§ Viscount HELMSLEYI beg to move as an Amendment, to add at the end of the Address:—
But we humbly regret that no proposals are included indicating any amendment of the Law governing the valuation and assessment to duty of land and houses, the present administration of which is causing loss and hardship to Your Majesty's subjects without a corresponding gain to the revenue.In moving this Motion, I am sure I shall be merely echoing the sentiments of both sides of the House when I say I very much regret the absence of the Chancellor of the Exchequer on this occasion, more especially because of the reason that has compelled him to be absent. I am sure we had all hoped that this Amendment, not coming on until to-day, we should have had the privilege of his presence here. Certainly it does afford a rather interesting comment on the strain to which Ministers and Members of this House are subjected by a general election to find that ill-health prevents him from being here. I do not think that anybody will be surprised that we should move this Amendment to the Address, and thus take the earliest possible opportunity of calling attention to the operation of the Land Taxes set up by the Finance Act of last year, because the circumstances under which those taxes were imposed are, I am sure, fresh in the minds of hon. Members on both sides of the House. Some of the grounds of complaint which we have to urge against these taxes are due to the Act itself, others are due to the administration of the Act. But when you consider the circumstance under which those taxes were imposed, I think it is not surprising that we on this side of the House should take every opportunity we can of calling attention to grievances both due to administration and to the Act itself. "What were the circumstances? These taxes were welcomed with wild pleasure and glee by hon. Members opposite. For what? Not because they were supposed to be special revenue producing taxes—on the contrary, it was shown that very little revenue indeed would come out of them—but because those taxes seemed to afford 894 an opportunity, of which hon. Members opposite have not been slow to avail themselves, of making what they consider a popular cry in the country against dukes. They have gone on this sort of syllogism—all dukes are landlords, therefore all landowners must be dukes; and they quite forget the smaller class who are unfortunate enough to possess land and who are drawn into the meshes of this net designed for those others against whom they seemed to think they could excite popular disapproval. One might have supposed, indeed, that the whole of the Gentlemen opposite composing the Liberal party and the Radical party really believed in the same doctrines as are held by the hon. Member for Bow and Bromley (Mr. Lansbury) who addressed the House the other day. He said that capitalists and landowners were saddled on the back of the people. He, no doubt, looked forward to the day when these incubuses would be removed, and some hitherto undefined order of civilisation would be substituted for it. But are we to take it that hon. Members opposite do share those views, or are we to take it, as far more probable, that they are quite eager and ready to shelter themselves behind those views, to make party capital, to indulge in those forms of oratory now known as "Mile End" and "Limehouse," and to excite every possible kind of animosity against those persons who at the present time are unfortunate enough to own land. There was also the circumstance that it was necessary in the interests of the party to which hon. Members opposite belong to find some adequate weapon with which to beat another place. The failure of Bills such as the Education and the Licensing Bills to pass excited no popular indignation whatever. On the contrary, if we may judge from the complexion of this House, we may assume that the approval of the electorate was expressed at the failure of these Bills to pass.Therefore, it was necessary to devise some measure, and they hit upon these Land Taxes, and I say here, as I have said elsewhere, that these taxes were deliberately made as unfair as they could reasonably be made. [HON. MEMBERS: "Hear, hear."]—as unfair as they could be made without the obvious and open denunciation of every honest man in the country, in order that the House of Lords might be entitled either to throw them out, which they did do, or suffer, on the other hand, from the allegations of dishonesty which would have been levelled 895 against them on the part of those who would require protection of their rights, if they had passed this Bill into Law. and had left those taxes in the unfair condition, as I hope to demonstrate, in which they were. That is the genesis of the Bill, and can you be surprised—with taxes introduced and imposed with this kind of motives which underlay the motives alleged by hon. Members opposite—when you find in this Act the most crude, cruel, and cynical proposals which have ever been submitted to this House for raising revenue? Moreover, we recollect that some Members of His Majesty's Government have been going about the country saying that this is only a beginning. I understand that the Lord Advocate, last night, when he was quoted upon this subject as having said that this was to be the first step only, and that ultimately the whole of the taxes would be put upon the land, stated that he had never said so. I am quite ready, of course, to accept what he says. I have here a report, not a verbatim report, which appeared in the "Scotsman" and in the "Times." I do not know whether the right hon. Gentleman will contradict these words:—
They were keen that the valuation should be made for another and greater purpose still, in order that they might in time remove all rating and all taxation from the value of buildings and improvements the work of man's hands, and place the whole of it upon the basis of the value of the land.4.0 P.M.I gather that directly represents what the Lord Advocate said. Hon. Members will see how far that goes, and, I think, will recognise that there is not very much difference between the version which I have just given and the version given by my hon. Friend in the course of the Debate last night. I do not know whether the Lord Advocate was speaking on behalf of the Government or not, but, at all events, it is sufficient ground for those of us who mistrust these proposals, because we believe they emanate from Bow and Bromley, and to recognise that the administration of these taxes calls for the most careful scrutiny on our part. If the House will allow me, I propose to go into questions which have arisen out of the administration of these taxes. The first grievance was the issue of Form IV. Hon. Members will recollect that the receipt of Form IV. created, to say the least of it, consternation in the minds of a great many people in this country, not merely dukes, but a great many people who own very small parcels or quantities of land. The result 896 was that the Chancellor of the Exchequer felt obliged, or felt it would be a wise thing for him to do, to call a conference of experts on valuation to go into the whole question of "Form IV.," and to see what the grievances really were. One of these grievances referred to Question Q, under Form IV., which referred to whether there had been a sale within twenty years before 1909, and that question was dealt with by the Chancellor of the Exchequer. And I have here the account. What happened was this: It was said that it was very hard. Supposing the man had bought his property five years ago, and there had been a slump in property, it would be very little guide as to the value of property in 1909. The Chancellor of the Exchequer put the case in this way:—
This point was put to us. Supposing a man bought property at say £2,000 and there is a slump of property in the neighbourhood, and down it goes to £1,000, and its value now is £1,000, and supposing it goes up say in five years to £1,500, there would be an increment of £1500 had it not been for this. We then say, 'No, in that case you can go back twenty years,' and if within twenty years he had paid more for it there is no increment. Therefore it is very important.… It is very important for owners of property that they should know that they can go back twenty years even if property has come down in the neighbourhood.I lay emphasis on those words of the Chancellor of the Exchequer in order to show the interpretation put upon them. At the same conference Mr. Edward Wood, Chairman of the Association of Building Societies, said to the Chancellor of the Exchequer:—You have called attention to a matter which I think it is very important the public should know, and that is the provision with regard to the Act where a property may have depreciated in value, that the purchase-money should be taken as the present value, as it is in the interests of the owner, and I do not think it would be wise to alter that.Therefore you see the impression which arose in Mr. Edward Wood's mind from the speech of the Chancellor of the Exchequer at that Conference was that the price given twenty years ago could be substituted for the total value if it was higher than the value as estimated in 1909. Indeed that seemed to be the mind of the Chancellor of the Exchequer, because subsequently, I see from the Official Report, that, in reply to an hon. Gentleman who had spoken, he gave exactly a similar case in words almost identical with those in the quotation I have just read. What has happened? Something very different indeed. I think what has happened will show that the remarks of the Chancellor of the Exchequer are open to the same criticism which the Prime Minister made upon another speech the other day, and 897 if he will allow me to borrow his language, I would say that they show traces of slop-piness, incurable sloppiness, because they certainly refrain from going into any details, or giving either a clear impression of what was in the Act, or what I presume he intended. I have here a letter from an owner, who evidently understood this speech of the Chancellor of the Exchequer in the way in which I am sure the House would have understood it. The letter says:—Referring to the provisional valuation, I claim to have the sum of £455, the price I gave for the premises in June, 1905, substituted for the £350 shown in the form.I think that was a very proper request to make, having regard to what the Chancellor of the Exchequer said. The district valuer, in his reply to that letter, dated 21st November, said:—In reply to your letter of 19th inst., I have to point out that you are not entitled under the Act to ask for the total value paid for the property to be substituted for the provisional valuation, but only the price paid for the site.One cannot blame the valuer; he was perfectly right. Section 2, sub-section (3) says so perfectly distinctly. It provides:(3) Where it is proved to the Commissioners on an application made for the purpose within the time fixed by this section that the site value of any land at the time of any transfer on sale of the fee simple of the land, or of any interest in the land, which took place at any time within twenty years before the thirtieth day of April, nineteen hundred and nine, exceeded the original site value of the land as ascertained under this Act the site value at that time shall be substituted, for the purposes of increment value duty, for the original site value as so ascertained, and the provisions of this part of this Act shall apply accordingly.So that the valuer was perfectly right and the Chancellor of the Exchequer merely misled the deputation of Surveyors, as published in the Press, as to the real meaning of that Section, and as to the real meaning of the relief which he had inserted in the Act, and which allayed a great deal of public anxiety. The two things are not the same. It is not the same to substitute the site value twenty years ago for the original site value estimated in 1909, and to substitute the total value given twenty years ago, that is the price paid twenty years ago, for the total value given now. To make that clear I will take the Chancellor of the Exchequer's own case in which property valued now as on the 30th 898 April, 1909, for £1,000, was bought twenty years ago in 1891 for £2,000, and is sold in 1914 for £1,500. That is exactly the case which the Chancellor of the Exchequer mentioned and which I have already read out. It all depends upon how the different values contained in that vague word "property" are divided. Let us take the case of the 30th April, 1909, and let us divide it and say that the site value at that time was £200, and the value of the buildings £800. Then let us say that when the property was bought twenty years ago the site value was equally £200, and that the buildings were then valued at £1,800. I think one can easily imagine that there might be that depreciation of building although the site remained the same. Take the case of a factory for any industry you like, and suppose that industry has declined in public appreciation, and that there is no large demand for that class of building while the site remains the same. It is quite on the cards that the owner may suppose that ultimately the demand for that class of building will revive, and therefore he does not pull the building down. He keeps it up although he gets nothing in return from it for the time being. Then we will say that on the occasion of a sale in 1914 he realises £1,500 for the whole thing. It would depend entirely what view the Government takes as to the respective values of site and building whether increment is payable or not. The Government valuer may say that the buildings in 1909 were valued at £800. They cannot have gone up in value because the tendency of buildings is to depreciate. Therefore, they are £800 in 1914, and the House will see that that leaves £700 as site value, whereas in 1909 it was £200. That means that increment is payable on £500, although, as a matter of fact, the wretched owner has lost £500 over the whole transaction. The way in which I should suggest that it might quite possibly be valued on the occasion of the same for £1,500, is that the buildings were £1,300. and that the site remained at £200, in which case you would have the depreciation of buildings in twenty years from £1,800 to £1,300.How are we going to suppose that the Government valuer would look upon it? After all they are out for revenue; they have got to earn their salaries somehow. They are most likely to be biassed in favour of their employers, the Government, rather than in favour of the private citizen whose property they are valuing, 899 if they have any bias at all. I do not wish to urge anything against the gentlemen whatever, but all I can say is this, that the whole tendency of public servants in public departments is always to act in the interests of the department as against the individual. It is obvious that the whole of the difficulty arises from the difference of opinion which there may be as to the two elements of value on any property. And why? It is because you are trying to raise taxes upon a shadowy site value which is never bought or sold in the open market, and which nobody really knows anything about, and a value moreover which cannot be tested by free sale as every other value to be of service must be decided. I come to the position of a man who has advanced money on mortgage 20 years ago on a piece of property. This is a case showing the way in which this provision may operate and how hard it may press upon the mortgage. This is from the solicitors to the mortgagees in possession. Provisional valuation has been served upon them. The property was purchased in the year 1900 at the price of £550, which was then without doubt its fair value in the open market. At the same time it was mortgaged to the first mortgagees for £350, and to the second mortgagee for £180, making a total of £530. The second mortgagee has been paid, and the first mortgagee is in possession owing to the bankruptcy of the owner, who was a trader. The provisional valuation placed the original gross value at £323, while in 1900 it was bought for £550. The original site value was placed at £108. In this case the solicitors asked that the site value within twenty years previous to 30th April, 1909, should be inserted in place of the site value as on 30th April, 1909, under the provisions of the Finance Act. The district valuer has declined to accept that view, although he has courteously promised to refer the point to headquarters, and the particulars have been sent to the Chief Valuer. Is it not rather remarkable that valuers should have been appointed who know so little of the Finance Act that they do not realise that it is expressly provided by Section 2 of that Act that the provision with regard to twenty years back shall apply to mortgagees, because it says: "This provision shall apply to a mortgage of the fee simple of the land or any interest in land in the same manner as it applies to a transfer."
A rather interesting point arises on this question, and that is what is the position 900 of the mortgagee. Has a martgagee any right in the matter if he has not entered into possession? It is obvious he is very much prejudiced if the provisional valuation assesses the property at a lower sum. than the amount which he has advanced on the mortgage. What opportunity is afforded him under the Act supposing he is not in the position of either seeing the provisional valuation or of objecting to it. I should like to know the opinion of the Law Officers of the Crown on that point. The last sub-section of Section 2 of the Finance Act says "An application for the purpose of this section must be made within three months after the original site value of the land has been finally settled under this part of this Act." Therefore application is to be made by the mortgagee. But what right has the mortgagee to inquire into it at all? Sub-section 5 of section 27 provides:—
Any person interested in the land, not being an owner, may apply to the Commissioners for a copy of the provisional valuation of the land before it is finally settled, and shall then have the same right of giving notice of objection and of appealing as the owner.What is the definition of a person interested in land? I think the Attorney-General will bear me out that the definition expressly excludes mortgagees. In Section (41) "the expression interest' in relation to land… does not include any other interest in expectancy or an incumbrance as defined by this Act." "The expression 'incumbrance' includes a mortgagee in fee or for a less estate, and a trust for securing money." Therefore it seems to me, as a layman, that a mortgagee has no right conferred upon him under the Finance Act of seeing that provisional valuation, and of making an objection within sixty days if the provisional valuation is put lower than the amount he has advanced. To show the position of the mortgagee still further, I will read a letter which I have received from my own Constituency. The case has not yet been dealt with, but it raises two points which I think deserve investigation. I have no figures yet, and I do not know what line will be taken, but the case ought certainly to be provided for. The letter states:—A client of ours 'A,' laid out a bililding estate some years ago. and another client 'B' still has a considerable sum on mortgage of the unsold land. 'A' died and we have been trying to sell the land on behalf of 'B.' It is abundantly clear that 'B' will never see all his money back. Apparently as the Act stands we should have to put a value upon this land, and though we are only too anxious to sell, shall have to pay undeveloped land 901 duty, so increasing 'B's' loss, who, as he is not receiving interest will have nothing out of which to pay. Eventually, presumably, we shall get it sold, and though we shall not realise enough to repay 'B's' mortgage money, yet if we get more than the present valuation we shall have to pay increment duty on what by no stretch of imagination can be called increment. As I say, I do not yet know how they will treat this matter, but there certainly ought to be some provision in the Act exempting mortgagees in possession from undeveloped land duty and from any increment until they have received the whole of their mortgage money and interest.That is a point in regard to which the Chancellor of the Exchequer led people to believe that there would be no increment until the whole of the mortgage money-had been received. It turns out that that is not the case. Supposing the mortgagee has any locus standi in the matter at all, the only thing he can claim is that some sum, supposed to bear a nearer relation to the total value than that put down by the Government valuer, should be substituted for the site value other than that which is assessed as the value on 30th April, 1909. Another point raised by that letter is as to undeveloped land duty. It is rather hard that a wretched mortgagee in possession, who has no chance of getting his money back, should at the same time be taxed for undeveloped land duty, and very likely increment duty, afterwards, because he cannot find a market for the property of which he has so unfortunately become the possessor.Now I come to the position of the mortgagor. Mortgagors will probably congratulate themselves if my reading of the Act is correct, no matter how hard it may be on the mortgagee, because many mortgagors are very much perturbed that mortgagees are getting to know the situation of the provisional valuation. These provisional valuations being put so low by the Government is a matter of great concern to a large number of persons who have borrowed money on mortgage. Here is a very ordinary case—a property consisting of fourteen houses, let at eight shillings a week, purchased by the present owner in 1900 for £2,730. The houses are identical, but owing to the red tape provided by the Act, there have to be fourteen separate forms for the provisional valuation. The valuer has valued each house separately, and has had to apportion to each house its share of the chief rent payable over the whole property. The total value for the fourteen houses amounts to £1,820, although already £1,800 is advanced on the property by way of mortgage, and the owner puts the value at £2,730. The House will notice that there 902 is the ordinary one-third margin which those who lend money on this class of security usually look for. That shows that somebody else besides the owner thought that £2,730 was the fair value of the property. The property must have been valued at the time of the mortgage, otherwise so large a sum would not have been advanced. Here is another case—six houses, exactly similar, estimated value £1,275, provisional valuation £796, while there is a mortgage on the property of £880. All these mortgages have been advanced by trustees, and in each case the valuation was made by a valuer of repute. Again there is the margin of one-third between the amount advanced and the value put on the property by the owner.
§ The ATTORNEY-GENERAL (Sir Rufus Isaacs)When was the original valuation made upon which the money was advanced?
§ Viscount HELMSLEYNo doubt I could get the date; it must have been since 1900.
§ Mr. PRETYMANBecause the price was actually paid in 1900.
