, giving full details as to whether this or any other tax of such description is in existence in Germany?
§ Mr. A. FELL
The Chancellor of the Exchequer in his reply omitted one of the important points raised by this Amendment. He did not touch upon the question of ordinary leases of 7, 14 or 21 years, which are pointed to by this clause in the Bill. I suppose there are hundreds of thousands of these ordinary leases in London at the present time. The Chancellor of the Exchequer referred solely to building leases. May I ask a question: A residential lease of, say, 21 years, may have a couple of years expired. At the end of seven years the tenant has the option of renewing it for a further period, if he thinks fit. Would the effect of his renewal of that lease for the further fractional period be one of the cases referred to by the Bill on which a further valuation would have to be made on the site of the premises and increment value paid upon it? If that is so there will have to be hundreds of thousands of valuations made in the course of the next few years in London to settle the question of what the site value will be of these ordinary leasehold houses and as to any Increment Duty that is payable in respect to them. This is a matter that does not affect land-owners largely, but it affects every tenant in the country. That question has not been considered, because we have been obsessed by the idea that this relates to any improved land and to building leases, and we have forgotten entirely that this clause relates to every residential lease that exists. These ordinary houses in Bloomsbury and other squares of the city and the sites go up simultaneously in value. But it is a singular fact that there are cases where the value of the land and the house may remain at the same total, yet the value of the land may have gone up and the value of the building down. Exactly the converse has taken place in some parts of London. So that when you know that the premises have been let at a higher rental how can you possibly say how much is attributable merely to the value of bricks and mortar, and how much is attributable to increased site value of the land? The difficulty will be very great, though I am 141 perfectly certain that, so far as these short leases are concerned, this clause cannot stand. I hope the Chancellor of the Exchequer, when he speaks again, will specifically refer to these short leases—the ordinary residential leases which are so many in the country. Has the Chancellor of the Exchequer considered the Report of the Committee that went out to Frankfort to consider this very question? They pointed out that rents are exceedingly dear in Frankfort, and that the poor people are suffering from the rents they have to pay, and the Committee pointed out that that was owing to the fact that the houses in Frankfort are not built upon long leases as they are in this country. If the Chancellor of the Exchequer refers to that report he will find some very interesting information on that head. They are considering in Frankfort whether they cannot adopt the English system of granting long leases.
§ Sir E. CARSON
I wish to ask the right hon. Gentleman whether the granting of a lease also includes the granting of a sublease. The reason I put the question is this: When I look at the clause upon which the valuation is to be taken I find Clause 2, section 2, sub-section (b), "the value of the fee simple of the land calculated on the basis of the value of the consideration for the grant of the lease, or the transfer of the interest"; I want to know if you are to perform these two operations of capitalising the consideration for the lease to go on the fee simple, and then on the sub-lease. Will there be two valuations of the fee simple, or how does it operate?
§ Mr. WILLIAM MOORE
My position on this Amendment, so far as it affects Ireland, would be very much clearer if I knew exactly what a lease meant. In England a lease means a document executed under seal, and the interpretation clause in this Bill, while it recognises leases, only means, I submit, a document executed under seal. In Ireland a lease is defined under Deasy's Act, which is the root of our land tenure as an ordinary note or contrast in writing for anything from 12 months. Does not lease mean here a lease in the English sense? If lease in the English sense, which is a document under seal, is meant, all our leases in land in Ireland would escape, because we have only to make a note or contract for a period. I want to know will there be at a later stage a separate definition clause to bring the Irish definition 142 of "lease" into the Bill, or will it be left as it is? This will leave a very large field for the exemption of people making contracts with regard to Irish land.
§ Sir W. ROBSON
With regard to the question put to me by the hon. Member for North Armagh, I think all his difficulties are met by looking at the definition of the word "lease" in the Bill. It says "the expression 'lease' includes an agreement for a lease." Consequently there is no need to have a document under seal.
§ Mr. MOORE
I do not think the hon. and learned Gentleman paid attention to what I said. I pointed out that a lease in England meant a document under seal. The definition clause provides that an agreement for a lease is to be a lease. I ask whether the term "lease" in subsection (a) of Clause 1 is to be interpreted in the English sense as a document under seal.
§ Sir W. ROBSON
The expression "lease" in Clause 1, sub-section (a) is to be interpreted according to the definition provided in the Bill on page 18, Clause 27, and therefore a document under seal is not needed. It must be a document for not less than seven years, so that really the hon. Gentleman's Irish troubles about the word lease are somewhat superfluous. [OPPOSITION cries of "Oh!"] That is my answer, and if that will not suit him I am afraid that nothing I can say will. With regard to the Amendment, the Committee has already decided that the proper occasion to take the accrued increment on the land is the transfer on sale. Having decided that we can scarcely avoid the occasion which in many cases is equivalent to a sale and partaking of the nature of a sale. In the case of a period of 99 years it requires a fine mathematical distinction to tell that from a sale at all, because it is practically parting with the whole property in the land. All that remains is a mere fractional interest, not half-a-year's purchase, or anything like a year's purchase. It is not until your lease works down to an eighty years' term that you get as much value to the reversioner as a single year's purchase. That would be a futile way of imposing the tax. As the term of the lease expires of course there is a transfer of value from the leaseholder to the reversioner. Consequently the reversion becomes more valuable, and there is no difficulty in ascertaining the value. I rather thought that the hon. Member for Dulwich put the case of a builder whose 143 increased profits were due to his own exertions. I do not think that would be a case which would come under the Increment Tax at all. It is not usual for a builder to grant leases at all. If the builder does grant a lease he will be in a privileged position in regard to reduction. He may be able by himself to give a value to a site which the ground landlord may not be able to claim. We have heard over and over again the argument that if you cannot make a valuation it will be troublesome, and we have answered that argument over and over again. You have already got the 1909 site valuation, and surely from that point it is a very easy thing to make the calculation; it may be on a ten years' lease or a 50 years' lease; it is a simple calculation made by expert valuers, or it can be made by the man who sells the land or by his solicitor, the latter when he conducts the transaction has generally much more difficult work to do. There has been a description of what the Commissioner has to do; it has been suggested that ancient historical records have to be looked into, that deep researches are required, that tremendous learning is needed. Why, one would be led to believe that in England no conveyance could be carried out at all. But the thing would get done, because it would be to everyone's advantage that it should be done. If a man could sell his land at a large profit he would try to get that advantage, and he would make the calculations that were necessary to enable him to pocket four-fifths of the profit himself.
§ Mr. BALFOUR
I think that everybody after listening to the hon. and learned Gentleman's speech will be quite willing to agree with him that these questions are BO difficult that some mistakes must occur, and some errors must be made by even the most expert arguers. What was the hon. and learned Gentleman's last contention? It was that because conveyance in England was difficult, owing to the fact that the title was often hard to prove, therefore the question of dealing with real property ought not to frighten anybody with regard to putting on taxation. But if you are to examine the title before you put on taxation it would be absolutely prohibitive to the imposition of new taxes. The argument amounts to taking one of the least fitting subjects for special treatment and treating it specially. The hon. and learned Gentleman told us that nobody but a mathematician accustomed to deal- 144 ing with decimals would be able to distinguish between the owner of a 99 years' lease and the owner of a freehold. It is very gratifying but rather surprising, but I always thought that the charge against the big landowners in London was based on the fact that they would not sell, but insisted on 99 years' leases. The right hon. Gentleman, the Chancellor of the Exchequer, denounced the whole system of long leaseholds, and it now seems that the difference between the system of 99 years' leases now in force, which are denounced by the Chancellor of the Exchequer, and the freehold which, in the Budget but not in other legislation, the Chancellor of the Exchequer approves of, is of so refined a mathematical order of language that even the well-trained intellect of the learned Attorney-General is almost incapable of seeing the difference between them. That is a very grave state of things.
§ Sir W. ROBSON
I was speaking, of course, of pecuniary value. You may have a great many incidental disadvantages attaching to leaseholds quite apart from questions of pecuniary value.
§ Mr. BALFOUR
Then the Chancellor of the Exchequer and the learned Gentleman are of opinion that from a financial and pecuniary point of view the man who has taken a 99 years' lease is exactly in the same position as if he were a freeholder. Surely there are some other accidental disadvantages not mentioned by the Government which painfully differentiate between the position of the two. Let us pursue this a little further. According to-the Attorney-General the man who has got a 99 years' lease is, to all intents and purposes, a freeholder. Nothing but the microscopic gaze of the mathematician accustomed to deal with the differential calculus can distinguish between the two. A common—a very common—practice is for a builder to take a 99 years' lease and then become, according to the Attorney-General, a freeholder. He then builds a house, and, according to the Attorney-General, he ought not to be taxed upon this house, because after all the builder, who is freeholder to all intents and purposes, is using his capital and his brains, and his industry, and his general knowledge of affairs to make a fair profit. Then who are you going to tax? You are not going to tax the man who is technically the owner of the land because you say that his whole interest, except this vanishing quantity, has been parted 145 with to the builder. You are not going to tax the builder because, says the Attorney-General, the builder has earned everything he gets—everything he gets is the result of his industry and those admirable qualities which conduce to the general increase in the wealth of the community. Then it seems to me you wipe out everybody who can be taxed at all. You cannot tax the man who, you say, does not own the land; you cannot tax the man who has given up the taxable value of the land which you want to get at. I cannot reconcile the theory of the Attorney-General with the terms of this Bill.
Then a last observation in this brief, and I hope friendly, speech which I mean to make. The Attorney-General got up immediately after my hon. Friend behind me, and dealt with a point of importance, but connected entirely with the definition of what a lease was in England and Ireland respectively, and to my great surprise he entirely ignored the argument of my hon. Friend near me as to the method in which you were going to capitalise rent in order to arrive at the value. The subclause runs as follows: "Where the occasion is the grant of any lease of the land, or the transfer or sale of any interest in the land, the value of the fee simple of the land calculated on the basis of the value of the consideraiton for the grant of the lease or the transfer of the interest." In other words, the Government desire to obtain an estimate of the value of the fee simply by capitalising the amount of the rent. Then my learned Friend put this very plain and simple point. The land is let to A on a long lease, and A sublets it to B on a shorter lease. B pays rent to A and A pays rent to the owner of the land. By capitalising, which of those two rents are you going to arrive at the capital value of the land? The rents are different. The rent which the original lessor pays is one and the sublessor pays another. You want to arrive at the capital value upon one or other, or both. Which is it? Why did not the Attorney-General answer that?
§ Mr. BALFOUR
The hon. and learned Gentleman did not refer to it. Is it the capitalised value of the first lease or the second?
§ Sir W. ROBSON
The increment accrues from day to day and from year to year. The first person in the right hon. Gentle- 146 man's hypothesis granted the lease to B. That is the occasion on which the increment value is taken. If A is getting an increment upon his lease to B, there is-an allocation, and he has to pay increment duty. Afterwards B grants a sublease. If he grants it at no additional rent there is no increment, but if there is an additional rent there is an increment, and B pays just as clearly as A. I am sorry I spoke a little impatiently. I did not refer to the right hon. Gentleman, I agree, but I thought I had made my argument sufficiently clear to show that it would cover his case. It does not matter whether you have a lease or an out-lease or half a dozen leases. If this bounding increment keeps going on, at each lease you take part of it, and each payment of increment duty franks the premises up to that figure. When you have a certain increment on the premises, and you have paid duty on that increment, you may have 20 sales afterwards, but if the figure is less than that there is no valuation and no tax. But if the income goes on increasing in this remarkable property, which is the subject of so many hypotheses, then the tax-collector follows it.
§ Mr. BALFOUR
I am obliged for the hon. and learned Gentleman's concise interruption, but he really has not yet explained the particular point which my learned Friend asked. If the hon. and learned Gentleman will look at subsection (b) of Clause 2 he will see this phrase, "the value of the fee simple of the land calculated on the basis of the value of the consideration," and so on. That consideration is twofold. There are two separate leases at two separate rates. On which of those two separate leases and separate rates are you going to take the fee simple of the land?
§ Sir W. ROBSON
There are two separate transactions, and on each of these you apply your method of calculation.
§ Mr. BALFOUR
The hon. and learned Gentleman knows so little of the subject that he does not know that a builder may make an arrangement at the same time with the owner of the land and with the 147 man who is going to take the house. I am bound to say I did expect that the learned Gentleman would answer to-night and let us know how this question is really going to be settled. I believe the Committee no more understand this question than I do. I think they have not the smallest conception how this tax on increments is going to be levied at all. I do not believe they understand the relation between the freeholder and the landlord whose whole interest is taken away by the 99 years' lease, or the relation between the first and second tenants, or the relation which the value of the land bears to the subsequent sub-interests concerned. I do not know whether it is the deliberate intention of the Government in regard to these matters to add a double dose of darkness and confusion by the manner in which they have explained them. I think everybody will admit that what is the inherent difficulty of the subject, namely, land tenure in this country, and the methods of adding interest to interest when dealing with property, has been rendered even more difficult than it need have been by the manner the Government have put the Bill before us; and, if the learned Gentleman will forgive me for saying so, by some of the explanations he has given.
§ Sir E. CARSON
The question I asked the Attorney-General has not been answered. I ask him again for the construction of the sub-section. Do the words "grant of any lease" include the grant of a sub-lease?
§ Sir E. CARSON
Sub-section (b) of Clause2says: "Where the occasion is the grant of any lease of the land, or the transfer on sale of any interest in the land, the value of the fee simple of the land calculated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest." You have first of all to get at the value of the fee simple to ascertain what is the increment to be paid. The point I put to the Attorney-General was this: Can the value of the fee simple be different in the case of a grant of a lease and the grant of a sublease?
§ Sir W. ROBSON
If it has increased in value, certainly. If it has not increased in value, then it will not.
§ Sir E. CARSON
I am dealing with the question of the value of the fee simple. Take this case, and I think you will see the absurdity of the proposal. A makes a lease for £50 a year to B for so many years, say 50 years if you like. You capitalise that at £50 a year to get at the fee simple. If B makes a lease to C at £75 a year you capitalise that also to get the fee simple. Therefore you have two valuations for the fee simple.
§ Sir E. CARSON
There is only one fee simple. The case I put to the Attorney-General is: Clause (b), which I have read, only anticipates the one thing and does not anticipate the two things, and in my opinion it is impossible to have two different valuations, simply because a lease and a sub-lease have been made probably within a few days the one of the other, and you are asked to come to the conclusion that under such circumstances the fee simple in the two cases is a different value.
§ Sir E. CARSON
One is a lease from A to B at £50 a year. The other is a lease from B to C at £75 a year. Does my right hon. Friend say there are two capital valuations? Then with which is he going to put the tax?
