§ Increment Value Duty shall not be charged in respect of agricultural land while that land has no higher value than its value for agricultural purposes only if sold at the time in the open market:
§ Provided that any value of the land for sporting purposes, or for other purposes dependent upon its use as agricultural land, shall be treated as value for agricultural purposes only, except where the value for any such purpose exceeds the agricultural value of the land.
§ Mr. CLANCY moved, after the word "its" ["no higher value than its"], to insert the word "market."
These Amendments have on the Paper designed to meet objections raised to the Clause which passed the House of Commons last year. The great objection made in Ireland to the provisions for exempting agricultural land was as to the nature of the value. It was said that the value arrived at might be described as a "land hunger value." The case was mentioned of a returned Irish-American with plenty of money, or a retired head constable of police with a certain amount of cash, or a large farmer also with ample means buying a farm and paying for it more than its agricultural value should myself think that if a sum of money were paid for the land as a farm, and for the purpose of being used as a farm, that would be the basis, but the point was taken
*Note.—Amendments inserted in the Bill since it passed the House of Commons in November 1909, ore indicated in the OFFICIAL REPORT by printing in brackets any words or matter erased, and by printing in black type any words or matter inserted.
that Clause 26 of the Bill, which directs the valuation to be made, must be read in connection with Clause 7. Clause 26 directs, among other things, the ascertainment of the agricultural value of the land. It was said that two things follow from that. First, that the value might be taken as the economic agricultural value and not the real agricultural value, and, consequently, when the duty came to be assessed, any increase over that economic valuation would be regarded as agricultural value and the difference might be taxed. Secondly, it was pointed out that the operation of Clause 26 might be stereotyped as to the agricultural value directed to be ascertained under that Clause, and that consequently, when Increment Value Duty came to be assessed it would be the present value, the value on the occasion of the duty becoming payable, and not the agricultural value ascertained under the operation of Clause 26. In other words, the date of the valuation will be taken as the agricultural value, and if it went beyond the original figure, if it was a higher value, even though it was for agricultural purposes, then the difference would be taxed. I have read various other criticisms of this Clause; but confess that these are the only two objections that impressed me at all. It is in order to meet those two objections that wish to add the words, "for sale at the time in the open market." take it that "at the time" is the time of valuation for payment of duty. I think there can be little doubt about that. Then, again, understand the words "in the open market" are introduced to meet the express point of competitive value. Of course, the value obtained in the open market is a competitive value. Therefore, very much doubt if the words in the Bill are plain enough heard the suggestion made last week, and the same point occurred to myself, that the words "if sold" might be held to apply to only one of the three occasions on which the duty may become payable, and that, of course, would be the occasion of the sale of the land. We do not mean that, neither do I think the Government mean it. I take it the intention is it should apply to all three occasions upon which the duty becomes payable. It is to remove any doubt upon that point that move my Amendment. If that and my subsequent Amendment are adopted, the Clause will read: "Increment Value Duty shall not be charged in respect of agricultural land while that
land has no higher value than its market value at the time for agricultural purposes only." It seems to me that that will make the Clause watertight, and will meet the objection that has been taken that competitive value is to be taxed. One other matter desire to mention. The question of valuation is mixed up inextricably with this matter, and suggest that the Government might declare their intentions as to what they mean to do in the matter of valuation. It seems to me there is no necessity, in Ireland at least, for any valuation. In that matter we differ from England, because there we have a Government valuation of every inch of land, and we also have a valuation of the buildings separate from the value of the land, and this valuation is revised every time any structural improvements are made. Under these circumstances it seems to me absolutely needless to have any valuation, and hope the Government will be able to assure the people of Ireland that no valuation of agricultural land is going to be made.
§ Mr. AUSTEN CHAMBERLAIN
On a point of Order. I understand you have intimated that the Amendment standing in the name of my hon. Friend the Member for Kingston (Mr. Cave) is out of Order, do not know the reasons which have actuated you, except, of course, that you are governed by the Order of the House under which we are working; but after listening very carefully to the hon. and learned Member who has just spoken, I submit he has explained that his object is to make clear words already existing in the Clause, and not specially to amend new words that are added. If it be in order for him to do that, I submit it is equally in order for my hon. and learned Friend the Member for Kingston to move the Amendment which stands in his name.
§ The CHAIRMAN
I think the Amendment of the hon. and learned Member for Kingston raises a different point. Perhaps the Government will say whether I am right in my understanding of what they mean. I take it that the Government alteration in the Bill is intended to make it clear that the market value and not the economic value is to be the basis of exemption. The Government proposal is that if there is a surplus value over and above the agricultural market value, then the whole increment will be taxed. That is the Government proposal as it stands, and when say it is the Government proposal, mean the Clause and not merely the 271 alteration in it. The hon. and learned Member for Kingston proposes words which would diminish the taxation upon 'and if still used for agricultural purposes, but having a building, or other value, over and above its agricultural value. The Government alteration is merely explanatory, stating what they desire to see in the Bill and making it more clear. The two cases are, think, quite different.
§ Mr. AUSTEN CHAMBERLAIN
If may, with perfect deference to your ruling, Sir, should like to submit one further observation for your consideration. The Amendment is of course stated by the Government to be declaratory of the fact that agricultural values are not to be taxed. That is the object of the Amendment which the Government suggest. In regard to the proposal of my hon. and learned Friend, we showed the other day that the words proposed by the Government are quite ineffectual for the purpose for which they offered them, and my hon. and learned Friend proposes to substitute effective for ineffective words.
§ The CHAIRMAN
quite see what the hon. and learned Member wishes, but the Clause is that—
"Increment Value Duty shall not be charged in respect of agricultural land while that land has no higher value than its value for agricultural purposes only."
And the hon. and learned Member for Kingston proposes to alter the datum line from which the tax is to be levied, and therefore that is quite a different proposition.
§ Sir ALFRED CRIPPS
On the point of Order, Sir. As have a very similar Amendment on the Paper, may suggest that it would be in order on this ground? We are dealing here with the question of value—as you put it, whether it is the economic value or the market value. Supposing the proposal is to insert, in place of those words, another method of valuation, would that be in order? These words of mine deal with the method of valuation; that is their real purport. It is a question of market value as distinct from economic value; and supposing one suggests, as have, in a subsequent Amendment an entirely different method of valuation, would not that be in order?
§ The CHAIRMAN
do not think the words of the hon. and learned Member are in order. In fact, they are less in order 272 than those of the hon. and learned Member for Kingston. The Government Amendment does not in any way alter the taxable quid, it does not after the datum line above which the tax is to be levied, but the other proposals of the hon. and Earned Gentleman the Member for South Bucks and the hon. and learned Member for Kingston do alter that datum line. Therefore say they are not Amendments to the Government Amendment.
§ Mr. MARTIN
My Amendment has, of course, been ruled out of order on the same principle, and what submit is this. The Chancellor of the Exchequer said in the Debate upon the Second Beading that he would welcome any Amendment, the effect of which would—
§ The CHAIRMAN
am afraid that is not a point of Order. The hon. Member is now making an argument and he must do that in Debate. He is not discussing a point of Order.
§ The ATTORNEY-GENERAL (Sir William Robson)
The discussion of the point of Order has helped to elucidate the Amendment which the hon. and learned Member has moved. The effect of the proposal is not so much to alter the words of the Bill as to alter their position, but do not think that it substantially affects the sense, and his words are quite as good as our own for the purpose of carrying out the proposals of the Government. The object of the Amendment has been very well put by the hon. and learned Member. The case he has put is that you may sometimes get a very high, or in the case of Ireland very extravagant, value for purely agricultural purposes. It is absurd to say that the peasant who returns anxious to purchase some little holding in his native land which he desires to live upon during his remaining days creates in any sense a building value. Nor do think it ought to be called so. That is the value that we are allowing by these additional words to be put clearly within the exemption of agricultural value. It extends both to English and Irish agriculturists, though Irish agriculturists represent the more extreme case. We are willing to accept the words of the hon. Member in the place of ours, and think they will read a little more conveniently as he proposes to insert them than at the places where we have put them.
§ Mr. AUSTEN CHAMBERLAIN
This is interesting, if may say so, because it 273 shows the extremely restrictive limits within which hon. Members are placed, by being deprived of any opportunity on this stage of the Bill of securing that exemption for agricultural values which the Government profess their willingness to give. But we cannot reopen that discussion, and that is settled not by the Debate of its merits, but by the operation of the guillotine Resolution which says that no discussion shall take place upon it. Hon. Members on this side of the House thought we had some pledge, or hoped we had the word of the Chancellor of the Exchequer, that the grievance and the injustice which he recognised, and which we recognise, would be met to-day, but the Chancellor of the Exchequer has taken care to prevent us having any power, or any hon. Member having any power, to raise the question, and he himself would have no power to accept or move an Amendment, or to give that satisfaction to the hopes by which the hon. Member was enticed to put the Amendment down. There is still time—
§ The CHAIRMAN
must remind the right hon. Gentleman that he has no right to reflect upon the action of the House as a whole.
§ Mr. AUSTEN CHAMBERLAIN
ought not to have fallen within the scope of that ruling, Sir, and apologise to you for doing so. I would only suggest to the hon. Member opposite to reflect that even after the action of the House there is still time for him to do his duty to his constituents, as he will still have an opportunity of voting against the Bill. As regards the Amendment moved by the hon. and learned Member for North Dublin (Mr. Clancy), and accepted by the Government, confess that intrinsically do not attach great importance to it, nor do think it is going to have any widespread effect. I am more interested in the arguments of the learned Attorney-General than in the Amendment itself. He says that if agricultural land has a competitive value in excess of its economic value, you cannot describe that as building value. In the kind of case which he was describing that is perfectly true, but what really has that got to do with the principles on which the Bill is founded What you are to tax under this Bill is unearned increment, or windfall, and where can you have a clearer case of unearned increment or windfall than the case of a man who gets a price for his land altogether beyond its economic value, by reason of the land 274 hunger of some man with some money in his pockets who desires to have that particular plot of land to reside on and to finish his life there? You have not that land hunger for a particular kind of land in particular cases which goes to make the value of any part of land in our towns. What makes the value of Berkeley Square or other squares in London but the land hunger of monied individuals, who will give an exceptional price in order to be able to reside in that particular spot? I have said do not think that you have made any difference, but do not object to the relief if relief is given. I think, however, the tax is bad in principle, and think the less it is applied the better. But call attention to the absolute inconsistency of the Government and the way in which they disregard, when Parliamentary or electoral circumstances arise, every consideration they have laid down by their previous arguments. The Bill is a mere patchwork of expediences, and the Chancellor of the Exchequer is always ready to give way when the pressure is sufficient, but merely when the pressure is confined to Ireland.
§ Mr. EYRES MONSELL
May point out, Sir, that my Amendment does not alter the datum line, but simply is to exempt increased agricultural value due to the efforts of the cultivator himself and it only attempts to put into the Budget what the Government say they want put in, but which they have entirely failed to insert.
§ The CHAIRMAN
The Clause and the Government Amendment do not deal with the question which the hon. Member raises. The hon. Member wants to take something from the tax, and that is a different thing from defining what the tax means or exactly what is to be taxed.
§ Mr. MAURICE HEALY
have not the smallest objection to the acceptance of the Amendment of the hon. Member for North Dublin, but do not agree that it contributes in the smallest degree to settle the difficulty which appears in the Bill on the face of it and which is admitted universally to exist. That difficulty has been stated by the hon. Member for North Dublin himself, and has been frequently referred to by Members of the Government. What is it? It is that there is ambiguity in the wording of this Clause, which consists in the fact that the words "for agricultural purposes" may be construed by a court of law in such a manner as to exclude the value which has been referred to as 275 competition value and is not land value. If that is the difficulty, how do the words of the Government or the hon. Member for North Dublin in any way dispose of that objection by assuming that the ambiguity lies in the word "value"? The ambiguity, however, is not in the word "value" at all. That word can only have one meaning, unless you give it an artificial meaning by definition. If you do not give the word "value" an artificial meaning by definition it can mean nothing except its price if sold in the open market. The word "value" presupposes some hypothetical sale for the purpose of ascertaining what the particular property would realise. Therefore the Chancellor of the Exchequer would be perfectly justified in saying that his Clause as it originally stood, so far as the word "value" is concerned, includes both his own Amendment and the words "value if sold in the open market," as suggested by the Amendment of the hon. Member for North Dublin, which would read market value at the time. Value can only mean "market value" when sold at the time, and, therefore, putting these words in, whether in the form suggested by the Government or in that adopted by the hon. Member for North Dublin, does not carry the case one whit further. Where, then, is the ambiguity? It is not in the word "value," but in the words "for agricultural purposes only," and unless you qualify those words, not by reference to the word "value," but by some express enactment that the words "for agricultural purposes only," shall be deemed to include this land hunger value, or competition value, or American bidder value, or what other phrase you will, you will not have succeeded in extirpating from this Clause the ambiguity which it is now universally admitted exists in it. The Government professing to be in agreement with the hon. Member (Mr. Clancy) and the House generally, it ought not to be difficult to devise words which would carry out the meaning. Our objects are the same, but it is perfectly plain that merely by expanding the word "value," and by giving it the meaning which it has apart from the definition, you cannot get rid of the ambiguity, and you will still have inherent in the Clause the ambiguity which it is admitted places the whole agricultural land of Ireland and England in peril of being taxed.
§ Mr. J. MARTIN
One of the Amendments have proposed makes the matter 276 clear according to the desire of the hon; Gentleman (Mr. Maurice Healy). I have listened to the discussion with an open mind, and as far as am concerned it is absolutely clear, in spite of the declarations of the Government to the contrary, that the effect of the Bill is certainly to tax agricultural values in many contingencies. The Chancellor of the Exchequer has stated that the Government do not intend to do so, and of course accept that statement. The Noble Lord (Viscount Helmsley), the other day, moved an Amendment which he thought would cure this difficulty, but it was pointed out that it would do a great deal beyond what the Noble Lord said he wanted to do. The effect would be to prevent there ever being an increment at all, because any land held for building purposes could easily be made to be agricultural land. It seems to me that the difficulty is that when the Government say they do not intend to tax agricultural values under the Increment Duty they attach a peculiar meaning to the words "agricultural value" which is entirely different from its ordinary meaning to ordinary people. In other words, just as soon as a piece of land—I am speaking now of bonâ fide agricultural land, and not land on which cabbages have been planted for the purpose of making it agricultural land—has any value, no matter how slight, for building purposes, it ceases to be agricultural land at all or to have any agricultural value which exempts it from Increment Duty, was absolutely convinced on the matter by the illustrations put forward the other day by the Leader of the Opposition, who pointed out that a piece of land at the time of the original valuation might perhaps have a purely agricultural value of £20 per acre. The duty may not be collected for fifty or 100 years from the time of the original valuation, and a great many things might occur in the meantime. There might be an increase of, say, £50 per acre in purely agricultural value.