§ Viscount HELMSLEYThe whole of the property, as far as I can make out, was purchased in 1900. In another case the property was mortgaged for £200, and the provisional valuation is £160. After much correspondence the Government valuer increased the amount by £40, making it equal to the amount lent on mortgage, with the result that notice has been given to foreclose. In all these cases the assessable site value has been placed at nil. Why have the Government valuers undervalued the houses in this way? If the amount which has been borrowed on the security of the houses is realised, then, the Government will say that increment value is due. It will be contended that the houses cannot have appreciated in value; therefore it must be the site, and increment value will be payable. Some hon. Members have stated in the country that the effect of these Land Taxes upon those who suffer from them has been exaggerated. I will read two letters that show how the taxes are working. Here is a letter written on 24th November. If the names are challenged I shall be prepared to give them privately, but I am not at liberty to divulge them to the House generally:—
Dear Sir.About thirteen years ago. I borrowed on mortgage £2,500 on a grass farm in Bedfordshire. I have received notice that I must reduce the mortgage to £1,500, and pay £1,000 at Christmas next. I wrote and 903 asked if the mortgagees would accept a ground rent of £39 per year in lieu of the £1,000 as additional security. I here enclose you the solicitor's reply. I have other mortgages, and fear that the money will be called in, or that I must reduce the amount, which will be very serious. I hare no doubt but that other borrowers will experience the same inconvenience, and most likely be ruined by the new Land Act.This is the letter from the solicitor:—We have this morning received a reply from the mortgagee. He says he should prefer to receive the £1,000 from you at Christmas next, rather than accept ground rents to the value of £39, as additional security. The course pursued by the present Government has resulted in such a serious depreciation in the value of properties, that it is no wonder the mortgagee wants the mortgage reduced.So much for the position of the mortgagor. His position has obviously been very much prejudiced by the mortgagees getting to know of the valuations, which we maintain have, on a definite prearranged system and plan, been put far too low throughout the country for the purpose of increment value duty. The same applies to other property on which there need not necessarily be a mortgage. An increment duty may be obtained ultimately where no increment has really occurred unless some alteration is made. I have the particulars of a case in which a man bought a property in 1897; he paid £35 for each plot, spent £180 in building each house, and paid £2 for paving, making a total of £217 in respect of each house. The Government valued the property as on the 30th April, 1909, as having a site value of £39. The owner does not quarrel with that; he thinks that a fair valuation of the sites. But the Government put the total value at £145, although it has cost the owner £217. Therefore the Government, since they put the total at £145, and the site at £39, reckon the value of the house alone at £106, although it has cost the owner £182. Suppose he sells in a few years' time at £200; he will make a loss of £17 on the transaction. But the Government have valued the house at £106; that represents a site value of £94; therefore the owner will have to pay increment duty on the difference between £94 and £39. That is on £55. That is £11 of duty, and that when there has been no increment; when we have actually made a loss of £17 on the whole transaction. It shows how these taxes can be jerrymandered in order to get increment when there is really no increment whatever due. I come to another letter, one received from a solicitor of very high standing in my own Constituency. I should like to read it in toto. I think it really shows what the impression is in the country. He says:— 904That there is a deliberate—and I should say uniform disposition—to put down the site values as at 30th April, 1909, there can, I think, be no doubt. I will give you a concrete example (one of several) in my own experience here. I received six provisional valuations, each for one cottage. The gross values varies from £56 to £84, and the site value from £2 10s. to £4 5s. The site value was put at an average of 2s. per square yard. The property is in the centre of the town, in a side street of a main street. I at once objected to the district valuer, and I must say he showed every desire to meet me, and in fact ultimately accepted my minimum, that is 3s, 6d. per square yard. He has now issued the amended provisional values accordingly, leaving the gross value as before. I had precisely the same experience with fourteen cottages. Again the sites had been put at 2s. per yard. They were increased on my objection to 3s. Cd. and amended valuations issued. Of course it will be said ——And here I have no doubt that hon. Members are thinking the same thing—that district valuers are ready to meet objections fairly when made. That is all right when professional men are employed by the owners to receive and check the provisional valuations. In many cases they are mostly trustees, and so naturally seek advice, and then when the district valuer finds himself cornered by someone with local knowledge of values which he does not possess he gives way, but says nothing of the expense of all this caused to the owners. It leaves untouched the great mass of small owners who receive the provisional valuations themselves and do not, or cannot afford to employ professional assistance; and accept what is sent them——I want the house to mark this—quite in ignorance that this site value is fixed once and for all, and that it is on that that increment will be charged on sale or death More than that these poor people are rather content with low values, as they just have the general idea that there is a tax on laud values, and naturally think therefore it is an advantage to have these professional values as low as possible.That is exactly the point. Does anyone suppose that out of the many thousands who have helped to return hon. Gentlemen opposite that 10 per cent. understand with any degree of accuracy the incidence of these taxes. Ten per cent. is ridiculously high. I should think, perhaps, one in a thousand would be nearer the mark. Of course hon. Members have only got such support as they have received on these taxes from those people who have not come in contact with them, and from those who are really ready that some tax should be imposed upon the rich that they think the poor will escape, especially if it seems to offer such opportunities for making those delightful speeches which we heard so much of during recent times.There is another thing I have got to show, and that is that the valuers, as I have said, are consciously or unconsciously biassed m the interests of the Department which they serve. I have a case here in which two properties almost exactly similar have been valued differently for Increment Duty and for Estate Duty. A gentleman writes as follows:—
I have now before me the professional valuation, sent out by valuers appointed by the Commissioners of 905 Inland Revenue who have valued a freehold house of mine, let at 7s. 6d. per week, for Increment Duty at £178. I have also before me a valuation by valuers appointed by Somerset House Authorities of another freehold house, situated quite in the country, and let at only 7s. per week. This house is valued at £225, for the purpose of Estate Duty.Therefore, you get a house situated in the country, let at 7s. per week, valued at £225 for Estate Duty, and the other house, let at 7s. 6d. per week, which is a house in no way comparable, valued at £178. The writer goes on to say that the house valued at the higher figure for Death Duties is not nearly so good as his. These figures speak for themselves. Then there is the question of deductions. The House knows how complicated all these deductions for ascertaining the site value are. No doubt hon. Members have been in the position in trying to understand Form IV., and also the instructions which accompany Form IV., which give all the many kinds of valuations which the ingenuity of the present Government has endeavoured to place upon land. Here is an interesting series of letters which deal with the point which, I think, is quite defined in the Act, and I will ask the right hon. Gentleman the Attorney-General when he replies to deal with this point. Section 25 (e) of the Act applies to it. The right hon. Gentleman will see that—deduction is allowed off any sums which, in the opinion of the Commissioners, it would be necessary to expend in order to divest the land of building, timber, trees, or any other things of which it is taken to be divested for the purpose of arriving at the full site value.That is enough for my purpose I think. Here is some interesting commentary, but perhaps I had better allow them to speak for themselves. Here is a solicitor writing to a valuer. He says:—We observe that you have made no allowance for the cost of clearing the site. No one would undertake this work without being paid for it. The cost will probably be £30 per house.The District Valuer replied:—Dear Sirs,—I have your letter of the 11th inst., and in due course will send you the form referred to in my letter of the 9th. With regard to the allowance for cost of clearing the site, I have to inform you that there is no difficulty at the present time——In the place mentioned—in securing a price for these old materials of house, on the basis of a purchaser forthwith clearing them from the site. No allowance should be made in respect to this item.I have another case in which the owner writes:—The officer informs me that his instructions are that where for the purposes of arriving at assessable site value, buildings, timber, or similar improvements, have in imagination to be removed from land, the value of the material so removed is to be taken into account and set off against, the cost of removal.906 His instructions from Somerset House! Where did he get them in the Act. I should like to have the Section of the Act quoted to me which authorises these instructions. I think I cannot do better than urge the fallacy of that view in the words of a gentleman who wrote the letter I first quoted in this connection. He says:—The argument contained in your letter of yesterday is a most extraordinary one. If a contractor will undertake to remove the materials of a building in consideration of being allowed to retain such materials then the cost of clearing the site is given equal to the value of the materials. The Finance Act allows a deduction from the total value of any sums which it will be necessary to expend in order to divert the land of buildings, &c. The Section does not state or imply that the owner has to give away the materials. The Act plainly shows that a deduction is to be allowed for the cost of removal. We are surprised to find that Government valuer suggests that such work can be done without cost, or argues that because a contractor will remove materials and pay something for them, therefore, the owner is put to no cost. A contractor would pay more for the materials if the owner removed and delivered them than if the contractor had to do the work. The difference represents the cost of removal.It is obvious to the House that the owner might not want to part with the materials. Supposing he is forced to reckon his buildings in the way which the ingenuity of the Government mind contemplates, then it is quite conceivable that he might want to erect them somewhere else. Therefore, it seems to me a monstrous perversion of the Act that the value of materials is to be set off against the cost of removal.I should like to say a word or two about agricultural land. Hon. Gentlemen who will follow me will deal with this point more fully than I can. It is rather, of course, premature to say much of agricultural land, because so few provisional valuations have been served. I have not been able to hear of any in my own Constituency. The valuations were hurried up before the beginning of the autumn Session, in order to present them on the meeting of the House of Commons. A row of houses was selected. One house being taken and valued, a duplication of this one house was merely clerk's work. There is not much to go upon yet with regard to the valuation of agricultural land. But I do rather resent the statement which has been made by some hon. Members in the course of the election, that all agricultural land is exempt. For instance, here is one sentence in a leaflet set out by the hon. Member for South Moulton, which says that all land used for small holdings or market gardens is exempt. Frankly, that is not so. It is a gross inaccuracy. A great many people, and hon. Members of this House who have received that notice, 907 must have known the falsity which it contains. Fortunately for them, a great many voters were not much concerned about this matter, and, therefore, they were quite able to vote for them. Allotments are not exempted. Equally, of course, a great deal of agricultural land will be subject to these taxes. You cannot exempt land used for agricultural purposes, and insist upon your Undeveloped Land Duty, your Increment Value Duty, and your Site Value Duty. No form of words will do it. I am quite ready to admit that the Government have done something to exempt some agricultural land; that is, so far as it goes. But there is no doubt that agricultural land will be subject to Increment Value Duty as soon as its building value is held by the Government valuer to exceed its agricultural value.
There is another thing, in similar leaflets to that which I have spoken, the small owner is said to be exempt; but the House should know that that exemption is a very partial one, even for the small owner who comes within the provisions of the Section, and a good many do not. Taxes, possible taxes upon land which he owns, must have the effect of depreciating the value of the land, must have the effect of restricting the sale that is possible for them—particularly building land—because unless it is bought by a small holder similar to himself it becomes subject to these taxes. Therefore, I do not think hon. Members opposite are justified in going down to their constituents and saying that small holders and small holdings are exempt. I am led to this conclusion that anybody who goes into these taxes must arrive at the conclusion that it is impossible to amend these clauses, to make the Bill workable. Even if hon. Gentlemen still believe in the principle of increment—though I think it could be shown that that principle has very many qualifications before it can be made a sound one—even if they believe in the principle of increment, they must recognise the fact that these taxes must be worked without the hypothetical and imaginary ideas of value which are laid down by this Finance Act. Therefore the whole Act requires the most radical and fundamental alteration.
§ Mr. GEORGE CAVEIn rising to second this Amendment I must at the beginning say how much I share the view expressed by my noble Friend of regret at the absence of the Chancellor of the Exchequer. I regret his absence not only 908 from the cause of it, but also because I feel sure if he were here and had listened to my noble Friend's speech which I think has greatly impressed the House, he would have seen there was really a case for reconsideration of many of the details of the Finance Act, if not reconsideration of the whole policy of the Government. I do not propose to follow my noble Friend into the details which he gave in connection with different parts of the Act. I am going to dwell mainly and very shortly upon those points which I think are really very urgent, and these are the character and the method of the valuations which are now being made from day to day. I believe anybody who knows something of the figures and facts would agree when I say that where valuations are not merely haphazard the valuers show an incredible bias to value houses, especially in urban districts, as low as possible, with the result, of course, that Increment Value Duty must accrue upon the first occasion of a sale. I speak mainly from the point of view of counties like my own and the home counties, where there are very many small owners. In my own county I think the land held by small owners has a valuation of something like £1,000,000 a year. That is also the fact in many other urban districts where land is being constantly developed, where houses have been built and bought and sold, and taxes like this must have a very material and serious effect upon that particular industry.
My noble Friend put before the House certain figures of valuation, and I think what struck us all was this: that in the cases he gave the valuation was either just about the same or a little less than the amount actually standing upon the mortgage of the House. Nobody who knows anything about land can fail to see that that means valuation very seriously below the actual value. Mortgagees, and especially trustees, do not lend money upon land without valuation, nor do they keep their loans alive without looking into the value from time to time. So if you find £1,800 in one case actually standing upon mortgage or loan it cannot be right that the value of the land should be put at the actual figure of £1,800. The effect of valuation like that must be to undervalue the land and site, and to make it certain that in a short time Increment Value Duty will accrue where no real increment has accrued. In many cases it looks as if the valuer had taken the mortgage amount and put the value at the 909 same, or with a very slight difference indeed. In other eases similar observations may be made. I will give one or two figures. I take a house assessed now to Property Tax at £50 a year, yet it is valued at £300. It is hardly credible that that should be the figure. The ground rent alone of this house is £15 15s. Still the value is put at £300. The total value assessed in this case is really only the value of the ground rent.
Let me give another case. There are two houses standing side by side built at the same time exactly, no difference in room accommodation or in any other way, yet one of them is valued at £225 and the the other at £128. What is the result? If the house valued at the lower sum is sold for £225, Increment Value Duty has to be paid, while the other house, although it is sold at the same price, pays nothing at all. Another case was brought to my notice only last night by a man experienced in these matters. He says: "I have two houses. I sold one of them in the spring of 1909, which was the date at which the valuation had to be made, for £650. I have another house which is just like it. That was valued as in April, 1909, and yet while I sold one house at £650 the other is valued at £470." What is the result of these different figures to him? He is told the second house is worth £345, and the original site value is put at £120. If the second house sells at the same price as the first he would be deemed to have made a profit or increment of £180. From that the valuer tells him, and quite properly tells him, must be deducted 10 per cent. upon the site value, or £12 10s. His net increase is £167 10s., upon which duty to the amount of £33 10s. is charged. This is the duty to be paid in a case where the man has not made one shilling more profit than on the other house which has paid no duty at all, though he has not sold the house for a penny more than it was worth two years ago. This man is a builder, and a very experienced one, and he says the result is to depreciate his trade and to make matters difficult for those in the building trade, and to make it almost impossible to make any profit on building.
As a business matter I think these valuations are grossly unfair to people who either invest in houses or sold them as this man does. There was a case of a house brought to my notice yesterday. It is situated in a very populous part of London and a short time ago an offer was obtained for it of £6,800. What is the official 910 valuation of this house? It is put at £3,200. So that if the owner accepts the offer he received and sells for £6,800 he will be deemed to have made a profit of something like £4,600. Yet there is no better indication of the value of a house than the offer made for it. That shows the absurdity of this valuation, and although many of the valuers are able men and take trouble with their work, I cannot think that the men who give these figures are all of them qualified to make these valuations. And, of course, almost all this falls upon the site value, because if you say a property was worth £3,000 only we years ago, but sells for £4,000 this year, it cannot be that the bricks and mortar have appreciated; the appreciation must be of the site value, and, therefore, you must pay a duty on the whole difference, which they call increment.
One other fact with regard to that. Many valuations are made now on the sale. Of course, there has been no time to value all the property in the country and, generally speaking, the question of value arises upon sales. I had cases sent to me where property is actually sold and the sale price is given in the valuation. So far as I can see, what happens is this: The valuer takes the sale price, takes something off, and assesses the amount as increment. In two or three cases brought to my notice he just took a percentage off the sale price. Of course, whatever percentage he takes off, duty upon that at 20 per cent. is paid, and by a mere stroke of the pen duty accrues to the Government. I think that the whole system of valuation wants reconsideration. Everyone knows that in the spring of 1909 there was a slump in land. In earlier years the figure was high. Then it came down at the critical date, and it has gone up since. That is exactly what we prophesied would happen two years ago. Of course, land does go up and down, and does rise and fall; but the result of all this is that because there happened to be a fall in value exactly at the critical moment, therefore a man who may have made no gain, and, indeed, may have made a loss, is deemed to have obtained an increment and must pay duty to the State.
Out of the many people who receive these valuations, only a very small proportion understand what they mean, or whether it is to their advantage to have a high valuation or a low one. In the country where land is undeveloped, and may remain so, it may be of advantage to have 911 a low valuation. In towns, and especially in our business centres, it is disadvantage. People who do not look into matters closely do not know that. They do not object, and if they did object I do not know that they would be likely to obtain any change unless they were able and willing to press the matter to an appeal. Of course, there is an appeal, but an appeal costs money. People have been paying for the original valuation so much per form. Over ten million forms were issued in this country, and if you are going to appeal in a large number of these cases it costs very much more. Fees have to be paid. Lawyers accept very little, but you cannot get surveyors to act for you without larger fees. A man has, perhaps, 1,000 forms to deal with, and it is impossible for him even to consider the question of appealing against so large a number of valuations. Appeals are very costly, and I do not think many can afford appeals such as I have indicated. I say if you are to keep alive this system, this figment, of site value in 1909, at all events, the valuers should take the owners and the occupiers more into their confidence. I do not understand, and many people do not understand, upon what basis these valuations rest. With what figures do the valuers start? What percentage do they postulate? How many years' purchase do they allow for all these profits? Nobody knows, and everybody tells me there can be no common basis for the valuation. I have a letter from a man, and he says, and his expression is worth quoting:—
Careful scrutiny fails to disclose the basis on which these valuations have been made. There is no visible relation with any known standard of value, and apparently no common principle or basis underlying-them.5.0 P.M.One would like to be told what is the basis of these valuations. I should like to know whether the valuers were instructed to take the owners into their confidence, whether they appealed or not, and show them what the basis is in order that some test may be applied to these valuations before they become valid. The whole system is wrong. I have never been a believer in this system of estimating site value, but if it is to be adopted let it be applied in such a way that people will not feel a sense of injustice.
With regard to the Stamp Duty, the Attorney-General is aware that a double conveyance stamp is imposed by a section 912 of the Act, but there is an exemption for sales at a price under £500. Many people, instead of buying property, take a lease paying a small premium to the owner, and they think, not unfairly, that they ought to be put on the same basis as a purchaser for the amount of that premium, and ought not to pay the double Stamp Duty. The matter was brought before the Government last July by my Noble Friend the Member for Chorley, and the reply given was that it would be considered, and, if possible, dealt with. I do not know whether the Government is prepared to answer that point to-day, but I should like, as soon as possible, to know whether that matter will be dealt with. I also want to ask how far has the valuation progressed, and what proportion of properties have been valued for the purpose of the new Doomsday Book? In the first place, how far you have got in this tremendous process of valuing the whole of the land in the country; secondly, what has been the cost of the valuation to the Government up to now? I mean, of course, the cost to the nation, and not the cost to the proprietors. That you cannot estimate, but I think it is far greater than the cost to the Government. Thirdly, I would like to know what has been the revenue up to this time? If all this great inconvenience is to be suffered we should like to know what there is to show for it. Is there any profit on the tax, or is there a loss? To many of those in my Constituency these are matters of great interest, and I hope we shall have an answer to the points I have raised.
§ The ATTORNEY - GENERAL (Sir Rufus Isaacs)The Noble Lord who moved this Amendment, in a speech full of information and hypothetical points for consideration, made some interesting observations about the Land Tax. He soon made it very apparent that he approached the whole system of this new land taxation in a spirit of very jealous suspicion of the motives which actuated those who put the taxes forward, and who were enabled to pass them through the House, and eventually, after an appeal to the country through the House of Lords, the Noble Lord made some very strong comments, with which I shall deal in a moment, on the action of the valuers; but, after listening to his speech, I take the view that, notwithstanding that he used some words which might convey to the ordinary mind that he was reflecting on these officials, I am assured now that he 913 had no such intention. The Noble Lord, in the early part of his speech, after he had warmed to his task, made use of the expression that all this was part of a definite system of a prearranged plan to put the values too low.
§ Viscount HELMSLEYI addressed my observation to the Government, not to the valuers.
§ Sir RUFUS ISAACSI am glad that the valuers are freed from that imputation. But what does the charge of the Noble Lord mean? It means that the Government has set out upon the deliberate plan to put the values too low. If he says that he does not impute this action to the valuers who then are the persons responsible for putting the values too low? How is it possible for the values to be put too low unless it is done by the valuers? Does the Noble Lord mean that instructions were given to the valuers that the values should be put too low, and that it was part of a definite system and a prearranged plan that the values should be put lower than their fair value? I fail to understand the charge unless it means—as the Noble Lord will see it means, on reflection—an attack upon the valuers, although, perhaps, he meant it as an attack upon the Government. The Noble Lord cannot attack the one without attacking the other.
§ Viscount HELMSLEYIt is within the experience of everybody who has had anything to do with valuations that all valuers can put things high or low according to the persons for whom they are acting. They are always biassed in the direction of the persons for whom they are acting, and very often there are arbitrations in consequence.
§ Sir RUFUS ISAACSI agree that valuers often act very high on one side and very low on the other; but this point really does not touch the question which I have put to the Noble Lord. I asked him whether he really meant, as I think his words imputed that the valuers have instructions to put the values too low. If all the Noble Lord meant was that the valuers, acting on behalf of the Government as experts in their professional capacity, were acting honestly in the discharge of their duty by putting the values too low because they thought this would suit the Government's purpose, again I say it seems to me that, however much he may disclaim it, he is making an attack upon the valuers.
§ Sir F. BANBURYWhy should he not?
§ Sir RUFUS ISAACSI have no objection. If the charge is made then we can defend it. What I object to is an attack being made upon these professional men, while at the same time a disclaimer is being made of any intention of attacking them. If the Noble Lord meant to attack them he has a perfect right to do so. From my experience of the Noble Lord in this House, I think if he meant to make a charge, when he is confronted with the insinuation his words convey, at least he ought to say plainly and fairly whether he intended to convey an imputation upon the valuers. I understand that the Noble Lord had no such intention, and made no such attack. I will not take up too much time upon that part of the Noble Lord's utterances, which, if I may say so with respect, entirely marred the speech he was making, which was full of very interesting comment upon a matter which this House naturally wishes to discuss, and which seemed to me to contain some expressions embodying a covert charge and insinuation.
