§ No duty under this Part of this Act shall be charged in respect of land or any interest in land held by any person or body of persons carrying on any undertaking or institution without any view to the payment of any dividend or profit out of the revenue thereof, for purposes which in the opinion of the Commissioners are public purposes or charitable purposes, while the land is occupied and used by that person or body for those purposes, but nothing in this Section shall prevent the collection of Increment Value Duty where any such land is sold or ceases to be occupied or used for the said purposes.
§ Sir PHILIP MAGNUS moved to leave out the words from the beginning of the Clause to the word "land" [" in respect of land or any interest in 'land'"], and to insert instead thereof the words "Nothing in this part of this Act shall apply to." On behalf of my hon. and learned Friend (Sir W. Anson), I desire to move the Amendments standing in both our names. I should say, with a view to saving the time of the Committee, that I have consulted to-day with some of my Friends who are interested in this Amendment; they have thought it better that these words should be followed by the Amendment which stands in the name of my hon. Friend the Member for the University of Oxford. Perhaps I might be allowed to 974 state at once that if this Amendment is accepted, which I hope it will be, by the Chancellor of the Exchequer, the first few words of the Clause will read: "Nothing in this part of this Act shall apply to land or any interest in land the income and profits whereof are legally appropriated and applied to the promotion of education, literature, science, or the fine arts." This Amendment anticipates the Amendment which is down in the name of the Chancellor of the Exchequer, and it goes a little further than his Amendment takes us. The words I have proposed to insert include all these proposals that were submitted to the Chancellor of the Exchequer on the occasion of the deputation which waited upon him in August last, and which unfortunately he personally was unable to see. That deputation was composed of a very large number of representatives of secondary schools in the country, who went to the Chancellor with a view of obtaining complete exemption from the duties under these land clauses in respect to any land which those schools hold. It also includes the proposals, which, I understand, were privately made to the Chancellor of the Exchequer by the small deputation on behalf of the universities of this country, which also naturally desire that they should be exempted from the incidence of these taxes. I would like to point out clearly and definitely that the Amendment which I am introducing proposes to exempt all educational institutions from the Increment Duty, the Undeveloped Land Duty, and also from the Reversion Duty. After the deputation to which I have referred the Chancellor of the Exchequer put down the Amendment in his own name which gives certain exemptions on behalf of these institutions. But his Amendment does not go far enough. I have no doubt he will explain when he comes to it how it is that Reversion Duty can be charged upon land which is occupied and used, and continues to be so occupied and used, by these institutions. I should have thought that under the circumstances the Reversion Duty would have only been charged when that land ceases to be occupied or used by these bodies. The Amendment of the Chancellor of the Exchequer proposes to exempt charitable institutions. I understand by this that educational institutions are all included. The right hon. Gentleman proposes to exempt them from Reversion Duty and Undeveloped Land Duty, but only with respect to land 975 which is occupied and used by those bodies, and only so long as they are occupied and used by those bodies. Further, he proposes that the Increment Duty shall not be collected periodically, i.e., without prejudice to the collection of the duty on other occasions. Now it is these exceptions to the exemptions which all those who represent universities and secondary schools of this country are desirous should be omitted from this Clause. I should like to point out in a few words only how very seriously this Clause, as proposed to be amended by the Chancellor of the Exchequer, will affect a large number of educational institutions which are doing splendid work at the present moment. It is well known that many of these schools have large funded property which is derived from the rents of freehold land, or houses standing on land. If the Reversion Duty is charged on this property they will be deprived of opportunities, to which they have been looking forward for years, of using the whole of these reversions for the purposes of extending their schools, building libraries or laboratories, or other departments which are required for their work. Let me take, for instance, the case of the schools of the Harpur Trust at Bedford, which are exclusively maintained by rentals received to a large extent from properties situated in London in the neighbourhood of Bedford-row. This property was so large at one time that the trustees were enabled to support not only two excellent boys' and girls' secondary schools, but also all the elementary schools connected with the trust. These taxes will fall very heavily upon the land occupied by them, and the, Undeveloped Land Duty and the Reversion Duty will have to be paid in respect of land the rentals of which are devoted to the purposes of the school.
§
With regard to the case of Dulwich, which has been separately under the consideration of the Chancellor of the Exchequer, in the memorial which was sent to him it was stated:—
The Board of Education have been for some time past very desirous that the Estates Governors should provide further endowment for Dulwich College, which is sorely in need of funds to carry on its work. If this new tax is enforced the consequence will be to seriously cripple, not only the college, but all the other schools which are maintained out of that large estate.
§ As regards undeveloped land, it is well known that many schools in the immediate neighbourhood of some of the large cities hold up a certain strip of land to serve as a 976 kind of buffer-state between the town which is approaching the school and the school. The land is held up—although it may be a valuable building site—so that the town shall not approach too near the school. Under the Clause, as amended by the Chancellor of the Exchequer, that land might be subjected to a very heavy Land Tax. I need scarcely remind the Chancellor of the Exchequer that we in this country devote far less money to secondary education than is devoted in many of the great Continental countries. This Clause of the Finance Bill proposes to take away from these secondary schools a part of the income which they at present possess. Surely this is not the time for doing anything of the kind. More money is certainly required for secondary and university education in this country. Here is a Liberal Government, which has always been supposed to be friendly towards education, coming in and putting down proposals in the Finance Bill which will seriously hamper these schools, and prevent them doing that useful work which they are now doing, and hope to do in the future. Out of this fund scholarships are even kept up, so that the effect of this tax will be to a great extent to prevent some of those scholarships from being awarded. Let me state for a moment the effect of this Clause upon some of our local authorities. There are many endowed schools scattered throughout the whole country which have a certain amount of income from landed property. A large number of these schools have not sufficient income to keep up the work in which they are engaged, and they constantly receive assistance from the local authorities. Under this Clause these schools would be receiving less than they previously received from their endowments, and they will consequently have to make a larger call than they do at present upon the local authority. Therefore yon are putting an additional tax upon the local authority by not exempting those schools from the tax which you impose in the Budget. It is proposed in the Chancellor's Amendment that institutions such as those to which I have referred shall be exempt from periodic valuation, and that is, of course, a considerable advantage; but the advantage which he gives with one hand he takes away again with the other, because he says "without prejudice to the collection of the duty upon any other occasion." That is to say, supposing they sold their land with the view to purchase more convenient land, then any increment that would arise upon that sale of the land 977 would be taxed. That again, I say, is very unfair. I venture to thank all these taxes which are proposed to be placed upon these institutions, which are doing great public work and where their income is necessarily and exclusively applied to educational work, should be applied in this way are very unfair. I have moved this Amendment for the purpose of raising a general discussion upon this matter, and with a view of eliciting from the Chancellor assent to the further modification of his own Amendment so as to exempt all institutions such as those to which I have referred from the Land Taxes contained in his own Amendment.
§ Sir WILLIAM ANSONMy hon. Friend and I have combined our Amendments for convenience in raising the whole question, and it may be useful therefore that I should second his Amendment at once. The Amendments introduced by the Chancellor are certainly very disappointing, after the kindly way in which he received the deputation from the two Universities of Oxford and Cambridge. We hoped for more from him in the way of concession than we should merely obtain relief from periodic increment charge which will not relieve us from the very heavy charge which will fall upon us in the case of a sale, and certainly hoped for more than that the mere land in the immediate use and occupation of the colleges and schools should be exempt from the different forms of Land Taxes. I should like to point out to the Chancellor that we have endeavoured to confine the application of further exemption within very strict limits. The lands for which we ask exemption are lands which legally belong to the institutions, and are contributing towards the expenditure upon educational matters. In the case of universities or colleges that means that this property is governed by University College Estates Acts, and in the case of schools by the Charitable Endowed Schools Act, and in the case of literary and scientific institutions by an Act passed in 1854. Supposing that a college or a university obtained a windfall by a sale which had increased upon the increased value of the land what would happen to that money? It is immediately placed in the hands of the Board of Agriculture; the sale cannot take place without the approval of the Board, and the Board takes the money and keeps it until it is invested in land or in trust funds or sent to the college for the de- 978 velopment of its property. Supposing the increment does not take the form of a capital sum, but of an increased rental value; the use of that money is strictly limited to the statutory purposes of the institution to which it belongs. That money can only be used for the good of the university or the college, and I am right, I think, in saying that the endowment belonging to schools which fall within the terms of this Amendment are regulated by the Charitable Trusts Acts. Sales take place under the authority of the Board of Education or the Charity Commissioners, and the proceeds of that sale or any increment are all alike employed under the supervision of one or other of two Government Departments.
I believe these literary and scientific institutions are very largely handed over to the local authority under the Local Government Act of 1894, and they will hardly come into consideration at all in so far as the terms of this Amendment go. What I am concerned with are the university colleges and public schools and the endowed schools. In the first place, I would ask the Chancellor to recollect not only is all this property governed by statute, and under the control of the Government Departments, but it is all applied to public purposes, and where money arises from undeveloped land, or from increment, or from increased reversion, it has all to be applied to public purposes for the education of children and to the advantage of the country generally. Take the case of the Undeveloped Land Tax. There are certain schools and other institutions which have bought land deliberately intending to reserve it so long as it is necessary. Harrow School has done this on a very large scale and has bought 8,000 acres of land in order to keep London off its boundaries. Eton has done the same in order to prevent a street being run through its grounds. The University of Oxford has bought land in order to have free access to the country on one side, and I venture to say that it is in the public interest that these great public schools should uphold some surroundings suitable for the good government and well-being of the school, and that the university should have at any rate on one side access to the country, when there is no demand for building on that land, which I am bound to say is very often liable to be flooded in wet weather.
I think it is very much in the interest of public schools that they should have such free and open surroundings for the good of boys such as they have at Oxford. The 979 Undeveloped Land Tax has its effects upon the lands which the colleges and schools hold as part of their endowments for the purposes which these institutions are intended to serve. The Chancellor of the Exchequer, when this matter was raised on the Resolution, spoke in a very cheerful and encouraging way as to the slight effect this Undeveloped Land Tax would have upon the certain kind of property I have mentioned. I hope he may be right, but I am afraid not, because I have learned differently from hon. Members upon the other side. The hon. Member for Aberdeen and the hon. Member for Sheffield made very interesting speeches upon this question of valuation, both Gentlemen being eminently skilled in that branch of knowledge, and the impression they made upon my mind has been one of absolute uncertainty. It is not merely that the Undeveloped Land Tax may be very costly, but it is that it is quite uncertain what value a valuer will put upon it. And it is by no means certain that any two valuers would put the same value upon it. I have obtained the best information I could with regard to the Undeveloped Land Tax. A man with considerable experience in that line of business puts it at £1,000 a year in a case which I submitted to him, and £1,000 a year is more than an income of a professorship, and would certainly be a very considerable loss to the interests of learning in a university. I cannot say what it would be at Harrow, but I am told that it would have a very serious effect. When you add this actual loss to the uncertainty of the Land Taxes, I think everyone must realise that great injury will be done to these institutions by the imposition of this tax. We have heard from the very eminent valuer, who spoke upon the subject of the uncertainty, that probably no two valuers would value the same thing in the same way. We also heard from the Prime Minister that it would take at least two years to complete the Government system of valuation. I think from what we heard from others it will take considerably more, and during all that time these institutions will be in a state of uncertainty whether their land is to be regarded as undeveloped land or is to be regarded as nothing more than agricultural, and as to the value that will be put upon it and what the consequences of the tax will be. It must be borne in mind that in every school or college uncertainty with regard to its revenue is a much more serious thing than it is to 980 the individual. The individual may let his house, cut off his motor car, and economise in various directions from year to year or from month to month. But a college cannot decline to continue a professorship which it has once taken over. A school may have to reduce its staff or reduce the salary of its teachers, and this tax may prove a heavy hardship upon educational institutions. Upon whom will this charge fall? It will fall upon the universities and colleges. The consequence will be that they may have to diminish the number of their professors who are engaged promoting studies and advancing knowledge in their respective departments. Either the staffs must be diminished or the salaries of the teachers must be reduced, and it cannot be said that the teachers either in our universities or public schools are an overpaid class of men. On the contrary, I think it is admitted that the public get admirable work from the teachers—which it has taken them a long course of study to enable them to give—at an uncommonly cheap rate. This tax will also fall upon parents, because the sources of revenue of these schools are endowments, and if the revenues of the schools are reduced in one way they will have to be increased in another way. It must not be supposed that these large schools are used only by the children of well-to-do parents, because many persons put themselves to great inconvenience and deny themselves enjoyments in order to give their sons a good education.
Then there is a fourth class of person who will suffer; I mean the students themselves. If there is a diminution of endowments there must be a diminution of scholarships, and everybody knows what assistance scholarships are to the boys who are enrolled amongst a group of scholars at a public school. I wish to call the attention of the Chancellor of the Exchequer to the extreme injustice of imposing these taxes on the higher education of the country. What is the sum spent upon elementary education? It is more than £11,000,000 annually. What is spent upon secondary education? Less than £800,000, and on university education the total is less than £200,000. Why is the State able to spare itself the expense of maintaining the higher education of the country? Because of these very endowments which you are now taxing. You save yourselves the cost of maintaining the great schools of the country which you would have to maintain but for the endowments which you 981 are now taxing in order to swell the Exchequer for other purposes. You are using these endowments for two purposes in two ways, and you are burning the candle at both ends. Literally these endowments suggest Goldsmith's lines:—
The chest contriv'd a double debt to pay,A bed by night, a chest of drawers by day.This policy is not only unjust and ungenerous, but it is also unwise, because you cannot lightly diminish the educational sources of the country. By this Amendment we are asking not for concessions, but we are merely suggesting the removal of a blot on the Bill, and I trust, at the close of this Debate, we may hear something from the Chancellor of the Exchequer which will lead us to hope that this blot will be removed.
§ Mr. LLOYD-GEORGEI should not have put forward a proposal of this kind unless I had very good reasons for doing so. Before I give those reasons, I should like to express my disappointment that the right hon. Gentleman does not appreciate the very great concessions made in regard to the Universities of Oxford and Cambridge. What are those concessions which have been treated as if they were merely nothing? They amount certainly to two-thirds, and all that is left is the one-third, which we cannot give up without surrendering a very considerable revenue. Of course, if concessions are made to universities, they must be made in regard to all lands similarly situated. May I point out that the Amendment which the hon. Gentleman has moved is extended by proposals put down by other hon. Members to other institutions? What is the concession made to Oxford and Cambridge? They are not to be charged at all as corporations. They are not to be charged Undeveloped Land Tax or Increment Duty in respect of property which they actually occupy and enjoy. They are not charged the corporation tax of 20 per cent. in respect of any of their property, and surely that is a great concession: I am afraid the hon. Baronet opposite does not quite appreciate that.
§ Mr. BONAR LAWDo I understand that the Increment Duty is not payable in the case of these institutions if they make sales of property belonging to them?
§ Mr. LLOYD-GEORGEWhat I said was that the corporation tax is not charged. There is a great difference between a tax on sales and the corporation duty levied every 15 years. When they 982 sell property I do not think the hon. Member for Dulwich will think it is unfair that the universities should pay. [An HON. MEMBER: "Yes it is."] Does the hon. Member opposite want property of this kind exempted altogether, because that proposition is absolutely indefensible. I want the Committee to realise what this means, since the Mover and the Seconder have not thought it worth while to inform the Committee.
§ Mr. PRETYMANIt is not an exemption, it only varies the occasion.
§ Mr. LLOYD-GEORGEThe proposal is a complete exemption from the corporation tax. They only pay on sale, and if they do not sell they do not pay at all. What I am saying is strictly in accordance with the form of the Amendment proposed by the Government. Universities and educational institutions are not charged the tax at all, and that means that the duty which is levied upon land held by all other corporations except municipal corporations every 15 years is not chargeable at all upon educational institutions. That will be a very considerable sum. Take the increment in that property year by year. The Undeveloped Land Duty will be nothing compared with it. They have been let off all this, and yet it has been treated as if it were a mere £5 note every 15 years, whereas it is a very substantial concession.
I come now to the taxes which are to be charged. The point is are religious, charitable, and educational institutions to be exempted altogether from taxation? That is a doctrine which was fought for hundreds of years ago, and fought successfully in the old feudal days. This is the old claim which was put forward then. It was proposed that they should be exempted from taxation, and in the past the accumulation of these lands became a very serious matter for the revenue, because in consequence of exemptions of this kind the tax fell much more heavily upon those outside. The hon. and learned Gentleman forgets that these institutions pay under Schedule A at the present moment in respect of this property a much heavier duty than the Undeveloped Land Tax. Under those circumstances, why should they be exempted from this tax while they are paying the other? Where is the principle of it? If you lay down a general rule that all these institutions should be exempted from taxation altogether there is a principle, at any rate, which is arguable, but which I at once say I do not 983 accept. Let there be no mistake about that. That is a thoroughly arguable proposition, but this is not. This is a proposal to get rid of the Land Tax. I will take the figures given by the hon. and learned Gentleman. He has come to the conclusion that All Souls' will pay £1,000 a year Undeveloped Land Tax. That means that All Souls' has a property so valuable that its building value over and above its agricultural value is very nearly half a million. And this, we are told, is a college that cannot pay its professors and cannot give a proper education to its students purely and simply because they have to pay £1,000 a year on this invaluable property. In this case the agricultural value is four times what it would be in any other district. That value is not created because the soil is especially good. In other districts not far away the value is £1 per acre, but I think I am right in saying that this college gets about £4 an acre.
§ Sir W. ANSONFor allotments.
§ Mr. LLOYD-GEORGEI think they get more than £1 on an average.
§ Sir W. ANSONNot much more, but this applies to quite a small part of it.
§ 7.0 P.M.
§ Mr. LLOYD-GEORGEThe part which is producing £4 an acre will probably have a special building value, but all that is exempted, and they are getting this high price for it. I do not think it is too much to ask that land of this enormous special value should pay a halfpenny upon the value over and above its purely agricultural value. Of course, were this purely a matter of universities it would not be worth arguing about. I think it is far better to levy this tax, and if universities are short of money it will be better to have a straight deal with Parliament on that point. If you are going to exclude universities, how can you include, say, the Ecclesiastical Commissioners with their enormous values? How can you except the great religious corporations? You cannot do it. If you begin exempting them, it will make a very serious hole indeed in the revenue, and I do not see, if you are going to exempt them from this halfpenny Land Tax, why you should not exempt them from the rates, from Schedule A, and from all taxes. I really do not see the distinction. I am not sure whether there is anything to be said in principle for the concession 984 the Government have made. After all, it is purely a compromise, and there is not in principle even anything to be said for that. We have, however, gone to the extent of meeting these corporations by providing that the tax shall be collected when they dispose of the property rather than every 15 years, and to that extent it is a departure from the principle, and I could not defend it purely upon principle. It is purely a compromise, as the result of a real and genuine desire to meet the case of the university. Land is getting more and more into the possession of great ecclesiastical, religious, and charitable institutions—very considerable tracts are getting into their possession, and if this exception is made it cannot be confined to educational institutions. The hon. and learned Gentleman's Amendment confines it to educational institutions, but let him look at the Amendment of the hon. Member for Kingston (Mr. Cave). He extends it to religious institutions, and, if you give it to educational institutions, on what ground can you refuse it to religious institutions? I can imagine the sort of argument that would be advanced. The hon. Gentleman seeks to confine it to educational institutions, but he would probably be in favour of extending the concession to religious institutions. Do I understand him to say he would not?