§ Mr. LLOYD-GEORGE
On a point of Order. It seems to me that we are discussing the very question which you ruled out of order. The whole point raised by the hon. Member is the point which was involved in the Amendment which you have already ruled out of order. If the Amendments are out of order it is perfectly clear that the Debate on the Amendment of the hon. Member (Mr. Clancy) must also be out of order upon any other Amendment.
§ Mr. HICKS BEACH
Is it not a fact that this Government Amendment was introduced into the Bill this year for the purpose of making clear the fact that agricultural land was exempted from Increment Duty? It is our contention that the Amendment does not carry out that object. That being so, are we not entitled to criticise, in whatever way we think best, the Amendment introduced by the Government?
§ The CHAIRMAN
It does not always follow that because a specific Amendment raising a specific point in a specific way is out of order any mention of that point is out of order on another Amendment. I do not think we ought to switch off the Debate on to what the Government ought to do other than they are doing. On the other hand, I think it is competent for hon. Members to point out any deficiencies which in their opinion are inherent in the Government Amendment. Within reasonable limits that could be done.
§ Mr. MARTIN
I am only attempting to put forward the evil which I intended to remedy by my Amendment. The Leader of the Opposition pointed out that there might be an increase of £50 an acre on purely agricultural value, and a slight increase, say of £1 per acre for building purposes on land which had not a building value at all at the time of the original valuation. On account of this increased building value, when the land was sold, or becomes liable for Increment Duty, the owner has to pay 20 per cent, on the £50 of pure agricultural value. I might put the case still stronger by taking two pieces of land, on opposite sides of the road, which may come to be sold fifty years hence. In the meantime an industry has been started comparatively close to them, which results in the growing up of a town. One piece of land may lead towards the town, and the other away from the town. Both pieces of land may have been valued at the same price to start with, say £20 per acre, but by reason of the town coming there, they may get an increased agricultural value which might be £100 per acre. When they are sold the piece leading towards the town has a slight building value of £5 per acre, while the other has no building value whatever. 278 The man whose land does not lead towards the town would not pay a single penny of Increment Duty, while the other unfortunate man would pay £20 per acre on the increased agricultural value of his land. Is not that so? [HON. MEMBERS: "No."] That is my construction of the Statute, and we are going to be in this position in discussing the Budget throughout the country that there is some opinion that this is going to be the effect of it, and we have a right to say that we object to that kind of thing, and under the circumstances think it is perfectly fair to expect the Government to make it clear beyond all doubt. They have undertaken to do that by adding the words, "if sold at the time in the open market." What possible connection have those words with the question as to whether the agricultural value of that land is going to be taxed under the Increment Duty or not? To my mind, those words have no meaning whatever in relation to that point. Clearly they can refer only to one of the cases provided for—the collection of Increment Duty when the man sells his land. But supposing he dies, how are those words to come in If words are to be added which really fix this matter up they ought to be words which would apply to all possible cases which could arise under the Statute, and it ought to be very simple to do that Supposing the land when it is first valued has its agricultural value stated, not in one case, as in the Act, but in every possible case which can arise.
§ The CHAIRMAN
The hon. Member is now getting a little beyond the bounds of Order. I will try to explain as well as can. He is entitled to point out that the Government Amendment does not meet the case which he thinks ought to be met, but he is not entitled to go into details of how it can be and ought to be met.
§ Mr. MARTIN
It seems pretty hard to get on with this matter at all have no interest in misrepresenting the matter. I am not desirous of putting the Government into difficulties. Why should I? I want to be in a position to make this perfectly clear to the meetings may have to address in connection with the General Election which, understand, we are going to have. I cannot do it as long as the Bill remains as it is. I contend that these words which have been put in by the Government have absolutely no effect at all, and that for the reason put forward by the right hon. Gentleman opposite 279 (Mr. Austen Chamberlain). There is no question as to the word "value." It is all a question of what "agricultural" means. As long as the Bill defines agricultural land to be land that has no building value whatever there will be no difficulty, but some difficulty will arise as long as you can convert agricultural land into building land. As long as the proportion of the building value is as one in a hundred you will have this difficulty. I wish to say further that the proposal of the hon. Member for North Dublin (Mr. Clancy) to insert the word "market" does not help you out of the difficulty. The hon. Gentleman stated that, in his opinion, the only way of determining the meaning of value was to ascertain what people were prepared to pay for the land. That the hon. Member can convince farmers in Ireland that by the insertion of the word "market" he is relieving them of the tax on agricultural land, cannot for a moment imagine.
§ Mr. H. S. FOSTER
gather that the Amendment next on the Paper standing in my name will coma under the same ruling as you have already given in regard to others; and want to submit for your consideration that the object of my Amendment is to make the declaratory words effective, and not for the purpose of altering the datum line at all. The First Lord of the Admiralty stated last week that the object of the Government Amendment was to give relief from taxation of all genuine agricultural land. The object of my Amendment is to make it clear that, so long as land is used for agricultural purposes and agricultural purposes only, it will be exempt from Increment Duty.
§ The CHAIRMAN
The hon. Gentleman's Amendment is even less in order than those have ruled out of order.
§ Mr. JOHN DILLON
The hon. Member opposite (Mr. Martin) laboured under the difficulty, so far as could follow him, of having to deliver a speech applicable to a matter which is not raised by this Amendment at all. The hon. Member cannot now discuss the matter, because he voted for the Closure Resolution. His argument would come well from any hon. Member on these benches who voted against the Closure Resolution. It is a very stringent Resolution. It was supported by every man on the Ministerial side of the House, and having put upon 280 themselves this stringent closure, they have no right to complain of the consequences. The difficulty under which many Members of the House have laboured is that they have not sufficiently clearly, think, seen that there are two absolutely distinct points before the Committee. One is in order because it is affected by the Government's addition to the Clause; the other is out of order because it does not touch upon the Government addition. It may be referred to, but it cannot be fully-debated. The point is not raised by this Amendment, and it cannot be raised in any Amendment. One point raised by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) is as to the exemption from taxation of all agricultural values. The other point has reference to the exemption from taxation of all agricultural land. They are two distinct points altogether. I want to say for myself perfectly frankly that I am not interested in the question of the first exemption at all. What I am concerned about, and what the people of Ireland are concerned about, is the exemption from taxation of all genuine agricultural land. I am free to maintain, in spite of what has been said by the hon. and learned Member for North-East Cork (Mr. Maurice Healy), that the Government Amendment, together with the Amendment of my hon. and learned Friend (Mr. Clancy), fully and most satisfactorily achieve that purpose.
§ Mr. DILLON
have often said before that feel considerable difficulty and disadvantage in arguing a point with the hon. and learned Member for North-East Cork. What does the hon. and learned Member say, presuming on the ignorance of some Members of this House? [HON. MEMBERS: "Oh."] I am speaking about their ignorance of Irish matters. I think some hon. Members would plead ignorance of these matters. Even words have a different significance in Ireland from what they have in this country. The hon. Member for North-East Cork said, in regard to the definition of value, that all you have to do is to go to the dictionary and you will find out all about value. That is not true. Value in Ireland has various meanings. The whole campaign carried on in Ireland during and since the election was based precisely on the distinction in the different readings of value, although now we are told by the hon. and learned 281 Member for North-East Cork that it has but one meaning. That statement was made for consumption in the House of Commons. It was pointed out on Irish platforms by the hon. and learned Member and his Friends that when the courts came to consider the working of the Clause they would take the value of agricultural land, for the purpose of the Clause, to be the economic value, or, in other words, its true value. What is its true value it is a term perhaps not known in this country. True value is the value fixed by a court of law for the purpose of pre-emption by the landlord. It used to be done every weak in the year. That true value, as fixed by a court of law, was very often a half or 30 per cent, under the value of the farm. What was the case made against this Clause when hon. Members wanted to misrepresent the intentions of the Government? It was that in Ireland they would have the agricultural value fixed at the. I true economic value, and that people would be called upon to pay 25 per cent, more, that amount representing the difference between the true value and the economic value. The hon. and learned Member goes to the dictionary and says that the word "value" can have no meaning but one, whereas his argument at all the meetings he addressed turned on the very point that it has two distinct meanings, and that the courts would use that difference for the purpose of giving the Chancellor of the Exchequer 20 per cent, above the value fixed by the courts. I am one of those who believe that the Irish courts, in whose impartiality wherever there is a question between landlord and tenant we have no confidence at all, are courts, when it comes to a question between Irishmen and the British Exchequer, are courts which go against the Exchequer. That view was expressed by the hon. and learned Member for Louth (Mr. T. M. Healy), and agree with it.
§ Mr. DILLON
I am only repeating what the hon. and learned Member said, and he is a better authority with regard to the courts than I am. I was of opinion that the words in the original Clause did protect all genuine agricultural land in Ireland from the Increment Tax, and I am of that opinion still. But the hon. and learned Gentleman went on platforms in Ireland and used the argument that there were two different values—the market value and the true value—and he induced thousands of 282 farmers in connection with whose land the question of building value would never arise, or would never be likely to arise for generations to come, to believe that their land would be taxed under this Clause. These two points with respect to agricultural land were pressed upon the Government, and it being the avowed intention of the Government to exempt agricultural land, they made no difficulty about putting in words to make the matter clear. I have not heard any argument either to-night or in the previous discussion of this question which has in the least degree shaken my belief that the words as they stand cover the case we have in Ireland. We had a long discussion the other night, and those who took part in it included many Members learned in the law, and the right hon. Gentleman the Member for East Worcestershire, but not a single Member took up the point at all of the danger of inflicting the competition value for the purpose of the tax. The thing does not enter very much into Irish transactions. Their point was one we had never raised, namely, whether when land has acquired a value greater than its agricultural value, even the highest competition agricultural value, a value for building purposes, it passes into another category altogether, and whether the tax was to be calculated, not on the original datum line, but upon a subsequent datum line. That is a totally different question, although it may be a very important one. That is not the question we are interested in. The question we are interested in is whether the farmers of Ireland, because of the land hunger which exists, are going to be taxed on the value given by the land hunger of Irish peasants. It was said on Irish platforms by the hon. and learned Member that that would be done. That is what I deny. That is what the Government gave us a solemn pledge last autumn they would not do, and it is in order to make it clear that this Bill is not doing it that words are now to be put in. In spite of the expert opinion of the hon. and learned Member for North-East Cork, given for the purpose of political propaganda in Ireland, believe these words are perfectly effective for the purpose.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George)
The position of the Government in regard to this Amendment is a perfectly clear one. It was laid down by the Prime Minister when he moved the Closure Resolution. 283 It is that this Bill has been reintroduced in the House of Commons, and is being pressed through the House without any amendment, except Amendments of a purely declaratory character. Once you entered into Amendments which affected the merits in any way, think it would be impossible to limit the discussion to the particular Amendments suggested by the Government. We also considered the matter not merely from the point of view of honour, but from the constitutional point of view. We were bound to present the same Bill practically in the House of Lords as the Bill they rejected. That is the view we take.
§ 5.0 P.M.
§ Mr. LLOYD-GEORGE
beg the right hon. Gentleman's pardon. The Bill has been submitted as a whole to the country. It was accepted as a whole by the country.
§ Mr. LLOYD-GEORGE
If you say it was not, dare you to throw it out again. I am only explaining the position of the Government in regard to the matter. We set down a few Amendments of a purely declaratory character. We never said that these Amendments made any alteration in the Bill. I agree with the hon. Member for Mayo that that is the position which the Government put on their interpretation of this Clause; but I think it does make it very much clearer that we never intended to tax land of this character. In the opinion of every lawyer we submitted it to, land of that character was not being taxed; but we wanted to put it beyond the possibility of a doubt, and we were quite prepared to accept any words that would do so. The hon. Member for St. Pancras said that I said that no agricultural value was to be taxed. I never said anything of the kind. What 6aid was that no purely agricultural land was being taxed, and still say so. The land he is thinking about is the purely town land, where the value has been created entirely owing to its proximity to a town. That is a very different kind of thing from the kind of land which the hon. Member for North Dublin (Mr. Clancy), the hon. Member for Mayo (Mr. Dillon), and the hon; Member for Louth (Mr. T. M. Healy) had in mind; the kind of agricultural land in the open country which has an artificial value given to it for two reasons. 284 That is not merely in Ireland. It is in Great Britain also. There is no single Member of this House who has lived in agricultural districts—and mean purely agricultural districts—who does not know that there is land in those districts which has an artificial value for one or two reasons. One is there may be a special demand there, because there are men in the neighbourhood who have been making money in trade and who come back and want to purchase the old home or purchase land in the old neighbourhood. The agricultural land has got a purely artificial value for that reason. I know many neighbourhoods of that kind. The land is still agricultural land; it is not bought for residential purposes.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman is perfectly wrong. I have lived in an agricultural district, and can assure him that there are many cases of the kind, men buying farms of that sort where they never intend to reside; but they buy either the old home or land in the neighbourhood merely for the pleasure and delight and pride of owning land in the district where they were bred and born. That is not building value at all. It is purely agricultural value.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman says it is not. All can say is that we intend to exempt that, and we will do it in the words of this Clause. What is the second value? The second artificial and exceptional value is where you have got accommodation land. You get very often accommodation land far removed from a town. You get perhaps land which if let as part of a farm would bring only £1 an acre, and which is let sometimes for as much as £3 and £4 an acre in the midst of the country purely as accommodation land. That is also a sort of artificial value which is due, it may be, to some special property in the soil, or, it may be, because of its special convenience for graziers and others, or for a variety of other reasons which it is not necessary to discuss. At any rate, that is an artificial value; but it is also a purely agricultural value, and is exempt. And the whole point is this—whether those two exceptional, capricious, artificial values, which are created in the special circumstances were exempt by the 285 Bill as it left the House of Commons. I say they were, but some counsel in Ireland say that they were not. And right hon. and hon. Gentlemen on the opposite benches went about to platforms in this country saying that they were not exempt. I thought at any rate, if we were going to have a contest, we should not have a contest merely about the interpretation of an Act of Parliament. There is a real issue between us as to the datum line, and if it were relevant I should defend it, and am prepared to defend it. I have defended it outside, and I will defend it in the House of Commons when relevant, as it would be on the Second Reading; but here it would be irrelevant. It has been ruled out of order by the Chairman, and I cannot go into the matter. The other two values are strictly relevant to this Amendment, and are strictly relevant to the Amendments of the Bill. I maintain that we have amply protected those two cases. That is what we have set out to do, and think we have done so, and that is all we intend doing—to deal with these two exceptional cases.