As the House will see when I come to deal with the facts, there is not a tittle of evidence to support the charges which have been made. On the contrary, the facts which I will state to the House in a moment will show—I do not know whether they will be plain to the Noble Lord, but they will be to the House—that you could not have a valuation proceeding more fairly, with more reason and with a greater desire to deal in a spirit of concession to those whose property is being valued than in the valuations which are being made under this Finance Act. Let me tell the House how this matter stands at present. I will take an instance from one district for which I have the figures. I take, an instance in which there has been 40,000 provisional valuations made and served. Now what is the percentage of objections? It does not amount to more than 1 per cent. out of the whole 40,000 in that district. In making that statement I am not omitting consideration of the Noble Lord's suggestion that there are a great many persons who are ignorant of the procedure and do not object. Out of that 40,000 there is not more than 1 per cent. of objections, and I am putting it at the highest. In making that statement I am not saying anything that will not bear examination. That is the percentage out of the whole 40,000 provisional valuations. Does anybody imagine that this 915 means that because a number of the people are poor they do not understand it? If so it would mean that in your provisional valuations your objections would come from the wealthy proprietors and land owners, while from the poor you would not get any.
§ Mr. PRETYMANHas the time expired within which notices of objections may be given?
§ Sir RUFUS ISAACSYes, for the particular district with which I am dealing. I selected it because the sixty days have elapsed, and therefore there can be no further objections. It would not have been fair, and I should not have given the instance otherwise. I certainly would not have done so without stating the fact to the House. The instance selected is one where you have a number of provisional valuations, where the time has expired for notices of objections, and where you have got all the possible objections you can have. Of course, although there are 1 per cent. of objections, which is the maximum, there is still opportunity under the Act, as hon Members are well aware, for meeting the Commissioners and for concessions being made, or perhaps of convincing the owner that his property has been valued at the right amount. The result, if the facts turn out in this as they have done in a number of other cases, will no doubt be that out of the whole 40,000 provisional valuations there will not be one single appeal. There have, of course, up to the present moment, been a number of cases where objections have been raised, but in point of fact there have only been notices of two appeals out of the whole number. The spirit in which this Act is being worked is that the valuer should act fairly and reasonably. It may be that the House does not quite appreciate the full significance of the statement which I have just made about the appeals. I said that out of the 40,000 provisional valuations there have been only 1 per cent. of notices of objections, but no appeal has emerged from those 40,000 provisional valuations at all. When I said there were two appeals, I was speaking of the total number of provisional valuations. We have at the present moment only got these two appeals out of them all.
The basis upon which these valuations have been conducted is, of course, important. The hon. Member for the Kingston Division (Mr. Cave) asked what was the 916 basis upon which they were made. I can tell him. It is that of arriving at the fair value between a willing buyer and a willing seller. I disclaim altogether and repudiate entirely the notion that valuers are acting in the interests of the Government when they value too low. I think it may be hardly necessary for me to say there is not the faintest vestige of truth in what I think I must now call the charge which the Noble Lord made, that the putting of values too low was part of a definite system and a prearranged plan of the Government. With what object should the Government put them too low? The Government interest is to have one valuation. If they put them too low in one case, it must affect the valuations they get in another where they want them fixed high. Let me take an instance. Supposing you have to value a property for Estate Duty. You have some means of arriving at the value by the provisional valuation you have already for the purpose of the Increment Tax, and, if you put your value too low, as seems to be suggested, for the purpose of enabling you to get a greater Increment Tax when the time comes, either at sale or on some other occasion under the Act, then the result would be that the Government would defeat themselves when it comes to levying the amount payable as Estate Duty. Perhaps it would be undesirable to mention it, but I have in mind a particular case where the provisional valuation already made has availed for the purpose of Estate Duty and has been used. It is a guide.
§ Mr. AUSTEN CHAMBERLAINI hope the hon. and learned Gentleman will not think I am discourteous in interrupting him, but I am anxious to get at his meaning. I quite understand that a valuation of property made two years ago may still have some bearing on the value of that property to-day, but would this valuation, made as it is in 1909, be any defence if pleaded by a taxpayer twenty years hence?
§ Sir RUFUS ISAACSIf in twenty years' time the property has increased in value, certainly not.
§ Mr. AUSTEN CHAMBERLAINIf a definite value was put upon it.
§ Sir RUFUS ISAACSOf course, in order to arrive at your definite value, you will first of all have to say, assuming that 917 you are dealing with a property twenty years hence, has the value increased? Having once arrived at the fact that there has been no increase in this particular district and as regards this particular property, you have a definite value you can use, and use against the Government if they attempt to put the value too high. The truth is that with regard to these matters the Government has only one object, and that is to get at what is the real and fair value. What objection is there to any man stating what is the fair and real value of his land? He is quite entitled to do it, and, so long as he is ready to do that, there is no difficulty. If he is entitled to do that, and if the Government does not accept it, what is the alternative?
§ Viscount HELMSLEYThe hon. and learned Gentleman has misunderstood my argument. It is not the difference in the total value. It depends largely upon how that value is to be adopted.
§ Sir RUFUS ISAACSYou have, for example, to arrive at the site value, and you have got to have a valuer to fix that site value. He has a total value and splits it up into four, and arrives at the site value which is necessary for the purpose of deciding what is the amount of the Increment Tax. However much you may travel over this ground, and whatever you may say, it always come back to this point. If there is any objection by anybody to the value which is being put upon his property, he has, as this House has taken care to enact, that he should have, a right of appeal to the referees and a right of appeal to the High Court. The House may remember the discussion which took place upon this particular matter on the introduction of the original Bill. I was one of those who desired that the appeal should be the freest appeal to the High Court of Justice and should not be confined as it was, as the Bill was at first drafted, to the referees to state a case to the High Court. The view taken by a number of us was that that was not a satisfactory appeal and that the right sort of appeal was the same as that under the Finance Act of 1894, a very full appeal, and the consequence was that in the result the Chancellor of the Exchequer announced he would agree to that, and it was embodied in the Bill and now forms part of the Act. I think it may be taken for granted that there will be differences of opinion whichever of these valuations you may take. I do not know what the Noble Lord's experience 918 is, but mine is rather to the effect that a man who wants to borrow money puts a higher value on his property than, perhaps, a valuer on behalf of a mortgagee would. I do not feel inclined to draw any inference as to the value of it from what he tells me. It does not seem very fruitful to point what he says is the value of it. I agree that when a valuer has valued for the purpose of a mortgage and the mortgagee has advanced a certain sum—more particularly if he is a trustee—it would show, and I should draw the inference, that the mortgagee had been advised that the property was worth a third more than he had actually advanced. Of course, the value of that property may change and the mortgagee. may in some cases find it a little more than he advanced upon it, and in other instances he may find it something less. You cannot draw any general inference from that.
Something was said with reference to Form IV. Form IV. was devised in the same way, to get information in order that you may have a fair valuation placed upon the property. There have been altogether ten and a half millions of Form IVs. sent out. Out of those nine and a quarter millions have been returned, and of the balance quite half a million are represented by forms from railway companies, local authorities, and large statutory companies, who have asked for further time, and who have had it granted them. There is no difficulty in securing time. So far as one can see, there is not the slightest reason why anyone should complain about Form IV., except the natural disinclination of everybody to fill up any form of any kind. There is this disinclination with regard to the Income Tax and Super-tax and even with regard to quinquennial assessments, and every other form of assessment or tax there may be. Except that, Form IV. is really perfectly harmless. It asks for information. You are not even bound to give part of it, and it may be, as we say in the result it has been, that the information is given very fairly, and, so far as the Government know and have been able to check it, very honestly. It has been of very material assistance to the Government in arriving at what is the fair value of property. Complaints as to Form IV. do not, therefore, seem to be very well founded. The Noble Lord put a question to me about the interest in the land. I can only say I am surprised to hear that that 919 included the mortgagee. I have made inquiry, and I have found that the revenue have been advised that the mortgagee can get a provisional valuation, and that large numbers of them have got them on application. I understood the Noble Lord to complain that the mortgagee could not get the provisional valuation.
§ Viscount HELMSLEYI asked if he could.
§ Sir RUFUS ISAACSOf course, if the Noble Lord would prefer that the mortgagee should not get it that is another thing. Undoubtedly, he did complain that there were only three months in which the mortgagee could find out the particulars, and he suggested that it might not even be possible to get the information during that time. The Noble Lord cannot have it both ways. He must take it one way or the other. I think I have answered all his points.
§ Viscount HELMSLEYThere is the point about divesting the cost of materials for removing.
§ Sir RUFUS ISAACSThat depends on whether it comes under the provision that is made for deductions.
§ Viscount HELMSLEYMy point was whether valuers are entitled to set the value of the material against the cost of removal. We maintain that there may be a cost of removing materials quite apart from any value of the material, because it may be wished to use them for another purpose. I mentioned the fact that a site-owner had written to say he had been informed by the revenue officer that his instructions were that where, for certain purposes, things had been in imagination removed from the land, the value of the material should be taken into account and set off against the cost of removal.
§ Sir RUFUS ISAACSOne answer to that is that if the owner has a grievance he has a right to appeal. I object to giving an answer in the House to questions on which I have not full information, and which, as a Law Officer of the Crown, I have not had an opportunity of considering. I am not prepared to give an answer to the Noble Lord's question, and I hope he will not think I am in any way disrespectful. That, at any rate, is my conception of the duties of my office. Let me say with reference to this matter that the 920 objections which the Noble Lord is putting to us are that these taxes are so crude and so cynical that they would work very great hardship. But why is it, I would ask, that the Noble Lord and his party did not take advantage of the opportunity afforded them so recently as a meeting which took place at Nottingham, when the right hon. Gentleman the Leader of the Opposition could have announced that the policy of his party was to repeal these Land Taxes. [An HON. MEMBER: "Wait and see."] That is a little late, seeing that the General Election has taken place. The announcement might have been of much more use beforehand. I can only say that these taxes have become part of the law of the land, and it behaves everybody, however much he may have objected to them at the time they were passed, to recognise that they are part of the revenue which has to be exacted from the taxpayers. It is no use saying that they are bad taxes; so long as the taxes exist and so long as they stand unrepealed they must be paid. I submit I have shown, from the material which I have laid before this House, that there is no ground of complaint against the present administration, and that there is no right to say that there is any undervaluing of property. On the contrary, everything has been done to make this tax work with the utmost fairness, and there has been a desire to make concessions so that the new tax may not inflict any hardship on those who have to bear it.
§ Mr. PRETYMANI think the hon. and learned Attorney-General's peroration might do very well for the constituencies, but it is hardly borne out by the facts he gave us in his speech in answer to my Noble Friend, who Moved, and the hon. Member who Seconded the Amendment; I know perfectly well that it was extremely difficult to give an answer off-hand to the objections raised by my Noble Friend, and I do not wish to find fault with the learned Attorney-General's speech in that respect. But I think I am entitled to say that he has not answered in any way the questions put or the objections raised by either the Mover or Seconder of the Amendment. The only answer that could, in the slightest way, be said to meet my hon. Friend's question was the figure which the hon. and learned Gentleman gave with regard to the 40,000 valuations as to which no objection has been raised. I entirely accept that figure as a material fact, but that one fact is not a sufficient answer to 921 the scores of cases of under-valuation stated again and again by both the Mover and the Seconder, and I may say, in passing, that those cases represent but a very small percentage of the innumerable complaints of under-valuation which are reaching us from every part of the country. My Noble Friend read a letter from a solicitor in his own constituency in which he stated that, to his own knowledge, under-valuation was general in that district, and that the only people who could deal with it were those who employed professional men with a knowledge of valuation to act for them; consequently the smaller owner was at a disadvantage in having his property greatly undervalued. The only answer the hon. and learned Gentleman made to that was that in some other districts there had been 40,000 valuations to which no objections had been made. I should have thought that the hon. and learned Gentleman would have said: "We have no desire to undervalue; we will make inquiry into these complaints, and if there has been under-valuation we will deal with them." But the hon. and learned Gentleman, speaking as a Law Officer of the Crown, contented himself with saying that the Government had nothing to gain by an original under-valuation. I reply to that, that that statement is absolutely without foundation, that it has no value of any sort or description. The future tax for Death Duty or the Increment Value Duty is not levied at the figure which is now being taken, but it will be made on death or on the occasion, and if you put a low figure now, and you get a high value on the occasion, you get both the Death Duty and the Increment Duty. What, then, does the hon. and learned Gentleman mean by saying that the Government will gain nothing by it? I think he might be a little more careful before he makes a statement of that kind. This is a most serious matter. There are tens of thousands of His Majesty's subjects who stand to be ruined by this method of conducting the taxation, and there is more in it than that.
§ Sir RUFUS ISAACSDoes the hon. Gentleman by that mean to make a charge against the Government of having these values put low for the purpose of getting the benefit of a low valuation?
§ Mr. PRETYMANCertainly not, I made no such charge. The first point made by the learned Attorney-General had reference to the motives of the Government. I have nothing to do with the motives of the 922 Government. I will admit they desire everything that is for the best in the best of all possible worlds, but I say that their actions are most injurious to the subjects of the Crown. I have not said one word about the Government's motives. I am dealing with the consequences of their action. I absolutely repudiate any intention of suggesting motives either to the Attorney-General or to the Government. I am quite certain that the last thing the hon. and learned Gentleman would do would be to mislead the House. I make no such suggestion or imputation in any way. It is the last thing I should think of doing. But I do ask will the hon. and learned Gentleman repeat what he has said in his defence of the Government?
§ Sir RUFUS ISAACSI adhere to every word I said.
§ Mr. PRETYMANAnd that is that the Government has nothing to gain by a low valuation. The point which the learned Gentleman made was this, that low valuing could not advantage the Government because they were going to lose on the Death Duties what they might gain on the Increment Duty. Will the learned Attorney-General repeat that?
§ Sir RUFUS ISAACSI will repeat what I said as far as possible in the same words. I said that the Government had nothing to gain by putting too low a valuation on the land. I still say so, and the object of my statement was to refute what I suggested was an insinuation, if not something worse, against the Government. I instanced one case for the purpose of showing how it would operate. I had in my mind the case of a large estate, in which, if the Government had put too low a valuation on the property in its original valuation, the effect would be that they would lose on the Estate Duty. I adhere to that.
§ Mr. PRETYMANIn that one particular case it happens that the date of death coincides very nearly with the date of valuation, and therefore in that particular instance—and it can happen in only a few cases where the deaths occur in the year, when the valuation has taken place —the result will be as the Attorney-General suggests. But the way in which the House understood his argument was this. If it meant anything at all, it meant that there was no general object in the Government fixing a low valuation; that there would be no gain to the State from a low valuation, because 923 what it gained in one case it would lose in another. I think, however, it can be shown that there is a gain both ways. That appears to me to be, perfectly obvious. In regard to these duties, I should like here to read a letter which goes to the whole basis of them as they are now affecting the people who have to pay them, and who have found this arbitrary measure imposed upon them. I am going directly to show, arising out of the arguments produced by the Mover and Seconder of this Amendment—I hope to show that these duties have no real basis—are actually arbitrary in their incidence, and that the great difficulty which those who are subject to them find is that they do not now know to what they apply and in what form they are to be taken. This is how it strikes a gentleman who wrote to me from Lancashire:—
Under Mr. Lloyd George's Bill, a man found in the the possession of land that he does not see his way to build upon for the moment, is treated as a man in possession of contraband goods—in other words, land by this measure is turned into an unlawful commodity. As, however, the law has hitherto never declared the possession of land to be unlawful, I think the infliction of the penalty might very well be challenged in the courts, the laws to which penalties are attached being required to be made clear and duly promulgated; and as in this case, the law was not in existence when the offence was committed—entering upon possession—the accused party can hardly he considered liable. You will Bee that I regard Mr. Lloyd George's methods as very far-reaching. He is trying by legislation to supplant the jurisdiction of the courts. If penalties can be inflicted in this way upon classes of individuals arbitrarily selected, who are deprived by the mode of procedure of those opportunities of defence which the law allows even to the most criminal, there is an end to individual liberty.That is, perhaps, an extreme view, but I ask whether it is a tax payment or a penalty when you say that under some system, which is indefinite, every man found in possession of certain property shall pay a certain amount, not to be decided by the courts of law on proof to the courts of law that the offence has been committed of possessing that land, but purely at the will of the Government of the day. That brings me to a point arising out of the facts which have been stated by the Mover and Seconder. Where do the Government stand in levying this increment value duty? You have got under this Act two separate methods of calculating increment value. You have, first of all, under Section 25, a method of calculating the original value. Then you have, under Section 2, the method of calculating duty on the estate which is called estate duty. In the one case you have a simple valuation, in the other case you have a 924 value based upon the consideration of the sale—the purchasable consideration. What happens? You have a property which is worth, we will say, £1,000. You fix the original value of that property at £5, and you fix the original site value of that property at £200. That is a pure matter of valuation. You have a totally different method for many other values, such as gross value, agricultural value, and there are altogether five values which have to be ascertained. The important point is that the total value, which is supposed to coincide with the sale value and the assessable site value on which the duty is to be made—that is levied purely by valuation, and then, on the occasion at which the duty arises, you take the purchase price—the sale price.Let us suppose in that case the original total value having been £1,000, the purchase price or consideration is £1,500. On what principle is duty going to be levied? You have the increment in the total value, which is an increase of £500. How is that going to be levied as between the untaxed building and the taxed site? A statement has been made to the Press, and published by the United Committee for the Taxation of Land Values, that buildings cannot increase in value, and it is absurd to attribute any part of that increase to the building, and therefore the whole of that increment must be a tax to the land. Is that the view of the Government? I hope when the right hon. Gentleman replies he will answer that, because it is the most important question. Nobody knows up to now how the increment is to be calculated, what deduction is to be made, is there going to be a fresh valuation; and that is what arises out of this if you are going to take the view that buildings are not of increasing value and the whole increment must be due to the sites. What happens when the property is sold? Site value will alter according to the price which is to be paid for composite house and land. That means that what you are taxing is not the site value, but the occasional profit that the composite property has made. What follows from that? You will get a row of houses to deal with. I have a case here which will illustrate my point, and it is in a letter which I received this morning from total strangers to me in Wales, and I believe the hon. Member who represents these working men concerned is a Member of the United Committee for the Taxation of Land Values. This is what is written on behalf of the Napier's Building Club, Mountain Ash:— 925
I beg to place before you the provisional valuation of the property of this club by the club valuers. The club consists of about 100 working men, who built 135 houses at a cost of £270 each. The houses have been "Hotted to the members already, to the number of shares held by each. Each member pays the monthly subscription of £1 per lunar month in respect of each share to the funds of the club. The monthly rents are also paid to the same funds. After the payment of all outgoings, such as ground rents, rates, taxes, interest, and bank charges, the net residues are applied in reduction of the loans obtained for the purpose of building the houses. The architect and myself are of opinion that at the present time the houses may fetch in the market the sum of £240 each. The valuers have arrived at the valuation of these houses thus.He then gives some figures, and says the valuers have valued each of these houses at £200. That is another case of undervaluation and 135 houses, each house belonging to working men, worth in the estimation of competent valuers on the spot to be of the value of £240, are all valued at £200. But that is not the point I want to make, which is that here you have 135 similar houses and these houses are all valued at £200, and a similar site value is fixed upon them all. These houses are subsequently sold in the open market, as occasion arises, some to a willing buyer, some with difficulty. If you take a house which is worth on valuation, and fairly worth on valuation, £300, if the man who owns it has to sell it in a hurry because he is going abroad and cannot find a market, he may have to sell it for £200. On the other hand, somebody may come along who wishes to have that house particularly, and the seller may get £400 for it. That is one of the chances of the market, or rather, both those chances of the market may happen to all these 135 houses. They will be sold at all kinds of varying prices, and you are going to start at an equal site value on these 135 houses, with a total value of £200. These houses are sold from prices varying from £250 to £350, and you are going to charge Increment Value Duty on these houses which are sold at a higher price than £200. They are identical in regard to site and building and you are going to get a series of absolutely different site values on all these houses. And that is not all. There is more which arises out of it. This matter goes slap and straight to the very principle on which this tax is based. You say you are taxing site value, which is the value of the land only. If you are taxing the value of sites and land only it is absolutely childish to suggest and absurd to suggest, that you can have a row of houses of equal value and they can all have a site valuation which may vary a good deal. The other day I had a discussion with several others on these Land 926 Taxes, and on this question of site value-a gentleman of the party said: "But Parliament cannot make a thing what it is not." Looking at an electric light globe, he said, "The Government cannot make that into a satellite of Mars." My answer was, "No, it cannot, but it can say that the electric light globe is to be deemed a satellite of Mars," and that is what it has-done in this case, and I am afraid that they have said that something is to be deemed something else which it is not and never can be. When, however, individuals outside find that the article is quite different and that it is to be deemed something else their respect for Parliament will decline.In this case you have two working men who own two houses on a similar site, and of exactly similar value, and yet, in fact, one man is deemed to have a site value double that of the other, simply because he got a better price in the market. That knocks the whole bottom out of your Act. If you are going to take the actual site value you are not going to get any increment until there is a rise in the actual money value of the property situated in that part of the country. If that is all you want, tell us so, namely, that you are going to get 20 per cent. on the increased value of any land in any district. But why, if that is so, all this machinery, because all you have to do is to have two valuations of the site itself? You will take the valuation of the bare site value of any land on the 30th April, 1909, and you will again take a valuation of that same land when the occasion arises for the charge of duty. That is all you have to do to carry out your principle. But what you are now doing is you are attempting to place a tax upon occasional profits in the land market and call it site value, and use the argument that you are taxing land only. I think we are entitled to claim that if you are going to tax the occasional profits on selling houses which are simply the work of men's hands you cannot avoid taxing the increment made on the occasional profits made by selling stocks and shares or any other source of income. On what principle are you taxing the occasional profit made on the selling of a house and not the occasional profit made on selling any other kind of property. The learned Attorney-General made no answer to the Mover of the Amendment in regard to the twenty years' clause. My Noble Friend devoted a considerable part of his speech to that points 927 He asked a question upon it and made the matter very clear to the House that there was an understanding that the purchase price of a property bought within twenty years should be substituted for the valuation. That has now been repudiated under the valuation part of the Bill.