§ Sir W. ROBSON
We are going to do it on both. If the lease from A to B is not in excess of the original site value, there is no interest to be charged. If it is, then there is an interest to be charged. The result will be that so far as increment value is concerned, the property which A leases to B will be franked up to the amount that A has paid. B has got the property. We all wish we had this property. Then B lets to C at £75. You have got another transaction Again you repeat the process. Paragraph (b), which my right hon. Friend seems to think is so framed that it can only apply to one transaction, and that in some mysterious way its function ceases and is not to be used, of course comes in the moment B lets to C, and he gets his extra £25. Then the whole process is gone through again, with the result of a profit of £5 to the State.
§ Mr. E. A. RIDSDALE
There is an essential difference between lease and sale. When a man sells his land he gets the money, and there is a very definite sum in his pocket. Of that, a certain amount 149 will be taken out of his pocket for the tax. But it is very different in the case of a lease. The Attorney-General told us that a 99 years' lease is very nearly the same thing as a freehold. I believe that if you work it out actuarially you may get nearly as much for a 99 years' lease as for a freehold. But, speaking personally, I should prefer the freehold. These words which it is suggested should be left out do not limit the lease to 99 years, and it may run down to 7 years. The ordinary term of a lease in London, I understand, is 14 and 21 years. Take a lease of 50 years. The man has paid capital value which is represented by £50 a year. Another lease is granted at £75 a year, but the leaseholder is a very lucky man if he gets a profit of £25 a year from a really good tenant. But it depends on whether you get a good tenant or a bad one. You capitalise the profit, and of the five-fifths you take one-fifth. Does the State step in and guarantee the tenant. Apart from the merits of the Increment Tax, I can quite see that once the man has got five-fifths profit into his pocket the State comes in and takes one-fifth. But if he has not got the five-fifths in his pocket, but has merely got the annual income, which may or may not be five-fifths, then I say you have no right to take one-fifth. He has not got it; he may possibly never obtain it at all. My hon. Friend is trying to obtain a reasonable modicum of fairness, that is to say, that a man should only be taxed on the profit which he has got in his possession.
§ Mr. F. W. LAMBTON
I am not a lawyer, and being only a layman I am still in a fog. The Attorney-General said that if B, with a lease of £50, let for £75, both transactions have to bear Increment Duty. There is only one fee simple. I wish to ask whether the owner of the fee simple will have to pay the Increment Duty on the profit received from the second transaction, when he absolutely gets no profit himself. He leases at £50 a year, and the Attorney-General now tells us that he will be taxed on the full £75. Has the owner of the fee simple to pay the full value of what he has not received?
§ Mr. HARMOOD-BANNER
There is one question which has not been discussed, namely, who is to bear the cost of the Increment Tax? I take the case of a lease where I had to pay the lessor £13 costs. In future there will be, say, £10 added, so that the lessor will say to him: "I do not 150 want £13 from you, but £23." The learned Attorney-General says that is so.
§ Mr. HARMOOD-BANNER
I know a good deal about leaseholds, and I shall say to every tenant who wants to renew the lease, "I only renew this lease upon your paying your own costs and my costs and also the increment costs which I have to pay to the Chancellor of the Exchequer." Therefore, the cost will fall not on the grantor but on the grantee. Land is a monopoly, as has often been expressed, and, therefore, this Increment Tax is not going to be paid by the grantor. Every shopkeeper in London, every office-holder throughout the City every farmer who takes land on more than a 7 years' lease will have to pay not only the solicitor's costs, but the costs of the Increment Tax. I hardly think the Government can have contemplated that fact. The Government with their wisdom thought they were going to hit the landlord. He was the person to be pounced upon and to be deprived of his wealth. It is not so. The person who has got to bear it is the person who is to receive the lease, and he will not receive it unless he bears the costs of the lease. Therefore, you are only adding by this provision an immense burden to the cost of every man who takes a lease from this day forth. Is that advisable? Do you think it is advisable in your own interest to set the whole leaseholders of the country against you? I am a trustee for a good deal of property where there are shops rented from £200 per year to £1,000 per year rent. The shops in front go up in value, and the shops at the back go down in value. The Government on that block of property, say a thousand square yards, are going to ask for the increment on the increase in the front shops, while they will not even allow the loss on the back shops to be deducted or as a set-off. There is a case of the same block of buildings back to back, with the same lavatory accommodation and the same staircase. I really cannot see how the Government can put a tax on increment and deal fairly between man and man.
§ Mr. A. C. BECK
I hope the Chancellor of the Exchequer is going to reply to the very material point put by the hon. Member for Brighton (Mr. Ridsdale) It is a point which influences many of us in this matter, that the Government seem 151 desirous of taking a tax not out of what a man actually gets, but out of what they consider he may get in the near or distant future. I hope it will be made clear whether the Increment Tax on leaseholds is to be charged annually—which seems impossible—or on the capitalised value, which I understand is the purport of the Bill, and which is grossly unfair, because the tenant may be only a man of straw, and a person may consequently pay the Increment Duty on an amount which he never received.
§ Mr. LLOYD-GEORGE
The reason I did not deal with that question is that it concerns a matter in respect of which we have a specific provision in the Bill, in Clause 4, sub-section (5). It may be said that it is not adequate; but we have shown there that we realise that the point is one
§ of substance, and are endeavouring to meet it. My hon. Friend assumes that in every case we capitalise the total sum by so many years' purchase, and take one-fifth of the total value; but he will find that in Clause 4 we provide for taking the payment by instalments. I agree that the point is one which ought to be dealt with, and when we come to that clause, if my hon. Friend is still of opinion that it does not meet the case, the matter can be further considered.
§ Question put, "That the Question be now put."
§ The Committee divided: Ayes 234; Noes 116.153
|Division No. 204.]||AYES.||[12.10 a.m.|
|Acland, Francis Dyke||Crooks, William||Hobart, Sir Robert|
|Agnew, George William||Crosfield, A. H.||Hobhouse, Rt. Hon. Charles E. H.|
|Ainsworth, John Stirling||Crossley, William J.||Holland, Sir William Henry|
|Allen, A. Acland (Christchurch)||Dalziel, Sir James Henry||Halt, Richard Durning|
|Allen, Charles P. (Stroud)||Davies, Timothy (Fulham)||Hooper, A. G.|
|Ashton, Thomas Gair||Davies, Sir W. Howell (Bristol, S.)||Hope, John Deans (Fife, West)|
|Astbury, John Meir||Dewar, Arthur (Edinburgh, S.)||Hope, W. H. B. (Somerset, N.)|
|Balfour, Robert (Lanark)||Dickinson, W. H. (St. Pancras, N.)||Horniman, Emslie John|
|Baring, Godfrey (Isle of Wight)||Dickson-Poynder, Sir John P.||Hudson, Waiter|
|Barlow, Percy (Bedford)||Dobson Thomas W.||Hutton, Alfred Eddison|
|Barnard, E. B.||Duckworth, Sir James||Hyde, Clarendon G.|
|Barnes, G. N.||Duncan, C. (Barrow-in-Furness)||Idris, T. H. W.|
|Barry, Redmond J. (Tyrone, N.)||Dunn, A. Edward (Camborne)||Illingworth, Percy H.|
|Beaumont, Hon. Hubert||Dunne, Major E. Martin (Walsall)||Isaacs, Rufus Daniel|
|Beck, A. Cecil||Edwards, Sir Francis (Radnor)||Jardine, Sir J.|
|Bellairs, Carlyon||Elibank, Master of||Johnson, John (Gateshead)|
|Benn, Sir J. Williams (Devonport)||Erskine, David C.||Jones, Leif (Appleby)|
|Benn, W. (Tower Hamlets, St. Geo.)||Essex, R. W.||Jones, William (Carnarvonshire)|
|Bennett, E. N.||Evans, Sir S. T.||Jowett, F. W.|
|Birrell, Rt. Hon. Augustine||Everett, R. Lacey||Lambert, George|
|Black, Arthur W.||Falconer, J.||Lamont, Norman|
|Bowerman, C. W.||Ferens, T. R.||Layland-Barrett, Sir Francis|
|Bramsdon, Sir T. A.||Ferguson, R. C. Munro||Lehmann, R. C.|
|Brocklehurst, W. B.||Fiennes, Hon. Eustace||Lever, A. Levy (Essex, Harwich)|
|Brodie, H. C.||Fuller, John Michael F.||Levy, Sir Maurice|
|Brooke, Stopford||Fullerton, Hugh||Lloyd-George, Rt. Hon. David|
|Brunner, J. F. L. (Lancs., Leigh)||Gibb, James (Harrow)||Lupton, Arnold|
|Bryce, J. Annan||Gill, A. H.||Luttrell, Hugh Fownes|
|Buckmaster, Stanley O.||Gladstone, Rt. Hon. Herbert John||Lynch, H. B.|
|Burns, Rt. Hon. John||Glen-Coats, Sir T. (Renfrew, W.)||Macdonald, J. R. (Leicester)|
|Burnyeat, W. J. D.||Goddard, Sir Daniel Ford||Macdonald, J. M. (Falkirk Burghs)|
|Burt, Rt. Hon. Thomas||Gooch, George Peabody (Bath)||Mackarness, Frederic C.|
|Buxton, Rt. Hon. Sydney Charles||Greenwood, G. (Peterborough)||Maclean, Donald|
|Byles, William Pollard||Grey, Rt. Hon. Sir Edward||M'Callum, John M.|
|Carr-Gomm, H. W.||Gulland, John W.||M'Micking, Major G.|
|Causton, Rt. Hon. Richard Knight||Harcourt, Rt. Hon. L. (Rossendale)||Maddison, Frederick|
|Cawley, Sir Frederick||Harcourt, Robert V. (Montrose)||Mallet, Charles E.|
|Chance, Frederick William||Hardie, J. Keir (Merthyr Tydvil)||Marks, G. Croydon (Launceston)|
|Channing, Sir Francis Aliston||Harmsworth, R. L. (Caithness-sh.)||Marnham, F. J.|
|Cherry, Rt. Hon. R. R.||Harvey, A. G. C. (Rochdale)||Mason, A. E. W. (Coventry)|
|Churchill, Rt. Hon. Winston S.||Harvey, W. E. (Derbyshire, N.E.)||Massie, J.|
|Clough, William||Haslam, Lewis (Monmouth)||Masterman, C. F. G.|
|Clynes, J. R.||Haworth, Arthur A.||Micklem, Nathaniel|
|Cobbold, Felix Thornley||Hazel, Dr. A. E. W.||Middlebrook, William|
|Cooper, G. J.||Hedges, A. Paget||Mond, A.|
|Corbett, C. H. (Sussex, E. Grinstead)||Helme, Norval Watson||Money, L. G. Chiozza|
|Cornwall, Sir Edwin A.||Hemmerde, Edward George||Montagu, Hon. E. S.|
|Cory, Sir Clifford John||Henderson, J. McD. (Aberdeen, W.)||Morrell, Philip|
|Cotton, Sir H. J. S.||Herbert, Col. Sir Ivor (Mon. S.)||Morse, L. L.|
|Cowan, W. H.||Herbert, T. Arnold (Wycombe)||Murray, Capt. Hon. A. C. (Kincard.)|
|Craig, Herbert J. (Tynemouth)||Higham, John Sharp||Napier, T. B.|
|Newnes, F. (Notts, Bassetlaw)||Rogers, F. E. Newman||Verney, F. W.|
|Nicholls, George||Runciman, Rt. Hon. Walter||Vivian, Henry|
|Norman, Sir Henry||Rutherford, V. H. (Brentford)||Walsh, Stephen|
|Norton, Captain Cecil William||Schwann, Sir C. E. (Manchester)||Walters, John Tudor|
|Nuttall, Harry||Scott, A. H. (Ashton-under-Lyne)||Waring, Walter|
|Parker, James (Halifax)||Seaverns, J. H.||Warner, Thomas Courtenay T.|
|Partington, Oswald||Saddon, J.||Wason, Rt. Hon. E. (Clackmannan)|
|Pearce, Robert (Staff, Leek)||Seely, Colonel||Wason, John Cathcart (Orkney)|
|Pearson, Sir W. D. (Colchester)||Shaw, Sir Charles E. (Stafford)||Waterlow, D. S.|
|Pearson, W. H. M. (Suffolk, Eye)||Shipman, Dr. John G.||Watt, Henry A.|
|Pointer, J.||Silcock, Thomas Ball||Wedgwood, Josiah C.|
|Ponsonby, Arthur A. W. H.||Simon, John Allsebrook||Weir, James Galloway|
|Price, C. E. (Edinburgh, Central)||Soames, Arthur Wellesley||White, Sir George (Norfolk)|
|Price, Sir Robert J. (Norfolk, E.)||Soares, Ernest J.||White, J. Dundas (Dumbartonshire)|
|Priestley, Arthur (Grantham)||Spicer, Sir Albert||White, Sir Luke (York, E. R.)|
|Priestley, Sir W. E. B. (Bradford, E.)||Stanley, Hon. A Lyulph (Cheshire)||Whitehead, Rowland|
|Radford, G. H.||Stewart-Smith, D. (Kendal)||Whitley, John Henry (Halifax)|
|Raphael, Herbert H.||Strachey, Sir Edward||Wiles, Thomas|
|Rea, Rt. Hon. Russell (Gloucester)||Straus, B. S. (Mile End)||Wilkie, Alexander|
|Rea, Walter Russell (Scarborough)||Strauss, E. A. (Abingdon)||Wilson, Hon. G. G. (Hull, W.)|
|Rendall, Athelstan||Summerbell, T.||Wilson, J. W. (Worcestershire, N.)|
|Richards, T. F. (Wolverhampton, W.)||Taylor, John W. (Durham)||Wilson, W. T. (Westhoughton)|
|Roberts, Charles H. (Lincoln)||Tennant, H. J. (Berwickshire)||Wood, T. M'Kinnon|
|Roberts, G. H. (Norwich)||Thomas, Sir A. (Glamorgan, E.)|
|Robertson, J. M. (Tyneside)||Thomasson, Franklin|
|Robinson, S.||Thompson, J. W. H. (Somerset, E.)||TELLERS FOR THE AYES.—Mr. Joseph Pease and Mr. J. Herbert Lewis.|
|Robson, Sir William Snowdon||Thorne, G. R. (Wolverhampton)|
|Roch, Walter F. (Pembroke)||Toulmin, George|
|Roe, Sir Thomas||Trevelyan, Charles Philips|
|Anson, Sir William Reynell||Fletcher, J. S.||Newdegate, F. A.|
|Arkwright, John Stanhope||Forster, Henry William||Nicholson, William G. (Petersfield)|
|Balcarres, Lord||Foster, P. S.||Oddy, John James|
|Baldwin, Stanley||Gardner, Ernest||Parkes, Ebenezer|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Gibbs, G. A. (Bristol, West)||Pease, Herbert Pike (Darlington)|
|Banbury, Sir Frederick George||Gooch, Henry Cubitt (Peckham)||Peel, Hon. W. R. W.|
