§ It is hereby declared that, for the purposes of Section twenty-seven, Sub-section (2), of the Finance (1009–10) Act, 1910, the words "the first claim for Increment Value Duty or Undeveloped Land Duty" shall be inserted in place of the words "the copy of the provisional valuation," and this Section shall be amended accordingly.
§ Before moving this new Clause I feel I must express my personal regret, which I am sure is shared by everyone who takes an interest in this question, that the learned Solicitor-General is too unwell to 2164 be here to-night. Both sides have profited by his knowledge and his courtesy. From the point of view of hon. Gentlemen opposite, I am sure they will agree with me that we are conducting this Debate under circumstances of very great difficulty. These new Clauses are being taken on the Report stage, but it is really a continuation of the Committee stage, and the position we are in is this, that Clauses of a very difficult character, dealing with subjects which require a good many questions and answers across the floor of the House, and which are essentially matters for Committee stage, are, owing to circumstances with which every Member of the House is well aware, remitted to the Report stage where they can only be debated under limitations which do not make for efficient 2165 discussion. We, on this side of the House, have serious reason to complain of the manner in which the Finance Bill has been put back until a week before Christmas. I think I shall be within the rules of order in saying that the excuse of the Government, that the Bill contains little or no new matter, does not hold good. It must be recognised, seeing the number of new Clauses on the Paper, that the Finance Bill of the year is the only opportunity for the House itself to review the financial system of the country. This is our only opportunity, and it is confined to new Clauses, Amendments to the Bill itself being necessarily restricted to new proposals made by the Government, or to proposals of long standing. So far as the finance of the year is concerned, the House of Commons is in the position that it can only criticise or make any new proposals in the form of new Clauses, and we are now confined to one evening for the Report stage. I think that is a most regrettable position, which ought not to be repeated. Some hon. Members opposite cheer that; will they support it by going into the Lobby? That is the only course by which apparently the Government may be diverted from a procedure not adopted for the first time, but really the last stage of a long course of financial decadence, and treating control of the House of Commons over finance with absolute contempt.
§
This Amendment deals with the question of the method of valuing property for Increment Value Duty and Undeveloped Land Duty. The present position is that a provisional valuation is served on the owner of the property, and within sixty days of that being served he is entitled to object to the figures of the total value and site value but not to the gross value or full site value. If he does not object to that within sixty days the figures become absolute and cannot be altered, amended, or repealed. That is indicated by Section (33a), which enacts that
An appeal shall not lie against a provisional valuation made by the Commissioners of the total or site value of any land except on the part of a person who has made an objection to the provisional valuation in accordance with this Act.
That is to say within sixty days. That matter is, therefore, perfectly clear. What I want to put to the House is this: What is the position of an owner of small house property under the Act as it now stands? He receives his provisional valuation, and
2166
upon it he sees certain figures, one a figure of site value, the other a figure of total value. These terms are Greek to him; he does not understand them. There is no demand made from him at all. All that he receives is a yellow piece of paper containing the statement on it that the total value of his propery is a certain figure, and that the site value is another figure. He is not asked to take any action upon it. Naturally the ordinary attitude of a small owner, who has no comprehension whatever of the mysteries of the Finance Act, is that he simply does nothing. In, I believe, a large majority of the cases in which owners of small property have been served with this valuation, they take no action whatever upon it.
§ Let us go another step in knowledge. Let us suppose that some of these gentlemen are followers of the Land Tax gospel. They have heard that gospel perpetually preached, and they have also read and heard of it being enunciated over and over again by the Chancellor of the Exchequer in the Debates of 1909, that this tax is levied on the site value only; that is, upon the bare value of land and on any increase which takes place in that value. An owner of small property, having that in mind, would look mainly to the figure fixed upon his site value, and if, in his opinion, the site value approximates the value of the land on which his house stands, he would not consider it was necessary for him to take professional advice or to object to it. He would not consider that the figure of the total value being considerably below what he considered to be the selling value of his property would have any effect upon the tax he would ultimately have to pay, particularly having regard to the fact that all the taxes within his knowledge have always been levied directly upon the assessment, and he has always been accustomed to know that a low assessment means a low tax. His natural desire would be to confine his objection to the site value, and he would raise no question upon the total value. What is the next step? It is that he sells the property. I am assuming that the property has been undervalued. That is the normal position. I am not stating an accidental but a normal case. The original site value is usually fixed by a process which is not enjoined by the Act, but a process which the valuers have adopted. They say we consider the value of the land on which the house stands is £50. They may be approximately right. That is what they do. That means that the normal site value is 2167 not very far out, although in some cases it may not be normal. But with regard to the total value—I do not wish to throw stones at anybody—I say there is systematic under-valuation. It is occurring everywhere, especially in regard to small house property. The cases are to be numbered by tens of thousands all over the country.
§ Then comes an occasion, and the properly is sold at what, for the moment, I am entitled to call its real value, the value which it cost the owner to either build or purchase, and something about what he considers it to be worth. It is sold at a figure considerably higher than the total value fixed by the provisional valuation. What happens then? Another process is brought into play, and a totally new kind of calculation or valuation is made based upon the purchase price. A comparison is made between the original site value, fixed by the process I have just described, and the site value on the occasion, which is derived by an arithmetical process from the price on the occasion. The practical effect of it is that the whole difference between original total value and the total value on the occasion is debited to site or credited to site and treated as assessable site value; and the whole difference, minus 10 per cent., is liable to a 20 per cent. Increment Value Duty. Let us see for a moment how this new Clause bears upon it, and the position the owner is in. By the lapse of these sixty days he has got what I am entitled to assume is, and which certainly is the fact in innumerable cases, a fictitious total value placed upon his property. By the lapse of these sixty days that fictitious value has become a statutory value, absolutely unalterable by any process of law or of appeal. That is to be compared on the occasion with a figure which is a real figure, derived from the actual sale of the property; that is unquestionable because there is the fact that the property has been sold at a certain figure which the owner cannot dispute, which he is not in a position, nor does he desire to dispute. He only realises the necessity for disputing the matter when he finds the original figure of the total value which has been fixed upon him by the lapse of the sixty days by, you may say, his own laches, ignorance or carelessness. I say you fix upon him a liability under an Act of Parliament which he cannot understand, and which he ought to have a fair and reason- 2168 able opportunity of objecting to when his attention is called to it.
§ What the Clause says is, that instead of this provisional valuation being fixed for all time against the owner by the mere lapse of sixty days from the date of its service, it shall not be fixed until there has been an occasion. The advantage of that is this, that it will be fixed at a time when a claim has been made upon him for Increment Value Duty. Then you will really make the process more workable, and for the first time you will have an opportunity for comparison between the theoretical value fixed by the valuation and the actual price fetched in the open market by the property. You cannot test it otherwise, because the fictitious value placed upon the property by the provisional valuation, a month, a year, or two or three years before, is fixed as a statutory figure by the lapse of sixty days. There is nothing like chapter and verse to show how these cases occur in actual practice. There is one case in point which I need not deal with at length, but I must mention it because it is the most complete illustration. It is the far-famed Richmond case. That is an illustration up to the very limit. The actual process proposed in this Clause of mine had to be taken in the Richmond case. What happened there was that a valuation was fixed upon the property, the sixty days were allowed to elapse. That value was obviously an undervaluation. Then came the sale at the true value. You then got two fixed figures, that of the under-valuation, fixed by the lapse of sixty days, and the higher figure, fixed by the fact of sale. You had the comparison between the two, and then you got to the impasse. What happened in that case, and what did the Government do? Their first action when the matter was put to them by the sufferers was to refuse to do anything. When the matter was put to the highest authority, the Commissioners of Inland Revenue, by the solicitors for the party, there was no redress. The matter was debated in this House, and the Government were forced to take action. What action did they take? The action which this new Clause suggests is proper in all such cases. They allowed the question of sixty days after the real value had been found by the actual sale. What was the answer the Government gave on that matter? That it was an isolated case. As a matter of fact they come into the Land Union in shoals.
