HC Deb 22 October 1909 vol 12 cc641-7

(1) No Reversion Duty shall be charged On the determination of a mining lease, and no Increment Value Duty shall be charged on the occasion of the grant of a mining lease or in respect of minerals which are comprised in a mining lease, or are being worked, except as a duty payable annually in manner provided by this Act.

(2) Increment Value Duty shall not be charged in the case of any minerals which were, on the thirtieth day of April nineteen hundred and nine, either comprised in a mining lease or being worked by the proprietor, so long as the minerals are for the time being either comprised in a mining lease, or being worked by the proprietor: Provided that the exemption under this Section shall continue to apply in the case of any minerals, although they cease for a temporary period to be comprised in a mining lease or to be worked, So long as the period does not exceed twelve months.

(3) Increment Value Duty in respect of the increment value of minerals which are Comprised in a mining lease or are being Worked shall, where that duty is chargeable, be charged annually; and the increment value shall, instead of being esti- mated as a capital sum, be taken to be the sum (if any) by which, in each year during which the tenancy under the lease continues or the minerals are being worked, as the case may be, the rental value on which Mineral Eights Duty is charged in respect of the right to work the minerals exceeds the annual equivalent of the original capital value of the minerals, or the capital value of the minerals on the last preceding occasion on which Increment Value Duty has been collected, as the case may be; and the annual equivalent of any such capital value of the minerals shall be taken to be two twenty-fifth parts of that capital value.

(4) Increment Value Duty payable annually under this Section shall, instead of being collected as provided by this Act in other cases, be recoverable in the same manner as Mineral Rights Duty, with the same right of deduction.

(5) Any proprietor or lessor of any minerals who pays Increment Value Duty in pursuance of this provision shall be entitled to be relieved in any year from the payment of Mineral Rights Duty, as such proprietor or lessor, up to the amount paid by him in that year in respect of Increment Value Duty.

For the purposes of this provision a deduction of any amount from the rent payable to a lessor on account of Mineral Rights Duty shall be deemed to be a payment of that duty, and the relief may be given either by allowance or repayment or both of those means, as the occasion may require.

(6) Where minerals cease to be comprised in a mining lease or to be worked within the meaning of this Section, the capital value of the minerals at the time shall be specially ascertained in accordance with the provisions of this Act, and the capital value as so ascertained shall be treated as the original capital value of the minerals.

(7) Nothing in this Section shall apply to minerals which are exempt from Mineral Rights Duty under this Act.

Mr. JAMES HOPE (for Mr. Lambton) moved, in Sub-section (1), after the word "Act" ["in manner provided by this Act"] to insert the words "or in respect of any minerals which are exempt from Mineral Rights Duty under this Act."

I think the Amendment is merely consequential because if these substances are to be exempt from one tax I do not see why they should be included in the other. These taxes are only to be collected and payable in the manner provided by the Act; the Act only provides for other minerals, and not exceptional minerals.

Viscount CASTLEREAGH

I beg to second the Amendment.

Mr. LLOYD-GEORGE

Increment Duty upon all classes of land, whether it has minerals or not, is to be charged. I do not see why this class of land, if sold at enhanced value, not attributable to anything the owner has done himself, should escape any more than an ordinary individual who owns the land with no minerals underneath it at all.

Amendment negatived.

Sir J. RANDLES (for Mr. Laurence Hardy) moved, in Sub-section (2), to leave out the words "so long as the period does not exceed twelve months."

In the Committee stage the Chancellor of the Exchequer recognised the importance of this point and promised that consideration would be given to it.

Mr. LLOYD GEORGE

I think I did give a promise, and I am now prepared to extend the period to two years.

Sir JOHN RANDLES

I think that is very reasonable.

Amendment made in the proposed Amendment: To leave out the words "twelve months," and to insert instead thereof the words "two years."

Words, as amended, there inserted in the Bill.

Further Amendments made: In Sub-section (3) leave out the words "the tenancy under" ["in each year during which the tenancy under the lease continues."]

In Sub-section (3) to leave out the words "as the case may be" ["Increment Value Duty has been collected as the case may be"], and to insert instead thereof the words "otherwise than as an annual duty if Increment Value Duty has been so collected before the minerals have become comprised in a mining lease or have commenced to be worked."—[Sir W. Robson.]

Sir W. ROBSON moved, at the end of Sub-section (3), to add the words, "If in any special case it is shown to the Commissioners that the rental value on which Mineral Rights Duty is charged represents in part a return for money expended within fifteen years by a lessor in boring or otherwise proving the minerals, the rental value shall be reduced for the purposes of the collection of Increment Value Duty by the amount which represents that return."