§ Mr. PRETYMAN
The first thing that must strike the Committee on this point is, if it takes this House days and days of discussion to discover exactly what the meaning of a certain important series of words in this Bill is, how is it possible to have it decided in the courts of law? What enormous and intolerable expense that would be to the subject. I traverse the right hon. Gentleman's contention that the two values to which he refers are exempt either in the original words or by the addition which it is now proposed to be made to this Clause. I cannot understand how these values are exempt under this Bill if building values are not exempt. There is not a single word in the Bill as to those building values. As understand the principle of Increment Value Duty, and it has been stated over and over again upon Liberal platforms, it is to charge the owner of land on any increment which is unearned of any form except a purely agricultural increment. That is the proposal. Does the Chancellor of the Exchequer suggest where a man succeeds in selling his land at a price above its market value, and the purchaser who happens to buy it is willing to pay more than its value, because he was born in that parish fifty years before, that that is an earned increment? Is it any more an earned increment than if the man who was willing to give more than the agricultural value 286 happens to want to build houses upon it? Where is the difference on the principle on which the Bill is founded? Is or is not the Bill founded on the principle that what is called unearned increment should be taxed? If the Bill is founded on that principle, with certain exemptions professing to carry out the object that agricultural land which has a value for agricultural purposes only is to be exempt, what is to govern the wording of that Clause creating those exemptions? The two governing words suggest to the Committee—and particularly wish to draw the attention of the hon. Member who moved the Amendment to this point—are the word "while" and the word "agricultural."
It is a question of time with the word "while." The tax begins to attach to the land from the moment it attains a value in excess of its agricultural value. Then comes the question. What is agricultural value? This "agricultural value only" is the value for purely agricultural purposes, and as soon as it acquires a value for any other purpose whatever the argument perpetually used, which has been used over and over again, is that it only applies to building land. It does not apply only to building land. Whatever value that lands attains beyond purely agricultural value, it becomes taxable on the whole increment, agricultural or otherwise. The question the hon. Member has asked us to solve by his Amendment is, Do these words exempt the kind of sentimental value in Ireland (anywhere)—[HON. MEMBERS "Any where?"]—or anywhere, which he desires to exempt? Our object is to deal with the matter as a whole, but understand that hon. Members from Ireland are particularly interested in the question as affecting Ireland. The question is, do the new words, or the old words, exempt that kind of value? I maintain that they do not, and it is perfectly clear if the old words do not exempt it that the new words do not. I submit with all respect to the hon. Member, that if he is satisfied with the old words, well and good; but if he is not satisfied with the old words, can prove to demonstration that the new words have no effect whatever upon that point. I submit to the hon. Member that the words can have no possible bearing on whether the land is agricultural or not. If the land is not purely agricultural in its value it is exempt. It is not a question of whether the value of the land is market value, or economic value. I am bound to say I 287 cannot see the distinction. It is a question of whether the value is purely agricultural or not. Surely the hon. Member must see that the insertion of these words makes absolutely no difference whatever on the question whether the value is purely agricultural or whether the land has any other value. Therefore, if the land is taxable under the words which are here now it is still taxable after these words are inserted. I do not suggest for a moment that I should lay down the law as to whether it is taxable under either contention. I think it is an open question as to whether, in the case of a farm purchased and used for agriculture only, but for which a value above agricultural value is paid for sentimental reasons—that is the real point—will the Courts hold or not hold that that is a purely agricultural value?
§ Mr. PRETYMAN
By the market value which is obtained for purely agricultural land in the district. That is the obvious way. A valuer goes into a district and ascertains by the ordinary market transactions which prevail in the district that land of a particular character has a market value of about £20 an acre. A particular farm of exactly the same character in the district is bought by a returned Irishman from America at £30 an acre. For purely agricultural purposes the value of that land is £20 an acre, and not £30 an acre; but for sentimental reasons a purchaser comes and gives £30 an acre. The question is: Would the Courts hold that that £30 was purely agricultural value simply because the pur chaser is going to use the land as agricultural land? That is the point. I am perfectly certain that the learned Attorney-General will not be able to give a very confident answer.
§ Mr. PRETYMAN
The hon. and learned Gentleman may, but think that even from him the Committee would not accept it without some further authority—the question is such a difficult one submit to the Committee of the House of Commons that the first duty in all legislation is, as far as possible, to make perfectly clear what is its meaning. Unfortunately, in legislation, we have unwittingly left many points which have had to be settled 288 by the Courts. We ought not to do so wittingly, however, and we should endeavour to settle to our own satisfaction the actual meaning of any words which are used, or, at any rate, the House of Commons should at least so alter them as to make them look clear, in order that they may not have to come before the Courts afterwards. As to the words now before us, I do not think they are clear, and do not think the point raised by the hon. Member has been met. I am not at all sure, if the matter is left as it stands, that hon. Gentlemen from Ireland will not find that it is they, and not the land, who have been sold in the open market.
§ Mr. T. M. HEALY
It appears that certain malignant persons in Ireland have been misrepresenting the intentions and wishes of a good and gracious Government, but these malignants, instead of having their tongues pierced with hot irons, instead of having their limbs broken or their arms cut off, because they have the audacity to differ from the hon. Gentleman the Member for Mayo, are met now with phrases, and are to be satisfied with the East wind; we are never again, once these words are inserted in the Bill, to venture to differ from the hon. Gentleman. But if I think I am right in the view I hold, I will state my view, even if it should differ from the view of the hon. Gentleman the Member for Mayo. He has a great many persons behind him, I know, with whom he confuses persons like myself; but allow me to tell him that, as far as persons like myself are concerned, we shall hold the view about agricultural land and about taxation under this Clause which we held before the Amendment of the Member for North Dublin was accepted. In the first place, these words are of no value whatever. The hon. and learned Member for Dublin stated, almost in words, that there really was to be no new valuation of agricultural land at all; that we have a nice comfortable old system of valuation in Ireland, a most handy and convenient system, that was not to be disturbed. I wonder whether any Member who is able to read our Bills—as I believe every Member of the House is supposed to be able to do—has omitted to take account of the 26th Section of this Act, which refers to the Commissioners, not, remember, the valuation Commissioners in Ireland, who are gentlemen not interested in taxation and who are only interested in valuation, but the Commissioners who will make this 289 impost—persons interested, not merely in valuation, but in the taxation that is to be derived from it, namely, the Commissioners of Inland Revenue. What is to happen? This is the Section: "The Commissioners shall as soon as may be after the passing of this Act cause a valuation to be made of all land in the United Kingdom." I believe Ireland is in the United Kingdom by law or statute; whether otherwise, it would be out of order to discuss. What is the valuation to show? It is to show separately the total value and the site value respectively of the land, and in the case of agrciultural land the value of the land for agricultural purposes, where that value is different from the site value. Yet hon. Gentlemen who are Members of this House, learned in the law, get up and tell the Committee, and through the Committee the country, in the phrase of the hon. Member for Mayo, for the purposes of their political campaign, that there is no such thing as a valuation of agricultural land. Remember that there are over 600,000 agricultural holdings in Ireland, and I ask any man in his senses what is the object of this country, which grudges Ireland one shilling of expenditure on any useful purpose, in sending over from Somerset House, at the instance of the Commissioners of Inland Revenue, valuers to value the 600,000 holdings? And remember that it is mandatory on the Commissioners, and you must pass this Clause without Amendment or Debate. The Member for St. Pancras said that once we voted the closure we voted the Bill. That is the worst condemnation of this Debate I have yet heard. There you have it—that even in the miserable islands of Achill and Arran, and in these congested' districts, places where practically a snipe can hardly get food, the Commissioner of Inland Revenue at Somerset House is bound by law to send over his valuers from London.
What has the valuer to find? He has to find the value of the land, and remember the word "value" is not qualified in this 26th Section by the word "market," which the Member for North Dublin is inserting in the Section before us. It is purely and simply the value of the land for agricultural purposes, where that value is different from the site value, and then observe the meticulous precision of the draftsman: "Each piece of land, land which is under separate occupation, and, if the owner so requires it, Any part of the land which is under separate occupation, shall be separately 290 valued, and the value shall be estimated as on 30th April, 1909." Then the hon. Gentleman the Member for North Dublin said the value is to be the value of Griffith's valuation, which is a valuation on the price of beef at so much a hundred, on the price of mutton at so much a hundred, and on the price of butter at so much a pound, and, forsooth, you are to define site value and all the other values in this Bill on the price of butter in 1852, when Griffith's valuation was made. These Gentlemen, as I said, for the purposes of their political campaign, would debar me from saying what I think about this Bill, after thirty years' experience in this House. I must I say think the Chancellor of the Exchequer has treated the House with perfect frankness; he has not deceived us in any respect; he has I said, and I think it is to his honour—I because perhaps it might have been to his convenience to have said something different—"We have brought in this Bill, so far as language and intention are concerned, without the change of a comma; we have taken up a constitutional position." That being so, take leave to say, on my part, that shall go back to my Constituents and will say to them, "Friends, dear, would you like to have a gentleman sent over from Somerset House; would you like to know why he is coming upon your holdings, and would you like to know who send him?" And shall say, "The gentlemen who send him are the representatives of Nationalist Ireland."
§ Mr. LLOYD-GEORGE
I am sorry to get up at once to disappoint the hon. and learned Gentleman, who is so anxious to see that gentleman from Somerset House introduced to the Irish peasants, but they will not see him; there is no intention of sending a gentleman over from Somerset House.
§ Mr. LLOYD-GEORGE
The hon. and learned Gentleman is quite wrong. As said in my answer to the hon. Member for Dublin University, who asked my reason for the distinction made between the case of Ireland and that of England, the simple reason is that we have got all the materials, as far as agricultural land in Ireland is concerned, for a valuation. We have got two valuations for Ireland, and they are both official and both national valuations—they are not merely local valuations—and in those valuations I am assured—and have been making careful inquiry—it will 291 only be necessary to consult the official documents, so far as agricultural land is concerned, in regard to its value from that point of view. And when we made our estimates for the valuation—
§ Mr. T. M. HEALY
Why do you have site value? What does the Department fix the site value for? [HON. MEMBERS: "Hear, hear."]
§ Mr. LLOYD-GEORGE
Really, hon. Members are cheering on a matter they know nothing about. at least know this much about it, that have seen the gentleman who is responsible for the national valuation in Ireland—Sir John Barton, who is not an appointment of this Government but an appointment of the late Government. He holds a very considerable position, and he has the confidence of Members of all parties in this House. He assured me last year that it would not be necessary to make a valuation, not merely for the sake of the Bill, but for the sake of the estimates. We have no need at all to send a gentleman from Somerset House to visit houses and homes in Ireland. It is not necessary, because we were assured by Sir John Barton that all the particulars necessary for the purpose of making a valuation are already in the possession of the office which he commands. But it is a perfectly different thing as far as town sites are concerned. There is no material of that kind for town sites, and for these a valuation will be necessary. I really apologise for intruding; it is out of order upon this particular Amendment, and except for my hon. and learned Friend, should not have made these observations.
§ Mr. T. M. HEALY
The right hon. Gentleman has made a reference to Sir John Barton. He says that he has practically no need of further materials to make these valuations. Allow me to say that it is the most momentous statement which has yet been made in reference to this matter.
§ Mr. T. M. HEALY
remember the statement of the right hon. Gentleman, but he did not go the length, if he will permit me to say so, which he has gone to-day. Allow me to say that if Sir John Barton said anything of the kind, he ought to be impeached. What as the valuation—I have sent out for the Valuation Act—I speak from recollection. I 292 think the Section of the Valuation Act provides that the original valuation of agricultural land, apart from buildings, shall never be altered, and shall be incapable of being altered without a fresh Statute. That Act was passed as long ago, speaking from recollection, as the 13 and 14 Victoria. Therefore, the position is going to be this that it is the valuation—stereotyped according to the right hon. Gentleman—of 1840 that the Government are going to take for the site value of Ireland. Observe that the valuation of Ireland is not a valuation for increment, or for site, or for anything else, but it is a valuation of one year with another, having regard to the rent, taxes, insurance, and deductions for repairs which the tenant could fairly pay. That is the position of valuation in Ireland. It is the annual tenantable value of the land, but that has nothing to say to the site value, and, observe, if that land has improved, am to be told this—and this is the first kind word we have heard from the right hon. Gentleman, and welcome it if it be true—if that land was, as in the case of Stewart's holding, valued at 6d. per acre, and if the tenant has made it up to the value of 25s. per acre, the tenant would be in the lucky position of having the 6d. per acre stereotyped both as the site value and the tenantable value? welcome the pronouncement of the Government. I think he has made a momentous declaration, but where did Sir John Barton get his authority for it? He certainly did not get it in any Act of Parliament. Let me call the attention of the House to the section dealing with Ireland. In the 15 and 16 Victoria, Section 11, it is provided: "In every valuation hereafter to be made, or to be carried on or completed under the provisions of this Act, the Commissioner of Valuation shall cause every tenement or rateable hereditament hereinafter specified to be separately valued, and such valuation in regard to the land shall be made upon an estimate of the net annual value thereof with reference to the average prices of the several articles of agricultural produce hereinafter specified, all peculiar local circumstances in each case being taken into consideration, and all rates, taxes, and public charges, if any (except tithe rent charge), being paid by the tenant (that is to say). Wheat at the general average price of seven shillings and sixpence per hundredweight… Oats at the general average price of four shillings and tenpence per 293 hundredweight.… Barley at the general average price of four shillings and ten-pence per hundredweight.… Flax at the general average price of forty-nine shillings per hundredweight, Butter at the general average price of sixty-five shillings per hundredweight. Beef at the annual average price of thirty-five shillings and sixpence per hundredweight, Mutton at the general average price of forty-one shillings per hundredweight, Pork at the general average price of thirty-two shillings per hundredweight …"
Am to be told that that is the valuation which the Government are going to enforce for the purposes of this Bill in Ireland If so, the whole principle of this Bill for Ireland is to be one thing, and the whole principle in England is to be another, and each valuation is to be fixed having regard to the rent which the tenant can pay year by year, deducting insurance and deducting depreciation. Why this valuation under this Bill is capital value. One is annual value and the other is capital value, and for Sir John Barton to tell the right hon. Gentleman that he is prepared to give a valuation within that Statute and under that Act, passed long before he was appointed, and that this valuation was anticipated under Griffiths, why Sir John Barton has no such power. If I may say so, when encomiums are now being showered on Sir John Barton, it was the hon. and learned Member for North Dublin (Mr. Clancy), think, who got a Select Committee upon him in this House within the last four or five years. At any rate, he was examined before the Committee, and I believe he was a Member of it. I say any Commissioner of Valuation who has asserted that he can step over the words of this Clause and fix the valuation except in the manner hereinafter provided, say he will be impeached, and say he deserves it, because the provisions of this Bill are these—the right hon. Gentleman laughs, but the words must be taken into account, they are:—"The Commissioners shall, as soon as may be after the passing of the Act, cause a valuation to be made of all land in the United Kingdom showing separately the total value and the site value, and, in the case of agricultural land, the value for agricultural purposes." Those three valuations are to be made by the Commissioner of Inland Revenue. He must make them upon a given date. I respectfully say that in the Act of 1840 neither Sir John Barton nor anybody else can discover the data on which are laid the foundations of this Bill.
§ Mr. LLOYD-GEORGE
I really cannot understand the position of the hon. and learned Member for North Louth. He told me he welcomed this now, and I thought that was exactly what he wanted, but he has a very curious way of welcoming it, to say that we should impeach the gentleman who is responsible for this opinion. I can only restate the opinion that it will not be necessary for the purposes of this Bill to send men from Somerset House or anywhere else to tramp over the agricultural land of Ireland to find out its value, because they have already got full particulars to enable them to ascertain its value. [An HON. MEMBER: "Where?"] I have already said so.
