§ (1) 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.
§ (2) For the purposes of this Part of this Act the site 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 if the land were divested of any buildings and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or used in connection with any such buildings, and of all growing timber, fruit trees, fruit bushes, and other things growing thereon.
§ (3) For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any rent-charge and to any burden, charge, or restriction arising by operation of law or imposed by any Act of Parliament or in pursuance of the exercise of any powers, or the performance of any duties under any such Act, and to any right of common and to any easements affecting the land, and to any covenant or agreement restricting the use of the land where, in the opinion of the Commissioners, the restraint imposed by the covenant of agreement is reasonably necessary in the interests of the public, or in view of then character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final, and not subject to any appeal.
§ (4) The Commissioners shall allow as deductions from the site value of any land—
- (a) Any part of that site value which improved to the Commissioners to be-directly attributable to work executed or expenditure of a capital nature (including any expenses of advertisement) incurred bonâ fide by or on behalf of any person interested in the land, or arising from the dedication for open spaces of any part of the land of the same owner for the purpose of improving the value of the land as building land, or for the purpose of any business, trade, or industry other than
659 agriculture, or to the expenditure of money on any redemption of Land Tax, or any rent-charge as defined by this Act, or other fixed charge not being an incumbrance within the meaning of this Act, or on the enfranchisement of copyhold land or customary freeholds, or to goodwill or any other matter which is personal to the owner, occupier, or other person interested for the time being in the land, provided that where any works executed or expenditure incurred for the purpose of improving the value of the land for agriculture have actually improved the value, of the land as building land, or for the purpose of any business, trade, or industry, other than agriculture, the works or expenditure shall, for the purpose of this provision, be treated as having been executed or incurred, also for the latter purposes; and - (b) Any sums which in the opinion of the Commissioners it would be necessary to expend in order to divest the land of buildings, timber, trees, or other things of which it is to be taken to be divested for the purpose of arriving at the site value and of which it would be necessary to divest the land for the purpose of realising the full site value;
§ (5) The provisions of this Section are not applicable for the purpose of the valuation of minerals.
§ Mr. LLOYD-GEORGE moved, in Subsection (1), to leave out the word "total" ["total value of land"], and to insert instead thereof the word "gross."
§ Mr. LLOYD-GEORGEI am not sure if the right hon. Gentleman is not himself responsible. He pointed out that the words "site value" defined so many different things that it was really confusing. I thought at the time there was a great deal in it. The draftsman considered it very carefully, and we have come to the conclusion that it would be better to make perfectly clear what the various site values are. There is no difference at all in substance. The same deductions are made and the same processes will be gone through by the valuers in order to ascertain what the taxable subject is.
§ Mr. LLOYD-GEORGETerminology.
§ Amendment made.
§ Drafting Amendments also made.
§ Sir W. ROBSON moved, in Sub-section (2), after the word "the" ["the site value"], to insert the word "full."
§ Mr. JAMES HOPEThis is a new term. Does it make any difference in substance?
§ The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Masterman)No. It was pointed out that we had two entities, "site value" and "site value for the purposes of this Act." One is now called "full site value" and the other is called "assessable site value."
§ Amendment made.
§ Drafting Amendments also made.
§ Mr. JAMES HOPE moved, in Sub-section (2), to leave out the word "buildings" ["any such buildings"], and to insert thereof the word "land."
§ This is a matter of some substance. As the Clause stands, the divestiture comprises buildings and structures on or under the surface which are used in connection with any such buildings. I think that it does not apply to such matters as field drains. I certainly gathered that it was the intention of the Government to include such things which have been provided in connection with the land, and I submit that my hon. Friend's Amendment is necessary.
§ Mr. G. D. FABER (York)In seconding the Amendment I seem to remember in the dim and distant past an Amendment moved by my hon. Friend the Member for Ayr Burghs (Mr. G. Younger), touching upon this point, and I understood that the Government were going to give their kindly consideration to it on the Report stage.
§ Mr. LLOYD-GEORGEIf the hon. Member will look down the Paper he will find that later on we have an Amendment that where expenditure which may be incurred purely for agricultural purposes does improve the land as building land he would get the benefit. Obviously drains would be included.
§ Mr. G. D. FABERDoes the Amendment to which the right hon. Gentleman has referred cover the substance of this Amendment?
§ Mr. LLOYD-GEORGEI would hardly like to say that. I think that this goes a little beyond what we could accept, but our Amendment covers all the cases that were put to us in Committee, and it amply redeems the pledge we gave.
§ Sir W. ROBSON moved to leave out from the beginning of Sub-section (3) to the word "and" ["and to any right of common"], and to insert instead thereof
662§ Question put, "That the word 'buildings' stand part of the Bill."
§ The House divided: Ayes, 133; Noes, 43.
661| Division No. 835.] | AYES. | [1.55 p.m. |
| Acland, Francis Dyke | Harcourt, Rt. Hon. L. (Rossendale) | Ponsonby, Arthur A. W. H. |
| Agnew, George William | Harcourt, Robert V. (Montrose) | Price, Sir Robert J. (Norfolk, E.) |
| Astbury, John Meir | Hardy, George A. (Suffolk) | Rees, J. D. |
| Barker, Sir John | Harmsworth, Cecil B. (Worcester) | Richards, Thomas (W. Monmouth) |
| Barnard, E. B. | Harmsworth, R. L. (Caithness-shire) | Richards, T. F. (Wolverhampton, W.) |
| Beale, W. P. | Haworth, Arthur A. | Ridsdale, E. A. |
| Beck, A. Cecil | Hedges, A. Paget | Robertson, Sir G. Scott (Bradford) |
| Bennett, E. N. | Helme, Norval Watson | Robinson, S. |
| Berridge, T. H. D. | Henderson, J. McD. (Aberdeen, W.) | Robson, Sir William Snowdon |
| Bowerman, C. W. | Herbert, Col. Sir Ivor (Mon., S.) | Rose, Sir Charles Day |
| Brace, William | Herbert, T. Arnold (Wycombe) | Rowlands, J. |
| Brigg, John | Higham, John Sharp | Russell, Rt. Hon. T. W. |
| Brodie, H. C. | Hobart, Sir Robert | Rutherford, V. H. (Brentford) |
| Brooke, Stopford | Hodge, John | Samuel, Rt. Hon. H, L. (Cleveland) |
| Brunner, J. F. L. (Lancs., Leigh) | Horniman, Emslie John | Schwann, C. Duncan (Hyde) |
| Bryce, J. Annan | Hutton, Alfred Eddison | Schwann, Sir C. E. (Manchester) |
| Burns, Rt. Hon. John | Hyde, Clarendon G. | Scott, A. H. (Ashton-under-Lyne) |
| Buxton, Rt. Hon. Sydney Charles | Idris, T. H. W. | Soames, Arthur Wellesley |
| Cameron, Robert | Illingworth, Percy H. | Steadman, W. C. |
| Causton, Rt. Hon. Richard Knight | Jones, Leif (Appleby) | Strachey, Sir Edward |
| Cheetham, John Frederick | Keating, M. | Thomas, Abel (Carmarthen, E.) |
| Cherry, Rt. Hon. R. R. | King, Alfred John (Knutsford) | Thorne, William (West Ham) |
| Clough, William | Layland-Barratt, Sir Francis | Toulmin, George |
| Cobbold, Felix Thornley | Leese, Sir Joseph F. (Accrington) | Ure, Rt. Hon. Alexander |
| Collins, Stephen (Lambeth) | Levy, Sir Maurice | Verney, F. W. |
| Corbett, A. Cameron (Glasgow) | Lloyd-George, Rt. Hon. David | Villiers, Ernest Amherst |
| Corbett, C. H. (Sussex, E. Grinstead) | Luttrell, Hugh Fownes | Walker, H. De R. (Leicester) |
| Cornwall, Sir Edwin A. | Macdonald, J. M. (Falkirk Burghs) | Walsh, Stephen |
| Cotton, Sir H. J. S. | Macnamara, Dr. Thomas J. | Wardle, George J. |
| Craig, Herbert J. (Tynemouth) | M'Callum, John M. | Warner, Thomas Courtenay T. |
| Crossley, William J. | M'Laren, H. D. (Stafford, W.) | Wason, John Cathcart (Orkney) |
| Dunn, A. Edward (Camborne) | M'Micking, Major G. | Waterlow, D. S. |
| Edwards, Sir Francis (Radnor) | Mallet, Charles E. | White, J. Dundas (Dumbartonshire) |
| Erskine, David C. | Marnham, F. J. | White, Sir Luke (York, E. R.) |
| Essex, R. W. | Massie, J. | Whitley, John Henry (Halifax) |
| Evans, Sir S. T. | Masterman, C. F. G. | Williams, J. (Glamorgan) |
| Everett, R. Lacey | Molteno, Percy Alport | Williams, Sir Osmond (Merioneth) |
| Falconer, James | Morgan, G. Hay (Cornwall) | Wilson, Henry J. (York, W. R.) |
| Fiennes, Hon. Eustace | Murray, Capt. Hon. A. C. (Kincard.) | Wilson, P. W. (St. Pancras, S.) |
| Foster, Rt. Hon. Sir Walter | Murray, James (Aberdeen, E.) | Wilson, W. T. (Westhoughton) |
| Fuller, John Michael F. | Myer, Horatio | Wood, T. M'Kinnon |
| Fullerton, Hugh | Nicholson, Charles N. (Doncaster) | |
| Gibb, James (Harrow) | O'Brien, Patrick (Kilkenny) | |
| Gibson, J. P. | O'Connor, John (Kildare, N.) | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| Glendinning, R. G. | Parker, James (Halifax) | |
| Goddard, Sir Daniel Ford | Pearce, William (Limehouse) |
| NOES. | ||
| Balcarres, Lord | Gibbs, G. A. (Bristol, West) | Powell, Sir Francis Sharp |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gordon, J. | Randles, Sir John Scurrah |
| Banbury, Sir Frederick George | Goulding, Edward Alfred | Renwick, George |
| Bertram, Julius | Guinness, Hon. W. E. (B. S. Edmunds) | Starkey, John R. |
| Bignold, Sir Arthur | Haddock, George B. | Talbot, Lord E. (Chichester) |
| Bowles, G. Stewart | Hamilton, Marquess of | Thornton, Percy M. |
| Carlile, E. Hildred | Harris, Frederick Leverton | Valentia, Viscount |
| Castlereagh, Viscount | Harrison-Broadley, H. B. | Walker, Col. W. H. (Lancashire) |
| Chamberlain, Rt. Hon. J. A. (Worc'r) | Heaton, John Henniker | Walrond, Hon. Lionel |
| Channing, Sir Francis Allston | Hope, James Fitzalan (Sheffield) | Wolff, Gustav Wilhelm |
| Courthope, G. Loyd | Hunt, Rowland | Younger, George |
| Craik, Sir Henry | Kerry, Earl of | |
| Faber, George Denison (York) | Kimber, Sir Henry | TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W. Forster. |
| Ferguson, R. C. Munro | Magnus, Sir Philip | |
| Fletcher, J. S. | Parkes, Ebenezer | |
| Foster, P. S. | Pease, Herbert Pike (Darlington) |
§ the words, "The total value of land means the gross value after deducting the amount by which the gross value would be diminished if the land were sold subject 663 to any fixed charges and to any public right of way or any public rights of user."