2169§ I will take the most recent case, that was only handed to me yesterday. It was also in Yorkshire. A lady purchased two small properties in 1892 for £550. She died in 1911 and the property was sold on the 31st July, 1911, by auction. It realised £1,065 and Estate Duty was actually paid on that sum of £1,065. On the 2nd November the district valuer made and served a provisional valuation, showing a gross value of £765 and a site value of £30. He then calculated the sum exactly as I have described, taking the purchase price of £1,065, and deducting £735, and he brings out the site value on the occasion at £330. That is in a village or a small town in Yorkshire, where there has obviously been in the two years from April, 1909, no general increase in the value of the site. Here you have the site value of a small house fixed as on the 30th April, 1909, at £30, and in July, 1911, it is multiplied by eleven and fixed at £330. That is what happens to the small owner, and that is the vice of this matter. The small owner can be bullied and taxed, and money can be extorted from him. I speak strongly on this matter because that is what is being done. What makes me more indignant is what I see happens to people who can defend themselves. There is a certain gentleman who is a property owner in this country who has made it his business to make a close study of this Act. The valuers know that, and they are not in a hurry to cross swords with him. He to-day gave me certain information. I am prepared to give his name if required to the right hon. Gentleman, but for obvious reasons I cannot give his name now. This is what happens to a big owner who can defend himself and who has professional advice. About the time of the passing of the Act this gentleman bought four plots of bare land, for each of which he paid £181. He sold them recently, plot by plot, for £220 each, making a pront on each plot of £40. The valuer does not want to cross swords with this gentleman, and he has served a provisional valuation on him of £220 for each plot, so that there is no tax payable. The valuation, in the case of the poor woman in Yorkshire who makes no profit, is raised from £30 to £350, and there is £279 of taxable increment. Something like £60 is extorted from her. The big owner makes an actual profit of £40 on each plot, and it is wiped out, and there is not a penny charge made on him at all. That is the way this Act is being administered.
2170§ There is no other means except this Amendment by which the Act can be made workable. You have two different processes, under different conditions, of arriving at figures which are to be compared for the purpose of levying the tax. Taking the value of the land without the house on it, and getting that figure statutorily fixed, and then comparing it afterwards with another figure arrived at by a different process, the sale value of the land, and calling that site value is not a method of taxation at all. It is simply a method of serving on owners of small house property a piece of paper bearing certain mystical, cabalistic figures which no human being can understand. I know of no valuer who can describe by what process these two values are obtained under the Act. There are innumerable cases ready to go to the Referees on points of this character. I complained the other day that these matters were not taken to the Referees, and I asked that cases of doubt should not be pressed against people from whom this tax was claimed, where these doubtful points arose, until they had been settled by the Referees or the Courts. The Secretary to the Treasury gave me the answer, straight across the floor of the House, that the Government intended to press these claims and to press their own interpretation of this Act upon the owners of house property and to demand the money from them even before the case was decided by the Referees or the Courts. That is not the method in which taxation should be administered. This is a grave indictment which I make, not on behalf of the large owner who can obtain professional advice. There has been very little got out of the large owners. There has been very little got out of the Act altogether.
§ There is the question of leaseholds, which is even worse than the case I have named. I will not go into it myself, but I hope someone else will deal with that question and show how the Amendment is absolutely necessary to enable a leaseholder charged with Increment Value Duty to have any opportunity of realising his position and of objecting within a reasonable time. There is also the most complicated and extraordinarily difficult question of substituted site values, which has been debated over and over again, and on which the assurances and promises of the Chancellor of the Exchequer, in his conference with the builders, have been contrasted with the procedure under the Act. It is obvious that these promises 2171 have not been fulfilled. Substituted site value is almost worthless. There again this Amendment would afford very great opportunity for a fair and reasonable valuation as between the owner and the Government. It is only a question of time before the Act will fall to pieces. Its administration is a farce and the Government are a laughing-stock. Surely it must be to their interest, if they wish the Act to stand at all, to try and bring it into some form in which it can, at any rate, have the appearance of being reasonably worked. The Amendment will have the effect of enabling the valuation, upon which Increment Value Duty and Unveloped Land Duty are to be based, to be a matter of real, fair argument, question and decision between the owner of the property, the Government, the Referees and the valuers concerned, whereas under the law as it stands now the Government and the owners on any point at issue go into Court with their hands absolutely tied, because fictitious figures are fixed by Statute which cannot possibly be sustained, and when the case is brought to this House the Government have to take the very course which this Amendment enjoins upon them. I accuse the Government and the Valuation Department of levying taxes upon poor owners of house property which this House had not imposed upon them. This Amendment will do something to remedy that grievance. We have very little opportunity for stating grievances in this House, especially financial grievances under special conditions. This is a real grievance, and I hope it will receive sympathetic treatment, and I think we have a right to demand that this process, which has been exposed over and over again, shall now cease.
§ The ATTORNEY-GENERAL (Sir Rufus Isaacs)The hon. Gentleman has travelled very far afield in his observations upon this Amendment. When the House comes to realise what the Amendment proposes it will be seen that his intention is, indeed, to destroy the object of the Act. It will have the effect of destroying altogether our datum line, the starting-point for the collection of this duty. If it were carried the consequence would be that all your valuation would be absolutely unworkable. There is no definite time given at all at which the valuation is to take effect and be fixed. The hon. Gentleman desires to take the sixty days which are to fix the time in the Act and to substitute 2172 for them the first occasion. It might be sixty years, it might even be one hundred years.
§ Mr. PRETYMANThe first occasion is the occasion of either a death or a change of ownership. I hope the right hon. Gentleman will live one hundred years, but I cannot say I think he will.
§ Sir RUFUS ISAACSIt may be that one hundred years is taking too large a view of human life, notwithstanding the Insurance Bill, but sixty years is quite sufficient for the purpose. The object of the Amendment, as I understand it, is to postpone indefinitely this valuation and the collection of these duties on the first occasion. The hon. Gentleman wishes the first claim for Increment Value Duty or Undeveloped Land Duty to be inserted in place of the copy of the provisional valuation. The sixty days runs now from the copy of the provisional valuation being served. If the Amendment is carried the sixty days will run from the first claim for increment value or Undeveloped Land Duty. Then you would have no datum line at all at the time the first occasion arose.
§ Mr. PRETYMANYou fix the value.
§ Sir RUFUS ISAACSYou cannot fix the value until you come to the period of sixty days after the first copy of the valuation.
§ Mr. PRETYMANYou cannot get any duty till then, anyhow.
§ Sir RUFUS ISAACSYou may have, during this period of sixty years, land multiplying in value two, three, four, five or six times over, and what the hon. Gentleman desires to do is to postpone the operation of the Act indefinitely.
§ Mr. CASSELOnly the right to appeal.
§ Sir RUFUS ISAACSYou prevent the valuation being a fixed and definite thing for a certain period. At present you can do it by taking sixty days from your copy of the provisional valuation having been served. If no objection is raised it is the fixed value, and the hon. Gentleman seems to destroy that altogether. Upon that the Act, and the whole scheme under the Act with reference to these duties, is based, and if we give effect to the Amendment we should undoubtedly be destroying the scheme as it passed this House. So far as I follow what he said, he gave no grounds for that except the objection, to which he has given utterance a good many times, to 2173 the whole scheme under the Act. Except for that I fail to see that he has given any reason why we should take out the sixty days.
§ Mr. BONAR LAWThe injustice of it.