This is in fulfilment of a promise made last night with regard to expenditure by the lessor in boring or otherwise proving the minerals within 15 years, and this Amendment enables the reduction to be made for the purposes of Increment Value Duty.

Lord BALCARRES

Why should this be limited to special cases?

Sir W. ROBSON

The word "special" has no limiting effect at all. It rather indicates we are dealing with cases that do not come within the general rules laid down. I do not attach any importance to the word.

Lord BALCARRES

Then I move to omit the word "special" in the proposed Amendment.

Amendment to proposed Amendment made.

Question proposed, "That the Amendment, as amended, be there inserted in the Bill."

Mr. AUSTEN CHAMBERLAIN

I want an answer from the Government to some observations which I made last night as to why they treat the mine-owner differently from the land-owner. The mine-owner is in one sense a land-owner. The Government have decided that the land-owner is not to be charged Increment Duty on; any value which is created by his expenditure. Suppose a man has marshy bog land, and the landlord by a scheme of drainage and reclamation has converted that into building land, no Increment Duty is to be charged upon any of the value he has so created. If, however, on top of the value he has created there is what is called a socially created value due to the growth of population in that district, he may be charged. Why should the owner of mineral property be denied the same advantage as that which has been extended to landowners? According to this proposal the mineral owner is only to be allowed this partial exemption for a period of 15 years. I will give an illustration which has already been placed before the House, Take the case were a former owner of the land has spent something like £250,000 in constructing a railway to a place on the seaside coast where a dock has been built. In that case the Chancellor of the Exchequer said definitely that he desired to protect, and had protected, the whole of the value created by that expenditure, no matter what period of time had elapsed. The value of that property was created by the expenditure incurred by the present owner's predecessor, and the Chancellor of the Exchequer said to that extent the property was exempt from taxation. Why not allow the same advantage in the case of a man who has done a similar thing in regard to mineral property, where he can show that any portion of the value of the minerals is due to his own expenditure? Why should the mineral owner under such circumstances not have the same consideration as that which is shown to the landlord? I cannot see any possible ground for allowing this exemption to the owner of land and refusing it to the owner of minerals. The owner of minerals, if he undertakes expenditure of this kind, probably undertakes it with a greater amount of risk, and certainly with less chance of a profit, than the owner of land, and I think he has at least an equal claim for favourable consideration. The Amendment, I agree, is a concession, but I desire to have some explanation from the Government of the distinction which has been drawn, and some reasoned argument ought to be given in favour of the course which the Government are asking the House to pursue.

Sir W. ROBSON

The right hon. Gentleman has asked why we propose to make a distinction between the case of a landowner and the mineral owner. So long as we deal with the mineral owner in the same way and on the same footing as the land-owner, he gets the benefit of the same deduction. In the case of the mineral owner we have made a difference in the machinery at his request. When we came to deal with the increment value in these cases we had to put it in a somewhat different category, and we could not allow the same kind of capital deductions as we allowed when dealing with the capital sum. We cannot consider every year a number

of elements which would be in the nature of a fresh valuation. I am only giving this as a reason for the distinction. I do not attempt to defend an exceptional concession as if it made no kind of difference in the principle of the tax generally.

Viscount CASTLEREAGH moved to amend the proposed Amendment by omitting the words "within fifteen years."

I do not think the Attorney-General has made out a case for retaining this period. I do not see why the mineral owner in regard to the spending of money upon his property should be placed in a different position to the land-owner. We know quite well that in the mining industry before any money can be obtained from a mining property money has to be sunk in the ground for a good many years, and I know a case where 10 years has elapsed, and probably another five years will elapse, before any return will be forthcoming.

Mr. JAMES HOPE seconded the Amendment.

Sir W. ROBSON

I think the Noble Lord heard what I said on this point, and I hope he will not think me discourteous for not replying to his Amendment.

Mr. AUSTEN CHAMBERLAIN

I think it will be necessary for us to press this point to a Division. To treat the owners of mining property different to the owners of land as is proposed under the machinery embodied in the Mineral Clauses will be a very difficult and complicated thing to do. I think the mineral owners are entitled to have a much longer period allowed them than 15 years. If the Government will not give them an exemption for all time like the landowners, I think you ought to give them at least a term of not less than 30 years.

Question put, "That the words proposed to be left out stand part of the proposed Amendment, as amended."

The House divided: Ayes, 106; Noes, 24.

Proposed words, as amended, there inserted in the Bill.