§ Mr. AUSTEN CHAMBERLAINI am not quite certain as to whether this proposal makes any change. Perhaps the Attorney-General will explain whether it does so or not.
§ Sir W. ROBSONI think it makes no change whatever. We are showing the meaning of the various definitions, but they will make no difference to the incidence of the tax; they do not alter it. These Amendments are simply to ensure that the various explanations which were given during the Committee stage shall be put into the Bill. "Total value" is the rent of the land, with hereditaments, as it stands, subject to certain restrictions and qualifications, which are preserved here and must be such as are approved. The Amendment is: "The total value of land means the gross value after deducting the amount by which the gross value would be diminished if the land were sold subject to any fixed charges and to any public rights of way or any public rights of user." As to the assessment of the site value, the total value is after making all deductions, which are set out in the definitions. We have already passed the "gross value": that is the value of the land, with the buildings upon it, and taking no account of restrictions. We have passed also the "full site value," which is the land without the buildings, and taking no account of restrictions. And now we come to the "total value," which is the land with the buildings on it, and taking account of restrictions. We come next to the "site value," which is the total value reduced by all the deductions which we provide. We have used so many expressions, like "gross value," "full site value," and others, that it was desirable to put those expressions into the Act. They are also useful in this respect, that they are directions to the valuer which he must obey, and they will assist the subject if he seeks to appeal from the valuer's determination. Otherwise, a valuer might say, "I fix the value at so and so," and the subject would have difficulty in appealing. By the Amendments inserted in the Bill the valuer has to make his valuation with all deductions. In that way the subject will be able to put his finger on the spot where he finds cause of complaint. They are, therefore, really drafting Amendments.
§ Mr. AUSTEN CHAMBERLAINI understand that the valuer is to give a figure under each of those values. It might be that the total and the assessable value were the same thing, but he will have to set out a figure under each one of those separate values, so that the subject will be able to see at once where the valuer's valuation differs from his. Assuming that they are both agreed as to the market price of, say, £10,000, but that they differ as to the amount on which the tax ought to be levied, the subject will see at a glance, if I understand the Attorney-General, at each stage of those proceedings.
§ Sir W. ROBSONThat will be the effect.
§ Sir FREDERICK BANBURYI do not rise to object to the Amendment, because I think it will make the Bill more complicated than it is, and I have no objection to the Bill being so complicated that it will make it very difficult to work. I should have thought it would have been much better to have left the Clause as it stood, instead of putting in all these provisoes, because it is quite evident that the valuer must, in valuing the land, take into account all the ordinary conditions, and this is one of them.
§ Amendment made.
§ Mr. MASTERMAN moved, in Sub-section (3), to leave out the word "where" ["the use of land where"], and to insert instead thereof, "entered into or made before the thirtieth day of April, nineteen hundred and nine, and to any covenant or agreement restricting the use of the land entered into or made on or after that date, if."
§ This is a concession promised in Committee allowing the full value of any restrictive covenants to be taken off the total value of the land.
§ Amendment made.
§ Mr. MASTERMAN moved, in Sub-section (3), after the word "agreement" ["imposed by the covenant or agreement"], to insert the words "so entered into or made on or after that date."
§ Amendment made.
§ Mr. MASTERMAN moved, in Subsection (3), to leave out the words "is reasonably necessary" ["is reasonably necessary in the interests of the public"], and to insert instead thereof the words "was when imposed desirable."
665§ Mr. AUSTEN CHAMBERLAINThis Amendment really raises the question of the manner in which the Commissioners are to exercise discretion as to the covenants. Covenants, owing to the concessions which the Government have just made, entered into before the passing of the Act, cannot be included, but I do not know what meaning the Government attach to those words. They give the Commissioners an enormous discretion in dealing with land, for instance, in the neighbourhood of great towns, such as that part of the City of Birmingham which is known as Edgbaston. The Courthope estate in Edgbaston has been developed for some generations on a settled plan, excluding from the land, or the greater portion of it, any public-houses, or practically excluding public-houses, factories, or shops. The result is that it is entirely a residential quarter, and I think that that serves undoubtedly the needs of the town, and that it is to its advantage to have a district of that kind. Is a matter of that kind to be left to the discretion of the Commissioners in regard to any restrictive covenants entered into after the passing of the Act? Is a Commissioner wholly unacquainted with the circumstances of Birmingham, and who does not hear on the subject any local representations, except from some party immediately interested, to settle what is in the interests of Birmingham and how Birmingham ought to be laid out? I think the Government take some credit to themselves for a Town Planning Bill, which was in another place, and which has come back to us, but has not yet been considered. There their object is to give the local authorities, as I understand, power to direct and settle the limits, as prescribed in the Bill, of what the planning of new districts in the neighbourhood of those towns should be. Here you give that power, not to a local authority, but to a Commissioner sitting in London, and the Commissioner has no interest in seeing that the town is developed in the best interests of the inhabitants. The Commissioner's interest is to put an end to the covenant which lessens the value of the land, and to hold that it is an unreasonable covenant and restricts the value of the land. That is not a personal interest, but it is his official interest. If he admits that the covenant is reasonable then he loses the tax. He is a Revenue official whose business is to get taxes where he can. I do not mean to say for a moment that the 666 Inland Revenue officials, or any officials of the Government, have regard solely to the possibility of wringing the utmost farthing out of the taxpayer. I think they try to exercise their authority and powers reasonably. What I do suggest is that they are not really competent to judge of these cases, and that they are necessarily advised against what may be the interests of the community. The wording adopted by the Government appears to me to lend itself to misconception or misapplication. The Commissioners may say, "We are not considering Birmingham, as a whole, or greater Birmingham; we are regarding this particular piece of land. Here is an improvident landlord who has entered into restrictions which deprive his land of its highest economic use"—the highest economic use being interpreted to mean the use which will produce the greatest amount of revenue. Thereupon they dispute the covenants. An appeal appears to me to be absolutely necessary. If there is one matter more than another in which the taxing authority should not be also the deciding authority as to the reasonableness of covenants, it is this. Even with an appeal, the hardship on the subject might be very great. You cannot take a matter to the High Court for nothing. You must have the best advice, which is always very expensive. If, there being no appeal, the whole matter is left to the discretion of the Commissioners you may have the whole local opinion and knowledge overriden by Commissioners sitting in London, who, having no local knowledge themselves, are obliged to trust to an agent whom they send down. I do not think that either the rights of the landlord or the rights of the community, which, in such a case as I have named, are concerned even more than those of the, landlord, ought to be submitted to the uncontrolled discretion of the Commissioners in matters of this kind.
§ Mr. G. A. YOUNGERThe words now being introduced do not in the slightest degree remove my objection to the Clause. It is a perfect absurdity to place in the hands of mere revenue officials the power of saying whether restrictions of this kind are to be allowed. The local representative of the revenue authorities is the man who will practically settle these matters, a gentleman who, after a few years at Somerset House devoted to Income Tax collection or exaction, goes to a locality for a brief period, perhaps four or five years, where he learns at the expense of the community a certain amount of valuation 667 and other business, and then probably goes to a more important district. That is the kind of man who will have the responsibility of advising the Commissioners in these matters. Could there be anything more ridiculous? There is the local authority, who, surely, is the proper body to say whether or not the restrictions are reasonable and ought to be maintained. I wish the Attorney-General, when amending the Bill, had paid some attention to the criticisms made in Committee on this point. In my opinion the words now proposed do not improve the Clause in the least degree.