§ Sir RUFUS ISAACSYou must have some definite time fixed from which your valuation is to date. How will the hon. Gentleman's proposal affect valuations? What was intended by the House when the Act was passed was that we should have the valuation as soon as possible. Under the Amendment it would be postponed indefinitely, and you would have an entirely different system. You might have the value of one parcel of land fixed in ten years' time, while the adjoining parcel of land might not be fixed for twenty or thirty years, and another parcel would not be fixed for sixty years. When the proposal comes to be understood, I think the alteration that the hon. Member desires to make would be grotesque in view of the scheme which has been passed. I cannot really think he means what his Amendment says, but, if he says he does, all I have to say in regard to it is that it is an absolutely impossible Amendment for us to accept, and the acceptance of it would have all the defects I have stated, which I have not exaggerated in the slightest degree; and, as far as valuation is concerned, it will make it quite indefinite when we shall be able to say we have a valuation of the land. Under these circumstances I cannot accept the Amendment.
§ 5.0 P.M.
§ Mr. AUSTEN CHAMBERLAINThere is only one matter which the hon. and learned Gentleman has not thought worthy of consideration, and that is whether justice is done. That never entered into his head for a moment. Not a word did he say on that subject. He made two observations. He said it would upset the whole scheme of the Act as regards valuation, and that it would postpone the collection of taxation indefinitely. I interrupted him on the second point and asked "Why?" He did not answer my interruption. He dealt with the other subject. What is the delay in the collection of taxes involved in my hon. Friend's Amendment? No tax becomes due until there is an "occasion." On the occasion you may, under the law as it stands, appeal against the valuation. My hon. Friend says you ought to be able to appeal against the original valuation.
§ Sir RUFUS ISAACSindicated dissent.
§ Mr. AUSTEN CHAMBERLAINYes, Sir, I understood the point which was made by the Attorney-General, and which I was endeavouring to answer, was that you would indefinitely delay the collection of taxes by this Amendment. I say that is not so. You cannot collect the tax until the valuation on the occasion is made, and if an appeal is taken you cannot collect it until the appeal is decided. An appeal against the original valuation could be decided as rapidly as the appeal against the new valuation on the occasion. There is no foundation for the statement of the Attorney-General that the collection of the tax would be delayed. His other point is that this Amendment would destroy the whole scheme of the Act. What was the scheme of the Act? It was a Finance Act to raise the revenue for that and succeeding years. The object was, I presume, to collect taxes. This Amendment will not interfere with the collection of taxes justly due. If you have an ulterior view, utterly unconnected with the collection of revenue from taxes immediately, that is another matter. If you want the valuation for some other purpose, which you can Act upon at once, I admit that my hon. Friend's Amendment would prevent you having that, but that is not the point of the Attorney-General, who is most enthusiastic about this tax. [An HON. MEMBER: "You want to kill the valuation."] Hon. Gentlemen opposite desire it for some other purpose. They do not care twopence for the taxes as they stand. They support the Government for some entirely different purpose. Yes, but that is not the line of the Government. It is not open to the Attorney-General to say that my hon. Friend's Amendment destroys the principle, or any leading principle, of the Finance Act of 1909–10. It may prevent some other Bill which hon. Gentlemen below the Gangway opposite desire to see introduced, but it does not prevent or seriously interfere with the administration of the Act of 1909–10, as passed by this House.
The Attorney-General boldly stated that my hon. Friend had made no case whatever for his proposal, unless it was his desire to destroy the whole Act. My hon. Friend has made and proved his case again and again in this House. What is the case? It is that you are serving forms of valuation upon a great number of poor people who are not learned in the law, not able to readily afford the cost of obtaining skilled assistance, such as is necessary either for the valuation of land or 2175 for the interpretation of an Act of this complexity—that you are serving a great number of forms of valuation upon those persons who have no idea whatever of the effect of these valuations. They have the right of appeal within sixty days, but they have not the least conception that there is the least necessity to appeal, or of what the effect of accepting these valuations will be. All the experience they have of other taxation leads them to suppose that a low valuation is in their interest. For the first time a low valuation acts against them. They are not prepared for that, they are not suspicious, and they are not people who can readily afford the fees of lawyers, surveyors, or technical experts to advise them whether they ought to appeal or not. They have a very well-founded abhorrence of any legal expenditure or action. These persons of small means have reason to avoid procedure of that kind, and they accordingly take no action. They take no action in ignorance. Is there anybody to protect these people against the results of their ignorance? Have we any evidence that the agents of the Inland Revenue are really seeking to protect these people against possible injustice? No, Sir, all the evidence is the other way. My hon. and gallant Friend has had case after case brought to his notice. I think I may say that hundreds of cases have been brought to his notice, and more than once he has brought cases before this House.
There is one case now specifically under appeal, and of the merits of which I will say nothing. It was a case that was brought to the notice of this House, and the Government thought it was of such primâ facie force that they at once consented to an indefinite extension of the time for appeal against the valuation in order that the case might be brought before the Court. But do the Government desire or think it possible that Members of Parliament should bring every one of these cases to the attention of the House? That which the Government has admitted to be just was refused to these people until the case was brought before the House of Commons. We want to protect these poor people. All the rich people in these cases employ the skilled advice of people who are constantly dealing with the Act, and they therefore protect themselves at considerable cost to themselves. It is the small man to whom the right of appeal, when he sees the effect of the valuation tells upon him, is so necessary. If you do not have appeals, you will have valuations 2176 which are not correct from the beginning, and which could not be substantiated if they were challenged, having all the force of law, and these men will become subject to taxation without knowing what was involved in not appealing against the valuation.
That is a side of the case with which the Government have not shown the slightest sympathy. To make their scheme workable is their first desire, and it is extremely natural that it should be so. It is not an easy task. I sympathise with them in their efforts whether in or out of Courts to achieve that object. I observe that their efforts out of Court meet with a great deal more success than their efforts in Court. As long as they are judge and jury in their own case they get on, but when an appellant does have access to the Court, then we learn something of the amount of reliance we can place on the knowledge or the competency of those who are charged with the administration of this Act, and who deal with the very complicated questions which have been left to them. I think it is absolutely essential in the interest of justice, and in order that men shall not be fined sums of money for which, as my hon. Friend says, there is no legal authority under the Statutes dealing with taxation. The right of appeal, which my hon. Friend has asked for, should be given, or the Government should find some other way of redress. As long as the Government offer no other method of redress I stand by the proposal of my hon. Friend, and I say it is the least this House can do for the protection of the citizen.
Mr. McKINNON WOODI think there are obviously strong practical objections to the proposal of the hon. and gallant Member (Mr. Pretyman). Does he suggest that it will be as easy to value property in ten, twenty, or forty years time as now? The right hon. Gentleman (Mr. Austen Chamberlain) made a great deal of the case of the poor. It is very remarkable how intimately the poor are connected with the ownership of land in all these discussions—much more in argument than in real life. Let us take the case of the poor. How is the poor man advantaged by having his appeal put off for an indefinite time? We are told—and it is the argument used on the other side—that these valuations are matters of opinion. Well, it is at any rate the opinion under present existing conditions. It is not speculative opinion given in appeal, ten, twenty, or forty years hence as to 2177 the value of a property under the 1909–10 Act. Just fancy what would be the nature of a trial in a case of that kind. You would have valuers brought up to speculate as to what the value of the land was forty years hence, when everything had changed and the whole of the buildings had been swept away. That is the practical improvement proposed by the hon. and gallant Gentleman. Is that a practical method of carrying out the valuation? It would be a valuation of one property now, a second next year, another in seven years, and another possibly seventy years hence. That is the method of valuation propounded by the hon. and gallant Member. That is what his Amendment means.
§ Mr. PRETYMANNothing of the kind.
Mr. McKINNON WOODNo doubt the cases brought forward by the hon. and gallant Gentleman are thought fair argument. One of them is sub judice. One is the case of a property in which a high price was given because the resident tradesman did not wish to be disturbed. That is the contention of the Inland Revenue. That is a very common case where a tradesman, having built up a business, will give either a fancy rent or a fancy price rather than be disturbed and have his business damaged.
§ Mr. AUSTEN CHAMBERLAINDoes that alter the site value? Do you assess site value on the profits of the business?