§ Sir W. ANSONI will wait until that Amendment is reached.
§ Mr. LLOYD-GEORGEThe Ecclesiastical Commissioners are lying in wait, and, the moment the educational institutions have got this out of the Government, the hon. and learned Gentleman, I suppose, will join with the others in claiming that they should also be exempted. I am not going to talk of shoplifting or use language of that kind. I do not use that kind of language—that is the language of the universities. At the same time the Government could not resist that argument, and the hon. and learned Gentleman can see he himself could not resist it, although he has confined his Amendment to this particular branch of the subject. That would be simply whittling away the Land Taxes in one concession after another until there was nothing left. I think we have met the case of the universities liberally. The Undeveloped Land Tax is not a heavy tax except where the property is a very valuable one. I still think the hon. and learned Gentleman and his advisers grossly exaggerate the 985 amount they will have to pay. He is assuming that every acre is valuable building land at the present moment, but he says it is part of a swamp, and it will take a long time to have any building value. By that time they will be able to dispose of it at such a price that £1,000 a year will really be very little for them to pay.
§ Mr. BONAR LAWThe Chancellor of the Exchequer began by saying this was an Amendment any Chancellor of the Exchequer would be unwilling to resist, and then he proceeded to give us the reasons why he, unwilling, was yet bound to resist it. I did not see much force in any of those reasons except the peroration at the end of his speech, when he told us he did not indulge in shoplifting and that sort of language. It is not the man who does it that uses the language; it is the man to whom the injury is done. If we examine the reasons the right hon. Gentleman gave I think he will admit they are slightly feeble. If the principle on which these taxes is based is correct, then the amount in the case of educational institutions simply accumulates. It is true they do not pay the tax until they sell the property or lease it, but then they pay all the more, and they gain nothing by this concession which the right hon. Gentleman says he gives them. He contemplated, of course, them selling, and, therefore, the full burden will inevitably fall upon them just as if this concession had not been made. The case I wish to put to the right hon. Gentleman and to the Committee as strongly as I can is the way this tax will affect an educational institution, the value of which many Members of this House on Loth sides know, and which, I am sure, no Member would be willing to injure if he could help it. I mean the governors of the Dulwich estate. The idea may be in the minds of some hon. Gentlemen that this is only going to hit the better class schools or universities, like Oxford or Cambridge, which can well afford it. If the Chancellor of the Exchequer had happened, as I did two years ago, to give away the prizes at the James Alleyn school in Dulwich, which is filled entirely with children of poor parents, and had realised what the effect of this taxation will be on the revenue of the governors, I think he would find better reasons for refusing, or he would allow this Amendment. The Undeveloped Land Tax alone will take, on a most moderate estimate, £1,000 a year out of a revenue of £1,900 from the land, leaving only £900 for educational 986 purposes from that source. That actually amounts to more than 7 per cent. on the total revenue enjoyed by this institution.
§ Mr. LLOYD-GEORGEDoes the hon. Gentleman say really that the land is worth £500,000 over and above the agricultural value?
§ Mr. BONAR LAWI am giving the statement given to me by the governors of Dulwich College. The building land on the average would be £1,000 per acre, and the Land Tax on 480 acres amounts to £1,000. That is my authority. They went on to say that the total income from the land is only £1,900. That is not the only way in which this institution will be hit. They have, wisely or unwisely, adopted the proposal of leasing their land on the usual principle of getting back the property at the end of a fixed time, and a large part of their revenue depends upon the falling in of these leases. The Government propose to take 10 per cent. on the reversion and 20 per cent. whenever there is a sale. The governors say that amount will be extremely heavy, and it is absolutely impossible for them to form any estimate of it. What really is the answer which can be given? The right hon. Gentleman earlier this afternoon told us he was putting on this special tax with the view of handing over half of it for various purposes throughout the country in places other than where it is collected to a large extent. He is going to collect this money and then distribute it for purposes which he thinks for the good of the whole country. Can anybody imagine anything more foolish than to collect that amount of money from an institution like this and then hand it over to the hills of Wales and leave this institution suffering for the money of which it is deprived? The right hon. Gentleman says that if you once begin exempting this kind of institution you cannot stop, and must exempt religious institutions. He says it is a question of principle. Once you go down the slippery slope there is no end to it—you must go the whole way. I do not think that ought to worry the right hon. Gentleman. I do not think the principle or the length which he is going need concern him. He might fairly look at this question upon the merits and say, quite apart from religious institutions—and, as far as I am concerned, I say frankly I do not think they are on the same footing at all, and if I were in his position I would give exemption in the case of educational, but not in the case of 987 religious institutions—the expediency of it is in itself a sufficient justification for making this concession. Unless I am greatly misinformed, there is another very strong reason why he should make it. The right hon. Gentleman made a statement that institutions of this kind now pay all other taxes, and he asked why they should not pay this? There is one reason why they should not pay it. The Government do not pretend this is imposed merely for the sake of revenue. They say it is partly for the sake of revenue, but they profess it is for other objects as well. If they put on taxes not merely for revenue, then surely Amendments which have the effect of serving a good purpose should be accepted.
I am informed by the governors of this institution that, contrary to what was stated by the right hon. Gentleman, they do not now pay Income Tax on this property. When the governor made that statement I asked him for his authority, and he sent me back the statement that they do not pay it in accordance with the Income Tax Act, 1842, Section 61, which says all land belonging to hospitals, public schools, and almshouses, or vested in trustees for charitable purposes are exempt from the payment of Income Tax. All we ask, if I am right in this, is that in imposing his new special taxation the Chancellor of the Exchequer should not be more exacting than in the old Income Tax, and should not at least put institutions of this kind in a worse position with regard to this tax than they are with regard to other taxes now imposed by the Government. I really think if hon. Gentlemen will seriously consider this question they must feel it is extremely unwise to deprive an institution which admittedly is doing a good work of a large part of the revenue which it is usefully employing, simply in order to give the money to some other purpose which may or may not be equally good. It cannot be said that the Dulwich Governors deserve this fate—that they are not acquiring their land to the best purposes. As a matter of fact, they are doing their best in that direction. I happen to remember when a statement was made by Mr. Gladstone to the effect that there was no better purpose to which property in the neighbourhood of large towns could be put than the erection of villas with gardens around. I cannot for the life of me see why the right hon. Gentleman should not yield in this case, although he says, if he does it now, he would have to do it for religious institutions.
§ Mr. J. MASSIEThe Amendment proposed and the speeches delivered have touched a principle which opens up a wide sphere. You cannot confine this matter to education. You cannot give any special consideration to the four undergraduates at All Souls' College, nor can you give special consideration to a rich corporation like that at Dulwich. The words "charitable purposes" in the Clause cover, of course, by every custom and practice of law, education and religion as well as charity. We have often heard, from the other side that there is a combination which they call education combined with religion, and it is very difficult from their point of view to distinguish between the two. I was very much surprised to hear the hon. Member for Dulwich endeavouring to separate education from religion. I think there are some points in the Clause itself that are questionable, but I do not propose to offer any opposition to the Clause as shaped or re-shaped by the Chancellor of the Exchequer, although I am very uneasy about its substance. I wish to point out that the Amendments of the Chancellor of the Exchequer go quite far enough. He has burdens enough, and, therefore, I do not expect him to take in addition to them the mantle of the late Mr. Gladstone, which he wore in his Budget speech of 1863, when he proposed the exemption of charities from taxation—when he entered into what he called "the deadly encounter with the so-called charities." A reversal of an ancient custom would be too much for the present Chancellor of the Exchequer, as it was too much for Mr. Gladstone himself, even though, according to good judges, the speech he made on that occasion was among the two or three most powerful speeches he delivered in his career. In the course of that speech he knocked the bottom, if I may use a colloquial expression, out of the spurious charity claim when, as he said, "he upheld the reality of truth and justice against their superficial and flimsy appearances." Lord Morley, in writing of him, says he
Turned a rude searchlight on the illusions about charity which are all the more painful because they often spring from pity and sympathy.But Mr. Gladstone failed at that time as the Chancellor of the Exchequer would fail now, and for much the same reason. Lord Morley, if I may quote his words, tells us howThe House was impressed with the argument and the performance, but the clamour was too loud; all the idols of the market place and the tribe were marched forth in high parade, and the proposal had to be dropped.989 Some of these "idols of the market place" we find represented in the Amendments today. These Amendments would exempt from taxation all land and incomes from the land which are connected, not only with charities, but with education and religion, even though those lands might not be occupied and used, or, to put it in shorter phrase, though they may not be the "homes" of charity, of school, or church. The Chancellor of the Exchequer himself proposes an Amendment to free them from the Undeveloped Land Tax and the Reversion Duty so long as they are occupied and used, and he delivers them from the periodical Increment Value Duty under all circumstances whatsoever. Now I have said that in the Clause and the Chancellor of the Exchequer's Amendments there are a few questionable features, and this seems to me one. It will discourage the sale and distribution of land, especially as after the sale the ordinary Increment Duty will have to be paid. But the hostile Amendments go much further; the limitations which the Chancellor of the Exchequer has put down in the words "occupied or used" are to be scattered to the winds if the Amendments are accepted which substitute "owned or held" for "occupied or used." Let us consider the consequences of these Amendments. These bodies, whether educational, or charitable, or religious, will be able to buy valuable property and hold it up while becoming more and more valuable, and keep it away from the community. They will not have to pay Undeveloped Land Duty. They may lease it for building and at the end of the lease they will be called upon to pay no Reversion Duty though they may exact fines and acquire other kinds of profit. This is nothing else than a gift to these bodies at the expense of the already overloaded taxpayer. What is the reason for it? What is their claim? It may be some of these bodies are wasteful; some even corrupt. Do they not owe anything to the State that protects them, or to the ordered condition of the community which adds to the value of their property and increases their security? What is true of charities in the ordinary way is true of religious bodies. I need not call the House to witness that religion is not by any means always charity. I am glad to have the agreement of the hon. Members opposite, shown by their cheers, to this statement. But I may add that religious funds are not infrequently used to kill charity. Do not these bodies—not forgetting the 990 Established Church, or the French Orders who have come over with bag and baggage to this country for shelter—do they not owe anything to the powers that be by whose beneficent providence they are enabled to worship under their own vine and fig tree, no man making them afraid? Are there any uncompromising hon. Members who are inclined to look askance at the vine as scarcely reputable? There are still the broad sheltering leaves of the fig-tree. The Ecclesiastical Commission would be exempt. They are the largest landowners in the country. I believe they hold more than 300,000 acres, and of their income—I am speaking in round figures—of something like £2,000,000 some £400,000 comes from landed property. The Orders that have come to us from abroad will also be exempt, and I am told that they are becoming some of the largest buyers of urban property in this country. Now, this cry from the charities, schools and religious bodies for exemption from their share in the burdens which are already so heavy on the community is becoming irksome and irritating, and tends to engender a certain feeling of contempt. The cry does not seem to me to be very manly. The late Mr. Gladstone declared it was entirely unjust. I cannot exactly quote his words, but the effect was this: Why should the fathers of families, with all their heavy burdens upon them (and I might add in this atmosphere, why should spinsters and widows) pay an augmented rate of taxation in order to furnish the luxury of exemption to bequests which, though meant for charitable purposes, are often useless and even deleterious bequests, made when the owner has no further use for his money except to leave it away from his children, or to hand down to posterity an everlasting name, in what Mr. Gladstone called in 1863 "enormous letters" of brass. There is one argument against this exemption of bodies connected with charitable purposes which Mr. Gladstone used which is even stronger now as against the Chancellor of the Exchequer's already sufficient indulgence. The argument was this, that when such exemptions were first granted the State expended practically nothing on education or on the Poor Law, and in 1863 Mr. Gladstone gave these figures: "But now the State is spending £1,111,000 on education and £227,000 on the Poor Law." But at the present time we are spending on all sorts of education something like 17½ millions, and on pauperism—I cannot separate the local from 991 the Imperial contribution—but on pauperism we are spending something between 16 and 17 millions. The State is just about, too, to spend £9,000,000 per annum on old age pensions alone. Therefore, the State has become more and more largely charitable out of the pockets of the ordinary taxpayer, and, therefore, it seems to me that these endowments of institutions, many of which are rich, ought to bear their fair share of the burden of taxation. I am not asking for anything more than a fair share in the burdens of the ordinary taxpayer while these bodies recognise their indebtedness to the State for protection and security. Of course, I cannot expect the Chancellor of the Exchequer to make any proposal which would carry out such a policy with drastic completeness, and so I am not prepared to oppose this Clause, with the limits in it to which I have referred, but I should strongly oppose any of the extensions of exemption which some of these Amendments seek to force upon the Clause.
§ Sir HENRY CRAIKI could hardly follow very fully the argument of the hon. Member who has just sat down, without running the risk of being called to Order for irrelevancy. The hon. Member, on an Amendment which does not touch the religious question at all, tried to induce us to enter upon it, but I will not do so further than to say that I note with satisfaction how closely the hon. Member thought that religion and education were necessarily bound up together. The hon. Member's argument against this exemption which we claim, seemed to me to be of a somewhat flimsy character. In the first place, he said these are rich endowments, and do not want help. The word "rich" which he used in this connection can be nothing more than a relative term. A university, or a college, or a school is rich, not because you can say that so much income comes to it, but because it has over-ample funds for doing the work entrusted to it, and which are necessary for that work. A university which had the richest endowment in the world might be poor if it had a task which was larger than that of any other university.
§ Mr. MASSIEI did not say the universities were rich. I spoke of some corporations being rich.
§ Sir H. CRAIKWe were talking about the universities, and the hon. Member, I 992 assume, addressed his argument to what we were speaking of, and he most distinctly mentioned a scholastic institution at Dulwich and the University of Oxford and some of its colleges in this connection. The hon. Gentleman agreed with the right hon. Gentleman in trying to lead us on to a false track by raising the question of religion. I am not going to be drawn into any question of logic, but if the hon. Member wishes for my opinion upon the question I am quite ready to give it, and I think that a strong claim can be made for religious institutions as well as for those we are discussing, but the two institutions are not bound up with one another. I shall only give one argument in reply to the Chancellor of the Exchequer, which, I think, completely disposes of his argument that the two matters follow the same course. The right hon. Gentleman is giving grants for university education. Is he prepared to say, because he is giving those grants for university education, that he is bound to give grants for ecclesiastical education? And, if not, why does he seek to complicate this question by saying that necessarily the Amendment which we are now putting forward would force him if it were carried to grant some exemption to ecclesiastical institutions? At all events, I speak for those institutions which are not wealthy, and which are not for a select or privileged class. They are popular institutions, and they have the hardest work to make both ends meet in performing the educational task that lies before them.
The right hon. Gentleman wishes, in the first place, in dealing with these institutions, to make a distinction for which I can see no ground whatever. He is ready to make a certain allowance—it is quite easy to prove that the allowance is only verbal, and is not really an allowance at all. He is prepared to make an allowance in regard to the Increment Tax, the Development Tax, and the Reversion Tax in regard to land which is actually held for the immediate purposes of the university or institution. But what can be the difference between land bequeathed to a university or an institution, the rent of which is to go to the University and be used for its purposes, and land which happens to be convenient for the University to use for its own scholastic purposes? What logical distinction is there between the two? I cannot see it. So far as the larger question is concerned, that of land held by a university, whether for its own special purpose or merely for the sake of 993 the profit which it brings in in a year, the right hon. Gentleman only allows the periodical Increment Tax. It is only, of course, as I said before, an allowance in words, and not in fact. As long as the land is not sold that periodical increment will not be charged. But the moment it is sold all the arrears of the quinquennial periods will be charged as heavily as in any other case. But I ask not only that the land so held shall be exempt, but I say that all land held by a university should be freed from this new tax.
Let me give a case to the right hon. Gentleman which is a practical one, and which arises in one of the universities that I have the honour to represent. The university advanced money on mortgage in respect of a particular estate. They had no desire to come within that wicked and accursed class of landowners and advanced money on mortgage on land, as they might have advanced it on any other security. The land so held ceased to pay interest on the mortgage, and it fell into the hands of the university simply because the owners were no longer able to pay interest on the mortgage which the university holds, but only until it can realise the money that it has sunk in it. At present, if the estate were put upon the market, it would realise nothing like the amount they paid for it. But if they wait for a few years until, perhaps, it has recovered its value, then they will have to pay this Increment Duty on this land. Is that in any way fair? Why, if one of those pious benefactors whose motives the hon. Gentleman who spoke before this gave to be nothing but self-glorification, if a pious benefactor left for a university or another institution land rather than money, why is it necessary that you should take a part of his gift and lay your hands upon a part of it when you would not do so on that part of it if it was in money? There is an interesting bequest which was left by Thomas Carlyle, and the estate is still held by the university, and there is a great interest attaching to it. I hope the university will continue to hold it, but why is it to be taxed with an Increment Tax because Thomas Carlyle or his executors kept the estate together and handed it over to the university?
The distinction which the Government attempt to make is really quite absurd, and I ask again why is the right hon. Gentleman to give lavish university grants in England with one hand if with the other he is taking away the proceeds of that which has been left to those institutions by pious 994 founders in times past. It seems to me to be almost a reductio ad absurdum of taxation, if at the very moment that you are putting a heavy burden upon the taxpayers to extend the range of university teaching in Wales and England you are at the same time to impose upon those who are unquestionably doing good work, and to whom you are giving a public grant, a very heavy tax which will tie their hands in the work that they have to do. Surely we have a right to claim in the midst of all this talk of widely increased resources for social development—surely we have a right to hold that which we have, without the interference of the State, with that freedom and independence which is the one essential element in the free and uncrippled life of a university—and that these institutions should be free from this new tax, which in the case of the university I represent would amount to something like £700 a year. The resources of this university are as narrow as they can possibly be. The clientèle which they provide for is amongst the poorest. The charges which they make to their students are reduced to the very lowest level. But you are now going to ask that they shall cripple their work, narrow the range of their education, or that they should pay less to their teachers and professors, or make the entrance to this university more difficult to the poor man. On all these grounds I say you would do well to release these educational institutions from the burden of your new taxes, and I shall be very much mistaken if throughout the whole of Scotland this part of your taxation is not unpopular with the vast masses of my fellow countrymen.