§ Sir W. ROBSONWe are here discussing a somewhat limited Amendment, which substitutes words more favourable to the subject than those in the Bill. The general principle of the Clause the Government must now take as settled. When dealing with restrictions, which might be created on a scale that would practically nullify the provisions as to the tax, we must have some kind of check. As the Bill left the Committee the check was that the Commissioners should be entitled to disregard any diminution of value due to those restrictions if they thought the restrictions "reasonably necessary," The words "reasonably necessary" no doubt narrowed the discretion of the Commissioners in a sense adverse to the subject more than the words now proposed. Instead of finding the restrictions to be reasonably necessary, they have only to find that they were when imposed desirable. The right hon. Gentleman (Mr. Austen Chamberlain) referred to the discretion of the Commissioners. I think that point must be regarded as settled. The only question is what direction shall be given to that discretion. It is very favourable to the subject. The Commissioners are to allow the diminished value where they think the covenant is in the interests of the public—which in itself is a wide discretion—or desirable in view of the character and surroundings of the neighbourhood. I think that, that meets the case put by the right hon. Gentleman. Where, in view of the character and surroundings of a neighbourhood, the Commissioners thought it was desirable that a certain district should be confined to residential purposes, they would say, "We will not consider the interests of the public in the wider sense; we will regard only the interests of the neighbourhood." It is objected that there is no 668 appeal. There is this House. The shadow of this House is always resting on every official and every Department, and I do not think you will find the executive any less amenable to that influence. The executive see what is the spirit of the Act, and they will be very anxious not to infringe it. I can scarcely conceive a case where, in view of these words, the Commissioners would insist upon applying the tax to property such as that described by the right hon. Gentleman.
§ Amendment made.
§ Mr. JAMES HOPE (for Lord Robert Cecil) moved, in Sub-section (3), to leave out the words "and the opinion of the Commissioners shall in this case be final and not subject to any appeal."
§ It is true that on another and similar occasion on this point the Government undertook to look into the matter, and an Amendment was not on that account pressed.
§ Mr. MASTERMANIt was pressed.
§ Mr. JAMES HOPEThe Amendment was, by leave, withdrawn by the hon. and learned Gentleman the Member for Kingston on the assurance of the Secretary for War. I know, of course, what happened later on another Amendment, that there was the Closure and a Division. But my learned Friend withdrew his Amendment, and the House was satisfied at that time that something would be done. When you consider the amenities of the locality, the very last persons who ought to decide the questions involved are the Commissioners. The learned Attorney-General spoke of the shadow of this House being over the Executive, and as to their correct interpretation of the spirit of the Act. I think the shadow of the Executive is much moreover this House. And as to their interpreting the spirit of the Act, well, there is the Swansea case. It was certainly not interpreted by the Executive in the spirit of the Act.
I would suggest to the hon. and learned Gentleman that he might even now accept what was laid before him last night by my hon. Friend. I quite see these are not proper cases to go into the law courts. I believe they are cases neither for the Commissioners nor for the law courts. But I believe all my hon. Friends will be satisfied if the appeal is to the Referees and their decision may be final. They would consider matters in an impartial way, for I believe everyone agrees that the appointment of Referees, as now provided for by 669 the Bill, is quite satisfactory. But it is necessary that these words should be left out.
§ Mr. GEORGE RENWICKI second this Amendment because, unlike the hon. Baronet the Member for the City of London (Sir F. Banbury), I want to see this Bill made as clear as possible. At present it is nothing of the sort. I am certainly not in favour of leaving the decision of important questions such as covenants, easements, etc., in regard to land to the Commissioners. Who are these Commissioners? Are they men accustomed to deal with questions of this sort? Are they to form a new Department? Have they any legal knowledge, or have they had any legal training? We ought—I have asked for it before—to have some idea of what their status will be, and from what body they will be selected. We might then have some confidence in them. I am absolutely surprised at the childlike faith some hon. Gentlemen seem to have in the Commissioners. The word "Commissioner" is a blessed word, and one to which they seem to attach great importance. People outside do not attach that great importance to them, but have the greatest fear of how they will deal with some of these matters. I quite agree that the Referees will be a body in whom, at any rate, we will have some confidence.
§ Mr. MASTERMANI do not rise to reargue the question, but only to correct a point of fact which we regard as important. The assertion has twice been made by the hon. Gentleman the Member for Sheffield (Mr. James Hope) that we promised to make an Amendment to the Bill on this point, and that we have not fulfilled our promise. That is not a fact. The whole of this Amendment moved by him was moved in Committee, also on Friday afternoon, and was fully discussed. The points that have been placed before us to-day were placed before us by many Members, including—with considerable force—the hon. Baronet opposite. There was no Closure, and the Committee decided by a large majority against the appeal. It is perfectly true that we promised before to consider whether it would not be desirable to have an appeal to such a body as the Local Government Board. That was advanced from the opposite side, and was immediately repudiated by the right hon. Gentleman the Member for South Dublin (Mr. Long), who thought it was quite inadvisable that the Local Government Board should be the body. 670 After the fullest discussion we found, I think with the general agreement of the Committee, that there was no more suitable tribunal to decide the questions concerned than the Commissioners who were ultimately responsible.
§ Mr. AUSTEN CHAMBERLAINI think, speaking subject to correction, that there is a difference in the position now and before as described by the hon. Gentleman. We did not at that time know exactly what the appeal was going to be. The Government had proposed to allow an appeal and gradually as the discussion went on the idea of the appeal widened. But what exactly was its scope we did not know, for the matter we were debating was changing its aspect day by day. Now we know what the appeal is. At that time it is perfectly true, as the hon. Gentleman reminded us, there was an admission from this side that there was a certain inconvenience in referring speculative matters of opinion for decision by a court of law, although, as I ventured to observe last night on a similar though different point, courts of law do as a matter of fact have to decide such speculative questions as between man and man, and citizen and citizen, on the private litigation which comes before them. Whether a covenant is reasonable or not is a matter that is often the subject of legislation, and so are many matters of trade, and the decisions of courts of law on these subjects are often more difficult to understand than upon any other they have to deal with. They often deal with these subjects, but I admit they are not an ideal body for dealing with them. On the last occasion when this subject was under discussion the Secretary of State for War, who was in charge, admitted that neither the Commissioners nor the courts of law were satisfactory tribunals to deal with this subject. On that occasion we had half convinced the Secretary of State for War, and having been half convinced he disappeared. Now we have to deal with the Under-Secretary to the Home Department.
§ Mr. MASTERMANI was present all through on the last occasion.
§ Mr. AUSTEN CHAMBERLAINBut was not half convinced, and though the hon. Gentleman will be half convinced when we have done with him to-day, on neither this nor the last occasion had we the advantage of the presence of the Chancellor of the Exchequer.
§ Mr. MASTERMANThe Chancellor was fully through these Debates, and spoke several times.
§ Mr. AUSTEN CHAMBERLAINThen he is like the Secretary of State for War—being half convinced, he remained away. I know the Chancellor is doing extremely hard work, and has had a strain upon him that can hardly be paralleled by anything that has fallen upon Ministers in recent times; but I must observe that never has there been a Finance Bill, or any other Bill, from the discussion of which the Minister in charge has been so often absent. I do not make that as a charge against the Chancellor, whose conduct has been admirable; but it renders it extremely difficult to deal with the matter, because of having to argue with different people at different times. I do not derogate from the position of the hon. Gentleman the Under-Secretary, or suggest for a moment he does not do his work admirably, but he has not the authority to deal with this matter that the Chancellor of the Exchequer, or indeed any Cabinet Minister would have. If I convinced him now that our proposal was a reasonable one he could not accept it. We are dealing not with a plenipotentiary, but with somebody who only give the answer he has been told to give beforehand. I do not complain of the Chancellor, but I complain of the injustice it is to the House not to have any one upon the Government Bench with full powers to deal with this matter.
This matter does not stand now where it did when we raised it in Committee. Then we were discussing on the one side a proposal giving absolute discretion to the Commissioners, and on the other an appeal to the courts of law. We admitted that an appeal to the courts of law was not entirely satisfactory in our view. The via media suggested at that time was an appeal to the Local Government Board, and Members on both sides of the House, with the curious unanimity which had nothing to do with the character or abilities of the present President of the Board, decided that the Local Government Board was not the body to whose tender mercies they desired to entrust this matter. We do not ask now for an appeal to the Local Government Board, but we still maintain, as the Secretary for War admitted, there is great inconvenience in allowing the matter to be decided by the Commissioners, and we suggest now that the appeal should go to the Referee. The 672 Attorney-General yesterday thought there was a great deal to be said for that suggestion. All he said against it was that it came upon him with surprise. There has been time since for considering the matter, and therefore I hope now that the Gentlemen representing the Government will take it upon themselves to accept this compromise as being reasonable and right, or else send for the Chancellor and ask him to come in and hear the arguments. We ought not to have an Amendment of this kind refused simply because the only Minister who has authority to accept it is not here to say "Yes."
§ Sir W. ROBSONI submit to the House that to introduce the Referee as the Court of Appeal and to ask his opinion instead of the Commissioners' is really only changing one person, whose opinion is in no way above the Commissioners for the Commissioners themselves. There is really nothing between the two. The Commissioners are just as likely to fulfil their duties as satisfactorily as the Referee.
§ Mr. BERTRAMI have no particular predeliction for a Referee, but I have no confidence whatever in the unrestricted powers of these bodies of Commissioners. I feel most strongly that in no part of the taxation under the Finance Bill should the taxpayer be deprived of the right of appeal ultimately to a court of law. I should like to remind the House of a case that occurred a few days ago, which shows how completely and quite bonâ fide in the case of the Revenue authorities the public can be mulcted in matters of this kind. For some years Messrs. Whiteley had to pay at the request of the Revenue authorities male servants' Licence Duty for the men in their employment. Some time ago some doubt arose as to whether that tax ought to have been paid or not. An action was brought, and the courts held that the money ought not to have been paid, but no refund was possible on the ground that the money was not paid under duress. If the Revenue Commissioners collected this tax there will be no duress, and the taxpayer will have to pay without being able to obtain any redress.
