§ (1) Subject to the provisions of this Part of this Act, there shall be charged, levied, and paid for every financial year in respect of the site value of undeveloped land a duty, called Undeveloped Land Duty, at the rate of one halfpenny for every twenty shillings of that site value.
§ (2) For the purposes of this Part of this Act land shall be deemed to be undeveloped land if it has not been developed by being built upon or by being used bonâ fide for any business, trade, or industry other than agriculture:
§ Provided that—
- (a) Where any land having been so developed reverts to the condition of
471 undeveloped land within the meaning of this Section, and so remains for one year, it shall be treated as undeveloped land for the purpose of Undeveloped Land Duty until it is again developed; and - (b) Where the owner of any land shows that he or his predecessors in title have spent sums at the rate of at least one hundred pounds per acre for the purpose of so developing the land on roads (including paving, curbing, metalling, and other works in connection with roads) or sewers, that land shall, for the purposes of this Section, not be treated as undeveloped land although it is not for the time being built upon or used for any business, trade, or industry other than agriculture, but for the purposes of this provision no sums shall be taken into account after ten years have elapsed since the time when the sums were spent.
§ (3) For the purposes of Undeveloped Land Duty, the site value of undeveloped land shall be taken to be the value adopted as the original site value or, where the site value has been ascertained under any subsequent periodical valuation of undeveloped land for the time being in force, the site value as so ascertained:
§ Provided that where Increment Value Duty has been paid in respect of the increment value of any undeveloped land, the site value of that land shall, for the purposes of the assessment and collection of Undeveloped Land Duty, be reduced by a sum equal to five times the amount paid as Increment Value Duty.
§ (4) For the purposes of Undeveloped Land Duty undeveloped land does not include the minerals.
§ Mr. JAMES HOPE moved, in Sub-section (2), after the word "agriculture" ["other than agriculture"], to add the words "and if it could be developed without causing to contiguous or adjacent land in the possession of the same owner an injury countervailing the advantage he might be expected to derive from its development."
§ This Amendment applies to land which is not capable of development without causing injury to the property adjacent held by the same owner. There are many cases where this will undoubtedly be so. Supposing a man owns 40 acres of land and one corner of his property is adjacent 472 to some cross-roads along which there is a good deal of cyclist and pedestrian traffic. Some enterprising person might Bay, "Here is an ideal site for a public-house, and I will give you a large sum for the piece of land at that corner." To build upon that land will undoubtedly be developing it. The Attorney-General said yesterday that development meant getting the utmost price the owner could get, and in this case the selling of a site for a public-house might be deemed getting the best advantage the owner could get for his plot of land. The owner might refuse to sell that particular corner because it would affect the value of the other 39 acres. There are some narrow-minded people who object to public-houses, and the landlord might be looking forward to selling the whole of his 40 acres for residential property, and the taking away of the little plot of land at the corner for the purpose of a public-house might spoil the prospects of letting the remainder for residential purposes. There are many other examples where the letting of a portion of an estate would depreciate the rest of the property. The owner of a piece of land might get an offer for the erection of chemical works which would emit obnoxious fumes, and there might be available other land for such a factory where no harm would be done to neighbouring property. I might multiply instances of this kind. In the South of England there are a number of small residential estates varying from 80 to 100 acres, and it is quite possible that one or two corners of such estates might be developed as separate sites, and if they were the amenities of the property as a whole might be destroyed. Somebody might offer a large price for four or five acres, and many such cases have come to my notice. I know in some of these cases substantial compensation has been paid for severance, and the same element which allows a man to obtain compensation for severance ought to operate in the cases I have mentioned. I know that Clause 25 deals with restricted covenants, but the provisions are very vague and unsatisfactory, and they do not cover very many cases of this kind. I think it is necessary that you should not impose this tax in cases where there is no public object to serve. It is not a question of land being needed for housing. It is simply a matter of whether it is possible for the Commissioners to say that this or that land might be developed, although the owner can prove that only part of it could be developed, and the whole of it 473 would be injured by that development. I think hon. Members will realise that such cases ought to be met, but they are not met by this Clause. The valuation may be taken on any small unit of land. Under Clause 29 it would be quite within the power of the Commissioners to say that any particular corner of a piece of land if not developed might be developed, and in that case the whole of the value of the remaining land would be destroyed. I do not think this case was brought prominently forward in Committee.
§ Sir PHILIP MAGNUS seconded the Amendment. I have known many similar cases to those brought forward by my hon. Friend.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)I quite recognise the force of the arguments which have been advanced by the hon. Member, but I do not think he need have any apprehension on this point. I think the words of the Clause quite cover the sort of case he has mentioned I am not quite sure that the introduction of such words as he has proposed would not be really embarrassing. Take the case of the public-house which he has given as an illustration. I do not think that is a likely case.
§ Mr. JAMES HOPEI said it would be an unlikely one.
§ Mr. LLOYD-GEORGEI think we may dismiss the public-house case at once. A valuer looking at the land would not be likely to say, "This is a good site for a public-house." Besides a licence is a very difficult thing to get.
§ Mr. JAMES HOPEYes, but the owner might have an offer subject to a licence being granted.
§ Mr. LLOYD-GEORGEThe granting of the licence depends upon the magistrate. No valuer would say that if a judicial authority granted a licence then undoubtedly this land is very valuable. That is not the principle we have to follow in regard to land. The hon. Member said that the setting up of a public-house in the case he alluded to would depreciate the value of the other property. I hope he will bear that admission in mind when we come to discuss later clauses in this Bill.
§ Mr. JAMES HOPEI said that narrow-minded persons might think so.
§ Mr. LLOYD-GEORGEI hope he will bear that admission in mind when we come to another part of the Finance Bill. A far 474 better case given by the hon. Member was that of a man who has had an offer for a piece of land upon which to erect a factory, the nature of which might destroy the value of the surrounding property. Before any owner sells land for that purpose he always insists upon getting a price out of proportion to the actual value of the area covered by the factory, because he has to take into account the fact that the rest of his property will be destroyed. The owner may ask £20,000 for a piece of land for the setting up of a factory, although he might be prepared to sell the same piece of land for £10,000 for some purpose which would not cause a nuisance. Valuers always take that kind of thing into account. What they have got to do is to find the market value of the whole of the property, and the market value for exceptional things of that kind will only be taken as evidence, that is all. I think the hon. Gentleman may very well leave it to the words of the Act itself.
§ Mr. AUSTEN CHAMBERLAINWhat words?
§ Mr. LLOYD-GEORGEClause 25—"For the purposes of this Part of this Act the total value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition, might be expected to realise." That is commonly known as market value. If you send a valuer down for Death Duties—it is the same principle—he does not take an exceptional offer of that kind and say, "No, you have had an offer of £5,000 for a few acres for the purpose of setting up a bone factory; therefore, the whole is worth £30,000."
§ Mr JAMES HOPEHas the right hon. Gentleman forgotten Clause 29, which provides for assessment on separate parcels of land and apportionment of valuation?
§ Mr. LLOYD-GEORGEYes, but he takes the whole of the land into account It is an apportionment entirely in the interests of the subject, and is made with a view to the increment. It is to prevent the State saying, "You have an increment of so much on this particular plot. If you spread that over the whole area it means that your increment is very considerable." It is purely in order to enable the subject to claim an apportionment, with a view of diminishing the amount of the increment charged. I do not think the words which 475 have been submitted by the hon. Gentleman could possibly be accepted. They would introduce a very serious complication, and I agree with what was said yesterday, that you do not want to introduce any of these unnecessary considerations. It is far better to aim at simplicity, if you can possibly achieve it, in an Act of Parliament.
§ Mr. AUSTEN CHAMBERLAINThe Chancellor of the Exchequer gives very cold comfort to any of those concerned in these matters or to those who are interested to secure justice for those who are concerned. He thinks it is better not to enter into these unnecessary matters, but what are the unnecessary matters? You are going to tax a man for not putting a particular plot of his land to a use which deteriorates the value of all the rest of the land more than he gets for that plot, and the Chancellor of the Exchequer describes that as a consideration into which it is unnecessary and better not to enter.
§ Mr. LLOYD-GEORGEI said that when you are drafting an Act of Parliament you had better not enter into every consideration, which must be present to the mind of the valuer, but that is a very different thing. I certainly think the valuer ought to enter into those matters.
§ 4.0 P.M.
§ Mr. AUSTEN CHAMBERLAINThat is certainly different from the statement of the Chancellor of the Exchequer as I understood it; but even that is not satisfactory. I could not quite make up my mind what was the Chancellor's real defence—whether it was that he did not wish to do what my hon. Friend wanted, and his concluding sentence, which I misunderstood, undoubtedly seemed to point to that, or whether it was that the Bill had already done what my hon. Friend wanted in a better way than he suggested. I gather now that it is the latter of the two contentions which is the right hon. Gentleman's defence. He says the owner ought to be protected against having a tax imposed upon land for not having put it to a use which would cause a greater deterioration of the rest of his property than the increased value given to the particular plot so used, and that that is done. How is it done? He referred us to the words of Clause 25, which defines, as he said, the total value. It is no longer to be the definition of total value, but is to become the definition of 476 gross value. That is immaterial except for the purpose of accuracy and clearness. The Government should, at least, remember the changes they are making in their definitions. "The gross value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller, might be expected to realise." That is exactly the case which my hon. Friend put. It is not necessarily a question of estimate. A buyer comes along and says, "I will give you so much." The owner says: "That is so good an offer that I am forced to ask what you want it for?" The buyer says he wants it to put up a dust destructor, gas works, chemical works, or it may be simply a factory in a district where a factory is itself, so to speak, out of place. That is a definite offer. How can the valuer go behind it? How can a valuer say that the amount of an offer before the owner is not the value of the land, and disregard it? I venture to say Clause 25 will give no protection in a case of that kind. The valuer is not called upon to value the land in plots, and he will say, "Here is so much of the land of which the value may be comparatively small, but here is a particular plot which has a very high value, and the proof is that here is Mr. A, who offers to give a cheque for that amount for it to-day." There is no protection in Clause 25 for that case. It is quite true, as the Chancellor of the Exchequer says, that when a man sells a bit of his land for what I may call a noxious use, he takes in the price which he gets compensation for the deterioration in the value of the rest of the land, but that is a consideration which is more germane to the Increment Tax than to the tax with which we are now dealing. It is a consideration I tried to press upon the Government when we were discussing the Increment Tax, I pointed out it was quite unfair to tax as unearned increment that which was compensation for the deterioration of the rest of the property. The Government refused to pay any attention to our representations, and decided to tax as unearned increment that which the Chancellor of the Exchequer now himself explains is compensation for the deterioration of the surrounding property. It is impossible to trace any consistent idea underlying the Government action on these different Clauses. They seize upon whatever consideration for the moment is most convenient to their particular purpose, without any regard to what they said the day before or what they are going to 477 say the next day. They do not mind how they contradict themselves so long as they find some answer, good, bad, or indifferent, to the particular argument of the moment. It is not merely the case of a factory or of a noxious trade. A case of ordinary building may arise in exactly the same way. I was told the other day of a case in London which, if the facts given to me are correct, sufficiently illustrate my meaning. It is the kind of case to which, I think, all of us could point in populous districts with which we are acquainted. There was attached to a certain house in a closely inhabited district a considerable amount of ground, and the fact that there was this open ground caused the houses in the neighbourhool to be much sought after. The owner of the house and vacant ground sold it for building purposes at a building value—a high building value. It was thought by his friends that he had acted extremely foolishly, and that he had got a very bad price. I have been told something about the subsequent history of that land. The syndicate which took it failed, another syndicate which took it on more favourable terms also failed, and I am not certain whether a third syndicate is not now in process of failing in this attempt to develop land which appeared to have a great building value. It seemed to have a special building value because the houses in that neighbourhood were much sought after. But they were sought after because of the amenities of this vacant land, and, the moment it was cut up for building purposes, there was not only no demand for the houses put upon it, but the houses in the immediate locality also lost their tenants. Whether in that particular case the facts are as I have described I cannot say, but we all of us know that there are plenty of cases where a vacant plot of land may fetch a very good price provided there is no intention to build on the adjacent land. If there is such an intention to build the value is totally different. You must, in common fairness, do something to protect owners against having the land valued as if the offer made for any particular plot governed the price of the whole. The Government have not done that; neither does Clause 25 cover the point. There is no direction to the valuers to take account of the land as a whole. The Chancellor of the Exchequer does not give any direction at all. That is the point raised by my hon. Friend; that is why he moves this Amendment. It points to a gap in the 478 Bill which ought to be filled up. My hon. Friend says in his Amendment, "You shall have regard to the whole of the land, to this extent, at any rate, that you shall not charge the land with the Undeveloped Land Duty on the possible value of a particular plot, without having regard to the damage which the use to which that particular plot is proposed to be put would do to the rest of the estate." I have got from the Chancellor of the Exchequer an admission that that is not in his Bill, that there is no direction of the kind to the valuers to take that into account, and I say it is only common fairness it should be taken into account; otherwise great injustice will result.