§ The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. C. F. G. Masterman)It is not in the Bill.
§ Mr. PRETYMANBut we were told it was in the Bill by the Chancellor of the Exchequer. I do not want to quote it again, and I will ask him to read it in the Parliamentary Debates. He will find it to-morrow quoted there, chapter and verse, as to what the Chancellor of the Exchequer told the estate agents at that conference.
6.0 P.M.
There would be no increment when the property would not fetch a higher price than it fetched within the twenty years. We all know the capital which was made out of that. It has been stated on every platform throughout the country that within twenty years of the purchase you are safe from Increment Duty provided you do not sell at a higher price than you paid. Now that is repudiated. It was put to the Attorney-General, but he gave no answer to it, and I hope the Secretary to the Treasury will deal very fully, and I hope satisfactorily, with the. point.
My hon. Friend who Seconded the Amendment asked two very definite and very important questions. They are questions on which the whole of the Amendment is based and upon which we certainly have a right to ask for information. My hon. and learned Friend asked the Attorney-General if he would state what up to date, approximately, had been the cost of this valuation to the State, and he also asked him if he could give some approximation to the yield of the duty; but no answer was vouchsafed to either of these questions. I hope that also will be made good when the right hon. Gentleman replies. There is one further matter I want to raise, and that is on the question of Reversion Duty. It is a matter of very considerable importance. The Reversion Duty is a duty levied at the rate of 10 per cent. upon the difference between the value of a property at the end of a lease and the value of a property at the commencement of a lease. The imposition of the duty was defended by figures which were given of the enormous amount which 928 accrued to the owners of ground rents when a reversion fell in. It now appears that the effect of the legislation is that when the lessee under a ground rent enfranchises his freehold by purchasing the reversion from the owner he has to pay Reversion Duty at the rate of 10 per cent. on the entire value of his house. That matter has been brought before the Chancellor of the Exchequer, who appeared to receive it, as far as I could judge from the report of the interview, with great surprise. He thought it was an entirely unforeseen hardship, and he proposes, I understand, to remedy it. But it is only right to call attention to the fact that that very point was foreseen in the Debates on the Budget of 1909, and that the following Amendment was moved by Mr. Joynson Hicks:—
No Reversion Duty shall be payable where the determination of the lease arises through merger.The Secretary of State for War replied on that that the point would have been very important as the law used to be, but that now there is no merger unless it is intentional merger, and such cases should not be exempt, and there was therefore no need for the Amendment. Then Mr. Joynson Hicks went on to say:—I act for an estate where the tenants have the right to purchase the freehold on such and such terms. That right is enormously taken advantage of. Under this section every tenant, large or small, who enfranchises his property terminates his own lease in terms of merger and he would have to pay Reversion Duty.Which is exactly the case which is now complained of. That was refused at the time. I understand it is going to be dealt with. The Government is very anxious to make a case for itself, but I hope it will avoid making' out that this was not foreseen or that it was an accident. They were fully warned at the time of the entire consequences of leaving the Act as it stood, and an Amendment was actually moved and words were suggested, but they refused to accept them, and everyone who has suffered owes the trouble he has suffered, and the expense to which he has been put, directly to the deliberate and knowing action of His Majesty's Government. There has been an immense number of enfranchisements prevented by it, and enfranchisements have fallen through and may never be renewed because the opportunity is gone. That, I think, is certainly not to the credit of the Government.I wish to say a word about a matter which really is the greatest grievance of all referred to by the Amendment, though it was not dealt with by the Mover 929 or the Seconder, and that is the effect of these taxes upon the building trade. Their effect has been most serious throughout the country. I have ample evidence of it. Case after case can be given. I will take one very comprehensive figure which was published in the papers, and which the Attorney-General probably has seen. The Labour Department of the Board of Trade obtained from ninety-one of the principal urban districts in the United Kingdom particulars of plans approved by the local authorities for three months of 1910 as compared with 1909. In July, August, and September of 1909 the estimated cost of building for which plans were approved in these ninety-one districts was £3,922,000. The corresponding figure for the last three months was £3,236,000, a decrease of about 17 per cent.—a decrease, in fact, of £685,876 in one quarter of the year, and in an area which represents about one-fifth of the total building area of the United Kingdom. That is rather a remarkable figure. These are the kind of things which throw a little light upon it. The Edmonton Board of Guardians recently decided, at a meeting, to write to the neighbouring district councils asking them to co-operate with the Board in seeking to obtain the consent of the local Government Board to contribute money for the improvement of Alexandra Palace, with a view to providing work. A deputation told the guardians of Tottenham that there were 600 men connected with the building trade out of employment. Then we have some very striking figures from Scotland. The Lord Dean of Guild in Edinburgh presented his annual report recently to the City Council, and he gave figures that in the last completed year the reduction in the plans which he had passed for building in Edinburgh over the year previous was 29 per cent. I believe the figures for Glasgow and Aberdeen were even higher. This is a letter written by a builder in Edinburgh:—
Ground acquired four years ago after being disposed in the open market. Offers made indicate fair price was paid. Assessed rental of the property less than £100. Two tenements per year have been erected at a cost of £6,000. Rents have been about average of similar surrounding property. Eight tenements would have been completed at Whitsuntide, 1911, at a total cost of about £24,000. Eight tenements would have increased the assessable rental from £100 to about £1,600. Eight tenements would represent a wage bill of about £12,000. Effect of the Budget has been to prevent the sale of property, to raise the rate of interest payable on borrowed money, to reduce to a very considerable extent the amount of money which I am able to borrow on the security of my buildings and which I require to enable me to proceed with the next year's buildings.There is a concrete case where building: is actually definitely stopped by the action 930 of the Budget. I suppose in answering this point some hon. Member opposite might quote the figures of unemployment in the building trade. I have a rather interesting communication with regard to that. There are two official sources of information of the trade union unemployed percentage, which, I believe, is the only figure available, and the only trade unions from which figures are available are the joiners and plumbers, and there are the returns which are published monthly in the "Labour Gazette" of the number of men and boys of a large number of firms, which deal with all branches of trade. The trade union statistics give the percentage of unemployment, from January to October inclusive in 1908: Carpenters and joiners, 10.9; plumbers, 12,3. In 1909: Carpenters, 11,6; plumbers, 13,2; and in 1910: Joiners, 8; and united operative plumbers, 10,6—a considerable reduction.
§ Mr. CHARLES DUNCANThat would include the shipyard lock-out.
§ Mr. PRETYMANThat makes my case all the stronger.
§ Mr. C. DUNCANThe lock-out would throw a large number of joiners and carpenters out of employment.
§ Mr. PRETYMANI do not think so.
§ Mr. C. DUNCANI know.
§ Mr. PRETYMANNo; this is only the building trade.
§ Mr. C. DUNCANBut the joiners and carpenters are connected with the same union.
§ Mr. PRETYMANI think that does not affect my point. This shows on the face of it an appreciable improvement, but the figures are vitiated by the big decline in the membership covered by the Return. For January to October, 1909, the membership averaged 60,496, and from January to October, 1910, 57,039—a decline of 3,457. This decline is mainly accounted for by the number of members who have failed to keep up their subscriptions and so have fallen out of benefit because they are out of employment. I think that is a very important side of the matter for the House. It shows how difficult it is, with the most honest desire on both sides to try to find out the real facts, to arrive at them, because here you have really a great increase of unemployment of the most aggravated kind, and the returns 931 actually show an apparent increase of employment simply because a number of the members have ceased membership owing to being unable to pay their subscriptions, therefore these figures of unemployment cannot be quoted against the definite statement of fact which I have quoted as showing what a serious increase of unemployment there has been in the building trade. Everyone knows it. There may be places where there is an abnormal amount going on, but, speaking of the country at large, there is no doubt that owing to this Act there has been a very considerable slump in the building trade. [HON. MEMBERS: "Oh, oh!"] The fact is not denied by anyone who has the slightest knowledge of the trade It is a matter of general comment. At any rate, I have quoted chapter and verse, and I daresay some hon. Member will reply. I shall be happy to hear him quote chapter and verse also, and it is a matter of evidence which I think it will be rather difficult to controvert. The United Committee for the Taxation of Land Values has a very ambitious programme. I have here a statement which they have recently issued with the names of 143 hon. Members opposite printed upon it. That is a considerable number. I think it is rather tempting when £5,000 is placed at their disposal for propaganda to spend it for the advantage of the principles in which they believe.
§ Mr. RAFFANOn a point of Order. Is the hon. and gallant Gentleman entitled to say that Members of the House who have signed this memorial have had £5,000 placed at their disposal for this purpose?
§ Mr. SPEAKERI do not know that there is any harm attaching to £5,000 being placed at their disposal. There are several Gentlemen on the Treasury Bench who receive that sum.
§ Mr. PRETYMANI hope the hon. Gentleman does not think that there is anything offensive in the statement I have made.
§ Mr. RAFFANIt is utterly untrue.
§ Mr. PRETYMANIt has been admitted over and over again.
§ Mr. RAFFANI deny it. It is absolutely and utterly untrue.
§ Mr. SPEAKERThe hon. Member will have an opportunity later of stating the exact circumstances.
§ Mr. RAFFANThank you.
§ Mr. PRETYMANI hope that the hon. Member did not understand me to suggest that the hon. Members had any part of this £5,000 themselves. I said they had had it placed at their disposal for the purposes of their propaganda.
§ Mr. RAFFANIt is wholly untrue.
§ Mr. PRETYMANMr. Joseph Fels has stated that fact in public, and it was admitted in this House in debate. There was no concealment about it, and I merely stated the fact. This is their programme. They desire to hasten the completion of the valuation of all land, apart from improvements; they desire to make that valuation accessible to the public; they desire to levy a Budget Tax on all land values, including of course agricultural land, the revenue to be applied towards the cost of education, poor relief, main roads, asylums, and police in substitution of the duties on tea, sugar, cocoa, and other articles of food. That programme is supported by the 143 Members of Parliament who issued the statement to which I have referred, it is supported on the platform, and it has been advocated by the Lord Advocate himself repeatedly. The Lord Chancellor dealt with that pretty drastically, and I will not delay the House repeating his words. They were stronger than I would use in regard to the matter. What is the principle of this policy? The supposed principle is that you can tax the unimproved surface of the globe by some means or other. [An HON. MEMBER: "These islands."] Well, these islands are part of the surface of the globe which we have to live upon. The supposition is that that tax is not, then, going to fall upon any single individual who lives in the country. No more taxes! It looks very well on an election poster.
§ Mr. WEDGWOODWhat about New-South Wales?
§ Mr. PRETYMANIt would be much more attractive if you would say moon-taxing. It would be just as effective and reasonable if hon. Gentlemen, instead of calling themselves planet-taxers, called themselves moon-taxers. How can bare, unimproved land bear taxes? Whatever is paid has to be paid by the owner of the land, and nobody else, and if you place a burden on the person occupying or owning land, he will have to put it on those who use the land or its produce, and it will not make any difference to make the unimproved 933 value the subject of the tax you levy. If the tax is levied on the same amount, whether on the unimproved value or on houses and property, what difference can it make? You have got to spend the money. I am assuming that you have a certain number of millions of pounds to raise by means of rates and taxes, and I have not heard it suggested that hon. Members propose to reduce them. The suggestion is that if you, put all the taxes on ground values, it is very much better for the people all round than if you put some of the taxes on other property. There is no justification for that argument. In the first place, the value would disappear directly you cover it all with taxes. So far as you would get anything, you would be merely appropriating what is paid as rent without paying for it, and do hon. Members think that would be sufficient to pay all the taxes? I have all the figures here, and they show distinctly in black and white that the amount of rent available for this purpose is quite insufficient to meet the claims which would fall upon it if the suggestion of hon. Members opposite were carried out. I think everybody will agree with the hon. Gentleman who proposed this Amendment that their proposals are fantastic and impossible proposals. They look upon the Land Taxes as a step towards the attainment of their proposals. I think that strongly accentuates our objection to these taxes and justifies our opposition to them. It shows that the whole basis on which they are designed is a theoretical and impossible basis, which cannot be carried to its full conclusion. It is now inflicting immeasurable expense, loss, and trouble on tens of thousands of subjects of the Crown, and it is not producing any corresponding advantage whatever to the revenue. If these valuations are carried out, you may devise and levy what I may call a dishonest tax; but if it is treated as an honest tax and if you are only going to act upon the theory of taxing the unimproved value of land, there is no revenue in it, and you will be spending immense sums of national money and untold sums of private money, and also what is worth much more than money, you will be spending effort and time, and diverting the brains of the people of the country from their legitimate business of production to wrestling with the Inland Revenue as to how their property is to be treated in future in regard to this form of taxation. You are committing all that mischief, while the only possible outcome can 934 be the obtaining of dishonest revenue and the causing of trouble, expense, anxiety, and waste of time without any benefit whatever to the revenue, and you will be merely attempting to carry out an impossible theory which has been put forward by hon. Gentlemen possibly with the best intention.
§ Mr. RAFFANMay I be allowed to say in regard to my interruption I grant that the hon. and gallant Gentleman (Mr. Pretyman) would not willingly impute to Members of this House improper motives, but I think he could not really have realised the nature of the suggestion he made. He was dealing at the moment with the action of the United Committee for the Taxation of Land Values, and particularly with a memorial signed by 143 Liberal and Labour Members of the House. He states that £5,000 had been put at their disposal. That, I stated, is utterly untrue.
§ Mr. PRETYMANI thought these 143 Gentlemen were the United Committee.
§ Mr. RAFFANMay I say that this is one of the many illusions under which the hon. and gallant Gentleman is labouring. The United Committee is quite as different from the 143 Members of this House as the Land Union is an organisation apart from the Conservative party. The Land Union turns up here and there at Parliamentary elections. It sometimes figures in the propaganda of Conservative candidates, but at other elections the Land Union is "warned off the course." Therefore, if I were to identify the Land Union with the Conservative party and state that they were one and the same organisation, I should naturally be charged with misrepresentation. May I say that it is an entire misrepresentation to confuse the 143 Members of this House who met and prepared the memorial with all those who are engaged in the propaganda work. I do not deny that the Union has received the sum. The hon. and gallant Gentleman agrees that there is no discredit to the United Committee in receiving it. There is no discredit to Mr. Fels in giving it. After all, the funds of the Land Union can only be maintained by the voluntary subscriptions of the Members. I think it would be well if this particular allegation in regard to the United Committee were allowed to pass.
I have listened with great care to the speeches on the other side, and I am bound to say that, with the best intentions in the world, I fail to realise what is the thesis 935 which right hon. and hon. Gentlemen desire to maintain. Is it still alleged that there ought to be no taxation upon land values and that there ought to be no rating of land values, and that it is absolutely-impossible to discriminate between the unimproved value of land and the value of buildings? Is that still seriously maintained? If so, all I can say is that the speeches made to-day by hon. Gentlemen on the benches opposite in support of this Amendment are in curious contrast with the speeches delivered from the same benches yesterday. Member after Member rose yesterday from the Opposition Benches and told us they were as sincerely desirous as we are that there should be a charge to the community on these land values. They said the mistake the Government had made was that they had appropriated these taxes for national purposes, while in their view they should go to local funds. Even the hon. and gallant Member (Mr. Pretyman), who is a distinguished ornament of the Land Union, has spoken with two voices in regard to this matter.
We found that in several by-elections preceding the last General Election the Land Union was active, and occupied offices and circulated literature in which they stated that the object of the Land Union was the total and absolute repeal of the Land Taxes. And at the same time in other parts of the country they stated that if the property owners affected would only combine with them, and incidentally subscribe to their funds, they would be able under the existing law to make these Land Taxes a dead letter. Have they made these Land Taxes a dead letter? If they have succeeded, why then all these complaints which were made to-day? They have been unable to make these taxes a dead letter. That part of the propaganda has utterly failed. That portion of the propaganda which aims at the total repeal of the Land Taxes has also absolutely failed. It has failed by the admission of the right hon. Gentleman and his friends themselves. Because although this propaganda was continued during the whole of last year, yet when it was necessary to meet the electors at the General Election, when the Conservative party met for the purpose of deciding what their attitude was to be upon Land Taxes, then all this agitation for the total repeal of the Land Taxes was utterly dropped. The Leader of the Opposition (Mr. Balfour), who we all regret is absent under such 936 distressing circumstances, hauled down the flag and stated that in his view these taxes ought to be applied to local purposes and not to Imperial purposes, and to my immense amazement subsequently the right hon. Gentleman who has just addressed the House seconded a resolution which stated that these taxes ought to be handed over to the local authorities.
§ Mr. PRETYMANI only wish to deny that statement absolutely.
§ Mr. RAFFANI do not know if it is possible to obtain a copy of the resolution which was proposed. The right hon. Gentleman will not deny that he seconded a resolution. The terms of the resolution I cannot give now, but it cannot be denied also that this resolution did not demand the total repeal of the Land Taxes. But in reality it did express a desire that these taxes should be handed over to the local authority. Hon. Gentlemen on the other side talk with two voices on this subject. The performance this afternoon was a mere repetition of the tactics of the Land Union, who have been endeavouring for the past year to make the law a dead letter. The allegations made here to-day are not for the purpose of showing that the laws are unfairly administered by His Majesty's Government, but for the purpose of placing discredit on the whole of this movement. Is it alleged that these valuers are incompetent valuers or that these valuers have of their own option engaged in these unfair valuations? Or is the allegation, on the other hand, that the Government have given them specific instructions to make unfair valuations? I think the hon. Gentlemen on the other side are bound to take one or other of these positions if the attack is on the administration only. But I observe that neither of these positions is consistently maintained. On the contrary, the hon. and learned Gentleman who seconded this Amendment, explained in his view the reason why these valuations are low was because the value of land in 1909, as he stated, was abnormally low. And it has since increased. And that he stated was what they on that side of the House had prophesied. On the contrary, what they always prophesied was that the value of land would continue to go down; and that we had permanently destroyed the value of land in this country. The scare which they engineered probably did result in the early part of 1909 in causing a certain amount of alarm and in inducing a certain number of weak-minded persons to part 937 with their property. And now the scare is over, and according to the hon. and learned Gentleman who seconded the Amendment, property has already appreciated and already is returning to its true value. In the latter part of the statement made by the right hon. Gentleman who has last spoken, he abandoned the whole ground in which this Amendment is based. There there is no talk of administration. There there is no charge against the valuers. There there is no charge even against the Government. There there is no suggestion that by any better system of administration you could secure fair play upon this enactment. If that is all that is wanted, if all that the Land Union wants is that these taxes should be administered fairly, and that the taxes shall fall on land values only and not fall upon improvements, then there is no reason why the Land Union and the United Committee for the Taxation of Land Values should not become one body, because they are animated with one object.