§ Mr. GEORGE YOUNGERThere is no part of the whole Bill under which it is more important to have an appeal than this. In a matter of this kind, where a man may be taxed upon a purely hypothetical value, it is more than ever necessary that there should be an appeal. I 673 cannot see why there should not be an appeal in this matter. I do not know whether it is possible to move the Attorney-General on this point, but where you have these hypothetical difficulties arising in the future you will prevent people undertaking covenants of any sort or kind in connection with the amenities of a town. I think it is very necessary and desirable that the Government should meet us on this point.
§ Sir HENRY CRAIKThe Attorney-General was in such a hurry to reply that he did not give us a chance of putting our arguments. Surely it is reasonable that we should have one system in this Bill, and that there should be some sort of consistency between the different parts of the Bill. We have long ago ceased to hope for any such consistency, but surely it is too much that on one page of the Bill we should find flagrant inconsistencies with regard to this question. In regard to the matters dealt with in Sub-section (3) the opinion of the Commissioners is to be final. The next Sub-section permits the Commissioners to allow certain deductions, and in paragraph (b) of Sub-section (4) it says "any sum which in the opinion of the Commissioners." Having pointed out all these inconsistencies surely it is very hard that we should be precluded by necessity from having any sufficient answer on these points simply because both representatives of the Government have exhausted their right to speak?
§ Mr. A. C. BECKEven at this late stage of the proceedings, I hope the Government will see their way to make this small concession. Yesterday the Attorney-General was most sympathetic on this point, and he admitted that an appeal might be desirable in certain cases. I think he said these questions of fact to be settled by the Commissioners were so trivial that it would be a waste of time to go to a court of law, and I think he suggested that it would be a happy compromise to have one of these Referees as a final arbiter. One argument used by the Attorney-General struck me as being a somewhat unhappy one. He said that there was a great deal in what the Opposition had said on this point, but it should have been dealt with during the Committee stage of the Bill, and it could hardly be expected that the Government could consider it now. That may be the case, but it will be somewhat hard on the individuals who will have to suffer to tell them that if this matter had been raised at an earlier stage they might 674 have got a substantial measure of justice. This is a fundamental question, although perhaps the principle will not affect a large number of people. The Commissioners, under the Bill as it now stands, will be the judges in their own case. On every rural bench of magistrates the justices who are interested in a case which comes before them retire from the bench, and it is one of the most fundamental principles of justice that a man interested should not be a judge in his own case. Under this Clause the taxing authority will be the judges in their own case.
§ Mr. G. D. FABERI was surprised to hear the Attorney-General say that this question would not be in a better position if it was decided to refer it to a Referee. If that is so, why have the Government deliberately provided that a Referee shall hear an appeal under Clause 34? Is that observation warranted in fact? The Commissioners are the taxing authority, and they are, therefore, interested parties; as they are only human beings, their personal feelings must enter into the matter. They are also interested in making the revenue as large as possible, and it is perfectly clear that there ought to be an appeal of some kind from the decisions of the Commissioners. If you have an appeal to the Referees, they are an independent body. Clause 34 provides that the Referees shall be "Fellows of the Surveyors' Institution, or other persons having experience in the valuation of land." The rules under which they will act will be made by the Reference Committee, which consists of the highest judicial officers in the country. Surely the Attorney-General must have used his arguments in despair, because when they are probed into they are not warranted by the facts. I know it is not his will; he is utterly unable to deal with the matter. He has no power. Really the case has been left untouched, and we labour under a grievance because the Secretary of State for War many weeks ago distinctly intimated to us some way out of the difficulty, and now, when the time has arrived for finally determining the matter, he is no longer here and we have nobody here to carry out that promise. Therefore, I suppose the matter has got to go by the board.
§ Mr. MUNRO FERGUSONIt is obvious when operations begin with the valuations which will have to be conducted they will be of an extraordinarily intricate character; and, excellent as the Commissioners may in many respects be, I think 675 there ought to be an appeal to the Referee. It is too much absolute power over such an extremely intricate and important valuation to entrust to any single representative of the Inland Revenue. When once the new proposals are in working order an appeal to a Referee may not be necessary; but I do think that in the first instance there ought to be such an appeal. There will be a want of confidence in the initial valuation unless that appeal to the Referee be given, because we may be sure that the Referee will be a person to whom confidence will be extended, whilst the number of the Commissioners must be so great that it is as yet uncertain what their character will be. It is simply handing ourselves bound hand and foot to the bureaucracy unless there is an appeal to the Referee. I have tried to give that the go-by wherever possible under this Bill. In dealing with these very intricate valuations leading questions in the first instance ought to be decided by persons in whom there is general confidence, and you have that confidence in the persons to be appointed as Referees. You could not possibly extend that confidence to the several hundred gentlemen who will act as Commissioners in the first instance under this scheme. I am quite sure the number of appeals will be limited, but there are some points which are left in a very uncertain condition in the Clause as it stands—such, for instance, as the question of field drains, which has been discussed to-day; and, in the first instance, I am clearly of opinion that we should not be asked to rely solely on any one of these Commissioners, but that there ought to be an appeal to a Referee.
§ 3.0 P.M.
§ Mr. E. G. PRETYMANI know the hon. and learned Gentleman can not speak again, but there is a general concensus of opinion on both sides of the House. [HON. MEMBERS: "NO."] Well, so far as vocal opinion exists it is all on one side. It is a perfectly simple point. You have on the one hand the Commissioners representing the tax collector, and on the other hand the individual representing the taxpayer; and the only answer given by the Attorney-General is that there is no advantage in bringing in a third party. That answer is obviously so incomplete and inexact that I am sure he would not wish to adhere to it. It cannot be pretended that it is a reasonable answer, because the 676 Attorney-General used the words that the Referee is no better than the Commissioners.
§ Sir W. ROBSONNo, I did not. I said it was purely a matter of opinion and discretion, and that the discretion of the Commissioners was as likely to be as good as that of the Referee.
§ Mr. PRETYMANThe hon. and learned Gentleman cannot maintain that for a moment. It is not a question of whose opinion is best. It is not a question whether the Commissioners are as wise as the Referee. It is a question whether parties are to be allowed to be judges in their own case. When you call in a third party to decide between two individuals, you do not do so because he is wiser or because his abstract opinion is better than the persons between whom he has to adjudicate, but because he is an impartial, unbiassed individual who has no reason to do otherwise than weigh the thing fairly. Although his decision may be in favour of one party or the other, it is accepted because no one could say that he could in any possible way have any bias in the matter. It is not only necessary to have this appeal for the sake of justice, but for the sake of public credit as well. Surely it is just as much in the interests of the State which is exacting the tax as in the interests of the individual who is to pay the tax, that when there is a dispute, in a question such as this rather intricate and difficult matter, the State should not have the discredit for doing a thing it has not done. The Commissioners might give a perfectly fair decision, but I do not think it likely that a subject who felt himself aggrieved by that decision would consider it fair, and he would have an obvious case. He could say: "Here is a decision given against me; I consider it grossly unfair. It was made against me by a servant of the State which is exacting the tax." I am really ashamed of arguing such a point; it is so obvious. May I just state the issue to the Chancellor of the Exchequer, now he has come in? It is a question of an appeal from the Commissioners. It was debated in Committee and we decided against an appeal. It was argued, and no doubt with great force, that to take matters, some of which might be trivial, to a court of law, and involve very great expense, would be both unnecessary and undesirable. Therefore the Committee came to a decision against that appeal. Since that 677 decision was come to it has been suggested that instead of taking the case to the courts of law a compromise might be effected, and the appeal might lie solely and only to the Referee, and that there would be little or no expense attached to that course. The case has been expressed on both sides of the House, and had the Chancellor of the Exchequer been here during this Debate I think he would have found that every speaker in this House has endorsed that opinion. The only answer that the Attorney-General has been able to give us is that he can see no advantage in bringing in a third party, whose opinion might be no better than the opinion of the Commissioners. The answer to that is that we do not set up a claim that the opinion of the Referee is any better than the opinion of the Commissioner. All we ask is that there should be an unbiased Referee to decide between the two in cases of dispute. That is absolutely necessary in the interests of the credit of the State for justice, and in the interests of the taxpayer also that he may obtain justice. The expense would be so small that I think everybody who has heard this Debate will agree that the Chancellor of the Exchequer would be doing what is best from every point of view if he accepted this suggestion and allowed appeal, not only to the courts of law, but to the Referee.
§ Mr. F. W. VERNEYI join in the appeal to the Government on this matter. I see that Clause 33 deals with appeals generally, and it gives the right of appeal to an aggrieved person except as expressly provided in the Act. We get an exception at the end of Clause 25, now under discussion. I have not had the advantage of hearing the Attorney-General, but I should like to ask why the exception is put into this Clause. Why do we have the words "the opinion of the Commissioners shall in this case be final and not subject to any appeal"? I should very much like to know the reason for the appeal being denied in this particular case when in general terms it is granted under Clause 33. There must be a reason for the exception, and I have not heard any explanation. Anybody who knows what an appeal is must know that it is not a question whether one judge is better than another judge in a court of law, but a question of having a fresh and impartial mind on the point. The man who has had nothing to do with the case before has no preconceived opinion. His intellect and judgment may not be any better than the judg- 678 ment of the person who has given his opinion before, but, at any rate, he has no preconceived idea, and is an impartial man. The person aggrieved has a right to that fresh opinion and judgment, and if he gets that opinion he goes away satisfied that justice has been done. It is for that reason I venture to appeal to the Government on this occasion to explain why this special exception is put in at the end of the Clause.