Mr. G. D. FABERIt is very interesting to hear the Chancellor of the Exchequer trying to convince a fatigued House that an Act of Parliament ought to be as simple as possible. I wonder when the right hon. Gentleman made that discovery. We have been debating and threshing out this Finance Bill for at least five months, and I think the general opinion in all quarters of the House is that, so far from its having advanced in simplicity, it has become greatly aggravated in complexity. Why does not the right hon. Gentleman practice what he preaches? Great simplicity in an Act of Parliament is, no doubt, much to be desired, but I am afraid that that doctrine is more honoured by the right hon. Gentleman in the breach than in the observance. As regards this particular Amendment, may I take a concrete case which seems to me to be to the point? Where I live in the country I bought some little time ago a rag mill on the Thames. It was worked by water power. It was a great detriment to the adjacent property. I threw the mill into disuse. At present it is not used for anything at all, and by reason of the disuse the property adjoining has risen in value. I have built some model cottages close to it. But suppose the Commissioners fixed upon the piece of land where this rag mill is and said, "It is disused, but we consider it is undeveloped land. It has a great business use for the purpose for which it used to be used, and we shall now value it as undeveloped land for the purposes of a rag mill." The effect of putting it in work again upon the adjoining property, and especially on my model cottages, would be most disastrous, because, after all, the rag mill was an intense nuisance. What I want to ask is—first, would the Commissioners, and, secondly, could they, take into account the 479 effect upon the adjoining property of reinstating the rag mill, or would they be obliged to insularise that particular property used as a rag mill? Is there anything in the Bill which entitles them to go into the position of the adjoining property or must they segregate this particular piece and consider it by itself without any regard to the detriment it may cause to the rest of the property? I think that is the point my hon. Friend had in mind when he moved this Amendment. I have given a concrete case. He only dealt with the matter in the abstract. I cannot see anything in the Bill which entitles
§ the Commissioners to look outside a particular piece of land. In fact, I thought the whole argument of increment and decrement amounted to this—that they could only look at the increment and they could not consider the decrement. That constitutes a great hardship. Although we have met with but little response to our appeals, I think we should be wanting in our duty if we did not put forward points of this nature with a view to securing a remedy.
§ Question put, "That those words be there inserted in the Bill."
§ The House divided: Ayes, 49; Noes, 168.
481| Division No. 821.] | AYES. | [4.10 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Duncan, Robert (Lanark, Govan) | Newdegate, F. A. |
| Anstruther-Gray, Major | Forster, Henry William | Nicholson, Wm. G. (Petersfield) |
| Balcarres, Lord | Foster, P. S. | Powell, Sir Francis Sharp |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gordon, J. | Remnant, James Farquharson |
| Banbury, Sir Frederick George | Goulding, Edward Alfred | Renton, Leslie |
| Beck, A. Cecil | Guinness, Hon. W. E. (B. S. Edmunds) | Renwick, George |
| Beckett, Hon. Gervase | Hardy, Laurence (Kent, Ashford) | Stanier, Beville |
| Bellairs, Carlyon | Harris, Frederick Leverton | Stone, Sir Benjamin |
| Bertram, Julius | Harrison-Broadley, H. B. | Talbot, Lord E. (Chichester) |
| Bignold, Sir Arthur | Heaton, John Henniker | Valentia, Viscount |
| Carlile, E. Hildred | Hermon-Hodge, Sir Robert | Walrond, Hon. Lionel |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Hunt, Rowland | Whitbread, S. Howard |
| Chance, Frederick William | Kimber, Sir Henry | Willoughby de Eresby, Lord |
| Chaplin, Rt. Hon. Henry | Magnus, Sir Philip | Wolff, Gustav Wilhelm |
| Courthope, G. Loyd | Moore, William | |
| Craig, Captain James (Down, E.) | Morpeth, Viscount | TELLERS FOR THE AYES.—Mr. James Hope and Mr. G. D. Faber. |
| Craik, Sir Henry | Morrison-Bell, Captain | |
| Davies, David (Montgomery, Co.) | ||
| NOES. | ||
| Abraham, W. (Cork, N. E.) | Craig, Herbert J. (Tynemouth) | Henderson, Arthur (Durham) |
| Agnew, George William | Crossley, William J. | Henderson, J. McD. (Aberdeen, W.) |
| Asquith, Rt. Hon. Herbert Henry | Dalziel, Sir James Henry | Herbert, Col. Sir Ivor (Mon. S.) |
| Astbury, John Meir | Davies, M. Vaughan- (Cardigan) | Herbert, T. Arnold (Wycombe) |
| Baker, Sir John (Portsmouth) | Davies, Sir W. Howell (Bristol, S.) | Higham, John Sharp |
| Baring, Godfrey (Isle of Wight) | Dickinson, W. H. (St. Pancras, N.) | Hobart, Sir Robert |
| Barker, Sir John | Dilke, Rt. Hon. Sir Charles | Hodge, John |
| Barnard, E. B. | Duckworth, Sir James | Holt, Richard Durning |
| Barnes, G. N. | Edwards, Sir Francis (Radnor) | Horniman, Emslie John |
| Barry, Redmond J. (Tyrone, N.) | Erskine, David C. | Hutton, Alfred Eddison |
| Beale, W. P. | Essex, R. W. | Idris, T. H. W. |
| Bonn, W. (Tower Hamlets, St. Geo.) | Esslemont, George Birnie | Illingworth, Percy H. |
| Betheil, Sir J. H. (Essex, Romford) | Evans, Sir S. T. | Johnson, John (Gateshead) |
| Betheil, T. R. (Essex, Maldon) | Everett, R. Lacey | Jones, Leif (Appleby) |
| Boulton, A. C. F. | Falconer, J. | Jones, William (Carnarvonshire) |
| Bowerman, C. W. | Fenwick, Charles | Keating, M. |
| Brace, William | Ferguson, R. C. Munro | King, Alfred John (Knutsford) |
| Brigg, John | Fullerton, Hugh | Lambert, George |
| Bright, J. A. | Gibb, James (Harrow) | Layland-Barratt, Sir Francis |
| Burns, Rt. Hon. John | Gibson, J. P. | Leese, Sir Joseph F. (Accrington) |
| Buxton, Rt. Hon. Sydney Charles | Ginnell, L. | Lewis, John Herbert |
| Byles, William Pollard | Gladstone, Rt. Hon. Herbert John | Lloyd-George, Rt. Hon. David |
| Cameron, Robert | Goddard, Sir Daniel Ford | Lupton, Arnold |
| Carr-Gomm, H. W. | Gooch, George Peabody (Bath) | Luttrell, Hugh Fownes |
| Channing, Sir Francis Allston | Greenwood, G. (Peterborough) | Lynch, A. (Clare, W.) |
| Cheetham, John Frederick | Guiland, John W. | Macdonald, J. M. (Falkirk Burghs) |
| Cherry, Rt. Hon. R. R. | Harcourt, Rt. Hon. L. (Rossendale) | Maclean, Donald |
| Churchill, Rt. Hon. Winston S. | Harcourt, Robert V. (Montrose) | Macnamara, Dr. Thomas J. |
| Clough, William | Harmsworth, Cecil B. (Worcester) | MacVeagh, Jeremiah (Down, S.) |
| Cobbold, Felix Thornley | Harvey, A. G. C. (Rochdale) | M'Callum, John M. |
| Collins, Stephen (Lambeth) | Harvey, W. E. (Derbyshire, N. E.) | McKenna, Rt. Hon. Reginald |
| Collins, Sir Wm. J. (St. Pancras, W.) | Haslam, Lewis (Monmouth) | M'Laren, H. D. (Stafford, W.) |
| Corbett, A. Cameron (Glasgow) | Haworth, Arthur A. | M'Micking, Major G. |
| Corbett, C. H. (Sussex, E. Grinstead) | Hazel, Dr. A. E. W. | Marnham, F. J. |
| Cotton, Sir H. J. S. | Helme, Norval Watson | Massie, J. |
| Masterman, C. F. G. | Ridsdale, E. A. | Tomkinson, James |
| Menzies, Sir Walter | Roberts, Charles H. (Lincoln) | Trevelyan, Charles Philips |
| Montagu, Hon. E. S. | Roberts, G. H. (Norwich) | Ure, Rt. Hon. Alexander |
| Morse, L. L. | Robertson, Sir G. Scott (Bradford) | Verney, F. W. |
| Morton, Alpheus Cleophas | Robinson, S. | Vivian, Henry |
| Murray, Capt. Hon. A. C. (Kincard.) | Robson, Sir William Snowdon | Waldron, Laurence Ambrose |
| Myer, Horatio | Rogers, F. E. Newman | Walker, H. De R. (Leicester) |
| O'Brien, Patrick (Kilkenny) | Rose, Sir Charles Day | Walters, John Tudor |
| O'Grady, J. | Rowlands, J. | Ward, John (Stoke-upon-Trent) |
| O'Kelly, Conor (Mayo, N.) | Russell, Rt. Hon. T. W. | Warner, Thomas Courtenay T. |
| Parker, James (Halifax) | Samuel, Rt. Hon. H. L. (Cleveland) | Wason, John Cathcart (Orkney) |
| Phillpps, Col. Ivor (Southampton) | Sears, J. E. | White, Sir George (Norfolk) |
| Pickersgill, Edward Hare | Shackleton, David James | White, J. Dundas (Dumbartonshire) |
| Ponsonby, Arthur A. W. H. | Shipman, Dr. John G. | Whitley, John Henry (Halifax) |
| Price, C. E. (Edinburgh, Central) | Soames, Arthur Wellesley | Wilson, Henry J. (York, W. R.) |
| Price, Sir Robert J. (Norfolk, E.) | Soares, Ernest J. | Wilson, P. W. (St. Pancras, S.) |
| Priestley, Sir W. E. B. (Bradford, E.) | Strachey, Sir Edward | Wilson, W. T. (Westhoughton) |
| Rainy, A. Rolland | Tennant, H. J. (Berwickshire) | Wood, T. M'Kinnon |
| Rea, Rt. Hon. Russell (Gloucester) | Thomas, Abel (Carmarthen, E.) | Yoxall, Sir James Henry |
| Rees, J. D. | Thomas, Sir A. (Glamorgan, E.) | |
| Richards, Thomas (W. Monmouth) | Thomas, David Alfred (Merthyr) | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Richards, T. F. (Wolverhampton, W.) | Thorne, William (West Ham) |
§ Mr. LLOYD-GEORGE moved to leave out paragraph (a), and to insert instead thereof the words, "Where any land having been so developed or used reverts to the condition of undeveloped land owing to the buildings being abandoned, or owing to the land ceasing to be used for any business, trade, or industry other than agriculture, it shall, on the expiration of one year after the buildings are so abandoned or the land ceases to be so used, as the case may be, be treated as undeveloped land for the purposes of Undeveloped Land Duty until it is again so developed or used."