We, too, desire no injustice. We, too, desire that no man shall pay upon his buildings or improvements. We are quite as keen on that as the right hon. Gentleman possibly can be. If that is all that he wishes, we will be the first to co-operate with him to prevent any possible case of injustice. But he goes further. He says that we have set ourselves an impossible task, that you cannot possibly ascertain what the value of land apart from improvements is, and that you cannot apply that in this planet at all; and he suggests that we should try the moon. That is so much moonshine, which is just fit for the propagation of the Land Union propaganda. But surely the right hon. Gentleman, and those who act with him, cannot deny that under our present system the value of land is ascertained, apart from improvements, every day of the year upon the expiration of leases. I could multiply cases. Every hon. and right hon. Gentleman in this House knows in his own experience of case after case in which this has been done. I will only give one or two. Here is a case of a twenty years' lease in Piccadilly which expired in 1909. The old rent for land and building was £80 per annum. But when the twenty years' lease expired the ground landlord demanded a new rent for the land alone of £1,800, and required that the old building should be pulled down and that the lessee should erect a costly building which at the end of the period will be left to the landlord. During the time when the old building is pulled down, and before 938 the new building is erected, what does the tenant get in exchange for his £1,800 a year? Is he paying on any buildings or on any improvements, or on anything except the bare land value? If the right hon. Gentleman thinks he is paying on anything else I will be very glad if he will inform me upon what he and the Land Union think the tenant is paying. There is another case from Sheffield where the tenant held at rent of £5 1s. a year from the Duke of Norfolk, and when the lease expired his rent was increased to £150 a year for a period of forty years only. He had to spend £1,000 on new buildings and pay all the rates. In this case, when the old building was down, and he was proceeding to put up his new building to cost £1,000, what was he paying his £150 for except for land value and land value alone? These are not cases from Mars or from the Moon. One case is from Sheffield and the other case is from London, and I would be quite pleased to allow the right hon. Gentleman to investigate them. Here is another case in Eastbourne. Seventeen years ago the late Duke of Devonshire sold ten acres of land for a cemetery for £7,000, or £700 an acre. Now, when the people of Eastbourne desire to extend the cemetery the price asked for 7½ acres is £12,500, or £1,700 an acre.
This is not a case of shops for the living. This is a case where the ground landlord having got these high rents from the people of this community demands this excessive price for land for the burial of the dead. Waiving that point in this case, what is the increased value from the £700 an acre to the £1,700 an acre for? It is for land. It is to be used as a cemetery. Is that building? Is that improvement? Is that anything except land value? Why, all this agitation is a belated agitation of men who see that power is slipping from them—power to oppress the people of this country, power to oppress leaseholders. All those cases we have heard about, where people have built and the person who holds the mortgage is to come in and' seize on the property, so far I think are fancy cases. We have been told of one man who has been ruined, but I could tell you, and every man in this House could tell you, of case after case of men who have devoted their lives to building up their businesses, and who held their land under leasehold, and these ground landlords, when the lease was over, put terms upon them which were absolutely prohibitive, and they had to go forth absolutely ruined. And not only did the land 939 revert to the landlord, but the buildings of the tenant and his improvements and every stock and every stone went to the ground landlords. Gentlemen endeavoured to create agitation over Four IV. Why did that agitation not succeed? That agitation failed because the complaint of the great mass of the people of this country was not that they had to fill up Form IV. The complaint of the great mass of the people of this country was that they had no opportunity to fill up Form IV. One half of the land of this country has passed into the hands of 4,200 people, and I say that if the right hon. Gentleman and his Land Union wish to go on with their agitatioa they are welcome to the support of these 4,200 people who own half the land of this country. But if the party on the other side hope that there is any future for them, if there is to be such a thing as a Conservative democracy—and it is a possible thing—it is incumbent upon them to pay less attention to these 4,200 people, and to pay some attention to the 42,000,000 people of this country who own not an acre, not a yard, not a foot of the soil of their native land. If the conflict goes on, if the party on the other side identify themselves with this narrow, selfish, partisan, aristocratic policy, with the party of those who bolster up the Lords, who, in the words of the Member for West Birmingham (Mr. Joseph Chamberlain) "toil not neither do they spin," then let them continue their agitation. We will continue ours, with the generous help of Mr. Fels, or without the aid of Mr. Fels, setting ourselves upon a basis of justice we will appeal to the democracy, and we have no doubt as to what will be the final issue of the struggle.
§ Sir J. ROLLESTONI wish to share the regret expressed in the Amendment that no alteration appears to be proposed in certain parts of an Act which has so strangely departed from, and so signally failed to carry out the intentions of its authors. It was an Act designed to squeeze the rich, and to get an abundant revenue from a selected class of property. In the result the revenue does not appear to be forthcoming, and although it hits to some extent the rich, who are few, and can afford to be indifferent, yet it has chiefly caught the many who are industrious, thrifty, and, by comparison, poor. It is in the interests of these classes that it was hoped that some amendment or repeal of the objectionable clauses might be 940 looked for. It is from these classes that the Act takes their savings, their earnings, and, in some cases, their employment. It has helped the ruin of a great trade: that of the builder, and has caused a great asset of our large towns, urban land, to be discarded as an investment. I do not intend to repeat what has been so well said by the Noble Lord who introduced this Amendment, but nothing quoted has been overdrawn: my own experience confirms this. The point which I wish to emphasise is the unjust incidence of what is now called "Increment Duty." This duty was at first described as that on unearned increment, but it has now come to include all increment, from a certain elate, whether unearned or earned, and even when there can never be any increment, or increased value or profit, the Government all the same is to take its share of the sale price. This surely cannot be supported by any fairminded person who wishes to be just to the landowner, and particularly to that class of landowner who has expended his brains and capital in an effort to develop and sell.
The following is a case I know: A developing purchaser has land costing him, in his ledgers, duly audited, putting down all legitimate expenses against the purchase, £20,000. In April, 1909, he finds the value £10,000, showing £10,000 loss; yet if he is able subsequently to cut his loss and get out at £12,000, as he wants to do, he has £400 duty to pay to the Government instead of to his banker, who has probably advanced him the money. This has never been successfully defended by the party opposite. No limit of time betters the position. If the man who has suffered loss is to pay on the same scale as the man who has won then the imposition of Increment Duty cannot be described as a just transaction, and I submit will ultimately in such cases have to go. I hope that the House will recognise, and remove this injustice, otherwise it will be a party to driving out of business the men who create the rates, provide houses for the people, and who risk their money in land development. Such a policy, I submit, is injurious to the public interest and damaging to the progress of all urban centres, whose aim should be to encourage and not to crush the builder.
There are curious contrasts in land holding between this country and some others. In the west, the plot of land near by, or accessible from a city, is a favourite form of investment. It cannot "vanish into thin 941 air," like a handsomely-engraved certificate or share or bond sometimes does; the interest is good, and accumulates, and cannot be spent; taxation is next to nothing; it forms a potential security if money is wanted, and the capital in all probability at the same time increases, thus constituting an ideal form of savings bank for the thrifty. In this country this was once the case. The savings of the thrifty have been largely invested in this form of bank, and how cruelly they have been disappointed! While land the world over, from the equator to the poles, has in the last generation appreciated, in this country alone has it suffered general depreciation—land both urban and rural. So that not only has this form of savings bank proved untrustworthy and caused loss to the depositors, but to add to the loss the State is now to come round and to increase that loss by taking further and heavy taxation out of the till. I hope still that in this respect the Act may still be remedied, and I beg to support the Amendment.
§ Mr. MORRELLThis Amendment in form is an attack on the administration of the Land Tax under the Finance Act, but one cannot help coming to the conclusion that there is a great deal more than the mere attack on the administration of this land tax, for the Noble Lord described these Land Tax proposals as "the most crude, cruel, and cynical that had ever been brought before this country." All through we have had attacks not merely upon the details of administration, but underneath those attacks a general objection to the whole system of land taxation. The Noble Lord's quarrel is not merely with the Government in this matter, but he has to make out his grievance against the leaders of his own party if he wishes to have a repeal of this land duty. In spite of all the attempts of the Land Union and the hon. Member for Chelmsford (Mr. Pretyman) the party opposite have been unable to get their leaders to come out boldly against the Land Taxes. If the party opposite had been successful in winning the last election, it is perfectly well known that it would never have dared to touch the valuation of the site value of the land which is now proceeding. I think the party opposite are wise. Undoubtedly whatever may be said about the details of these taxes, there is in the country at large, amongst all the millions of people who own not a foot of land, a wery general desire to ascertain, at last, 942 what is the value of the property which the community really creates. They know-perfectly well that when you are dealing with these values you are dealing with property which is not created by the individual alone. It is created by the presence and by the labour of the people, the electors of this country, who have a very natural curiosity to know what this real estate, what the land of this country, of which they are the sons, is really worth. I will take the opportunity of making one quotation from an eminent economist, Professor Thorold Rogers, who said:—
Every permanent improvement of the soil, every railway and road, every bettering of the general condition of society, every facility given for production, every stimulus applied to consumption raises rent. The land owner sleeps but thrives. He alone, among all the recipients in the distribution of products, owes everything to the labour of others, and contributes nothing of his own.For the first time we have an attempt now being made to ascertain what this estate really is worth, and we have for the first time a valuation being made which will distinguish between the value of the land and the improvements upon it. As far as I understand two objections have been raised by hon. Members opposite in this matter. In the first place, they say the methods employed are clumsy and unfair. In the second place they say that the tax will bring in very little revenue when the valuation is complete. With regard to the objection that the valuations are being badly made, that has been so well dealt with already that it is not necessary to go into it any further. Personally, I have never set any great store by the taxes which we already have. I believe they are simply a means of getting the site value of the land, and I am very glad to have it admitted that this value, if anything, has been put on the low side. I am glad to know that the land has not been over valued. I can imagine what might have been said if the valuation had been too high.7.0 P.M.
I can very well imagine what would have been said from the benches opposite. They would have told us you are putting on these great valuations that have no reality, and you are putting them on in order to raise a greater tax from a class. No such objection has been made to-day. As was said to me by a Conservative friend when he was discussing these taxes, the fact is that the landowner in considering the valuation he should put on his property is between the devil and the deep sea. If he puts on too high a valuation, he is afraid he may find himself rated too highly and 943 subject to taxes, while if he puts on too low a valuation he is afraid of the Increment Tax, which he will have to pay whenever another sale of his property takes place.
There is the other grievance of which I must say we have not heard very much except from the hon. Member for Fly-mouth, and that is that these taxes, after all the trouble, are going to produce so little revenue. If that is the only objection hon. Members opposite have to these taxes, that is an objection that is very easily remedied. Personally, I should certainly think very little more about these taxes if I thought that when the valuation has been made the Government were going to be content to leave it at that. I do not think hon. Members on these benches at any rate made any concealment of the fact that we regard these taxes simply as a payment on account. We desire to see a great deal higher charges put upon this great site value than it now has to bear. We believe in that way you can raise revenue without making any charge whatever on industry, and that you can raise it in the one fair way. By raising it in that way you can not merely not increase the price of land to the occupier, but you lower the price by bringing the land into the market, making it more available. We have been told several times, especially in the Debate of yesterday, that the burdens on land have already greatly increased, and that it is very unjust to attempt to put any further tax on the land of this country. As to the objection about the rates, I think it was amply shown that at present they do not fall directly on land values at all, but that they fall on buildings and improvements altogether, and that they are so badly adjusted that they chafe the shoulders of the unfortunate ratepayer, while the landowner is able to fight his battle in the person, so to speak, of the ratepayer. As to the other suggestion that land bears more in proportion than it used to bear of the revenue of this country I deny such a suggestion altogether. It is not a larger but a much smaller proportion that the land now pays towards the necessary revenue of the country. In the old days the whole revenue of the country was practically taken from the land. They have got rid of defence. They commuted the Land Tax, which was originally an ad valorem tax, for a fixed sum. They have obtained dole after dole when the party opposite was in power. Against all that 944 we have to consider the rise of land values steadily going on. I know hon. Members opposite deny that the land values have risen generally in the way that is suggested. But when we require land for public purposes we know how much then the land of the country is worth.
Not the least part of this valuation, when it is complete, is that I hope it will be made available not merely for rating purposes, but also for the local authorities to buy land at a fair price when they require it for small holdings, housing and other purposes. The other day land was sold in the City of London at £100 per square foot, or something like £1,000,000 per acre, and yet we are told that land values are going down and that the land cannot afford to pay the charges we seek to impose upon it. Hon. Members opposite speak as if this was an abstract theory, as if it had never been put into practice at all, and as if we were dealing simply with our own imaginations. Have hon. Members never read an account of what is going on in the Colonies with regard to this question of land taxation, or made any study of the experiments which have already been tried in New South Wales, in Australia, and in New Zealand in this direction? I have here the official account given us of the effect of rating on unimproved capital value in the City of Wellington, New Zealand. After two years' experience of this system of taxation the report in the Blue Book states that it:—
Encourages improvement, stimulates the use of land, secures the unearned increment to those who have added the value, mulcts all land in their fair share of taxation, and paralyses the old system under which rental values on land could, by simple manipulation, reduce local taxation to a farce. Much, if not most, of the activity of building operations during the past year due to influence of this healthy measure, and, with necessary restrictions to prevent overcrowding of buildings, no untoward result need be apprehended.There you have the experience of a Colony which has actually put those proposals into force. We have absolute confidence not merely that this does not discourage industry, but that it will have a valuable effect and that these proposals will stimulate building, bring the land into use, and reduce unemployment, as they have already reduced it in the Colonies where the system has been tried. The Government have, indeed, a. great opportunity when this land valuation is completed. I look forward to a day when we may see all those great national services which were referred to yesterday put upon the value of the land which has been created by the whole community, and which 945 hitherto has been appropriated by one small class of the people.
§ Mr. J. G. BUTCHERThe hon. Member who has just spoken has at any rate the merit of extreme candour. He appears to be a disciple of the Georgian school of economics. He is not only a devoted admirer of the bearer of that illustrious name, the Chancellor of the Exchequer, but he is still more so of his illustrious predecessor, Mr. Henry George. That enables one to estimate somewhat better his devoted admiration for this Act. Indeed, so enamoured is he of the principles of the Act, as you would expect from the principles he has just enunciated, that he regards it merely as an experiment, a soft of small beginning, just one of those pleasant little ways of leading up to complete, shall I say nationalisation or confiscation of the land, whichever he likes. On the present occasion I think it is hardly necessary either to discuss or to expose principles of that kind. I rather desire to confine myself to the Amendment before the House. I confess I was somewhat astonished by the closing words of the speech of the learned Attorney-General in defence of the Government. The Attorney-General told us that, after all, those taxes are the law of the land, that they are part of the revenue system of the country, and that it is no use saying they are bad taxes and that he is there to administer them. I say that is entirely the whole point of this Amendment. The Amendment says that we regret that His Majesty's Government have not brought forward any amendment of the law governing the valuation and assessment to duty of land and houses. That is the point of our complaint, and there is no use in telling us that they are not bad taxes and that they cannot be amended. We say they must, and some day they will be amended. A simple enumeration of the methods of the valuations imposed by this Bill as a preliminary to taxation is sufficient to show the vast difficulties to be overcome, and the enormous cost to be incurred, before one farthing of revenue will go into the Exchequer. What is the process. Taking the case of houses and buildings, before you can get a farthing into the Exchequer you must in the first place ascertain the original assessable site value of those houses and buildings as on 30th April, 1909. The same is true of agricultural land. What does that process involve? In the case of houses and buildings it involves the carrying out of from five to seven separate valuations, and in the case 946 of agricultural land it involves the making of five separate valuations. Let the House mark that each of those valuations is not. a valuation of anything in existence, of anything that is in the market, of anything that is bought or sold at a market value. Everyone of those valuations is a. valuation of some non-existent thing, of some abstraction, and the valuation must be necessarily speculative and hypothetical to the last degree. That is only the first process of getting revenue, the-ascertaining by means of all those valuations of the original assessable site value. What is the second process? It varies according to the nature of the duty. But, in the case of the Increment Value Duty, to which I desire chiefly to refer, whenever an occasion for the duty arises, all these-same processes have to be gone through' again. You have to; make from five to seven new valuations in respect of houses and land, and five for agricultural land; and, when all this is done, you may or may not get your Increment Value Duty. The first comment I make upon this method of taxation is that it offends against every recognised canon of finance. If there is one principle of finance more recognised than another, it is that taxation should be-certain in amount and easily ascertainable. It follows that if you desire to tax any subject-matter according to its value, you; ought to be quite sure that the subject-matter has a value, and a value which can be ascertained by some method of market value, and not by a purely hypothetical system of valuation. This taxation, however, is uncertain in amount, it is difficult to ascertain, and in many cases it is impossible to ascertain. Instead of taxing property which has a value, which is bought and sold in the market, and which consequently has an ascertainable market value, in this case you choose for your taxation an abstraction called site value, which-never has come into the market, which is never bought or sold, which has no market value, and upon which you endeavour to put this imaginary value. One of the-complaints which we urge is that not only does this method of valuation impose-enormous cost on the State, but it imposes undue and very unfair taxation upon the individual taxpayer, who has to check all the valuations to see that he is not overtaxed. It is admitted that if the original valuation made by the State is too low, either as regards total value or site value, the taxpayer will have to pay far more in the way of Increment Value Duty than 947 even the present Chancellor of the Exchequer desires. Therefore, in his own interest, it is absolutely essential that upon every provisional valuation we should obtain expert advice to see that it is not unduly low.
On whom is the cost to fall? I rather thought that an assurance was given by the Chancellor of the Exchequer that the cost in respect of this valuation should not fall upon the individual taxpayer, but that it must be borne by the State. On 22nd October, 1909, the right hon. Gentleman said:—
The Government propose that the State shall undertake the whole cost of valuation instead of casting it upon the individual landowner.What is the meaning of that assurance? It cannot mean merely that the State is going to pay their own valuers; that would be an unmeaning assurance. No one supposed that anyone else would pay the valuers appointed by the State. The assurance was surely intended to convey that the valuation would be carried out without cost to the individual; otherwise it is absolutely futile and without meaning. How has that assurance been carried out? It has been grievously violated. The landowner has to begin at the earliest possible moment to protect himself from the consequences of this valuation. The moment the provisional valuation is served upon him, he has to get expert advice to see that it is not too high or too low. Have the Government formed any conception or estimate of the cost to be thrown on individual landowners, large and small, for the purpose of checking this valuation? Will they undertake to carry out the pledge given by the Chancellor of the Exchequer to relieve the landowners of this cost? It will not be pleasant to find the necessary money, but still it is a pledge, and I shall be glad to know if there is any intention on the part of the Government to carry it out. Instances have been given to-day, which I think the Attorney-General has not met in any way, in which land has been unjustly valued too low, both as regards total value and as regards site value. No instance has been given by the Attorney-General where the valuation has been too high. Why is it, when it is to the interest of the Government that these valuations should be low, it turns out that the only cases given are of low valuation, and none at all of high valuation? It may be only a coincidence, but I should like some 948 Member of the Government to explain what appears prima facie a somewhat remarkable fact.There has been some misconception in the country as to the position of the small owner. It has been supposed by some that there has been a complete exemption from land taxes in favour of the small owners of land. From certain picturesque utterances or addresses issued by Members opposite, it would almost appear that their constituents were led to imagine that there was a complete exemption from all land taxes in favour of the small owners. That is an absolute and entire misapprehension. There is no such exemption, except in the case where the owner is in occupation. You may have a small owner of a cottage, it matters not how small in value, but unless he has been in occupation for twelve months before the claim arises he gets no exemption whatever. The same remark applies to a small owner of agricultural land: unless he has been in occupation for twelve months, he is just as liable to both taxes as the largest landowner in the Kingdom. I do not say it is more unfair to the small man than to a large man; I think that both are unfairly treated by the manner in which the taxes are levied under the Act. If it be as I say, what justification is there for the address quoted this afternoon by my Noble Friend (Viscount Helmsley). giving the public the impression that small owners were entirely exempted? The small owner, in order to protect himself from excessively unfair taxation has to check, verify, and, if necessary, correct the valuation made by the Government, just as the large owner does. On behalf of these small owners, I ask the Government whether they will give them any relief in regard to this cost? Will they provide them with the means, which in many cases they are entirely without, of getting expert professional advice to check the valuations which are admittedly in some cases too low?