§ Sir W. ROBSONI have already said, and I have not altered my opinion, that the matter, which is purely one of discretion, might very well be left without being made the subject of any further proceedings. I think it is now agreed that there should be no appeal to the court of law. In turning to the Debate in Committee, the difference seems to have arisen as between the final decision of the Commissioners and an appeal to the court of law, and it was in that sense I dealt with the matter yesterday. The suggestion was thrown out that there might be appeal to the Referee. I said it was somewhat late in the day to make that suggestion, but it is not one which the Government need have any hesitancy in accepting if it is the will of the House. In view of the opinion expressed on both sides of the House, the Government will insert that there shall be some appeal. The Amendment now is to omit from "neighbourhood" to the end of the Clause. I propose to add the words, "shall in this case be subject to an appeal to the Referee, whose decision shall be final."
§ Sir W. ROBSONI move, in Sub-section (3), to leave out the words ["the opinion of the Commissioners shall be"] to the end of the Sub-section, and to insert instead thereof the words "subject to an appeal to the Referee, whose decision shall be final."
§ Mr. AUSTEN CHAMBERLAINI am very glad that the Government have met us, as they have absolutely met us on this point, and I do not want to appear ungracious in treating any concession which the Government have made, but I do just wish to draw the attention of the House, and of the Government particularly, to the position in which we find ourselves. The suggestion which my hon. 679 Friend fathered to-day was a little child which I produced yesterday on Clause 17, where the character of the discretion entrusted to the Commissioners was exactly similar to that which was entrusted to them in this Clause. I then suggested, for reasons which have now commended themselves to the Government, that whilst these matters were not matters for a court of law they were not of a character which should be left to the uncontrolled discretion of the Commissioners. Clause 17, Sub-section (3), says that the decision of the Commissioners in regard to questions arising under it shall be final and shall not be subject to any appeal. The questions there are as to what is reasonable access by the public to woodlands, parks, or gardens, whether the access is a public benefit, and whether circumstances render it probable that use by the public will continue. These questions are exactly parallel to those which arise under this Section. They are not suitable for a court of law, but they ought not to be left to the decision of a taxing or biassed authority to decide. We have, unfortunately, passed from that stage, and the Chancellor of the Exchequer was not here, and did not, as in this case, come in at the time and assent to an amending of the Clause. Therefore the two parts of the Bill are no longer in harmony one with another. We cannot go back on that decision here, but I hope when the Bill reaches another place the Government will restore harmony and introduce the necessary Amendment.
§ Mr. LLOYD-GEORGEI do not think I can respond to the last appeal at any rate. I would rather recommit, but it is unnecessary. It is rather a different case. I can understand a Referee being a very good judge of a restrictive covenant, because you have always to consider the effect of restrictive covenants in cases of assessing the value of property, but when you come to the other question it is not a question of valuation at all.
§ Mr. AUSTEN CHAMBERLAINIt is not a question of value, but of the reasonableness of the covenant.
§ Mr. LLOYD-GEORGEI know; but these covenants are covenants which have constantly to be considered by the authorities, but the other is purely a public question, which ought to be decided by a public authority. I do not think they are quite in the same position.
§ Amendment made.
680§ Sir W. ROBSON moved, in Sub-section (4), to leave out the words "The Commissioners shall allow as deductions from the site value of any land," and to insert instead thereof the words:—
§
"The assessable site value of land means the total value after deducting—
(a) the same amount as is to be deducted for the purpose of arriving at full site value from gross value; and
(b).
§ Mr. RENWICKI do not quite know what the meaning of these words which it is proposed to omit is, but I very much regret that it should be proposed to leave them out, because I like the words, "The Commissioners shall allow as deductions," and I think all those who are interested in this Bill will agree that where we have a clause practically and distinctly saying that the Commissioners shall do a certain thing it is something that they can understand, and fortifies them in giving power to that body. Therefore I very much regret that these words are to be left cut which say what the deductions are in order to arrive at the assessable site value of land. The deductions are so involved that I am quite sure the lay mind will have great difficulty in arriving at what is meant. It is also noticeable that if this Amendment is carried at the beginning of Sub-section (4), the two words, "The Commissioners," disappear. It is rather remarkable that for the first time we find a weakening of faith in the Commissioners on the part of the Government. They seem hitherto to have had absolute faith in them, but we have just listened to a weakening of faith on the part of the Government, and this is a further sign that they are still further weakening. Considering that the land is first of all to be valued by valuers, and then it is to come before Commissioners, I think the Government ought to hesitate before they leave out these words, "The Commissioners shall allow as deductions from the site value of any land." I do not quite know what the idea of the alteration is, and perhaps we shall have an explanation. Whatever that explanation is, I hope, before the House finally decides, the difference between the words will be fully explained.
§ Sir W. ROBSONI do not think the hon. Member has looked at the White Paper.
§ Mr. RENWICKI have the White Paper.
§ Sir W. ROBSONThen, with great respect, I do not think he has read it.
§ Mr. RENWICKI have read it.
§ Sir W. ROBSONOf course the Commissioners have put upon them the general duty of valuation, and all that we are doing is that we are re-arranging the Clause for the purpose of dividing into sub-sections the parts of a long and troublesome clause. It is merely for the sake of simplicity of statement, and when we give the assessable site value we do not mean to repeat that the Commissioners shall make deductions. We say the assessable site value shall be so and so, and there is no occasion to repeat the words as to the Commissioners allowing deductions.
§ Amendment made.
§ Drafting Amendment also made.
§ Mr. T. H. IDRIS moved, in paragraph (a), to leave out the word "directly" ["to be directly attributable"].
§ I have been a supporter of the taxation of unearned increment and the diversion of it all my life. That led me in the early days of the garden city movement to take some active part in this work, because one of the main objects of the Garden City Company was to obtain the unearned increment for those who earned it. This Garden City is unique, and it merits special consideration. There is nothing like it. It is a self-contained city. The directors knew from the beginning that they could make a good profit out of a garden city suburb, but they were determined to have a self-contained city in order to carry out the ideas of Mr. Ebenezer Howard, and selected a site far away from all centres of population in order that the whole of the increment produced on that area should be produced by the people themselves and enjoyed by them. The whole of the unearned increment obtained in connection with it must, by the circumstances of the case, be due to the work of the people on it. We were careful to make sure that we should not be influenced in any way by adjoining towns by putting aside an agricultural belt of considerable extent to separate us from all other towns. Clause 17, as amended, gives protection to that agricultural belt, but it does not affect building land. It does not protect those who produce the increment on the building portion of the city. Every bit of the increment must of necessity be produced by the 682 promoters and inhabitants. Great sacrifices were made of work, of capital, and of interest, and of many other things in order to ensure this object. In calculating the value of the increment no other factors can be taken into account. We have deliberately risked or incurred heavy losses in providing electric power works, gasworks, and factories, and many other inducements to manufacturers and residents. We have tempted manufacturers to come by heavy sacrifices in the way of low ground rents, assistance of capital, and special facilities in order that we might obtain the increment. Roughly, probably about half of the increment is due to direct expenditure of capital. The other half is due to indirect expenditure. Shareholders have put down £170,000, prepared to make considerable losses at the outset in order to promote garden city ideals. By the Memorandum of Association it is only possible under the most favourable circumstances to pay a maximum dividend of 5 per cent. The influence of the Garden City has extended not only over our own country, but over other countries as well. We have hopes of support in work and money being continued to promote this slowly struggling enterprise.
§ We have not put down this Amendment with any idea of objecting to the taxation of unearned increment; we thoroughly support that principle. We have put the Amendment down entirely with the object of preventing what we conceive to be an instance of the taxation of earned increment. If the Government will not adopt this Amendment, we still hope that the Chancellor will recognise the great public utility of this movement, and we shall still hope that the Amendment to Clause 35 will be favourably received by the Government. As the Clause stands we cannot, in ascertaining the increment to be paid, deduct any value attributable to our expenditure, unless we can prove that it is "directly" so attributable. On the other hand, by the Amendment introduced by the Attorney-General to Clause 13 on Wednesday night, the owner of a reversion may deduct all "value attributable" (not merely "value directly attributable") to his own expenditure. The omission of "directly" in Clause 13 makes it clear that the deductions allowed under Clause 25 are narrower than under Clause 13, and the omission of "directly" in one case, and its retention in the other will necessitate its being strictly interpreted against the taxpayer by the courts. Under Clause 683 25, therefore, as it stands, a man is to be taxed on some part of the value attributable to his own expenditure. We ask that "directly" should be omitted in Clause 25, as in Clause 13. No one will wish to cripple an industry like the Garden City. Its retention will make the starting of any future garden city so difficult that it is improbable that anyone will attempt it. I have no intention of pressing the Amendment to a Division. We have put it down mainly with a view of influencing the Government to recognise our position and, if necessary, to look into it more carefully, because we are quite sure that everything I have stated can be fully maintained, and I sincerely hope we shall be met in this for the public good.