§ The reason why I put this Amendment in is that it was suggested by the hon. Member for Maidstone (Lord Castlereagh) that this provision might have the effect of treating houses which became vacant as undeveloped land and that that would be an interpretation which would be adopted. Therefore, he said it ought to be made clear that that was not the intention of the Bill, and on that ground I move the Amendment.
§ Question, "That paragraph (a) stand part of the Bill," put, and negatived.
§ Question put, "That those words be there inserted in the Bill."
§ Mr. AUSTEN CHAMBERLAINI remember the discussion on this point, and I have been refreshing my memory about it in order to see what the point raised was. I think this is a question on which both sides of the House are at one, but are the Government satisfied that their new wording will really carry out their meaning? Personally, I should have thought that instead of the conjunction "or" we ought to have the conjunction "and," so that the proviso should read, "owing to the buildings being aban- 482 doned and owing to the land ceasing to be used for any business," etc., and not "owing to the buildings being abandoned or owing to the land ceasing to be used." I am not quite certain, as this is a question of draftsmanship, what the meaning of the word "abandoned" in regard to a building is. I quite admit that I am very likely to be wrong in a matter of construction and draftsmanship. Suppose the buildings are left vacant, is that in point of law an abandonment of them? Supposing a trade ceases to be carried on after a factory has been put up. Let us suppose it was one of the old Coventry silk factories at the time that the silk trade failed there. The factory would not let. The land would cease to be used and the factory would be abandoned, in one sense; but whether it would be legally abandoned or not is the point I wish to be informed upon. It was not letable, and the owner had to wait until some other trade came to Coventry and settled and found occupation for these factories, having more or less to transform them in the process. I admit I am quite unable to say what the interpretation of the word "abandoned" would be, but clearly a case of that kind ought not to be taxed. The land is in one sense developed. The owner would be very glad to find a tenant, but the trade has gone, and no other trade has come which can make use of those buildings. There may come a time when the right thing to do is to pull down that factory, abandon all the capital sunk in it, and put up something quite different, but there will be a long interval before such a position arises where it will pay you to pull down a factory and put up dwelling-houses or to pull down dwelling-houses and put up a factory. It may be either way, but surely if a man cannot get tenants for a building you do not mean to tax him. I take it that you do not. I 483 do not think you mean to tax him, and under these circumstances he is entitled to protection. Have you protected him by these words? It seems to me that the buildings would be abandoned or derelict, and that they would not afford a case for taxation.
§ Mr. LLOYD-GEORGEI agree that on both sides of the House we have the same purpose, and what we mean by "abandoned" is not that the tenant has left you with a building and you are looking out for another tenant. It will not in that case have been "abandoned"; but, supposing the landlord took no further interest in it, did not repair it, allowed the roof to fall in. Then really "derelict" is the word.
§ Mr. AUSTEN CHAMBERLAINWill you put in the word "derelict"?
§ Mr. LLOYD-GEORGEIf it is a legal term I will. I find it is a legal term, and I should be quite willing to put it in. I understand it is a term that can be used, and if it would meet the view of the right hon. Gentleman I would move that the word "abandoned" be omitted and the word "derelict" be inserted.
§ Mr. AUSTEN CHAMBERLAINIt would be better to make it read "owing to the buildings becoming derelict."
§ Mr. HENRY CHAPLINBefore that is put, may I ask how it would apply to land? There is another question entirely apart from the building, and one part of the Chancellor of the Exchequer's Amendment provides for a case where the land has ceased to be so used, that is to say, where it is not being used for any business trade or industry other than agriculture. Will the word "derelict" apply to land as well as to buildings? Then I think it would be an excellent word, and it ought to be used for this reason, that land will not have ceased to be used for a particular trade or business unless it has ceased to pay, and if it has ceased to pay it seems to me to be extremely hard upon the owner of the land that, having once developed it, and developed it successfully, the land has become undeveloped again, and then it is to be the subject of fresh taxation.
§ Mr. LLOYD-GEORGE"Derelict" would not be the word there, because it is clearly inapplicable to land, as there are all sorts of users as far as land is concerned. Supposing you take the case of a timber yard. You cannot say that the moment it 484 has ceased to be used for a timber yard the land becomes derelict. That is not the word, because you may use it for agricultural purposes. It means, cease to be used for that purpose. A rope walk is another case. It may cease to be used for that purpose, but "derelict" would not be the word to use. "Derelict" would be applicable to buildings and buildings alone.
§ Mr. CHAPLIN"Derelict" is a term very commonly used with regard to land. "Derelict land" is a common phrase, and it is perfectly well known what it means, and in this case of the Amendment of the right hon. Gentleman land is mentioned that has "ceased to be used for any trade, business, or industry other than agriculture." I want to know how that land is going to be protected, and I am afraid from what the right hon. Gentleman has said up to the present time there is no protection in his Clause for land of that description.
§ Mr. J. BERTRAMIt seems to me that the word "abandoned" is an extremely loose word, and that the word "derelict" is very little better, and in any case, especially in regard to houses, this Clause must some time or another become the subject of judicial interpretation. I should be very glad to know if there is any real objection to retaining in the newly-proposed Clause what appeared in the old Clause, which I very much prefer. I should like to see the words "within the meaning of this Section" retained in the Clause. Then in the case of a, judicial decision having to be placed upon these words, "abandoned" or "derelict," the judge would be able to take into account the whole meaning of the Section and the whole scope of the tax.
§ Sir FREDERICK BANBURYAm I right in supposing, in regard to the illustration which the right hon. Gentleman gave as to a rope walk—a person who has started a rope walk finds that he cannot make a profit on the business, and consequently he gives it up—that the land on which the rope walk is erected when it is used as agricultural land is to be treated as undeveloped, and is to be taxed because it is no longer used as a rope walk, and he can get no tenant to take it? If that is so, it seems to me a very great hardship upon a man who has developed his land in a direction in which there is a demand that when it ceases to be profitable and he puts it back to the use of agriculture he is to be taxed.
§ Mr. LLOYD-GEORGEThen it is untaxed. It certainly would not be taxed. It could not be taxed as a rope walk or a building.
§ Mr. A. J. BALFOURMay I ask the right hon. Gentleman exactly in what position a disused burial ground would be? Is that being used bonâ fide for any business, trade or industry other than agriculture? There are disused burial grounds, and a very great many of them, and therefore I do not quite see how they are to be dealt with under this Clause. The words are "ceasing to be used for any business, trade, or industry other than agriculture." There is no trade, and I do not suppose even a burial ground which is being used would be described as being used for a "business, trade, or industry" unless it belonged to a company. Then I suppose in that connection it would be an industry; perhaps the only agricultural industry which the Government are going to leave out. How are you going to deal with a disused burial ground? How does that come under this Clause—a thing we cannot leave entirely on one side as of such insignificant importance or of such rare occurrence that it may be neglected by the draftsman.
§ Mr. ROBERT DUNCAN (Lanark, Govan)With regard to the use of the word "derelict" we may consider the case of a factory. A foreign tariff injures the business, and the factory is closed. The owner might hope that the trade might be revived, and that possibly by a change of Government and of policy that which was derelict might very soon not be derelict.
§ Mr. RENWICKI have noticed several cases where disused burial grounds have been used for buildings, and all that is necessary is to get a faculty for the removal of the remains, and then the land is used.
§ Amendments made in the proposed Amendment: To leave out the words "being abandoned," and to insert instead thereof the words "becoming derelict."
§ To leave out the words "are so abandoned," and to insert instead thereof the words "have so become derelict."—[Mr. Lloyd-George.]
§ Proposed Amendment, as amended, made.
§ Mr. SPEAKERThe next Amendment, in the name of the hon. Baronet (Sir F. Channing), was disposed of by the decision of the House last night.
§ Sir FRANCIS CHANNINGWe inserted, on the proposal of the right hon. Gentleman yesterday, the words "including glass-houses or greenhouses" in Subsection (2) of this Clause. I, therefore, meant to submit the Amendment omitting the words "greenhouses or other" in order to argue the wider question, and what I wish to submit is that by the Amendment made yesterday the Government practically admitted that market gardens which have been made of a permanent nature ought to be treated as developed land. I wish to submit that, that provision having been made with regard to this higher class, it ought logically to be extended to other classes of market gardening where the outlay and expenditure has been of a permanent character, and would last a number of years, and that special consideration should be given to these cases.
§ Mr. COXThe essence of my Amendment was that no agricultural land should be taxed, whereas this Amendment accepts the principle that agricultural land is to be taxed, but makes an exemption in the case of land on which certain development has taken place.
§ Mr. SPEAKERThe House decided yesterday that agricultural land was to be taxed, and the whole argument raged round the question of small holdings and intensive culture in the neighbourhood of towns. Then came the very point which the hon. Baronet seeks to raise again. I do not see how if a Debate arises now it could be distinguished from the Debate that we had last night. It seems to raise exactly the same point.
§ Mr. AUSTEN CHAMBERLAINOn the Amendment we were discussing last night, which the Chancellor of the Exchequer moved in order to meet the case of glass-houses, I had intended to raise this very question of intensive culture. I did not do so because this Amendment distinctly raised that question, whereas the glass-houses Amendment did not do it. I suggest that there is something more in this Amendment than was raised by the glass-house Amendment, and at the same time that it is distinctly less than was raised by the Amendment of the hon. Member (Mr. Cox), and that there would be nothing inconsistent with the previous decisions of the House that they will not except all agricultural land, or that they will except land on which glasshouses have been put, in saying now that 487 they would also except land on which similar expenditure has been incurred though not in the form of glass-houses.
§ Mr. SPEAKERI think the governing words are "other than agriculture." These words stand in, and we cannot begin to whittle them away. We cannot begin to say agriculture is not to include the planting of raspberries, the growing of strawberries, and so on. There seems to be no object in putting in the general words if they are to be whittled away.