|Banner, John S. Harmood-||Goulding, Edward Alfred||Percy, Earl|
|Baring, Capt. Hon. G. (Winchester)||Gretton, John||Pretyman, E. G.|
|Barrie, H. T. (Londonderry, N.)||Guinness, Hon. R. (Haggerston)||Ratcliff, Major R. F.|
|Beach, Hon. Michael Hugh Hicks||Guinness, W. E. (Bury St. Edmunds)||Remnant James Farquharson|
|Beckett, Hon. Gervase||Hamilton, Marquess of||Renton, Leslie|
|Bertram, Julius||Hardy, Laurence (Kent, Ashford)||Renwick, George|
|Bignold, Sir Arthur||Harris, Frederick Leverton||Roberts, S. (Sheffield, Ecclesall)|
|Bowles, G. Stewart||Harrison-Broadley, H. B.||Ronaldshay, Earl of|
|Bridgeman, W. Clive||Hay, Hon. Claude George||Ropner, Colonel Sir Robert|
|Bull, Sir William James||Helmsley, Viscount||Rutherford, W. W. (Liverpool)|
|Burdett-Coutts, W.||Hermon-Hodge, Sir Robert||Salter, Arthur Clavell|
|Butcher, Samuel Henry||Hill, Sir Clement||Scott, Sir S. (Marylebone, W.)|
|Campbell, Rt. Hon. J. H. M.||Hills, J. W.||Sheffield, Sir Berkeley George D.|
|Carlile, E. Hildred||Hope, James Fitzalan (Sheffield)||Smith, Abel H. (Hertford, E.)|
|Carson, Rt. Hon. Sir Edward H.||Hunt, Rowland||Smith, F. E. (Liverpool, Walton)|
|Castlereagh, Viscount||Joynson-Hicks, William||Smith, Hon. W. F. D. (Strand)|
|Cave, George||Kennedy, Vincent Paul||Stanier, Beville|
|Cecil, Evelyn (Aston Manor)||Kerry, Earl of||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Lord R. (Marylebone, E.)||Keswick, William||Talbot, Lord E. (Chichester)|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Lambton, Hon. Frederick Wm.||Thomson, W. Mitchell- (Lanark)|
|Chaplin, Rt. Hon. Henry||Lane-Fox, G. R.||Thornton, Percy M.|
|Clive, Percy Archer||Law, Andrew Bonar (Dulwich)||Walker, Col. W. H. (Lancashire)|
|Clyde, J. Avon||Lockwood, Rt. Hon. Lt.-Col. A. R.||Walrond, Hon. Lionel|
|Coates, Major E. F. (Lewisham)||Long, Col. Charles W. (Evesham)||Warde, Col. C. E. (Kent, Mid)|
|Cochrane, Hon. Thomas H. A. E.||Long, Rt. Hon. Walter (Dublin, S.)||Williams, Col. R. (Dorset, W.)|
|Craig, Charles Curtis (Antrim, S.)||Lyttelton, Rt. Hon. Alfred||Willoughby de Eresby, Lord|
|Craig, Captain James (Down, E.)||MacCaw, Wm. J. MacGeagh||Winterton, Earl|
|Craik, Sir Henry||M'Calmont, Colonel James||Wortley, Rt. Hon. C. B. Stuart-|
|Dalrymple, Viscount||Magnus, Sir Philip||Wyndham, Rt. Hon. George|
|Doughty, Sir George||Meysey-Thompson, E. C.||Younger, George|
|Douglas, Rt. Hon. A. Akers-||Mildmay, Francis Bingham|
|Faber, George Denison (York)||Moore, William||TELLERS FOR THE NOES.—Sir Alexander Acland-Hood and Viscount Valentia.|
|Faber, Capt. W. V. (Hants, W.)||Morpeth, Viscount|
|Fell, Arthur||Morrison-Bell, Captain|
§ Question put, "That the words 'or the grant' stand part of the clause."154
§ The Committee divided: Ayes 254; Noes 120.157
|Division No. 205.]||AYES.||[12.15 am.|
|Abraham, W. (Cork, N.E.)||Allen, A. Acland (Christchurch)||Astbury, John Meir|
|Acland, Francis Dyke||Allen, Charles P. (Stroud)||Balfour, Robert (Lanark)|
|Agnew, George William||Ashton, Thomas Gair||Baring, Godfrey (Isle of Wight)|
|Barlow, Percy (Bedford)||Haworth, Arthur A.||Pearce, Robert (Staffs, Leek)|
|Barnard, E. B.||Hayden, John Patrick||Pearson, Sir W. D. (Colchester)|
|Barnes, G. N.||Hazel, Dr. A. E. W.||Pearson, W. H. M. (Suffolk, Eye)|
|Barry, Redmond J. (Tyrone, N.)||Hedges, A. Paget||Philipps, John (Longford, S.)|
|Beaumont, Hon. Hubert||Helme, Norval Watson||Pointer, J.|
|Bellairs, Carlyon||Hemmerde, Edward George||Ponsonby, Arthur A. W. H.|
|Benn, Sir J. Williams (Devonport)||Henderson, J. McD. (Aberdeen, W.)||Power, Patrick Joseph|
|Benn, W. (Tower Hamlets, St. Geo.)||Herbert, Col. Sir Ivor (Mon. S.)||Price, C. E. (Edinburgh, Central)|
|Bennett, E. N.||Herbert, T. Arnold (Wycombe)||Price, Sir Robert J. (Norfolk, E.)|
|Birrell, Rt. Hon. Augustine||Higham, John Sharp||Priestley, Arthur (Grantham)|
|Black, Arthur W.||Hobart, Sir Robert||Priestley, Sir W. E. B. (Bradford, E.)|
|Boland, John||Hobhouse, Rt. Hon. Charles E. H.||Radford, G. H.|
|Bowerman, C. W.||Hogan Michael||Raphael, Herbert H.|
|Bramsdon, Sir T. A.||Holland, Sir William Henry||Rea, Rt. Hon. Russell (Gloucester)|
|Brocklehurst, W. B.||Holt, Richard Durning||Rea, Walter Russell (Scarborough)|
|Brodie, H. C.||Hooper, A. G.||Reddy, M.|
|Brooke, Stopford||Hope, John Deans (Fife, West)||Redmond, John E. (Waterford)|
|Brunner, J. F. L. (Lancs., Leigh)||Hope, W. H. B. (Somerset, N.)||Redmond, William (Clare)|
|Bryce, J. Annan||Horniman, Emslie John||Rendall, Athelstan|
|Buckmaster, Stanley O.||Hudson, Walter||Richards, T. F. (Wolverhampton, W.)|
|Burke, E. Haviland-||Hutton, Alfred Eddison||Roberts, Charles H. (Lincoln)|
|Burns, Rt. Hon. John||Hyde, Clarendon G.||Roberts, G. H. (Norwich)|
|Burnyeat, W. J. D.||Illingworth, Percy H.||Robertson, J. M. (Tyneside)|
|Burt, Rt. Hon. Thomas||Isaacs, Rufus Daniel||Robinson, S.|
|Buxton, Rt. Hon. Sydney Charles||Jardine, Sir J.||Robson, Sir William Snowdon|
|Byles, William Pollard||Johnson, John (Gateshead)||Roche, John (Galway, East)|
|Carr-Gomm, H. W.||Jones, Leif (Appleby)||Roe, Sir Thomas|
|Causton, Rt. Hon. Richard Knight||Jones, William (Carnarvonshire)||Rogers, F. E. Newman|
|Cawley, Sir Frederick||Jowett, F. W.||Runciman, Rt. Hon. Walter|
|Channing, Sir Francis Allston||Joyce, Michael||Rutherford, V. H. (Brentford)|
|Cherry, Rt. Hon. R. R.||Kennedy, Vincent Paul||Schwann, Sir C. E. (Manchester)|
|Churchill, Rt Hon. Winston S.||Kilbride, Denis||Scott, A. H. (Ashton-under-Lyne)|
|Clough, William||Lambert, George||Seaverns, J. H.|
|Clynes, J. R.||Lamont, Norman||Seddon, J.|
|Cobbold, Felix Thornley||Layland-Barrett, Sir Francis||Seely, Colonel|
|Cooper, G. J.||Lehmann, R. C.||Shaw, Sir Charles E. (Stafford)|
|Corbett, C. H. (Sussex, E. Grinstead)||Lever, A. Levy (Essex, Harwich)||Shipman, Dr. John G.|
|Cornwall, Sir Edwin A.||Levy, Sir Maurice||Silcock, Thomas Ball|
|Cotton, Sir H. J. S.||Lloyd-George, Rt. Hon. David||Simon, John Allsebrook|
|Cowan, W. H.||Lough, Rt. Hon. Thomas||Smyth, Thomas F. (Leitrim, S.)|
|Craig, Herbert J. (Tynemouth)||Lundon, T.||Soames, Arthur Wellesley|
|Crosfield, A. H.||Lupton, Arnold||Soares, Ernest J.|
|Crossley, William J.||Lynch, H. B.||Spicer, Sir Albert|
|Dalziel, Sir James Henry||Macdonald, J. R. (Leicester)||Stanley, Hon. A. Lyulph (Cheshire)|
|Davies, Timothy (Fulham)||Macdonald, J. M. (Falkirk Burghs)||Stewart-Smith, D. (Kendal)|
|Davies, Sir W. Howell (Bristol, S.)||Mackarness, Frederic C.||Strachey, Sir Edward|
|Dewar, Arthur (Edinburgh, S.)||Maclean, Donald||Straus, B. S. (Mile-End)|
|Dickinson, W. H. (St. Pancras, N.)||MacVeagh, Jeremiah (Down, S.)||Strauss, E. A. (Abingdon)|
|Dobson, Thomas W.||MacVeigh, Charles (Donegal, E.)||Summerbell, T.|
|Duckworth, Sir James||M'Callum, John M.||Taylor, John W. (Durham)|
|Duncan, C. (Barrow-in-Furness)||M'Micking, Major G.||Tennant, H. J. (Berwickshire)|
|Dunn, A. Edward (Camborne)||Maddison, Frederick||Thomas, Sir A. (Glamorgan, E.)|
|Dunne, Major E. Martin (Walsall)||Mallet, Charles E.||Thomasson, Franklin|
|Edwards, Sir Francis (Radnor)||Marks, G. Croydon (Launceston)||Thompson, J. W. H. (Somerset, E.)|
|Elibank, Master of||Marnham, F. J.||Thorne, G. R. (Wolverhampton)|
|Erskine, David C.||Massie, J.||Toulmin, George|
|Essex, R. W.||Masterman, C. F. G.||Trevelyan, Charles Philips|
|Evans, Sir S. T.||Meagher, Michael||Verney, F. W.|
|Falconer, J.||Meehan, Francis E. (Leitrim, N.)||Vivian, Henry|
|Ferens, T. R.||Micklem, Nathaniel||Walsh, Stephen|
|Ferguson, R. C. Munro||Middlebrook, William||Walters, John Tudor|
|Fiennes, Hon. Eustace||Mond, A.||Warner, Thomas Courtenay T.|
|Fuller, John Michael F.||Money, L. G. Chiozza||Wason, Rt. Hon. E. (Clackmannan)|
|Fullerton, Hugh||Montagu, Hon. E. S.||Wason, John Cathcart (Orkney)|
|Gibb, James (Harrow)||Mooney, J. J.||Waterlow, D. S.|
|Gill, A. H.||Morrell, Philip||Watt, Henry A.|
|Ginnell, L.||Morse, L. L.||Wedgwood, Josiah C.|
|Gladstone, Rt. Hon. Herbert John||Murphy, N. J. (Kilkenny, S.)||Weir, James Galloway|
|Glen-Coats, Sir T. (Renfrew, W.)||Murray, Capt. Hon. A. C. (Kincard.)||White, Sir George (Norfolk)|
|Goddard, Sir Daniel Ford||Nannetti, Joseph P.||White, J. Dundas (Dumbartonshire)|
|Gooch, George Peabody (Bath)||Newnes, F. (Notts, Bassetlaw)||White, Sir Luke (York, E. R.)|
|Greenwood, G. (Peterborough)||Nicholls, George||Whitehead, Rowland|
|Grey, Rt. Hon. Sir Edward||Nolan, Joseph||Whitley, John Henry (Halifax)|
|Gulland, John W.||Norman, Sir Henry||Wiles, Thomas|
|Gwynn, Stephen Lucius||Norton, Captain Cecil William||Wilkie, Alexander|
|Harcourt, Rt. Hon. Lewis (Rossendale)||Nuttall, Harry||Wilson, Hon. G. G. (Hull, W.)|
|Harcourt Robert V. (Montrose)||O'Brien, K. (Tipperary, Mid)||Wilson, J. W. (Worcestershire, N.)|
|Hardie, J. Keir (Merthyr Tydvil)||O'Brien, Patrick (Kilkenny)||Wilson, W. T. (Westhoughton)|
|Harmsworth, Cecil B. (Worcester)||O'Doherty, Philip||Wood, T. M'Kinnon|
|Harmsworth, R. L. (Caithness-sh.)||O'Kelly, Conor (Mayo, N.)|
|Harvey, A. G. C. (Rochdale)||O'Shaughnessy, P. J.||TELLERS FOR THE AYES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Harvey, W. E. (Derbyshire, N.E.)||Parker, James (Halifax)|
|Haslam, Lewis (Monmouth)||Partington, Oswald|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Forster, Henry William||Parkes, Ebenezer|
|Anson, Sir William Reynell||Foster, P. S.||Paulton, James Mellor|
|Arkwright, John Stanhope||Gardner, Ernest||Pease, Herbert Pike (Darlington)|
|Balcarres, Lord||Gibbs, G. A. (Bristol, West)||Peel, Hon. W. R. W.|
|Baldwin, Stanley||Gooch, Henry Cubitt (Peckham)||Percy, Earl|
|Balfour, Rt. Hon. A. J. (City, Lond.)||Goulding, Edward Alfred||Pretyman, E. G.|
|Banbury, Sir Frederick George||Gretton, John||Ratcliff, Major R. F.|
|Banner, John S. Harmood-||Guinness, Hon. R. (Haggersten)||Remnant, James Farquharson|
|Baring, Capt. Hon. G. (Winchester)||Guinness, W. E. (Bury St. Edmunds)||Renton, Leslie|
|Barrie, H. T. (Londonderry, N.)||Hamilton, Marquess of||Renwick, George|
|Beach, Hon. Michael Hugh Hicks||Hardy, Laurence (Kent, Ashford)||Roberts, S. (Sheffield, Ecclesall)|
|Beckett, Hon. Gervase||Harris, Frederick Leverton||Ronaldshay, Earl of|
|Bignold, Sir Arthur||Harrison-Broadley, H. B.||Ropner, Colonel Sir Robert|
|Bowles, G. Stewart||Hay, Hon. Claude George||Rutherford, W. W. (Liverpool)|
|Bridgeman, W. Clive||Helmsley, Viscount||Salter, Arthur Clavell|
|Bull, Sir William lames||Hermon-Hodge, Sir Robert||Scott, Sir S. (Marylebone, W.)|
|Burdett-Coutts, W.||Hill, Sir Clement||Sheffield, Sir Berkeley George D.|
|Butcher, Samuel Henry||Hills, J. W.||Smith, Abel H. (Hertford, East)|
|Campbell, Rt. Hon. J. H. M.||Hope, John Fitzalan (Sheffield)||Smith, F. E. (Liverpool, Walton)|
|Carlile, E. Hildred||Hunt, Rowland||Smith, Hon. W. F. D. (Strand)|
|Carson, Rt. Hon. Sir Edward H.||Joynson-Hisks, William||Stanier, Beville|
|Castlereagh, Viscount||Kerry, Earl of||Staveley-Hill, Henry (Staffordshire)|
|Cave, George||Keswick, William||Talbot, Lord E. (Chichester)|
|Cecil, Evelyn (Aston Manor)||Lambton, Hon. Frederick William||Thomson, W. Mitchell- (Lanark)|
|Cecil, Lord R. (Marylebone, E.)||Lane-Fox, G. R.||Thornton, Percy M.|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Law, Andrew Bonar (Dulwich)||Valentia, Viscount|
|Chance, Frederick W.||Lockwood, Rt. Hon. Lt.-Col. A. R.||Walker, Col. W. H. (Lancashire)|
|Chaplin, Rt. Hon. Henry||Long, Col. Charles W. (Evesham)||Walrond, Hon. Lionel|
|Clive, Percy Archer||Long, Rt. Hon. Walter (Dublin, S.)||Warde, Col. C. E. (Kent, Mid)|
|Clyde, J. Avon||Lyttelton, Rt. Hon. Alfred||Whitbread, S. Howard|
|Coates, Major E. F. (Lewisham)||MacCaw, Wm. J. MacGeagh||Williams, Col. R. (Dorset, W.)|
|Cochrane, Hon. Thomas H. A. E.||M'Calmont, Col. James||Willoughby de Eresby, Lord|
|Craig, Charles Curtis (Antrim, S.)||Magnus, Sir Philip||Winterton, Earl|
|Craig, Captain James (Down, E.)||Meysey-Thompson, E. C.||Wortley, Rt. Hon. C. B. Stuart-|
|Craik, Sir Henry||Mildmay, Francis Bingham||Wyndham, Rt. Hon. George|
|Dalrymple, Viscount||Moore, William||Younger, George|
|Doughty, Sir George||Morpeth, Viscount|
|Douglas, Rt. Hon. A. Akers-||Morrison-Bell, Captain|
|Everett, R. Lacey||Napier, T. B.||TELLERS FOR THE NOES.—Sir|
|Faber, George Denison (York)||Newdegate, F. A.||John Dickson-Poynder and Mr.|
|Faber, Captain W. V. (Hants, W.)||Nicholson, William G. (Petersfield)||Bertram.|
|Fell, Arthur||Oddy, John James|
§ Mr. JOYNSON-HICKS
I beg to move: After the word "land" ["seven years) of the land"] to insert the words, "provided that Increment Value Duty on the occasion of a sale or lease shall not be payable upon any transaction taking place within five years of the last bonâ fide payment of Increment Value Duty." I put it to the Chancellor of the Exchequer that this is a reasonable concession to make. If he insists on the clause as it stands it will force landlords to grant leases for only 6½ years, a most inconvenient period. I suppose the reason for adopting such a short period as 7 years is the hope that still another increment will be extracted from the owner. But may I point out that at the present moment there is practically no increment taking place in the value of ordinary house property in London. Take a case, not in Grosvenor Square, but in one of the ordinary suburbs of London, in the South or East, where the poorer classes of houses are to be found. You will not discover any increment value there—(interruption). I protest against the impatience of hon. 158 Members opposite; when we are discussing an Amendment of some substance we are entitled to have a hearing accorded to us. What I have to submit is that so far as the great bulk of house property in London is concerned there is no increment value at this time, and I suggest that it would be hard upon both landlords and tenants and upon those who have the management of this class of property to insist on this duty applying to seven years' leases. I hope the right hon. Gentleman will accept my very reasonable Amendment.