§ Mr. S. H. BUTCHERThe Chancellor of the Exchequer seemed disappointed with us, and thought we were very ungrateful for the concessions which he had made. I amply recognise the meaning and value of those concessions as far as they go. At the same time, the Amendments in the name of the right hon. Gentleman do not, as far as I can see, add anything whatever in substance to the form of the Bill as it originally stood. The effect of those deputations, in whose breasts the right hon. Gentleman raised such hopes, has simply been to make explicit and clear what was obviously ambiguous in Clause 25. Let us see exactly what we have got. The universities which are most hit by the Land Taxes, of course, are the old Universities of Oxford and Cambridge. Let me enumerate the gains which we have from, 995 these concessions. In the first place, we get off the Undeveloped Land Tax in the case of our buildings, our libraries, our laboratories, our botanic gardens, our college buildings generally, and our playing fields, and similarly the schools which are in a position like ours get off the Undeveloped Land Tax on those lands which are in their own immediate use and occupation, and we get off the Increment Tax in the case of the 15 years' periodic tax, but we have still to pay the Increment Duty both upon the leasing of land and the selling of land. The Chancellor of the Exchequer actually told us that he had conceded about two-thirds of what we wanted, and that there was one-third left, but the proportion ought to be more than inverted. What we have actually got is exceedingly small, because to be let off the Undeveloped Land Tax on buildings which are occupied by the University is not freeing us from the tax. These are not the sources from which revenue comes in. The moment he sees the real source of revenue—undeveloped land—down he comes upon it We get off no tax upon actual revenue, but merely a tax upon buildings, or gardens, or the like that we occupy. Then in the Amendment of the Chancellor of the Exchequer it looks as if he had another exemption. But will the Attorney-General give his attention to these words:—
No Reversion Duty … under this part of the Act shall be charged in respect of any land, or interest in land, while the land is occupied and used by that body.How could a Reversion Duty be charged on land while the land is used and occupied for the purposes of that body? The word, no doubt, is surplusage, but it looks to the ordinary man as if we were being let off Reversion Duty. You cannot have Reversion Duty on land which is in your occupation. The words "while the land is used and occupied for the purposes of the body," really refer only to the Undeveloped Land Tax, which is combined with the other, and pays no Reversion or Undeveloped Land Duty under this part of the Act. This is misleading, and it has misled people outside who think they are getting off Reversion Duty when they are not.Now I come to what I think is, after all, the main point. We ask for complete exemption from all the Land Taxes, and the ground on which I base that claim is the principle which the Government have themselves asserted in their own Bill. I 996 refer to Clause 24, in which the Government give complete exemption from all the Land Taxes to schools conducted by local authorities. Why are the local authorities exempted? I imagine simply on the ground that the education which they give is supposed to be a benefit to the community at large. If that is so, can it be maintained that whereas the education given in the secondary schools is one which serves the public end, the education given in the universities and the great public schools which are not under local authorities is in any other and lesser sense a public benefit? Surely that is the real ground for the exemption. If anything, I should say that there is a distinction to be made in favour of the university education to this extent, that these local authorities give an education which serves a local purpose, while the universities give an education which serves a national purpose, and is not confined to any locality. Let us look for the moment into the distinction made in the Clause between land used and occupied by the body and land which they hold in some other way. Is that distinction in any sense a valid distinction, and what does it rest upon? My hon. Friend (Sir Henry Craik) proved that this is a wholly illusory distinction to make, because if you once grant that exemption is to be given for a certain public educational purpose, and also that the revenues of the school, or the university, are devoted legally, by statute or by deed, to that purpose, what earthly difference does it make whether the body itself uses that land or whether they choose to let it to some others? Is there any ground, in other words, for hampering the administration of a governing body who say it will be more convenient to them administratively to let their land than to hold it? If they hold it they are free from the Undeveloped Land Tax. If they let it they at once come under all the other taxes, and if they sell it they also come under the Increment Tax. This distinction seems to me of an entirely arbitrary character. May I point out two instances in which it works out in an absurd way, just as you might expect. I take the case of Trinity College, Cambridge, which at this moment proposes, and has, indeed, made arrangements for letting to the university certain agricultural land as an experimental farm under a lease of 10 years. If Trinity, Cambridge, had worked that experimental farm itself it would be free from the Undeveloped Land Tax, but it hands it over to a body whose educational objects are precisely the same as its 997 own, and for that reason it comes under the tax. Can any excuse be set up for such an illogical conclusion? It is the natural result of an illogical and absurd distinction. The two bodies exist for the same purpose, but the body that owns the land is not occupying it. The college lets it to the university, and therefore comes under the Land Tax which otherwise it would have avoided.
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The famous case of Harrow rests also upon the distinction, which I think breaks down, between land used and occupied for the purposes of the body and land held otherwise under lease for this same purpose. Harrow, at a cost of about £80,000, acquired some 250 acres in the immediate vicinity of the school. Its main object, no doubt, was to preserve an open space. Supposing these fields had been kept for organised games or as a recreation ground they would have got off the Undeveloped Land Tax. They have, as a matter of fact, been let for agricultural purposes, but they are being used for school purposes. They are being used for the boys to jump ditches, climb trees, and come in contact in various ways with country life. And though they are not used as cricket and football fields and the like, Harrow men tell me they look upon that 250 acres over which the boys roam as quite as valuable as the actual school fields in which they play their games. The tax they will pay will be something like £170 a year upon those lands, all due again to this absurd and illogical distinction. Although, in my opinion, the public schools of the country have an equal claim to be exempted from all the taxes, there are special circumstances which affect universities. In the first place the colleges of the universities are comparatively rich, and the universities themselves are poor, and by the last Commission a charge was laid upon colleges to make contributions to the universities. It refers to a prospective increase in value of the college lands. As a matter of fact, the agricultural rents have fallen from a third to a fourth during the last 20 to 25 years. On the other hand, the value of the building lands has been going up, and the hope has been that the balance might be redressed by the increased value of the lands which were ripening for building. Hitherto, few of the colleges have been able to pay their full quota to the university, but they were looking forward to the time when they could do so, owing to the great value of the other lands. Even if all the surplus funds of the college derived from this increasing value in the de- 998 veloping lands went to the university, the university means would still be unsatisfied. Instead of that you are cutting off some of that surplus money, and it is becoming necessary, quite apart from this, to make great appeals to the public for £250,000 for each university in order to extend and enlarge the scope of study, to equip the universities with the very costly scientific plant necessary for reseach, and to make them keep pace with the enlarging science of the day. That is one way in which they are placed, and therefore both universities have schemes for giving cheaper education to the poor man, and in proportion as you put on these taxes, of couse, you make it impossible to carry out these schemes. What we ask for is not, as in the case of other universities—the Scottish universities and the provincial universities of England—that the State should provide funds, but that they should be allowed to keep their own endowments when straining every nerve to bring the universities' equipment up to the ideal we desire. I have asked myself in reading this Clause, and it would be interesting to know, what is the relative value and importance of certain public ends in the eyes of the Government? We have with difficulty induced them to admit the public value of air, free space, light, and so forth. We also got them to admit in the Bill that education is a great public purpose, and one which entitles a school or body to an exemption from taxation if carried on by public local authorities, and only if so carried on. In other ways education seems to be ranked in the Bill with the erection of suburban villas. I would ask the Chancellor of the Exchequer if the work of the jerry-builder is a more important national object than helping to erect learning. It seems to me that in his unwillingness to give us these exemptions he lays the country open to the taunt often brought against us of national indifference to learning, and surely it is a squalid view of the ends of national existence that an intellectual factor in national life should count for so little. I believe that even from the point of view of material prosperity the intellectual work done in the laboratories of the universities is worth hundreds of thousands of pounds a year more than any of these taxes would be. Does it not seem a cruel, shortsighted, and Philistine thing to be crippling the universities at the very moment when they are doing their utmost for the extension of science. It is necessary that the Budget 999 should press hard on private ownership, at least I hope the Chancellor of the Exchequer, who I believe has great sympathy with these objects himself, will at least spare the great public institutions which exist for the spread of education, the adornment of life, and the advancement of learning.
Mr. BALFOURThe hon. and right hon. Gentlemen who have spoken on this side of the House have made speeches of very remarkable ability. They have all spoken on behalf of great institutions of learning, and perhaps therefore it is necessary someone representing the general public—and, from my own point of view, I claim to represent those who, while agreeing with me, are not directly connected with or directly representative of seats of learning—should take part in the Debate. The Chancellor of the Exchequer has only found one supporter so far on his own side, namely, the hon. Member for the Cricklade Division (Mr. Massie). I listened to his speech with very great regret. He is himself a man of learning and cultivation, but he approached this Amendment, which is to relieve learning of the tax, not from the point of view of learning whose interests are in danger, but from the point of view of a man profoundly alarmed lest any concession made to Cambridge, Oxford, Harrow, or Dulwich, should be extended to some religious denomination. Evidently he was obsessed, and mainly obsessed, by the terror that, if anything was done for education, the concession might be extended to a religious denomination. I do not think that is the proper state in which to approach the Amendment, and I am sorry that in his speech the Chancellor of the Exchequer seemed a little to yield to the same temptation as that to which the hon. Member for Cricklade yielded. That is not the only matter of regret in the hon. Member's speech. The hon. Member apparently has ransacked some Debate in 1863 in which Mr. Gladstone took part in order to justify the argument which he has placed before the Committee. I cannot imagine a more ungrateful, more unnecessary, or more unfortunate task being undertaken by any Member of the House The hon. Member said that the motive of the benefactor of a university or of a great school was to erect some monument, not to learning, but to his own benefit. He spoke in terms of contempt of those who leave their money to those institutions, and in a way which was 1000 profoundly discouraging to those who, like myself, are deeply concerned in any movement which can add to the too narrow resources at present enjoyed by our great universities. It is a most unhappy way of treating that object. I have no doubt it was entirely in view of the fear with which he was oppressed lest any driblets of the Chancellor of the Exchequer's charity might reach in their course some religious institution that he spoke in that way. He went the length of saying that these pleas for relief from public taxation on behalf of charitable institutions were almost mean in their character. He forgets that almost every Church and Nonconformist chapel in the country is relieved from rates. Is that mean? Is that contemptible? I really cannot understand how a man with the breadth of intellectual sympathy which I believe the hon. Member possesses should allow himself to be dragged down by his fears, and I must say by his prejudices, to join with those who look with horror at the very possibility of the Chancellor of the Exchequer going even an inch further than the Amendment he has put on the Paper.
Let us consider what the hon. Member's main point was apart from the religious point. He asked, "After all, what are these charitable institutions whose endowments you wish to preserve? Many of them are wealthy, many of them are extravagant, and some of them are corrupt." I do not know which he meant, but just compare with that description the corporate bodies in this country which are actually relieved from these taxes. Is every municipality in this country having large funds at its disposal free from the charge of extravagance? Is every municipality in this country free from the charge of corruption? I say if these charges are to be bandied about from one public body to the other it is not the trustees and managers of those great charitable, institutions which have most to fear from a critical examination on the lines suggested by the hon. Member for Cricklade. For my own part, I think the whole tone of the speech which he delivered is lamentable. We want, above all things, in this country imitators of those great American benefactors who have done so much to make the American universities among the best universities in the world. Is the way to maintain the liberality of men to throw in their teeth those charges that all they care for is to see their own names written in letters of brass, and to see their names immortalised by some monuments 1001 whose chief purpose is to keep their memory alive, and not to carry out great public objects. I do most earnestly trust that the hon. Gentleman does not represent any large body of opinion in this country. On the contrary, the feeling of responsibility among wealthy men is growing that they do owe something, that they do owe much, to those great centres of learning, culture, and research from which more than from any other shape social reform can take, in my opinion, the future progress of the race must really proceed. If I come to the other total exemptions which the Government have made from these taxes—football fields and golf grounds—I shall not be charged with want of sympathy for any form of sport, and, least of all, to some of those forms of sport which the Government have exempted under the Bill. You say that a golf club or a cricket field is not to contribute to the defence of the country, but the Chancellor of the Exchequer says: Why should not these great educational institutions contribute to the defence of the country? If that is so, why should not a golf course or a football club contribute to the defence of the country? Are we really to say that in the view of the Government the educational work done by Cambridge, Oxford, Edinburgh, Glasgow, Dulwich, and Harrow is inferior to the work which is carried on—admirable work, I think—by our municipalities and the work which is carried on in connection with the sports of our people?
A charge brought against us at present as a nation is that sport is all we care for. It is merely as football players, golfers, or cricketers that we count in the world at all. The Government seem by the legislation to suggest that the charge after all is well founded, and that any land which is set apart for these pastimes is land which may well be excused from any contribution whatever to the national purposes, but that land which is used for the improvement of the intellect of our people is land which, in the language of the Chancellor of the Exchequer, should be called upon to bear its share of the taxation required for the defence and development of the country. Compare the two speeches of the right hon. Gentleman, one at five o'clock this afternoon and the other about an hour ago on this subject. On the last Amendment the Chancellor of the Exchequer talked of raising revenue for great public purposes, and then he cast about to think what public purposes he would recommend 1002 to the House. What was the public purpose he recommended? Secondary education in Wales. That was the great example. "We in Wales got part of the whisky tax; we earmarked it for the purposes of education." How admirable! How excellent! How more than excellent in its result! And now when we speak for places of education, which I am sure the Chancellor of the Exchequer will admit are not doing less important work than the secondary schools in Wales, he pares off, as he admits somewhat illogically, a little bit of the taxation here and some of the taxation there. But essentially he leaves on them the burden of the tax. How can he reconcile his speech of five o'clock with his speech of seven o'clock? They cannot be reconciled. The thing is quite impossible. I think he is in a difficulty; and why is that? None of my hon. Friends who have dealt so ably with the incidence of this tax on educational institutions have made this point: It is that the Land Taxes are special taxes, and they are placed arbitrarily on certain individuals or institutions. They are not taxes spread over the whole community. I think there is a great deal to be said for not freeing public institutions or private institutions from taxes spread over the whole communty. I believe that Cambridge and Oxford pay Income Tax. Schools do not, but universities do pay Income Tax, and pay their fair share of the general taxation of the country. If this was general taxation there would not be so very much to say about it. But the Chancellor of the Exchequer is caught in the toils of his own net. He has chosen to impose an arbitrary tax on certain kinds of property. He finds that that kind of property happens to be held in a very large measure by great public charitable institutions. He finds that he is not merely hitting this or that rich man, this or that poor man, this or that speculative builder, or this or that man who owns land in the neighbourhood of a big town. He is not only doing that—a pastime in which he so delights—but what is much more serious from the point of view of the general community he is taxing all the higher education in this country. I say that higher education in this country is already so ill-endowed as compared with the resources it possesses, and compared with every other big country in Europe that no Chancellor of the Exchequer ought to propose a tax which has its special incidence upon that special form of national 1003 endeavour. For these reasons I support with special sympathy and special enthusiasm the Amendment proposed by my hon. Friend.
§ The ATTORNEY-GENERAL (Sir W. Robson)The speech of the right hon. Gentleman in its earlier part was mainly directed against the taxation of educational institutions at all. They are treated as being institutions of such delicate and precarious existence that even when they have got endowments, and bring in very large incomes they ought, nevertheless, to be exempted from taxation altogether, because their incomes were devoted to such excellent purposes. That is an absolutely impossible doctrine, and that became clear to the right hon. Gentleman as he proceeded, because all these indirect taxes must fall on educational institutions, and they fall with special severity on schools. Indirect taxes fall on education perhaps more severely than any other tax. They add to the cost of education, and to the cost of the maintenance of the children, and, therefore, an indirect tax, which I suppose one may regard as not impossible, would fall with a greater degree of severity upon educational institutions throughout the country than even a tax upon undeveloped land; and on a far greater number of educational institutions. Let us take exactly the measure of this tax and this burden before we come to consider whether or not educational institutions should be exempted. Quite unintentionally I daresay, and not unnaturally, the weight of this burden has been much exaggerated, especially in the speech of the hon. Member for Dulwich (Mr. Bonar Law). He said that in Dulwich College they would have to pay £1,000 a year Undeveloped Land Duty. That means that Dulwich College possesses an annual estate worth £480,000 over and above the land which is used and occupied by the school itself, and over and above the agricultural value of the land. But I put that out of the question, because it is a small matter when dealing with figures so large as £480,000. The school is exempted by the Amendment which the right hon. Gentleman has put down, and the land used for games and other land used and occupied by the school are also exempted, and it is only what may be called the business lands, the lands productive of income that are to be taxed. "Now," says the hon. Member, "that land in this case will produce £1,900 a year, 1004 and therefore you will take away £1,000 and leave only £900 for educational purposes, and you put a cruel and most oppressive tax upon the financial resources of a very great and most valuable educational institution." What, according to him, are the proprietors of the school doing at this moment? According to him, the proprietors of the school have got half a million of money which they are refusing to put to its best use. He said it is really depriving the school of £1,000 a year.
§ Mr. BONAR LAWThat is the whole point of the case. I stated that the governors of Dulwich College admitted they were doing their very best to dispose of the land as quickly as they could. The hon. and learned Gentleman says that the value is grossly exaggerated, and that the Commissioners would not value it at so much. What I said was that the Commissioners would value it at £1,000, but the governors could not possibly sell it; no one would buy it, though they are trying to dispose of it as quickly as they can.
§ Sir W. ROBSONI am not in the least saying you are exaggerating the value; I am not quarrelling with their estimates, and I do not care whether it is half a million or £100,000. I take the hon. Gentleman's own figures, and we have got to take the value of the land in the market.
§ Mr. BONAR LAWThe case is not what the land is worth, but that the Commissioners would value it at that rate.
§ Sir W. ROBSONI do not think the hon. Member has improved the position. We have got too deal with land which is valued for the purpose of this Act, and in valuing undeveloped land it has to be considered what that land will fetch in the market. [An HON. MEMBER: "There are many allowances."] There are plenty of allowances to be made before you can reach the net building value of the land. According to the hon. Member, it was not a question of going on paying £1,000 a year; it was a question of the necessity of getting half a million of money for this land before they would sell it. So that the hardship to education is not that the Government are going to take £1,000 a year, but that the governing body refuse to make many thousands a year by selling land which is in urgent demand in the neighbourhood.
§ Sir P. MAGNUSThe land is not in urgent demand. It could not be sold as a whole, but only in small portions at a 1005 time, and the governor are doing their best to sell it. The hon. and learned Gentleman is misrepresenting the governors.
§ Sir W. ROBSONI do not think that interruption is justified. Does any man in his senses pretend that Dulwich College, with such an enormous amount of land, could not sell it at a price? [An HON. MEMBER: "It is not saleable."] I am told by my hon. Friend (Mr. Masterman), who is no bad authority on the subject, that the governors of Dulwich College have been by no means very ready to sell at a reasonable price the land which is wanted by the adjacent population, and the enormous value which I hear is put upon it shows that the complaints of those who live near Dulwich are not altogether without ground. If the authorities of Dulwich College choose to keep back land from the paramount necessities of the community, and thus lose the interest which they might obtain on the purchase money, then the Dulwich authorities would be benefited by being reminded that they could fulfil their obligations both to the adjacent population and to the education which they control by selling their land at a reasonable price and investing the money for the purposes of education. The hon. and learned Member for Glasgow said it would mean £700 a year in the case of the university of that city; but if these universities, like any other great institution, choose to hold their land up in order to get a better price later, by all means let them do it, but do not let them complain of the tax which is laid precisely upon that operation in the case of others. I think the complaint of the hon. Member is altogether ill-founded and inappropriate. The hon. Member for Dulwich went on to deal with the Increment Tax. I think he was scarcely explicit enough in dealing with the remissions that the Government gave in the case of the quinquennial sum, or the equivalent of the Corporation Duty which will be paid. The Committee will understand exactly how corporations, whether educational or otherwise, are now treated under the Bill. There is, of course, the valuation on the ordinary corporation, and one that is not a charitable corporation pays an amount which would correspond with the amount which probably that property would pay on the average if it were in the hands of a private person who died, because there must be a corporation duty as a sort of equivalent to the Death Duty. All the educational institutions are exempt 1006 from that duty if they do not sell the land or do not use it. If they do not sell the land—and there are many cases in which they do and must sell their land—[An HON. MEMBER: "Or lease."] The hon. Member does not propose that all these leases are made the occasion of collecting duty. It is only particular leases in particular circumstances that give rise to any duty. When a sale takes place we take 20 per cent. of the increment. That shows how far we have gone in the way of concession; indeed, I think my duty should really be to endeavour to justify such concession. Increment on what? Not an increment as between agricultural value and building value, but an increment over and above the value of the Dulwich land on 30th April, 1909. The whole of the existing value is exempt for the purpose of Increment Duty, yet the hon. Member gets up and first of all says we are taking £1,000 a year from Dulwich, and that if by chance they sell we wall take 20 per cent. of what they get. We are doing nothing of the kind. We take 20 per cent. of the increment value over and above the value as fixed on 30th April, 1909. There are many deductions, for some of which we shall be reproached, I suppose I say that that is not a very severe burden to put on any corporation, educational or charitable, possessed of these gigantic estates.