§ Mr. LLOYD-GEORGE
I have already told the House of Commons before the hon. and learned Gentleman arrived. I gave full information on this out of the speech of the hon. and learned Gentleman. The whole information will be in the Debate, and hon. Gentlemen must remember this: that Ireland is in a different position as to the valuation of land from Scotland and England and Wales, because you have at least two or three different official valuations already there.
§ Mr. LLOYD-GEORGE
The first is Griffith's valuation. I say this on authority which is quite good enough for me. The second valuation is the valuation under the Land Acts. [An HON. MEMBER: "That is not a general valuation."] It is a valuation of the value of the land of Ireland, and the hon. and learned Gentleman who has been going round backwards and forwards in Ireland saying that there would be a valuer sent to every little holding there, now that he finds that is not going to be the case, is naturally very angry.
§ Mr. GORDON
Will the right hon. Gentleman tell us what general valuation there is under the Land Purchase Acts, because have something to do with them in Ireland, and have never heard of them. It is only in cases where there has been a sale or a fair rent fixed, and they were only treated as a valuation on questions between landlord and tenant.
§ Mr. LLOYD-GEORGE
If you value the land as between landlord and tenant it is the value of the land. I am making no new announcement at all. This is an announcement I made in the last Parliament, and I say that is the view the Government take, and that is their interpretation of this Bill. It is altogether irrelevant in the Debate on this Motion, but thought would have to correct the hon. and learned Gentleman. I am purely restating the position took up in the late Parliament, and the statement on which framed estimates in the late Parliament. It is the view taken that we have got plenty of material at the present moment to frame a valuation of the agricultural land in Ireland. Especially as agricultural land in Ireland will never produce a penny under these taxes, we do not feel we would be justified in going to any further expense, inasmuch as we have got all the material that is necessary. The third valuation is a valuation which I agree does not cover the whole of Ireland. It is only a valuation which you have got under the Land Purchase Acts.
§ Mr. PRETYMAN
Will the right hon. Gentleman say if these valuations are annual value or capital value?
§ Mr. LLOYD-GEORGE
They are annual value. That is the basis. Under the Land Purchase Acts they would be annual, of course. At any rate, am here to state again what the Government stated in the last Parliament, and stated without challenge by any hon. Gentleman on either side of the House, that we were not going to have the expense of valuing the agricultural land of Ireland because we have abundant material for the purpose. We did not think we were justified in going to the enormous expense of valuing land of this kind which cannot possibly produce any taxes. You are in a position there different from that which you are in in Great Britain, where land at one moment may be purely agricultural and in a year or two afterwards may be most valuable building land, because either of the growth of towns or the discovery of minerals. Besides in Great Britain you have not the material to enable you to produce this valuation. If we had a valuation of this kind in Great Britain there would not have been the same justification for our valuation provision because we would have had two official valuations; and, as far as half the land is concerned, another 296 as well. I am only stating this again, and I apologise for making a statement which is not relevant to this Amendment.
§ Sir ALFRED CRIPPS
I do not wish to pursue further the question of valuation except on this point, and that is that am sure the Chancellor of the Exchequer and the Attorney-General must be aware that any valuation, such as has been referred to by the Chancellor of the Exchequer, would have nothing to do with the valuation of site value. I wish further to say that unless and until that is done under this Bill there never has been a valuation on the site value basis for any purpose whatever. So exceptional is it that, as the hon. and learned Gentleman the Attorney-General will remember, the late Lord Farrer, who was a great expert, stated that in his view you could not have a valuaation on the site value, because the condition of the premises necessary for such a valuation did not exist in fact. If the hon. and learned Gentleman will consider what was said in the Report of the Royal Commission on Local Taxation, of which had the honour to be a Member, he will find there that one of the great-objections to taking site value for any purpose is the extreme difficulty and novelty of the valuation. The majority of the Commissioners thought it was impossible, and others thought it was a matter of extreme difficulty and novelty, and in reference to which we could not get any guide whatever from any existing valuation at the present time. On the question of valuation it must be true of the vast majority of agricultural land in this country that it can never come under Increment Value, or what is called Development Duty. Of course, in the neighbourhood of large towns you may have a change from agricultural land, but that has been the same in the neighbourhood of Dublin and in the neighbourhood of Belfast. If the argument against providing a site value of land in Ireland is because a very large amount of agricultural land can neither come in for Increment Duty or Undeveloped Duty, then exactly the same argument applies to the great mass of agricultural land in England. Surely, speaking on behalf of England for the moment, one may say this, that if Ireland is to escape valuation under the Bill it is a monstrous thing as regards agricultural land in England, that a valuation should be made by the same body as is interested in imposing the taxation. I agree with everything that was 297 said by the hon. and learned Member for North Louth upon that point. In fact, he emphasised the unfairness with which England was treated when you propose to impose upon agricultural land in this country a form of valuation from which you say agricultural lands in Ireland are to be exempt, although, as regards those lands, no valuation has ever yet been made on the site value basis.
May I say one word as to the principle of the Clause. There must have been a misapprehension in what the Attorney-General said. I think he will not differ from me when I say that the principle of the Clause is to charge Increment Duty when the land has a higher value for other purposes than for agriculture. The words are quite clear. So long as it has a value for agricultural purposes only, it is to escape taxation, but so soon as it has a higher value for any other purpose, Increment Duty is to be chargeable. The insertion of the words "market value" and "at the time for agricultural purposes only" make not the slightest difference whatever to the principle. If the principle of the Clause is what have stated, how can the Attorney-General say that these words affect what is in substance either a sentimental or a residential value do not care which it is called. There is not the least difference principle in the valuation of the two. I understand the hon. and learned Gentleman to say that although land may have a higher value than for the purposes of agriculture, either on a sentimental or on a residential basis, yet so long as it is used for agricultural purposes it is to escape taxation under the words now introduced. Surely that is a wholly illogical position. If you are to allow land used for agriculture to escape, even if it has a higher value from sentimental or residential reasons, how do you seek to exclude all other purposes In the case of other purposes the hon. and learned Gentleman thinks it logical and right to tax the land, although it is still used for agriculture only. We want to know what is really meant by the word "land." Does it mean that so long as land is used for the industry of agriculture it comes within the category of agricultural land That is a plain question. If it does not, these words are only a mockery and a delusion. It does not matter whether the land is used for agriculture or not; if it has a higher value for residential or sentimental purposes, or for the purpose of erecting a factory, or for building pur- 298 poses, it will come in to be taxed under Clause 7.
We have had considerable discussion as to the way in which Increment Duty will be charged, assuming it is chargeable in a particular case. The Attorney-General stated the other night, quite accurately as understand, that the difference for the purposes of Increment Duty would be between the original site value and the site value ascertained at the date when the duty was imposed. If that is true, you are putting a monstrous and unjust charge upon vast quantities of land used for agriculture. There are a large number of cases where the original site value has become an improved site value for agricultural purposes, and if the tax is assessed in the way suggested by the Attorney-General the whole of the increased agricultural value created by the industry of agriculture and by those engaged in the industry will fall to be charged under the head of Increment Duty. A moment's consideration will show how extremely unjust that is. Take two plots of land together, the value of one of which has been doubled by agricultural industry and expenditure, while the neighbouring plot has been allowed practically to go to waste. Under this Clause, when these two plots come to be assessed for Increment Duty, they must be assessed to the same extent, and the whole benefit of the expenditure for the industry of agriculture will be wholly thrown away. Under these circumstances you cannot expect people to expend money in improving the industry of agriculture. There is, no purpose in this country for which land wherever situated can be more beneficially used than for the industry of agriculture, because in that way you not only benefit agriculture itself, but you give employment, and leave open spaces used for the purposes of agriculture just where they are wanted most—in the immediate neighbourhood of our large town populations. Therefore you are really imposing a fine on the people who use land for agricultural purposes just where such land is most wanted.
My last question is. Does the Attorney-General think, from his legal knowledge of these matters, that either the words "if sold at the time in the open market" or the alternative words "its market value at the time for agricultural purposes only" have the smallest effect upon the meaning of the Clause, or in any way alter the point am making, namely, that 299 the only test is whether the land in question has some higher value if used for purposes other than agriculture? If that is the test, these words axe absolutely useless, and have no meaning at all. The words are absolutely misleading if anyone thinks, as the Irish Members apparently do, that he is getting any benefit from them. On the other hand they may lead to a heritage of litigation which this House ought to avoid as far as possible by putting the Clause into language about which there could be no doubt, and which would clearly express the intention of the Government as regards the agricultural land of the country.
§ Mr. SCOTT DICKSON
Arising out of the reply of the Chancellor of the Exchequer with regard to the valuation in Ireland, may I ask whether the same principle will apply to Scotland? As far as our valuation is concerned, under the Act of 1854, we are in exactly the same position as Ireland, except that our valuation is made up year by year, and is not stereotyped. I take it therefore that in Scotland there will be no capital valuation made, but that this annual value will be taken.
§ Sir W. ROBSON
Apparently in Scotland they have the good fortune to possess materials for valuation which are brought up to date year by year.
§ Sir W. ROBSON
What better basis can you get for the ascertainment of capital value than the annual value in normal circumstances, together with such differences as may be created by proximity to a town, obvious building value, and so on1? The Scotch valuation clearly will enable immense quantities of land to be dealt with without any specific valuation and without any visit of the Commissioners or their agents. My hon. and learned Friend opposite (Sir A. Cripps) asked me whether I thought these words made any difference. I think they give some additional clearness to the terms of the Clause. I hold the view, which, perhaps, not every lawyer would adopt, that the particular kind of value which hon. Members from Ireland, and those representing agricultural districts desire to protect, was already protected by the Clause as it originally stood. In my view the value for agricultural purposes was the value which land would fetch in the open market for agricultural purposes. These 300 other vague terms, such as "market value," "improved value," and so on, are expressions which, no doubt, might have importance in particular districts; but, in truth, the value that the law looks at when the word "value" occurs in a Bill of this kind is the market value—that is to say, the value which would be fetched at an open sale in the market under normal conditions. Under these circumstances, in my view, what may be called "land hunger value "—that is, the presence of a hunger for agricultural land—would in reality be part of the agricultural value. What a peasant wants land for is agricultural purposes, and he will give more for the land for agricultural purposes than a strictly economic farmer would give. An economic farmer would in many parts say, "I must not buy land and use my labour and capital upon its development unless I can get at least a normal rate of interest. A normal rate of interest for such an amount of capital and for the work and skill which shall put into the land ought to bring me, say, 10 per cent., and will not apply my capital and labour for anything less." That is what is popularly called the economic value. But the peasant perhaps cares very little for economic value. We have had instances showing the enormous sums sometimes given at auctions in Ireland for the right to occupy land for purely agricultural purposes. From whatever cause the hunger may arise, whatever may be the necessities of the peasant, he is buying for agricultural purposes, and he is buying in the market for agricultural purposes. Therefore the whole of that value will be exempt. But the word "value" is like the word "right," in regard to which we have continual difficulties, especially in the sphere of law. Has a man a "right" to do this or that? So it is with the word "value." It lends itself to much ambiguity, and therefore these words are inserted for greater clearness.
I do not think in strictness that they make any legal difference. The hon. and learned Gentleman said, "You axe going to tax improvements in agricultural land under Clause 7. Whatever words you add to the Clause you are leaving a liability on the back of the owner of agricultural land, or person interested in agricultural land, by a tax on their improvements." think the hon. and learned Gentleman does not sufficiently distinguish between the different meanings of the word "value." 301 Let me put it to him as simply as I can. You have in agricultural land prairie value; you may have value for the purposes of agriculture, and also for the purposes of building. It may be that at a given time your agricultural value is in excess of your building value. It may be that no one particularly desires to build upon that land. Under those circumstances your land is strictly agricultural land, and will be exempt from Increment Duty as agricultural land. But the building value may grow until it exceeds in amount the agricultural value.
§ Sir W. ROBSON
I am taking agricultural land for the purpose of the original site value. That is the case with which we are dealing. All agricultural land at present in England will be put under valuation. Its original site value will, of course, be agricultural value. It is called site value; but the word "site" is not very appropriate to that value. [HON. MEMBER: "Hear, hear."] Well, if hon. Members, opposite will suggest better phraseology we shall be glad to consider it in subsequent Budgets. It is a sufficiently clear word to those who have studied the Budget itself. Its value, as agricultural land is the original site value. The land grows into building value—a building value attaches. Let us see what the situation is. We talk about taxing land. I find that there is generally an ambiguity attaching to the very simplest words that create confusion and logical differences. Do not let us talk for a moment of taxing land, but let us talk of taxing an owner in respect of his land, or some particular element of value in his land. The talk of taxing "goods" has been productive of more mental confusion than anything else since the fall of man. You do not tax "goods." You do not tax land. You tax persons in respect of land, or goods. You may tax a person in respect of particular elements of value in land. Under this Bill we are, speaking generally, taxing persons, owners, in respect of building value attaching to land. That is what we tax. We tax that building value, and no other value.
We do not tax agricultural land. We do not tax agricultural labour. We do not tax agricultural capital. We tax simply the building value attaching to land. It is suggested on the other side 302 that you cannot do that without taxing agricultural value; and a case is put of land whose value was originally £20 an acre for agriculture. That land goes up to £30 an acre, and beyond. So long as it is improving agriculture up to £50 there is still no tax upon it, because the increment is agricultural increment. By and by, it comes to have a building value. It goes up to £51, and from that to £100 or £150. What has happened then? The real value of that land is no longer agricultural. The proper value of an article is that which it will fetch at its highest price, and the proper value of that article has ceased altogether to be agricultural— absolutely ceased. When the owner comes to sell it he does not sell it upon an agricultural basis. He takes no account whatever of the agricultural improvement. He throws that away. People talk about our taxing this agricultural value. We do nothing of the kind. When the owner sells his land for building he throws away his agricultural value. He treats it as absolutely non-existent: if anything it is decrement. What we tax, and what alone is taxed—the hon. Gentleman seems to express dissent, but I think if he would only wait and give a little reflection to it he would see that I am right—is the building value of land. We are taxing the value which has superseded the agricultural value altogether. We are entitled to tax the whole of that value. What hon. Gentlemen opposite desire us to do is to take from the building value the agricultural value which the owner is throwing away when he is selling the land for building purposes. It is absolutely certain that we tax no kind of agricultural value, or of agricultural land, while it is in any proper sense agricultural land. We tax the value of building land alone. The hon. and learned Gentleman asked me a question: whether I was willing to exempt land so long as it is used for agricultural purposes. Mark the insidiousness and ambiguity of that. You go to a man whose land for building near a town is worth £1,000 an acre. You say, "That is building land, and we shall tax on the building value." "Oh," says my hon. and learned Friend, "you must not do that; look at that blade of grass there."