§ Mr. LLOYD-GEORGE
We have, of course, to meet two extreme views, and I agree that if leases of two or three years were to be taken, that would probably be taking an extreme view of the occasion on which the tax ought to be levied. On the other hand if you make the cases too long there is a danger of a very considerable increment, which in our judgment should be subject to the tax escaping. ["How?"] It could not of course escape altogether because in the case of a corporation it would become subject every 15 years to taxation. But I have been looking at the 159 amendments and I am not prepared to press too hard the term which is in the Bill, and on the whole, after very careful consideration of the various suggestions that have been made, I am rather inclined to take the view that the Amendment which stands in the name of the hon. Member for West Derby (Mr. W. W. Rutherford) would most fairly meet the case, and I should be prepared to strike a compromise between the view of the Bill and that put by the hon. Member for North West Manchester (Mr. Joynson-Hicks), and instead of establishing 7 or 21, strike the mean between the two and split the difference, and take the suggestion of the hon. Member for West Derby and put it at 14. I think 21 would be much too long, and I do not think 14 years would be at all an unfair period. I should be perfectly prepared to leave out the word seven with a view of inserting the Amendment later on to be moved by the hon. Member for West Derby.
§ Mr. JOYNSON-HICKS
May I suggest to the right hon. Gentleman that in Scotland all the leases are 19 years, and every occupation house in London is 7, 14 or 21 years, and the 21 will meet the case of the Scotch leases. If the right hon. Gentleman will not accept this proposal he will force an alteration in the whole system of leasing in Scotland and of occupation houses in London. The difference between us is so small that on this occasion only I hope he will be generous.
§ Mr. LLOYD-GEORGE
I have gone halfway to meet hon. Gentlemen opposite, and I think they might encourage me.
§ Mr. D. S. WATERLOW
May I ask whether the Chancellor of the Exchequer would make it "not exceeding 14 years"? That would enable the ordinary 14 years' leases to come in. As you are leaving it now it is 14 years or more, and therefore the 14 years' leases would be subject to the Increment Tax. If he could make it not more than 14 years it will harmonise with the usual practice in London, and I hope he will under the circumstances agree to that.
§ The CHAIRMAN
It can be done by leaving out "less than 7," and when we put in the words "not exceeding 21"it must be moved to leave out "21" and insert "14."
§ Amendment put, and agreed to.
§ Further Amendment agreed to, leave out "21" and insert "14."—[Mr. Lloyd-George.]
§ Mr. JOYNSON-HICKS moved to insert at the end of sub-section (a), the words, "provided that Increment Value Duty on the occasion of a sale or lease shall not be payable upon any transaction taking place within five years of the last "bonâ fide payment of Increment Value Duty."
§ Without this provision the whole of Somerset House will be clogged up with very minute transactions. Land changes hands and leases and sub-leases are granted day by day, and the increment must be very small. Land does not bounce up in value in a night or a week, and it would be only fair and reasonable that there should not be a tax for a limited number of years. The Government will get their tax just the same, but instead of getting £10 this week, £10 in six months, and £10 in a year, they will get £30 in 18 months. It will save those who have to do with land the great bother of paying taxes when transactions take place every few days or weeks.
§ Question proposed, "That those words be there inserted."
§ Mr. LLOYD-GEORGE
I can quite see the object of this Amendment, and so far as that is concerned, I am in sympathy with it, but I do not think this is the most practical way of obtaining that object. Without wishing to put the matter off, I would suggest to my hon. Friend that I think there are Amendments on the Paper that would better meet his view. The hon. Member does not want every lessee to go through all the trouble of submitting particulars when the increment may be a trifling one. It would involve a great deal of trouble to do that, and it would not bring in much revenue. We do not want to tax every little trifling increment. As to the method proposed by the Amendment I would point out that if you put off the question of the increment value for five years, there may be four or five transactions in the meantime, and, though each may not be large, they represent in the aggregate a considerable sum. It seems to me that under the Amendment the last man in an operation of this kind would have to bear the whole of the increment whereas he had only received part of it and it is just possible that the proportion he received was the smallest of the lot. I think a much better way is that suggested in the Amendment of which the 161 hon. Member for Stepney has given notice. It provides for levying duty when the site value increment exceeds a certain percentage. The words of the hon. Member's Amendment are:—"Provided that for the purposes of this Act no Increment Duty shall be levied unless the site value of the land on the occasion on which the increment value becomes due exceeds the original site value by an amount exceeding fifteen per cent." I think there is a great deal to be said for that. It seems to me that would be a better way of obtaining the same object as the hon. Member for West Marylebone (Sir Samuel Scott) desires, and I am prepared to consider that favourably. I have to consider the percentage, and, therefore, the hon. Member must not take me as agreeing to the percentage at the present moment. I do not think he will find when we come to that Amendment that I will be obdurate. The Amendment now before the Committee is the very worst way of obtaining the same object. If the hon. Member finds that his views are not adequately met by the Amendment of the hon. Member for Stepney, he can discuss the question on that Amendment. I cannot possibly accept his Amendment in this form.
§ Earl WINTERTON
The right hon. Gentleman is quite right in saying that the Amendment of the hon. Member for Stepney meets one of the points raised by this Amendment, but I do not think it deals with all the points. One of the principal objects is to avoid the trouble to all interested in land which would be caused by the constant taking of increment value. It is really impossible to arrive at a fair estimate of the value of land by having this kind of stock taking in a less period than five years. You must take a period of at least five years before you can arrive at the real value of the land. No money market or anything like that gives you an idea of the value of the land. Therefore, the Amendment of the hon. Member for Stepney does not really meet the situation. The real point is that owners of land should not be put to an amount of trouble entirely disproportionate by paying duty every five years. A very bad precedent with which some of us are familiar is the provision of Death Duties with the various Finance Acts by which land and other property has to bear heavy burdens, very often at short periods. I submit that the Amendment before the House is much better than 162 the Amendment of the hon. Member for Stepney, and by adopting this Amendment the Committee will best carry out the Chancellor's wishes.
§ Mr. PRETYMAN
These two Amendments are both good ones. The difference is that one is a question of fact and the other is a question of opinion. Under the Amendment before the House the exemption is on a plain question of fact, whether there has been or has not been a valuation in five years. Therefore no valuation would be required and no expense incurred. Under the Amendment of the hon. Member for Stepney, a valuation being taken, the question would have to be submitted to the Commissioners. In every case where it is possible under this Bill, where it is conceivable that any Increment Duty can be leviable, the figures will have to be furnished to the Commissioners and it will be their decision, and their decision only, that will settle whether duty is leviable or not. Therefore under the Amendment of the hon. Member for Stepney the only way in which exemption can be obtained would be by submitting figures to the Commissioners and satisfying them that the increment accrued is less than 15 per cent. That means that the whole trouble has to be gone through and all the expense undertaken of an application to the Commissioners and of obtaining the valuation, which is the very thing the right hon. Gentleman agrees we should avoid, by fixing the fact that within a certain period, if there has been an antecedent valuation, then another valuation need not be taken. The two Amendments deal with totally different points and raise totally different questions. Although I concede that the Amendment of the hon. Member for Stepney will give some relief, it does not give relief from the major burden. The cost, expense and trouble of the valuation are much greater to many people than the payment of the tax. I believe that they would prefer to know where they stand and not to have the permanent bother of an intermittent valuation, even if the last person did have to pay all the increment accrued during the five years.
So far we have had a considerable amount to do. It is now ten minutes to one. This is an intricate point to discuss at this moment, and I therefore beg to move that you, Sir, report Progress.
§ Question proposed, "That the Chairman do report Progress, and ask leave to sit again."163
§ Mr. LLOYD-GEORGE
We are discussing this matter very amicably. I have suggested the adoption of another Amendment on the Paper, which carries out the object in view in a very practical way, and I hope that the hon. and gallant Gentleman will not press his Motion. I simply want to get as far as the next page, and then we will come to the very important Amendment of the hon. Gentleman the Member for Ashford (Mr. Laurence Hardy).
§ Mr. BALFOUR
I do not think that the suggestion of the right hon. Gentleman is unreasonable, and I agree that the situation is such that we cannot expect to get away at the accustomed hours. Probably, as my hon. and gallant Friend has got a definite announcement as to the point which the right hon. Gentleman wishes to reach, he will not press his Motion.
§ Motion to report Progress, by leave, withdrawn.
§ Mr. BALFOUR
The argument of the Chancellor of the Exchequer against my hon. Friend was this: If the valuation was only every five years, the person at the end of the five years would pay all the increment which ought to have fallen on his predecessors. What is the case with regard to the Amendment which the Chancellor of the Exchequer desires to substitute? The Chancellor of the Exchequer sees my point, and I will not pursue it further.
§ Mr. LLOYD-GEORGE
That is why I do not pledge myself to accept an Amendment in this form. I quite see the point raised by the right hon. Gentleman (Mr. Balfour), and therefore I would rather like to consider the form in which to accept it, because it would be obviously unfair to the last man. That is my objection to this Amendment and to the other, and I agree the point must be considered. The difference in the Frankfort case is that you date from the last transaction and this increment has been adding from the last transaction rather than anything in the nature of an operation. Therefore the Frankfort precedent does not apply, and I have to consider the form in which it will appear. I think the point is a perfectly sound one, and it has get to be met. It is not quite met in the Amendment of the hon. Member for Stepney. I accept it rather in form, but I have got to consider the form.
§ Mr. CHIOZZA MONEY
May I ask whether he could not meet that difficulty by taking the point at 15 per cent., and upon any increment over that amount deducting 15 per cent. By that he will have a graduated scale for any subsequent transaction.
§ Mr. JOYNSON-HICKS
I would prefer that the two Amendments should be dealt with now. With regard to the point as to the last man having to pay, in my opinion they are all very minute increases during a period of five years. At all events, the last man who buys will buy with the knowledge that there is a slight increment. He will allow for that increment in his purchase-money. My point in arguing for this five years' limit is the extraordinary difficulty of making large numbers of people pay a miserable increment and go through all this paraphernalia each time. I quite agree with suggestion of the Amendment of the hon. Member for Stepney, but it does not quite cover the point. I should like to accept the proposal of the hon. Member for Marylebone.