I should like also to refer to the question of allotments. There is no doubt as to the growing importance of allotments being found in the neighbourhood of our large towns. There is a growing desire among the working classes to obtain these allotments, and I think it is a desire which ought to be encouraged in every possible way. I am glad to see that upon that point I have the assent of hon. Members opposite, as well as of hon. Members on this side. In my own Constituency there is a large desire on the part of the working 949 classes to obtain allotments at reasonable prices, I should have thought that that was a desire which the Government would have wished to meet in every possible way, and, if they did not facilitate it, at any rate, throw no obstacle in its way. But what do they do? When this Act went through the House there was not one line in it, in the direction of exempting allotments from Undeveloped Land Duty. I was not in the House at the time, and I am not sure whether an Amendment was pro posed; but that measure emerged from the House with the exemption of allotments deliberately left out of it by the Government. Do the Government adhere to that position? That allotments will be liable under this Act to taxation for Undeveloped Land Duty is undeniable. It is notorious that these allotments almost invariably have a far greater value for prospective or potential building purposes than for agricultural purposes. Therefore, there is no doubt as to their being subject to Undeveloped Land Duty unless they have a special exemption. The imposition of this duty must have the effect of making it more difficult and more expensive to obtain allotments, because you force owners either to turn out the holders and build upon the allotments or to charge an increased rent. May I respectfully ask the Government whether they will favourably consider this request to exempt allotments from Undeveloped Land Duty? I cannot imagine that it would ruin the Chancellor of the Exchequer. By so doing the right hon. Gentleman will do something, at any rate, to avoid putting a fresh burden on what I conceive to be a very necessary provision for the people in the great towns. The last point I make is this. What is the general effect of this Act? There is ample evidence throughout the country to show that the general effect of this Act as regards house property has been absolutely to cause the market to come to a standstill. [An HON. MEMBER: "Oh, oh."] Yes, you ask men in a position where they can know—auctioneers and others in large towns, as to the position of the investor in house property at this moment. I do not say there are not places where people are anxious to buy houses. But I do say this, that in many parts in the great towns of England the investor in house property as an investment has ceased to exist. For a very good reason; it is not merely that he fears the existing taxation—which is bad enough in all its uncertainty; what he fears is the trend of opinion of hon. Gentlemen like the one who had just spoken— 950 those Georgian philosophers, apostles of what I, in my ignorance, call confiscation. These gentlemen desire, they say, to have nationalised land, and to tax it more than ever. Is it, therefore, any wonder that the investor in house property, or in any other kind of property, stands aghast? Because, mark you, these doctrines will not be confined to property in land. Why should they? I do not suppose the hon. Gentleman who has just spoken would for one moment confine his desires for more taxation to land. He would extend the imposition to other kinds of property. Therefore, it is perfectly natural that the result should follow that has followed—namely, that investors are not coming forward for house property, men are not developing their land. I say that this Act is founded upon methods of taxation which cannot be. justified, and which are economically unsound. For my own part I do not object to taxing land fairly any more than I object to taxing any other kind of property. I certainly do not object to tax the rich or to tax them according to their ability to bear it. No sane man does. What we do object to is the imposition of exceptional, unfair taxation upon one form of property, taxation involving enormous cost to the State, hardship and undue cost to the individual, and taxation which, if extended in the direction which hon. Members apparently with ostentation and pride avow it is their intention to extend it. would end in results which are certainly not desirable in the interests of a great commercial and law-abiding country.
Mr. CHANCELLORI have listened with very great interest to the Debates of to-day and yesterday. On both occasons the subjects have been somewhat similar, and some extraordinary doctrines have been enunciated in the course of the speeches. We have been told that land values are not a real thing at all; that they are purely imaginary. The hon. Gentleman the Member for Kingston (Mr. Cave) in his speech earlier to-day spoke of "the figment of site value." The hon. Gentleman who has just sat down has spoken of these values as "not ascertainable," and he said that they are unreal. I cannot remember all the adjectives he used. In the Constituency that I have the honour to represent we have purchased recently a small open space to turn into a public garden and playground in order that the children living in the overcrowded tenements around may have an opportunity to get fresh air and to play. 951 That site cost £210 two hundred years ago. We have just had to pay £24,000 for it. That was no figment of the imagination to us! What did we pay it for? When the site was purchased first some small almshouses were built on it. Since that date nothing whatever has been done to the land, except that a few trees have been allowed to grow. Certainly the buildings cannot be said to be of greater value than when they were first put on. The price paid for this little piece of land 1½ acres was £24,000. How has that increased value come into existence I Who created it? Surely not the persons who have owned and used it for almshouses during all this period. They have done nothing to create that value. That value has been created by the growth of population, the growth of industry, the expenditure of public funds, the building of roads, the draining and flagging of streets, the laying down of tramlines, and expenditure in various other directions. Land values are a public creation in every sense, and that applies as much to agricultural land as to other land. An hon. Gentleman who spoke yesterday said that agricultural land in the country represented only the value of the improvements that had been made upon it. Is there nothing m proximity? Are there no markets? Is there no difference in value in land which lies alongside public highways or even a few miles from a railway station, as compared with similarly fertile lands in other parts of the country far removed from these conveniences. In Canada you have large quantities of land practically given away to settlers to induce them to settle upon it. But surely there is a great difference between the land that is 100 or 200 miles away from facilities which enable you to have your market, and land which may be called similar, and be accounted similarly fertile, and which is next door to a Canadian town. This valuation is really the creation of the community, and not of the individual. What we who sit on these benches desire is that what the community itself creates the community should enjoy. We say that the taxation of the value of land is not in any real sense taxation at all It is the retention by the nation or by the local community—as the case may be—of the value which the nation or the community has created. It is the enjoyment by the community of its own revenue. Surely there is no injustice in that! The hon. Gentleman opposite just 952 now termed the proposal confiscation Our contention is that the confiscation has been on the other side. My hon. Friend the Member for Leigh just now gave illustrations of the power which exists on the part of the man who owns the site value to confiscate the results of other men's industry. We have had case after case this afternoon, and the Chancellor of the Exchequer, to the great discomfort of the landowners in the country, has given us many illustrations. It was perfectly natural that when the unjust exemptions from taxation which have been enjoyed for centuries by the owners of land began to be altered, and they were brought within the purview of the public taxes, and this preliminary—for it is, I hope, only a preliminary—of valuation was put into operation, it was quite understandable that those who had previously enjoyed the privilege of holding land, and by this means abstracting from the industry of others a certain portion of the results of their industries should cry out when brought under the clauses of this further taxation. I can quite understand that the Noble Lord who moved this Amendment to the Address, being himself largely interested, feels the pinch of the taxation which already exists. We hope it is only the preliminary to a greater extension in the future, for let me tell hon. Members opposite that I personally am not at all ashamed of being a pupil of the distinguished economist whom he quoted just now. Mr. Henry George has taught probably more of the just principles on which taxation should be levied than any economist of recent times. I have nothing whatever to unlearn of what he has taught me. I am profoundly grateful to him. I have heard him denounced by men who were not worthy to black his boots. We hope and pray that the Government will push on with this valuation, that they will complete it at the earliest possible moment; and when they have arrived at it that they will make it the basis for the raising of any further taxes necessary to enable them to carry out their social programme. We believe that if in place of the taxation proposed to be levied upon foreign goods coming into this country that will make it harder for the poor, a tax on land-values should be levied. This will make it unprofitable to devote huge areas to the breeding and the hunting of foxes——
§ Mr. BUTCHERMay I ask the hon. Member if he can tell me any area which 953 is enclosed in this country for the hunting of foxes?
Mr. CHANCELLORI do not know that it would be difficult to give a good many examples. [HON. MEMBER: "Give one."] We believe that the taxation of land values would make it unprofitable to clear the Highlands of their population, and make it possible to bring under cultivation large areas which are now not cultivated. An hon. Gentleman who objects very much to these taxes yesterday gave an illustration in connection with certain labourers' cottages which were built on land, and which were let to the labourers at an unprofitable rent. He said that the worst of it was that as soon as the land was devoted to the building on it of cottages for the labourers, the assessor came round and put a heavy rate upon the cottages. Our contention is that practically the exemption of land from rating and taxation really makes difficult the development of land for the purpose for which it is more useful. The moment a man improves his property and puts buildings upon it, the moment he improves his value, you increase the assessment, and tax him or rate him upon it. Yesterday the hon. Gentleman the Member for West Aberdeen (Mr. J. M. Henderson) gave an illustration of two men living in houses of equal value. The one made no improvements to his house. The other one built an addition to his. The moment the house was added to by the expenditure of labour and capital and so improved, down came the rate collector, and because that man had employed labour and put capital into the improvement of his property, his assessment was increased. He was punished, penalised, because of the industry which he had encouraged and developed.
§ Mr. J. M. HENDERSONI never said anything of the kind. My contention was that the property was properly taxed, having been increased in value.
Mr. CHANCELLORHis property was taxed because he created more rent-producing property. In other words, he encouraged industry and did something to put people into employment by employing his capital for these purposes, and because he did so the local authority came down and put a tax upon him and discouraged and penalised him for the future. Now what we say is, that if instead of taxing that man, and instead of penalising and discouraging people for putting their 954 efforts to employment, and to developing the wealth of the country, you took taxes and rates entirely off these men and put it entirely upon land, you would most certainly force into use large areas of land now kept out of use, and by so doing you would afford an opportunity for work for hundreds and thousands of people who are now begging for some employment, and you would largely solve the unemployment problem and merely reserve for the State the value which the State itself actually created without any injury to the owners of the land. We want the Government to go on with the work they have begun. Valuation is the basis, and we want to build upon that basis, so that there shall be a system of taxation which shall be just to the producers in the country and to everybody else in the country, and which instead of penalising and discouraging industry, shall have a tendency to develop land and bring it into use as rapidly as possible, to re-people the villages and the countryside with a happy population, to clear our towns of the "out-of-works," who are now distressing us by conditions under which they live, and to ensure that what is to-day happening in the State of Vancouver shall happen in this country.
In Vancouver they have adopted the plan of taking off local rates on houses and improvements, and putting them upon land. The effect of that has been such that the only difficulty they are suffering under at the present moment is the difficulty of obtaining enough of labour. Plots of land that in the middle of the city had been kept out of use are being brought into use to-day there. It is unprofitable to pay rates and taxes upon land unless it is used, and while hitherto it was kept out of use in order to enable the owner to wait for the improved value brought about by the increased growth of population the land has been brought into use to-day, and everyone is better off. We want to push forward that process of acquiring land in towns. We believe if the Government will only proceed upon this principle, which has been so denounced by hon. Gentleman opposite, and if they make that principle apply not only to urban, but also to agricultural land, we will soon have all the villages and towns alike benefiting, and will break down a monopoly which is really at the bottom of the congestion of our population, and will make for the industrial and agricultural development of the whole country, and do more to solve the unemployment and poverty problems than anything else whatever.
§ Mr. HENRY TERRELLThe hon. Member who has just sat down has told us candidly that he is a disciple of Mr. Henry George. We all know Mr. Henry George was an advocate for the absolute confiscation of land. [HON. MEMBERS: "No, no."] Let me quote in a few words substantially what Mr. Henry George said about the confiscation of land. He said, "You need not use the word 'confiscation.' You have only to tax land to the full rental value, and you have got the land, and you can leave the owner the shell." If that is not confiscation I do not know what is. You may call confiscation by the name of taxation, or any other name, but substantially it is confiscation all the same. That is what the hon. Member advocated. I wonder if whoever speaks on behalf of the Government closing this Debate to-night will agree with his hon. Friend behind him in advocating confiscation of this kind. I do not think the Government will advocate anything of that kind. I think they will advocate the halfpenny in the pound duty. The arguments of some hon. Members opposite were all centred upon this. They gave instances of what they called the increase in value of land by reason of the public services. Land is not the only thing increased in value from time to time. You may take all kinds of property, and land, amongst other things, increases in value in some places and decreases in others. Land varies in value, so does other property vary in value. Why try to found an argument merely upon what occurs in connection with a piece of land or a house, or a plot of unoccupied land, because it has increased in value in the course of 200 years. What effect do you get from that, as a basis of a general argument. Why not take other kinds of property, and found an argument on the idea that property does from time to time increase in value. I say that such is absolutely valueless, for the purpose of founding an argument upon it, but of course it is valuable for the purpose of getting the votes of people who are simple and ignorant.
Another argument which was used by an hon. Member opposite was this: he gave instances of property held under long leases which when the leases came to an end was found more valuable than when the lease was granted. Of course, it is in scores of cases, but what argument do you find upon that. The population of the country has increased, and therefore there are more people who want the particular piece of land, and if you have more bidders for one particular article you may 956 get a bigger price for it. In other places you have land that has gone down in value. [HON. MEMBERS: "Where?"] Within a couple of miles of where I am now standing. There is plenty of land that has gone down in value in the past few years. You are trying to found some argument which is to support a great fiscal change by picking out one or two pieces of land, and saying, "the lease which was granted ninety-nine years ago was worth so much, but now it is worth so-much more, and in consequence of that we must tax land values all over the country." That is a method of argument which has no substance in it, and is only useful for the purpose I indicated.
The hon. Member asked, were any Members upon this side of the House still opposed to the taxation of land values. I, for one, am absolutely opposed to it. This is a matter of trade, and as we have said, if you tax land values, consider for a moment who is to bear the burden of these taxes. The Chancellor of the Exchequer, in the course of the wonderful speeches he made last January, spoke about taking the burden off the backs of the people, and placing them upon the backs of the dukes. The Increment Taxes and the Undeveloped Land Duty in the Budget are taxes which are placed on urban land with which we are all familiar, and which exist in the neighbourhood of most growing towns—land which possibly to-day is not ripe for building, but which it is anticipated in some few years will become ripe for building. That is the land which will have to bear the burden of these taxes. This is not land which in the main is owned by dukes. Will hon Members consider who it is that owns the land which has to bear the burden of these taxes. As a rule such land is owned by builders, or building societies, or land societies, or individuals who propose in the course of time, to develop it for building.
Let me take the case of a builder. The greater part of that class of land ultimately gets into the hands of the builder. A builder, like every other class of tradesman, does not buy his land from hand to mouth, so to speak. Where he finds a piece of land in the neighbourhood of a town which he thinks in the course of a few years would be valuable for building he buys it in advance. He is a business man and keeps his books, and in his books he debits himself with the cost of the land. He has now to pay the Increment Tax and Undeveloped Land Duty upon this piece of 957 land. He puts all that down in his books on the same side as the cost of the land. He develops the land by building roads and drains and sewers and that cost again goes down upon the same side of the account, and when he has built his house he has to make up what it all cost him, and that cost is increased by the amount of the taxes and duties which he has had to pay. He is a tradesman; he is not building for pleasure, but for the purpose of getting a return on his money in the course of his business. However much you increase the cost to the builder, so much more must the occupier of the house ultimately pay. You increase the cost to the builder and the builder has got to get it back from some one else. fie gets it back by selling the house, in which case the purchaser has to pay, or he gets it back by letting the house, in which case the occupier has to pay, yet people people go on saying, as has been said over and over again—the Chancellor of the Exchequer led the way in this—that this was a tax to impose a burden upon the rich man, and not upon the poor man, whereas it really imposes the burden upon the man who ultimately occupied the house, built on the land on which this tax is paid? Does not the land constitute the raw material of the builder? It is necessary for the builder, he cannot build without it, just as it is necessary to the ironmaster to have iron, and as you tax that land which is to be developed for the purpose of building, that tax is ultimately paid by the person who occupied the house.
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The reason for that is that building land in every town is limited in area. You have only a limited amount of building land, but you will impose this extra taxation upon every person who ultimately uses the land. [HON. MEMBERS: "NO."] Hon. Members say "No" too soon. I say that you increase the burden which is placed upon that land, and it has to be discharged by the men who ultimately use that land for the purpose of living in the houses upon it. You may put it as you please, but just as you say to tax raw material is to tax the consumer, so the taxation of land values is to tax the ultimate occupier of the houses which may be built upon that land. The whole foundation of this taxation scheme is that you are going to raise a great fund to relieve the poor and place the burden upon the rich. Really this form of taxation will not benefit the poor man, because it will impose a greater burden upon him. Its real object is a 958 desire to injure a class who are supposed, to hold the greater part of the land.