§ Sir W. ROBSON
Do hon. Gentlemen really mean that any land, so long as a blade of grass or a cabbage is allowed to 303 grow upon it, it is not to be treated as building land? Would that be making the land in any sense correspond with the common phraseology of building land? I venture to say that people perfectly well understand the meaning in practice and from reading the Bill, if they ever undertake that task. They know we are taxing building land. We are not taxing agricultural land. We are not touching the agricultural industry, or labour, or capital! We are putting a tax upon the owner of agricultural land which has ceased to have in any proper sense agricultural value, and instead has acquired a building value which it has not earned, and which may very properly be made subservient to the needs of the community as a whole.
§ Mr. HICKS BEACH
We should like to know something of the point that has been raised by the hon. Member below me as to whether the system of valuation to be adopted will be the same as in Ireland and Scotland, because, as pointed out, the Scottish valuation is totally different from that in England. I should like to know what is the basis of value to be adopted in England? Is the value of a pair of cottages to be the capital value of those cottages, which may be £400, or is the valuation to be based on the annual value of those cottages, which is only represented by a rent of £3 or £4 a year for each of them?
§ Mr. HICKS BEACH
Perhaps I was rather led astray. To turn to the actual Amendment which we were discussing, so far as I can gather from the course of this Debate, the only good we derive from this Amendment of the Government is that we discover the fact that the market value of land—that is to say, the price which a willing purchaser is willing to give to a willing seller in the open market—is not the true value of the land. That may be an Amendment which is very suitable to Ireland. There may be some reason for accepting it for the Irish people, but it only adds still more difficulty to this Bill, in which I believe there exists already no less than thirteen different descriptions of the value of land. There is only one definition of the true value of land. What we were told this afternoon was that what we all thought was the true value of land is not the true value of land.
§ Mr. T. M. HEALY
In Ireland we have a term known as "true value," which is settled by the courts. It is peculiar to Ireland. As a matter of fact, it is from 25 per cent, up to as much as 60 per cent, under the market value.
§ Mr. HICKS BEACH
At any rate, that particular true value does not exist in England. That only adds point to my argument that this particular Amendment of the Government may be acceptable to the Irish people—it is certainly not acceptable to the people of England, where this true value does not exist. I am not surprised at the hon. Gentleman the Member for East St. Pancras expressing a certain dissatisfaction. In the first place, he apparently was led to believe that it was safe to trust the Government. Secondly, he was led to believe—and foolish to believe it—that if you vote for a drastic Closure Resolution upon a Bill, there was likely to be any chance at all of discussing the particular point which you wish to raise. I can only express the hope that the hon. Gentleman will in the future see that it is by no means safe to trust any Government—and this Government in particular—and that it is also rash to vote for any particular Closure Resolution if you want to discuss a Bill. A case was instanced of a man who desired to go back to his own country and purchase a small farm of his own. The point I wish to emphasise is this, that although the Government do not mean them to be taxed in Ireland, at any rate they will be taxed under the Bill as it now stands. Take the case of a man who for years wanted to come back to the neighbourhood of his own home and bought a farm for £5,000, at the time that agricultural land was standing at a high value. The value of that farm in April this year had been reduced, owing to economic causes, to £2,500, in the course of the next ten years, say, the value rises partly owing to the general increase in agricultural property, and partly also owing to the energy and the enterprise of the owner himself, and owing to the amount of labour he may have spent on it, and owing to the intensive cultivation of the property. Supposing, then, in ten years' time the value of the farm rises again to what it was originally—£5,000. The Government valuer comes along, and he says, "This farm is worth £5,100 to somebody who may buy it for building purposes. People are building here all round upon 305 the hills," and the Government valuer accordingly puts that value upon the land. He will have to pay increment value, not upon the £100, but upon the difference between the sum of £2,500 and the value of the land at the time the Bill was passed—that is, £5,100, which is the building value that the Government assessor put upon it. That is monstrously unfair. I say, in the first place, the purchaser ought to be entitled to have deducted the price which he originally gave for the land, and he ought to be entitled to the benefit of any increase brought about in the value of the land entirely by himself.
Under this Bill you are not perhaps, directly speaking, taxing agricultural land as such, but you are undoubtedly taxing agricultural land, and that is the point that we on this side of the House disagree with most strongly. We say, if you wish to exempt agricultural land altogether, you ought to exempt from the building value of the land that part of the agricultural value which has been due either to the increased energy and labour of the cultivator of the farm, or to the increased general value of agricultural land throughout the country owing to the general rise in agricultural prices, or owing to intensive cultivation and so on. It would be perfectly possible for this to be done by anyone who wishes to obtain the benefit of it giving notice to the Commissioners and proving to their satisfaction that the land has risen in value on a particular date for agricultural purposes only. If you really mean to exempt agricultural land, as you say you do, from the Increment Value Duty, the only way you can do it is to satisfy the Commissioners that the land has risen to an increased agricultural value owing to certain causes, and to allow them to take that as the datum line from which to deduct agricultural value. That is the only possible way to do it.
Mr. RODEN BUXTON
Many hon. Members upon the opposite side of the House wish to alter the datum line from that which is proposed in the Bill and to place the datum line at a point where the land has received increased agricultural value and to take the increment value from that upper datum line instead of from the lower datum line in the Bill. Listening to this Debate, it almost seems as if the echoes of the last Parliament are still ringing within these walls, and that people are subjected to the atmosphere of those old conflicts and struggles of which we heard so much. Hon. Members on the 306 opposite side seem to be at cross purposes, for really they axe quarrelling about something which is easily comprehensible when looked at from an outside, independent point of view. As the Attorney-General has just said, the building value and the agricultural value are two independent and separate things. They have grown up parallel to one another; they may exist side by side, but so long only as one or other has a potential value. When one or other comes to be realised they can no longer co-exist; they are incompatible in point of time; they are two entirely distinct things. That is the contention upon this side of the House. I am aware that is a somewhat theoretical description, and I am aware that the case is somewhat subtle and complex. But surely that is no reason why it should be preposterously misrepresented and should not be looked at in a calm manner. As a matter of fact, what is the practical effect of that distinction? I think that is a point which has not been, so far as I have heard the Debate, brought out. The practical effect is this. The owner of the kind of land we are dealing with, say a market garden, such as the hon. Member for Wycombe referred to, knows that at a certain point the building value of his land will be realised, and the agricultural value will at that moment come to an end and be extinguished. He takes that into account, and takes particularly good care as a business man that he will get the full return for his money and labour out of the agricultural value before the land passes into the category of building land. He takes care that he will be fully rewarded, and he puts no more labour and capital into the land than he knows he will get a return for before the land becomes building land. [HON. MEMBERS: "Hear, hear."] I am very glad hon. Members agree with me.
A man would not be so foolish—take an extreme instance—as to plant trees here because he knows that long before he would get a return for his money from the trees the land would pass into the category of building land. He takes very good care not to put more capital and labour into the land than he will get a return for, because at a certain moment he knows the land will cease to be agricultural land and will lose the whole of its agricultural value. That is an incident of the transaction—in any case it has nothing whatever to do with the putting on of this tax in the Budget—it is an incident of the transaction inherent to the transaction; it happens now. We are not creating that grievance, if it is a grievance; it exists already. The very moment 307 that that man—that very fortunate market gardener I should call him—sells his land to a builder he destroys and extinguishes every penny of agricultural value in it. The builder gives him nothing for the agricultural value. It is no advantage to the builder that there are cabbages on the land, and that a cow was on the land would be of still less value. The whole of the value that the builder buys is the building value, and it is that value we are taxing, and that is the only value that we are taxing. The agricultural value has ceased to exist. We are taxing the building value and that alone. A man in that position has realised two values. He has first of all realised the agricultural value. He realised that while he was enjoying that value previous to the land becoming building land, and he gets out of that value the full return for capital and labour. When that is done he sells the land for other purposes. At the moment he sells he realises the second value, and it is upon that that we are taxing him. Take the case put by the Leader of the Opposition, where the increase was £35—that is the increase from the original datum line, up to the present value—we ask that man to pay £7 of the £35, while he puts £28 in his pocket, which is clear increment to him upon the building value. It seems to us that these are two altogether distinct values, and I cannot understand the unfairness complained of.
Is it unfair that that man should be taxed upon that value? I cannot see that it is. How do hon. Gentlemen opposite propose to remedy it? They propose to exempt that man who has put some capital into his market garden, and not to exempt another man side by side with him who perhaps has not used his land as a market garden but has let it out as a football ground all the time. We say it is grossly unfair to exempt a man who has used his land as a market garden and to tax the man who has let his ground as a football ground. The two are in the same position, and each has got his return from the land before it became building land, and therefore I say there is no reason why the man who has made the land into a market garden should not be taxed on the building value, but should be let off while the other man is taxed. We have it now admitted, I believe, that agricultural land is not taxed in any respect by any of these taxes except as alleged under the Increment Tax. The issue is narrowed 308 down to that one point. Hon. Members opposite have ferreted out this one exemption, which is a very rare, very exceptional, and very extraordinary exemption, and on the strength of that they are going among the tenant farmers to their "ordinaries" in agricultural districts to tell them that their land is to be taxed. I say that is not a fair or true representation of what the Government is doing. Hon. Members opposite assent to that, so I am glad to find that my prognostication is correct. Tenant farmers will be addressed at their market "ordinaries," tenant farmers, who are doubly protected, and they will be told they are to be taxed. If we have done nothing but to show how inconsistent these statements are as to the market gardeners' land and as to ordinary agricultural land, we have done some good by this Debate.
§ Mr. GEORGE CAVE
It would be difficult for any one of us to put the argument against this Clause as it stands more forcibly than it was put by the hon. Member who has just spoken. What the hon. Member says is this: "I defend this Clause upon this very ground, that when a man takes agricultural land which may some day have a building value, he will be extremely careful not to put a penny into that land or to improve it in any way for agricultural purposes."
§ Mr. CAVE
If the argument is good now it will be equally good when this Clause passes. Surely those who defend the Clause, including the Attorney-General, are under a total misapprehension as to the point we are putting. The hon. Member who has spoken makes the same mistake to some extent, because it is thought we are trying to exempt from taxation to a certain extent land which has become building land. That is not the point at all, because this Clause deals solely and entirely with land which remains agricultural land. If it is sold for building we 309 all agree this Clause no longer applies, and the whole thing applies only to agricultural land. The point is that when land under this Clause, which is still agricultural land and used for agricultural purposes, comes to have a building value, however, small, it becomes subject to the tax, and you tax it not only on the building value, but on the increased agricultural value.
The point does not arise on sale only. I will take a simple instance. It arises on death. Take the case of a man who is doing his best to farm his land well. He dies. Of course his land has to pay Increment Value Duty. Some valuer comes along and says, "I have looked at the land. It is not very far from the town. It is a district in which building might very well take place. Therefore this land has a building value of so many pounds per acre." What happens? The tax is levied not only, as the Attorney-General suggests, on the building value, but on the whole of the agricultural value which that man has put into the land. I say without fear of contradiction that the effect of that will be to discourage the improvement of agricultural land, and will make it foolish for any man whose land is fairly near a town, and is likely to acquire a building value, to put his money and his brains into agricultural land for agricultural purposes. That is the whole basis of our complaint, and that is not touched either by the Government Amendment or by the Amendment of the hon. and learned Member for North Dublin (Mr. Clancy). That is the point we are anxious should be met. When the Prime Minister introduced the guillotine Resolution he said he meant to deal with this point, and he used these words:—We propose to insert declaratory words in the Clause which will make it perfectly clear as regards Increment Duty that the increases in the value of purely agricultural land are not subject to the tax.It cannot be denied that in the way I have endeavoured to explain the moment land has a building value, not only the building value, but the increase in the agricultural value of that which is purely agricultural land will be subject to the tax.
§ Mr. CAVE
Yes it is at the moment agricultural land within the meaning of the Bill, that is it is "land used for agriculture," and, although it is still agricultural land, the agricultural increase in 310 value is going to be subject to the tax. I had not the advantage of being present when the Chairman indicated that the later Amendments intended to alter the Government Amendments might be out of order, but those Amendments were intended to give this proposal the effect which the Prime Minister said it would have. I regret those Amendments may be held to be out of order, and I still hope we shall have a chance of discussing them. If that is not so, I think we have reason to complain. The Prime Minister promised that he would meet this point by an Amendment; the Chancellor of the Exchequer said his words would meet the point, and he promised that if we put down Amendments to those words he would consider them. The effect of the ruling of the Chairman is that the words put down cannot be considered, and the result is that whatever hon. Members may say Increment Value Duty will be charged upon agricultural land. That will be found in time to come to be a really heavy burden. We have been taunted with raising this point only on the Increment Value Duty, but who is to blame for that? Under the guillotine Resolution we cannot move Amendments to Clauses which the Government do not desire to amend. If we had had the chance of raising the point on the other duties we could have done so with equal effect. It is only because we are shut out by the Rules of Order that we cannot raise this point when the other duties are under discussion.
§ Mr. J. M. HENDERSON
If any trouble has arisen over this point it is owing to the good nature of the Chancellor of the Exchequer in trying to provide that agricultural land should escape Increment Duty. What was the Chancellor of the Exchequer's reason? He said that agriculturists had had a bad time. He might easily have proceeded by making the datum line either the price the man paid for his estate or the amount at which it was valued for the purpose of succession, and any increase ought to pay Increment Tax just the same as building land. I will put a case to the Committee. A owns agricultural land, and we put the value at £500. That is the datum line. He sells it to B for £800, and B's solicitors say, "How about the Increment Tax?" A replies that there is no Increment Tax. B sells it to C for £1,000, and C's solicitors ask, "What about the Increment Tax?" and B replies, "It is only a stamp for about £200." They reply, "Oh, no. There 311 is a stamp for £500. B has escaped that stamp, or at least A escaped it, and B has to pay it." I think if you were to say frankly that any increase above the datum line shall pay Increment Duty, whether it is building or agricultural land, it would be the best way to proceed. The hon. Member (Mr. Roden Buxton) said that when it becomes building land the agricultural value disappears; but it does not. It disappears, it is true, up to the datum line, but it still remains up to that line. I agree that there is a difficulty about this point, but it will not occur very often, and it has arisen entirely in consequence of the Chancellor of the Exchequer's good nature in trying to leave out agricultural land. I contend that there is no hardship in letting the man start the datum line on what he has put into the land or the figure he paid for it. Let that be the line, and let all above it pay Increment Tax, just the same as upon building land. I met a landlord the other day who said that five years ago he could not get £80,000 for his estate, but if he sold it to-morrow he could get £120,000 for it. Why should he not pay Increment Duty? If the £80,000 is what it cost him there is an increment of £45,000 by reason of the growth in the value of the land and why should he not pay Increment Duty on that amount? I know another owner in Essex who bought an estate with a house upon it twenty years ago, and he sold half of it for as much as he gave for the whole of it, and he has now got half of his estate for nothing. Why should he not pay Increment Duty? It is entirely because of this desire to relieve agricultural land that this little difficulty has arisen, and I think the best way to proceed is to say that the datum line shall be the line, and all value above that, whether building land or agricultural land, should pay the tax. That was the standard which John Stuart Mill set up, and he clearly had that point in view. I see no reason why if you strike a datum line agricultural land should not pay duty if there is a clear profit, just the same as building land.