§ Mr. REESThe hon. and learned Gentleman has not dealt with an entirely different class of case, in which the land of the educational institution cannot be sold because it is a necessary condition of the case that it should be held up from building, and should not be sold. I do not know the case of Dulwich, but I know that the case of Harrow, on which I wish to address the Committee, is such as I have described.
§ Sir W. ROBSONThe hon. Member no doubt would put his case in due time. Now, what does the hon. Member for Cambridge University say? He asked the Committee whether the work of the "jerrybuilder" was to be considered of greater importance than the maintenance of these great educational institutions. I should be sorry to think that the sentiment of that observation was common to many Members. Nobody likes "jerrybuilding," but, after all, this is not a Debate as to the future construction of houses. It is the question of the provision of houses for the people, who must have land and are offering a famine price for it. Is not that of more importance than the maintenance of great estates in the hands 1007 of corporations who will not deveop their land and who are withholding it? The other questions really are not of very great importance.
§ Mr. BUTCHERMay I hope that the hon. Gentleman will give me an answer as to the point which I have raised, and that is as to the Reversion Duty in the beginning of the Chancellor of the Exchequer's Amendment?
§ Sir W. ROBSONIt is quite true that in the Clause as amended, instead of saying no duty under this part of the Act shall be charged, and so on, we have said no Reversion Duty, or Undeveloped Land Duty, shall be charged in respect of land held by a governing body for charitable purposes while the land is used and occupied by that body. I think there is just enough justification for the words to have them there. Unfortunately, in drafting this Bill there is brought to the attention of those who are concerned many rare and remote cases, and very often when rare and remote cases are not brought to our notice we have to imagine them in order to see how far our words require to be extended and safeguarded. It was thought that the words had better be inserted there for the sake of perfect clearness. To deal with the case where land is possessed or held by managers from a body of trustees, for instance, and used for the purposes of a school. In order, therefore, that there might be no doubt and out of greater caution, it was considered necessary to insert the words so that no Reversion Duty is to attach at all, and so that if there are any of those remote cases we exclude them by the use of those words. That is the whole reason for the words being put there. The right hon. Gentleman the Leader of the Opposition did, I think, rather scant justice to my hon. Friend the Member for the Cricklade Division (Mr. Massie), who took a view rather in an extreme form, and certainly not in a form with which I would find myself in complete agreement. Still, he took a view which was not at all uncommon among the great masters of finance in the sixties, when our English financial system was put upon the basis which we thought was immortal, and which, after all, has lasted a fairly long time. A distinction was drawn then, and it was upon that that my hon. Friend relied most to-night, between educational institutions and religious institutions.
With regard to education, there is much more common agreement among all sec- 1008 tions than with regard to religion, in which there are profound and vital differences. There are those who regard it as worse than a hardship, almost an iniquity, that they should be compelled to support those doctrines in which they do not believe, and, after all, exemption from taxation for religious bodies is a direct form of State support to those organisations. We are not completely logical in England; but occasionally there comes forward someone like my hon. Friend who is not afraid to push the voluntary principle to its most extreme application, and he objected to any kind of benefit being given by way of exemption to those doctrines. It is not a new doctrine; it has many many arguments that could be urged in its favour, and I think it scarcely received quite fair justice from the right hon. Gentleman. We have made exemption in favour of all charitable purposes wherever land is held for charitable purposes. What are those charitable purposes? They were defined in the words of a great judge in a case which was decided in 1891, and which has since been the leading authority on all cases on what is the law of charity. I think I may say that hon. Members who have Amendments down may not take up their time in trying to add the word "educational" to charitable purposes. The hon. Gentleman who moved this Amendment wished to have the words "charitable or educational." The word "charitable" is already sufficiently wide to cover educational, and a great many other purposes besides. Lord Macnaghten in the case to which I have referred, said:—
In this case the expression 'charitable purpose' has a much more extended meaning than in the popular sense. The words include trusts for the relief of poverty, trusts for the advancement of education, trusts for the advancement of religion, and trusts for any other purpose beneficial to the community not falling under any of the preceding headsWe cannot have a wider definition than that, and for those who are desirous that charitable purposes should be exempt, this takes them as far as we can exempt them, and I think they would be well advised not to quarrel with the words as they are.
§ Mr. RAWLINSONThe question of the exemption of religious bodies raises a question which no doubt is wider than that as to whether those bodies holding land forms a desirable use. This Amendment does not deal with that case at all, and I ask the Committee to judge the Amendment without reference to that part of the question. The Chancellor of the Exchequer asked how, if he granted an exemption to universities and public schools, he could 1009 logically withhold it from these religious bodies. The answer to that is that a long time ago there was a very strong feeling against bodies of this kind holding land in England at all, and the result of that was the passing of certain Acts called the Mortmain Acts, which are in existence at the present day, preventing the holding of land by religious bodies except under certain stringent conditions. But in those Acts exemption has always been granted to the universities and certain public schools. Therefore, as far as the case of the universities is concerned, from time immemorial a distinction has been drawn between them and other religious bodies in the matter of holding land; and I submit that there can be no logical reason why the same distinction should not be drawn with reference to this new taxation. The case of the universities rests on a perfectly logical basis. You have rightly exempted lands held by municipal authorities, because the land is held for the public benefit and is used for public and useful purposes—in some cases for the purposes of schools, in others for the general good of the community. The position of the universities rests on the same basis, namely, that they are devoting their endowments to public ends, to educational work, and to work which is of use to the community at large. Many universities at present receive considerable assistance from the Government by way of grants; others have not yet received that aid. To take the case of my own University (Cambridge), there can be no doubt about their want of money, and they have amongst members of their own body during the last year or two collected £150,000 for the purpose of extending their work, which extension is needed very urgently. If you put an extra tax on the land held by the University you will surely be doing a great injustice; you will either make a further claim upon the resources of the members of the University or you will curtail the useful work which the University is doing.
The Attorney-General has referred to educational bodies holding up land instead of selling it. But he has failed to remind the Committee that land held by a college or university can in no case be sold by them without the leave of the Board of Agriculture, and in the vast majority of cases it is only after asking the advice of that Department that any step in the matter has been taken. The universities being in the position that the bulk of their endowments have been left to them in land which they cannot part with without the consent 1010 of a Government Department, it is rather hard when an entirely new kind of taxation is being imposed, and an exemption is asked for on behalf of the universities, that they should be taunted with having held their land when they could not sell it except with the consent of the Board of Agriculture. What is the exemption which the Chancellor of the Exchequer has given? He has admitted that universities should be exempt up to a certain point. This matter will probably become of much broader interest when we discuss the exemption given to friendly societies. The property of the university—I use that term, but the argument applies equally to other educational establishments—is of two kinds. The first is that situated in Cambridge itself, which is used and occupied by the university for the purposes of the university. As far as that is concerned exemption from rates exists in a large number of cases. Under the Act of 1856 the Senate House and similar places are already exempted from rates. Under the present Bill it is proposed that land and houses occupied or used by the university for the purposes of the university shall be exempt from Reversion Duty which could never arise; from Undeveloped Land Duty, which is not likely to arise, and from the 15 years' periodical collection of Increment Duty. That is a comparatively small exemption, but one for which we are certainly grateful. It applies only to land within a mile or two of Cambridge, but ridiculous cases might have arisen if the exemption had not been granted. From a pecuniary point of view, however, the important matter is the land held by the university, but not used or occupied by the university for its own purposes, such as land in London and in different counties, the rents of which go to the emoluments of the professors and so on. As far as that is concerned we get no exemption from Increment Duty. There is exemption from the valuation at the end of every 15 years, but there is no exemption from the duty. Consequently, whenever a sale of such land takes place Increment Duty will have to be paid. In the case of land held upon leases, heavy duties will fall on the university in connection with reversions. The colleges are large holders of leasehold property, and will consequently suffer. They get no concession as far as Undeveloped Land Duty is concerned. Therefore, the concession to the universities from the financial point of view is practically infinitesimal, and the drain upon the resources of any educational 1011 establishment of that kind must be very large indeed. I would strongly urge the Committee to deal fairly with this case, and not to be led away by references to religious houses or anything of that sort. I will not deal with the speech of the hon. Member for Cricklade (Mr. Massie). My position is a somewhat difficult one, as not only is the hon. Member for Cricklade one of my Constituents, but so also is the Leader of the Opposition, who spoke so strongly against him. I think I am entitled to say this much: With his distinguished, or rather various, university career at Ox ford, Cambridge, Birmingham, and else-
§ where, the hon. Member for Cricklade (Mr. Massie) must know the great need for money, and he must feel, if not carried away with his views on the religious aspect of the question, that this is not the time to put additional taxes upon educational bodies which are doing public service.
§ Sir W. ROBSON rose in his place, and claimed to move, "That the Question be now put."
§ Question put, "That the Question be now put."
§ The Committee divided: Ayes, 171; Noes, 53.
1013| Division No. 734.] | AYES. | [8.55 p.m. |
| Agnew, George William | Glendinning, R. G. | Pease, Rt. Hon. J. A. (Saff. Wald.) |
| Alden, Percy | Glover, Thomas | Pickersgill, Edward Hare |
| Allen, A. Acland (Christchurch) | Gooch, George Peabody (Bath) | Pirie, Duncan V. |
| Allen, Charles P. (Stroud) | Gulland, John W. | Pointer, J. |
| Ashton, Thomas Gair | Harcourt, Robert V. (Montrose) | Pollard, Dr. G. H. |
| Atherley-Jones, L. | Hardie, J. Keir (Merthyr Tydvil) | Rea, Rt. Hon. Russell (Gloucester) |
| Baker, Sir John (Portsmouth) | Hardy, George A. (Suffolk) | Rees, J. D. |
| Balfour, Robert (Lanark) | Harmsworth, Cecil B. (Worcester) | Richards, T. F. (Wolverhampton, W.) |
| Barker, Sir. John | Harmsworth, R. L. (Caithness-sh.) | Roberts, Charles H. (Lincoln) |
| Barnard, E. B. | Hazel, Dr. A. E. W. | Roberts, G. H. (Norwich) |
| Barnes, G. N. | Hedges, A. Paget | Robertson, Sir G. Scott (Bradford) |
| Barran, Sir John Nicholson | Helme, Norval Watson | Robson, Sir William Snowdon |
| Barry, Redmond J. (Tyrone, N.) | Henderson, J. McD. (Aberdeen, W.) | Roch, Walter F. (Pembroke) |
| Beauchamp, E. | Higham, John Sharp | Rowlands, J. |
| Bell, Richard | Hobart, Sir Robert | Russell, Rt. Hon. T. W. |
| Benn, W. (Tower Hamlets, St. Geo.) | Hodge, John | Rutherford, V. H. (Brentford) |
| Berridge, T. H. D. | Hope, W. H. B. (Somerset, N.) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Bethell, Sir J. H. (Essex, Romford) | Horniman, Emslie John | Schwann, Sir C. E. (Manchester) |
| Black, Arthur W. | Howard, Hon. Geoffrey | Sherwell, Arthur James |
| Boulton, A. C. F. | Hudson, Walter | Shipman, Dr. John G. |
| Bowerman, C. W. | Hyde, Clarendon G. | Simon, John Allsebrook |
| Bramsdon, Sir T. A. | Idris, T. H. W. | Snowden, P. |
| Branch, James | Jackson, R. S. | Stanger, H. Y. |
| Brigg, John | Jenkins, J. | Stanley, Albert (Staffs, N. W.) |
| Bright, J. A. | Jones, Sir D. Brynmor (Swansea) | Steadman, W. C. |
| Brodie, H. C. | Jones, Leif (Appleby) | Stewart, Halley (Greenock) |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, William (Carnarvonshire) | Stewart-Smith, D. (Kendal) |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Jowett, F. W. | Straus, B. S. (Mile End) |
| Burns, Rt. Hon. John | Kekewich, Sir George | Summerbell, T. |
| Byles, William Pollard | King, Alfred John (Knutsford) | Taylor, John W. (Durham) |
| Channing, Sir Francis Allston | Laidlaw, Robert | Thomas, Sir A. (Glamorgan, E.) |
| Clough, William | Lamb, Edmund G. (Leominster) | Thompson, J. W. H. (Somerset, E.) |
| Cobbold, Felix Thornley | Lamb, Ernest H. (Rochester) | Thorne, G. R. (Wolverhampton) |
| Collins, Stephen (Lambeth) | Layland-Barratt, Sir Francis | Toulmin, George |
| Compton-Rickett, Sir J. | Lea, Hugh Cecil (St. Pancras, E.) | Trevelyan, Charles Philips |
| Corbett, A. Cameron (Glasgow) | Lehmann, R. C. | Verney, F. W. |
| Corbett, C. H. (Sussex, E. Grinstead) | Lever, A. Levy (Essex, Harwich) | Vivian, Henry |
| Cotton, Sir H. J. S. | Lever, W. H. (Cheshire, Wirral) | Wadsworth, J. |
| Cross, Alexander | Levy, Sir Maurice | Walsh, Stephen |
| Dalziel, Sir James Henry | Lloyd-George, Rt. Hon. David | Ward, John (Stoke-upon-Trent) |
| Davies, Timothy (Fulham) | Lough, Rt. Hon. Thomas | Wason, Rt. Hon. E. (Clackmannan), |
| Davies, Sir W. Howell (Bristol, S.) | Lupton, Arnold | Wason, John Cathcart (Orkney) |
| Dickinson, W. H. (St. Pancras, N.) | M'Callum, John M. | Waterlow, D. S. |
| Duckworth, Sir James | M'Laren, H. B. (Stafford, W.) | White, Sir George (Norfolk) |
| Duncan, C. (Barrow-in-Furness) | Maddison, Frederick | White, J. Dundas (Dumbartonshire) |
| Duncan, J. Hastings (York, Otley) | Mallet, Charles E. | White, Sir Luke (York, E. R.) |
| Dunn, A. Edward (Camborne) | Marnham, F. J. | Whitehead, Rowland |
| Dunne, Major E. Martin (Walsall) | Massie, J. | Whittaker, Rt. Hon. Sir Thomas P. |
| Edwards, Sir Francis (Radnor) | Masterman, C. F. G. | Wiles, Thomas |
| Essex, R. W. | Menzies, Sir Walter | Wilkie, Alexander |
| Evans, Sir S. T. | Molteno, Percy Alport | Williams, J. (Glamorgan) |
| Everett, R. Lacey | Mond, A. | Wilson, Henry J. (York, W. R.) |
| Falconer, J. | Murray, James (Aberdeen, E.) | Wood, T. M'Kinnon |
| Ferguson, R. C. Munro | Myer, Horatio | Yoxall, Sir James Henry |
| Findlay, Alexander | Norman, Sir Henry | |
| Foster, Rt. Hon. Sir Walter | Nuttall, Harry | |
| Fuller, John Michael F. | Parker, James (Halifax) | TELLERS FOR THE AYES.—Captain Norton and Sir E. Strachey. |
| Fullerton, Hugh | Partington, Oswald | |
| Gibb, James (Harrow) | Pearce, Robert (Staffs, Leek) | |
| NOES. | ||
| Anson, Sir William Reynell | Gretton, John | Pease, Herbert Pike (Darlington) |
| Balcarres, Lord | Guinness, Hon. R. (Haggerston) | Pretyman, E. G. |
| Baldwin, Stanley | Guinness, Hon. W. E. (B. S. Edm'nds) | Randies, Sir John Scurrah |
| Baring, Capt. Hon. G. (Winchester) | Hamilton, Marquess of | Ratcliff, Major R. F. |
| Butcher, Samuel Henry | Hardy, Laurence (Kent, Ashford) | Rawlinson, John Frederick Peel |
| Carlile, E. Hildred | Hart-Davies, T. | Remnant, James Farquharson |
| Carson, Rt. Hon. Sir Edward H. | Helmsley, Viscount | Roberts, S. (Sheffield, Ecclesall) |
| Cecil, Evelyn (Aston Manor) | Hope, James Fitzalan (Sheffield) | Rutherford, Watson (Liverpool) |
| Cecil, Lord R. (Marylebone, E.) | Hunt, Rowland | Smith, Abel H. (Hertford, East) |
| Clyde, J. Avon | Kimber, Sir H. | Staveley-Hill Henry (Staffordshire) |
| Craik, Sir Henry | Lane-Fox, G. R. | Stone, Sir Benjamin |
| Dalrymple, Viscount | Law, Andrew Bonar (Dulwich) | Talbot, Rt. Hon. J. G. (Oxford Univ.) |
| Dickson, Rt. Hon. C. Scott- | Lowe, Sir Francis William | Tuke, Sir John Batty |
| Doughty, Sir George | Magnus, Sir Philip | Walker, Col. W. H. (Lancashire) |
| Douglas, Rt. Hon. A. Akers- | Mildmay, Francis Bingham | Wortley, Rt. Hon. C. B. Stuart- |
| Duncan, Robert (Lanark, Govan) | Morpeth, Viscount | |
| Fletcher, J. S. | Oddy, John James | TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W. Forster. |
| Gardner, Ernest | Parker, Sir Gilbert (Gravesend) | |
| Goulding, Edward Alfred | Parkes, Ebenezer |
§ Question put accordingly. The Committee divided: Ayes, 176; Noes, 50.