§ Mr. J. M. HENDERSONI do not see any difficulty in the valuation of urban land or houses. As a matter of fact, such a valuation is absolutely necessary if you are going to enforce the Increment Tax. I have always said and thought that that valuation could have been obtained without all the enormous paraphernalia which, has now been developed. I do not know why, in regard to agricultural land, to. which the Increment Tax does not apply, you should not have taken a datum line and have done with it. Valuation is a word like Mesopotamia—something on which people think they are going to found a new heaven and a new earth. The hon. Member for York (Mr. Butcher) seems to think there would be great difficulty in regard to the valuation of urban land. I cannot see that there need be any real difficulty at all in the matter. When you have ascertained the rent of a house you have not the slightest difficulty in fixing the amount of insurance on the building. With regard to outlying land, I have not the slightest doubt that every man who. owns a bit of land has a shrewd notion as to its value, and, therefore, I do not see that there need be any difficulty about its valuation. When the Land' Valuation Bill dealing with Scotland was introduced by Lord Shaw, he said that all that was necessary was just to add one other column to the valuation form. If that was all, the valuation should have been obtained much more rapidly without the enormous ramifications which the assessors are asked to make in the valuation. I do not know whether any hon. Member has seen an assessor's book in-which the assessor has to enter all devaluations. It consists of about twenty columns, and the assessor has to put cash value in each, and it works down to the trees and shrubs and bushes. How that is going to be worked out finally I do not know, but one assessor told me that a lifetime would be too short to work it out. The valuation is absolutely necessary, and the assessors have all the information and all the elements necessary to arrive at as near a valuation as in all human probability will be necessary. I never believe in any valuation as a real test. Some sort of idea may be obtained, and the hon. Member for York objected to valuations being put too low. I daresay the tendency of Government officials would be to get as much out of a tax as they can, and there 959 fore they would put it as low as possible. If it is put too low, I know there is an appeal, and owners have got that remedy. May I say that a great deal of the arguments I have heard on both sides of the House have been directed, not to the valuation at all, but to the taxes. I have always been in favour of the Increment Tax, and I have told hon. Members opposite that they ought to be grateful for it, because I believe it blocks the other taxes. There are two systems or policies in connection with land taxation. One of them was adumbrated by Henry George, and it was absolute confiscation. [An HON. MEMBER: "No."] Now that is not very straightforward. Let me remind the hon. Member who interrupted me what Henry George wrote:—
It is not necessary to confiscate the land, it is only necessary to confiscate the rent of land; it we get the kernel, we may leave them the husk.If you take the rent of the land, that is confiscating the land. You cannot deny that proposition, and all honest men will admit that that is so. Henry George's policy is absolutely opposed to the policy of the Government. The Government has adopted a doctrine laid down by John Stuart Mill, who said that you cannot go back upon the past, but from any given moment which has been determined you may ascertain the increment and place a special tax upon that. Hon. Members near me say that is not enough. They do not think 20 per cent. is enough, but there is a danger if you take the whole of the increment of arriving at a state of things where there would be no increment at all, because a man would not own his property for five minutes beyond its proper value. What I object to is any attempt to go back upon the past. It is no use quoting to us what they do in a new country like New South Wales, where, by the way, they do not adopt Henry George's principles. Why do hon. Member's when they want to make you believe in some particular policy go away from this highly civilised country to the wildest parts of the earth? Why do they not give us some samples at home. The hon. Member who spoke last on this side of the House gave an instance out of which he convicted himself. He mentioned the case of a house in which the value of the rent had been going up, and he said it was a publicly created value. I know of a house in the City which cost £5,000 to build, fifty years ago. At that time the land upon which it was built was worth 960 about £45. Putting the two together the house was rated at £250 a year, but to-day it is rated at £1,250. Now if my hon. Friends say "We will take this publicly-created value ourselves" that means you are going to demand the whole £1,250. Is that what you mean? Dare you say that is what you mean? If the value of that land has increased to £1,250, there is an increment of £1,000 and the man is drawing £1,000 where he previously drew £50. The house I allude to has been bought and sold several times, and therefore the last owner is drawing £1,000 by way of increment. You say that is a publicly created value, and you ought to take it for the public? [An HON. MEMBER: "Not all at once."] I think that is a wretched argument. You might as well say, "I am going to poison a man, but I will not do it all at once, because that would be murder; I will do it gradually over a process of six or seven years, and then it will not be murder at all." To say that you are going to take this publicly created value bit by bit is to admit that you are afraid to take it all at once. I am in favour of a real taxation of land revenues, and I approve of the Increment Tax and the Reversion Tax. If you can show me any other just and fair taxes of this kind I am quite prepared to support them, but to try to tack on to the Liberal party the doctrine of confiscating the rent of land by a single tax is something if it is ever adopted by the Liberal party that will split it asunder in a way it has never been split before. Land is rated now, every penny piece of land value is rated, and I challenge any hon. Member to deny it. It is rated to the full amount which it yields whether in regard to the site of a house or in the shape of a farm. If land makes any return at all it is taxed and rated to the full value now. When people tell us that it escapes taxation, that is not fair. We are told that this is going to encourage building. I do not agree with the hon. and learned Member for York and some other speakers on the other side who have said that the Finance Act of 1909 has destroyed the value of building land, or has kept people out of the property market. It may have had some effect that way, but the trouble with the property market has been of long standing. I remember that in 1906, before the Select Committee, the Statistical Officer for the London County Council was asked this question: "Is it not a fact that there are hundreds of houses all over the suburbs of London, north, south, east and 961 west, which you can now buy for one-third less than the actual mortgage money?" and Mr. Harper, the Statistical Officer, said it was so. The depreciation in the suburbs of London had been enormous. What was the cause? It was not this Act or the Increment Tax. Why should the Increment Tax affect house property at all? It cannot affect it, because unless there is a profit on a sale there is no Increment Tax. The truth of the matter is that the whole of the suburbs of London and the suburbs of very big towns have been grossly overbuilt. The building trade was boomed some ten years ago to such an extent that there are any number of houses which any man can buy in the suburbs of London, Liverpool and Manchester for such a sum as will eliminate the ground value altogether. What tax is it these gentlemen want to put on in addition to the Increment Tax and the Undeveloped Land Tax. They are not satisfied with these. Let them propound their own taxes and see whether the House and the country will accept them, but let them not, I beg of them, try to tack this doctrine of Henry George, the confiscation of the whole of the rental of land, on to the Liberal party, because, if they do, they will disband that party, and they will break it in two. I stand here to protest most sincerely and solemnly against any such proposal.The question arose last night about improvements, and my hon. Friend challenged me about this. What I said was this. It may be a good standard, or it may be a bad standard, but the only standard we have got to-day of the ability of a man to pay in comparison with his neighbour is the rent he pays. If you find another standard, let us see what it is. I am reminded when I think of it that these hon. Gentlemen always forget to tell you, when they speak of New South Wales and New Zealand that there is a local Income Tax in both. That is perhaps a better standard than the rent, because we know one man may be a very rich man in a small house and another a moderately rich man in a far bigger house. If you are going to alter your standard, do so, but so long as you have this standard you cannot avoid taxing upon the rent. Suppose I have a house on an acre of land and that house can accommodate twenty people, and suppose that on the adjoining acre, which has precisely the same land value, I build an hotel and give accommodation to 150 people, is the corporation and municipality to receive in return for the services it renders to 150 people only the same as 962 it receives for the services it renders to twenty people? Hon. Members forget that after all the rates, to a large extent at all events, represent policemen, lighting, street paving, and all the conveniences and amenities of social life. People assemble together round a piece of land, and they all have to subscribe. They pay for the policemen. Why should one get policemen and all the services I have referred to for 150 men for the same price that one gets them for twenty men? It is ridiculous.
The land costs nothing in the country, and yet it is just in the country where they cannot afford to build. If you have land to give to people they could not build; it is the money to build that is the trouble. [An HON. MEMBER: "How can they get the land?"] You can get the land for very little indeed. I myself have been engaged in letting 250 plots near a town for £1 apiece. Men cannot build, not because of the cost of the land, but because of the cost of building. Do not forget you have to build up to a certain standard. You cannot, for instance, put up a thatched cottage. You have to conform to the requirements of the local authorities with regard to a great number of things, and that means more money to come out of the pocket of the man who wants to build. If you say that this taxation, on the doctrine of Henry George, is going to create a new heaven and earth, you are only deceiving yourselves and those people who listen to you in your own particular constituencies. I know it attracts people, but I am prepared to demonstrate at the proper time that if you took the whole of the land values of the country it would not be two-thirds of the rates, let alone the taxation. Hon. Gentlemen laugh, but I would refer them to the Report of the Select Committee with regard to one big town in Scotland, where the whole thing was worked out by friends of their own. They worked the ground value out at £150,000 a year. What are the rates? They amount to £220,000. You could not, therefore, find the rates cut of it. I think the Amendment was not well timed or well advised. It has raised up a great many questions that would have been better left to die out. It has given our friends just the opportunity they longed for of letting their principle be known. They do not really let their principle be known; they put a sort of veneer upon it. I want to bring them down to the bedrock of their principle. It is pure confiscation of the 963 rentals of the land, which they will never get the people of this country to adopt.
§ Mr. NEWMANIf I were a merely ordinary landlord called upon to fill up a certain number of English Forms A, I should not have invited you, Mr. Speaker, to select me to take part in this Debate. But I represent a division of Middlesex (Enfield), where we have two main industries—market gardens and the building of dormitories. With regard to the market garden industry, this land tax has placed an extra duty upon the land which the owners of market gardens are called upon to pay. With reference to the building of dormitories, I may say that the building trade is absolutely dead. Speculation in land, for the moment, is absolutely a thing of the past. At the January election in 1910, I made the Land Tax one of the chief planks of my platform, and in the last Parliament I threw out a suggestion to this House that, by doing so, I scored a great number of votes, and got a great deal of support. Members who heard me were incredulous, and laughed at me, but eleven months later, in December, I fought the same opponent over again, and one of the reasons which that gentleman gave for asking support of Liberal interest was that in the intervening months people had had time to consider the land taxes. But the consistency of my argument is proved by the fact that I am still here as Member for the Enfield Division of Middlesex. I had a batch of Form IV.'s last September to fill up, and I did so, inserting large numbers of negative replies. But I am looking for the Irish Form IV. In June last we were told that there was to be supplied a Form IV. for Ireland, but that the Irish Form IV. would only be partial—that in the first place it would only be issued to the big cities—Dublin, Belfast and Cork—that then it would go to the smaller towns, and finally it would go to the holders of ordinary agricultural land. I confess I was rather surprised when I heard the right hon. Gentleman, in speaking of the general valuation of the land, stating that it would be possible in the case of Ireland to dispense with the English Form IV. I happen to be a grandson of the man who made that great valuation known as Griffith's valuation, and I looked forward to seeing how that could be made of any use in filling up the Irish Form TV. Some hon. Members may not know what Griffiths' valuation was. May I tell them that, in the year 1835, 964 Sir Richard Griffiths was ordered by the Government of the day to make a general valuation of every bit of land, and of every house in Ireland, and it was to be made on the "live and let live" principle. He was to have regard to agricultural prices, to the prices of corn and wheat. How much corn is grown in Ireland now? I think 40,000 acres are now devoted to it. How much corn was grown in Ireland in the years from 1835 to 1840? The answer is 800,000 were devoted to it. Is there any comparison at all between the price of beef then and now? Absolutely none. The valuation which was begun in 1835 and completed in 1855, is the valuation on which the Government seek to evade serving Form IV. on the Irish agricultural owners. I am not decrying the valuation of Sir Richard Griffiths. As a matter of fact, the late Duke of Argyll described it as one of the greatest works in Europe. The Government told us in June of last year that because of this Griffiths' valuation it would not be necessary to issue anything in the nature of the English Form IV. in Ireland. During my holidays I spent a pleasant afternoon in Dublin hunting up the Irish Form IV. It wanted a bit of finding, but just on time, before I had to catch my boat, I got the form. I admit it had been superseded by another form, which I have not received, but I gather that that second form simply omits four questions, which, after all, are not very important. In fact, they are absolutely unimportant. For instance, there is the Christian and surname of the person making the return, and the request for a description of and extent of the land he owns. In that case I believe it is well known that the information would have to be checked by getting fresh retrns from the owners. I think we need not bother about the Irish Form IV., either No. 1 or No. 2. It has been swept away to all intents and purposes. We have been told that something like over ten millions of the English Form IV. have been issued, whereas only 3,000 of the Irish form had gone out, and I would ask, how is it possible for the Government with the information at their disposal, to make a general valuation of Ireland without asking Irish occupiers and owners to fill in any questions. One may divide Ireland in this matter into two parts. First, you have the suburban land—the land in towns and just outside. What have you there to enable you to fill up Form IV.? You have got the parish, you have got the occupier, and that information after all is unreliable. You have got 965 the extent of land. That, too, is unreliable, and I venture to say that on all points, for valuation purposes, it would be necessary to check the information. Then take the lands on which the rent has not been fixed. Again, there the information is most unreliable, and so, too, it is with the judicial holdings. I quite admit they have more information in those cases than they have in the other two cases I previously mentioned, because land, when it has been in the Land Court and had a judicial rent fixed, is in such a position that there are certain records available in regard to it. Also in cases where land has been sold by a landlord to a tenant under the recent Act, there is information to be obtained in regard to it. But they have no information for half of the questions which are to be found in the English Form IV. It is impossible for information to be obtained from the Irish Government, from John Barton's office, or the Estates Commissioners' Office, to answer certain of the questions, as the Commissioners have no information whatever. Take one question in the English Form IV., as to whether land is subject to any fixed charge through rights of way, users of commons, or covenants restrictive of the use of the land, and it says full particulars should be given in each case. What information had the Estates Office or the Land Commissioners' Office got as regards these particulars on an ordinary Irish holding? Absolutely none. So much so that it is provided in the Land Act itself that in all sales of land the Judge, the Commission, the tenants of the land, the owners, and the people to whom it is sold, in order to save trouble and expense in the inquiry, must take the land as it is.
That is a question of importance. I have land which I want to sell with a house attached. That land has got a right of way through it—a very troublesome right of way—which I do not admit though it has been in use for some 200 years. I am telling the exact truth, and it is a right of way exercised by the Protestant community going to church on Sunday. It cuts off half or three-quarters of a mile on their way to church. Three years ago I let that land to a Catholic, and he for a moment was rather disposed to object to all these Protestants leaving his gate open, but he was a decent man, and at my request he allowed the right of way to continue; but if I sold that land to-morrow if the tenant were a Catholic he would say, "Can these Protestants go through my 966 land on Sunday"? I should reply, "It has been done for 200 years, but I do not admit the right." Probably he will say in reply to that, "if you will take £200 off the price I will allow it to go on." I ought to be allowed to put that into my form of valuation. Then going on a step further, and taking Form VII.—that is to say the claim for site value reduction—there you have to describe accurately any deduction you want to make in your claim for site value. One of the items I am talking about is good will. The other day the tenant right was put up for auction in a second term holding. The acreage of the farm was 25 acres, and the rent was £17 10s. [An HON. MEMBERS: "What was Griffiths' valuation."] I cannot tell you, but I am sure it was absolutely correct. There was very keen competition for the farm, and it fetched the high figure of £495 10s. That was the price which a man was prepared to give to occupy that farm. For the good will of the farm the sum of £495 10s. was paid by that incoming tenant to the outgoing tenant. Has that any bearing on the site value or not? Yet, according to what the Government say, they have in this office all the figures they want, and the price which is paid for a 25 acre farm is not necessary to be ascertained at all.
The Government may say, and hon. Members opposite may say, that all this is a storm in a teacup—that all this revaluation of Irish land and making an Irish Doomsday book, is simply a revisal of Griffith's valuation which can hurt nobody. And in certain events, and if one thing happens I am prepared to agree that it is a storm in a teacup. We are told that in the course of a couple of months or a couple of years Ireland is going to be given Home Rule, and if Ireland is going to be given fiscal freedom and Home Rule I perfectly admit I am raising this afternoon a storm in a teacup. Because. does anybody imagine that if Ireland gets Home Rule and fiscal freedom she will go on putting on land taxes. Is it likely that she will consent to all the heavy taxation which is being raised in Ireland by duties on tea and sugar? Will the Irish farmers, as they then will be, consent to all these taxes being placed on the value of land? Not a bit of it. If Ireland gets fiscal freedom what will she do? She will not tax tea and sugar, but she will tax the cloth that comes from Huddersfield and the stuff that comes from Manchester. She will not tax Irish land, and 967 she will not tax tea and sugar. Supposing she gets Home Rule and fiscal freedom. But supposing she does not get Home Rule at all, I say that the average Irish landowner, whether he be big or small, is face to face with a dangerous proposition, and will be up against a great danger. There are 143 Gentlemen opposite who acknowledge themselves that they want to put all these taxes which at present are on tea, sugar, and other things on the value of the land, and if they are going to do that the Irish owner will scarcely be able to meet the instalments he at present pays to England, and he will be ruined, and this country will lose the interest paid half-yearly on the hundred millions or more which she has lent the Irish on the security of Irish land. Therefore I say it is of importance to Ireland, and Ireland has a right to demand that the Government to-day shall give us Irishmen an explanation of what they are going to do and how they are going to make this new Doomsday Book. We demand the right at every stage to repeal, to reject, and to advise. In England we have had our opportunity for filling up Form IV. We demand the same right in Ireland.
§ Mr. C. E. PRICEI am quite sure that the bulk of the 143 signatories to the memorial presented to the Prime Minister would not subscribe to the doctrine that the whole taxation should come out of the land. The hon. Member (Mr. Pretyman) referred to the Lord Advocate as looking on land as the sole source of taxation, but the Lord Advocate never advocated anything of the kind, and he has specially and specifically repudiated it. In his speech in Glasgow he expressly stated that he would not exclude tobacco or spirits or certain other things, and that he only looked on taxes on the land as one form of taxation. I trust the hon. Member will withdraw the expression, because it is scarcely fair to charge the Lord Advocate with views for which he is not at all responsible. It has been very difficult, indeed, to follow the Debate as it has been carried on on the other side, because most of the arguments have been directed against putting a tax on land altogether. But when hon. Members go to their constituencies, or when they hold meetings, they never declare that, and yet the resolution which was referred to in the early part of the day very expressly acknowledges that they will continue the taxes 968 on the land. Let me read the Resolution which was Seconded by the hon. Member:
That the valuation of land and all land taxes imposed by the Budget of 1909–10, should be repealed so far as they affect land used for agricultural purposes or affect persons dependent on the building trade or small property owners, and that the proceeds of any land taxes levied upon urban building land should be employed in the relief of local taxes and should not be paid into the Imperial Exchequer.I understand the hon. Gentleman to deny that he had repudiated that. What then becomes of the whole of the argument of the other side if they here admit that if you collect these taxes and apply them to local rates it is fair to have them? Everyone knew perfectly well that the administration of this Act would here and there work injustices, but the main principles underlying the Act we on this side have advocated for a long time, and they will not now repudiate them in view of the Resolution passed at this public meeting. This Resolution does not want any valuation upon agricultural land. How can you draw the line between agricultural land and building land unless you know its value? I had a farm offered to me some time ago. The price was given at £4,500, and the rental was only £120. Is £4,500 a fair value for agricultural purposes? It is not, and it is clear that there is some potential building value in it. The owner, however, would not say so, and when I declined to entertain the price he told me that I was frightened because of Lloyd George's Budget. What we are trying -, o get at is this: If we get from these men a public declaration of the value of the land, we shall be able to see whether the price we ask for it in this form is the valuation which he gives when he returns it and on which he pays rates and taxes.The hon. Member (Mr. Cowan) said you can always get land for building cottages. That is quite contrary to the fact. I will give him a case for which I can vouch. In a district bordering on Shropshire and Denbighshire there is a colliery working night and day. The miners have had great difficulty in getting cottages. They tried to get land, but could not until one small proprietor said to the colliers: "Why do you not build houses?" They said: "We cannot get the land." He said: "I will sell you land," and he sold them a long strip of land running alongside of a canal, and he charged sixpence a square yard, which works out at £120 an acre. He was there getting nearly three times the value of the land for agricultural purposes. The colliers took it up strip after strip, and built cottages for themselves.
969 When they had taken the whole of the land this man had to sell, they applied to a man holding land on the other side of the canal. His price was 3s. 6d. per square yard. The result is that building is stopped, and the miners cannot get land to build upon. Let me give the other side of the story. Because they would not pay 3s. 6d. per square yard, the beds that they sleep in are occupied during the day by the night-shift men and through the night by the day-shift men. That is a perfect scandal, and it is because we are going to deal with cases like that that we on this side have been advocating, as we have done for years, the taxation of these men who hold land back. Let us see how just that is. How is this man, who holds back land for which he demands 3s. 6d. per square yard taxed? He is only being taxed at the agricultural value. If a collier took the land and paid 3s. 6d. per square yard for it he would at once be taxed upon the value which he paid for it. Why should the man who retains the same article at 3s. 6d. pay a tax of about 2d. only? Why should the State discriminate between one and the other. If the landlord retains possession of his land, which, he says, is worth 3s. 6d., we say "All right, you can keep your land, but you shall pay the same tax as anyone would who purchased it from you."
To say that you can get any amount of land for nothing is sheer nonsense. It is perfectly well known that often in country districts overcrowding is vastly greater than in our big towns, and you have far greater difficulty in getting cottages. In this particular area at one time there were seven couples waiting to get married and could not, simply because they could not get cottages in which to live. A cottager with whom I had a conversation waited no end of time before he could get married, and when he did he had not a house, but continued to live with his father while his wife lived with her mother. Is that a condition of things which is satisfactory to the country? We say no. We are trying to deal with these difficulties, and hon. Members opposite are not trying. It may be that in trying to get this Act through there are little injustices here and there. Let me give another case. I think it is well to give cases one knows, because there is then no fear of being called in question by anyone from Canada or anywhere else. I signed a document not long ago in regard to a property in London. There were fourteen years of a lease still 970 to run, and the rental was £850 a year. It was acquired by an insurance company, in which I am interested, and we proposed to enormously improve the property by spending £6,000 or £7,000 upon it. The ground landlord said: "We will not allow you to touch it under the current lease." We were compelled to enter into a new lease extending for thirty years. The rent was raised from £850 to £1,100 for the first five years, afterwards to £1,250, and at the end of twenty years it will be raised to £1,600. We were obliged to enter into the new lease in order to carry out the improvement towards which the landlord has not contributed a single penny. Therefore, what we claim is that there is this enormous increase going on in the country, while you have a class of the community holding land and demanding any price they like to put on it, and saying that they will not allow the industries of the country to develop. We, who are asking to remedy this state of affairs are sometimes told that we are not patriotic. We say that we are working in the best interests of the country. I wish only to say a word in reply to the hon. Member for Chelmsford (Mr. Pretyman). He started the agitation for the repeal of the taxes. All we wish is that he will continue that agitation. I have taken part in elections for thirty years, and I have no hesitation in saying that the Liberal party never touched any question which was likely to be so vital and which the people were so determined to carry through as this question. There is more vitality in it from our point of view than in any other question we could touch. When you go to meetings and talk about the land to people who know the deplorable conditions under which many have to live, we find that we are able to carry election after election if we speak of this one doctrine of putting the burden where it ought to be.