§ Mr. W. MOORE
From what the hon. Member has said, I think there appears to be a misconception that this Amendment involves the operation every five years, or rather counting back for a period of five years. That surely is not the case; if a lease is in possession of the lessee for sixty or seventy years, during which there has been no death or other transaction, and the point will not arise at all. The point is, where a lease from one circumstance or another has been obliged to change hands in three, four, five, or six years. It is an intolerable thing that on every occasion of the kind, instead of having an automatic duty which the Amendment would provide, you have a fresh operation. It is, therefore, from its very terms, meant only to apply to those exceptional cases. It has been argued that there would be so little gain to the Treasury, from the investigations of small amounts of increment in such a comparatively short time, that it would be to the interest of the smoother and better working of the Act if the Amendment were accepted.
§ Mr. W. W. RUTHERFORD
There are no less than eight Amendments all practically to the same effect as the Amendment we have now before us, and suggested at different positions in the Bill. There are in addition to that three Amendments which are to the effect of the hon. 165 Member for Stepney's or something of the same kind. There are two absolutely distinct classes of property for the purposes of this increment which we have got to look at. The agricultural land that is merely agricultural land, and land in certain neighbourhoods on which houses are built, constitute a class of property which is not going to have any increment of any importance in five years. But there is a class of land which may vary enormously in 18 months, and again in the following 18 months. There is a great deal in what the Chancellor of the Exchequer said as to it being conceivable that you might have three transactions in five years on a piece of land on the outskirts of a city, upon each of which transactions there may be a very substantial increment indeed, and it is obvious in such circumstances, it would be grossly unfair that the person concerned in the last of the three transactions should have to pay the whole increment, though he had not been able to participate in it. It therefore follows that the Amendment of the hon. Member for Stepney does not cover the case, and it also follows to a very large extent that the Amendment now before the Committee does not cover the difficulty. I have looked through the whole of the Amendments on the Paper with regard to this point, and I am bound to say that neither the Bill as drawn nor any of the suggested Amendments really seem to meet the exceedingly hard case which is likely to arise in either of these two circumstances. We shall be placed on the horns of a dilemma. There may be transactions within two or three days of one another. A piece of land with a house upon it will be bought and within two or three days it may strike someone else that he would like it, and he will give so much more for the land. I have known the same piece of land to change hands four or five times in a year with substantial advances, and it is conceivably possible that the adjoining piece of land will not change hands for 20 years. How are you going to meet this case? It illustrates the exceeding difficulty of carrying out the suggestion which the Chancellor of the Exchequer is making. It is a very easy thing to sit down and theorise upon increment value and say that it ought to be taken by the State, but it is a very difficult thing, indeed, to sit down and say how it is going to be done without creating an intolerable nuisance and annoyance out of all proportion to the amount of Duty you are going to get. This is just one of those points of difficulty which the Government 166 have not solved. I am inclined to think that an increment ought to be taxed. I have always taken that view. I hope Members of the Committee will at all events give me credit for sincerity. In the last ten or twelve years I have taken some trouble to study this question, and I came to the conclusion some time ago that there is only one way to do it, and that is to make a periodical valuation of the whole land in the country, in the same way as we take a periodical census of the people, and if the land has gone up in value, the State will take——
§ Mr. W. W. RUTHERFORD
I am afraid I was. All I desire to say is I do not believe that with or without this Amendment there is any way of making the proposed machinery of this Act reasonably feasible, and it was for that reason I moved that the whole of this sub-clause A should be left out because I felt that it would be impracticable to make reasonable arrangements for collecting the duty without hardships that had been overlooked.
I really think there is a great deal more in this Amendment than the right hon. Gentleman seems to think, because there is no question whatever that if under somewhat similar Amendments we have a definitely fixed term, it will be of great benefit to those who are dealing with property whether of a large or small amount. What are the facts of the case with regard to the transfer of property to make which as simple as possible every Radical in this House, according to his own words, has been doing his best? This clause makes the transfer more difficult, and therefore from the Radical point of view, an Amendment of this sort is absolutely necessary. The limit of five years has been selected apparently by more or less unanimous consent on this side of the House without any consultation. The period of five years is a very fair time for which we should note the Chancellor of Exchequer not to worry us. It is not so much the amount of the tax in some cases as the extraordinary proportion of costs in arriving at the amount of duty. In small transactions I venture to think the whole of the tax will be swallowed up by the cost of the Commissioners in valuing the property and the cost of collection. Could anything be more absurd? I think this particular Amendment would have the effect at all events of making these valua- 167 tions as few as possible. If valuation is to take place on every possible occasion on which property passes under lease, it is a ease of "heads I win, tails you lose" the whole time so far as the Chancellor of the Exchequer is concerned, because he is bound on every occasion to get the increment without ever giving a chance to the owner of being benefited by the decrement. On all these occasions he is bound to hit the increment, but never to give the decrement a chance at all. If he intends to deal fairly with us he ought to accept this Amendment. Surely all that he would lose by it would be something very small if it was anything at all. I may mention a case which I have just been quoting privately on these benches to my hon. Friends. Suppose a property broker in Tokenhouse Yard, I believe that is the place where he carries on his business, purchases a piece of land, and the very moment after that estate has been purchased another person comes along and says I will give you £1,000 for the transaction. There you would have two distinct transactions in regard to the same piece of property, but in one case the man has not actually signed the deeds when another man comes along and says he would like to have the property, and will give £1,000 for the bid. How can the Chancellor of the Exchequer get this Increment Duty on the second £1,000, for so far as I know the second person gives a cheque for £1,000 and says "you may transfer the property to so and so." The first person pockets the cheque and does as he is asked. There you have two transactions, not in five years, but in five minutes. All that the Chancellor of the Exchequer should want to do should be to say that if at the end of five years any property passes by sale if the property has improved in value he wants his Increment Duty. It is not necessary that a man wanting to buy a piece of property should have always hanging over his head the whole of the machinery of this complicated Act. That this machinery should be constantly there ready to be set in motion seems to be an absolute anomaly. This is a very sound Amendment, and though the Chancellor of the Exchequer has promised something, something more is necessary, for unless this Amendment is carried, people will be deterred from buying for the sake of investment or improvement. I shall certainly go into the Lobby with him if my hon. and learned 168 Friend desires to carry his Amendment so far.
§ Sir SAMUEL SCOTT
I unfortunately was out of the House and did not know that my Amendment was coming on quite so quickly. I am told the Chancellor of the Exchequer will accept some Amendment of this kind later on. The object of my Amendment is to meet the case which was so ably put the other night by my hon. Friend the Member for York. We have heard to-night from those Benches that this Bill will very likely drive capital away from the land, and from developing the land, and, Mr. Emmott, this Amendment is designed to deal with one form of investment of capital which is eminently suitable and eminently desirable, especially for those who are unable to afford to put down a large sum of money in payment for their house. There is a form of enterprise, as was pointed out by the hon. Member for York, which is in existence all round London, and if the Bill is carried in its present form without some Amendment, such as I suggest, this enterprise will be absolutely killed. As hon. Members who were in the House the other night may remember, the particular form of enterprise to which I refer is that of the builder who takes land on a ground rent of, say, £2, and then puts up a cheap form of house, such as is common all round London, and particularly at Richmond Hill, where there are hundreds of them. This class of house costs about £400, but the builder does not get his profit on the house which he puts up, but on the ground rent. If the ground rent is £3 he will put it up to £5, and get his profit in that way. What will happen after the passing of this Bill I do not know, but hitherto there has been a fairly ready sale for that form of improved ground rent, and I put it to the Chancellor of the Exchequer whether it is or is not a great advantage to any man who has not a large amount of capital to be able to buy a house at cost price and pay a small sum for the improved ground rent? Now the right hon. Gentleman comes along and demands 20 per cent, on the increment on that ground rent. What will be the result? In my opinion it will either be that the builder will be unable to afford to sell his house for £400 and that he will have to put up the price to something like £440, taking his profit for his house in that way, or else he will have to add whatever the Increment Duty may be to the price of his ground rent. Thereby he will largely increase the cost of the 169 house or ground rent to the man who has come forward to purchase it. I do not at this late hour desire to detain the House very long, but, Mr. Emmott, this is a matter of very great importance to a large number of builders all round London, and I should very much like to know from the Chancellor of the Exchequer whether this and like cases have been considered by him, whether he can realise the great advantage which is derived by the poorer classes of people who desire to invest their money in houses of this description, and whether, if he cannot accept this Amendment, he will at all events give some assurance that he will put some Amendment down himself to meet cases of this character.
§ Mr. LLOYD-GEORGE
I do not think the hon. Member was in the House when I replied. I did recognise that this Amendment was designed to meet a case which,
§ on the whole, I think is entitled to the sympathy of the Finance Minister; and I did say that I considered this probably was not the best way of meeting it. I promised that when we came to the Amendment of the hon. Member for Stepney (Mr. Leverton Harris), I would consider whether we could not do something which would be substantially in the direction of that Amendment which, I think, will meet the case put before the Committee by the hon. Member.
§ Question put, "That the words 'Provided that Increment Value Duty on the occasion of a sale or lease shall not be payable upon any transaction taking place within five years of the last bonâ fide payment of Increment Value Duty' be there inserted."
§ The Committee divided; Ayes, 82; Noes, 185.171
|Division No. 206.]||AYES.||[1.20 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Foster, P. S.||Morrison-Bell, Captain|
|Anton, Sir William Reynell||Gardner, Ernest||Newdegate, F. A.|
|Arkwright, John Stanhope||Gibbs, G. A. (Bristol, West)||Nicholson, Wm. G. (Petersfield)|
|Balcarres, Lord||Goulding, Edward Alfred||Oddy, John James|
|Baldwin, Stanley||Gretton, John||Pease, Herbert Pike (Darlington)|
|Baring, Capt. Hon. G. (Winchester)||Guinness, Hon. R. (Haggerston)||Pretyman, E. G.|
|Barrie, H. T. (Londonderry, N.)||Guinness, W. E. (Bury St. Edmunds)||Ratcliff, Major R. F.|
|Beach, Hon, Michael Hugh Hicks||Hamilton, Marquis of||Remnant, James Farquharson|
|Bignold, Sir Arthur||Hardy, Laurence (Kent, Ashford)||Renton, Leslie|
|Bowles, G. Stewart||Harris, Frederick Leverton||Renwick, George|
|Bridgeman, W. Clive||Harrison-Broadley, H. B.||Roberts, S. (Sheffield, Ecclesall)|
|Bull, Sir William James||Hay, Hon. Claude George||Rutherford, W. W. (Liverpool)|
|Burdett-Coutts, W.||Helmsley, Viscount||Salter, Arthur Clavell|
|Carlile, E. Hildred||Hill, Sir Clement||Sheffield, Sir Berkeley George D.|
|Castlereagh, Viscount||Hope, James Fitzalan (Sheffield)||Stanier, Beville|
|Cave, George||Hunt, Rowland||Staveley-Hill, Henry (Staffordshire)|
|Cecil, Evelyn (Aston Manor)||Kerry, Earl of||Talbot, Lord E. (Chichester)|
|Cecil, Lord R. (Marylebone, E.)||Lambton, Hon. Frederick Wm.||Valentia, Viscount|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Lane-Fox, G. R.||Walker, Col. W. H. (Lancashire)|
|Clyde, J. Avon||Law, Andrew Bonar (Dulwich)||Walrond, Hon. Lionel|
|Coates, Major E. F. (Lewisham)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Warde, Col. C. E. (Kent, Mid)|
|Cochrane, Hon. Thomas H. A. E.||Long, Col. Charles W. (Evesham)||Williams, Col. R. (Dorset, W.)|
|Craig, Captain James (Down, E.)||Long, Rt. Hon. Walter (Dublin, S.)||Wortley, Rt. Hon. C. B. Stuart-|
|Craik, Sir Henry||MacCaw, William J. MacGeagh||Younger, George|
|Dalrymple, Viscount||Magnus, Sir Philip|
|Douglas, Rt. Hon. A. Akers-||Meysey-Thompson, E. C.|
|Faber, George Denison (York)||Mildmay, Francis Bingham||TELLERS FOR THE AYES.—Mr. Joynson-Hicks and Sir Samuel Scott.|
|Faber, Captain W. V. (Hants, W.)||Moore, William|
|Forster, Henry William||Morpeth, Viscount|
|Acland, Francis Dyke||Bramsdon, Sir T. A.||Cotton, Sir H. J. S.|
|Agnew, George William||Brocklehurst, W. B.||Cowan, W. H.|
|Ainsworth, John Stirling||Brodie, H. C.||Craig, Herbert J. (Tynemouth)|
|Allen, Charles P. (Stroud)||Brooke, Stopford||Crosfield, A. H.|
|Balfour, Robert (Lanark)||Bryce, J. Annan||Crossley, William J.|
|Baring, Godfrey (Isle of Wight)||Burke, E. Haviland-||Dalziel, Sir James Henry|
|Barlow, Percy (Bedford)||Burns, Rt. Hon. John||Davies, Timothy (Fulham)|
|Barnard, E. B.||Burnyeat, W. J. D.||Davies, Sir W. Howell (Bristol, S.)|
|Barry, Redmond J. (Tyrone, N.)||Buxton, Rt. Hon. Sydney Charles||Dickinson, W. H. (St. Pancras, N.)|
|Beauchamp, E.||Carr-Gomm, H. W.||Dobson, Thomas W.|
|Beaumont, Hon. Hubert||Channing, Sir Francis Allston||Duckworth, Sir James|
|Beck, A. Cecil||Cherry, Rt. Hon. R. R.||Duncan, C. (Barrow-in-Furness)|
|Bellairs, Carlyon||Clough, William||Dunn, A. Edward (Camborne)|
|Benn, Sir J. Williams (Devonport)||Clynes, J. R.||Dunne, Major E. Martin (Walsall)|
|Bennett, E. N.||Cobbold, Felix Thornley||Edwards, Sir Francis (Radnor)|
|Black, Arthur W.||Corbett, C. H. (Sussex, E. Grinstead)||Elibank, Master of|
|Bowerman, C. W.||Cornwall, Sir Edwin A.||Essex, R. W.|
|Evans, Sir S. T.||Lever, A. Levy (Essex, Harwich)||Robertson, J. M. (Tyneside)|
|Everett, R. Lacey||Levy, Sir Maurice||Robinson, S.|
|Falconer, James||Lloyd-George, Rt. Hon. David||Robson, Sir William Snowdon|
|Ferens, T. R.||Lough, Rt. Hon. Thomas||Rogers, F. E. Newman|
|Fiennes, Hon Eustace||Lundon, T.||Runciman, Rt. Hon. Walter|
|Fuller, John Michael F.||Lupton, Arnold||Rutherford, V. H. (Brentford)|
|Fullerton, Hugh||Lynch, H. B.||Scott, A. H. (Ashton-under-Lyne)|
|Gibb, James (Harrow)||Macdonald, J. R. (Leicester)||Seddon, J.|
|Gill, A. H.||Maclean, Donald||Seely, Colonel|
|Ginnell, L.||MacVeagh, Jeremiah (Down, S.)||Silcock, Thomas Ball|
|Gladstone, Rt. Hon. Herbert John||Maddison, Frederick||Simon, John Allsebrook|
|Goddard, Sir Daniel Ford||Marks, G. Croydon (Launceston)||Smyth, Thomas F. (Leitrim, S.)|