1015| Division No. 735.] | AYES. | [9.10 p.m. |
| Agnew, George William | Findlay, Alexander | Masterman, C. F. G. |
| Alden, Percy | Foster, Rt. Hon. Sir Walter | Menzies, Sir Walter |
| Allen, A. Acland (Christchurch) | Fuller, John Michael F. | Molteno, Percy Alport |
| Allen, Charles P. (Stroud) | Fullerton, Hugh | Mond, A. |
| Ashton, Thomas Gair | Gibb, James (Harrow) | Murray, James (Aberdeen, E.) |
| Atherley-Jones, L. | Glendinning, R. G. | Myer, Horatio |
| Baker, Sir John (Portsmouth) | Glover, Thomas | Norman, Sir Henry |
| Balfour, Robert (Lanark) | Gooch, George Peabody (Bath) | Nuttall, Harry |
| Barker, Sir John | Gulland, John W. | Parker, James (Halifax) |
| Barnard, E. B. | Harcourt, Robert V. (Montrose) | Partington, Oswald |
| Barnes, G. N. | Hardie, J. Keir (Merthyr Tydvil) | Pearce, Robert (Staffs, Leek) |
| Barran, Sir John Nicholson | Hardy, George A. (Suffolk) | Pease, Rt. Hon. J. A. (Staff. Wald.) |
| Barry, Redmond J. (Tyrone, N.) | Harmsworth, Cecil B. (Worcester) | Pickersgill, Edward Hare |
| Beauchamp, E. | Harmsworth, R. L. (Caithness-sh.) | Pirie, Duncan V. |
| Bell, Richard | Hart-Davies, T. | Pointer, J. |
| Benn, W. (Tower Hamlets, St. Geo.) | Hedges, A. Paget | Pollard, Dr. G. H. |
| Berridge, T. H. D. | Helme, Norval Watson | Rea, Rt. Hon. Russell (Gloucester) |
| Bethell, Sir J. H. (Essex, Romford) | Henderson, J. McD. (Aberdeen, W.) | Rea, Walter Russell (Scarborough) |
| Black, Arthur W. | Higham, John Sharp | Rees, J. D. |
| Boulton, A. C. F. | Hobart, Sir Robert | Richards, T. F. (Wolverhampton, W.) |
| Bowerman, C. W. | Hodge, John | Roberts, Charles H. (Lincoln) |
| Bramsdon, Sir T. A. | Hope, W. H. B. (Somerset, N.) | Roberts, G. H. (Norwich) |
| Branch, James | Horniman, Emslie John | Robertson, Sir G. Scott (Bradford) |
| Brigg, John | Howard, Hon. Geoffrey | Robson, Sir William Snowdon |
| Bright, J. A. | Hudson, Walter | Roch, Walter F. (Pembroke) |
| Brodie, H. C. | Hyde, Clarendon G. | Rose, Sir Charles Day |
| Brunner, J. F. L. (Lancs., Leigh) | Idris, T. H. W. | Rowlands, J. |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Jackson, R. S. | Russell, Rt. Hon. T. W. |
| Burns, Rt. Hon. John | Jenkins, J. | Rutherford, V. H. (Brentford) |
| Byles, William Pollard | Jones, Sir D. Brynmor (Swansea) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Channing, Sir Francis Allston | Jones, Leif (Appleby) | Schwann, Sir C. E. (Manchester) |
| Clough, William | Jones, William (Carnarvonshire) | Sherwell, Arthur James |
| Cobbold, Felix Thornley | Jowett, F. W. | Shipman, Dr. John G. |
| Collins, Stephen (Lambeth) | Kekewich, Sir George | Simon, John Allsebrook |
| Compton-Rickett, Sir J. | King, Alfred John (Knutsford) | Snowden, P. |
| Corbett, A. Cameron (Glasgow) | Laidlaw, Robert | Stanger, H. Y. |
| Corbett, C. H. (Sussex, E. Grinstead) | Lamb, Edmund G. (Leominster) | Stanley, Albert (Staffs, N. W.) |
| Cotton, Sir H. J. S. | Lamb, Ernest H. (Rochester) | Steadman, W. C. |
| Cross, Alexander | Layland-Barratt, Sir Francis | Stewart, Halley (Greenock) |
| Dalziel, Sir James Henry | Lea, Hugh Cecil (St. Pancras, E.) | Stewart-Smith, D. (Kendal) |
| Davies, Timothy (Fulham) | Lehmann, R. C. | Straus, B. S. (Mile End) |
| Davies, Sir W. Howell (Bristol, S.) | Lever, A. Levy (Essex, Harwich) | Taylor, John W. (Durham) |
| Dickinson, W. H. (St. Pancras, N.) | Lever, W. H. (Cheshire, Wirral) | Thomas, Sir A. (Glamorgan, E.) |
| Duckworth, Sir James | Levy, Sir Maurice | Thompson, J. W. H. (Somerset, E.) |
| Duncan, C. (Barrow-in-Furness) | Lloyd-George, Rt. Hon. David | Thorne, G. R. (Wolverhampton) |
| Duncan, J. Hastings (York, Otley) | Lough, Rt. Hon. Thomas | Toulmin, George |
| Dunn, A. Edward (Camborne) | Lupton, Arnold | Trevelyan, Charles Philips |
| Dunne, Major E. Martin (Walsall) | MacVeagh, Jeremiah (Down, S.) | Verney, F. W. |
| Edwards, Sir Francis (Radnor) | M'Callum, John M. | Vivian, Henry |
| Essex, R. W. | M'Laren, H. D. (Stafford, W.) | Wadsworth, J. |
| Evans, Sir S. T. | Maddison, Frederick | Walsh, Stephen |
| Everett, R. Lacey | Mallet, Charles E. | Ward, John (Stoke-upon-Trent) |
| Falconer, J. | Marnham, F. J. | Wason, Rt. Hon. E. (Clackmannan) |
| Ferguson, R. C. Munro | Massie, J. | Wason, John Cathcart (Orkney) |
| Waterlow, D. S. | Whittaker, Rt. Hon. Sir Thomas P. | Wood, T. M'Kinnon |
| White, Sir George (Norfolk) | Wiles, Thomas | Yoxall, Sir James Henry |
| White, J. Dundas (Dumbartonshire) | Wilkie, Alexander | |
| White, Sir Luke (York, E. R.) | Williams, J. (Glamorgan) | TELLERS FOR THE AYES.—Captain Norton and Sir E. Strachey |
| Whitehead, Rowland | Wilson, Henry J. (York, W. R.) |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Goulding, Edward Alfred | Parkes, Ebenezer |
| Anson, Sir William Reyneil | Gretton, John | Pease, Herbert Pike (Darlington) |
| Balcarres, Lord | Guinness, Hon. R. (Haggerston) | Pretyman, E. G |
| Baldwin, Stanley | Guinness, Hon. W. E. (B. S. Edmunds) | Randies, Sir John Scurrah |
| Baring, Captain Hon. G. (Winchester) | Hamilton, Marquess of | Ratcliff, Major R. F. |
| Butcher, Samuel Henry | Hardy, Laurence (Kent, Ashford) | Rawlinson, John Frederick Peel |
| Carlile, E. Hildred | Helmsley, Viscount | Remnant, James Farquharson |
| Carson, Rt. Hon. Sir Edward H. | Hope, James Fitzalan (Sheffield) | Roberts, S. (Sheffield, Ecclesall) |
| Cecil, Evelyn (Aston Manor) | Hunt, Rowland | Rutherford, Watson (Liverpool) |
| Cecil, Lord R. (Marylebone, E.) | Joyce, Michael | Smith, Abel H. (Hertford, East) |
| Clyde, J. Avon | Kimber, Sir Henry | Staveley-Hill, Henry (Staffordshire) |
| Dalrymple, Viscount | Lane-Fox, G. R. | Stone, Sir Benjamin |
| Dickson, Rt. Hon. Charles Scott | Law, Andrew Bonar (Dulwich) | Talbot, Rt. Hon. J. G. (Oxford Univ.) |
| Doughty, Sir George | Lowe, Sir Francis William | Tuke, Sir John Batty |
| Douglas, Rt. Hon. A. Akers- | Lundon, T. | Walker, Col W. H. (Lancashire) |
| Duncan, Robert (Lanark, Govan) | Mildmay, Francis Bingham | Wortley, Rt. Hon. C. B. Stuart. |
| Fletcher, J. S. | Morpeth Viscount | |
| Forster, Henry William | Oddy, John James | TELLERS FOR THE NOES.—Sir P. Magnus and Sir H. Craik. |
| Gardner, Ernest | Parker, Sir Gilbert (Gravesend) |
§ Mr. LLOYD-GEORGE moved after the word "No" ["no duty under this part of this Act shall be charged in respect of land"], to insert the words, "Reversion Duty, or undeveloped land."
§ Mr. STUART WORTLEYThis is one of the series of Amendments which, I understand, are to be made to reconstruct this Clause for the purpose of effecting the concessions, such as they are, which the Chancellor of the Exchequer has consented to insert. I had an Amendment on the Paper along with my hon. Friend the Member for Kingston (Mr. Cave) which had for its object the exemption of land held by religious bodies. The last thing I wish to do, as the representative of the largest of these bodies in this country, is to appear in the attitude of an unreasonable and vexatious consumer of the time of this House. I do not propose, however, to move my Amendment, because I recognise the decision the House has just come to in its refusal to exempt land of religious bodies, practically disposes of my Amendment also. But it remains for us to see that such concessions as the Chancellor has offered to those lands in the hands of educational and other bodies and charities are fully carried out. It is quite clear that these lands come within the benefits of the exemption which the Chancellor is giving; but is it quite clear that glebe land in the possession of a parson would come within that definition in the Amendment of the Government, which appears in the name of the Chancellor of the Exchequer lower down upon the Paper? Where it says "governing body" does 1016 that include any person who has the management of land? The importance of that will be seen when it is borne in mind what an extreme hardship it would be to impose upon the life-tenant all these duties. The position as regards the Increment Duty is extremely difficult. I want to make quite sure that along with all the other bodies intended to have the benefit of this exemption the clergyman will come into the advantages, and will not be excluded by reason of the fact that this proposal is made to apply in the first instance to communities which will be under the control of what is called "a governing body." The proviso standing in the name of the Chancellor of the Exchequer on page 20 of the White Paper gives a definition of the phrase "governing body." and it is probably intended to meet the case of individuals who stand in the position of a governing body. I hope I may receive some assurance that glebe land will get the benefit of this limited exemption.
§ Sir W. ROBSONI hope we are taking the discussion on this point upon the understanding that the discussion will not be renewed. I think the Committee will agree with me when I say that we should not have a discussion of this kind repeated. First of all, the right hon. Gentleman opposite asked me whether a clergyman would be included in the expression "governing body." The definition standing in the name of the Chancellor of the Exchequer lays down that "the expression 'governing body constituted for charitable purposes' includes any person or body of persons who have the right of holding, or any power of government of, or 1017 management over, any property appropriated for charitable purposes." I think the clergyman in the case put by the right hon. Gentleman would undoubtedly be held as having a right of management over property appropriated for charitable purposes. On the spur of the moment that seems to me to be the literal construction, but I put forward that construction with some doubt. Whether the clergyman would come within the substantial wording of this Clause for charitable purposes when he is holding it for his own maintenance I am not so sure. Perhaps the right hon. Gentleman will allow me to reserve the point for the consideration of those better skilled in conveyancing law than I am. My own impression is that he would come within the construction, but I will consider that point later on. The general definition is very wide. The words "charitable purposes" include four classes. In the first place, trusts for charitable purposes; secondly, advancement of education; thirdly, the advancement of religion; and fourthly, trusts for other purposes beneficial to the community not included under any of the preceding heads. Those are the words of Lord Macnaghten, and I think if those words are left alone they will suit the object of hon. Members opposite much better than introducing specific charitable purposes which may limit the general meaning of the phrase "charitable purposes" itself. The effect of this Amendment would be that the Court would say it is clear that the expression "charitable purposes" is not intended to have the wide meaning given to it in Benson's case or it would have been unnecessary to have this other definition. Education and religion will remain, but it may have more of a limiting than an extending effect. The definition of "charitable purposes" is so wide that I am quite sure it is sufficient to meet all practical purposes.
§ Lord ROBERT CECILAfter what the Attorney-General has said I do not wish to occupy the time of the Committee. The actual question whether a clergyman is included can be specifically raised by the next Amendment of the Chancellor of the Exchequer, which alters the definition by leaving out certain words and inserting "governing body." Under the Clause as printed in the Bill there is not the least doubt a clergyman would have been included. I ask the Government to consider very carefully before we reach the next Amendment whether they desire to exclude 1018 the clergymen and include the Ecclesiastical Commissioners. The effect of the Amendment would be that a body like the Ecclesiastical Commissioners would remain, but it is doubtful whether a clergyman would remain or not. The clergyman is a person who certainly has not more than enough money to live upon and carry out his duties, and he ought to be more an object for the consideration of Parliament in putting in an exemption of this, sort than a body like the Ecclesiastical Commissioners, some of whose beneficiaries are people comparatively wealthy. The Clause provides that "No duty under this Part of this Act shall be charged in respect of land or any interest in land held by any person or body of persons carrying on any undertaking or institution without any view to the payment of any dividend or profit out of the revenue thereof, for purposes which in the opinion of the Commissioners are public purposes or charitable purposes, while the land is occupied and used by that person or body for those purposes." Surely that would clearly include a clergyman. At least, I should have thought so. I should have thought he was clearly a person carrying on an undertaking for charitable or public purposes. If he is not doing that he is not doing his duty. I can conceive that in law he is a corporation sole for charitable purposes. I should have thought it was quite clear he was a person within the meaning of that Clause. It is quite true the Government by substituting the words "governing body for charitable purposes" may conceivably have raised a doubt, and if they intend to raise that doubt the matter requires some consideration.
§ Sir W. ROBSONI think the words substituted by the Government are rather more favourable to the contention of the Noble Lord than those deleted. The words are: "The expression 'governing body constituted for charitable purposes' in eludes any person or body of persons who have the right of holding, or any power of government of, or management over, any property appropriated for charitable purposes."
§ Mr. STUART-WORTLEYThe hon. and learned Gentleman has said he agrees as to the effect of the words, and he has promised a further statement as to the intentions of the Government. I expressly refrained from arguing the merits, and I must warn him that should it appear not to be the intention of the Government to include clergymen in the exemption I shall 1019 be prepared to show that there is not only a strong case for their inclusion, but that it would be particularly hard not to bring them within the exemption.
§ Mr. WALTER GUINNESSThe right hon. Gentleman stated that this is really only a formal Amendment, but, if it is accepted, it cuts out all chance of any discussion of exempting all charitable bodies from the operation of the Increment Duty. If this Amendment is accepted it will be quite impossible to raise that question. I have got down a series of Amendments on behalf of the London County Council to extend this exemption. They are concerned very much in this Increment Value Duty which may be charged on charitable institutions, because in a large number of cases they will have to make up the deficiency. They subscribe £80,000 per year to polytechnics and nearly £40,000 per year to secondary schools, and if these bodies are mulcted in these various duties and their revenue proves insufficient the whole of the loss will practically be borne by the county council. That would be a very serious burden on the future ratepayers of London. Then, again, there are cases where schools wish to move, and in which great hardship will result. At present Archbishop Tenison's School, St. Martin's High School, and Owen's School, Islington, are anxious to move, but they can only afford to do so if the sale of their valuable sites bring in enough money to enable them to build on a more suitable space outside the County of London. If these institutions are to be made liable to Increment Value Duty it would be quite impossible for them to sell their present sites and retain enough money to replace the schools they are leaving. For these reasons I think it is most important to exempt these charitable organisations from the duty. I am obliged to raise the point now, because I am afraid there will be no other opportunity of raising it at all.
I quite realise this exemption would not only apply to charitable institutions, and I do not wish it solely to apply to charitable institutions. I am also anxious to make it possible to exempt friendly societies from the operation of these Land Taxes. Under the Amendment of the Chancellor of the Exchequer registered societies are to be considered bodies for charitable purposes, and, unless we can prevent the narrowing of the Clause to the exemption of only that land actually in occupation, it will be quite impossible later on to raise the ques- 1020 tion of the exemption of friendly societies. At present the friendly societies will practically get no benefit from the exemption. In most cases they only have one set of offices in their actual use and occupation. The vast majority of the local lodges meet in the local public-houses or some other premises, and they have no abiding home. Those organisations will get no benefit whatever from the Government proposals unless they consent to widen the scope of the Clause and include in the exemption not only land which they have in their use and occupation, but also land whose revenues they are enjoying for their own purpose. We have been told by the President of the Board of Trade that in future the tax collector is not only going to say, "How much money have you got?" but also, "How have you got your money?" I do not think anybody could have a greater claim on the Government than these friendly societies who have raised their money from the contributions of working men.
§ The DEPUTY-CHAIRMAN (Mr. Caldwell)There is a Government Amendment dealing with friendly societies on this Clause.
§ Mr. WALTER GUINNESSI do not wish to raise the question now, if you will allow it to be raised later, but I consulted you about it, and I understood that unless it was raised at the beginning we could only discuss the definition of friendly societies and not the question whether they should be exempted from the taxation in respect of land of which they were not in actual occupation.
§ The DEPUTY-CHAIRMANThe Amendment is, after the word "No," to insert the words "Reversion Duty or Undeveloped land." There is a Government Amendment which deals afterwards with registered friendly societies.
§ Mr. WALTER GUINNESSThe Government Amendment does not deal with the amount of exemption. They are to get the same exemption as charitable bodies.
§ The DEPUTY-CHAIRMANThe hon. Member will notice that here we are just dealing with the question of whether we should insert after the word "No" the words "Reversion Duty or undeveloped land."
§ Mr. WALTER GUINNESSIf this Amendment is accepted by the Government it will rule out an Amendment I have to exempt them from the Increment Value 1021 Duty. I am anxious to raise the question of exempting friendly societies not only in respect of the land they have in their use and occupation, but also in respect of land which is not in their use or occupation.
§ The DEPUTY-CHAIRMANThe effect of the Amendment before the Committee is to limit the exemption to Reversion Duty and Undeveloped Land Duty, thereby excluding the Increment Duty, so that the Amendment of the hon. Member later on in the Clause to include the Increment Duty in the exemption will be out of order if this Amendment is carried.
§ Mr. JAMES HOPEMay I point out that the effect of the Government Amendment will be to limit the exemption to the Reversion Duty and the Undeveloped Land Duty, except in the case of Increment Duty paid by corporate bodies once in 15 years? I wish to ask whether we cannot argue against the limitation of that exemption on the ground that it would shut out from the purview of the Committee the case of various bodies, such as friendly societies, which have special claim upon exemption not only from the Undeveloped Land Duty, but also from the Increment Value Duty. Otherwise their case will be restricted in discussion to the question of the tax once every 15 years, and the matter in its full aspect will never be brought before the Committee unless it is possible to raise the Debate now.
§ The DEPUTY-CHAIRMANThis Amendment restricts the exemption to the Reversion and Undeveloped Land Duty. It is a very narrow point.
§ Mr. WALTER GUINNESSI think I understand your point, and I will limit my remarks to the Amendment I have down. I feel it is necessary to mention this in view of the speech which the President of the Board of Trade made at Leicester, in which he stated that next year it was hoped to bring in, on the policy of this Budget, a far-reaching plan of social organisation giving a greater field of security to the labouring classes, and that it was proposed working through the friendly societies by means of substantial subventions to give a steady workman and his family aid which would enable provision to be made against sickness, etc. I should like to point out how absurd are these proposals of the Government, if you are going to give back to friendly societies the amounts which you have taken from them. If they have already invested their 1022 money and are getting increased value for it, surely it would be very much better to leave that increment in their hands rather than the consolation of a rather distant prospect of a large dole from the State. We know that there are many slips in politics, and I really think that friendly societies would prefer to have their present state left to them than trust to the fortunes of a future Session of Parliament. I am sorry I cannot now raise the whole question which I intended to. I think some justification is needed from the Government in regard to restricting the exemptions to friendly societies so far as regards lands in their use and occupation is concerned, and levying Land Duties on revenues which they derive from land they have bought for investment.
§ Sir W. ROBSONI am anxious to at once deal with a case which illustrates an unfortunate misapprehension prevailing with regard to the scope of this Bill. Mention has been made of the cases of three schools which wish to remove, and it is said they will be unable to remove if they are to be subject to this very heavy tax. But I must point out that hon. Gentlemen, judging from the speeches they have made, still fail to appreciate the nature of this Increment Value Duty. Take the case of the three schools referred to. The hon. Member forgets that they would be valued as on 30th April, 1909—their existing value, in fact. The idea seems to be that the Increment Value Duty would be assessed as between the price of the property if sold and the price originally given for it. That is not the case. The price originally given is wholly ignored for the purposes of this Clause. I cannot repeat too often that for the purposes of the Increment Value Duty the existing values are exempt, so that there is no substantial danger with regard to these schools. The hon. Member also referred to the case of friendly societies which hold land for the purposes of investment, which may be undeveloped land, and would therefore be subject to Increment Duty. We went into this subject very fully on a previous Amendment. I think it would be giving an unfair preference to those societies which might think it their business to deal in land to relieve them from this increment. In my opinion, we have gone as far as we ought to in exempting lands which they themselves occupy.