Mr. McKINNON WOODI never made any such absurd statement. We were talking of a case in which the hon. and gallant Gentleman suggested that the valuation was fixed on a higher price than the price in the total original valuation.
§ Mr. PRETYMANindicated dissent.
§ Mr. PRETYMANMay I explain again? The case was simply this. A certain property was sold by auction for £1,065 on July 11th, and Death Duty was actually paid on that amount. Therefore the Government were ready to accept that as the value then. They did not take duty on the profits. They took duty on the total value. On 2nd November a valuer served an additional valuation of £765, and a site value of £30, after the property had been sold, and the Death Duty paid upon it, on which duty is to be paid. This is a new case, which I brought forward to-day.
Mr. McKINNON WOODI was not discussing that case at all, but a different case in which the Board of Inland Revenue allowed an appeal. That shows the difficulty of arguing any cases unless you are given the facts and unless you have time to look into those facts. It has happened that the hon. and gallant Gentleman has given us cases, and when we investigated them we found that material circumstances had not been known to the hon. Gentleman, so that it is perfectly impossible——
§ Mr. PRETYMANWhich cases? You have said there are cases: which cases are they?
§ Mr. SPEAKERWe cannot conduct Debates with these constant interruptions.
Mr. McKINNON WOODI am talking about a case in South Wales. My point is this. It is absurd to think that any effect can be made on the mind of the House by simply bringing up cases on the floor of the House without giving notice or allowing any opportunity for examination so that we might have all the circumstances of the case before us. It would be perfectly impossible to conduct the valuation in the way suggested, and instead of having a valuation that was more in accord with facts and less a matter of opinion you would have a valuation that was a matter of speculative opinion at the latest possible time, because you would have a valuation after all the facts had passed away and where you were dealing with a state of affairs long gone by.
Mr. PEELThe attitude of the two right hon. Gentlemen who have just spoken seems I am bound to say to support our contention during the passage of the Bill of 1909 that this Bill was intended not so much as a method of raising revenue as a punitive measure for those who possess the land. The right hon. Gentleman who spoke last was most sneering in his allusion to small owners of land. He seemed to think that no poor man had a right to have an acre or even a rood of land, and I do not wonder at it. The whole of this land agitation has been started with the idea that 10,000 people own the whole land of this country. Now it has been discovered that there are 36,000 owners of freehold in London alone, and the Government have discovered, from the enormous number of separate occupations and ownerships, that the number of small owners is far greater than they ever imagined. Now these gentlemen think that it is extremely difficult to fix these valuations if they post- 2179 pone them for ten, twenty, thirty, or forty years. But that is just what is going on at the present. From some of the calculations which have been gone into it has been shown that at the present rate of progress it will be between thirty and forty years before the valuation of all the land in this country has been settled. How about these enormous difficulties? I agree that they are difficulties. But these difficulties are going on, and will go on, under the plan of the Government just as much as under the scheme brought forward by my hon. Friend below me. The case is really very strong. They say it is impossible to go back twenty or thirty years to find the measure of the site value thirty years before you get your datum line; but that is exactly what is going to happen under the Act. You have got the datum line, say, fixed for two properties as from 1909. A hundred years hence, we will say, after various changes, two portions of those properties are amalgamated for sale. Then you have got to go back 100 years, and you have got to discover what portion of the site value of the whole occupation of each of those old occupations was, represented by the particular premises that are going to be sold, one hundred years before. And that may take place 200 years hence even. The whole scheme of this Bill involves that you have always to be going back twenty or thirty or an indefinite number of years.
The method of valuation that has been carried out by hon. Gentlemen opposite really traverses the whole principle of the Bill. The whole principle of the Bill was this: that the tax be taken on the addition, the snippings as it were, the very modest snippings, as the right hon. Gentleman said opposite, on the increment value, on the increased site value. But by this valuation they do not get snippings on the increased site value. They are taking great slabs of the actual value itself, that particular valuation which they said they were never going to touch or tackle at all. Ordinary small people, and many people, are utterly deceived by this method of carrying on business. Why the very words "provisional valuation" have got a nice mitigating, compromising sound about them. Nothing final is suggested by the word "provisional," and no particular document or paper is ever sent to these people afterwards to tell them when the sixty days have elapsed or that if they do not send in their papers before sixty days the valuation will be a per- 2180 manent valuation. It is impossible to expect a very large number of owners in the country to be aware of the details of a Finance Bill of that kind. There is one point that I would like to allude to in the way of a concrete case which shows how very severely people are affected, for instance, as regards that principle of substituted site value which was referred to by my hon. Friend below. Hon. Members are aware that under Sub-section (3) of Section 2 of the Act owners are allowed, if the property has been purchased within the last fifty years, and if the site value is higher than the site value in 1909, to substitute the one value for the other. But they have got to do that within a certain time after the provisional valuation, and of course it is not everybody who knows that that can be done. I have got here a concrete case to which I would like to call the attention of the House, and under which great hardship will result.
There is a row of sixteen houses. Three of them were bought by working men and thirteen were bought by one large owner. The three were bought for £380 each, and the thirteen for £370 each. The site value is brought out at £50 to the large owner, but he, being able to employ advice and understanding how he would be affected, got the other site value substituted for the new site value, so that his site value works out at £110. The others did not do that, so if these three unfortunate men who purchased these separate properties sell their properties, and if the site value works out at only £110, they will have to pay one-fifth of the £60. They will have to pay a large sum which they have no business to pay, and which is their own, and ought to go into their own pocket, and which is being taken from them by the Government merely because they do not happen to know particular conditions and details, and have not got the means to pay for the advice which is necessary for them to understand so complicated a measure. If the right hon. Gentleman opposite is not going to accept the Amendment it really is his duty to consider how these hard cases are to be obviated. He does not seem to have the slightest sympathy with a case of this kind. He does not seem to want to deal with it in any way. He simply stands up vigorously and opposes a strong front to the Amendment of my hon. Friend because he says that that particular Amendment is not practicable. I think that I have shown that it is quite as practicable as the working of the Bill under the 2181 Government scheme. If he does not think that it is practicable, does he think that it is a right thing that these injustices should be committed on these small owners of property? If he does not think that they ought to be done, it is his business to propose some Amendment to prevent these injustices which are committed under the Act, and it is the duty of the Government to see that, when people's property is taken from them in this way, because of their un-familiarity with complicated legal details, if they do not accept the Amendment they should at least provide some remedy.
§ Viscount HELMSLEYI think the position which the Government take up on this question is most unsatisfactory. If hon. Members on this side produce what the Government are pleased to call isolated cases they say, "What is the use of raising cases of this sort when we have had no chance of investigating them." If, on the other hand, you raise them as general propositions they say, "What is the use of raising general propositions when you cannot give us concrete cases?" Still the fact remains that under the provisions of this Act great injustices have been done, and this Amendment, if carried, would go far to remove some of those injustices. I am not in the least impressed by the argument of the learned Attorney-General on the subject. It seems to me there was no reason whatever why the owners should not have the opportunity of protesting against the original valuation at the time when the occasional valuation was made. It presses particularly severely on leaseholders who are called upon to pay Increment Duty for the value of their interest in leasehold premises. The learned Gentleman does not like concrete cases, but there is a concrete case which has been brought to my notice. It is the case of a leaseholder who had bought his interest in the property in 1909 for £270 and sold it in 1910 for £260, and yet was called upon to pay £3 18s. as Increment Duty. Where is the increment in that, and why is it that he was called upon to pay that duty?