§ Mr. A. W. WILLSI beg to second the Amendment. The word "directly" does not seem to me to have any effect, except as limiting the discretion of the Commissioners. I believe the Chancellor of the Exchequer has considerable faith in the Commissioners, and I have also. I think the Commissioners will be men of common-sense, and will not go too wide in their attempt to discover value not really due to reasonable expenditure upon the development of an estate. But I particularly hope that the Government will be able to grant us some concession in this matter, because I think we really touch what is a danger-point in the whole of this part of the Bill. Of course the Garden City is perhaps the most salient instance of an association which actually produces what is commonly called unearned increment. It actually produces by its own operations, and mainly by indirect expenditure that value which is to be the subject of this tax. If the word "directly" is eliminated from this portion of the Bill it will affect not only garden cities, but all developing building estates. One must first of all premise that it will chiefly help those developing such estates, who approximate in their particular operations to the methods of the Garden City. It will not help the owner who sits down and spends nothing. The Amendment is to help the man who spends money on his estate, but who has to go somewhat outside ordinary business operations to attract people to a particular place. They all deserve consideration when they are doing work to encourage which is essentially one of the objects of this Bill. I hope we shall not have the answer given to us that the Garden City must be very 684 lucky indeed if it has such an increment as will result in a taxation of £8,000. I say it is a substantial sum at any rate. The main proposition that we make is that in these cases this is not really a tax upon net increment, but upon gross increment. Of course, everyone who knows the operations of the association knows that their expenditure, I will not say mainly, but as regards one of the principal items, is expenditure which is entirely indirect in its nature. I cannot see why expenditure of a direct nature should be deducted and indirect not, provided both produce the value. The may be given that if the Clause were made too wide, the Commissioners would have all sorts of nonsensical claims made, but the Commissioners will be men of common-sense, and will disregard them. Lastly, I would express the hope that the argument will not be used that there must be hard cases. Of course, there must be hard cases, but this particular case is one that does not present any of the evils with which this portion of the Bill seeks to deal. What garden city is ever likely to hold land up or levy blackmail? The objects of the Garden City, as everyone knows, are consistent not only with the general principles of Liberalism, but with the very principles which this part of the Bill is meant to help. I believe thoroughly in the Land Clauses of the Budget; but, if it is pointed out to me by people who understand their business that this proposal is to be a machine not only to tear up the wheat with the tares, but, in a sense, to collect the wheat for destruction even more than the tares, I shall deeply regret that the Government put it forward. I do not lay particular stress on the omission of the word "directly." I shall be content to accept any form of Amendment which will protect value produced by the owner. I think that the word "reasonably" would be quite sufficient for my purpose, but I do think that to limit the discretion of the Commissioners by ruling out all indirect expenditure is likely to do harm to the principles which Liberals hold dear.
§ Mr. LLOYD-GEORGEAfter listening carefully to both of my hon. Friends, I am not sure that even now I know what they mean. The hon. Member for North Dorset (Mr. Wills), in one part of his speech, spoke as if there was to be some great injustice inflicted on the Garden City. Then he said that these words made very little difference one way or another.
§ Mr. LLOYD-GEORGEThere I agree with him. I think they will make a very considerable difference, and it is for that reason that the Government must stand by them. I will tell the House why. As to the objects of the Garden City we are in complete agreement. I hope and believe that the movement will extend. I tell the hon. Member that nothing will extend garden cities more than this Budget. It will have a great effect, not merely in developing land for building, but in doing so on rational lines, which is the whole focus of the garden city movement. My hon. Friends have presented the case of one garden city. With the exception of the directors of Letchworth Garden City, the representatives of all the other garden cities concerned have expressed complete satisfaction with the concessions which the Government have made. What have the Government done to meet the case of the garden cities? They have, first of all, included in the Bill the admission that all the money spent in preparing land for development shall be deducted. They have also got in this very Clause an Amendment which provides that where "any part of the total value which is proved to the Commissioners to be directly attributable to the appropriation of any land or to the gift of any land by any person interested in the land for the purpose of streets, roads, paths, squares, gardens, or other open spaces for the use of the public"; that is to be taken into account. My hon. Friends never mentioned that. Then, in Clause 17, it is provided that Undeveloped Land Duty shall not be charged "on the site value of any land where it is shown to the Commissioners that the land is being kept free of buildings in pursuance of any definite scheme, whether framed before or after the passing of this Act, for the development of the area of which the land forms part, and that it is reasonably necessary in the interests of the public, or in view of the character of the surroundings or neighbourhood, that the land should be so kept free from buildings." Under that provision, if a whole area in the middle of a town is left unbuilt upon as part of the plan to give air space and to provide lungs for the locality, there will be exemption from the duty. We have introduced these substantial Amendments entirely to meet the case of the garden cities, and I want to put it to my hon. Friends that if we do not accept this Amendment, it is not because we have not 686 gone out of our way to meet the case of the garden cities and safeguard their interests against anything like the nature of burdensome taxation.
One reason why we cannot accept the Amendment is that it would let in all kinds of expenditure, not only in their case, but in innumerable other cases, which are not justly attributable to any scheme of building development. We want to leave the word "directly" in the Bill to indicate to the courts when interpreting the Clause that there must be some direct connection between this expenditure and the actual development of the land. [An HON. MEMBER: "That is in the Bill."] We want it to remain in the Bill. It is of the first importance. I think my hon. Friends have grossly exaggerated the case. I do not believe that it will make the slightest difference to them to have the word "directly" included in the Clause, but it would make a difference in a large number of cases I know of. We discussed some of them yesterday. They are cases where there may be an expenditure, not merly for the purpose of land development, but for railways, docks, and other purposes. This would lead to the exemption of the whole of the building land in the neighbourhood of many towns and cities. He knows the danger of vague, obscure words and the necessity of making what the intention is absolutely clear. My hon. Friends, I believe, do not want to knock out the whole of these taxes. They believe in the Land Taxes, and sincerely support them; and yet when they want to knock out words which are deliberately put in and which are of essential importance in the construction of the machinery of this Land Tax I do not think they are acting consistently with their professions. And this is done purely in the interests of a body which is not really damnified.
§ Mr. WILLSI consider that other developing owners who do the same work are equally entitled to consideration. I do not suggest that it should be confined to the Garden City.
§ Mr. LLOYD-GEORGEAll those are amply protected. But there are cases where it might be argued, especially if you leave out the word "directly," that it is expenditure which has a value in improving the property. It might be said that docks down in Cardiff improved the value of the whole of South Wales, unless you make it clear that what you mean is that the money must be spent directly for that purpose. That is the case here. The 687 money has been spent directly for the purpose of improving the value of that spot. My hon. Friends are simply going out of their way not to fight the battle of the garden city, but that of the great urban landlords in other districts. They have been misled entirely by figures for which there is absolutely no justification. The £8,000 is a ludicrous figure. It could only be charged on the assumption that Letchworth is going to make enormous profits in the course of the next five years; because all these things have to be deducted, and it means not so much profit made by Letchworth as what they spend, because all that is taken out. It means profit made by Letchworth on the purely prairie value of the soil after every value which they have created has been deducted. Eight thousand a year profits for five years, made after every deduction for every expenditure, and not merely that, but for every value which is created, would represent profits beyond the dreams of most landlords. In the course of the next five years they are not merely going to get back the whole of the money spent, the whole value they have created, but in addition they are going to make £40,000 profit on the prairie value of the soil which they bought. That is a most extraordinary statement and ought to send up Letchworth shares in the market instantly. The two Amendments have been moved together. That is perfectly right, I understand. The other is with reference to expenditure of a capital nature. Every man of business knows what that means. It is expenditure which you may not expect a return on that year, but which you make part of your capital in that year. All that will be deducted. But that all the expenditure on your office, or on rail-way and tram fares, and every little item of expenditure, current expenditure of the year, should be deducted, would mean such an examination by the Commissioners into the ménage of every urban landowner that you could not begin to collect the tax for many years to come. I trust therefore that my hon. Friends will be satisfied with the very substantial concessions that have been made to meet that case, because we recognise that there are great merits in the garden cities, and we have met them amply. They will not be taxed in the slightest degree on any value which they themselves have created, but will only be taxed on the improved prairie 688 value, after every value which they themselves create has been deducted.