§ Sir F. CHANNINGMay I ask whether the position in which I stand of wishing to extend a provision which was introduced last night does not alter the conditions under which you made your ruling.
§ Mr. SPEAKERI think the Amendment ought to have been worked in somehow, if it were possible, on the word "agriculture," but we have passed that point.
§ Mr. AUSTEN CHAMBERLAINMay I draw you attention to paragraph (b)? Paragraph (a) having said that Undeveloped Land Duty is to be charged generally on all undeveloped land, paragraph (b) provides that land on which a certain amount of money has been spent shall not be considered to be undeveloped, even though it does not fulfil the definition of "developed land." It seems to me that the Amendment of the hon. Baronet really runs exactly parallel with the exemption given in paragraph (b), though it applies to a different thing.
§ Mr. SPEAKERI do not think paragraph (b) applies necessarily to agriculture.
§ Mr. AUSTEN CHAMBERLAINThat is so. Sub-section (1) applies generally, and says that all undeveloped land is to be charged. Sub-section (2) says what undeveloped land is, and then paragraph (b) says that although certain land would be undeveloped land as defined in Sub-section (2), yet it is not to count as undeveloped land for the purpose of the tax.
§ Mr. COXThe introduction of the word "greenhouses" does not bring out the parallel which the right hon. Gentleman opposite insists upon, because paragraph (b) says where you spend the money on sewers, etc., the land is exempt. In the same way, greenhouses being treated as buildings, where you spend money in developing land for the purpose of greenhouses that makes it an exactly analogous case to paragraph (b).
§ Mr. SPEAKERThe hon. Member wishes me, in other words, to strike out paragraph (b). That is a concession which was made by the Government.
§ Mr. LLOYD-GEORGE moved, in Subsection (2), paragraph (b), after the word "land" ["Where the owner of any land"], to insert the words "included in any scheme of land development."
§ It was objected in Committee that the sum of £100 which the Government are prepared to take as the expenditure for exempting land for development purposes might not cover anything except the particular ground upon which the money is spent, and therefore we want to make it perfectly clear that the sum of money is to cover the whole ground for this part of the scheme of development. Otherwise it might very well be argued that the £100 only protects the land which is actually contiguous, as it were, to the road. This very largely covers the case of a garden city and also of a builder who develops an estate. He may spend £4,000 or £5,000 on one particular part of the property, but he develops the whole, and we want to make it clear that so long as the money is expended as a part of the scheme of development he shall be given credit for the whole of the £5,000, as far as the whole of that area is concerned. I move these words for that purpose.
§ Amendment made.
§ Further Amendment made: In same paragraph to leave out the words "spent sums at the rate of at least one hundred pounds per acre for the purpose of so developing the land," and to insert instead thereof the words "with a view to the land being developed or used as aforesaid incurred expenditure."—[Mr. Lloyd-George.]
§ Mr. RENWICK moved, in the same paragraph, after the word "sewers" ["in connection with roads or sewers"], to insert the words "or on draining or levelling or (in case of any land intended to be used solely for any business, trade, or industry other than agriculture) on railway sidings, tramways, quays, or jetties."
§ This is an Amendment of very great importance to important interests in this country. The object of paragraph (b) is that where an expenditure of £100 an acre has been made the land shall not be considered as undeveloped land, provided the £100 is spent in a certain way. The object of my Amendment is to extend the purposes for which the money can be spent. 489 It is quite evident that the draftsmen have not considered the matter as it ought to have been considered. If it had been so considered they would have known that, in addition to roads, money is expended upon railway sidings, upon small tramway lines, upon retaining walls, jetties, quays, and upon drainage and similar works.
§ I have two concrete cases in my own personal experience which I desire to bring before the House. The first of these is an important undertaking in the neighbourhood of Manchester—the Trafford Park Company. That was a very large estate primarily bought for the purpose of developing factories contiguous to the Manchester Ship Canal. It consisted of no less than 1,180 acres, of which 480 have already been developed for that purpose. Large works have been raised there, and dwellings have been put up in the neighbourhood for the convenience of the workers engaged in these factories. The development has been very enormous in that district, and a large amount of money has been spent on roads, not only for the convenience of the 480 acres which have been developed, but the whole 1,180. Not only have roads, but sewers, drains, walls, tramways, and railway sidings have been constructed, and it would be a great hardship to this company if the expenditure on these works were not included as well as expenditure on roads. It may interest the House to know one or two facts in regard to this company in order to indicate that it has not gained through the enterprise shown by the promoters of the company. It is, I think, 15 years since that land was purchased at a cost of no less than £762 an acre. During the whole of these 15 years, with the exception of the last financial year, which ended a month ago, no dividend has ever been paid. For the past year the shareholders have received 1¼ per cent. I think it cannot be denied in the face of figures like these that the owners of this land have received nothing like adequate remuneration for their enterprise. It would be awkward and disastrous for Manchester and district, and especially for the Manchester Ship Canal, if by the imposition of the Undeveloped Land Duty that company had to pay in respect of their land at Trafford Park a sum which, I am informed, would amount to £1,200 a year. That is a large sum for a company paying no dividend. It would be disastrous if the land were driven into the market prematurely, and, for instance, small dwellings were put up where fac- 490 tories ought to be. The factories already erected are huge, and they have added greatly to the development of Manchester and of Stretford and other suburbs of Manchester. The company is doing an enormous work. It has done a great deal for the growth not only of the canal traffic, but of the factories in the neighbourhood of the canal. Those who know the facts will recognise how disastrous it would be if the effect of the tax were to drive the land prematurely into the market to be used for purposes for which it was never meant to be used—purposes for which, perhaps, it might be most unsuitable. I believe the Chancellor of the Exchequer does not recognise how this tax is going to saddle on such companies as I have mentioned onerous charges. I believe the right hon. Gentleman thinks that this is not going to cast further expenditure on this company at all. If the charge in respect of this company's land will amount to £1,200, surely the right hon. Gentleman, when he introduced the Bill, could not have imagined that he was going to saddle that company, which is doing such good work, with the payment of so large a sum.
§ Let me give another case. The right hon. Gentleman seems to think that only roads and sewers are necessary for the development of land, but I would point out what happens in the case of land alongside of navigable rivers which is required for various purposes, such as shipbuilding, dry docks, and so on. Before that land can be developed or a single penny obtained, retaining walls have to be put up, and quays and jetties have to be constructed. In the case of land with which I am intimately acquainted, roads and railways have been constructed, and, in addition, it was necessary to build jetties and quays. They are the roads from the water on to the land and they are far more valuable in certain ways than the roads which the right hon. Gentleman seems to think are the only things to be exempted. Hundreds and thousands of pounds have been spent on jetties and quays. Purchasers for the docks and big warehouses have not yet come forward. It would be monstrous to go down to one of those ports, where £17,000,000 has been spent, where huge grain, wool, or cotton warehouses have been erected, and to set up alongside of them flats or small dwellings, as might be done if the land is forced prematurely into the market. I plead that the right hon. Gentleman should extend the concession already 491 given in regard to this matter. If argument is necessary to induce him to do so, I would remind him and the House that this Clause was amended in Committee, with the result that the exemption I am now asking was removed. Why it was withdrawn I do not know. If that was done in Committee, I think we are entitled to some reply from the right hon. Gentleman as to whether he is prepared to meet us at the present time. The facts are the same. I can assure the right hon. Gentleman that unless he meets us more liberally than is proposed by the Clause as it stands, he is doing grave injustice in connection with the development of such undertakings as I have mentioned. It would be a sheer act of justice to those developing Trafford Park and the Ship Canal to accept this Amendment. I know the Ship Canal will be exempt from the duty, because the Bill provides that statutory companies are to be exempt. Though the Trafford Park Company is not a statutory company, the right hon. Gentleman ought to give it the fair treatment which he is giving to statutory companies.
§ Mr. A. J. KINGI beg to second the Amendment, and in doing so I need hardly say that I do not take this course in any hostile spirit to the Government. I have been a loyal though passive supporter of the Government for the last five months, and I think it is not always fully realised what a strain upon one's loyalty this long-continued passivity implies. The hon. Member who moved the Amendment (Mr. Renwick) has stated his case very fully, and not many words will be required from me. This is clearly a case which is primarily interesting to particular companies of which we may know something. I disclaim any personal interest in this matter. I am not interested as a shareholder or in any other way. The facts have been represented to me, and it seems to me it is a fair case for making a concession. It is one of the hardships which we acknowledge are inevitable, which the Chancellor of the Exchequer has constantly proclaimed his desire to meet, and which on the whole he has made strenuous and unfailing efforts to meet. There is no doubt that the Trafford Park Company, to which the hon. Member opposite referred, is more or less a concern carrying on work in the public interest. The Manchester Ship Canal has involved the community of that city and neighbour- 492 hood in an enormous expenditure, by which the city and neighbourhood have greatly benefited, but the shareholders have received no return whatever. They were unable to find the means to develop this land, and it was taken up by this company. I am only sorry that this Finance Bill was not passed years ago, for if it had been in force the Exchequer would have received a great deal of money from the Increment Duty. When the Ship Canal was made this land was sold for a few pounds an acre. It was afterwards disposed of to Mr. Hooley for £320 an acre, and he sold it to this company for £760 an acre. That was a nice increment on which duty has been lost. This company have paid the full value that has accrued to the land through the construction of the Ship Canal. They do not complain of having to pay on further increment value due to exertions not their own. What this company asks is that the Clause as first introduced should operate. When the Clause was originally proposed there was no restriction as to the kind of expenditure to be allowed for the £100. An hon. Member moved an Amendment restricting the expenditure, and that Amendment was accepted. What we ask is that that restriction shall be done away with, and that the company shall be granted credit for the expenditure over a period of years. They claim that this land cannot be developed all at once, and that being so, they ask to be excused from this tax in the way I have indicated. Unless the Amendment is accepted the company will have to pay the Undeveloped Land Tax, which will amount to about £1,200 a year. I think the case is clear, and I will leave it to the judgment of the House.
§ 5.0. P.M.
§ Mr. LLOYD-GEORGENo one listening to the speech of the hon. Member who moved this Amendment would have realised that any credit was given to this company for the expenditure which they may incur upon railways, sidings, canals, jetties, or tramways. One would imagine that they were taxed in respect of values created by the expenditure which they had incurred in respect of those undertakings. The hon. Member omitted that altogether. He said that there was a deduction in respect of all this expenditure, but that by some process, which he did not explain, it was to be added on afterwards. I do not understand that at all. It is not to be added on at all. It is to be deducted. But the position is really this: If there is any expenditure in respect of either 493 jetties, railways, tramways, or quays, with a view to developing any land, the company get full credit not merely for every penny which they spend, but for all values which they create by that means. It is fair that the House should know that.
§ Mr. RENWICKIs that under Clause
§ Mr. LLOYD-GEORGEYes.
§ Mr. RENWICKThat is quite different.
§ Mr. LLOYD-GEORGEIt should have been stated. It makes a very considerable difference, because the point he made is that the value in this case is created by the enormous expenditure by this company, and the whole of the value that is created by them is credited. Does the hon. Gentleman contradict?