Is it because of the provisional valuation? When the provisional valuation was served upon him he naturally thought that it was perfectly satisfactory, because he saw the actual figure £270, which was the same as what he had paid for the property, put down in the provisional valuation as the difference between the gross value and the value of the fee-simple divested of buildings, trees, etc., which must be natu- 2182 rally the value of the building. He, therefore, thought that his interest had been correctly valued at £270, not realising that what he should have looked into was the original full site value; and, moreover, in the provisional valuation there was no figure whatever to show him how it is worked out in tables by the Inland Revenue people when they charged the duty, and what was the proportion of the interest in the site value, which interested him, and on which he would be called upon to pay duty when the occasion arose. Now he finds himself served with this claim. He cannot make an appeal, because the sixty days have long ago elapsed, and when the provisional valuation was served it appeared to him, as far as he understood the Act, satisfactory. Therefore, you get this ridiculous position that this man is called upon to pay Increment Duty when, in fact, he has suffered a loss of £10 on the actual sale made, besides the expenses, which are another £10 or £15. There is a concrete case, and in spite of the objection of the Front Bench opposite to concrete cases, I do think that these cases occurring so constantly, as they do, show that the system is wrong. I do not want to attach particular importance to this particular case. It may be right or it may be wrong. There may be facts withheld or they may not. But when you get a succession of these cases arising time after time brought up in this House on every possible occasion, then it is a monstrous thing for the Government to disregard them and brush them aside, and say that the Act of 1909 and 1910 is perfectly satisfactory and is working all right, and that they do not propose to alter it in any direction whatever.
I say it is a great injustice upon the subject, and the sooner the Government realise that, and realise also that their scheme is unjust in principle and unworkable in practice, the better it will be both for the taxpayers of the country and for the revenue of the country. It is interesting to observe how much this country is losing by the expenditure on this so-called valuation. The Government seems to me to be very fond of going outside the provisions of the Act, and the Act itself, as we find, is sufficiently unjust. But there is another injustice about which I should like some explanation from the learned Attorney-General, and it relates to the instructions issued by the Inland Revenue Department on the 21st January, 1911, and printed by order of this House. I do not wish to quote the whole of them, but it is 2183 comparatively easy to see what the instructions amount to. They amount to this, that where the occasion for valuation arises the valuers are not necessarily bound to take the price at which the property changed hands as the accrued value, but they are to arrive at the gross value independently, and at the full site value independently. The result of that is that if the property has been sold for a larger sum than the gross value which is put down, then the whole of the increment is attributed to the value of the site, although, as a matter of fact, it ought to be attributed to the value of the building. This remarkable document goes on to say, firstly, secondly, and thirdly——
§ Mr. WEDGWOODIs the Noble Lord in order in going into the instructions upon this particular Amendment?
§ Viscount HELMSLEYI was endeavouring to show the necessity for appeal because of the way in which valuations are made. Firstly, secondly, and thirdly——
§ Mr. WEDGWOODMay I ask for your ruling, Sir, upon a point of Order? The Noble Lord is going into instructions which were issued to the valuers, whereas the Amendment deals purely and simply with the length of the period of appeal.
§ Mr. SPEAKERI think the Amendment goes a good deal further than that. It is not merely the question of time, it is the question at what particular period the appeal is to be taken. I think the Noble Lord is entitled to proceed.
§ Viscount HELMSLEYThe first paragraph of these Instructions says:—
By this method the following result shall be achieved.The second paragraph says:—The Increment Value Duty will be collectable in all cases where there has been either (a) an increase in the value of the site as compared with the actual site value; or (b) the unit of valuation or the interest therein has actually been sold for more than its worth at the time.What provisions are there in the Act to justify increment being taken in that case? We were told all through that the increment was on the site value, and the site value only. The Chancellor of the Exchequer frequently waxed eloquent on the point that no improvements were to taxed, and that no other incidental accretion to the value of the property which was not due to the value of the site was to be taxed. Yet we find the Government Department issuing to the 2184 valuers an Instruction to take the occasional profit and charge Increment Duty upon it, although there is not a word in the Act of Parliament to justify such a proceeding. The result of that is that you take the highest value where it suits you, in order to deduct the value of the building which you have ascertained by putting your gross value lower than the highest value, and then you attribute the whole increase to the increase in the site, and so charge Increment Value Duty. I shall be very glad to hear what the Attorney-General has to say upon the point, which is of vast importance. I raise the subject only to show how necessary it is that the person who is charged the duty should have an opportunity of appealing when he sees the duty which is going to be charged. Naturally, it is essential for him to be clear that the site value has been fairly fixed, otherwise he might be improperly charged with the duty. I must say I think the Government ought to accept the Amendment of my hon. Friend. It would at all events mitigate some of the injustice done under this Act, and I do not think any argument against it has been advanced from the Treasury Bench that has the least validity of any sort or kind.
§ Mr. BOYTONThe officials who have the administration of this Act have a very difficult task to perform, and they can only deal with valuations as occasions serve. The Financial Secretary to the Treasury, in endeavouring to deal with one concrete case put before the House, tried to make out that the tradesman was being penalised by the high price being asked. It may surprise the House, and it may surprise a great many people to know that, instead of the landlord trying to take advantage under this Act, he is compelled under this Act to take as much as he can from the tenant. I will give an illustration of how the matter works. The tenant approaches his landlord for the surrender of a certain interest on the grant of a longer lease. The landlord, out of consideration for the long tenancy, quotes a reasonable rent, which the tenant accepts. This is the occasion for a valuation, and, in the endeavour to make their valuations uniform in a particular street or road, the officials under this Act have to ask that the landlord shall pay Increment Duty to correspond with the rents and value of the property on either side. That is actual experience of the working of the Act, and landlords are being penalised for treating their tenants with due regard 2185 to the fact that they are long-established tenants. The great majority of leaseholders in this country are quite unaware, up to the present, that they have anything to do with this Act. The valuations are only doled out on occasion, and it comes as a very great surprise to people to find that they have anything to do with these valuations at all. I am speaking of leaseholders. A great many people are still under the impression that the valuation has only to do with land, and they receive a very rude awakening when they are applied to in respect of Increment or Reversion Duty under transactions on which these charges accrue. They are not served with a notice of what the Government consider the valuation to be as in 1909, and the leaseholders only receive notices when their cases come under official notice. From the way in which this Act is worked, landlords, I say, are unable to extend the consideration to many of their tenants that they would otherwise do, because it is the desire of the officials to make the valuations uniform in a street. In one case, I know of a landlord who was asked to pay as much as 62½ per cent. Reversion Duty, instead of the 10 per cent. under the Act.
§ Sir F. BANBURYThe right hon. Gentleman the Financial Secretary rather laughed at the Amendment of my hon. Friend on the ground that it would take sixty or seventy years to make a valuation, and it would be impossible to make valuations under those circumstances. That was dealt with by my hon. Friend behind me, who pointed out that under this Act probably thirty or forty years would elapse before the valuations are completed. I think there are very great reasons for having an extension of time in which to make appeal. The right hon. Gentleman told us that cases had been given to him, and that it is quite impossible for him to judge of them unless he has been told beforehand what the cases are. I will give him a case which is so simple that I think he will be able to understand it, having been given previous notice of it. I happen to be trustee for certain freehold properties in the neighbourhood of London which belong to a near relation of mine. I had some valuations made of those properties. I looked into the matter, and I found that five houses of the same character were valued differently from other houses—that is to say, the assessable site value of the five houses was only £5, whereas the assessable site value of all 2186 the other houses was £24. I have the letter of the district surveyor, and this is what he says:—
I beg to acknowledge receipt of your letter of yesterday's date. The reason that the assessable site values of Nos. 13 and 20, Plevna Road and Nos. 21 and 26, Osman Road, are lower than the remainder, is that these are corner plots of land with flank frontages to Beaconsfield Road of about seventy feet each, and therefore part of the value of the land is attributable to the fact that the side road has been made up and taken over. You are aware that in the case of corner plots of land where the side road has not been taken over, the value of the land is practically nil owing to the liability for road-making charges. I have taken the value of works executed at £35, so as to have a nominal assessable site value. If the actual cost of road-making was deducted instead of the value attributable thereto, the assessable site value would be minus £40.Because I happen to own five houses in the neighbourhood of London, in the case of four of them, in consequence of the road-making, I found that the site value was minus £40, and that the sites were worth £160 less than nothing. I received the following communication from the Valuation Department of Inland Revenue:In regard to No. 14, Osman Road, it appears that by a clerical error the value attributable to works executed was put at £35 instead of £16, and the assessable site value should have been £24. In this case, I have pleasure in enclosing an amended valuation.Perhaps, being naturally of rather a suspicious disposition, and having spent many years in this House and many hours in listening to the exposition of this Act, I was very careful before accepting the new valuations. If I had been an ordinary innocent sort of person who had not spent many years in the House of Commons, I should have let this go by, and should have been assessed by a clerical error on something quite different from what the value really was.I have taken the value of works executed at £35 so as to have a nominal assessable site value.And he puts the value of these four houses at £5 each. I want to ask the Attorney-General this question. I wrote to this gentleman, and asked him to point out to me the Clause in the Act which permits him to attribute a hypothetical value to the site of £40 less than nothing, and then put it at £45. I always understood you had to pretend to know what the assessable site value was, and that, having taken certain precautions and made certain inquiries, you came to a conclusion. I should like the Attorney-General to inform me where there is any power under the Act to put a different site value on property to that which the assessor says is the correct one, because if we are going to allow these valuers to say, "I believe that the valuation is so much, but for certain purposes of my own I will put it at something 2187 else," then there is an unalterable case for the Amendment, which would give time to find out all these difficulties, so that people will not be eventually caught in a trap and compelled to pay something which they never ought to pay. I am sorry the right hon. Gentleman has already spoken, but I am sure that the Under-Secretary for the Home Department, who has a very quick mind, would easily take any reference or hint as to this particular Clause. I am really most anxious on this point, not only in my own interests, but in the interests of people who are not rich men, though I do not think it should make the slightest difference whether they are rich or poor men.