|Gooch, George Peabody (Bath)||Marnham, F. J.||Spicer, Sir Albert|
|Greenwood, G. (Peterborough)||Mason, A. E. W. (Coventry)||Stanley, Hon. A. Lyulph (Cheshire)|
|Gulland, John W.||Massie, J.||Stewart-Smith, D. (Kendal)|
|Gwynn, Stephen Lucius||Masterman, C. F. G.||Strachey, Sir Edward|
|Harcourt, Rt. Hon L. (Rossendale)||Meehan, Francis E. (Leitrim, N.)||Straus, B. S. (Mile End)|
|Harcourt, Robert V. (Montrose)||Micklem, Nathaniel||Strauss, E. A. (Abingdon)|
|Hardie, J. Keir (Merthyr Tydvil)||Middlebrook, William||Summerbell, T.|
|Harmsworth, Cecil B. (Worcester)||Montagu, Hon. E. S.||Taylor, John W. (Durham)|
|Harmsworth, R. L. (Caithness-Sh.)||Morrell, Philip||Tennant, H. J. (Berwickshire)|
|Harvey, A. G. C. (Rochdale)||Morse, L. L.||Thomas, Sir A. (Glamorgan, E.)|
|Haslam, Lewis (Monmouth)||Murphy, N. J. (Kilkenny, S.)||Thomasson, Franklin|
|Haworth, Arthur A.||Murray, Capt. Hon. A. C. (Kincard.)||Thompson, J. W. H. (Somerset, E.)|
|Hayden, John Patrick||Nannetti, Joseph P.||Thorne, G. R. (Wolverhampton)|
|Hazel, Dr A. E. W.||Newnes, F. (Notts, Bassetlaw)||Toulmin, George|
|Hedges, A. Paget||Nicholls, George||Trevelyan, Charles Philips|
|Helme, Norval Watson||Nelan, Joseph||Walsh, Stephen|
|Herbert, Col. Sir Ivor (Mon., S.)||Norton, Captain Cecil William||Waring, Walter|
|Higham, John Sharp||Nuttall, Harry||Warner, Thomas Courtenay T.|
|Hobhouse, Rt. Hon. Charles E. H.||O'Brien, K. (Tipperary, Mid)||Wason, Rt. Hon. E. (Clackmannan)|
|Hogan, Michael||O'Brien, Patrick (Kilkenny)||Wason, John Cathcart (Orkney)|
|Holt, Richard Durning||O'Doherty, Philip||Waterlow, D. S.|
|Hooper, A. G.||O'Kelly, Conor (Mayo, N.)||Wedgwood, Josiah C.|
|Hope, John Deans (Fife, West)||Parker, James (Halifax)||White, Sir George (Norfolk)|
|Horniman, Emslie John||Pearce, Robert (Staffs, Leek)||White, J. Dundas (Dumbartonshire)|
|Hyde, Clarendon G.||Philips, John (Longford, S.)||White, Sir Luke (York, E. R.)|
|Illingworth, Percy H.||Pointer, J.||Whitley, John Henry (Halifax)|
|Johnson, John (Gateshead)||Price, C. E. (Edinburgh, Central)||Wilkie, Alexander|
|Jones, Leif (Appleby)||Radford, G. H.||Wilson, J. W. (Worcestershire, N.)|
|Jones, William (Carnarvonshire)||Raphael, Herbert H.||Wilson, P. W. (St. Pancras, S.)|
|Joyce, Michael||Redmond, John E. (Waterford)||Wilson, W. T. (Westhoughton)|
|Lambert, George||Rendall, Athelstan||Wood, T. M'Kinnon|
|Lamont, Norman||Ridsdale, E. A.|
|Lavland-Barrett, Sir Francis||Roberts, Charles H. (Lincoln)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Lehmann, R. C.||Roberts, G. H. (Norwich)|
§ Lord ROBERT CECIL
I am very sorry to have to move my Amendment at this hour, but I am sure it will not for that reason fail to receive attention from the Government. It is an Amendment designed to meet what I venture to think is a very serious difficulty in the way of this tax. As I understand the theory of this tax it is to penalise or to obtain money from those who, holding and having done nothing to improve its value, suddenly find themselves in possession of a very considerable windfall, owing to causes which are described by right hon. and hon. Gentlemen opposite as social causes. But there is another kind of dealing in land which is not in the minds of the Government at all, although it is a very important one in the interests of the community. Land is bought and sold in exactly the same way as any other object of commerce. It is bought by those who purchase it for the purpose of making a profit. They form a large number of individuals and a very large number of companies. I saw a statement made on the authority of the Surveyors' Institution that there 172 were 57 companies in London alone engaged in this trade. They are carrying on the business of dealers in land. They buy the land and either sell it or lease it, and out of the transaction make a profit which is their income. Sometimes they make a profit and sometimes a loss. If this Increment Tax is passed it will mean to these companies that on every transaction they carry out which results in a profit they will be charged 20 per cent, or one-fifth of the gross profit which they make out of their profitable transactions. But they will not be allowed under the provisions of this Bill to set against that profit any loss they may suffer. The result will be that in some cases their whole profit, and in most cases at least 50 per cent, of their actual income will be taken away by this tax. It will amount to an income tax of 10s. in the £—I put it at a very low figure—on this particular industry. How can that possibly be defended? In what respect is that trade different from that of any other merchant? What does the ordinary merchant do? Take, for 173 instance, a corn merchant. He buys corn, holds it and sells it again, and makes a profit out of the transaction. He does not do anything to the corn which makes it profitable. It is, from the point of view of the Government, purely unearned increment—that is to say, it is an increase of profit derived from social causes, namely, the demand for corn in the markets of the world. The man who deals in land is in precisely the same position. He sees an eligible plot of land on the outskirts of a town. He buys it, probably because the owner has not sufficient money to develop it, and after perhaps developing it, sells it again. The development will account for a considerable rise in profit, but in addition to that there will be the rise in value due to the fact that it was really worth more than he gave for it. In that case he will make a profit and be taxed under this provision. There is a particular case which has been brought to the notice of many hon. Members—namely, that of the British Land Company. That company exists for the purpose of buying up plots of land, splitting them up into smaller plots and selling them, thereby promoting the transfer of land to individuals. In that case the land company does nothing whatever, as I understand it, to increase the value of the land. I do press the Government that this case must be dealt with somehow. You must not use this tax in order to create an Income Tax of a very special and onerous character on a special industry. The matter has been mentioned in the course of these Debates, but it has never been dealt with by way of Amendment. I can conceive that the actual drafting of the Amendment may be open to objection because I drafted it hastily to meet the point, but the substance must be dealt with, and I press the Government to give some serious consideration to the matter.
§ Amendment proposed: After "land" ["interest in the land"] insert the words "other than land acquired for the purpose of building so sold or leased."—[Lord Robert Cecil.]
§ The PARLIAMENTARY SECRETARY to the LOCAL GOVERNMENT BOARD (Mr. Masterman)
Although, as the Noble Lord has said, the Government are prepared at any time of night to give consideration to any Amendment raised in any part of the House, I may be excused from being drawn into a discussion on the general question as to whether increment 174 of land resembles increment of corn or any other increment. The sole question raised by the Noble Lord is whether there should be a special exemption in dealing in increments which are taken through the increment tax on land from the land speculator as such, as distinct from the man who develops land by who holds land in the normal process of ownership. I think the Noble Lord was accurate in saying it would be impossible to accept the Amendment as it stands at present. To state that land is other than land acquired for the purpose of being leased or sold throws an impossible proof both on the Commissioners and on the public and, indeed, on the man himself. It is absolutely impossible for a man when he acquires land to say whether he intends to sell or lease it or retain it, or whether he buys it to use only for the purposes of trade or for agricultural land. As to general speculation, surely it is right, if you are to resume increment in land at all, that you should resume it at the time when this enormous amount of money, produced by speculation, has been put into the pockets of the man who obtains the benefit. The Noble Lord, in proposing his Amendment, rather suggested that there might be wild fluctuations up and down in the value of land, and that the land hoof once descended, it would once again rise and the tax be charged on that rise. That is not the case under the Bill. As the learned Attorney-General has explained several times in these Debates, when the value of land for increment purposes is franked at a certain amount, in no other circumstances is increment value taken below that amount. If the value is a certain amount, and then descends, but rises up towards that amount, no Increment Duty is to be paid on such a speculation as that. It is only when subsequent to that amount being fixed the land speculator receives a further increment of considerable amount, and after the deduction of anything that may be attributed to his own development—such as that suggested in the case of the British Land Company—that the State steps in to take one-fifth of that very advantageous speculation. I think that is wholly justifiable.
§ Mr. PRETYMAN
This is not a case of asking for special exemption. It is the case of the Government desiring special exaction for a particular kind of trade. I do not find myself at variance with the general idea of the Government, which is to encourage the occupation of land. I 175 understand their general object is to cover land as quickly as possible with houses. But that will be impossible if you place this heavy impost on transactions in land. It always comes back to that. Every detail is different, but every detail will have the effect of obstructing the very object which apparently this Bill is intended to carry out Here, however, we have a case which is not a detail. It is much more than that. It is proved by the speech of my noble Friend that this tax is going to be a heavy burden, and a burden of such indeterminate amount that it will be a terror to builders. If a builder buys a few acres of land which he proposes to develop, and sells some of the plots at a profit and some at a loss, if he makes a profit he has to pay 20 per cent, to the Government, and on those in which he sustains a loss he is not to have any set-off in return.
It is obvious that no man will go into a speculation on those terms. Let me put it in this way. What is the inducement to a man to buy a be of land to build houses upon? It is the hope that he will get unearned increment. If you remove the inducement which a man now has to carry on his building operations which are going to benefit the whole community you are making his trade difficult, if not impossible to carry on. I trust some words will be inserted to meet the case, and that the trade may be carried on with the success in future which has attended it in the past.
§ Mr. STEWART BOWLES
The hon. Member who has just spoken on behalf of the Government has not, I think, appreciated the force of the case which has been made in regard to this Amendment. He seems to suggest that this was a request made on behalf of what he called speculators in land for some special exemption in regard to that kind of speculation. That, it appears to me, is not the way in which this matter should be regarded by anybody who considers the matter dispassionately. Certainly it is not the way that the Government, with their views, ought to regard it. It has been demonstrated, and it is not denied by the Government, that unless some Amendment or other having the same object as this Amendment is introduced into this part of the clause, the result will be to levy a tax of something like 10s. in the £ upon the profits of all persons who are doing exactly what the Government desire people should do—i.e., deal with land in order 176 to bring it to more useful purposes. Is it really conceivable that the Government should desire to use a weapon of this sort. The Parliamentary Secretary to the Local Government Board (Mr. Masterman) dismisses all that. He said: "It may be true that you are halving the profits of these people." At any rate, he did not deny it or deal with it. He said that the real answer was that these people were speculators. They are no more speculators than any other trader in any other commodities. They have selected certain plots of land in order, if possible, to make a profit for themselves out of that very work which the Government desire should be undertaken in enormous quantities in all parts of the country. The truth is that if the Government are sincere in their desire to increase building on land—and if that be a worthy object—I do not see a people more useful to the community than these people—men and companies—that the Government dismiss as speculative builders, but who as a matter of fact make the market in real property and afford the machinery to carry on the very operations which the Government say are the object of these duties, and which is the only good result which can possibly flow from it. No, Mr. Emmott, I submit with great respect that however good may be the object of the Government in imposing these duties, nothing can justify the Government in halving the profits of persons engaged in an industry in which there is nothing criminal, which is legal and lawful, and which is a useful industry. This tax is particularly objectionable and indefensible when one considers that these people whose profits you are going to halve——
§ Mr. STEWART BOWLES
I do not think that is a very difficult matter to demonstrate. If the hon. Member had listened to what my hon. Friend said he would have heard it demonstrated. If the Government deny that the effect of the clause as it stands is practically to halve the profits of these persons, let them tell us upon what grounds they dispute it. They have not disputed it, and if it is true the Government ought not to allow to be produced the proposals which they have submitted. I earnestly hope we shall have some more consideration given to this matter.
§ Mr. PHILIP MORRELL
On a point of order, Mr. Chairman. Is it not a fact that on line 17 we settled the land which was to be subject to this duty? Is it not a fact that sub-section (a) of this clause merely states what are the occasions on which these duties can be levied and not the kind of land on which the duty shall be paid?
§ The CHAIRMAN
Most Bills are constructed on the principle of laying down a general principle and then stating the exceptions afterwards. This is an exception which, in my opinion, it is perfectly proper to bring forward.
§ Mr. MORRELL
Very respectfully, may I remind you, Mr. Chairman, that when we were discussing line 17 an Amendment was moved to limit the land to agricultural land? That Amendment was then defeated and, therefore, all land is now to be included as subject to this tax.
§ The CHAIRMAN
The Amendment with regard to agricultural land which applied to A, B and C does not exclude this Amendment.
§ Mr. LANE-FOX
I do not think the Parliamentary Secretary to the Local Government Board can realise what a very important link this class of speculators form in undeveloped land and houses, and how very many acres there are in this country which would never have been developed but for this class of speculators. These are men deserving of full consideration by the Government.
§ Mr. LANE-FOX
One of the most impressive appeals which the Government have made to us during these discussions is to the effect that they have justified their Budget proposals almost more on this ground than on any other, since they hope to improve the slums of our great cities. I remember a passionate appeal by the President of the Board of Trade in which he dealt with 120,000, I think it was, who dwelt in single rooms in Glasgow, and he spoke as if the whole effect of these Budget proposals was going to be to remedy this state of things. I have listened with patience to try and find out how under any of the proposals of the Budget the Government are going to carry out any of these great social reforms. I have not discovered anything that will 178 tend to make it easier, but I have found in the proposals we have been discussing to-day very considerable reasons why building should be discouraged. Nothing is more likely to do that than the refusal of the Government to meet this Amendment. I hope the Government will yet make some concessions to meet this particular class of case, otherwise I am quite sure they will be doing great injury to the cause they profess to have so very much at heart. I think when it is realised how narrow is the margin of profit in this particular class of operation, as seen by the fact that very few become rich and many go under, it will not be difficult to perceive what may be the effect of the Budget.