§ Mr. WALTER LONG
I have been moved to say a few words on this subject by the speeches to which we have listened from two hon. Gentlemen opposite. Nobody can deny that the hon. Member for West Aberdeen (Mr. J. M. Henderson), who has frequently addressed us on these taxes, brings to bear upon these technical 312 questions a vast amount of experience, and he also has the power of putting his case very clearly before the House. No hon. Member has succeeded more completely in establishing the whole contention we have put forward on this point than the hon. Member for Ashburton. There is one remark made by the hon. Member for West Aberdeen which I venture to take exception to. He says that this proposal is due to the "good-nature" of the Chancellor of the Exchequer. I think that is a curious term to use in this connection. What does this good-nature mean? It is an attempt on the part of the Government to keep their word. A definite proposition has been laid down, and we are trying to give effect to it. From the very beginning when this Land Tax was first suggested, we have pointed out that the Government are not doing that which they professed to do, namely, exempting agricultural land, and the reason we have given, I admit not with the lucidity of the hon. Gentlemen opposite, is the identical reason that he has given. He thinks there will be few cases of injustice, but I think there will be many more than he contemplates, and, in support of my view, I adduce the fact that there is no question which has aroused a, greater feeling of anxiety, not only among the owners of land, but in the minds of all the most experienced valuers connected with land throughout the country. Every Member of the Committee must have received an immense number of letters calling attention to the fact that injustices will arise. There will be cases of injustice, but whether they will be many or few does not matter to the argument, because, even if they are few the injustice ought to be removed. There will be cases in which it will be so difficult that in all probability it will be impossible to differentiate between the value at the time of the sale and the original value.
The Under-Secretary for the Home Department said that my hon. Friend in his argument took land which would really be building land, and which could hardly be described as agricultural land. The Attorney-General, whose speech I am bound to say did not in any way justify the conclusions at which he asked the Committee to arrive, however, said most emphatically at the end of his speech:—We do not mean to tax agricultural land or agricultural capital,and so on. We ask to-day, as we have asked from the beginning of these pro- 313 ceedings, whether, if that is the deliberate intention of the Government, it passes the ability of the Attorney-General, the Law Officers, and the draftsman who are responsible for the language of the Bill to put in words saying in definite terms: "We do not mean to tax land whilst it is agricultural, but only when it becomes building land." You are doing nothing of the kind. You are adhering to ambiguous language, and the Amendment in no way carries out what we understood to be the declarations of the Prime Minister when moving the Closure Resolution early in the Session. I listened to him very carefully, and I certainly gathered that the Government would introduce an Amendment in the Bill which they hoped would meet the case, and that they were determined before we parted with it that the language of the Bill should meet the case. Here we have had an admission from probably one of the most experienced supporters of the Government that this difficulty exists, and can only be removed either as he suggests by exposing agricultural land to the tax or by a precise exemption.
The taunt which has been levelled at us that we only raise this question upon one of the taxes is most unfair, coming from hon. Members who have supported the passing of a Closure Resolution which makes the discussion of the Bill almost, if not completely, a sham. Surely this Debate has disclosed this afternoon that there may be an injustice. Finding our Amendments have been ruled out of order, we can only raise the question in a general way, and we are face to face with this undoubted fact, that the Bill will do that which the Government have declared it is their intention not to do, and must leave this House with that defect in it. Consequently, not only will the Bill fail to do what the Government said it should do, namely, altogether exempt agricultural land, but it will place a new burden upon an industry which bears enough burdens already, and which is in no position to have fresh burdens added to it. I do not know why the hon. Member for Mid-Devon (Mr. Roden Buxton) talks about our making speeches to tenant farmers at market ordinaries in the depths of the country. I venture to say it is quite right to say at those meetings what we say in this House—that this tax will fall on agricultural land. This Clause will not exempt agricultural land. We said it here last Session, we repeat it to- 314 day, and we shall say it again, as the hon. Member rightly said, because we believe it and because it is true; and in support of our argument we shall adduce the speech he made himself and the speech just made by the hon. Member for Aberdeen (Mr. J. M. Henderson). The two speeches made on that side of the House marked by their ability, have made it evident the Government have failed to carry out their original intention and that they are proposing to add by this Bill an additional burden upon an industry already overburdened both by taxes and rates.
§ Mr. GEORGE TOULMIN
I do not agree at all with the right hon. Gentleman when he claims that this will lay a tax on any industry. It will not lay a tax on the agricultural industry in any way. The tax will not come upon the land until it has ceased to be agricultural land. If it were a tax on the industry I should consider it an unjust tax. It would be treating the industry of agriculture in a different manner from other industries in the country; but, if the tax does not fall until the land ceases to be agricultural land and becomes building land, it cannot be a tax on the industry of agriculture. The right hon. Gentleman said that the speech of my hon. Friend (Mr. Roden Buxton) showed the justice of their whole contention. If that is their whole contention, the limits of dispute are narrow.
§ Mr. WALTER LONG
I made that remark in reference to the speech of the hon. Member for Aberdeen (Mr. J. M. Henderson), and I went on to say, in reference to the speech of the hon. Member for Mid-Devon (Mr. Roden Buxton), that I certainly should adduce it in support of our arguments that this tax would be an unjust one and would be laid on the industry.
§ Mr. TOULMIN
I wish to point out how narrow the limits really are. The hon. Member for Aberdeen gave certain figures, and I will take some figures per acre. Supposing land is of the value of £50 per acre, and it rises to £80 per acre, so long as it is agricultural there is no tax; but, supposing it goes up to a value of £100, and it becomes building land, is the tax to be fixed as between £80 and £100, or as between £50 and £100? The point is, I say, a very small one. The question is where you draw the line. The rise in value of any agricultural land as agricultural land is not very great, but when it passes from agricultural to building land the rise is great. It is not a 315 question as between £50 and £90, or £80 and £90, but rather as between £50 and £800 and £80 and £800, and the point is whether you would calculate the Increment at £720 or £750. I do not agree with my hon. Friend the Member for Aberdeen as to it being a question of the good nature of the Chancellor of the Exchequer. I understood that it was his intention that the industry of agriculture should never be taxed, and I consider he has done all he can to make that clear, and I hope he will stick to his own proposal.
§ Mr. R. A. SANDERS
It has been stated that the object of this Amendment is to make it clear that agricultural land shall not be taxed. I am afraid that is a slight misstatement. I think the real object of the Amendment is to make the Irish think that agricultural land will not be taxed, and I must say that the affect of it appears to me to be that it will deceive no one except an Irishman who wants to be deceived. The hon. Member for Mid-Devon stated that we should go about the country telling the tenant farmers at their market ordinaries that they were not to be reassured, that they had some justification for their fears, and that they were going to be taxed under this Budget. I think it is very clear, from what my right hon. Friend (Mr. Long) said, that we shall very likely tell not only the tenant farmers but the freeholders, and especially the small freeholders, that this Clause will not remove the fears which I think they are perfectly justified in entertaining. When we here talk of big landlords and farmers on a big scale, it sometimes occurs to me that in my own Constituency there are whole districts in which many of the occupiers of the soil own the land which they till. All those freeholders are frightened, and I think they are justifiably frightened, by these Land Clauses in the Budget. This Amendment is not going to remove those fears. It seems that if their land is not going to be taxed, there is no reason why it should be valued.
The Chancellor of the Exchequer said earlier in the evening that the reasons why the land was going to be valued in England, although the same careful valuation is not apparently to be made in Ireland, and the reason why men were to be sent down from Somerset House to value the land in England was that, 316 although it might not have a site value at the present time, it might sometime acquire one. Take Sedgemoor. There are miles of country there which in wet weather is under water. Is it ever possible to get a site value for land which is under water whenever you get, not an exceptional winter, but a winter when there is anything more than the ordinary rainfall. Take the allotments of Exmoor. Each of them to be separately valued. They are quaking bogs. They have undoubtedly a value as a sheep run, but, if anyone wanted to build a house on them, I would not insure that man's life for a great deal. The fear agriculturists and freeholders have is not entirely as to what is going to happen to them at once, but what is going to happen to them in the future, and the speech of the hon. Member for Aberdeen will, I think, be of considerable service to the opponents of the Budget, having put it so plainly that, at all events, there is a section on his side who are very disappointed because agricultural land is not avowedly included in these taxes. 7.0 P.M.
The very day that the Budget came out the "Daily Chronicle"—and in the West Country the "Daily Chronicle" is the Liberal paper par excellence—mentioned that the most important tax was the halfpenny tax on capital value, and if this is to be regarded in its first application to certain clauses of the Land Act there is little doubt that it will ultimately become universal. If these fears are to be reassured, if the small freeholder is to have his fears taken away from him, then I say there is a perfectly simple way for the Chancellor of the Exchequer to do it. Will he get up and openly disavow those opinions which are expressed by so many of his supporters, and will he say that neither in this nor in any future Budget does he mean to extend these taxes to agricultural land?
§ Mr. JAMES MASON
The question of building value in connection with agricultural land has been very much discussed, but I should be glad if I can to get some information on the question of one or two other values which seem to come into this matter. The Attorney-General told us that the intention was to tax building value and no others, but it is quite evident land may receive an increment value for other than building purposes. It may or may not remain agricultural land. We heard just now a reference to the question of football grounds. It is quite possible 317 that a particular field may have a special attraction as a football ground, and may, therefore, be sold at a high figure for that purpose. I should very much like to know whether, in the case of a field being sold at a high value for the purpose of a football ground, and evidently that is not a building purpose, that would come within the meaning of the Increment Tax? Will a field sold at a higher value than its agricultural value, because it is to be devoted to football purposes, be liable to the Increment Duty? There is another point upon which I am not quite clear. Supposing that in a particular place there are three fields, the original value of which was £50 per acre. These fields may attain an agricultural value of £80 per acre. But then a railway may be made through that country, and through that particular spot, and the railway company's action enhances the value of the fields to £150. The company buys two of the fields out of the three. On one of the two fields it erects a station and other buildings. I suppose there is no doubt whatever that the field bought by the railway company for the purpose of building the station becomes building land, and would be subject to the Increment Tax. The other field it buys possibly in order to have control of the land, and that remains agricultural land, and probably will always remain so, although the company has paid the same price for it as it did for the other field on which it erects the station. In the first case, where the station is erected, it is building land. In the case of the other field there is no prospect of its being built upon, and it will therefore remain agricultural land, and not subject to the tax. But then we come to the third field, which adjoins the other two. It has got an enhanced value for agricultural purposes, because it is near the station, and becomes to all intents and purposes accommodation ground. It is placed nearer the market, and therefore gets an enhanced value, although it may still remain agricultural land. Its enhanced value is due to the railway. I presume that that enhanced value will be subject to Increment Tax, while the other field, which the railway holds in reserve, will not be. I think it would be interesting to know whether in a case of that kind the owners of these three different fields will be differentially treated in regard to the payment or nonpayment of Increment Duty.
§ Mr. REES
I confess I was unable to accept the argument of my hon. Friend 318 near me when he attributed the Government action in exempting agricultural land to the good nature of the Chancellor of the Exchequer. Although I would not like to accuse the Chancellor of the Exchequer of any want of good nature, I would rather attribute his action in this respect to an endeavour to do justice to the situation and to recognise the fact that agricultural land is upon an entirely different footing from building land, and, therefore, properly calls for exemption. As for good nature, I should think it is not a quality in which Chancellors of the Exchequer can afford to indulge to any very great extent. It is a luxury denied to right hon. Gentlemen occupying that very distinguished position. It appears to me there are exceedingly good reasons for this exemption in the case of agricultural land. What is to happen in the case of small holdings in my own Constituency—in the rural portion of it. The average of the holdings is about fifty acres. If there is a tax on agricultural land it is imposed in the end on the tenants of the land, and it must diminish the prosperity in the agricultural district concerned, and so affect the market towns. When my hon. Friend the Member for Aberdeen spoke of an estate which lately changed hands at £80,000, now passing for £120,000, he must have been referring to property under exceptional circumstances. It most certainly is not the case that agricultural land has appreciated in late years by anything like that amount; whether it has really appreciated at all I myself entertain considerable doubt. He said that the effort of the Government to carry out its undertaking in this respect had not been successful. It is the function of the draftsman to carry out the intention of the Executive Government, but finally the lawyers come in and interpret what was intended to be made clear in the Act. I understand that hon. Members from Ireland are satisfied with the effort which have been made by the Government; I believe they are sincere, and earnestly anxious to bring about the exemption of agricultural land. But they have the reputation of being hard task-masters, demanding that bricks shall be made without straw, and if they are satisfied, as they are, probably the exemption provided in the Bill is very likely to be effective. They have urged that Ireland, being an agricultural country, should not be subjected to these taxes. I believe that is a good argument, 319 but I would point out that Ireland is no more entitled to this exemption than agricultural land elsewhere. I think Wales is entitled to every concession made to Ireland. I venture to suggest that, as far as agricultural land is concerned, there are a great many districts in this country which are equally entitled to exceptional treatment. I am not complaining of the action taken by the Government. I am not attempting to draw any invidious distinction. I am arguing the fact that hon. Gentlemen speaking for an agricultural country are satisfied with the efforts made by the Government to carry out their pledges in this respect, and that it is probable, therefore, that the effort is effectual. It may be asked what has this to do with the representative of boroughs. I altogether deny that there is any natural antagonism between their interests and those of that portion of the country which I represent. Their interests are identical in this respect, that where you get a small market town with rural surroundings it is chiefly, and in many cases absolutely and solely, dependent on the prosperity of the surrounding agricultural land, and no distinction and no such antagonism between industrial and agricultural interests can therefore be fairly drawn. It is for this reason that I, as representing boroughs, have always taken this side upon this question, and I regard it as being the only sound one from the point of view of the national prosperity as well as of those market towns in rural areas, several of which I have the honour to represent. Then I would also point out that unless there are minerals, or some exceptional circumstances accruing to any particular land, that the rent which is drawn from it—the mere agricultural rent—is small. The greater part of such rent often goes in repairs and other expenses, and unless the owner of land has some other resources, in point of fact he has not the apoplectic revenue which is suggested by hon. Members who I am assured cannot have any first-hand acquaintance with agricultural problems, or they would not put forward such contentions on that point as they do. I mention that more for the purpose of introducing another matter as to which I should like to have the attention of the Chancellor of the Exchequer. I apologise for referring to a matter which may have been referred to in another part of the Debate, because, although I spend a great deal of time here, I confess I am 320 sometimes absent. The Chancellor of the Exchequer promised, I think it was an under-standing, that he was going to transfer land from Schedule A to Schedule D.
§ The DEPUTY-CHAIRMAN (Mr. Whitley)
The speech of the hon. Member is, I must point out, somewhat wide of the question before the Committee.
§ Mr. REES
I am sorry to be out of order, and that I have not had an opportunity of asking the question at the right time. If, moreover, that point is out of order, then the further question that I was about to ask as to slate quarries is equally out of order. I have really no further observations to make, but I may remark that this is the first time that I have opened my mouth on this subject, though I myself have often listened with greater patience and resignation to far longer discourses from hon. Gentlemen possessing less acquaintance with the land than that with which they have listened to me, but, notwithstanding that, I will take the opportunity of thanking them for the modified patience with which they have heard me.