§ Question put, "That those words be there inserted."
§ The Committee divided: Ayes, 190; Noes, 54.
1025| Division No. 736.] | AYES. | [9.45 p.m. |
| Agnew, George William | Hardie, J. Keir (Merthyr Tydvil) | Pearce, Robert (Staffs, Leek) |
| Alden, Percy | Hardy, George A. (Suffolk) | Pease, Rt. Hon. J. A. (San. Wald.) |
| Allen, A. Acland (Christchurch) | Harmsworth, Cecil B. (Worcester) | Pickersgill, Edward Hare |
| Allen, Charles P. (Stroud) | Harmsworth, R. L. (Caithness-sh.) | Pirie, Duncan V. |
| Ashton, Thomas Gair | Hart-Davies, T. | Pointer, J. |
| Atherley-Jones, L. | Hazel, Dr. A. E. W. | Pollard, Dr. G. H. |
| Balfour, Robert (Lanark) | Hedges, A. Paget | Power, Patrick Joseph |
| Barker, Sir John | Helme, Norval Watson | Rea, Rt. Hon. Russell (Gloucester) |
| Barnard, E. B. | Henderson, J. McD. (Aberdeen, W.) | Rea, Walter Russell (Scarborough) |
| Barnes, G. N. | Higham, John Sharp | Roddy, M. |
| Barran, Sir John Nicholson | Hobart, Sir Robert | Richards, T. F. (Wolverhampton, W.) |
| Barry, Redmond J. (Tyrone, N.) | Hodge, John | Ridsdale, E. A. |
| Beauchamp, E. | Hope, W. H. B. (Somerset, N.) | Roberts, Charles H. (Lincoln) |
| Bell, Richard | Horniman, Emslie John | Roberts, G. H. (Norwich) |
| Benn, W. (Tower Hamlets, St. Geo.) | Howard, Hon. Geoffrey | Robertson, Sir G. Scott (Bradford) |
| Berridge, T. H. D. | Hudson, Walter | Robson, Sir William Snowdon |
| Black, Arthur W. | Hyde, Clarendon G. | Roch, Walter F. (Pembroke) |
| Boulton, A. C. F. | Idris, T. H. W. | Rogers, F. E. Newman |
| Bowerman, C. W. | Jackson, R. S. | Rose, Sir Charles Day |
| Bramsdon, Sir T. A. | Jenkins, J. | Rowlands, J. |
| Branch, James | Jones, Sir D. Brynmor (Swansea) | Russell, Rt. Hon. T. W. |
| Brigg, John | Jones, Leif (Appleby) | Rutherford, V. H. (Brentford) |
| Bright, J. A. | Jones, William (Carnarvonshire) | Samuel, Rt. Hon. H. L. (Cleveland), |
| Brodie, H. C. | Jowett, F. W. | Schwann, Sir C. E. (Manchester) |
| Brunner, J. F. L. (Lancs., Leigh) | Joyce, Michael | Sherwell, Arthur James |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Keating, M. | Shipman, Dr. John G. |
| Burns, Rt. Hon. John | Kekewich, Sir George | Simon, John Allsebrook |
| Byles, William Pollard | Kilbride, Denis | Snowden, P. |
| Clough, William | Laidlaw, Robert | Stanger, H. Y. |
| Cobbold, Felix Thornley | Lamb, Edmund G. (Leominster) | Stanley, Albert (Staffs, N. W.) |
| Collins, Stephen (Lambeth) | Lamb, Ernest H. (Rochester) | Steadman, W. C. |
| Compton-Rickett, Sir J. | Layland-Barratt, Sir Francis | Stewart, Halley (Greenock) |
| Corbett, A. Cameron (Glasgow) | Lea, Hugh Cecil (St. Pancras, E.) | Stewart-Smith, D. (Kendal) |
| Corbett, C. H. (Sussex, E. Grinstead) | Lehmann, R. C. | Straus, B. S. (Mile End) |
| Cotton, Sir H. J. S. | Lever, A. Levy (Essex, Harwich) | Summerbell, T. |
| Cross, Alexander | Lever, W. H. (Cheshire, Wirral) | Taylor, John W. (Durham) |
| Cullinan, J. | Levy, Sir Maurice | Thomas, Sir A. (Glamorgan, E.) |
| Dalziel, Sir James Henry | Lloyd-George, Rt. Hon. David | Thompson, J. W. H. (Somerset, E.) |
| Davies, Timothy (Fulham) | Lough, Rt. Hon. Thomas | Thorne, G. R. (Wolverhampton) |
| Davies, Sir W. Howell (Bristol, S.) | Lundon, T. | Toulmin, George |
| Dewar, Arthur (Edinburgh, S.) | Lupton, Arnold | Trevelyan, Charles Philips |
| Dickinson, W. H. (St. Pancras, N.) | MacNeill, John Gordon Swift | Verney, F. W. |
| Duckworth, Sir James | MacVeigh, Charles (Donegal, E.) | Vivian, Henry |
| Duncan, C. (Barrow-in-Furness) | M'Callum, John M. | Wadsworth, J. |
| Duncan, J. Hastings (York, Otley) | M'Laren, H. D. (Stafford, W.) | Walsh, Stephen |
| Dunn, A. (Camborne) | M'Micking, Major G. | Ward, John (Stoke-upon-Trent) |
| Dunne, Major E. Martin (Walsall) | Maddison, Frederick | Wason, Rt. Hon. E. (Clackmannan) |
| Edwards, Sir Francis (Radnor) | Mallet, Charles E. | Wason, John Cathcart (Orkney) |
| Essex, R. W. | Marnham, F. J. | Waterlow, D. S. |
| Evans, Sir Samuel T. | Massie, J. | White, Sir George (Norfolk) |
| Everett, R. Lacey | Masterman, C. F. G. | White, J. Dundas (Dumbartonshire) |
| Falconer, James | Menzies, Sir Walter | White, Sir Luke (York, E. R.) |
| Ferens, T. R. | Molteno, Percy Alport | Whitehead, Rowland |
| Ferguson, R. C. Munro | Mond, A. | Whittaker, Rt. Hon. Sir Thomas P. |
| Findlay, Alexander | Muldoon, John | Wiles, Thomas |
| Foster, Rt. Hon. Sir Walter | Murray, James (Aberdeen, E.) | Wilkie, Alexander |
| Fuller, John Michael F. | Nannetti, Joseph P. | Williams, J. (Glamorgan) |
| Fullerton, Hugh | Nicholson, Charles N. (Doncaster) | Wilson, Hon. G. G. (Hull, W.) |
| Gibb, James (Harrow) | Norman, Sir Henry | Wilson, Henry J. (York, W. R.) |
| Glendinning, R. G. | Nuttall, Harry | Wood, T. M'Kinnon |
| Glover, Thomas | O'Brien, Patrick (Kilkenny) | Yoxall, Sir James Henry |
| Goech, George Peabody (Bath) | O'Connor, John (Kildare, N.) | |
| Gulland, John W. | Parker, James (Halifax) | TELLERS FOR THE AYES.—Captain Norton and Sir E. Strachey. |
| Hall, Frederick | Partington, Oswald | |
| Harcourt, Robert V. (Montrose) |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Craik, Sir Henry | Guinness, Hon. R. (Haggerston) |
| Anson, Sir William Reyneil | Dalrymple, Viscount | Hamilton, Marquess of |
| Balcarres, Lord | Dickson, Rt. Hon. C. Scott | Hardy, Laurence (Kent, Ashford) |
| Baldwin, Stanley | Doughty, Sir George | Helmsley, Viscount |
| Banbury, Sir Frederick George | Douglas, Rt. Hon. A. Akers- | Hope, James Fitzalan (Sheffield) |
| Baring, Captain Hon. G. (Winchester) | Duncan, Robert (Lanark, Govan) | Hunt, Rowland |
| Butcher, Samuel Henry | Faber, George Denison (York) | Kimber, Sir Henry |
| Carlile, E. Hildred | Fletcher, J. S. | Lambton, Hon. Frederick William |
| Carson, Rt. Hon. Sir Edward H. | Forster, Henry William | Law, Andrew Bonar (Dulwich) |
| Cecil, Evelyn (Aston Manor) | Gardner, Ernest | Lowe, Sir Francis William |
| Cecil, Lord R. (Marylebone, E.) | Goulding, Edward Alfred | M'Arthur, Charles |
| Clyde, J. Avon | Gretton, John | Magnus, Sir Philip |
| Mildmay, Francis Bingham | Ratcliff, Major R. F. | Talbot, Rt. Hon. J. G. (Oxford Univ.) |
| Morpeth, Viscount | Rawlinson, John Frederick Peel | Walker, Col. W. H. (Lancashire) |
| Oddy, John James | Remnant, James Farquharson | Winterton, Earl |
| Parker, Sir Gilbert (Gravesend) | Roberts, S. (Sheffield, Ecclesall) | Wortley, Rt. Hon. C. B. Stuart- |
| Parkes, Ebenezer | Rutherford, Watson (Liverpool) | |
| Pretyman, E. G. | Salter, Arthur Clavell | TELLERS FOR THE NOES.—Mr. Lane-Fox and Mr. W. Guinness. |
| Randies, Sir John Scurrah | Staveley-Hill, Henry (Staffordshire) |
§ Mr. RAWLINSON moved, after the word "held" ["shall be charged in respect of land or any interest in land held"], to insert the words "occupied or used."
§ This is a very small Amendment, and probably the Chancellor of the Exchequer will accept it. The exemption which is granted by the Clause from Reversion Duty or Undeveloped Land Duty is in respect of land which is held by any person or body of persons for public or charitable purposes while the land is occupied and used by that person or body for those purposes. This Amendment is to meet the case of land which is let by the university, for instance, to Trinity College, or vice versa, and both being charitable bodies, one lets the land to the other for the purposes of the other.
§ Mr. LLOYD-GEORGEThe word "held" will cover that.
§ Mr. RAWLINSONNo; "held" only applies to the owner here. It would be held by the owner of the university, but it would be occupied by the college which leases it from them, and I think it is necessary to insert the words "occupied or used" in this place also.
§ Mr. LLOYD-GEORGEI quite see the kind of case which the hon. and learned Gentleman has in his mind, but I am not quite sure about inserting his words. I can see no objection to his proposal, and we certainly do not mean to cut out the nature of the exemption he suggests; but I do not think his words would quite carry it. If he will withdraw his Amendment I will see if I can devise words to meet this special case, but I think his words go beyond the case he makes.
§ Amendment, by leave, withdrawn.
§ Mr. JAMES HOPE (in the absence of Sir William Anson) moved, after the word "by" ["interest in land held by any person"], to insert the words "or in trust for."
§ On the face of it I do think it is necessary to insert these words, but I am not quite certain whether they would not be sub-stanitally covered by the words later in the Clause. I would ask the right hon. 1026 Gentleman to assure me on that point, but it is not worth while pressing if the Government accept the intention.
§ Mr. LLOYD-GEORGEI should think that land held in trust for charitable purposes would be included, and that would be governed by the words "or charitable purposes." If the hon. Member will look at the words later on he will see that they are "any person or body of parsons carrying on any undertaking or institution" for charitable purposes. They certainly govern the case put, but if the words proposed were inserted they might defeat the words already in, and be unnecessary.
§ Amendment, by leave, withdrawn.
§ Amendment proposed, to leave out the words, "person or body of persons carrying on any undertaking or institution without any view to the payment of any dividend or profit out of the revenue thereof, for purposes which in the opinion of the Commissioners are public purposes or charitable," and to insert instead thereof the words "governing body constituted for."—[Mr. Lloyd-George.]
§ Question, "That those words ['persons or body of persons,' etc.] stand part of the Clause," put, and negatived.
§ Mr. PRETYMANIs the word "governing" necessary? It seems to limit it without any good ground.
§ Mr. LLOYD-GEORGEI should have thought it was necessary, because there is a definition of the words "governing body" later on, and it is a very comprehensive definition. It depends so much more upon the definition than upon the words here.
§ Mr. JAMES HOPE moved, as an Amendment to the proposed Amendment, after the word "body," to insert the words "club or society."
§ My first reason is that the words "governing body," when you come to define them, are limited to governing bodies for charitable purposes, and there are certain bodies which hold land for useful purposes which I am not sure will be covered by the word "charitable." The sort of thing I have in my mind is this: An 1027 archæological society holds a rum with land around it for a public purpose, but I do not think it could be described as a charitable purpose. An agricultural society may have grounds for an annual show. There is no question of any dividend or profit, but it is for the encouragement of agriculture and so on. That again is a public purpose, but I do not think it could be deemed to be a charitable purpose. I am not sure the National Trust is not a case in point. They hold certain beautiful spots or interesting monuments for a public national purpose. I do not think that again is a charitable purpose. Therefore, I think other words are necessary to be inserted which cover rather wider ground than the words "governing body" as defined in the section. Then I would ask the Government to give a short statement as to the position of their various Amendments with regard to recreation grounds. I know they have a Clause with regard to that subject.
§ The DEPUTY-CHAIRMANThat would not be in order on this Clause.
§ 10.0 P.M.
§ Mr. JAMES HOPEThis will have to be read with a later Amendment of my own "for public or recreative purposes," and this is a general exemption of land where there is a public advantage. I know that recreation grounds are to be excluded under certain conditions from Increment Duty by a later Clause, but there is also the question of Undeveloped Land Duty, and that point has so far been passed in the Bill, and the Amendments which were certainly adumbrated on that point have never been discussed. There are two cases to be borne in mind. There are the cases where the ground is owned by a club for the purpose of recreation, such as Lords or certain county cricket grounds, and there is the case where it is leased by a club from the owner. I understand the position is this: That where it is owned by the club for the purpose of recreation they will be exempt from Increment Duty under the later Clause, unless, of course, they sell their land, in which case Increment Duty will very properly be paid.
§ Mr. LLOYD-GEORGEWill the hon. Member give me the sort of case he has in mind?
§ Mr. JAMES HOPEI wish to know what is the Government position with regard to these grounds where no profit is 1028 made, because it is rather difficult to trace it through the different Clauses.
§ Mr. LLOYD-GEORGECricket grounds clearly do not come into this Clause but into Clause 11.
§ Mr. JAMES HOPEThat is only for Undeveloped Land Duty.
§ Mr. LLOYD-GEORGEClause 25 has nothing whatever to do with them. I want to know what other kind of societies the hon. Member has in view.
§ Mr. JAMES HOPEI was trying to argue that this was a public purpose in certain cases, and that this was the only Clause under which the whole position of these grounds could be discussed, because, otherwise, they could only be discussed on one Clause for Increment Duty and another for Undeveloped Land Duty. There is also the distinction between grounds owned and grounds leased for the purposes of recreation. As I understand, they will be exempted from the Increment Duty. In the case of the Undeveloped Land Duty the case is not clear, and I wish to know a little more of the intentions of the Government with regard to those societies and the Undeveloped Land Duty. Will they be exempted or not, and especially where they do not own the ground, but only take a short lease of it, or from year to year? Of course, there is a certain amount of discretion vested in the Commissioners in deciding as to whether the use for this purpose is a bonâ fide use or not. There was a similar question raised under Clause 14 as to public parks. The Committee decided that the Commissioners should say in the first instance whether those parks satisfied the conditions which would allow them to be exempted, and that there should be an appeal, but it has not been decided what the nature of that appeal should be. Some hon. Members suggested that it should be to a special referee, and others that it should be to the Local Government Board. I wish to know whether if there is a bonâ fide use of land for recreation purposes—
§ Mr. LLOYD-GEORGEOn a point of Order. There is a Clause on the Paper, on page 39 by the Government dealing with this specific point, and therefore it cannot arise at present.
§ The DEPUTY-CHAIRMANI would point out also that Clause 11 deals with exemptions from the Undeveloped Land Duty. Sub-section (3) says that the duty 1029 shall not be charged on land which is used for the purpose of games or other recreation, where the Commissioners are satisfied that the use of the land is for the benefit of the public or of the inhabitants of the locality." That being so, this Amendment provides for something which we have already done under Clause 11.
§ Mr. JAMES HOPEI understand from what the Under-Secretary for the Home Department said it is the intention of the Government to override it.
§ The DEPUTY-CHAIRMANThey cannot override it as regards undeveloped land. There is a specific Sub-section dealing with that.
§ Mr. JAMES HOPEI have done my best to get a specific declaration, but on account of the raising of points of Order and the disinclination of the Chancellor of the Exchequer to discuss the matter on this occasion I am afraid I have failed. I am afraid also that the persons interested in these grounds are as much in a fog as ever. I wish to know whether the words of this Amendment, or the words of the Clause, would cover land used by an agricultural society, land vested in the National Trust, or land possessed by an archaeological society—all of which are bodies using land for public purposes, though I do not think they are charitable purposes. I beg to move.
§ Mr. PRETYMANPerhaps it would be as well if the Chancellor of the Exchequer or the Solicitor-General would tell us how far they are satisfied that these words will cover associations of that description, because clearly, I take it, it is not the intention of the Government that they should be taxed. A good deal of land is held by agricultural societies for experimental purposes, such as manurial experiments and things of that sort, and these are public purposes. There are such things as experimental farms, which are used for the purpose of scientific investigation in regard to agriculture.
§ Mr. LLOYD-GEORGEBy whom?
§ Mr. PRETYMANI think they are generally held by agricultural societies, but I have not any actual cases in my mind.
§ Mr. STUART-WORTLEYThere is the case of the National Trust, who have vested in them ruins of probably no undeveloped land value. They possess a head- 1030 land in Cornwall, which they acquired at a price for the purpose of preventing its being built upon. They acquired also the side of a lake in Cumberland to prevent its being built upon. I do not know whether that would come under the definition of "charitable purposes." The object of my hon. Friend is to raise that question. We can hardly be expected to know without the guidance of the Government.
§ The SOLICITOR-GENERAL (Sir Samuel Evans)It is difficult to answer questions put in this way as to whether the lands held by a club or a society are held for charitable purposes. "Charitable purposes" is a phrase well known to the law, but it is not easy to apply it to a particular institution. I do not know myself of the National Trust. My right hon. Friend the Attorney-General has quoted the definition which is now the classical definition. He divided charities into four classes. Three of them were perfectly clear and distinct, and the fourth was a more general one, namely, that where the object was to benefit the community it could be properly described as a charitable object. I do not pretend that it is clear. It is obviously impossible to say without knowing the object of a particular body whether the land held is, or is not, for charitable purposes. I know of no particular case in which I could give an opinion.
§ Earl WINTERTONI may give two cases which as the Clause stands would be affected, and which ought properly to come under the definition of my hon. Friend. One is the case of the experimental farm at Rothamsted, which, I believe, is held by a trust under the Royal Agricultural Society. The other is that of a large common and some land adjoining, which is not common land in the practical sense of the word, at Hindhead in Surrey. For the benefit of the public that land was acquired by a syndicate of people, and the deed was drawn up by which the land was held in trust by four trustees for the benefit of the public for ever. It would not, I think, come within the definition of open spaces under the Act, as it includes not merely common land, but a large amount of private land as well. About 1,000 acres of land were acquired by this syndicate for the purpose of preventing it being built over or spoiled. It is certainly land which would acquire an increment value. It is very valuable building property. I would ask the Government to promise to con- 1031 sider the matter and, if necessary, to add words which would prevent cases of the kind I have mentioned being included within the scope of this Clause.