§ Mr. RENWICKI only wish to point out that the one is a reduction and the other is an exemption.
§ Mr. LLOYD-GEORGEThe hon. Gentleman shook his head when I made the statement. That implies that he is challenging the statement which I am making. Whatever value is created by the expenditure of this company is not taxed at all. They are only taxed upon the balance which remains after deducting fully, and giving full credit not merely for their expenditure, but for every value which they create by the expenditure, which is a very different thing. For instance, this might have been purely waste land. I believe it was. A good deal of money has been spent by the Trafford Park Company, but what did it really lead to? And this illustrates the evil of concentrating upon merely one company without taking into account what the general effect of an Amendment like this would be. Here they got, I understand, a piece of waste land, which they have developed. They have spent some money upon roads and upon sewers, and they have spent a good deal of money upon railways, quays, and tramways; and, in addition to that, they have spent a good deal of money upon advertisements. All the value which they create by that expenditure is deducted out of the land before they are ever taxed. Now I am told they ought to get complete exemption in respect of this expenditure; not merely that they ought to get full credit for it, but that simply because they have spent it they ought to be completely exempted.
§ Mr. RENWICKThe same as the builders.
§ Mr. LLOYD-GEORGEThat shows the danger of making concessions. If you make this concession I have not the faintest doubt that arguments based upon it would be advanced in favour of some other cases. We made the concession to builders that where they spent money and actually destroyed the land for agricultural purposes they ought not to be charged, for some time, as if the land could be used for any other purposes. That concession is now used as a lever for the purpose of obtaining a much more formidable concession, which I think would mean the destruction in a good many cases of the whole tax. Let the House take one or two cases. There are cases where landowners have invested in railways in their district. Those railways pay. That makes no difference to the Amendment. They have invested in docks, and those docks pay; but that makes no difference here. The mere fact that they pay does not make the slightest difference. That is the real distinction between a road and a river. A railway is something which is laid down with a view to producing an income—a thing which is supposed to pay by itself.
§ Mr. RENWICKNot a siding.
§ Mr. LLOYD-GEORGEA siding is part of the machinery of a railway. When a dock or a jetty or something which is expected to pay is made there are tolls charged in respect of it. But when you come to a road nobody ever pretends to charge a toll in respect of the use of a road. I am perfectly certain there is no case where a company not merely lays down a railway, but undertakes for all time to maintain it without making any charge and without expecting any return. It is part of the investment of a company. They may do it, it is perfectly true, with a view of developing the estate, but they do it just as much with the expectation of a return in respect of the railway itself as with the idea of spending money upon building on the land. We say if you create any value out of that expenditure we give you credit for it. But there is no reason why that expenditure should entitle you to complete exemption beyond that in respect of the whole land. Otherwise you might get, for instance, the whole of the land in the neighbourhood of Cardiff completely exempted from taxation. That is the most valuable building land in that neighbourhood. The owner of that land may say, "Have I not invested money in 495 docks, and invested money quite recently in a railway?" and if an Amendment of this kind were carried all he would have to do would be to spread the whole of that sum over the entire area of his Cardiff property, and if he could show that the expenditure on the railway amounted to £100 per acre in respect of the whole of the land he would be exempted altogether. That is a case which I know, and I am certain that there are several other cases in the country. It shows, after all, that this is an attempt to destroy the tax. It is only one of those Amendments which are being moved with that idea. First of all, we are told that we must exempt all land which is cultivated for agriculture, though it is valuable building land. Then there is another Amendment to exempt something else. And then there is another Amendment to exempt any land you have where it is being let by a landowner to a railway, though he may be receiving 3 or 4 per cent. in respect of his investment. If these Amendments were accepted the result would be that there would be no land left at all for you to tax. Of course, that Trafford Park—because this is purely a Trafford Park case——
§ Mr. RENWICKNo.
§ Mr. LLOYD-GEORGEIt has been worked up by the Trafford Park Company. They have circularised in respect of it. And not merely that, but it is their Amendment. Suppose you concede their case. You would let in—or rather you would let out—areas which hon. Members have not given a thought to, while there is no real claim on the part of the landowner, because he invests in money for purely reproductive purposes. How can it be said that there is any injustice here? I say that under Clause 25 you are covering the whole of the case, and I understood that my hon. Friend was perfectly satisfied with the explanation given on the subject. I want the House fully to realise that all the money spent by these gentlemen on railways, jetties, embankments, or advertisements, which I believe are very considerable, or for any other purpose which has increased the value of the land, are all deducted before you begin to tax, and if they show that they have practically created the whole of that value of the land themselves by these means they pay no tax. Their representations as to the amounts they would be called upon to pay are perfectly ludicrous. My hon. Friend the Member for Sheffield, who 496 is an expert on these matters, knows perfectly well how it would work out, and I am glad to have his corroboration of the statement which I make. I have gone into the figures, and I say that they are perfectly grotesque. They get very large reductions on all the expenditure on their land. They will only be paying on the balance, the mere prairie land. They will pay upon that one halfpenny in the pound, which would be one-480th part of what remains after all these deductions. And the sum, instead of being the substantial sum it is represented to be, would be exceedingly minute, and they would be paying nothing in respect of the value which they create; but the value which my hon. Friend refers to was created by the expenditure of the ratepayers of Lancashire.
§ Mr. AUSTEN CHAMBERLAINI do not know whether any Member of the House thinks that the right hon. Gentleman has satisfactorily disposed of the case we have made. If hon. Gentlemen have followed him with some knowledge of the Bill—and I have to presume they have some knowledge of the Bill, for without it they might not see the whole effect of his statement—I think they will see that he has pretty effectively destroyed the case for his own tax. What is the answer to the Amendment? It is not an answer on the merits. It is that if he accepted the Amendment he would exclude so much land from taxation that the tax would be destroyed. That shows what a very bad tax it is, and it shows as clearly as anything could show that he is taxing what he is professing not to tax. He says that this is a Trafford Park Amendment. That is scarcely consistent with his statement a moment before that it applied not merely to Trafford Park but to many other cases. I heartily agree with that statement. It applies, he said, to Cardiff, and he stated that if he accepted this Amendment it would be possible for an owner to say that he had created a building value which he wanted to tax, but because the owner had created that building value it would be exempt, and then he would have no tax.
§ Mr. LLOYD-GEORGEI want to state exactly what I did say. As a matter of fact, if he can prove that he created the value he would not be taxed now. On the contrary, what I said was if he could prove that he had spent £100 an acre he would be exempted from the whole tax. If he can prove that by his railway he 497 has created the value he will not be taxed now.
§ Mr. AUSTEN CHAMBERLAINThe Chancellor of the Exchequer knows that there are hundreds of cases where the value has been so created, where the Government could not prove that it had not been so created, and where the difference between tax or no tax depends upon the party on whom you put the onus of proof. Instead of putting the onus on the Government to show that the value was socially created, you place the onus upon the individual owner to show that he can trace the value back to a particular investment of capital which he had made. The Chancellor of the Exchequer on this occasion has done a great deal more than the hon. Member behind him or my hon. Friend to confuse the issue. If he remembers the discussion in Committee he will recollect that he took me to task for references to matters which would be better dealt with under Clause 35. In every other sentence of the right hon. Gentleman's speech there appeared Clause 25. Really Clause 25 has nothing whatever to do with the matter, and the exposition of the case by the hon. Member for the Knutsford Division (Mr. A. J. King) was a much more correct exposition of the Bill than that given by the Chancellor of the Exchequer. Take the case of the Trafford Park Company. They paid £750 for the land before they spent a penny upon it. They have added to its value anything you like per acre. I have not the least idea of the figure. Perhaps they have added £250 per acre by their expenditure. The present value of the land would then be £1,000, but from that £1,000 you would deduct the value created by their expenditure under Clause 25. Where does that bring you back to? It brings you back to the £750 stated by the hon. Member. He is perfectly right. You first take the value as it exists to-day, that is the original value, plus the additional value given by the expenditure; then you take from that the additional value created by the expenditure of the company, and you come back to the £750, correctly stated by the hon. Member. It was not, I think, actually denied by the Chancellor of the Exchequer, but it was covered by him in a confused cloud of verbiage which had nothing to do with the case. You get back to the £750 per acre, and on that £750 per acre they have got to pay the ½d. tax. Why should not the builder who has spent £100 per acre on the development of the land, 498 and the laying out of roads, pay the tax as long as the development is not completed? You may say there is no reason at all if you like. But the Government do not take that view. They say there is a reason, and they put down an Amendment which provider that if you spend £100 an acre on roads you are exempt, but if you spend it on water fronts, jetties, and railway sidings you are not exempt. It determines in which way you are to spend the money.
If you want to build houses you spend the money on roads, but if you want, as in the case of Trafford Park, to put the money to the most economic and profitable use you construct water fronts, jetties, and railway sidings. The Government choose to say now that if you spend the money in one form you shall get credit, but if you spend it in an economic way, as in the case of Trafford Park, you get no credit at all. Is not that wholly illogical as either a possible or conceivable defence?
The right hon. Gentleman said that this is a Trafford Park Amendment and that the Trafford Park Company have circularised Members. But the Trafford Park Company are not the only people who have circularised Members; many people do that; and the Trafford Park Company are not in any way entitled to less consideration on that account. But it is perfect nonsense to say that this is a Trafford Park Amendment. The Chancellor of the Exchequer is forgetting the history of this question. This is a Government Amendment. Everything that is in my hon. Friend's Amendment, and more besides, was in the Amendment which the Government offered to the Trafford Park people, and which they accepted. Does the Chancellor of the Exchequer deny it? I will refer him to the Amendment which the Government subsequently placed on the Paper, and which would have relieved us of all this discussion if they had kept it in the form in which it appeared. The words of the Amendment were to the effect that where the owner of land or his predecessor in title have spent at the rate of at least £100 per acre for the purpose of developing the land, that land shall not be treated as undeveloped land. In that there is no qualification such as that which they now put in their Amendment. The Amendment as it originally stood covered the case of my hon. Friend's Amendment, and it covered a good deal more. That was the Amendment which they offered to the Trafford Park Company. My authority for saying that the Amend- 499 ment was offered to the company is that of the managing director of the Trafford Park Company, who at their meeting stated that they had had a conference with Mr. Masterman, who handed "to us a Clause which he stated to be one of the Government Amendments, in respect of which he said 'it has been most carefully considered, and although I do not think that we entirely meet you, I think you will agree that we have gone some way towards it.'"
§ The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Masterman)May I make a personal explanation on that point? I had a discussion with the Trafford Park people, or their representatives. I showed them various Clauses on the Paper, and I asked them what they considered the effect of those Clauses would be on their estate. There was no offer to the Trafford Park Company of any sort or description, nor was the Amendment put down in connection with the Trafford Park Estate as the right hon. Gentleman suggested.
§ Mr. AUSTEN CHAMBERLAINI do not say it was so, but, as reported, the words of the hon. Gentleman were: "This has been most carefully considered, and although I do not think we entirely meet you, I think you will agree we have gone some way towards it."
§ Mr. MASTERMANI cannot say whether those were the actual words or not, but there was no offer made.