§ Mr. MAURICE HEALY
Having expressed my views as to the wording of the Amendment at an earlier period of the evening, I do not intend to repeat what I then said, but I cannot let the Amendment go without referring to the extraordinary announcement made by the right hon. Gentleman the Chancellor of the Exchequer with reference to the methods and principles on which the valuation of agricultural land is going to be made in Ireland. The right hon. Gentleman said that his announcement was not a novel one, as he had made it at some previous portion of the Debates. I am sure if the right hon. Gentleman says so that it did occur, but I must confess that I failed to notice that announcement on the part of the Chancellor of the Exchequer previously, and the information which he has given to the House came upon me as a complete surprise and as an announcement of a very startling character indeed. It is to the effect that in valuing the agricultural land of Ireland the Executive Government propose to disregard the Act of Parliament and to proceed in that country by different methods and on different principles to those which are to be pursued in England, Wales and Scotland, and that, although the Act of Parliament makes no distinction between different parts of the United Kingdom, and directs the Execu- 321 tive to proceed with their valuation by exactly the same methods and upon the same principle in Ireland as are to be followed elsewhere. The odd thing about the Chancellor of the Exchequer's announcement is that he made it as one to allay feeling and to remove what I suppose he admitted to be a grievance. The statement had been made that valuers were to be sent from Somerset House or Dublin, it does not matter which, on to every holding in Ireland for the purpose of making valuations in accordance with the provisions of this Act. It would be very exasperating if such visits were made, and an experience of that kind would no doubt be highly calculated to alarm and distress holders of agricultural holdings in Ireland. But Ireland may have a worse fate; it may be a bad thing that valuers should visit agricultural holdings in Ireland for the purpose of making valuations, but it would be a worse thing if the valuation is to be made without any examination at all, and that, it appears, is the state of things which is now brought before the Irish agriculturists.
In England you are going to have a scientific valuation—you are going to have a valuation made ad hoc by officials specially appointed for the purpose. In Scotland you are to have the same good fortune. [An Hon. Member: "No."] Perhaps I am wrong about Scotland, but I did not understand that the Attorney-General assented when it was urged that the same methods were to be adopted in Scotland as in Ireland. Still, it is obvious that in England, if a valuation is made, it may be a grievance, but against that it is to be made by persons of skill; but in Ireland every inch of agricultural land is to be valued, and that without any process of examination at all. I can very well understand the Chancellor of the Exchequer saying: "We do not propose, or we do not expect to get any revenue from agricultural land in Ireland under the provisions of this Bill, and therefore we will not value it." But that is not what the right hon. Gentleman says. He says: "We do not expect to get any revenue from agricultural land in Ireland, but we will value it, only instead of a scientific valuation we will have a go-as-you-please one." Certainly, Somerset House may be bad, but the valuation which is made without any valuation of Irish land—what I call a blind fold valuation—may be ten times worse. Observe, also, the extraordinary claim that the Government set up that this 322 matter is not to be regulated by Parliament or controlled by statute, but by the caprice of the Executive, and observe that the right hon. Gentleman may not even be in office when this extraordinary process is to take place. This valuation might take place in six months' time, when other Gentlemen may occupy those benches, and although the Chancellor of the Exchequer's statement may be a perfectly bond fide one when it is made at this time, what guarantee have we that his successors will take the same view? In all these matters affecting the taxation of Ireland under this Bill we have been constantly referred not to the terms of the Act of Parliament, which ought to regulate it, but to some supposed dispensing power resting in the Executive. That was the way in which we were met last year when we complained that the right hon. Gentleman's Amendment relating to the Death Duties were not properly framed. It was admitted it was not properly framed, but he had issued orders, he said, to his officers in Ireland to construe it as he desired. That is all very well, but these matters must not be settled by the Executive, but by the law of the land, and the right hon. Gentleman's power will not last a single moment longer than he is in office, and his successor may have different views, and say, "This matter is not to be governed by the views of the late Chancellor of the Exchequer, but by the express terms of the Act of Parliament."
§ Mr. LLOYD-GEORGE
I should like to have your ruling on this. All this has arisen out of a correction which I made of a statement about valuation in Ireland. It is absolutely irrelevant to the Amendment and even to the Clause. The valuation clause is Clause 26, in respect of which there is no Amendment at all. The question of whether you are going to value Ireland and how you are going to value it is absolutely irrelevant. There has been a good deal of latitude by way of question and answer, but the hon. and learned Gentleman is now entering into an elaborate examination of the method of valuation, which I shall have to reply to, and there will be others to discuss it. There are other questions which it is desirable should be discussed before eleven o'clock.
§ Sir EDWARD CARSON
Has it not always been the rule of this House, Sir, when we are discussing under a gag that we should discuss the material points?
§ Mr. T. M. HEALY
During the whole time when the Chairman sat in your place, Sir, the discussion proceeded on this point and was treated as relevant and without a single point of Order. May I also say that the whole discussion has arisen by reason of a statement of the Chancellor of the Exchequer himself, which he now is trying to prevent being discussed. Surely if the Chairman himself, whom I presume you would naturally be inclined to follow, permitted this discussion without censure, we should not be overborne now by the intervention of the Chancellor of the Exchequer?
§ Mr. JOHN DILLON
On the point of Order, Sir. I do not desire to say a word about the exclusion of this matter from discussion, but I trust you will keep it in mind if you allow it to proceed, that you will permit some of the majority of the Irish party to reply to the remarks of the Chancellor of the Exchequer.
§ Mr. LLOYD-GEORGE
I must, on a point of Order, correct the statement made in error by the hon. Member (Mr. T. M. Healy). There was no discussion. I came in, and the hon. Member made a statement about valuation in Ireland. I got up and corrected that. I said it was not the case. The hon. Member afterwards got up to make some statement about it, and I apologised to the House for referring to it because it was out of order, and I could only do it by the indulgence of the House. Then the discussion proceeded on to other matters. There was no Debate at all in the ordinary sense of the term. Now a formal discussion has been raised on the whole question of valuation in Ireland, which has nothing to do with the Clause at all.
§ Mr. MAURICE HEALY
I submit that every word I said was relevant to the particular Amendment. We are discussing the taxation of agricultural land, and the securing that agricultural land shall not have this burden imposed upon it. Everything which is relevant to the method of valuation of agricultural land is, I submit, relevant to that topic.
May I ask whether it is not for the Opposition to choose the Amendments they desire to discuss under a Closure Resolution, and not for the Government to impose this gag?
§ Mr. JAMES HOPE
If a Minister makes, not a correction, but a detailed statement of administrative policy of con- 324 siderable length, is it not in order for the Members of the Opposition to dispute that statement?
§ The DEPUTY-CHAIRMAN
I should not have allowed the hon. and learned Gentleman to proceed as far as he has done had he not stated at the beginning of his remarks he was replying to a statement made by the Chancellor of the Exchequer, and while he was in the House I had already ruled against the hon. Member (Mr. Rees), who was raising a matter which is only pertinent to another Clause of the Bill. I understood from the remarks of the hon. Member (Mr. Maurice Healy) that he was replying to something which had been said by the Chancellor of the Exchequer. I certainly cannot allow the discussion to proceed further than his definite reply to the statement made by the Chancellor. No further Debate can occur on that matter.
§ Mr. MAURICE HEALY
I apprehend that your ruling will allow me to say that I consider that the announcement which the right hon. Gentleman has made as to the adoption of Griffith's valuation as the basis of valuation for the purposes of this Section was not only improper in that it arrogates to the Executive power a function which should only vest in Parliament itself, but also because in my opinion he could not select a worse or a more unsuitable valuation for the purpose. The right hon. Gentleman said he had consulted Sir John Barton, the Commissioner of Valuation in Ireland, who informed him that there was existing in Ireland full material on which this valuation could be made without setting up any special machinery for the purpose. On this subject Sir John Barton knows no more than the first man the right hon. Gentleman might meet in the street. It is not the function of Sir John Barton or his Department to value agricultural land. It was their function fifty years ago, and they made a valuation then, but the Statute expressly prohibits them from making any revision of that valuation, and for the past fifty years Sir John Barton's functions have been limited to the valuation of premises and hereditaments which are not agricultural. Sir John Barton can tell the right hon. Gentleman what the valuation of agricultural land was fifty years ago. It was made on the basis of prices which existed fifty years ago. In other words, he can tell the right hon. Gentleman what was the right price to put 325 on wheat-growing land when it grew wheat fifty years ago, and what was the proper valuation to put on pasture land fifty years ago, when pasture land had no value. There is not in the whole world a worse, valuation which could be selected for the purpose than the Poor Law valuation. It was made fifty years ago, under a state of things which is wholly inapplicable at the present day. That, at any rate, might do no harm if the imperfections in it were equal all over Ireland, but the Poor Law valuation is high it one county and low in another. Nay, it is not a question of counties. In the rural district of Kinsale I have put a holding into court the rent of which was half the Poor Law valuation, and have got a very large reduction. In another union in the same county I have put a holding into court in which the rent was twice the Poor Law valuation, and have not succeeded in bringing down the rent to the valuation. The reason is that one was a wheat-growing area when the valuation was made, and the other was not. The result is that, whether you take the Poor Law valuation as applying to land or to buildings, you could not, for the purpose of constructing a scientific valuation, go to a source which would land you in more error and more disaster than the Poor Law valuation.
§ The DEPUTY-CHAIRMAN
The hon. and learned Member has exceeded the limit I allowed him of a reply to the statement of the Chancellor of the Exchequer. He must not argue the question of the principle of valuation. [HON. MENBERS: "Hear, hear."]
§ Mr. MAURICE HEALY
I am sure you have good reasons for your ruling, but the only reason hon. Gentlemen who cheer have is that they think they are suppressing the truth. I cannot accept as final, or even legal, the right hon. Gentleman's announcement that in making this valuation he will proceed on the principles which he has laid down, or that it is leaglly open to him to do so. I should regard it as disastrous for Ireland if that was possible, because, though it would be a bad and a dangerous thing for Ireland that there should be a valuation made without examination or investigation, it would be a still worse disaster for the country if a scheme of valuation, which must ultimately be used for a purpose far beyond the limits of this Bill, was once inscribed upon the taxing books of your Imperial system which, instead of being made with the care 326 and skill and judgment which should be brought to any valuation of the kind, is to be made in a casual and haphazard way which the right hon. Gentleman considers good enough for Ireland.
§ Mr. H. S. FOSTER
May I ask the Chancellor of the Exchequer whether his view is that the moment the site value rises above the purely agricultural value the land ought at once to cease to be cultivated and ought to be thrown open for building. If the definition of this Clause were that so long as land is used for purely agricultural purposes it will be exempt from Increment Tax, there would be no difficulty on either side of the House. But there must be thousands of cases in which no mortal man could say, when he is cultivating land for agricultural purposes, what view the valuers will take, and whether they will put a site value upon it. Does the right hon. Gentleman think it is a good and a desirable thing that the large amount of land which is being used for purely agricultural purposes should be driven out of cultivation from fear of this Increment Tax? There must be thousands of cases in which the valuers themselves will not be able to say, until they come to meet their difficult task, whether or not they will put a site value on the land which will raise it above its purely agricultural value. If the result is that the site value is going to be but little in excess of the agricultural value, is it the view of the right hon. Gentleman that, although the land may not be absolutely ripe for building, but may yet have site value, the land should cease to be cultivated? If it is not his view that it should cease to be cultivated, he is putting by this Increment Tax a direct tax upon agriculture. The distinction drawn by the Government is that so long as land is purely agricultural land no Increment Tax will be imposed upon it, but the moment that, in the opinion of the body of valuers, there is any value in that site above its purely agricultural value, it has to come under the Increment Tax at once, not merely for the margin of increase over the agricultural value, but actually for the increased agricultural value from the datum line of the original valuation. If that is really his policy, he is in fact putting a very heavy tax upon land which may continue to be used for agricultural purposes, although conceivably it may have some slight increase in value over purely agricultural purposes in the opinion of the valuers. If that is so, in the words of the hon. Member (Mr. T. 327 M. Healy) the other night, you are taxing the food of the people, because you put a tax upon any land which, as a matter of fact, is being used for purely agricultural purposes. Whatever theory there may be about its site value you are putting a burden directly upon agriculture, and that will apply not in a small number of cases, but in many thousands of cases all over the country.
§ Mr. DILLON
Two powerful speeches have been delivered as representing the views of Ireland in response to the Chancellor's observations on the question of valuation, and I claim the right to place before the Committee the true view of Ireland, as this subject has been grossly misrepresented. The hon. and learned Member for North-East Cork (Mr. Maurice Healy) has just entertained the Committee at enormous length on the question of Griffith's valuation. His speech from beginning to end was an elaborate argument in favour of a new valuation for Ireland. I take issue with him on that subject, and I claim to speak the opinion of the vast majority of the Irish people when I say that we do not want a new valuation. Griffith's valuation was described by the hon. and learned Member as disastrous. Listening to him you would suppose that it was not used at present for any purpose in Ireland. He pointed out how unequal it was between county and county and district and district. As a matter of fact, Griffith's valuation is the basis of local taxation in Ireland at this moment, and, although it may be open to criticism, we are content with it. The real explanation of the situation is this. Somerset House valuers have been doing duty in Ireland on a large scale, and a great many farmers in Ireland have been alarmed that these valuers are going to revalue the land. When the Chancellor of the Exchequer got up and announced that there would be no Somerset House valuers under this Bill, there was consternation among the hon. and learned Member and his Friends. The disappearance of the Somerset House valuers is the disappearance of a valuable electoral asset. Griffith's valuation is not a perfect valuation, but it is good enough for us, and we are quite content to use it for the purpose of general taxation as well as for the purpose of local taxation. Over and over again in the last thirty years Government after Government has endeavoured to 328 pass Bills to revalue Ireland, and the Irish representatives have systematically opposed any such valuation. The hon. Member for North-East Cork said he would regard the use of Griffith's valuation as the basis for Clauses 7 and 25 of this Bill as disastrous. That is the point I am answering. I differ from the hon. and learned Member, and I believe I speak on behalf of the vast majority of the Irish representatives when I say that we accept and endorse what was put forward by the hon. and learned Member for North Dublin (Mr. Clancy). We are content to rest upon Griffith's valuation for this purpose. As a matter of fact, Griffith's valuation is in full use to-day by the Inland Revenue for the purpose of the Death Duties. In point of fact, it is used for taxation purposes. We have no other measure in Ireland, and we infinitely prefer it to any further valuation that may be put on the country. So far as we on these benches are concerned we are content that the Government should stick to their statement and to their intention that there shall not be any further valuation except so far as may be necessary. It will be necessary in a small degree, because this tax on increment value will apply to an infinitesimal small quantity of land in Ireland.
May I say with regard to the question of Griffith's valuation that, as I understand the matter, it is a valuation which is, or used to be supposed to be, a low valuation of the land? Every low valuation is an injury to the tenant as soon as the land develops for the purpose of taxation under this Bill.