§ Sir JOHN ROLLESTONI should like to say a word in support of this Amendment, which seems to me to be extremely desirable and necessary at the present time, inasmuch as it deals with those two most contentious taxes, the Increment Value Duty and the Undeveloped Land Tax. I do not agree with the argument of the Attorney-General about valuing land on distant dates. I venture to say that the land which is being valued to-day is being valued at its value to-day, and not at its value two years ago. It is well known that since the passing of the Act of 1909 there has been a large fall in the value of urban land, because there happened what some of us said would happen, and it has killed the building trade, which is the trade of all others which the community should foster and encourage, because it is the trade which creates rateable value, which has caused the growth of our large towns, and which makes provision of houses for the people without risk or expense to the community. By the ruin of this trade the municipalities must be great sufferers, while a large number of people who used to be steadily employed are now thrown out of work for the reason that there is no one now, neither banker nor solicitor, to finance the builder, and there is no one to buy land since the passing of this Act. I had a valuation served on me yesterday morning on land which cost me actually 25s. per square yard. That value was 5s. 6d. per square yard, so that if I could ever obtain 6s. for what cost me 25s. I should have to pay Increment Duty to the State.
I should like further to say that it is desirable to postpone by any means the time for valuation, because the methods of valuation are so imperfectly understood at present. The Amendment of the hon. and 2188 gallant Gentleman will remedy the Act in this respect. Those methods of valuation are so fantastic and grotesque that it seems really as if what is desired, firstly, is not the simple value, but the manipulation of figures designed to bring the landowner into the grasp of the tax-collector. Indeed, they are not only grotesque, but almost unintelligible, and I am sure anybody who has wandered through them must come to the conclusion of a well-known character in fiction who said with regard to learning the alphabet that it was hardly worth while going through so much to know so little. I am sure that even the expert, who has perhaps made himself acquainted with the letter of the Act, learns very little of land or property by these methods of valuation. I was hoping the Government would now know enough and have heard enough to show that these taxes in some respects are utterly unworkable and impracticable, and that there is real reason for their repeal. I looked on through the various Debates on this subject during the last two years, and heard the statements of hon. and right hon. Gentlemen on the Treasury Bench, some of them lawyers of great eminence, whose name and fame are on the lips of men, and it is a curious spectacle to see them floundering in the mazes of this bewildering Act trying to make plain the unintelligible, and to explain the unexplainable, and to fulfil what I am sure must be the disagreeable and almost impossible task of excusing and palliating its many injustices. Surely the authors of this Act must have realised by this time how hopelessly they have failed to hit the mark. They shot at a pigeon and killed a crow. They went out for dukes, and they have hit the hard-working builder and the poor and struggling property owner and investor. They professed to be going to help the municipalities and the communities which maintain them, and they have dealt to both of those a mortal injury.
The only way by which the Act can be made to produce revenue is by the manipulation of figures under these extraordinary methods of valuation. Simple value seems to have disappeared as the standard of the measure of property. When you have imagined some things and guessed at others, and added this and deducted that, then the poor property owner is so fogged that he cannot elucidate the problem. I do not wish for a moment to say anything offensive, but it is the working of the Act, and not in any sense those who made it, to which I wish to refer. I think it as well to 2189 say here what is freely said outside, and that is to guess the prospects of property because something may happen which has not happened, and may never happen, and to tax landowners on purely imaginary capital, and to take away from a man who has earned and worked or invested some part of his legitimate profit, and to claim by the manipulation of figures that the man who has lost by his investments, or by his labour, is to be treated in the same way as he who has won, and to take increment from losers, they say truly outside, that the Act in those respects is a swindle and a fraud on the landowner. I submit that the cases that have been brought forward in this country go to prove that, and also the experience which we have had of its working day by day. To taxes of this kind the Government must expect Amendments and determined opposition. By the removal of a few of them they will be able to secure the simple and easy working of the Act, which otherwise must remain a perennial source of irritation and soreness, and calculated to defeat the objects and purposes for which it was framed and passed.
§ Mr. RAFFANAs to the interesting speech which we have just heard, I should like to make a passing reference. As a matter of fact the building trade of this country is quite as prosperous to-day as when the Act of 1909–10 was passed. May I say that the view of the Members of the House who are associated with me in this matter is that the reason the building trade is not more prosperous is not because we made a beginning in land value taxation in the Finance Act of 1909–10, but it is because that advance is too timid. I would suggest a practical experience to prove the truth of that inference, and that is in Sydney, New South Wales, where they have direct land taxes put on land values instead of buildings. This country has been scoured for masons, bricklayers, carpenters, and other men connected with the building trade, and it is impossible to find men in Sydney or in New South Wales or in Australia for the purpose of meeting the demands of the building trade, which has been in a state of boom there since the passing of the land taxes a few years ago. I rose to direct attention to one feature of the Amendment which is proposed by the hon. and gallant Member for Chelmsford (Mr. Pretyman) to which I would fain think he has not himself paid sufficient attention. It is perfectly true that this Amendment is introduced in the
2190 6.0 P.M.
interests of the poor and not in the interests of the rich, and it is perfectly true that we are informed of particular cases of hardship which this Amendment would rectify. But the hon. and gallant Gentleman cannot limit the effect and scope of this Amendment. He cannot apply this Amendment to merely that part of the country where the land is in the hands of a certain number of people, thousands of people, and keep outside its scope half the land which is in the hands of 5,000 people. It is bound to equally apply to both. May I put to him this case for the purpose of showing that this Amendment is absolutely inconsistent with the general fabric of this Bill. His case, as I understand it, is that land at present is persistently undervalued, and that when the owner receives the valuation he is satisfied with the under-valuation and does not appeal. Might I put a very ordinary case—that of land in the neighbourhood of a town, at present used as agricultural land. That land is treated by the valuer as being agricultural land, and it is rated at the moment at £2 an acre. Its capital value could not be more than £50. According to the hon. and gallant Gentleman there can be no appeal until the occasion arises. After twenty years that land is sold to an education authority for the site of a school, and the education authority is asked not £50 but £1,000 an acre. According to the hon. and gallant Gentleman the owner of the land would lodge an appeal when he was asked to pay Increment Duty on this difference, and he would say, "What you are asking me for is totally unjust. This land was of the value of £1,000 all the time." He would go to the Referee and endeavour to prove to him that the land had been of that value for the whole twenty years. If the owner is able to prove to the satisfaction of the Referee that the land was worth £1,000 all the time, he will have escaped paying Undeveloped Land Duty during those twenty years. Under this Amendment, will the Government have any opportunity of recovering that Undeveloped Land Duty? If not, the Amendment is obviously a sham. It is not meant to meet a genuine need by proposing a genuine remedy. It is merely meant as another of the many attacks on the Finance Act of 1909–10 which the hon. and gallant Gentleman has made in this House and in the country. He tells us that the Government are a laughing-stock because of their association with this Finance Act, and that the framework of the Act is 2191 bound to be destroyed. At any rate, the Government have gone through two General Elections with this Act to defend, and, so far as I have been able to see, there is no indication that the people regard either the Government or the Act as a laughing-stock.