§ Mr. AUSTEN CHAMBERLAINIt is really a very small matter whether the hon. Member showed them the Amendment and said, "This is the Government Amendment," or whether he said, "This is a Government Amendment, and goes a long way to meet you." That was the Amendment which the Government put upon the Paper, and if they had only stuck to it when it was satisfactory there would have been none of this trouble. But they would not carry the Amendment in the form they had put it on the Paper, as the Trafford Park people understood it, and as we Members of the House of Commons had seen it. To our astonishment and surprise the Chancellor of the Exchequer moved that Amendment at about 4 o'clock in the morning, but first of all he amended it himself so as to limit the concession in point of time, and he then accepted, or shall I say he sought, from the hon. Member for Westmoreland a 500 further Amendment to limit it to roads and metalling—in the form in which it now stands. It is rather difficult to say what goes on sometimes in the House, but I should be astonished if the Government should say that this Amendment was the spontaneous idea of the hon. Member for Westmoreland. I think it originated from the Government, though it was fathered by the hon. Member for Westmoreland. The Government accepted the qualification and limitation of their own Amendment, and by so doing destroyed half the value of the concession that was made. Do not let us hear anything more about Trafford Park Amendments. All we want to do is to get the Amendment back into the form in which the Government brought it in. If they will stick to the Amendment which they originally put down I am quite certain my hon. Friend will withdraw his and accept the original Government form. What we object to is the alteration that they made, and my hon. Friend seeks to cancel some of the illeffects of that alteration. We shall support his Amendment rather than have the Government Clause as it stands, but we would sooner have the original Government Amendment.
§ Mr. TUDOR WALTERSI venture to suggest that in the Debate that has now taken place we are entirely confusing two different kinds of expenditure upon land. What we are dealing with now is the Undeveloped Land Tax, and the Government Amendment proposes to give exemption in the payment of the Undeveloped Land Tax in certain specific cases. The cases are these, where the land is actually being prepared for development, where road construction is taking place, and where certain works, which are essential to the development of the land for building, are being performed, works that have no other utility except to develop the land, works that produce no profit to the man who expends the money until the land is built upon and is developed; that is to say, while the man is taking all necessary steps to bring the land into the market for building you allow it exemption from the Undeveloped Land Tax. The man has ceased to hold up the land; he is proceeding to prepare it for development, and that is quite a clear and definite reason why you grant exemption. What does the Amendment ask? The Amendment says that because you are spending a large sum of money on a certain piece of land for all kinds of purposes, not necessarily to help it to be built upon, not necessarily to 501 bring it into the market, but for some general purpose for the increase of value, that, therefore, you are to exempt it.
Take the case of tramways, for instance. Conceivably it might be to the interest of the Trafford Park Company to construct a tramway across the first hundred acres of their land for the development of something else at the far end of the estate. It might absolutely pay them never to sell that land for building at all across which the tramway passes, but to keep it for the purpose of obtaining revenue from the tramway or railway that went across the land. Can it then be suggested that those are works for the development of the land? They might equally be works that will retard the development of the land, and that will make 100 acres unavailable for building purposes. I venture to suggest that works of that description—docks, quays, railways, tramways—may in some cases be essential for the development, but in others will be absolutely unessential, and may even retard the development. By no process of argument can you say that the construction of a tramway or railway is part of the process of developing the land for building purposes. Besides, and this is a most important consideration, in the case where there is an allowance for the roads the road can return no revenue, while the tramway, the railway, the jetty, the quay, may, and often do, return a substantial result. You know what large sums of money are paid for wayleave. Are you going to suggest that in an estate, say, in the colliery district, where a tramway is made across the land for the purpose of bringing coal, say, to the dock, that because that tramway is made across the land by the owner of the land, who receives a substantial wayleave for bringing in the coal, that because the owner has spent his money in constructing that tramway he is to pay no Land Tax? The thing is absurd.
This thing that has originated in Trafford Park is capable of extensive application. You cannot say in some other cases where a tramway or a railway is producing a large revenue that because of that the land ought to be exempt. You cannot distinguish between vice and virtue in taxation of this kind; you cannot say that the owners of the Trafford Park estate are eminently virtuous and high-minded people without any regard to profit, and that they are developing the estate so that Manchester may benefit, and that, therefore, 502 they ought to be exempt, whereas some other district that did lay down its tramways for personal profit shall not be exempt. The whole scheme of this taxation is not to tax the individual, but to follow certain parcels of land, to follow the piece of land, and tax that land. You can do that whether it is owned by a virtuous duke or a wicked Labour Member. In either case you must follow the land. You must lay down a principle that shall be applied to all similar land, and unless you do that you involve it in hopeless confusion. The right hon. Gentleman (Mr. Austen Chamberlain) said as to the money you expended upon the development of the land when you came to deduct that you got back to the original £750. May I submit that is not an entirely accurate statement. It does not follow that the land is worth £750 because £750 is the price paid for it. When the valuer proceeds to value the Trafford Park Estate, plus the expenditure thereon, he will take its present value, what its selling price in the market is, and he will deduct from that not only the expenditure upon it but the value that expenditure has given to land, and that conceivably may bring the net figure considerably below £750, the price paid for it. You must get your land fixed at the market value——
§ Mr. AUSTEN CHAMBERLAINThis is very important. In the deductions you do not take account at all of the money spent, you only take account of the value created. You may have spent £1,000 and only created £100 of value. You do not get credit for £1,000 but only for £100. You may have spent £100 and created £1,000 of value. You do not get credit for £100 but for £1,000. It has nothing to do with the amount of money spent but with the value created. How can you arrive at the value created? Surely that must be the difference between the value now, after the expenditure has been incurred, and what was the value before that expenditure.
§ Mr. TUDOR WALTERSThat does not follow. You had a piece of land in Trafford Park and certain roads were constructed upon it. The present value is easily ascertained by the price in the market. Then the value, which, say, now is 10s. per yard, may, if the valuer divested it of the roads and other expenditure, be reduced to, say, 6s., or 5s., or 4s. per yard. That is a process that he can arrive at without knowing exactly what the man spent or without knowing what it cost the 503 man before he spent anything on it. Therefore I say that for the right hon. Gentleman to argue that because £250 per acre was spent on the land that £250 is allowed off the value, and that therefore you necessarily get back to the £750 for the Undeveloped Land Tax is not correct. If that land is worth £1,000 per acre, and it is proved to the valuer that after deducting the works that have been performed on it it is now only worth £500, then it is on £500 the tax will be paid, and not on £750.
I should like to point out in connection with that £750 that it does not follow that because £750 was the price paid that therefore there is any injustice in taxing that, because the House will remember that the increase of value from £300 to £750 was created by the Manchester Ship Canal, which is the expenditure of public money. Therefore what this Amendment really asks for is this, that the Trafford Park Company shall be allowed credit for the expenditure of the Manchester Ship Canal that has increased the value of their lands, and that in addition they shall be allowed to deduct, before arriving at any amount, the whole amount of their expenditure, and in addition to that, while that land is increasing in value, and while the demand is continuing to take place, that they shall be exempt from the Undeveloped Land Tax. This seems to me to be just the kind of Amendment that will deprive the Exchequer of any kind of revenue from this tax at all. If you are going to take an isolated case like that of the Trafford Park Company, and lay down general principles of exemption, of course you will sweep away the entire proceeds of the tax. It seems to me the Amendment suggested by the Government is fair and reasonable, because it is an allowance, and an exemption from the Undeveloped Land Tax given on outlay of money essential to that development. The other suggestion seems to me to be entirely unjust and unfair, because it proposes to include the expenditure of money which may return a profit to the men who expended it, and which may or may not be an essential part of the development of the estate.
§ Mr. BALFOURThe hon. Gentleman who has just sat down speaks, I need hardly tell the House, with great authority upon all questions of land value. I confess I listened with very great surprise to the speech which he has just de- 504 livered. In the first place I observe that he has misunderstood the Bill as it now stands with the Government Amendments. What is his main criticism upon the Amendment of my hon. Friend? His main criticism is this, that my hon. Friend asks for an allowance to be made in respect of expenditure not made for the development of the land, but for some other independent and collateral purpose. That is not so, because we have already passed an Amendment which he will find on the Paper on page 24, and which was moved by the Chancellor of the Exchequer, and which governs, I understand, the Amendment moved by my hon. Friend. The words of that Amendment moved by the Chancellor of the Exchequer are these: "With a view to the land being developed or used as aforesaid." Therefore, my hon. Friend's Amendment only touches that kind of expenditure which, in the language of the Government, has been made "with a view to the land being developed or used as aforesaid," and the whole of that part of the hon. Gentleman's argument which deals with collateral expenditure bringing in independent revenue, and used for some wholly independent purpose, absolutely falls to the ground, and has nothing whatever to do with it. Every atom of expenditure which my hon. Friend's Amendment deals with is expenditure intended to develop the land for purposes "as aforesaid."
Therefore the whole question is reduced, is it not, to the one very plain issue: Why are you going to distinguish between two classes of expenditure, both of which have been used to develop the land for the purposes "as aforesaid"? To that question I venture to say the hon. Gentleman will not tell me he has made the smallest reply at all in the whole of the interesting speech he has delivered. He never touched it, he never dwelt upon it. Is it not quite obvious that in a case like the Trafford Park estate to build, not sea fronts, but water fronts, jetties, and all the rest of it, is entirely and directly intended by the company to develop the estate for the purposes "as aforesaid." It is just as useful as if the money were spent on kerbs, metalling, or on roads, and yet the Government choose arbitrarily to come forward and draw this distinction between two kinds of expenditure, both of which are intended to subserve the same public objects. There were other points in the hon. Gentleman's speech which I think were very much open to criticism and comment, 505 but I do not wish to detain the House, and I will not dwell upon them. I will ask the House to turn its mind from the narrow issue to the broader issue raised by the Amendment. The narrow issue is the amazing course the Government have taken in putting down an Amendment, correcting it, getting somebody else still further to correct it, thus disappointing the hopes which, rightly or wrongly—certainly I am not accusing them of breach of faith—have been raised in the minds of the Trafford Park Estate owners and other owners who are carrying out in connection with their land great works of development which do not happen to consist of drains or kerbs. I put that controversy between us and the Government on one side, and I ask the House to consider what is the policy now demonstrated to underlie the whole of this part of the tax. The Government have claimed throughout that this Undeveloped Land Tax is a tax incident purely upon that which is not only not enterprise, but is the converse, the negation, the absence of enterprise. This has been claimed to be a tax upon land the owners of which neither do anything with it themselves nor allow others to do anything with it. That is the whole justification of the tax. That is the claim on which the whole policy is based. It now stands plainly confessed that the men who will suffer from this are not merely such owners, if such owners there be, who fall under the description I have just
§ given, but people who are spending large sums of money on railways, jetties, harbours, and all those things that you want money spent upon in this country if you are going to develop its industries. This tax, obviously to all the world who take the trouble to understand it, is a tax upon some of the most important industrial enterprises in which the country can possibly engage. It is manifestly no longer an Undeveloped Land Tax; it is a tax on the development of land. Who henceforth is going to enter into a transaction like that of the Trafford Park Estate? Who, with this kind of legislation in their eyes, are going to get the public to invest their money in that kind of development? This is a direct and plain discouragement of a most useful form of enterprise. It is a toll upon the expenditure of capital for public purposes. For that reason, and that reason alone, I think the Government are most ill-advised, from their own point of view, not to have adhered to the policy which, in some lapse into reason and moderation, they accepted at an earlier stage of our proceedings, but from which, terrified at their own moderation, they ran away in the small hours of the morning, leaving the Bill very little better than it was before the Amendment was accepted.