§ Sir SAMUEL EVANSWith regard to the case of Rothamsted, that is clearly a case of an institution for an educational purpose, and I am certain that it would come under one of those definite headings which I have stated are to be found in Lord Macnaghten's judgment?
Mr. BALFOURI should think I am right in saying that Rothamsted is a case of purely agricultural research.
§ Sir SAMUEL EVANSI am certain that the experiments might very well come under the head of education. With regard to the other question put by the Noble Lord, I think it quite likely that that would be a case coming under the fourth heading of beneficial to the community, which, therefore, might be held to be for a charitable purpose.
§ Sir JOHN RANDLESThe statement of the learned Solicitor-General is satisfactory, as far as it goes, but it does not deal with cases I have in my mind in the constituency of Penrith adjoining my own, which Mr. Speaker knows. Large subscriptions were given by the public for the purpose of preventing very large spaces adjoining Lake Derwentwater and Lake Ullswater from being built over, and the properties are held by trustees, and they consist, no doubt, largely of land which by its position, owing to its contiguity to the lakes, might become exceedingly valuable from a building point of view; and yet it is one of the objects of the trust to prevent building in that particular locality in the interests of the public. And, in view of the great importance of cases of this kind, I think we ought to have some definite promise that such cases would be absolutely considered and dealt with in the Bill, and not left over to the decisions of a court of law. I think that the Chancellor of the Exchequer might give us a promise which would reassure us on this particular case.
§ Mr. LLOYD-GEORGEI quite agree that cases such as the hon. Member has just spoken of ought not to be subject to doubts that can be avoided. Where it is obviously desirable, in order to preserve the picturesque character of the landscape in the general interests, that it should not be built on, it is plainly unlikely that you 1032 should apply to it the Undeveloped Land Tax, which might have the effect of driving it into the market. Therefore unless we are very clear that these words do not affect the case we shall certainly introduce words.
§ Mr. LANE-FOXThere is one further question as to whether the case of rifle clubs will be affected through this Clause, and whether horticultural societies will be included.
§ Sir SAMUEL EVANSWith regard to land held by a horticultural society, I should, of course, require to know the circumstances to see whether they brought the land within the term "charitable" as understood by the law. The Chancellor of the Exchequer has undertaken to meet cases where it is clear that an object of public utility is served, and? hope that under the circumstances the Amendment will be withdrawn.
§ Mr. REMNANTWould the Botanical Gardens be included?
§ Amendment to the proposed Amendment, by leave, withdrawn.
§ Mr. CLAVELL SALTERBefore the matter goes to a vote, I wish to ask the Chancellor of the Exchequer what change we are to understand him to make in the Clause as printed. The right hon. Gentleman has struck out five lines, and inserted "governing body constituted for." The Clause as it stands establishes three tests before giving the benefits it provides. There must be no profit-making, and there must be either a public or a charitable object. The Chancellor of the Exchequer has struck out altogether the test as to profit, and I take it now that if the profit made is for a charitable object it would not be disentitled to the benefit. With regard to the distinction between public and charitable, are we to understand that the substitution of four words for five lines makes no difference in the substance of the Clause? I should be glad if the Chancellor of the Exchequer will tell us what beneficiaries who might have been benefited by this Clause as it stands will now be excluded.
§ Mt. LLOYD-GEORGEBy eliminating these words and confining the Clause to purely charitable institutions we are, at any rate, getting rid of two conditions which might have affected certain objects and certain societies which otherwise ought to be able to claim exemption, and undoubtedly it widens the area of exemp- 1033 tion. I could not give the hon. and learned Gentleman straight away the classes of societies that would come in, but I am perfectly certain that they run less risk of being deprived of the benefit of this Clause than if they had to comply with three conditions precedent instead of one. To that extent the Amendment is an advantage, and it widens the area and scope of the Clause.
§ Mr. PRETYMANI agree generally with the Chancellor of the Exchequer reducing the number of words is, generally speaking, reducing the limitations. I do not quite follow his reason for eliminating the word "public." That is clearly an extension. The word "public" was included in the original draft, "charitable or public." I do not see why he is now reinserting the word "charitable" and not inserting "public." In order to clear up the matter I will move that after the word "charitable" to insert the word "public."
§ The CHAIRMANWe have not got the Chancellor of the Exchequer's words in. We have left the words out that he proposed to leave out. Therefore no words can be put in after "charitable" until after we have got those words in. Further, we have agreed to eliminate the words "public purposes," and I do not see, therefore, how we can replace them.
§ Lord ROBERT CECILMay I very respectfully suggest there will be nothing wrong in striking out "public purposes" in front of "charitable" for the purpose of adding "public" after charitable?
§ The CHAIRMANThe only way in which that could be done would be on the plea that the words "governing body constituted for" introduced a new consideration as applied to "public purposes."
§ Mr. PRETYMANMay I adopt that plea?
§ Question, "That those words ['governing body constituted for'] be there inserted," put, and agreed to.
§ Mr. PRETYMANMay I now move to add "public purposes"?
§ Mr. LLOYD-GEORGEThat seems to me to be raising the whole issue over again.
§ Mr. PRETYMANIf that is so, I will not press it.
§ Amendments made: To leave out the words "person or" ["land is occupied and 1034 used by that person or body"]. To leave out the word "those" ["used by that person or body for those purposes"], and to insert instead thereof the word "the."—[Mr. Lloyd-George.]
§ Mr. LLOYO-GEORGE moved to leave out from the word "purposes" ["used by that person or body for those purposes, but nothing"], to the end of the Clause, and to insert instead thereof the words "of that body, and Increment Value Duty shall not be collected on any periodical occasion in respect of the fee simple of or any interest in any land held for the purposes of such a body, whether it is occupied or used by that body or not, without prejudice, however, to the collection of the duty on any other occasion.
§ "The expression 'governing body constituted for charitable purposes' includes any person or body of persons who have the right of holding, or any power of government of, or management over, any property appropriated for charitable purposes (including property appropriated for the purpose of any of the naval or military forces of the Crown)."
§ The object of this Amendment, which specifically raises the question of the Increment Duty, is to confine it to the duty paid on sales and leases. The second part is to define the governing bodies constituted for charitable purposes.
§ Mr. PRETYMANI think the Chancellor of the Exchequer has admitted that there is not going to be any great exemption under this Clause for property held for development by a university which desires to realise it for the purposes of their institution. It is quite clear they can only realise any building value from the property they may possess either by selling it or leasing it, and the moment they sell or lease it they become liable for the Increment Value Duty. I do not think the Chancellor quite fully expressed the position in what he said in the Debate on this Clause. He said quite accurately that they were exempt from Corporation Duty, but being exempt from Corporation Duty upon this Clause only means that the particular occasion for taking the duty is only passed over. The duty is still accruing. For instance, a university which owns property which it is developing would be passed over on periodic occasions, but a year or two later, when the property is ripe and is sold, then the whole of the duty which would be payable on periodic occasions, plus any additional duty that accrued since the periodic occasion, would 1035 have to be paid. So there is no real escape. I do not say there is no advantage. There is an advantage, but when there is a sale or lease there is a realised asset from which the duty will be paid.
§ Mr. LLOYD-GEORGEIt is an enormous advantage.
§ Mr. PRETYMANThe Chancellor says it is an enormous advantage. When he says that I hope he will realise the enormous disadvantage which other property it put to in having to pay this duty when they have not the asset to pay out of. The measure of advantage in one sense is the measure of the disadvantage in another. It is a very hard case upon a charitable body which has very small funds available for its purposes that it should have to pay this Increment Value Duty although exempt on periodic occasions. That will be a very heavy burden upon these transactions.
§ Mr. LLOYD-GEORGEThey will have the cash.
§ Mr. PRETYMANThey will have the cash less 20 per cent. There is no doubt with regard to this duty the escape will be very much less than in regard to Undeveloped Land Duty.
§ Mr. LLOYD-GEORGEI do not know whether the hon. and gallant Gentleman is trying to minimise the great benefit which this proposal will confer upon institutions which depend upon a regular annual income for carrying on their business. Take the illustration which has been put forward of property worth £500,000 being £500,000 over and above its agricultural value. That is a kind of increment which might very well take place in a London suburb. Surely it would be more advantageous to the college or university concerned that they should be allowed to pay the tax as the cash comes into their hands. Undoubtedly they have to pay the same in the end, but this plan is more convenient. They have not to pay as a corporation who have to raise money in the form of debentures or by loan to conduct their ordinary operations. Therefore, it is an enormous benefit that they should be exempt from this periodic payment of a sum upon the increment of their property.
§ Sir W. ANSONThey are not gaining very much by this concession.
§ Question, "That the word 'but' stand part of the Clause," put, and negatived.
1036§ Question proposed, "That those words be there inserted."
§ Mr. CLAVELL SALTER moved, in the proposed Amendment, to leave out the words "on any periodical occasion."
§ The omission of those words would extend the benefits of this exemption and make it a reality. Does the Committee realise how illusory is the benefit which this Clause proposes to give to charities? We are not only discussing charities, but we shall have in a moment the next Amendment of the Chancellor of the Exchequer dealing with friendly societies, and whatever measure we mete out to charities we are meting out also to friendly societies.
§ The CHAIRMANMay I ask the hon. and learned Member how this Amendment, taken in conjunction with his consequential Amendment, differs from the point we have already discussed at the beginning of the Clause?
§ Mr. CLAVELL SALTERThis is an Amendment which could not be raised until the Chancellor of the Exchequer's Amendment, in its amended form, was before the Committee, and I now desire to amend the amended form by striking out some of the words and adding others. Obviously my point could not be raised until now. This is not the point which was raised before. This attempt to distinguish between the payment of Increment Duty on any periodical occasion and the wider exemption has not been raised before, and I respectfully desire to raise it now.
§ The CHAIRMANWhat happened before was that an Amendment was moved by the hon. Member for the London University (Sir Philip Magnus), and on that it was argued that the Increment Value Duty should not be levied upon property of educational bodies and universities. This Amendment of the hon. Member, it seems to me, would go back upon the decision arrived at as regards educational bodies and universities. I cannot see any way out of it unless he can show me one. Having negatived the narrow point, we cannot deal with the larger one.
§ Mr. CLAVELL SALTERI think it will have that effect.
§ The CHAIRMANThen it would not be in order.
§ Mr. F. B. MILDMAYI propose to move to leave out the words "without prejudice, however, to the collection of the duty on any other occasion."
§ The CHAIRMANI am afraid that is the same, point.
Mr. MILD MAYMy object is to provide that on the occasion of the sale the duty shall not be payable. I do not think that point has been exclusively debated.
§ The CHAIRMANWhat happened was that, with regard to one large class of institutions—educational institutions—we decided this should not apply. Having decided that, the hon. Member cannot move an Amendment which would have the effect of giving that advantage to educational institutions.
§ Mr. CLAVELL SALTER moved to leave out of the proposed Amendment the words "whether it is occupied or used by that body or not, without prejudice, however, to the collection of the duty on any other occasion," and to insert instead thereof the words, "and such Increment Value Duty shall be deemed to have been paid on every occasion on which such duty would have been payable but for the provisions of this Section."
§ It will be plain that this is a very substantial matter. Increment Value Duty, by the decision of the Committee, is now being paid by all charitable bodies and all friendly societies upon their property. They are not, as the Clause of the Chancellor of the Exchequer stands, exempted from any penny or farthing of the Increment Value Duty. The only difference made is that, instead of making them pay as any other owner of land, in fractions at stated intervals, you wait until they have got the increment and then make them pay Increment Value Duty from the beginning of the 1909 register. They will therefore gain nothing at all. They will not gain a single farthing by the so-called concession of the Chancellor of the Exchequer. We are dealing with land which is the endowment of charities and which is the ordinary property and investments of the members of the friendly societies. It is land which they can only use to make profit out of either by letting it or selling it. If they let it, as the Clause stands, they pay the increment value on the lease or the Reversion Duty at the end of the lease. If a time comes when they want to sell the land they will have to pay the same Increment Duty as the private owner. If they have not parted with it they are in no better position than those who have no exemption and no benefit whatever. The point I venture to make is this, that when a friendly society or charity leases its lands the duty shall be deemed to have been 1038 paid, so that then when they sell they will only have to pay the Increment Duty on the last occasion, and that would probably be a very small matter. This will make it a real concession to charitable bodies as well as to friendly societies. I think this is a concession the right hon. Gentleman might well make.
§ Mr. LLOYD-GEORGEIt is true no Amendment has been made which has been narrowed to this one issue, but at the same time this point has already been debated twice, and I gave my answer to the hon. and gallant Member for Chelmsford. I can quite understand the desire of the hon. and learned Member for North Hants to enter his protest on this point in the form of an Amendment, but I cannot possibly accept the proposal as it would render absolutely nugatory the whole of our proposal.
§ Mr. T. M. HEALYLet me put one point to the right hon. Gentleman. Supposing land is sold for the purpose of exchange. A charity or a friendly society may have held on to certain land for a long period, and then circumstances may have changed, and it may have been found desirable to acquire new land, which may already have borne the extra burden for the purposes of the Estate Duty, and have acquired increased value which would have to be paid in the shape of purchase money. Would it not be fair to say there shall be no heavier burden borne by a charity in effecting an exchange of land than there would have been provided that this increment value had not been imposed? I think there is a great distinction between a transaction for purposes of profit, and for the purpose of exchange, and it does seem to me that if the right hon. Gentleman will consider it from that point of view he may see his way to give effect to it.
§ Mr. LLOYD-GEORGEThe difficulty about that is if an exception were made in this case there would be really a danger of getting rid of the duty altogether. If the Increment Duty were very substantial and exchanges were left out altogether, or, rather, included in the protective operation of the Clause, they might first of all effect an exchange and then sell the property. I shall, however, consider the point as the hon. Member has put it.
§ Question put, "That the words proposed to be left out stand part of the proposed Amendment."
§ The Committee divided: Ayes, 199; Noes, 72.
1041| Division No. 737.] | AYES. | [11.2 p.m. |
| Agar-Robartes, Hon. T. C. R. | Glover, Thomas | Pearce, Robert (Staffs, Leek) |
| Agnew, George William | Gooch, George Peabody (Bath) | Pease, Rt. Hon. J. A. (Saff. Wald.) |
| Alden, Percy | Gulland, John W. | Pickersgill, Edward Hare |
| Allen, A. Acland (Christchurch) | Gwynn, Stephen Lucius | Pirie, Duncan V. |
| Allen, Charles P. (Stroud) | Haldane, Rt. Hon. Richard B. | Pointer J. |
| Ashton, Thomas Gair | Hall, Frederick | Pollard, Dr. G. H. |
| Asquith, Rt. Hon. Herbert Henry | Harcourt, Robert V. (Montrose) | Ponsonby, Arthur A. W. H. |
| Atherley-Jones, L. | Hardie, J. Keir (Merthyr Tydvil) | Price, Sir Robert J. (Norfolk, E.) |
| Balfour, Robert (Lanark) | Hardy, George A. (Suffolk) | Rea, Rt. Hon. Russell (Gloucester) |
| Barker, Sir John | Harmsworth, Cecil B. (Worcester) | Rea, Walter Russell (Scarborough) |
| Barnard, E. B. | Harmsworth, R. L. (Caithness-sh.) | Rees, J. D. |
| Barnes, G. N. | Hazel, Dr. A. E. W. | Richards, T. F. (Wolverhampton, W.) |
| Barran, Sir John Nicholson | Hedges, A. Paget | Ridsdale, E. A. |
| Barry, Redmond J. (Tyrone, N.) | Helme, Norval Watson | Roberts, Charles H. (Lincoln) |
| Beauchamp, E. | Henderson, J. McD. (Aberdeen, W.) | Roberts, G. H. (Norwich) |
| Beck, A. Cecil | Henry, Charles S. | Robertson, Sir G. Scott (Bradford) |
| Bell, Richard | Higham, John Sharp | Robson, Sir. William Snowdon |
| Belloc, Hilaire Joseph Peter R. | Hobart, Sir Robert | Roch, Walter F. (Pembroke) |
| Benn, W. (Tower Hamlets, St. Geo.) | Hobhouse, Rt. Hon. Charles E. H. | Roe, Sir Thomas |
| Berridge, T. H. D. | Hodge, John | Rogers, F. E. Newman |
| Black, Arthur W. | Hope, W. H. B. (Somerset, N.) | Rose, Sir Charles Day |
| Boulton, A. C. F. | Horniman, Emslie John | Rowlands, J. |
| Bowerman, C. W. | Howard, Hon. Geoffrey | Russell, Rt. Hon. T. W. |
| Bramsdon, Sir T. A. | Hudson, Walter | Rutherford, V. H. (Brentford) |
| Branch, James | Hyde, Clarendon G. | Samuel, Rt. Hon. H. L. (Cleveland) |
| Brigg, John | Idris, T. H. W. | Schwann, Sir C. E. (Manchester) |
| Brignt, J. A. | Jackson, R. S. | Seely, Colonel |
| Brodie, H. C. | Jenkins, J. | Sherwell, Arhur James |
| Brunner, J. F. L. (Lancs., Leigh) | Jones, Sir D. Brynmor (Swansea) | Simon, John Allsebrook |
| Brunner, Rt. Hon. Sir J. T. (Cheshire) | Jones, Leif (Appleby) | Snowden, P. |
| Burns, Rt. Hon. John | Jones, William (Carnarvonshire) | Stanger, H. Y. |
| Byles, William Pollard | Jowett, F. W. | Stanley, Albert (Staffs, N. W.) |
| Causton, Rt. Hon. Richard Knight | Kilbride, Denis | Stewart, Halley (Greenock) |
| Cawley, Sir Frederick | King, Alfred John (Knutstord) | Stewart-Smith, D. (Kendal) |
| Charming, Sir Francis Allston | Laidlaw, Robert | Straus, B. S. (Mile End) |
| Clough, William | Lamb, Ernest H. (Rochester) | Summerbell, T. |
| Cobbold, Felix Thornley | Lamont, Norman | Taylor, John W. (Durham) |
| Collins, Stephen (Lambeth) | Layland-Barratt, Sir Francis | Thomas, Sir A. (Glamorgan, E.) |
| Compton-Rickett, Sir J. | Lehmann, R. C. | Thompson, J. W. H. (Somerset, E.) |
| Cooper, G. J. | Lever, A. Levy (Essex, Harwich) | Thorne, G. R. (Wolverhampton) |
| Corbett, A. Cameron (Glasgow) | Levy, Sir Maurice | Toulmin, George |
| Corbett, C. H. (Sussex, E. Grinstead) | Lloyd-George, Rt. Hon. David | Trevelyan, Charles Philips |
| Cotton, Sir H. J. S. | Lough, Rt. Hon. Thomas | Verney, F. W. |
| Dalziel, Sir James Henry | Lupton, Arnold | Vivian, Henry |
| Davies, Timothy (Fulham) | Mackarness, Frederic C. | Wadsworth, J. |
| Davies, Sir W. Howell (Bristol, S.) | Maclean, Donald | Walsh, Stephen |
| Dewar, Arthur (Edinburgh, S.) | Macnamara, Dr. Thomas J. | Ward, John (Stoke-upon-Trent) |
| Dickinson, W. H. (St. Pancras, N.) | McVeigh, Charles (Donegal, E.) | Wason, Rt. Hon. E. (Clackmannan) |
| Duckworth, Sir James | M'Callum, John M. | Wason, John Cathcart (Orkney) |
| Duncan, C. (Barrow-in-Furness) | M'Micking, Major G. | Waterlow, D. S. |
| Duncan, J. Hastings (York, Otley) | Maddison, Frederick | White, Sir George (Norfolk) |
| Dunn, A. Edward (Camborne) | Mallet, Charles E. | White, J. Dundas (Dumbartonshire) |
| Dunne, Major E. Martin (Walsall) | Marnham, F. J. | White, Sir Luke (York, E. R.) |
| Edwards, Sir Francis (Radnor) | Massie, J. | Whitehead, Rowland |
| Elibank, Master of | Masterman, C. F. G. | Whittaker, Rt. Hon. Sir Thomas P. |
| Essex, R. W. | Menzies, Sir Waiter | Wilkie, Alexander |
| Evans, Sir S. T. | Molteno, Percy Alport | Williams, J. (Glamorgan) |
| Everett, R. Lacey | Mond, A. | Williamson, Sir A. |
| Falconer, J. | Muldoon, John | Wilson, Hon. G. G. (Hull, W.) |
| Ferens, T. R. | Murray, Capt. Hon. A. C. (Kincard.) | Wilson, Henry J. (York, W. R.) |
| Ferguson, R. C. Munro | Murray, James (Aberdeen, E.) | Wilson, P. W. (St. Pancras, S.) |
| Findlay, Alexander | Nicholson, Charles N. (Doncaster) | Wood, T. M'Kinnon |
| Foster, Rt. Hon. Sir Walter | Norman, Sir Henry | Yoxall, Sir James Henry |
| Fuller, John Michael F. | Nuttall, Harry | |
| Fullerton, Hugh | O'Connor, John (Kildare, N.) | |
| Furness, Sir Christopher | Parker, James (Halifax) | TELLERS FOR THE AYES.—Captain |
| Gibb, James (Harrow) | Partington, Oswald | Norton and Sir E. Strachey. |
| Glendinning, R. G. | Paulton, James Mellor |
| NOES. | ||
| Acland-Hood, Rt. Hon. Sir Alex. F. | Butcher, Samuel Henry | Dickson, Rt. Hon. C. Scott |
| Anson, Sir William Reynell | Carlile, E. Hildred | Doughty, Sir George |
| Arkwright, John Stanhope | Carson, Rt. Hon. Sir Edward H. | Douglas, Rt. Hon. A. Akers- |
| Balcarres, Lord | Cecil, Evelyn (Aston Manor) | Duncan, Robert (Lanark, Govan) |
| Baldwin, Stanley | Cecil, Lord R. (Marylebone, E.) | Faber, George Denison (York) |
| Balfour, Rt. Hon. A. J. (City, Lond.) | Clive, Percy Archer | Fell, Arthu |
| Banbury, Sir Frederick George | Clyde, J. Avon | Fletcher, J. S. |
| Baring, Captain Hon. G. (Winchester) | Craik, Sir Henry | Forster, Henry William |
| Bull, Sir William James | Dalrymple, Viscount | Gardner, Ernest |
| Goulding, Edward Alfred | Law, Andrew Bonar (Dulwich) | Roberts, S. (Sheffield, Ecclesall) |
| Gretton, John | Lockwood, Rt. Hon. Lt.-Col. A. R. | Rutherford, John (Lancashire) |
| Guinness, Hon. W. E. (B. S. Edm'ds.) | Lowe, Sir Francis William | Rutherford, Watson (Liverpool) |
| Hamilton, Marquess of | M'Arthur, Charles | Smith, Abel H. (Hertford, East) |
| Hardy, Laurence (Kent, Ashford) | Magnus, Sir Philip | Starkey, John R. |
| Harris, Frederick Leverton | Mildmay, Francis Bingham | Staveley-Hill, Henry (Staffordshire) |
| Harrison-Broadley, H. B. | Morpeth, Viscount | Talbot, Rt. Hon. J. G. (Oxford Univ.) |
| Healy, Timothy Michael | Newdegate, F. A. | Walker, Col. W. H. (Lancashire) |
| Helmsley, Viscount | Nicholson, Wm. G. (Petersfield) | Warde, Col. C. E. (Kent, Mid) |
| Hermon-Hodge, Sir Robert | Parkes, Ebenezer | Willoughby de Eresby, Lord |
| Hill, Sir Clement | Pease, Herbert Pike (Darlington) | Wortley, Rt. Hon. C. B. Stuart- |
| Hope, James Fitzalan (Sheffield) | Pretyman, E. G. | Wyndham, Rt. Hon. George |
| Hunt, Rowland | Randies, Sir John Scurrah | Younger, George |
| King, Sir Henry Seymour (Hull) | Ratcliff, Major R. F. | |
| Lambton, Hon. Frederick William | Rawlinson, John Frederick Peel | TELLERS FOR THE NOES.—Mr. C. Salter and Mr. Remnant. |
| Lane-Fox, G. R. | Renton, Leslie |
§ Question put, "That, those words be there added."