§ Mr. LAMBTON
I am surprised to find the noble Lord's Amendment has not met with some consideration from the Government, more particularly when the principles of the party opposite are considered. A subject of which they are never tired of speaking is that of monopoly value. Here is a Motion which aims at doing away with monopoly value. The object of the clause, so far as I understand, as explained by hon. Members opposite, is to get at the increment and to tax landlords who hold up land. Those agents who deal in land—brokers in land, as they are called—are not persons who hold up land, but who desire to get land into the market. Another principle hon. Members opposite profess to hold very dearly, though I am sure they have done more harm to it by this Bill than by any other Bill I know of, is that of Free Trade. Free trade in land surely is promoted by the very persons whom my Noble Friend wishes to exempt from the provisions of this Bill. There are numbers of people in this country whose business it is to deal in lands and houses. If a man wants to buy land or a house, or wants to get any other interest in land, he goes to one of these agents or one of these associations formed for the purpose of dealing in land. Why should he be prevented from getting land? I forget what amount of land is sold every year in this country. Perhaps 200,000 or 300,000 acres come into the market every year. I should like to know how much is sold through agents or dealers in land. It is all very well to try to penalise landowners out of existence. I think it much better to get land-owners to dispose of land in the open market. All the Amendment proposes to do is to remove a very heavy penalty, which in some cases might 179 amount to 50 per cent., on those people who are doing the very thing the Government desires to be done, namely, inducing people, particularly those with small funds, to acquire small plots of land which they would not have the chance of obtaining but for these agents. The hon. Gentleman said it is too late at night, or too early in the morning—I forget which—to pay much attention to my Noble Friend's Amendment.
§ Mr. LAMBTON
I must apologise if the hon. Gentleman said exactly the opposite. I think there must be something in the hour of the morning to account for the object of the Amendment escaping the wits of hon. Members opposite. It is clear that it proposes to carry out principles of the party opposite. I think there ought to be some more consideration given to the Amendment. Perhaps on another occasion the Solicitor-General will be able to give us his views on the subject. I hope, at any rate, that some other Member of the Government will give us a more explicit answer than the Secretary of the Local Government Board gave us, because the subject is a most important one, no matter what the hour is.
§ Viscount HELMSLEY
I agree with the hon. Member who has just sat down, that we have not had much explanation yet from the Government as to their reason for resisting the Amendment, because it seems to me to be one to which they ought certainly to accede. It is very easy for this House to put on this tax and to think that they are going to hit only the person who has to pay the tax in the first instance, but does the House, especially at this hour of the morning, stop to consider what will be the effect of imposing this tax upon the particular class of people to whom this particular Amendment relates? It is obvious that a land company which exists by its traffic in land works on a general ratio of profit. It is clear that it sets out to make a certain amount of profit out of the average of its transactions, and if it does not make profit out of one, damage is done to the other. Through the addition of this tax they will have to make 20 per cent, larger profit out of their transactions than they have hitherto done. They will do that either by not endeavouring to buy the land as 180 cheaply, or, where they are not able to do that, they will take care not to sell it until they can get for themselves a profit sufficient to recoup them for the Increment Tax. It is not as if this land was all ripe for development, or all going to be sold at the same time. A great quantity probably has to be held by them for some considerable time, and yet all that time, though it is bringing in nothing to them, they will be paying the Increment Tax upon it. Therefore, it is obvious that if they wait to develop the land until they can get such a price for it as will recoup them for the increased tax which they may have had to pay, the result will be that instead of assisting development you will hinder it more than by any other measure which has ever been proposed. As a matter of fact, the actual result of the taxation you are proposing will be the very opposite to that which the majority of hon. Members opposite have in their mind when proposing this tax. I certainly think that whatever may be said for or against the principle of taxation of increment on general grounds, and which the Secretary of the Local Government Board rather rightly. I think, refused to go into to-night, at all events there is a great deal to be said for this particular Amendment, and I do think we might have had a rather more encouraging reception of it from the Government.
§ Mr. G. H. RADFORD
I must say that I feel grateful to the Noble Lord for having brought forward this Amendment, and I earnestly appeal to the Chancellor of the Exchequer to give sympathetic attention to it for this reason: the land companies of this country are doing great and important social work. They were led into it largely by the advice of great Liberal statesmen of times gone by, and they are persons generally of small means who put by their little sums in order to get a fund out of which land can be provided, and on which they can build for themselves. They have their little capital invested in companies which provide sites for people who cannot by any other way acquire a stake in the country. These persons are deserving of very sympathetic consideration on the part of the Liberal Chancellor of the Exchequer, and while I am in favour of the Increment Tax, I cannot but feel it to be a pity that this large, deserving and important class of the community should by these means be deprived of the profit on their investments, and, perhaps, have the value of their property largely depreciated. I can quite understand that 181 the words in which this Amendment is couched are not such as the Government can accept, but they contain some reasonable lines on which an exemption or concession might be extended, for they do point out the difference between persons who carry on a trade in land in which, of course, you must set out the profit against the loss, and arrive at the profit by taking into account the loss, and those who deal in land, but do not carry on the trade in it. I hope that on the ground of this being a trade in land and not a case of holding up land against the community my right hon. Friend the Chancellor of the Exchequer will give very careful consideration to this Amendment.
§ Mr. MOORE
I wish to add a very few remarks on another ground from that which has been stated. The class of persons dealt with in this Amendment is that which acts as wholesale buyers of land and retailers of it. That is a class which should be encouraged. I want to point out to the Chancellor of the Exchequer how very little the Government really take by enforcing the tax against this class of people, and I put it to him on the very real ground that there will be very great difficulty in collecting the tax. I will give an instance of what I mean. Take one of these companies, they buy a block of land for, say, £3,000. They get the land fairly cheaply, because they are able to put down £3,000, and they look to make a profit by cutting that land up and selling it in 12 lots at £300 each. They sell each lot at £300, and I do not see how you can pay an Increment Duty on £300, when the whole plot of land is worth £3,000. You have not increased the price by selling one lot for £300. It is not till they have sold 10 different lots that they are level, and that their profit can come in at all. All this time you have the Government and the Government officials on the pounce, waiting, until the company has made a profit, to come down, and say, "Now is the time for you to pay your Increment Duty." This operation must take time. You cannot sell the whole of your land in a day or a week or a month, and it may take you two, three, or five years before you make your profit and become liable to the Increment Duty. Surely it is not worth the trouble, time, or expense to which the Government officials will be put in watching the transactions for five years before they are able to claim the Increment Duty. I want the Chancellor of the Exchequer to consider this from the point of view of the diffi- 182 culty of collection, and to realise how very difficult it will be in the case of the retailer. I think when he does realise that and realises also how difficult it is to buy land and to retail it, he will come to the conclusion that the game is not worth the candle. I believe we shall be doing the State a useful service by liberating the officials from this work and enabling them to devote their time to work of a more useful character.
§ Mr. WALTER LONG
I am astonished that the Chancellor of the Exchequer, who is in charge of this Bill, has not made a reply, not only of a more satisfactory character, but also of a more comprehensive character, than the reply made by the Under-Secretary for the Local Government Board. It is extremely instructive to notice that at two o'clock in the morning, at a time when our Debates are neces-cessarily indifferently reported and many hon. Gentlemen are asleep, we are discussing a question which, by the frank admission of a cordial supporter of the Government, who is himself in favour of this Increment Tax, is one which materially affects a deserving class of the community, and a very large class. What is the answer the Government has made? The Under-Secretary for the Local Government Board was very indignant when my hon. Friend behind me said that he had dealt indifferently with this matter. I do not want to hurt the feelings of the hon. Gentleman, but I quite agree with my hon. Friend, for I do not think I have ever heard a serious proposition more lightly dealt with. The Under-Secretary told us that at this hour of the morning he was prepared to consider any Amendment worthy of attention. Then he proposed to discuss this particular Amendment in the most cursory manner. The Amendment of my hon. Friend he really dismissed as not worthy of consideration, and he said it was too early to talk about it. Then he came to the argument of my hon. Friend. He did not attempt to deal at all with the serious question which it raised, and which has been raised since by the hon. Member for Islington. The Under-Secretary confined himself to an answer which is perfectly simple and which has been given very frequently. He said: "There is this particular form of profit. Is it not fair that a portion of it be taken by the State?" He talked of resuming the increment right, a phrase which I do not think has been used before by any Member of the Government, and 183 which brings us to a new aspect of the subject. What he meant exactly by the phrase "resuming the right" I do not know, but perhaps he will explain on some future occasion. I know it is hopeless to expect that we should have any fuller statement of the case than we have had, but at the same time I do desire to protest in as strong terms as we are justified in using against this statement. The whole of the speech of the Chancellor of the Exchequer, or, at any rate, nine-tenths of it, when he was introducing his Budget was devoted to the new social programme of the Government which was to be the result of this Budget. In this case, even though we have proved this is a branch of land purchase largely used by the small people, we meet with the usual reply that it is impossible to listen or consider a case we have raised because the tax must be maintained. Does the Chancellor of the Exchequer if he is not prepared to accept the Amendment or to make any practical suggestions, mean to discuss it in the cursory way in which the Parliamentary Secretary of the Local Government Board (Mr. Masterman) has discussed it? Surely, if you are going to impose this tax in successful cases, you ought, as the hon. Member for Islington (Mr. Radford) and my Noble Friend behind me (Lord Robert Cecil) say, to make allowance in unsuccessful cases, notwithstanding that these societies are started in the best interests of the people. If by their existence and operation you hold out opportunities to people which probably nobody would otherwise enjoy, you are going to tax them when they are successful, and are not going to make any allowance when there are losses. If this Debate were carried on during a time of the day when it could be reported in full detail in the country, there are hundreds and thousands of people not belonging to the wealthy classes, of whom hon. Members opposite are so fond of talking, or the few land-owners who they seem to think own all the land in the country, but to the best of our working classes, who would read with amazement the announcement that the Government are determined to throw cold water on their efforts and to tax every owner of land in an unjust and unjustifiable manner.
§ Mr. LLOYD-GEORGE
I do not think the right hon. Gentleman has been quite fair to my hon. Friend in the description he has given of his observations. My hon. Friend declined to follow the Noble Lord 184 I into a general argument on the merits and demerits of the principle of the Increment Tax, and I think he very properly declined to do so.
§ Lord ROBERT CECIL
That was not at all my meaning, nor the meaning, I think, I conveyed to my hon. Friends. My point was that there was no difference in the man who dealt in land, who bought and sold in this sense, and anybody who bought and sold land and lived on the profit he made in successful transactions, setting against that the losses he made on other transactions. It has nothing to do with the general principle of the Increment Tax.
§ Mr. LLOYD-GEORGE
My hon. Friend said he would not pursue the argument in so far as it bore on the general principle, but, when he came to discuss the particular Amendment, I think he did address himself to the argument used by the Noble Lord. What is the position? The Noble Lord says: "Given the Increment Tax on land, is it fair it should be applied to the man why buys and sells land, and buys for the purpose of selling or leasing?" Under this Amendment the land speculator would have to contribute, and the man who would get off would be the man who sold to the speculator. That is not the man the Noble Lord has in his mind. Therefore, his Amendment does not carry out his object; he proposes that you should have an investigation into the motive of every man who buys land. I agree with a great deal of what has been said about the difficulty of valuing the different interests in land and the different elements you have got to consider when you arrive at the increment. Those are difficult enough to have each time we change the increment; but, if we are also to have a sort of research into the motive of every man who buys land, it will make it absolutely impossible. A man has simply to say he bought it with a view of selling it, and under the Amendment of the Noble Lord you could not charge a penny upon it. Surely that is not what the Noble Lord has in his mind. He is thinking of the pure land speculator, the case of a company formed for the purpose of buying and selling land. He assumed that we are going to walk off with the whole of the profit in that case, and he asked: "Is it fair to deprive the investor of his profit in the first place?" But it is only a percentage of the profit, four-fifths, that is touched to begin with. The point of the 185 right hon. and learned Member was that we are depriving him of the whole profit. We are doing nothing of the kind. My hon. and learned Friend was not here when I promised earlier in the evening to exempt a considerable margin, amounting to about 15 per cent. That is not an inconsiderable profit even for a buyer and seller of land. You exempt that before you begin to charge your one-fifth on the balance. I do not think my hon. and learned Friend need have all that sympathy for a man who has already made 15 per cent, profit before you begin to tax him on the increment. The right hon. Gentleman (Mr. Long) talks about the working classes in this case. I have yet to learn that the working classes buy land for the purpose of speculating heavily with a view of making a profit. I know they are shareholders of companies formed for the purpose of building houses of their own, but that is a totally different case from the case of the Noble Lord, which was that of a speculator who buys land for the purpose of selling it again.
§ Mr. LLOYD-GEORGE
I submit that the case of the building societies are amply safeguarded by the deductions which are made in respect of improvements and by the margin which we promised to accept. I do not see how we can possibly accept an Amendment of this kind, making the whole Increment Tax an absolute futility Any man who bought land would say he bought it with a view of selling it, and the moment he did that no Increment Tax would be charged.
§ Mr. BONAR LAW
I am certainly not going to occupy much time at this hour of the night, but I must say I think the right hon. Gentleman has not realised the point brought forward by my noble Friend or its importance. The right hon. Gentleman has just said that if the Amendment or anything on the lines of the Amendment were carried the whole thing would prove futile. That is not quite what we have to consider now. We have to consider whether this proposal is right and just. Granting that it is right and just, if it makes his Bill futile that is his look-out, not ours. The right hon. Gentleman entirely overlooked what is the real point of this Amendment, which is that it is not right to put this tax on a particular business which a particular class of the community is engaged in; in other words, that instead of being in any sense an Increment 186 Tax, this is a tax upon profits, or another form of Income Tax. The right hon. Gentleman turns round and says: "In any case we do not take the whole or even half or anything like that, because we allow certain deductions." But there are expenses before profits become available, and the deductions will not more than cover the expenses before the profit comes in, and the right hon. Gentleman's point does not really affect the position at all. In the case of any class of individuals carrying on business, it is entirely a question of averages. Everybody who has been connected with any business knows that he often makes profits and often makes losses. When the right hon. Gentleman says he does not touch this 20 per cent, until the other four-fifths has been made, he is entirely wrong. He must see at least that he is wrong to the extent of half of it. If half the transactions show profits and half losses, then he does take half the profits made by these societies. The real point the right hon. Gentleman has overlooked is that whatever may be said in other cases here is no case of a windfall or of unearned increment in any shape or form. It is the case of a profit which a man engaged in a particular business went out to get, which he sometimes gets and sometimes does not get, but the right hon. Gentleman steps in and says: "Where you make a profit I take a bit of it, but where you make a loss you must bear the whole of it." That is entirely unjustifiable. The only thing that did touch the right hon. Gentleman was the statement that the working men were interested in land. He hopes to get the votes of the working men, and does not want to offend them. He says that they have no interest in this kind of thing. He is entirely mistaken. I have myself received circulars from a large number of building societies and land development societies, in which they at least make the assertion that a large part of their stock is held by working men, who have taken it as a form of investment. On every ground the tax is unjust, and this is the most unjust form of it.