Mr. BALFOURI cannot help thinking that the right hon. Gentleman who has just sat down has been a little hard on his two Friends, because though their speeches may have been strong their action is very weak. The Mover of the Amendment (Mr. Idris) prefaced his speech by saying that he did not propose to divide on it. That is a very innocuous form of criticism from followers of the Government, and one which should have been more highly commended than the right hon. Gentleman (Mr. Lloyd-George) seemed disposed to think. With the speeches of the hon. Members I largely agree, especially with the speech of the Seconder. Those speeches, I agree with the Chancellor of the Exchequer in thinking, have no meaning from hon. Gentlemen who believe in a Land Tax. You cannot possibly argue the case of a garden city and then claim that it should be treated differently from the case of other land. It is perfectly true that the contention is that the original intention of the Government was that they were going to tax that portion of the land which had nothing whatever to do with the expenditure of the owner. But that was only a platonic statement of principle. The Chancellor of the Exchequer told us that if the suggestions made were embodied in the Bill there would be nothing left to tax. I quite admit that if the Bill did what the authors of the Bill say it was intended to do in this part of the Bill, it would produce nothing at all. I also agree with the hon. Gentlemen who moved and seconded the Amendment that this is no argument against the equity of their proposal. Their proposal is perfectly equitable. At the same time I believe the theory of the Mover of the. Amendment was a little shaky. He gave an explanation to us of the method of the garden city operations, and he said the garden city is so arranged that every atom of increment value is due to the action of individuals belonging to the garden city, and that nothing whatever will be due to society at large. He told us that the garden cities propose to give special encouragement to manufacturers to come into garden cities. When manufacturers come into the garden cities, as I hope they will, and when they establish prosperous works, as I hope they will, if the value of the land accrues from their enterprise, their risk, their energy, and their labour, the effect of that on the garden city will not be due to the garden 689 city itself, but will be due to the manufacturers in the garden city, and to the people who buy the produce of the manufacturers and the general conditions in which the society of the garden city finds itself. Carry off Letchworth to the middle of the Sahara, and what is the value of it? What would be its value in any part of the world where civilisation and manufactures have not reached the point of development which they have reached here? Letchworth is no more separated from the general communal action of the society in which Letchworth is situated than any other body, or corporation, or any professional man, or capitalist, or any workman or anyone else. Every single member of society is dependent upon that society. Make what arrangements you like, you cannot limit the action of that society or its prosperity. Therefore the argument of the Mover of the Amendment, from that point of view, entirely breaks down. Although he supported the discussion on those lines I am not disposed to follow him any further on those lines. I wish to go back to the narrower point, which really was raised yesterday, in connection with the Trafford Park Estate. Is it the policy of the Government that they should discourage indirect expenditure for the development of land? That really is the vital issue. One form of indirect expenditure we had yesterday in connection with the Trafford Park Estate. The Government would not hear anything of that. Now we have another form of indirect expenditure brought before us. I agree with all that has been said in favour of garden cities. It may be that it has been in a very small way, but I have done my best to foster the idea. I think the two hon. Gentlemen are right. I think this Bill does discourage indirect expenditure. I do not think anybody will start a new Trafford Park Estate, and I agree with the Mover that nobody will start a garden city.
4.0 P.M.
Can you conceive a greater condemnation of the lines on which the Bill is drawn? Can there be a worse thing done to the community than that this particular form of expenditure should be discouraged? I think that the Chancellor of the Exchequer rather realised that when he turned, as he always does when he is in distress, to the dukes. He asked his faithful supporters below the Gangway, "Do you really mean to throw in your lot with the great urban landlords?" 690 As far as I can make out, they are worse than any duke. When I heard the Chancellor of the Exchequer dilate on the gigantic profits that Letchworth was going to make, when he forecast the future of that city, it justified the allegations of the Mover and Seconder of the Amendment, that this tax is going to-mean £8,000 on the profits of Letchworth. Really, where are we? The dukes are not in it. The real blackmailers are the garden cities, and the representatives of the late Mr. Gorringe sitting on those benches opposite. I feel now that all our ideas of what is enterprise for the good of the community, what is philanthropy, and what is expenditure beneficial to the public are becoming so confused that we really do not know on what lines we ought to legislate. We start by taking unearned increment. We define unearned increment in our speeches as being that which a man has done nothing whatever to obtain. But in the Bill you find that that is not in the least what you intend to do, and if you did it you would get no money at all. We go a step further. Protest is made by gentlemen who are giving a great deal of money for indirect expenditure which will, no doubt, have a great effect in developing land. They make a very natural protest. The Government say, "Do you mean to join yourself to those wretched landlords, who may have done something to improve their land, but who are dukes? They are rich." You say you are going to make £40,000 increase on the prairie value of the land in five years. Robbers, spoliators, blackmailers, bloodsuckers! Here these hon. Gentlemen come before us pleading for their great philanthropic institution, and asking the mercy of the Government. If they want mercy from the Government they must not begin their protest by saying they do not mean to divide.
Mr. BALFOURI am glad that half the party, at all events, are now coming to a decision. If I may say so, I should divide with him with rather more consistency than I think he has shown. I do not think he has voted for the indirect expenditure made by the other blood-suckers whose unhappy lot was discussed last night. He then, I think, left them in the lurch. I supported this last night; I do not support 691 him to-day. I must say this, that the Government, have been consistent in this matter, as we have been consistent. They opposed a perfectly similar claim made last night on behalf of private individuals, and they are absolutely right to-day in resisting it on the part of a company.
§ Mr. WILLSIf the word "directly" were cut out it would apply to Trafford Park as well as to anywhere else.
Mr. BALFOURQuite so. I wish to say, on the other hand, that I did not happen to notice the hon. Gentleman in the Lobby last night when the Trafford Park case came on. I may have been deceived; I may not have seen him. I notice throughout these Debates that there is a very large amount of dissent from the various propositions in the Budget on the part of a good many hon. Gentlemen opposite, but they take care never all to pull in the same direction at the same time. Isolated action taken occasionally with great spirit by a single individual has very little effect, as the other individuals
§ who agree absolutely with him in principle always wait until their special exemplification of the principle comes on, and, therefore, if they vote against the Government they vote alone, when they do vote. That is not the way to get concessions out of the Government, and still less is it the way of getting concessions out of the Chancellor of the Exchequer when the Chancellor of the Exchequer is clearly consistent in his policy in this matter. I do not see how he could give way. He is absolutely unswerving in his absolute determination to discourage any form of expenditure to develop the land in this country. That being the fundamental and vital principle of the Government policy, it really is vain for hon. Gentlemen opposite, whether they mean to vote for their own Amendment or do not, to attempt to proceed on the lines they have done, with their obdurate chief's conducting operations on principles wholly inconsistent with the appeal they are making.
§ Question put, "That the word 'directly' stand part of the Bill."
§ The House divided: Ayes, 141; Noes, 62.
693| Division No. 836.] | AYES. | [4.8 p.m. |
| Abraham, W. (Cork, N.E.) | Ginnell, L. | Morton, Alpheus Cleophas |
| Acland, Francis Dyke | Gladstone, Rt. Hon. Herbert John | Murray, Capt. Hon. A. C. (Kincard.) |
| Allen, Charles P. (Stroud) | Glendinning, R. G. | Myer, Horatio |
| Astbury, John Meir | Goddard, Sir Daniel Ford | Nolan, Joseph |
| Baring, Godfrey (Isle of Wight) | Greenwood, G. (Peterborough) | Nuttall, Harry |
| Barker, Sir John | Gulland, John W. | O'Brien, Patrick (Kilkenny) |
| Beale, W. P. | Harcourt, Rt. Hon. L. (Rossendale) | O'Connor, John (Kildare, N.) |
| Beauchamp, E | Harcourt, Robert V. (Montrose) | Parker, James (Halifax) |
| Bethell, T. R. (Essex, Maldon) | Harmsworth, R. L. (Caithness-shire) | Pearce, William (Limehouse) |
| Birrell, Rt. Hon. Augustine | Haworth, Arthur A. | Philipps, Owen C. (Pembroke) |
| Brace, William | Hedges, A. Paget | Ponsonby, Arthur A. W. H. |
| Branch, James | Helme, Norval Watson | Price, Sir Robert J. (Norfolk, E.) |
| Brigg, John | Herbert, Col. Sir Ivor (Hon., S.) | Priestley, Sir W. E. B. (Bradford, E.) |
| Brooke, Stopford | Herbert, T. Arnold (Wycombe) | Radford, G. H. |
| Brunner, J. F. L. (Lancs., Leigh) | Higham, John Sharp | Rainy, A. Holland |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Hobart, Sir Robert | Rees, J. D. |
| Bryce, J. Annan | Hodge, John | Richards, T. F. (Wolverhampton, W.) |
| Buckmaster, Stanley O. | Horniman, Emslie John | Roberts, G. H. (Norwich) |
| Burns, Rt. Hon. John | Howard, Hon. Geoffrey | Robertson, Sir G. Scott (Bradford) |
| Buxton, Rt. Hon. Sydney Charles | Hutton, Alfred Eddison | Robinson, S. |
| Cameron, Robert | Illingworth, Percy H. | Robson, Sir William Snowdon |
| Causton, Rt. Hon. Richard Knight | Jones, Leif (Appleby) | Rose, Sir Charles Day |
| Cherry, Rt. Hon. R. R. | King, Alfred John (Knutsford) | Rowlands, J. |
| Clough, William | Lambert, George | Russell, Rt. Hon. T. W. |
| Cobbold, Felix Thornley | Layland-Barratt, Sir Francis | Rutherford, V. H. (Brentford) |
| Collins, Stephen (Lambeth) | Leese, Sir Joseph F. (Accrington) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Corbett, A. Cameron (Glasgow) | Lehmann, R. C. | Schwann, C. Duncan (Hyde) |