§ Lord ROBERT CECILPerhaps the Attorney-General can answer the question whether the definition in regard to governing bodies constituted for charitable purposes includes "incumbent."
§ Sir W. ROBSONI think it does.
§ Proposed words there added.
§ Sir W. ROBSONI beg to move to add the following Sub-section to the Clause: "(2) This Section shall apply to the fee simple of or any interest in any land held by a registered society as if the purposes of the society were charitable purposes.
"In this provision the expression 'registered society' means any society or body of persons who are registered, or whose rules are certified or registered, by a Registrar of Friendly Societies in pursuance of any Act of Parliament, and who by their rules make provision for benefits set out in Section eight, Sub-section one, of the Friendly Societies Act, 1896, and where the contract between the society and the member is of a permanent character."
I move this Amendment in a more expanded form, and perhaps a more limiting form, than that which appears on the Paper. To the Amendment as it appears on the Paper there are notices of something like 55 Amendments by hon. Members belonging to all sections of the House. We have accepted the substance of the Amendments with some slight alteration of the words. The effect of the Amendment is to confine the benefits of the exemption to those friendly societies which make provision for the purposes set out in Section (8), Subsection (1) of the Friendly Societies Act of 1896, which is the object of the Amendment of which such extensive notice has been given. In order that the friendly societies might avail themselves of that, they would be obliged to satisfy the Registrar of 1042 Friendly Societies that by their rules they have, in fact, accumulated adequate reserves. That would be a new duty, and one which I do not think the Registrar of Friendly Societies has proper machinery to discharge. I am quite sure, therefore, that the friendly societies would be quite satisfied to accept an alteration of these words so as to remove the necessity for that inquiry and get the substance of the definition.
The words I propose to add are as follow: "And who by their rules make provision for the benefits set out in Section (8), Sub-section (1) of the Friendly Societies Act, 1896." That is to say, if the rules are such as to make provision for all the various benefits which I have indicated, then that will suffice and the limitation will then apply. There are some words at the end which I do not think of much importance, "and where the contract between the society and the member is of a permanent character." Hon. Members know there are some kinds of societies called dividing societies who at the end of the year divide up the benefits. I do not think that these taxes could possibly be of much importance to them. Clause 25 is a Clause which exempts from any duty property held by bodies for charitable purposes, or with the care of friendly societies used and occupied by them for the purpose for which the society was founded. The dividing societies desire to come within that exemption and under the Amendment as it stands. I think they will do so. But as they divide up nearly all their property at the end of the year, of course they do not have any land subject to Undeveloped Land Duty, nor have they other property subject to Increment Duty because what they get is annually divided. But they do preserve some property, for instance, the premises on which they meet. They are not of any great value, but they preserve the continuity of the society, and therefore the words of the Amendment do not exclude dividing societies, though they are 1043 not of any great importance. Under these circumstances, I think that the Government Amendment is improved as compared with its original form.
§ Lord ROBERT CECILAs I understand, the Attorney-General is moving an Amendment to add words at the end of an Amendment which has been put from the Chair?
§ Sir W. ROBSONI am moving my Amendment in this form.
§ Mr. WALTER GUINNESS moved to add at the end of the first paragraph of the proposed Amendment the words: "Provided that no exemption under this Sub-section shall apply to any premises used for trading purposes."
§ The Committee will readily understand the necessity of some such Amendment. I am sure all sides of the House welcome the exemption of friendly societies so far as it goes; we only regret that it does not go very much further and apply also to those lands the revenues of which they enjoy. But registered societies, in many cases, may include co-operative societies for the purposes of trade, and of course they will get a very much greater benefit than friendly societies, which, in most cases, have only one headquarters, or one house, probably, in their sole occupation; whereas these co-operative trading societies, many of them may have branches all over the country—perhaps a branch in each town. I think this exemption will be of far greater value to them than to bonâ fide friendly societies. Unless this restriction is just in limiting it to real friendly societies, who give benefits in sickness and in circumstances of stress, these co-operative trading societies will be placed in a very much better position. It would be very hard on a small tradesman, who will have to pay Land Value Duty, that a co-operative store should come and establish a store next to his own, and that the latter should escape the duty altogether. I think this is a very necessary Amendment because there are a great many businesses carried on with so small a margin of profit that the starting of a co-operative store next door, free from all liability to this tax, might mean the end of the private enterprise altogether. I think that if the Government wish to avoid a grave sense of injustice on the part of small traders they will probably see their way to accept the Amendment.
1044§ Sir W. ROBSONI think the hon. Member's words are unnecessary owing to the addition now being made by the Government. That was an Amendment to restrict the benefits of this exemption to real friendly societies and not to let them extend to trading societies. The effect of the Government Amendment is that the exemption can no longer be claimed by a friendly society, but only by such societies as are formed for the purpose of carrying out the objects of Section 8, Sub-section (1) of the Friendly Societies Act, 1896. The exemption no longer applies to trading societies.
§ Mr. T. M. HEALYIf the hon. and learned Gentleman is correct he has met the point—the very valuable and substantial point—of the hon. Gentleman (Mr. Walter Guinness). At the same time this new system of drafting is so obnoxious because it prevents any Member of the Committee from really judging of the effect because it incorporates an older statute. The point raised by the hon. Member is a good and valid one. The Attorney-General says he has met the point. It is a serious responsibility for him to say that he has met it, but I accept his statement. The point is one that requires looking into. All over Ireland you have these societies. There is a so-called friendly society coming over from Manchester under the guise of what is called "co-operation," and it is going into competition with us in every sense in dealing in butter and eggs. It is merely a trading society, and why that should get any advantage such as is complained of here I do not understand. When the Attorney-General says he has met the point we are not able to judge; we have not seen the words; we have not had time to consider the earlier statute. I am quite disposed to accept the hon. and learned Gentleman's statement, but I do think there is a substantial and serious point in what the hon. Gentleman (Mr. Walter Guinness) raised.
§ Mr. PRETYMANI think we have some reason to complain of the way in which this Clause has been dealt with. I think I am right in saying that the Clause now on the Paper is in substitution for a previous Clause, so that this matter has gone through a good many phases. The question of what was to be done with friendly societies has now been a question of discussion for months. The Chancellor of the Exchequer put a Clause on the Paper, and after considerable con- 1045 sideration withdrew it, and substituted this Clause. At the last moment we are faced with a very substantial alteration of this particular Clause, so that I must say it is a very difficult thing for us to follow all these changes which are made so rapidly and on such short notice. As we have the assurance of the learned Attorney-General that this point is met we can be absolutely certain that it is met; and as I think it is met, I do not think we need press the matter to a division.
§ Lord ROBERT CECILI wish to ask the Attorney-General whether he has considered whether it is possible that a friendly society might have two objects? It may have one of the objects set out in Sub-section (1) Section 8 of the Friendly Societies Act, and it may also be carrying on for trading purposes. I admit I have not referred recently to the Sub-section. It is evidently very desirable that the point should be met. In that case it would be well to insert the proposed words, and put it beyond doubt that trading premises are not to be exempted.
§ Mr. T. M. HEALYI have now the words of the Friendly Societies' Act, and it seems to me that no harm would be done by the insertion of some such words as the hon. Member (Mr. W. Guinness) suggests. We are all in agreement as to what we want, and when the hon. Member is seeking to bring in more taxes I cannot see why the Government should object. When a man and a society go into trade they ought to start level.
§ Sir W. ROBSONIt is clear that friendly societies under this Act cannot trade. If they do, they do so contrary to law. After all, the criticism levelled against this proposal is not against the Government's original Amendment, but against the Amendment standing in the names of 55 Members. It is that which proposes legislation by reference. There is no doubt that the objects under the Section referred to are purely philanthropic, and a friendly society, when seeking registration under the Act, has to show that those are its objects. It is not entitled, as a friendly society, to trade. You may register as other societies under other Acts.
§ Sir W. BULLSurely a great number of building societies are registered under the Friendly Societies Act?
§ Sir W. ROBSONThey do not come under this Section.
§ Mr. J. GRETTONMy information is that a large number of co-operative societies are, as a matter of fact, registered as friendly societies.
§ Sir W. ROBSONNot under this Section.
§ Mr. GRETTONThe difficulty is got over in this way. They pay a duty or bonus to their members, and they usually set aside a portion of their profits for charitable, educational, and mutual improvement purposes, for the benefit of their members. If it is the intention of the Government that trading societies which are only to a limited extent charitable societies should not partake of the benefits of the contemplated exemption, I think a further Amendment will be required on Report.
§ Mr. LLOYD-GEORGEIf on examination hon. Members opposite come to the conclusion that other words are necessary—that they will strengthen the drafting of the Bill—very well, our object is exactly the same, and the words shall be inserted.
§ Mr. WALTER GUINNESSCan it be put right on Report?
§ Mr. JOHN WARDI think there is some misapprehension as to what friendly societies are. It is quite true that there are certain societies that do trading as suggested by the hon. Member who spoke above the Gangway just now, but who yet leave a certain surplus of their funds for some social purposes, either charitable or otherwise. But those societies have never, in my career, registered as friendly societies, but under the Provident Societies Acts, which are the Acts for the purpose of allowing trading co-operatively by societies. If the words suggested by the hon. Member for Bury St. Edmunds were inserted I am afraid that something serious might happen. For instance, even the ordinary friendly society had to do a little bit of trading. It has to sell its rules and to bargain for and buy its emblems. I do not know whether that would be considered as trading. At any rate, some sort of definition would be required if this buying and selling is to be considered trading, as it usually is. Unless there was some limitation attached to the words of the hon. Member for Bury St. Edmunds, I think they would be extremely dangerous.
§ Mr. LLOYD-GEORGEOn the point raised by the hon. Member opposite (Mr. 1047 Walter Guinness), if the rules of the House will not allow the Amendment on Report, we will see that the Clause is made clear before it leaves the House.
§ Amendment, by leave, withdrawn.
§ Mr. LLOYD-GEORGE moved to add at the end of the Clause the words: "(2) This Section shall apply to the fee simple of or any interest in any land held by a registered society as if the purposes of the society were charitable purposes. In this provision the expression 'registered society' means any society or body of persons who are registered, or whose rules are certified or registered, by a Registrar of Friendly Societies in pursuance of any Act of Parliament."
§ Mr. PRETYMANA great deal has been said as to confining the exemptions to friendly societies. As a matter of fact, the exemptions can amount to very little, because apparently the thing is governed by what is occupied and used for their own purposes. I want to have it perfectly clear that this would only apply in the case of friendly societies to their offices or such a thing as a foresters' hall. The Corporation Tax would apply to their property, but so far as Increment and Undeveloped Land and Reversion Duty are concerned it would only apply to such things as a hall or the offices of the society where the business was done, and it would not apply to any of their invested property which they own for the purposes of their fund in which their money is invested. In regard to Increment Value Duty, I take it they would be exempt from Death Duties or Corporation Duty, but they would be liable to Reversion Duty on the expiration of a lease and on the regranting of that lease, if for over 14 years, or if they sold any property, which is not very likely. Friendly societies are owners of ground rents and of property which they are not likely, except on exceptional occasions, to sell. I should like to know if that is the clear interpretation of the Bill, because there has been some dispute about it and there have been a good many inquiries as to what the effect would be upon their property. I should be glad to have some confirmation from the Government Bench.
§ Mr. LLOYD-GEORGEThey are quite in the same position as other charitable institutions. They are exempt from Reversion Duty and the Undeveloped Land Duty in respect of property which they occupy. 1048 They pay Undeveloped Land Duty upon property which they let for profit.
§ Mr. PRETYMANOn their investments?
§ Mr. LLOYD-GEORGEYes, and they are exempt on their property in respect of periodic payment, but if they sell and there is any increment upon the sale they are liable.
§ Mr. F. B. MILDMAYI do not think the question of Undeveloped Land Duty would fall heavily upon the friendly societies, but undoubtedly the information which the Chancellor of the Exchequer has given to the effect that Reversion Duty would be chargeable upon land not occupied must come upon the funds of the friendly societies. I think friendly societies are entitled to greater protection from taxation under this Bill, and it is most important to safeguard those societies in every way. I know there are a good many people who think that the thrift of the individual should be guarded in the same way as friendly societies, but I have always held that commercial thrift is more individual. I am sorry that the Chancellor has not thought fit to protect those societies more fully than he has done.
§ Mr. RAWLINSONWill the Chancellor of the Exchequer give us an estimate of the monetary value which he attaches to this concession to friendly societies? To me it appears to be no concession at all, and only applies as far as taxation is concerned to land occupied and used by friendly societies. The Chancellor of the Exchequer says that land occupied and used by friendly societies will be exempt from the Reversion Duty and the Undeveloped Land Tax. Of what value is an exemption of that kind? How can you possibly have a reversion upon property you are occupying yourself? The reversion can only occur when the lease falls in, and how can you get any benefit from an exemption from the Reversion Duty on a house you are using yourself. The value of such exemption may be put at something under 1s. As far as land is occupied and used by friendly societies it is practically nil, because they occupy and use no undeveloped land of any sort or kind. The right hon. Gentleman tells us that in respect of land which friendly societies do not occupy and use they will be liable just the same as any other individual. The only concession made to us in regard to land which they do not occupy as far as the increment is 1049 concerned is that they are not liable to the 15 years' assessment under the Corporation Tax. They are not liable to have that totted up at the end of 15 years, and they will only have to pay when they have a lease for more than 14 years. If the Chancellor of the Exchequer gives us the figure relating to the loss which he estimates this concession will entail, it will not work out at a very large figure. Friendly societies as a rule do not occupy a large amount of their property, the bulk of it being land which they neither occupy nor use. We know as far as the Undeveloped Land Duty is concerned, they are only liable to pay when they sell land. This concession to place friendly societies on the same footing as educational bodies is not of any large pecuniary value.
§ Mr. GEORGE TOULMINMay I say a word as to the Amendment which wag put down in identical terms by 55 Members? I am informed by the Stationery Office that the number of pages of printed matter occupied by the Amendments to the Finance Bill is 70,000. This is rather a straining of the ordinary custom and practice of the House, and if this precedent is followed for the future—
§ The CHAIRMANOrder, order. I must remind the hon. Member that the point he is raising does not arise upon the Amendment before the Committee.
§ Mr. GRETTONIn the country districts friendly societies have no premises of their own which they occupy. In places like London and Manchester the friendly societies have registered offices. Friendly societies stake their stability upon their investments. It is very usual with the smaller branches and districts to invest their savings in house property and building land. There is no concession whatever in this Amendment for the invested savings of friendly societies, on which they depend to ensure their financial stability and the benefits they have promised their members. I contend this Amendment will not meet the case of friendly societies. It is not the concession friendly societies have been urging for, and when they come to understand it there will be a feeling of universal disappointment that the Government have not taken up their case.
§ Question, "That those words be there added," put, and agreed to.
§ Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.