§ Question put: "That the proposed words be there inserted in the Bill."
§ The House divided: Ayes, 89; Noes 195.
507| Division No. 822.] | AYES. | [5.50 p.m. |
| Acland-Hood, Rt. Hon. Sir Alex. F. | Fullerton, Hugh | Percy, Earl |
| Agar-Robartes, Hon. T. C. R. | Gardner, Ernest | Powell, Sir Francis Sharp |
| Anstruther-Gray, Major | Gibbs, G. A. (Bristol, West) | Randies, Sir John Scurrah |
| Arkwright, John Stanhope | Gooch, Henry Cubitt (Peckham) | Ratcliff, Major R. F. |
| Balcarres, Lord | Gordon, J. | Remnant, James Farquharson |
| Balfour, Rt. Hon. A. J. (City Lond.) | Goulding, Edward Alfred | Renton, Leslie |
| Banbury, Sir Frederick George | Guinness, Hon. R. (Haggerston) | Ridsdale, E. A. |
| Beauchamp, E. | Guinness, Hon. W. E. (B. S. Edm'ds.) | Ronaldshay, Earl of |
| Beckett, Hon. Gervase | Hamilton, Marquess of | Rutherford, Watson (Liverpool) |
| Bertram, Julius | Hardy, Laurence (Kent, Ashford) | Sassoon, Sir Edward Albert |
| Bignold, Sir Arthur | Harris, Frederick Leverton | Scott, Sir S. (Marylebone, W.) |
| Bowles, G. Stewart | Harrison-Broadley, H. B. | Sheffield, Sir Berkeley George D. |
| Bull, Sir William James | Hay, Hon. Claude George | Stanier, Beville |
| Carlile, E. Hildred | Heimsley, Viscount | Stanley, Hon. Arthur (Ormskirk) |
| Cave, George | Hope, James Fitzaian (Sheffield) | Starkey, John R. |
| Cecil, Evelyn (Aston Manor) | Hunt, Rowland | Staveley-Hill, Henry (Staffordshire) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Kennaway, Rt. Hon. Sir John H. | Stone, Sir Benjamin |
| Chance, Frederick William | Kerry, Earl of | Talbot, Lord E. (Chichester) |
| Channing, Sir Francis Allston | Keswick, William | Thomson, W. Mitchell (Lanark) |
| Chaplin, Rt. Hon. Henry | King, Alfred John (Knutsford) | Thornton, Percy M. |
| Clark, George Smith | King, Sir Henry Seymour (Hull) | Valentia, Viscount |
| Cochrane, Hon. Thomas H. A. E. | Long, Col. Charles W. (Evesham) | Walker, Col. W. H. (Lancashire) |
| Courthope, G. Loyd | MacCaw, William J. MacGeagh | Walrond, Hon. Lionel |
| Cox, Harold | M'Arthur, Charles | Whitbread, S. Howard |
| Craig, Charles Curtis (Antrim, S.) | Magnus, Sir Philip | Willoughby de Eresby, Lord |
| Craig, Captain James (Down, E.) | Moore, William | Wolff, Gustay Wilhelm |
| Craik, Sir Henry | Morpeth, Viscount | Younger, George |
| Davies, David (Montgomery, Co.) | Morrison-Bell, Captain | |
| Duncan, Robert (Lanark, Govan) | Newdegate, F. A. | TELLERS FOR THE AYES.—Mr. Remnant and Mr. G. D. Faber. |
| Forster, Henry William | Nicholson, Wm. G. (Petersfield) | |
| Foster, P. S. | Parkes, Ebenezer | |
| NOES. | ||
| Abraham, W. (Cork, N. E.) | Goddard, Sir Daniel Ford | Philipps, Owen C. (Pembroke) |
| Acland, Francis Dyke | Greenwood, G. (Peterborough) | Ponsonby, Arthur A. W. H. |
| Allen, A. Acland (Christchurch) | Greenwood, Hamar (York) | Price, C. E. (Edinburgh, Central) |
| Allen, Charles P. (Stroud) | Guiland, John W. | Priestley, Sir W. E. B. (Bradford, E.) |
| Ambrose, Robert | Harcourt, Rt. Hon. L. (Rossendale) | Radford, G. H. |
| Asquith, Rt. Hon. Herbert Henry | Harcourt, Robert V. (Montrose) | Rainy, A. Rolland |
| Astbury, John Meir | Harmsworth, R. L. (Caithness-shire) | Raphael, Herbert H. |
| Baker, Sir John (Portsmouth) | Harvey, W. E. (Derbyshire, N. E.) | Rea, Rt. Hon. Russell (Gloucester) |
| Balfour, Robert (Lanark) | Haslam, Lewis (Monmouth) | Rea, Walter Russell (Scarborough) |
| Baring, Godfrey (Isle of Wight) | Hazel, Dr. A. E. W. | Rees, J. D. |
| Barker, Sir John | Hedges, A. Paget | Richards, Thomas (W. Monmouth) |
| Barlow, Sir John E. (Somerset) | Helme, Norval Watson | Richards, T. F. (Wolverhampton, W.) |
| Barnes, G. N. | Henderson, Arthur (Durham) | Roberts, Charles H. (Lincoln) |
| Barry, Redmond J. (Tyrone, N.) | Henderson, J. McD. (Aberdeen, W.) | Roberts, G. H. (Norwich) |
| Beale, W. P. | Herbert, Col. Sir Ivor (Mon. S.) | Robertson, Sir G. Scott (Bradford) |
| Benn, Sir J. Williams (Devonport) | Herbert, T. Arnold (Wycombe) | Robinson, S. |
| Benn, W. (Tower Hamlets, St. Geo.) | Higham, John Sharp | Robson, Sir William Snowdon |
| Berridge, T. H. D. | Hobart, Sir Robert | Roe, Sir Thomas |
| Bethell, Sir J. H. (Essex, Romford) | Hodge, John | Rogers, F. E. Newman |
| Bethell, T. R. (Essex, Maldon) | Holt, Richard Durning | Rose, Sir Charles Day |
| Birrell, Rt. Hon. Augustine | Horniman, Emslie John | Russell, Rt. Hon. T. W. |
| Boulton, A. C. F. | Idris, T. H. W. | Rutherford, V. H. (Brentford) |
| Bowerman, C. W. | Illingworth, Percy H. | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brace, William | Isaacs, Rufus Daniel | Sears, J. E. |
| Branch, James | Jackson, R. S. | Seely, Colonel |
| Brigg, John | Jones, Leif (Appleby) | Shackleton, David James |
| Brooke, Stopford | Jones, William (Carnarvonshire) | Shaw, Sir Charles E. (Stafford) |
| Brunner, J. F. L. (Lancs., Leigh) | Kekewich, Sir George | Shipman, Dr. John G. |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Lamb, Edmund G. (Leominster) | Sloan, Thomas Henry |
| Bryce, J. Annan | Layland-Barratt, Sir Francis | Snowden, P. |
| Burns, Rt. Hon. John | Leese, Sir Joseph F. (Accrington) | Soames, Arthur Wellesley |
| Buxton, Rt. Hon. Sydney Charles | Levy, Sir Maurice | Soares, Ernest J. |
| Byles, William Pollard | Lewis, John Herbert | Steadman, W. C. |
| Cameron, Robert | Lloyd-George, Rt. Hon. David | Strachey, Sir Edward |
| Carr-Gomm, H. W. | Lough, Rt. Hon. Thomas | Taylor, Austin (East Toxteth) |
| Causton, Rt. Hon. Richard Knight | Lupton, Arnold | Tennant, H. J. (Berwickshire) |
| Cherry, Rt. Hon. R. R. | Luttrell, Hugh Fownes | Thomas, Abel (Carmarthen, E.) |
| Churchill, Rt. Hon. Winston S. | Lynch, A. (Clare, W.) | Thorne, William (West Ham) |
| Clough, William | Macdonald, J. M. (Falkirk Burghs) | Tomkinson, James |
| Cobbold, Felix Thornley | Mackarness, Frederick C. | Trevelyan, Charles Philips |
| Collins, Stephen (Lambeth) | Macnamara, Dr. Thomas J. | Ure, Rt. Hon. Alexander |
| Corbett, A. Cameron (Glasgow) | Macpherson, J. T. | Villiers, Ernest Amherst |
| Corbett, C. H. (Sussex, E. Grinstead) | MacVeagh, Jeremiah (Down, S.) | Walker, H. De R. (Leicester) |
| Cotton, Sir H. J. S. | M'Callum, John M. | Walsh, Stephen |
| Crossley, William J. | M'Laren, H. D. (Stafford, W.) | Walters, John Tudor |
| Curran, Peter Francis | M'Micking, Major G. | Warner, Thomas Courtenay T. |
| Dalziel, Sir James Henry | Mallet, Charles E. | Wason, John Cathcart (Orkney) |
| Davies, M. Vaughan- (Cardigan) | Marnham, F. J. | Waterlow, D. S. |
| Davies, Sir W. Howell, (Bristol, S.) | Massie, J. | Watt, Henry A. |
| Dickinson, W. H. (St. Pancras, N.) | Masterman, C. F. G. | Weir, James (Galloway) |
| Dobson, Thomas W. | Menzies, Sir Walter | White, Sir George (Norfolk) |
| Dunn, A. Edward (Camborne) | Molteno, Percy Alport | White, J. Dundas (Dumbartonshire) |
| Edwards, Sir Francis (Radnor) | Morse, L. L. | White, Sir Luke (York, E. R.) |
| Elibank, Master of | Morton, Alpheus Cleophas | Whitehead, Rowland |
| Erskine, David C. | Murray, James (Aberdeen, E.) | Whitley, John Henry (Halifax) |
| Essex, R. W. | Myer, Horatio | Wiles, Thomas |
| Esslemont, George Birnie | Napier, T. B. | Wilkie, Alexander |
| Everett, R. Lacey | Nolan, Joseph | Williamson, Sir A. |
| Falconer, J. | O'Brien, Patrick (Kilkenny) | Wilson, J. W. (Worcestershire, N.) |
| Fenwick, Charles | O'Connor, John (Kildare, N.) | Wilson, P. W. (St. Pancras, S.) |
| Ferguson, R. C. Munro | O'Grady, J. | Wilson, W. T. (Westhoughton) |
| Fiennes, Hon. Eustace | O'Kelly, Conor (Mayo, N.) | Wood, T. McKinnon |
| Gibb, James (Harrow) | O'Malley, William | Yoxall, Sir James Henry |
| Gibson, J. P. | Parker, James (Halifax) | |
| Gladstone, Rt. Hon. Herbert John | Pearson, W. H. M. (Suffolk, Eye) | TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton. |
| Glendinning, R. G. | Philipps, Col. Ivor (Southampton) |
Question, "That those words as amended be there inserted," put, and agreed to.
§ Mr. COX moved, in paragraph (b), after the word "sewers," to insert the words "or on mains."