There may be cases, I quite agree, but I think there are a great many cases where you will find that the valuation is below the actual rent. But if that were the case, the tenant would suffer as soon as his agricultural land became liable to this tax. It will become liable when it sells above a certain value, or when it goes into a different category. Then he will be taxed upon the difference between Griffith's valuation and the new valuation. That may be a gross injustice under any circumstances, but the injustice will be manifestly increased if you start from too low a datum line, such as Griffith's valuation. Every tenant who improves his land raises its value by improving it, and when he comes under the new category he will suffer. I cannot 329 understand why hon. Gentlemen are anxious for Griffith's valuation, which, in certain cases, must obviously do gross injustice to the Irish purchaser.
§ Mr. O'SHEE
The Leader of the Opposition appears to be imperfectly informed with regard to Griffith's valuation. As a matter of fact, 90 per cent, of the fair rents fixed in Ireland are under Griffith's valuation. At the present moment Griffith's valuation is rather a high valuation. The Chancellor of the Exchequer stated early in the evening that he was going to take Griffith's valuation as the basis, but that he would take it corrected by the valuation of farms carried out by the landlords of Ireland. I think that is a desirable thing to do. In extreme cases it would correct too high a valuation or too low a valuation. Too high a valuation is the kind of valuation which requires to be corrected. I do not share the view expressed by the Leader of the Opposition that we have anything to fear in connection with the taxation of agricultural land. I think if ever it was made clear in any Act of Parliament that there was no danger whatever of the intentions of Parliament being frustrated, it is made clear in this Bill. It may be said that Parliament can never make its intention clear by any form of words. That is the contention of the hon. and learned Member for North-East Cork. The words of this Clause have, so far as I can see, been drawn to ensure that the intention of Parliament that agricultural land is not to be taxed will be carried out. I think the doubts expressed in Ireland as to whether the original words were sufficient to carry out the intention of Parliament were not justified. The Clause as originally drawn would have been quite sufficient to carry out the intention of Parliament. We have, however, much stronger words inserted in the Clause now, and if any doubt did exist it has been removed. The only basis for the argument that there was doubt as to the meaning of the words was to be found in the fact that under the Land Act of 1881 we had two kinds of values. We had the "true value," which was the value upon which the landlord served notice to the tenant when he wanted to pre-empt a holding, and we had the "market value." It was on this account that some ingenious lawyers suggested that this distinction would be observed by the courts. I do not think there is any real foundation for that view. The hon. and learned Member for Cork City and his friends have made 330 Ireland ring with denunciations of the bogey men coming from Somerset House who were to fleece the farmers. Now that that great injustice is not to be done they seem to be in greater agony than ever. Now they complain that we are not going to have a scientific valuation by men from Somerset House, but that we are to have a valuation by Sir John Barton. They made the farmers of Ireland squirm during the past few months with fear of the individuals who were coming over to make a raid upon them. It is almost pitiful to see the position they are in now. This new party from Ireland is led by a very remarkable man, namely, the hon. Member for Cork City. He is well supplied with legal advisers. He has a very remarkable man as his adjutant who is a solicitor, and he has his nisi prius counsel to advocate his ideas. The bogey that has been raised in Ireland has now disappeared, and the hon. Members to whom I refer will have to reverse the arguments they have been using during the past few months and take a different line altogether.
§ Mr. O'SHEE
They are now absolutely willing and ready to attack the Government because they will not send over Somerset House valuers. The Amendments which have been accepted by the Government to-day make it clear, if that were necessary, that nobody in Ireland will be charged Increment Duty in respect of agricultural land.
§ Mr. HAMERSLEY
In the course of this Debate it has been made abundantly clear that the Government have no desire that agricultural land should be taxed, but in deciding whether it will or not be taxed, we must be guided by the words of the Clause under which the Increment Tax is to be imposed, coupled with the interpretation put on Clause 7 by the Attorney-General. I listened with great interest to the statement of the Attorney-General that when agricultural land became of value for building sites, or for building land, then it would be subject to the tax. Turning to the interpretation of "site value" in Clause 2, I find these words:—Site value shall be estimated for the purpose of this provision by reference to the consideration given on the transfer in the same way as it is estimated by reference to the consideration given on a transfer where increment value is to be collected on the occasion of such a transfer after the passing of this Act.331 8.0 P.M.
That being the case, if you bring in Clause 7, and make it read as the Attorney-General wishes us to read it, it would read in this way: "Increment Value Duties will not be charged in respect of agricultural land as long as that land has not any site or building value, but directly it gets from the value of agricultural land and clothes itself with site or building value, then it will become liable to Increment Tax"; and that Increment Tax is calculated in the ordinary way under the other provision. But the whole question is this, whether agricultural land under this Clause will be liable or not. Directly it departs from its value as agricultural land pure and simple, then it becomes subject to Increment Tax.
I ask the Members of the Committee whether, with very few exceptions, in certain parts of England, land has not a value beyond the pure agricultural value, that is the sentimental value, or site value? Directly it gets out of that category it becomes liable to the Increment Tax, and being liable to the Increment Tax, the agricultural land having that building value becomes liable to a very heavy burden. If the Chancellor of the Exchequer is in earnest in his desire to exclude from this Act all agricultural land when it is used for agriculture, it would be very simple to accept the Amendment of the hon. Member for Kingston (Mr. Cave), which entirely meets the case. Why that Amendment is not accepted I cannot conceive, because it carries out the promises of the Chancellor of the Exchequer and the Prime Minister made in this House to exclude agricultural land from the burden of this tax, and to bring in the class of land that the right hon. Gentleman does want to tax, and it may be properly wants to tax—that is, land near towns that has an accrued value due to the community given to it as an added value over its agricultural value. The tax that is advocated by this Bill has not been placed upon any land in all the experimental Land Taxes or any of our Colonies or Dominions over the sea. No one has attempted to bring it into practical effect, not even in New Zealand, where they have had more experimental Land Taxes than in any of our Dominions over the sea. In all our Dominions, with certain exceptions in New Zealand, where they put capital value taxes on land, they have left it to the locality to put the taxes on, and not 332 done it through the Federal Government. The reason is that in each particular locality they have different reasons for putting on an Increment or Land Value Tax, so that it is better to leave it to the locality rather than to the Federal or Imperial Government.
Last evening the Chancellor of the Exchequer stated that all industries in this country were booming and increasing in prosperity. Surely he must have forgotten, when he said that, the agricultural land and the hop land. Take the hop lands of Kent. Should not they be included in agricultural land? Should not they be left free of any Increment Tax when used for hop-growing purposes—for purposes of an industry which is declining, to the enormous loss of the country? I submit with confidence, notwithstanding what the Chancellor of the Exchequer has said as to the intentions of the Government, that when a judge has to interpret the Clause as proposed now there would be very little, if any, of the hop lands of Kent that would not come under this Increment Tax, because there are very few of those lands that have not a sentimental or site value beyond what might be called the agricultural value. This has been clearly demonstrated by the right hon. Gentleman the Leader of the Opposition in the concrete instance which he brought before the House of the increase of value of land beyond its agricultural value as it grows into site value. That has not been answered. I have listened to a great part of the Debate, trusting that someone on the opposite side of the House might answer that concrete instance, but I have heard no one, and I have heard one hon. Member on that side support it as being unanswered. I would appeal to the right hon. Gentleman to accept the Amendment of the hon. Member for Kingston, and thus remove the very grave doubt which exists in the matter.
§ Mr. GORDON
I wish to emphasise the last observation made by the hon. Member who has just spoken. So long as there is any doubt on this question it is the duty of the Chancellor of the Exchequer to try to remove it. The right hon. Gentleman and his supporters from Ireland say that the other Nationalist Members have made Ireland ring with the suggestion that there will be a tax under this Bill upon Irish farmers and upon agricultural land. It is all very well to sneer at that and to suggest that those fears are groundless. But does the right hon. Gentleman know that so 333 well grounded were those fears of farmers in the South of Ireland that an association of farmers in Tipperary themselves instructed a solicitor and obtained the opinion of eminent counsel in Ireland who knows the law with reference to land in Ireland as well as most members of the profession, and that that opinion was obtained on several important matters in reference to this proposed Budget, and one of the questions put to counsel was: "Is agricultural land liable to Increment Duty or Site Value Duty, and if so, under what circumstances?" Notwithstanding the high position of the Chancellor of the Exchequer or of the Attorney-General for Ireland, the right hon. Gentleman would perhaps pay some attention to this opinion of counsel, who is an eminent member of his profession. If the right hon. Gentleman does so, perhaps he will not say so airily that there is no danger.
In giving his answer counsel goes through all the sections, and after carefully considering them, says: 'Again, Section 7 enacts that Increment Duty shall not be charged in respect of agricultural land while that land has no higher value than it has for agricultural purposes only. In my opinion it is unsafe to rely on this enactment as a protection against the competition value of agricultural land being rendered liable for Increment Value Duty, and I think there is danger lurking in the language of the section that it will be judicially construed in a sense that will impose Increment Value Duty on the part of the price of agricultural land which represents or is referable to competition value"; and he goes through the different Sections of the Bill and compares the language used, for instance, in Section 14 and Section 17, where you want to deal with things specifically. He says that in Section 14 it is made clear that no Reversion Duty is to be charged on any land which is at the time of determination agricultural land, and learned counsel reasons out from the way in which the exemption of agricultural land in other parts of the Bill is dealt with, that from the language which is used here, in his opinion there is grave danger of a court construing that it does affect agricultural land. We and Members from the South of Ireland have contended that it does affect agricultural land, and that being so, I would appeal to the Chancellor of the Exchequer to take into consideration that it is a far more important thing to have the considered opinion of counsel which it is the duty to give to the best of his ability, and to give 334 honestly, than to have any mere expressions of opinions from Members of this House, however they may be in the House. Every lawyer knows that in interpreting the laws you cannot look at the Debate. You must use the language of the Act of Parliament, and therefore it is incumbent upon the Legislature to put into the Act of Parliament words which will express its actual intention.
There is another matter to which I wish to refer. As I understand the Chancellor of the Exchequer thinks it is not quite relevant to the subject in hand, but it is a question that he has dealt with himself. That is the question of valuation. From my point of view there would be a great advantage I think in entrusting to the Commissioner of Valuation in Ireland the duty, which in England would be imposed upon Commissioners appointed solely for the purpose under this Act, of ascertaining what is the site value, what is the original site value, and what are the other valuations that seem to be necessary for the purpose of carrying out this Act. I think it will be a very good thing to put in his hands, but that does not get rid of the necessity of its being done by somebody. As the hon. and learned Gentleman the Member for North Louth pointed out, under Section 26 there is a mandatory provision that the site value and the original site value, and all the other values of agricultural land, shall be ascertained, and there is no provision in the Act enabling the Chancellor of the Exchequer or any other authority to get rid of the necessity for that valuation by someone. I know these Valuation Acts in Ireland as well as most lawyers, at all events, who have had to deal with them. I have been in a great many appeals, and I have dealt with these matters in various ways. I think the right hon. Gentleman was, perhaps, speaking too hastily when he spoke about the Griffiths valuation in Ireland, which was made a long time ago, and, so far as agricultural land is concerned, it cannot be altered. While the right hon. Gentleman was speaking my hon. Friend the Member for North Belfast reminded me that some years ago I appealed to Sir John Barton to revalue some of my agricultural land, and his reply to me was that he had no power to do it. That is exactly the way in which the matter stands. You have certain powers with reference to other classes of property, but not in respect to agricultural land. In the Land Commission, when a tenant brings his land holding into court, 335 they set out the Griffiths valuation and they set out the rent, as evidence of how much the tenant ought to pay, and they deduct for drainage and various other things. But there is nothing in the nature of a valuation of a farm which would suit the purposes here as to site value and things of that kind, and I think the right hon. Gentleman spoke too hastily in regard to these valuations. There can be no doubt that there must be this valuation in Ireland if this Bill is to be carried out in that country. I ask the right hon. Gentleman to get rid of this danger. He does not want agricultural values to be taxed. We are dealing with two different things—agricultural land and agricultural values. The value of agricultural land may be increased enormously by reason of a town growing up, or by reason of a railway station being brought to a particular locality. It may also happen, and I know places where in all probability it would happen, that the land would have some potential value owing to the possibility at some time of its being used as building ground through the extension of a prosperous town. In those cases the potential value would come under consideration in ascertaining the site value of the land, and the whole of the agricultural value would be brought in, and the increment treated for the purpose of this tax. I do think that the right hon. Gentleman should get rid of this difficulty, which would certainly be a great convenience and advantage to people interested in agriculture.
§ Amendment agreed to.
§ Further Amendment made: After the word "value" ["its value for agricultural purposes only"] insert the words "at the time."
§ Leave out the words "if sold at the time In the open market."
§ The CHAIRMAN (Mr. Emmott)
The next Amendment in order stands in the name of the hon. Member for Central Sheffield (Mr. James Hope) on Clause 53.
§ Mr. AUSTEN CHAMBERLAIN
On a point of Order. May I ask whether the Amendment in the name of my hon. Friend the Member for South Bucks on Clause 16 is in order. Are the words which my hon. and learned Friend proposes to leave out new words underlined?
§ Sir ALFRED CRIPPS
On a point of Order. As regards the Amendment which 336 I propose, it is to leave out the words which are underlined, "and every subsequent" ["for the financial year ending the 31st day of March, 1910, and every subsequent financial year"].
§ The CHAIRMAN
In the original Bill the Clause read, "Subject to the provisions of this Part of this Act, there shall be charged, levied, and paid for every financial year in respect of the site value of undeveloped land a duty called Undeveloped Land Duty," etc. The substantial alteration here is not in the words "every subsequent financial year." That Amendment is merely an alteration of the words. The real alteration here is "the financial year ending on the 31st day of March, 1910. "That is a substantial alteration. The other proposal is a mere alteration of the words.
§ Sir ALFRED CRIPPS
The point I wish to raise—I am not questioning the ruling of the Chair—is that it should be limited to one year. I understand what you say, Sir, on the point of Order, but I do raise that question.
§ Mr. AUSTEN CHAMBERLAIN
I quite see, Sir, that as a matter of substance your ruling would be obviously right, but I submit that, when we are working under a very severe closure, the guillotine Resolution must be interpreted with the utmost latitude in favour of the Opposition; in fact, you must have the same sort of prejudice in favour of the critics of this Bill as the courts have in favour of the taxpayer who comes into court.
§ Mr. AUSTEN CHAMBERLAIN
I put it that if technically we can be brought within the limits of the rule we are entitled to have the advantages of any technicality when we can get it.
§ Mr. LLOYD-GEORGE
I would point out that by straining the interpretation of a technical rule we would cause a restriction of the Debate on other Amendments. If the Chairman could possibly strain the rule in such a way, it must mean the reduction of Debate on other Amendments which are to come on, and therefore I think it would hardly be fair to the movers of the other Amendments.
§ The CHAIRMAN
I do not think the Amendment is in order. Even if it were, I 337 should have to take the technical point that it does not read as it is put down on the Paper.