§ Viscount HELMSLEYHow much of the valuation has been done?
§ Mr. RAFFANAt any rate, in both of those General Elections all the case that could be made against the Act was made by the Land Union whenever the party with which the hon. and gallant Gentleman is associated was willing for the Land Union to lake part; and wherever the Land Union was particularly active, there the Government majority rose. The whole suggestion that the present arrangement is unfair and that the landowner is being unfairly treated is based upon the alleged ignorance of the owner. We are told that these are poor men who have no opportunity of securing advice, and who cannot get expert assistance. As a matter of fact, the Land Union have told men all over the country that they have only to send to the offices of the Land Union and they can get all the expert advice they want for nothing or for a small fee of one guinea a year. Seeing that the propa-
§ ganda has been carried on up and down the country, that every property owner—large or small—has been circularised, that he has been told that he has only to pay one guinea a year to get all the expert advice that he requires, the hon. and gallant Gentleman is in this dilemma: either the ignorance which he assumes does not exist, or this propaganda has miserably failed to touch the property owners. I do not think it is necessary to appeal to the Government to continue to resist this proposal. The Amendment is absolutely inconsistent with the main fabric of the Finance Act of 1909–10. I do not think that the Government are a laughing stock now or that the framework of the Act is likely to fall; but if the right hon. Gentleman attempted to weave this Amendment into the framework of the Act, then, indeed, the Government would be a laughing stock and the framework of the Act would be in danger of falling. I have sufficient confidence in their good sense and good judgment to believe that the Government will resist the Amendment, and that the House will by a large majority support them.
§ Question put, "That this Clause be read a second time."
§ The House divided: Ayes, 136; Noes, 202.
2193| Division No. 444.] | AYES. | [6.8 p.m. |
| Aitken, Sir William Max | Craig, Norman (Kent, Thanet) | Knight, Capt. Eric Ayshford |
| Amery, L. C. M. S. | Craik, Sir Henry | Larmor, Sir J. |
| Anson, Rt. Hon. Sir William R. | Croft, H. P. | Law, Rt. Hon. A. Bonar (Bootle) |
| Anstruther-Gray, Major William | Dixon, Charles Harvey | Lewisham, Viscount |
| Ashley, Wilfrid W. | Doughty, Sir George | Lloyd, George Ambrose |
| Baird, John Lawrence | Du Cros, Arthur Philip | Locker-Lampson, G. (Salisbury) |
| Baldwin, Stanley | Falle, Bertram Godfray | Locker-Lampson, O. (Ramsey) |
| Banbury, Sir Frederick George | Fell, Arthur | Lockwood, Rt. Hon. Lt.-Col. A. R. |
| Banner, John S. Harmood- | Fisher, Rt. Hon. W. Hayes | Lowe, Sir F. W. (Birm., Edgbaston) |
| Barrie, H. T. (Londonderry, N.) | Fletcher, John Samuel (Hampstead) | Lyttelton, Rt. Hon. A. (S. Geo. Han. S.) |
| Bathurst, Hon. A. B. (Glouc., E.) | Gardner, Ernest | Lyttelton, Hon. J. C. (Droitwich) |
| Bathurst, Charles (Wilts, Wilton) | Gibbs, George Abraham | MacCaw, Wm. J. MacGeagh |
| Beach, Hon. Michael Hugh Hicks | Gordon, Hon. John Edward (Brighton) | Mackinder, Halford J. |
| Benn, Arthur Shirley (Plymouth) | Goulding, E. A. | Malcolm, Ian |
| Benn, I. H. (Greenwich) | Greene, Walter Raymond | Mason, James F. (Windsor) |
| Bentinck, Lord H. Cavendish- | Gretton, John | Mills, Hon. Charles Thomas |
| Bigland, Alfred | Gwynne, R. S. (Sussex, Eastbourne) | Morrison-Bell, Capt. E. F. (Ashburton) |
| Bird, Alfred | Haddock, George B. | Morrison-Bell, Major A. C. (Honiton) |
| Boyle, W. Lewis (Norfolk, Mid) | Hall, D. B. (Isle of Wight) | Newdegate, F. A. |
| Boyton, James | Hamersley, Alfred St. George | Newman, John R. P. |
| Brassey, H. Leonard Campbell | Hamilton, Marquis of (Londonderry) | Nicholson, Wm. G. (Petersfield) |
| Bull, Sir William James | Harris, Henry Percy | Nield, Herbert |
| Burn, Colonel C. R. | Harrison-Broadley, H. B. | Orde-Powlett, Hon. W. G. A. |
| Butcher, John George | Helmsley, Viscount | Pease, Herbert Pike (Darlington) |
| Campion, W. R. | Henderson, Major H. (Berks., Abingdon) | Peel, Capt. R. F. (Woodbridge) |
| Carlile, Sir Edward Hildred | Herbert, Hon. A. (Somerset, S.) | Peel, Hon. W. R. W. (Taunton) |
| Cassel, Felix | Hills, John Waller | Pole-Carew, Sir R. |
| Castlereagh, Viscount | Hoare, S. J. G. | Pollock, Ernest Murray |
| Cave, George | Hope, Harry (Bute) | Pretyman, Ernest George |
| Cecil, Lord R. (Herts, Hitchin) | Hume-Williams, W. E. | Pryce-Jones, Col. E. |
| Chaloner, Col. R. G. W. | Ingleby, Holcombe | Remnant, James Farquharson |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Jardine, Ernest (Somerset, East) | Rolleston, Sir John |
| Chaplin, Rt. Hon. Henry | Jessel, Captain H. M. | Rothschild, Lionel de |
| Coates, Major Sir Edward Feetham | Joynson-Hicks, William | Royds, Edmund |
| Courthope, George Loyd | Kerry, Earl of | Rutherford, John (Lancs., Darwen) |
| Craig, Captain James (Down, E.) | Kirkwood, John H. M. | Samuel, Sir Harry (Norwood) |
| Sanderson, Lancelot | Sykes, Mark (Hull, Central) | Warde, Col. C. E. (Kent, Mid) |
| Sandys, G. J. (Somerset, Wells) | Thompson, Robert (Belfast, N.) | Wheler, Granville |
| Smith, Rt. Hon. F. E. (L'pool, Walton) | Thomson, W. Mitchell- (Down, North) | White, Major G. D. (Lance., Southport) |
| Smith, Harold (Warrington) | Thynne, Lord Alexander | Williams, Col. R. (Dorset, W.) |
| Stanier, Beville | Tobin, Alfred Aspinall | Willoughby, Major Hon. Claude |
| Starkey, John Ralph | Touche, George Alexander | Worthington-Evans, L. |
| Staveley-Hill, Henry | Tryon, Captain George Clement | Younger, Sir George |
| Steel-Maitland, A. D. | Tullibardine, Marquess of | |