| Corbett, C. H. (Sussex, E. Grinstead) | Levy, Sir Maurice | Scott, A. H. (Ashton-under-Lyne) |
| Cornwall, Sir Edwin A. | Lloyd-George, Rt. Hon. David | Seely, Colonel |
| Cotton, Sir H. J. S. | Lupton, Arnold | Sherwell, Arthur James |
| Craig, Herbert J. (Tynemouth) | Lynch, A. (Clare, W.) | Shipman, Dr. John G. |
| Crossley, William J. | Macdonald, J. M. (Falkirk Burghs) | Soames, Arthur Wellesley |
| Dobson, Thomas W. | Mackarness, Frederic C. | Steadman, W. C. |
| Dunn, A. Edward (Camborne) | Macnamara, Dr. Thomas J. | Strachey, Sir Edward |
| Edwards, Sir Francis (Radnor) | MacVeagh, Jeremiah (Down, S.) | Tennant, H. J. (Berwickshire) |
| Essex, R. W. | M'Callum, John M. | Thomas, Abel (Carmarthen, E.) |
| Evans, Sir S. T. | M'Laren, H. D. (Stafford, W.) | Toulmin, George |
| Falconer, James | Mallet, Charles E. | Verney, F. W. |
| Ferguson, R. C. Munro | Marnham, F. J. | Villiers, Ernest Amherst |
| Fiennes, Hon. Eustace | Massie, J. | Walker, H. De R. (Leicester) |
| Fullerton, Hugh | Masterman, C. F. G. | Walsh, Stephen |
| Gibb, James (Harrow) | Menzies, Sir Walter | Ward, W. Dudley (Southampton) |
| Gibson, J. P. | Morgan, G. Hay (Cornwall) | Wardle, George J. |
| Warner, Thomas Courtenay T. | Whitley, John Henry (Halifax) | Wilson, W. T. (Westhoughton) |
| Wason, John Cathcart (Orkney) | Williams, J. (Glamorgan) | Wood, T. M'Kinnon |
| Waterlow, D. S. | Williams, Sir Osmond (Merioneth) | |
| White, J. Dundas (Dumbartonshire) | Williamson, Sir A. | TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton. |
| White, Sir Luke (York, E.R.) | Wilson, Henry J. (York, W.R.) | |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Fell, Arthur | Morrison-Bell, Captain |
| Agar-Robartes, Hon. T. C. R. | Fletcher, J. S. | Parkes, Ebenezer |
| Anstruther-Gray, Major | Forster, Henry William | Pease, Herbert Pike (Darlington) |
| Balcarres, Lord | Foster, P. S. | Powell, Sir Francis Sharp |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Gardner, Ernest | Pretyman, E. G. |
| Banbury, Sir Frederick George | Gordon, J. | Randles, Sir John Scurrah |
| Black, A. Cecil | Guinness, Hon. R. (Haggerston) | Renwick, George |
| Bignold, Sir Arthur | Guinness, Hon. W. E. (B. S. Edm'ds.) | Ridsdale, E. A. |
| Bowerman, C. W. | Hamilton, Marquess of | Ronaldshay, Earl of |
| Bowles, G. Stewart | Harrison-Broadley, H. B. | Scott, Sir S. (Marylebone, W.) |
| Burdett-Coutts, W. | Heaton, John Henniker | Talbot, Lord E. (Chichester) |
| Carlile, E. Hildred | Hope, James Fitzalan (Sheffield) | Tuke, Sir John Batty |
| Castlereagh, Viscount | Hunt, Rowland | Valentia, Viscount |
| Cecil, Evelyn (Aston Manor) | Kerry, Earl of | Walker, Col. W. H. (Lancashire) |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Kimber, Sir Henry | Walrond, Hon. Lionel |
| Chance, Frederick William | Lonsdale, John Brownlee | Willoughby de Eresby, Lord |
| Channing, Sir Francis Allston | Lowe, Sir Francis William | Wolff, Gustav Wilhelm |
| Cochrane, Hon. Thomas H. A. E. | M'Arthur, Charles | Younger, George |
| Cowan, W. H. | Magnus, Sir Philip | |
| Craig, Charles Curtis (Antrim, S.) | Mason, A. E. W. (Coventry) | TELLERS FOR THE NOES.—Mr. Wills and Mr. Bertram. |
| Craik, Sir Henry | Morpeth, Viscount | |
| Faber, George Denison (York) |
§ Drafting Amendments made.
§ Sir W. ROBSON moved, in paragraph (a), after the word "of" ["on behalf of any person interested"], to insert the words "or solely in the interests of."
§ This is a small Amendment, but I think it is a somewhat considerable concession. It will relieve from taxation a good many of what are called Trafford Park cases.
§ Amendment made.
§ Further Amendment made: In paragraph (a), to leave out the word "or" ["or to the expenditure of money"], and to insert instead thereof the words "and (c) any part of the total value which is proved to the Commissioners to be directly attributable to the appropriation of any land or to the gift of any land by any person interested in the land for the purpose of streets, roads, paths, squares, gardens, or other open spaces for the use of the public; and (d) and part of the total value which is proved to the Commissioners to be directly attributable."—[Sir W. Robson.]
§ Sir W. ROBSON moved, in paragraph (b), after the word "the" ["the site value"] to insert the word "full."
§ Mr. MUNRO FERGUSONIn divesting the land, why, if of buildings, timber, and trees, not roads, hedges, and so on. I understand that we are endeavouring to arrive at a prairie value of the land without its agricultural equipment. Why should not the agricultural equipment of timber be divested. In order to have the matter discussed I will move as an Amend- 694 ment in paragraph (b) to leave out the words "buildings, timber, trees" ["divest the land of buildings, timber, trees, or other things"] in order to insert instead thereof "agricultural equipment and timber." If you are divesting land of its agricultural equipment why do you merely mention "timber trees and other things."
§ Mr. SPEAKERI think the hon. Member is too late. This divesting took place under Sub-section (2), and this Sub-section simply refers to the sum which, in the opinion of the Commissioners, would be necessary to expend in divesting. The divesting has already been provided for under Sub-section (2). I do not think the hon. Member is entitled to add further subjects of divesting——
§ Mr. MUNRO FERGUSONMay I ask whether under the words "other things" I would not have a right to raise that point?
§ Mr. SPEAKERThis relates only to the imaginary cost of carrying out this divesting. The actual divesting in respect of the things of which the lands are to be divested occurred under Sub-section 2.
§ Mr. MUNRO FERGUSONMy point was that under Sub-section 2 there are certain matters of detail, but in paragraph (b) there are the words "other things" which do not appear in Sub-section 2.
§ Mr. LLOYD-GEORGEWill the hon. Member read the further words—"of which it is to be taken to be divested."
§ Mr. SPEAKER"The other things" referred to are the things mentioned in Sub-section (2).
§ The word "full" inserted in the Bill.
§ Further Amendments made: In paragraph (b), after the word "value" ["arriving at the site value of"], to insert the words "from the gross value of the land."
§ In same paragraph, to leave out the words "and the site value as reduced by those deductions shall be taken to be the site value as ascertained for the purpose of this Part of this Act," and to insert instead thereof the words:
§ "Where any works executed or expenditure incurred for the purpose of improving the value of the land for agriculture have actually improved the value of the land as building land, or for the purpose of any business, trade, or industry other than agriculture, the works or expenditure shall, for the purpose of this provision, be treated as having been executed or incurred also for the latter purposes.
§ "Any reference in this Act to site value (other than the reference to the site value of land on an occasion on which Increment Duty is to be collected) shall be deemed to be a reference to the assessable site value of the land as ascertained in accordance with this Section."
§ Question proposed, "That those words be there inserted in the Bill."
§ Mr. YOUNGERI desire to raise the question of the deduction of the cost of drains from the value of agricultural land. I raised the same point in Committee, and I understood the Chancellor of the Exchequer to reply that he had entirely met the point. Drains are most valuable and costly, and they should be allowed for in the valuation. I agree that there is no rating of agricultural land under these conditions, but that does not matter. You are valuing the land, and you ought to value your agricultural land on the same principle, which is the same principle as that which appears in the Land Values (Scotland) Bill. I wish to ask whether it is not possible for the Government to put in words to make it clear that in this valuation drains will be allowed for.
§ Mr. LLOYD-GEORGEI am afraid we cannot go into this matter beyond the words which are down on the Paper. I cannot imagine the Commissioners not taking into account land which is thoroughly drained when they come to 696 value it even for business purposes. I think we have really covered this point.
§ Mr. AUSTEN CHAMBERLAINOn the last occasion when this matter was discussed, the Chancellor of the Exchequer offered us words which, on examination, we thought met the point raised by my hon. Friend behind me (Mr. Younger), and we accepted them. Having done so, my hon. Friend, in deference to what we had done was good enough not to press his Amendment although he was dissatisfied with the offer of the Government. Since then I have had more time to look into the matter, and I think the point he raised is really much wider and of greater importance than I thought it was at first. I think now that I was much too hasty in giving any kind of approval to the words suggested by the right hon. Gentleman. I agree that they were better than the original words. The issue raised is whether when land has been improved for agricultural purposes and afterwards becomes building land you are to give the owner of the land credit for the agricultural improvements he has created, even though they do not directly subservea the purposes of building; or whether, although he has created that improved agricultural value—because the effect of putting houses upon it destroys the agricultural value—you are going to tax him on the value he has created, as if it were not the work of his own hands or the result of his own energy. It is, in effect, the same question, and the very big question, which suddenly dawned upon the hon. Member for the Buckrose Division of Yorkshire (Sir Luke White) the other day and caused him to state that, if the Bill was in fact what the Bill is, then he had entirely misunderstood it, and the description he had given could not be applied to it. Wherever there has been a value created by the work, the energy, or the expenditure of the owner, he should be given credit for it, even though that particular value becomes merged in another value he has not created. So long as you do not do that you are taxing improved agricultural value. That is grossly unjust and absolutely inconsistent with the claims the Government make for the Bill. We divided upon the matter under another form two days ago, and I am not going to move an Amendment or put the House to the trouble of another Division on exactly the same point.
§ Mr. MUNRO FERGUSONIf the intention is to get at the prairie value and to 697 remove all taxation from any improvements upon it, then the simplest thing to do is to remove the agricultural equipment and timber. If you are only going to remove what conduces to its value as building land, such as drains, then I do not see the use of putting in buildings. The agricultural equipment has to be cleared away at additional cost if you are going to turn it into building land. Agricultural buildings do not add to its value as building land. I admit drainage would in some cases add to the value of the land for building purposes, but the agricultural buildings certainly would not, and we ought to know on which horse we are riding.
§ Amendment made.