§ Sir WILLIAM BULL
I should like to assure the Chancellor of the Exchequer that there is a very large number of dealings in land going on in the small evening sales throughout the Metropolis and elsewhere, at which a large number of working men are continually dealing nightly, their profit being only £2 or £3 at a time. That is a well recognised thing in the London suburbs. Many local solici- 187 tors are aware of the fact that on Tuesday and Thursday evenings at seven o'clock well-known auctioneers deal in certain properties. Hundreds of pounds' worth of property changes hands to working men and small tradesmen, who sell and buy—when property goes below a certain level and they think there is a profit to be made on it they go in and buy. Very often in the course of an evening a property will change hands several times. I have here a list of a few building societies who deal regularly in Tokenhouse-yard. There is the Birkbeck Bank, a society which has done an immense amount of good work in the past. There is the Birkbeck Building Society; the society founded by Dr. Clifford—the Westbourne Park Chapel Building Society, which has done good work; the Second Mortgage Society; the Belmont Chapel Building Society, who are large dealers; the Hearts of Oak Building Society; the British Land Company; the Temperance Building Society, one of the largest; and the Royal Liver Society. All these are practically supported by the working men. I firmly believe that if this tax is put on transactions which are profitable, and allowances are not made in the cases where losses are incurred, injustice will be done. Sometimes these societies buy large estates which remain undeveloped for years. I can recall cases at Finchley, Acton, and Ealing where societies have gone in for estates which are practically lying derelict at the present time. The societies think that London is going to develop in a certain quarter, and they buy large blocks of land with the idea of putting up workmen's dwellings. There is the case of the Queen's Park estate in the Harrow-road. All these estates have been hanging fire, and these large societies are suffering in consequence. I think my Noble Friend is quite right, and that he is underestimating the figure when he. says that the Government will take at least 10s. in the pound of the profits of these societies.
§ Mr. JOYNSON-HICKS
There is one company which has not been mentioned tonight, and I am only going to mention it by way of protest against this tax. It is a company which is well known in the North, the Trafford Park Estates Company, which has developed an enormous industrial area in Lancashire and has given a large amount of work to the people in the district. I merely mention that company as a protest against having to dis- 188 cuss so important an Amendment as that moved by my Noble Friend when half the Front Bench is asleep and when it is impossible to have the Question properly discussed. Unless some such Amendment as this is accepted by the Government they will stop the development work of companies such as the Trafford Park Company.
§ Mr. W. W. RUTHERFORD
The Chancellor of the Exchequer said just now that one of his principal difficulties in accepting an Amendment of this kind was that he positively declined to go into the question of the motives of those who bought or sold land. He said that was nothing to do with us, who are collecting a tax, and that we cannot have a burden of that kind cast upon us. May I point out that that is exactly what he has done? I refer, of course, to the Income Tax. A company which buys or sells land is liable to-day for Income Tax, whereas if I happen to buy a house and sell it again later on I am not bound to account for the profit in my Income Tax Return. The question of motive and the business that is being carried on is one which is dealt with to-day for the purposes of taxation. I maintain that the remark of the Chancellor of the Exchequer was entirely unfounded, and the answer which the Chancellor of the Exchequer gave on that point was not satisfactory. I desire very shortly to point out that nine owners of land out of ten who have got it to sell, when it is ripe for building purposes, are unskilled in laying it out. They know nothing about where streets ought to be put or where there should be shops and so on. This work is done by a number of companies and people who make it the business of their lives. If it were not for this class of persons large parcels of property would never be brought into the market, and slums would not be removed as they are being removed to-day. If this class of persons did not exist the difficulties which have been referred to would remain. I venture to point out and to drive home the argument which has been made in bringing forward this Amendment, that this particular tax is very unfair indeed to this class of persona which is doing a good class of work to the community and is facilitating the transfer of land and the building of houses. There is just one more remark. That is that if these companies and the land developers are driven out of business, as I believe they will be if this 189 Bill is passed, who will suffer? The first persons to suffer will be the joiner, the brick-setter, the slater, and the plasterer—all those people who to-day are engaged in the building trade, and who draw their wages from that source, and I notice that their representatives in this House sneer and scoff at the idea. At all events, I am entitled to express my opinion, and I say that the Government are doing irreparable wrong to the people—workingmen—who are engaged in this business. I do not know that I can vote for this Amendment. No; not in this shape, and I tell the Committee candidly why. It is this, that of all the exceptions made in the Bill this is about the only place where increment will
§ be collected, and if we were to unanimously accept the Amendment put before the Committee the effect would be that you would create the greatest turmoil and nuisance in collection, because you would take away the only place where any substantial amount of increment will be collected. It only shows the astonishing want of foresight which has produced the Bill in this shape.
§ Question put, "That after the word 'land' the words 'other than land acquired for the purpose of being so sold or leased' be inserted."
§ The Committee divided: Ayes, 68; Noes, 169.191
|Division No. 207.]||AYES.||[2.35 a.m.|
|Acland-Hood, Rt. Hon. Sir Alex. F.||Foster, P. S.||Nicholson, Wm G. (Petersfield)|
|Anson, Sir William Reynell||Gardner, Ernest||Oddy, John James|
|Arkwright, John Stanhope||Gibbs, G. A. (Bristol, West)||Pease, Herbert Pike (Darlington)|
|Balcarres, Lord||Gretton, John||Pretyman, E. G.|
|Baldwin, Stanley||Guinness, Hon. R. (Haggerston)||Ratcliff, Major R. F.|
|Baring, Capt. Hon. G. (Winchester)||Hamilton, Marquess of||Renton, Leslie|
|Barrie, H. T. (Londonderry, N.)||Hardy, Laurence (Kent, Ashford)||Rutherford, W. W. (Liverpool)|
|Beach, Hon. Michael Hugh Hicks||Harris, Frederick Leverton||Salter, Arthur Clavell|
|Bignold, Sir Arthur||Harrison-Broadley, H. B.||Scott, Sir S. (Marylebone, W.)|
|Bowles, G. Stewart||Hay, Hon. Claude George||Sheffield, Sir Berkeley George D.|
|Bridgeman, W. Clive||Helmsley, Viscount||Starrier, Beville|
|Bull, Sir William James||Hill, Sir Clement||Staveley-Hill, Henry (Staffordshire)|
|Carlile, E. Hildred||Hope, James Fitzlan (Sheffield)||Talbot, Lord E. (Chichester)|
|Castlereagh, Viscount||Hunt, Rowland||Valentia, Viscount|
|Cecil, Evelyn (Aston Manor)||Joynson-Hicks, William||Walker, Col. W. H. (Lancashire)|
|Clyde, J. Avon||Kerry, Earl of||Walrond, Hon. Lionel|
|Coates, Major E. F. (Lewisham)||Lane-Fox, G. R.||Warde, Col. C. E. (Kent, Mid)|
|Cochrane, Hon. Thos. H. A. E.||Law, Andrew Bonar (Dulwich)||Williams, Col. R. (Dorset, W.)|
|Craig, Captain James (Down, E.)||Lockwood, Rt. Hon. Lt.-Col. A. R.||Wortley, Rt. Hon. C. B. Stuart-|
|Craik, Sir Henry||Long, Rt. Hon. Walter (Dublin, S.)||Younger, George|
|Dalrymple, Viscount||MacCaw, William J. MacGeagh|
|Douglas, Rt. Hon. A. Akers-||Meysey-Thompson, E. C.||TELLERS FOR THE AYES.—Lord|
|Everett, R. Lacey||Moore, William||Robert Cecil and Mr. Lambton.|
|Forster, Henry William||Morpeth, Viscount|
|Acland, Francis Dyke||Cotton, Sir H. J. S.||Harcourt, Rt. Hon. L. (Rossendale)|
|Agar-Robartes, Hon. T. C. R.||Cowan, W. H.||Harcourt, Robert V. (Montrose)|
|Agnew, George William||Craig, Herbert J. (Tynemouth)||Hardie, J Keir (Merthyr Tydvil)|
|Ainsworth, John Stirling||Crosfield, A. H.||Harmsworth, Cecil B. (Worcester)|
|Allen, Charles P. (Stroud)||Crossley, William J.||Harmsworth, R. L. (Caithness-sh.)|
|Balfour, Robert (Lanark)||Davies, Timothy (Fulham)||Harvey, A. G. C. (Rochdale)|
|Baring, Godfrey (Isle of Wight)||Davies, Sir W. Howell (Bristol, S.)||Haslam, Lewis (Monmouth)|
|Barlow, Percy (Bedford)||Dickinson, W. H. (St. Pancras, N.)||Haworth, Arthur A.|
|Barnard, E. B.||Dobson, Thomas W.||Hayden, John Patrick|
|Beauchamp, E.||Duckworth, Sir James||Hazel, Dr A. E.|
|Beaumont, Hon. Hubert||Duncan, C. (Barrow-in-Furness)||Hedges, A. Paget|
|Beck, A. Cecil||Dunn, A. Edward (Camborne)||Helme, Norval Watson|
|Benn, Sir J. Williams (Devonport)||Dunne, Major E. Martin (Walsall)||Herbert, Col. Sir Ivor (Mon. S.)|
|Bennett, E. N.||Edwards, Sir Francis (Radnor)||Higham, John Sharp|
|Black, Arthur W.||Elibank, Master of||Hogan, Michael|
|Bowerman, C. W.||Essex, R. W.||Holt, Richard Durning|
|Bramsdon, T. A.||Evans, Sir S. T.||Hooper, A. G.|
|Brocklehurst, W. B.||Falconer, James||Hope, John Deans (Fife, West)|
|Brodie, H. C.||Ferens, T. R.||Horniman, Emslie John|
|Brooke, Stopford||Fiennes, Hon. Eustace||Hyde, Clarendon G.|
|Bryce, J. Annan||Fuller, John Michael F.||tiling worth, Percy H.|
|Burke, E. Haviland-||Gibb, James (Harrow)||Johnson, John (Gateshead)|
|Burns, Rt. Hon. John||Gill, A. H.||Jones, Leif (Appleby)|
|Burnyeat, W. J. D.||Ginnell, L.||Jones, William (Carnarvonshire)|
|Carr-Gomm, H. W.||Gladstone, Rt. Hon. Herbert John||Joyce, Michael|
|Cherry, Rt. Hon. R. R.||Goddard, Sir Daniel Ford||Lambert, George|
|Clough, William||Gooch, George Peabody (Bath)||Lament, Norman|
|Clynes, J. R.||Greenwood, G. (Peterborough)||Law, Hugh A. (Donegal, W.)|
|Corbett, C. H. (Sussex, E. Grinstead)||Gulland, John W.||Layland-Barrett, Sir Francis|
|Cornwall, Sir Edwin A.||Gwynn, Stephen Lucius||Lehmann, R. C.|
|Lever, A. Levy (Essex, Harwich)||O'Brien, Patrick (Kilkenny)||Strauss, E. A. (Abingdon)|
|Levy, Sir Maurice||O'Doherty, Philip||Summerbell, T.|
|Lloyd-George, Rt. Hon. David||Parker, James (Halifax)||Taylor, John W. (Durham)|
|Lough, Rt. Hon. Thomas||Pearce, Robert (Staffs, Leek)||Tennant, H. J. (Berwickshire)|
|Lundon, T.||Philips, John (Longford, S.)||Thomas, Sir A. (Glan organ, E.)|
|Lupton, Arnold||Pointer, J.||Thomasson, Franklin|
|Macdonald, J. R. (Leicester)||Price, C. E. (Edinburgh, Central)||Thompson, J. W. H. (Somerset, E.)|
|Maclean, Donald||Radford, G. H.||Thorne, G. R. (Wolverhampton)|
|MacVeagh, Jeremiah (Down, S.)||Raphael, Herbert H.||Toulmin, George|
|Maddison, Frederick||Redmond, John E. (Waterford)||Trevelyan, Charles Philips|
|Marks, G. Croydon (Launceston)||Rendall, Athelstan||Walsh, Stephen|
|Marnham, F. J.||Ridsdale, E. A.||Waring, Walter|
|Massie, J.||Roberts, Charles H. (Lincoln)||Wason, Rt. Hon. E. (Clackmannan)|
|Masterman, C. F. G.||Robertson, J. M. (Tyneside)||Wason, John Cathcart (Orkney)|
|Micklem, Nathaniel||Robinson, S.||Waterlow, D. S.|
|Middlebrook, William||Robson, Sir William Snowdon||Wedgwood, Josiah C.|
|Montagu, Hon. E. S.||Rogers, F. E. Newman||White, Sir George (Norfolk)|
|Morrell, Philip||Rutherford, V. H. (Brentford)||White, J. Dundas (Dumbartonshire)|
|Morse, L. L.||Scott, A. H. (Ashton-under-Lyne)||White, Sir Luke (York, E. R.)|
|Murphy, N. J. (Kilkenny, S.)||Seddon, J.||Whitley, John Henry (Halifax)|
|Murray, Capt. Hon. A. C. (Kincard.)||Seely, Colonel||Wilson, P. W. (St. Pancras, S.)|
|Nannetti, Joseph P.||Silcock, Thomas Ball||Wilson, W. T. (Westhoughton)|
|Newnes, F. (Notts, Bassetlaw)||Smyth, Thomas F. (Leitrim, S.)||Wood, T. M'Kinnon|
|Nicholls, George||Spicer, Sir Albert|
|Nolan, Joseph||Stanley, Hon. A. Lyulph (Cheshire)||TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.|
|Norton, Capt. Cecil William||Stewart-Smith, D. (Kendal)|
|Nuttall, Harry||Strachey, Sir Edward|
|O'Brien, K. (Tipperary, Mid)||Straus, B. S. (Mile End)|
§ Mr. LLOYD-GEORGE
I said that when this Amendment was reached I would move to report Progress and ask leave to sit again. I, therefore, move.
§ Committee report Progress; to sit again this day (29th June).
§ And, it being after half-past Eleven of the clock on Monday evening, Mr. Speaker adjourned the House without Question put, in pursuance of the Standing Order.
§ Adjourned at Twelve minutes before Three o'clock a.m.