| Stewart, Gershom | Valentia, Viscount | TELLERS FOR THE AYES.—Lord E. Talbot and Mr. Bridgeman. |
| Swift, Rigby | Walker, Col. William Hall | |
| Sykes, Alan John (Ches., Knutsford) | Ward, Arnold S. (Herts, Watford) | |
| NOES. | ||
| Abraham, William (Dublin Harbour) | Hackett, John | O'Grady, James |
| Acland, Francis Dyke | Hall, F. (Yorks, Normanton) | O'Malley, William |
| Adamson, William | Hancock, John George | O'Shee, James John |
| Addison, Dr. C. | Harcourt, Rt. Hon. Lewis (Rossendale) | Palmer, Godfrey Mark |
| Agar-Robartes, Hon. T. C. R. | Harcourt, Robert V. (Montrose) | Parker, James (Halifax) |
| Ainsworth, John Stirling | Hardie, J. Keir (Merthyr Tydvil) | Ponsonby, Arthur A. W. H. |
| Allen, Charles P. (Stroud) | Harmsworth, R. L. (Caithness-shire) | Power, Patrick Joseph |
| Atherley-Jones, Llewellyn A. | Harvey, A. G. C. (Rochdale) | Price, C. E. (Edinburgh, Central) |
| Baker, Harold T. (Accrington) | Harvey, T. E. (Leeds, West) | Priestley, Sir W. E. B. (Bradford, E.) |
| Baker, Joseph Allen (Finsbury, E.) | Harvey, W. E. (Derbyshire, N. E.) | Primrose, Hon. Neil James |
| Balfour, Sir Robert (Lanark) | Haslam, Lewis (Monmouth) | Radford, G. H. |
| Barlow, Sir John Emmott (Somerset) | Havelock-Allan, Sir Henry | Raffan, Peter Wilson |
| Barton, William | Haworth, Sir Arthur A. | Raphael, Sir Herbert H. |
| Beauchamp, Sir Edward | Hayden, John Patrick | Rea, Walter Russell (Scarborough) |
| Beck, Arthur Cecil | Hayward, Evan | Reddy, Michael |
| Benn, W. W. (T. H'mts., St. George) | Henderson, Arthur (Durham) | Redmond, John E. (Waterford) |
| Bentham, George Jackson | Henry, Sir Charles S. | Rendall, Athelstan |
| Bethell, Sir John Henry | Higham, John Sharp | Richardson, Thomas (Whitehaven) |
| Birrell, Rt. Hon. Augustine | Hinds, John | Roberts, Charles H. (Lincoln) |
| Black, Arthur W. | Hobhouse, Rt. Hon. Charles E. H. | Roberts, Sir J. H. (Denbighs) |
| Boland, John Pius | Hodge, John | Robertson, Sir G. Scott (Bradford) |
| Bowerman, Charles W. | Holt, Richard Durning | Robertson, John M. (Tyneside) |
| Bryce, J. Annan | Hope, John Deans (Haddington) | Robinson, Sidney |
| Burns, Rt. Hon. John | Hughes, Spencer Leigh | Roch, Walter, F. (Pembroke) |
| Burt, Rt. Hon. Thomas | Isaacs, Rt. Hon. Sir Rufus | Roe, Sir Thomas |
| Buxton, Noel (Norfolk, N.) | Johnson, W. | Rose, Sir Charles Day |
| Cameron, Robert | Jones, Sir D. Brynmor (Swansea) | Rowlands, James |
| Carr-Gomm, H. W. | Jones, Edgar R. (Merthyr Tydvil) | Rowntree, Arnold |
| Cawley, Sir Frederick (Prestwich) | Jones, Henry Haydn (Merioneth) | Runciman, Rt. Hon. Walter |
| Cawley, H. T. (Lancs., Heywood) | Jones, Leif Stratten (Notts, Rushcliffe) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Chancellor, Henry George | Jones, William (Carnarvonshire) | Scanlan, Thomas |
| Chapple, Dr. William Allen | Jones, William S. Glyn- (Stepney) | Seely, Col., Rt. Hon. J. E. B. |
| Clough, William | Jowett, Frederick William | Sherwell, Arthur James |
| Clynes, John R. | Keating, Matthew | Shortt, Edward |
| Collins, Godfrey P. (Greenock) | Kellaway, Frederick George | Smith, Albert (Lancs., Clitheroe) |
| Collins, Stephen (Lambeth) | Kennedy, Vincent Paul | Soames, Arthur Wellesley |
| Compton-Rickett, Sir J. | King, J. | Spicer, Sir Albert |
| Condon, Thomas Joseph | Law, Hugh A. (Donegal, West) | Stanley, Albert (Staffs, N. W.) |
| Cornwall, Sir Edwin A. | Lawson, Sir W. (Cumb'rld, Cockerm'th) | Strauss, Edward A. (Southwark, West) |
| Cotton, William Francis | Levy, Sir Maurice | Summers, James Woolley |
| Cowan, W. H. | Lewis, John Herbert | Taylor, John W. (Durham) |
| Crawshay-Williams, Eliot | Low, Sir Frederick (Norwich) | Thorne, G. R. (Wolverhampton) |
| Crooks, William | Lundon, T. | Toulmin, Sir George |
| Crumley, Patrick | Macdonald, J. R. (Leicester) | Ure, Rt. Hon. Alexander |
| Dalziel, Sir James H. (Kirkcaldy) | Macdonald, J. M. (Falkirk Burghs) | Wadsworth, J. |
| Davies, Ellis William (Eifion) | Macpherson, James Ian | Walters, John Tudor |
| Davies, Timothy (Lincs., Louth) | M'Callum, John M. | Ward, John (Stoke-upon-Trent) |
| Davies, Sir W. Howell (Bristol, S.) | M'Curdy, C. A. | Ward, W. Dudley (Southampton) |
| Dawes, J. A. | McKenna, Rt. Hon. Reginald | Wason, John Cathcart (Orkney) |
| De Forest, Baron | M'Laren, Hon. H. D. (Leics.) | Watt, Henry A. |
| Denman, Hon. R. D. | M'Laren, Hon. F. W. S. (Lincs., Spalding) | Webb, H. |
| Doris, William | M'Micking, Major Gilbert | Wedgwood, Josiah C. |
| Duncan, C. (Barrow-in-Furness) | Marshall, Arthur Harold | White, J. Dundas (Glasgow, Tradeston) |
| Edwards, Enoch (Hanley) | Masterman, C. F. G. | White, Patrick (Meath, North) |
| Edwards, Sir Francis (Radnor) | Meehan, Francis E. (Leitrim, N.) | Whitehouse, John Howard |
| Elibank, Rt. Hon. Master of | Meehan, Patrick A. (Queen's Co.) | Williams, John (Glamorgan) |
| Essex, Richard Walter | Menzies, Sir Walter | Williams, Llewelyn (Carmarthen) |
| Esslemont, George Birnie | Mond, Sir Alfred Moritz | Williams, P. (Middlesbrough) |
| Falconer, James | Mooney, John J. | Wilson, Hon. G. G. (Hull, W.) |
| Ferens, Thomas Robinson | Morton, Alpheus Cleophas | Wilson, W. T. (Westhoughton) |
| Gelder, Sir William Alfred | Munro, Robert | Winfrey, Richard |
| George, Rt. Hon. D. Lloyd | Needham Christopher T. | Wood, Rt. Hon. T. McKinnon (Glasgow) |
| Gill, A. H. | Nolan, Joseph | Young, W. (Perthshire, E.) |
| Gladstone, W. G. C. | Norton, Captain Cecil W. | Yoxall, Sir James Henry |
| Glanville, H. J. | O'Brien, Patrick (Kilkenny) | |
| Goddard, Sir Daniel Ford | O'Connor, John (Kildare, N.) | |
| Greig, Colonel J. W. | O'Connor, T. P. (Liverpool) | TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Gulland. |
| Griffith, Ellis Jones | O'Dowd, John | |
| Guest, Hon. Frederick E. (Dorset, E.) | Ogden, Fred |
§ Mr. PRETYMANI beg to move, that the following new Clause be read a second time:—