§ There is no reason why a man should be credited with his expenditure on laying sewers and not also with his expenditure on laying mains. It means the money spent on laying gas, water, and electric mains, before an estate is developed; therefore I think it is purely a verbal point.
508§ Mr. T. H. W. IDRIS formally seconded the Amendment.
§ Mr. LLOYD-GEORGEI regret that my hon. Friend did not give me even a moment's notice of this Amendment. It is obviously impossible to accept an Amendment of this sort when I have had no time to consult anybody as to what its effect would be. My own opinion is that the word "sewer" would cover main drains 509 at any rate. Water, electric, and gas mains may be reproductive, and they are certainly not in the same position as sewers.
§ Mr. COXI must apologise for not giving notice, but I really thought the point was a purely verbal one.
Mr. J. W. WILSON (Worcestershire, N.)In the great majority of these cases these services would be rendered by the companies or corporations that were going to supply the gas, water, or electricity. I cannot recall a case where the owners of the land who were developing it were called upon to pay for the gas mains.
§ Amendment negatived.
§ 6.0 P.M.
§ Mr. WATSON RUTHERFORDhad an Amendment on the Paper, in paragraph (b), after the word "land" ["that land shall for the purpose of this Section"], to insert the words "and any part of the land dedicated to open spaces."
After what has taken place this afternoon I have no hope that the Chancellor of the Exchequer will listen favourably to this Amendment, and I do not propose to move it.
§ Amendment, by leave, withdrawn.
§ Mr. LLOYD-GEORGE moved, in paragraph (b), after the word "shall" ["that land shall for the purposes of this Section"], to insert the words "to the extent of one acre for every complete hundred pounds of that expenditure."
§ Mr. AUSTEN CHAMBERLAINI want to raise on this Amendment a point in regard to which the Chancellor of the Exchequer gave me something approaching a pledge in Committee—at any rate a pledge for favourable consideration. The point was, what exactly should the £100 per acre be charged on—on buildable land, land which could be covered by buildings or is intended to be covered with buildings, or on land which was to be used for other similar purposes? I raised the question specially with reference to garden cities, and quoted the cases like Bournville. Here at the meeting of roads, instead of drawing the roads to a right angle and putting the greatest number of buildings on the ground, the roads are sloped away, and little open spaces left in the centre of cross-roads, and railed off, and shrubs or trees are planted. I am sorry to say that I have brought the wrong number of the OFFICIAL REPORT.
§ Mr. LLOYD-GEORGEI remember.
§ Mr. AUSTEN CHAMBERLAINI have not the occasion on which the thing was said, but I have the reference which the Chancellor of the Exchequer made to the hon. Gentleman the Member for Durham. The Chancellor said: "That deals rather with the place.…" In reference to the Amendment of the Member for West Derby the Chancellor said that he thought the hon. Gentleman had made out a case, and promised to consider it. "That is all I promise," he said; "I should not like to have any misconception."
The Chancellor thinks he has dealt with; the matter. I do not see any Amendment dealing with it. If it could possibly be dealt with at this point, it might be by inserting the word "building" before "land," so as to make the £100 exempt such land as that referred to.
§ Mr. LLOYD-GEORGEI thought I had covered it. I cannot be quite sure that these words do not cover it. There is an Amendment on the Paper, the last on the page. I have there considered the point put by the right hon. Gentleman. I think it ought to be covered. I have done my very best to do so. The latter part of the Amendment, I think, meets the case: "the part of the land to be treated as land developed, or used as aforesaid, shall be determined by the Commissioners." That means that you can spread the £100 expenditure over, and not merely confine it. I am told that that covers that point.
§ Amendment made.
§ Further Amendments made: In paragraph (b), to leave out the words "undeveloped land" ["as undeveloped land although it is"], and to insert instead thereof the words "land so developed or used."
§ In the same paragraph: To leave out the words from "being" ["being built upon or used for any business trade or industry other than agriculture but"], and to insert thereof the words "actually so developed or used."—[Mr. Lloyd-George.]
§ Mr. LLOYD-GEORGE moved, in the same paragraph, to leave out from the word "no" ["no sum shall be taken"] to the end of the paragraph, and to insert instead thereof the words "expenditure shall be taken into account if ten years have elapsed since the date of the expenditure, or if after the date of the expenditure the land having 511 been developed reverts to the condition of undeveloped land, and in a case where the amount of the expenditure does not cover the whole of the land included in the scheme of land development the part of the land to be treated as land developed or used as aforesaid shall be determined by the Commissioners."
§ Mr. RENWICKI just wish to make an appeal to the Chancellor of the Exchequer. The purport of this Amendment is to limit the allowance of expenditure to 10 years. I wish the right hon. Gentleman would consider the advisability of accepting 20 years instead of 10 years. I have an Amendment down to that effect later, and I am not sure whether it will be in order.
§ Mr. SPEAKERIt will be in order.
§ Mr. RENWICKCan I move the Amendment now?
§ Mr. SPEAKERYes.
§ Mr. RENWICKThen I beg to move, after the word "if" ["if ten years have elapsed"], to insert the words "where it has been incurred before the passing of this Act twenty years have elapsed since the date of the expenditure, or if where it has been incurred after the passing of this Act."
In the case of Trafford Park, it is 15 years since that land was acquired. It is not only that park, but other cases that are concerned. From the moment these are acquired the expenditure upon them commences by building retaining walls, quays, and so on. The thing applies to a greater number of cases than Trafford Park. In nearly all cases of riversides, and especially where there is a tide, there is the necessity of retaining walls, jetties, and so on. It is absolutely necessary to make that expenditure. Therefore I think it will be very unfair to limit this to 10 years. If you accept 20 instead, you meet many cases of hardship. I do not think the amount in these cases will be very large.
§ Sir SAMUEL SCOTTI do hope the right hon. Gentleman will see his way to accept the Amendment of my hon. Friend. I have an Amendment down on the Paper to make the period 50 years instead of 10. But I am bound to say that I put that down on my first reading of the Clause, as I thought this Sub-section would govern the Sub-section in Section 25. I think I am now correct in saying that that 512 deals with an entirely different matter. Will the Chancellor say whether this Subsection in any way governs the Subsection in Clause 25?
§ Mr. LLOYD-GEORGEOh no, it is a totally different thing.
§ Sir S. SCOTTUnder those circumstances I think the period I put down was somewhat unreasonable. But I do hope the right hon. Gentleman will see his way to accept the very reasonable proposal of my hon. Friend. We have already heard of the Trafford Park estate; that during 15 years it paid no dividend whatever, and at the end of the 15 years only 1½ per cent. It is not only the Trafford Park estate, but many other estates in the country which will be burdened if only 10 years be allowed them for their development. I know many private estates myself. In the development of an estate you first have to make a road—very often a lengthy road—in order to open up the communication, and anyone who invests their capital in this way knows perfectly well that they will have no chance of getting a return for the money spent on a large portion of that road for considerably more than 10 years—even if then.
§ Mr. LLOYD-GEORGEThe hon. Gentleman who moved this Amendment was under the impression, I think, that my Amendment applied to jetties and sea walls. Well, it does not. It purely applies to roads and kerbs, and the arguments which he advanced are clearly inapplicable, because there is no necessity to renew these roads and kerbs every five or ten years. This Clause does not apply to jetties. The whole point is this: not whether you are going to give credit for 10 or 20 years for the expenditure on a road, but whether the specified exemption is to go beyond 10 years. Because after that the builder or the estate owner can stall deduct the expenditure which he has made in respect to the roads and kerbs. I have seen a good many builders on the matter, and they were of opinion that a period of 10 years was a very fair period for exemption, for after all there are very few cuttings-up of land 10 years in advance of its possible development. It may be a man has held up land purely for speculative purposes, and if you extend the exemption beyond 10 years that will be an encouragement to the speculator to hold out for high prices. That is exactly what we want to discourage. Although I am very anxious 513 to meet hon. Members, who have put this Amendment forward very reasonably and very temperately, I do not think I shall be justified in accepting it. Criticisms have been made from the other point of view that this exemption is much too wide. Undoubtedly it will lose a great deal of revenue. If we are to exempt beyond the period stated the revenue will be very seriously affected.
§ Mr. WATSON RUTHERFORDThe Clause to which this Amendment refers is not a clause really dealing with deductions. It is a clause that deals, as I understand it, with entire exemption. And land is not to be taxed as undeveloped land if built upon, or if £100 per acre have been spent upon it towards building houses or cottages. Of course, the Chancellor of the Exchequer has made it quite clear in the course of this Debate up till now that building factories upon land is not developing it; putting a railway upon land is not developing it. The only development of which the right hon. Gentleman takes any account is that of building cottages, and the only expenditure of £100 an acre that he is going to consider must be strictly upon roads in connection with such cottages. It is obvious, of course, that the Amendment was moved by my hon. Friend with the idea that other kinds of buildings might reasonably be considered as development, and that there are such things as roads and walls, and so on, the benefit of which is not exhausted in ten years. And, therefore, I think it would be a reasonable thing to prolong the periods beyond ten years. Perhaps, even although this is not developing land according to the view of the Chancellor of the Exchequer, I think it will be within the knowledge of every Member of this House that there are plenty of pieces of land that have had roads made, and on which houses were started to be built upwards of ten years ago where yet a considerable portion is unfinished. I could take the right hon. Gentleman to half a dozen such places within five or six miles of this House. What is the attitude the right hon. Gentleman takes up? He says that after ten years the benefit is no longer to be taken into account, and although you spend £100 per acre upon it, yet because you have lost your market he is going to come down upon you and take away some more of your money. It seems to me that even upon the extraordinary position taken up by the Government as to what developed land is, there is no answer 514 to the Amendment put forward. If a reasonable effort is made and a reasonable sum has been spent there is no excuse for imposing this tax if it is a penal tax in such circumstances. I think if exemption is allowed up to ten years it ought to be allowed to the extremely reasonable period which is proposed in the Amendment.
§ Amendment negatived.
§ Question put that the following words be omitted from paragraph (b), "no sums shall be taken into account after ten years have elapsed since the time when the sums were spent."
§ Amendment made.
§ Question proposed that the following words be there inserted: "expenditure shall be taken into account if ten years have elapsed since the date of the expenditure, or if after the date of the expenditure the land having been developed reverts to the condition of undeveloped land, and in a case where the amount of the expenditure does not cover the whole of the land included in the scheme of land development, the part of the land to be treated as land developed or used as aforesaid shall be determined by the Commissioners."
§ Mr. AUSTEN CHAMBERLAINThis is the Amendment which the Chancellor of the Exchequer referred to just now as meeting my point. I see it gives a discretion to the Commissioners to act in the way I desire, but it does not impose upon them any obligation to do so. I think they would do so, but I also think that it would be desirable that they should do so, and it is in expectation of the full consideration which the Chancellor of the Exchequer promised that I expressed the hope that the Government will be prepared to add some words carrying out that view.
§ Mr. MASTERMANWe quite agree the right hon. Gentleman had that promise from us in a former Debate. We thought we met it by the words put in, "determined by the Commissioners." But the right hon. Gentleman desires further protection, and I shall therefore propose to add at the end "as being land with the view to the development or use of which as aforesaid the expenditure has in the main been incurred."
§ Amendment made.