§ 9.0 P.M.
§ Mr. J. BOYTONThis afternoon the hon. Member for South-West Lancashire (Mr. Raffan), in the course of his speech, cited some very glaring examples of bad conduct on the part of individual landlords. I think his argument led up to the claim that the State should become the owners of all things. The trend of his argument was that individuals should not be allowed to exact such rents and prices from tenants as they can under the circumstances of market value at the time, but that all land should belong to the State. It is a very picturesque, and no doubt a very popular, way of putting the question before the electors of this country, but I 971 do not think it works quite well when you come to inquire what the State is really doing. For the purpose of my argument I shall refer to a Crown estate administered by the Office of Woods and Forests. We heard from the other side this afternoon very extreme and sad cases quoted. I can oblige hon. Members opposite with cases occurring on a Crown estate in the Division of London which I represent. I refer to Regent's Park. In the next ten or twenty years the whole of the Regent's Park leases will be falling in. In one case which I know a gentleman has been fifty-seven years in his house, the lease was running out, and not wishing to leave it at his advanced age, he said to the Crown, "Can I have a renewal of the lease?" If he had been paying a wicked landlord the rent would have been about £250. The ground rent is £21. They allowed him to remain at £350 a year. A covenant made with respect to alterations stipulated that he could make no alterations or improvements in the house, although he has made many in the last fifty-seven years. He could not underlet or transfer the lease without consent. That is an arbitrary covenant not made by an individual owner, but by the Crown. Within the next ten years the leases in the whole of Regent Street will fall in. I am glad that hon. Members opposite can smilingly contemplate such a contingency. I can tell the House that the people in that street who have built up businesses there do not look forward to the expiration of the leases without some concern. People who are now paying £50 will be asked to pay £500 or £600 for ground rent, and, besides, they will have on the top of their new leases conditions as to the putting up of new stone buildings to satisfy eminent architects. They cannot move away because their bread and butter is there. Then you have the clubs whose leases are falling in. I do not know whether hon. Members realise what the Reform Club and the Carlton Club will be asked to pay. Under the Budget the Crown does not share its 20 per cent. Increment Duty with the local authority.
As Crown holdings are exempt from contributions that is an exceedingly great hardship upon the City of Westminster, which contains Regent Street, Carlton House Terrace, Pall Mall and the other streets which I have been referring to. It is very hard on the people who are going 972 to pay these ground rents to the Crown that Westminster is not to obtain any relief of rates, because in the case of the individual owner getting the rate of increment which the Crown is going to get there would be a share of 10 per cent. going to the Government, and, of course, some of the localities hope to get back some of it, although I am afraid that the day is far distant when we shall see any of it. All these difficulties come up in every-day life, and it is hard to hear the landlord class held up to such opprobrium in this House. Some hon. Members opposite seem to writhe with pleasure when they hear an individual landlord castigated, but I do not think it is a good electioneering cry, because people who are tenants of the Crown or of a municipality do not find that they receive treatment one penny the better than is received by the tenants of individuals. In fact the Crown, corporations, and other bodies are much more difficult to deal with than individuals. The ground landlord is a much maligned individual. Knowing something of the West End, I will undertake to say that the terms which the ground landlords have given their tenants are far away better than the Crown or Municipalities ever did. No doubt when we get this Doomsday Book compiled, if ever we get it compiled, what I say would be found quite accurate, that the increment which accrues to the ground landlord is as nothing to the increment which accrues to the State, because it is no business of managers for the State to inquire what family consideration there may be behind the claims of the tenants, or how many years they have been there. They want their pound of flesh, and they see they will get it. But the ordinary tenant of a ground landlord in London gets consideration if he shows that he has been there for years and has made his business. I can show examples of freehold land which was bought by an individual next door at £20 a foot, and for which the ground landlord, that much maligned individual, accepted 2s. 6d. a foot. Of course, now that the State is the father of the ground landlords, and the valuation will be before everybody for every purpose for rating purposes and so on, the ground landlord will be only human if he extracts the full price. So I am afraid that the last state of the tenant will be worse than the first, and that the electors of this country will find, and particularly tenants of town holdings, that hon. Members opposite have not done them any good at all.
§ Mr. LANSBURYThis subject is one that concerns the district which I represent. I come from a district that pays rates at the rate of 12s. in the pound. Our land is owned by two Noble Lords, and several other people, who though not titled, are fairly rich landowners. A portion of our district is low marsh land right down by the bed of the River Lea. We get from that district diseases of all kinds brought on by people living on damp soil, soil that has been made up of the refuse of London. I remember seeing that soil made up by cartloads of sweepings from the London streets, and other stuff shot on them, to bring the land up above the river level; and I have seen people driven there to live because of the exactions of ground landlords in other parts of the Metropolis. In other words, we spent our money in that district during the last thirty years to make roads, put in sewers, and build schools, light the place, and establish all the amenities of life that society needs, and as the leases fall in the ground landlord raises the rent which (I agree with hon. Members opposite in this), is paid in the last resort by the tenant. What I am anxious to learn from someone is why two Noble Lords and other people who have never paid a single farthing for improving what was a waste marshy piece of land should out of the labour of people who make match-boxes or work in all kinds of sweated industries draw a revenue out of that land in that fashion. We heard something of spoliation and robbery. If there is any spoliation and robbery going on at present it is the spoliation and robbery of the ground landlords of this country from the poor people of this country, and when we are told, as we were told by the right hon. Gentleman the Member for Chelmsford, that this was an immoral doctrine, the immorality seems to me to be on the other foot altogether. Mention was made of Henry George this afternoon. He made a challenge to His Grace the Duke of Argyll to produce his title deeds. I am not aware that they have been produced to this day. For my part I want to know in respect to land, which, after all, cannot be increased, which is put here by God or Nature, however you choose to call it, why I should pay, as it were, toll to certain people for the privilege of living on it. We have had the instances of the poor freeholder brought out this afternoon. It seems to me to be forgotten that the small man has to pay tooth rabes at the present moment, and ground rent too, and that if a man has 974 saved up and built his own house, and is paying some amount of ground rent for the privilege of putting up a house to live in, that if that proposition is carried through the rent will go, and ought to go in my opinion, for the purpose of furthering those social services which are needed in every community. At present those social services have to be provided by the man in the house, in addition to his ground rent to the landlord, and if this Motion is carried his position would be infinitely better. We continually have to deal with London in a variety of ways, because of the congestion of the population, but every time we have one great difficulty to contend with. Early in the afternoon the hon. Member for Haggerston (Mr. Chancellor) told you of an open space which they are buying, and the mere fact that the County Council is buying that open space is going to increase all the ground value all round, and it is little short of iniquity that we should have to pay money in that fashion. It is precisely the same whenever we want to get a piece of land. In one part of the parish of Bromley there is a small piece of land, about an acre or an acre and a half. We have been asked to pay to preserve that space, which is in one of the most poverty-striken districts of Bromley, something like £10,000, and we have been asked to pay that amount for the last ten or a dozen years. It is being held up because the man who owns it hopes to squeeze a little more out of us as the years go on. I do not at all agree that the Chancellor of the Exchequer has gone too far. I say quite frankly to the House that what the working people of this country produce the working people are entitled to, and, for my part, I quite agree that this is only a very tiny beginning in the work of bringing justice to the working people, in, at any rate, preventing them from being despoiled and robbed as they have been during all these centuries. I believe that everything socially produced should be socially owned and shared by the entire community. I can quite understand landlords being in a funk just now. I can understand their forming a Land Union; but I have at last learnt something from hon. Gentlemen opposite about landlords. I have learnt to realise what absentee landlordism is in London. I understand now what I used to hear talked about years ago—I understand that the landlord stays here in the West End, and sometimes at Monte Carlo and other places, and draws his rents from the poverty-stricken 975 population of the East End. I hope the Chancellor of the Exchequer will have courage enough, and I hope this House will have courage enough, to say not only that they will despoil no one or rob no one, but that they will stop spoliation and robbery which have gone on in the past.
EARL of KERRYThe hon. Gentleman who has just sat down spoke of his right to address the House on the grounds that he came from a district where the rates have reached 12s. in the £1. I, for one, was very glad to hear the hon. Member's exposition, from his point of view, of the matters which we have been discussing. May I remind him it has often been alleged that the very high rates in Poplar were partly due to the system of local government pursued in that district.
§ Mr. LANSBURYOn a point of Order. The rates are high in Poplar for the very reason I told the House, that the poor people have been driven by the landlords to dwell in an unhealthy district, and they suffer from disease.
EARL of KERRYThat is the hon. Member's point of view. He went on to enlarge on the general aspect of land values and taxation on unearned increment, and pointed out that the proceeds of such taxation might be very usefully voted to social services. May I also remind him that in this particular ease the proceeds from the taxation at all events are not, so far, being devoted to the social and local services he mentions. But I should like to say a few words on the general aspect of these taxes. The first thing which occurs to anyone who, like myself, sat through the long Debates on the Budget, is that the criticisms levelled against this taxation from these benches have been justified, and more than justified, by everything that has occurred since. The warnings which were addressed to the Government by my hon. Friend the Member for Chelmsford, and by others taking a leading part in fighting these Land Taxes, have proved to be absolutely true. It is apparent now that the just administration of these taxes is now felt to be becoming an impossibility even to so versatile a genius as the present Chancellor of the Exchequer and the 149 official valuers and the unofficial valuers who have been consulted in this matter. It was often stated by hon. Members on this side of the House eighteen months ago that it was impossible to frame a just system of taxation on a 976 purely hypothetical basis. After all, gross land values, like the new hypothetical site values, is very much a matter of opinion; it is a speculative matter on which the greatest experts are well known to differ, and differ very largely, not by fractions, but by 100 per cent., and even more sometimes, as anyone who has followed big arbitration cases must know to be the case. Such valuations must always more or less be matters of a speculative nature. To found such a system of taxation as that of the Government upon them seems to me of necessity to spell disaster. If you introduce into the whole matter something even more speculative than the ordinary gross value of land, namely, this hypothetical site value, it makes confusion worse confounded. As a result of these things it must inevitably come about, as we say it has already come about, that there must be the greatest uncertainty in the market which deals in the particular commodity affected, that the transfer of land is delayed and hampered instead of being expedited, which was one of the professed objects, and, finally, the value of the security must be depreciated. I do not think anyone would or could deny, at all events I do not think that anyone has to-day denied the statement contained in the words of the Amendment, that these taxes are causing loss and hardship to His Majesty's subjects without corresponding gain to the revenue. No doubt we shall be told—I do not think we have been told to-day—it will be put right in future, and that there will be a colossal revenue arising from these taxes which will be sufficient to meet every kind of scheme for social reform.
However, I think we are to-day in this House entitled—more than entitled—we are bound to deal with the present state of affairs. Certainly, now that the account has been looked at and the tax has been before us for nearly twelve months, not counting the time before the twelve months in discussing them, we see that there is loss and hardship to many of His Majesty's subjects without any corresponding gain of revenue. Therefore, I think the Amendment really states with commendable moderation the want of results, so far, from the taxes. I think nobody has really contradicted—certainly not. successfully contradicted, the injustices and the anomalies which have been brought to light in the incidence of this Land Tax. Some of the injustices have been, I think, admitted by no less a person 977 than the Chancellor of the Exchequer, and general promises have been made that they would be amended by future legislation. Nothing has been done in that direction so far, which is oiie of the reasons why my Noble Friend put this Amendment on the Paper. And there are other matters as to which it has been said, or it has been inferred, at all events, that they are not in accordance with the true interpretation of the Land Tax, notably as to substituting a value of twenty years for the value stated in the provisional valuation. The statement of the Chancellor of the Exchequer, in answer to the deputation which waited upon him last September, certainly seemed to be a perfectly categorical and explicit statement that the actual received value for the piece of land in question could be substituted for the smaller value which might have been put in by the official valuers under the Land Tax valuation. It seems, however, that instead of interpreting the matter as the Chancellor of the Exchequer interpreted it the Finance Act only authorises the insertion not of the gross total value but of the site value, and that if the unfortunate owner is not able to find what the site value was fifteen or twenty years ago he has got no remedy. Does that not involve the assumption that the site value is not a variable but a constant quantity? And that if there has been depreciation the depreciation has been simply on the building but not in the land itself. If that is so it seems to me to knock the bottom out of the whole theory which underlies these land taxes. Surely that theory is based on the assumption that site values do change and change materially, or, to quote once more the well-known words of the Prime Minister, spoken some time before the Budget of 1909 was introduced, that there has been a steady, progressive and continuous increase in the site values of this country. If it is admitted that they are increasing surely it must also be admitted that they can, under circumstances, decrease. As it appears to be assumed by the Land Clauses of the Finance Act that the site value is a constant quantity which cannot possibly have changed within the last twenty years, it seems to destroy the whole basis underlying the theory.
It is incontestable that, at the present time, there is a chorus of complaints arising not from those who are directly affected by the Land Tax, but from those who have anything to do with the buying 978 and selling of land, estate agents and others of that category. Further than that, there is in the actual business of valuation a terrible state of congestion. So much is that the case at present that many people, including some of the valuers, seem to think that this "Doomsday Book" cannot really be finished or produced for a great number of years to come. I am sure we on these benches have never denied that there are cases, though not so frequent as hon. Gentlemen opposite would have us believe, where land required by the community has been unduly held up. Our argument has been that such cases should be dealt with on their merits as they arise, and that where a case has been proved against an owner who has held land up that he should be compelled to disgorge and pay a fair value for it. Neither has it been denied that in many cases undue profits have been made by owners of land, not necessarily by holding up, but without any effort of their own. Surely it is not fair to proceed and tax those individuals without proceeding against and attacking those who have made enormous fortunes in other forms of unearned increment. Why should you single out this one particular property for this specially oppressive form of taxation? If you are really going to carry out the inquisition theory surely you ought also to investigate cases where people have already made their profits, and put them in some unassailable security such as Consols. It seems to me that the whole of this system must be one of two things, either unjust or else administratively impracticable. By so much as you make it more just you make it more impracticable, and by so much as you make it less just you make it more practicable.
Undoubtedly these proposals as originally brought in by the Chancellor of the Exchequer were somewhat easier to carry out than in their present form. Various concessions were made, and concessions mostly pressed for from this side of the House, which the right hon. Gentleman very rightly did not see his way to refuse. Everyone of those concessions, as I think the Chancellor of the Exchequer would admit himself, opened the door to fresh concessions, and made the whole scheme more administratively impracticable than it was at the outset. It seems to me, therefore, that the Government have got a scheme which is neither just nor practicable. It was hinted that the Land Tax proposals were put in the forefront of the Budget in order to draw the power of the 979 Opposition, and to distract attention from other parts of the Budget which were more vulnerable and less easy to be defended in the light of public opinion, and that the land taxes were a species of political red herring designed to lure away the hounds of the Opposition on to a scent which would prove disastrous to them and would, meanwhile, let the Government fox escape. It was further said, and I think boasted, that this stratagem was eminently successful. I remember a quotation from the right hon. Gentleman the Chancellor of the Exchequer, about his success and his skill in capturing what he called "the big rats." But however successful the original manœuvre may have been, both from the point of view of capturing the big rats, and also from the point of view of the political capital which hon. Gentlemen opposite were able to make out of the Opposition to the Land Taxes in representing all those who opposed the Budget as dukes or closely allied to dukes, however successful that may have been in the first instance, I cannot help thinking that now when hon. Gentlemen find themselves confronted with all these difficulties, which are inherent in this new system of land taxation, they will regret the original step which they took. They will find that this political red herring which they laid so carefully to draw the Opposition does not, like other members of its tribe, improve by keeping.
§ Mr. J. SAMUELThe contention that landowners have not made undue profits unless they have spent money upon their land is one which, I think, cannot be sustained. I should like to give one or two instances in regard to the purchase of land for public school purposes in my own county which have come under my observation. We on this side contend that the Increment-Value Duty is a fair and reasonable tax where an increased value has been received by the owners of the land without their having spent money upon it. In the county in which I live we have spent since 1904 something like £850,000 upon new schools and alterations. For this purpose we have had to buy large quantities of land, and we have had to pay for agricultural land pure and simple £484, £605, £766, £826, £988, and in several cases no less than £1,210 per acre. In one case we had to pay even £1,472 per acre. According to a Return made to Parliament some time ago with regard to land purchased for small holdings by county councils throughout 980 the country, the highest price by agreement was £51 14s. 6d. and the lowest £16 18s. per acre, while for compulsory purchase the highest price was £51 5s. Id., and the lowest £23. In a Report made by Messrs. Knight, Frank, and Ruttley, the great land and estate agents, of London, it is stated that they had sold 113,000 acres at an average price of £22 10s. per acre; yet in our county we have had to pay from £484 to £1,210 per acre.
§ Mr. PRETYMANWill the hon. Member tell us the exact situation of the agricultural land sold for £1,210 per acre?
§ Mr. J. SAMUELIn the county of Durham. I shall be very pleased to supply the hon. Member with particulars. I have a return of every piece of agricultural land bought for schools. We have paid £1,210 per acre in three cases for purely agricultural land. I will give an even worse case. The borough council of Harrogate a few years ago extended what are known as the "Valley Gardens." They bought five acres of land, rated at £10 an acre, and the cost, including legal charges, amounted to £18,578, or an average of £3,000 per acre for land rated at £10 an acre. We say that if these charges are to be made against borough and county councils for sites which they have to purchase it is only right that the owners should return a small proportion of 20 per cent. of the increment value to the State, and that the State should return half of that to the local authorities. The President of the Board of Education yesterday made a statement implying that the increase of the education rate has been due more or less to the expensive buildings put up by local authorities. There is a certain amount of truth in that; but I can say from experience, as a member of the educational committee of the county of Durham, that these high prices which we have to pay are a very serious charge. The charge on the county has increased in four years, owing to these high prices, by no less than 3s. 8d. per head of the scholars in attendance.
This Increment Value Duty is a just and proper one. The Attorney-General, in his very able speech, pointed out that no less than 10,500,000 copies of Form IV. have been served upon the community. I do not dispute that for a time Form IV. was unpopular. I represent a town where, I am glad to say, there are hundreds of small owners, men who live on their own pioperty, and when it was pointed out to them that a man living on his own property 981 in a town of over 50,000 population is exempt from Increment Value Duty——[An HON. MEMBER: "Only up to a certain amount."] If he is living in a house valued at not more than £26 for Income Tax he is not touched by the Increment Value Duty. But if Form IV. was so unpopular, how is it that our party were returned so soon after those 10,500,000 forms had been circulated? Even landowners have in some cases admitted to me that if their agricultural land could be brought within the area of building purposes they could get the prices I have cited for it, and they would be quite prepared and glad to pay Increment Value Duty. I contend that if the. principles underlying these taxes—the Increment Value Duty, the Undeveloped Land Tax, and the Reversion Duty—were expounded in a fair and reasonable manner, any audience of business men or working men would give them their undivided support. The people of this country regard these taxes as being fair and reasonable, and that is why some of us have been returned to the House of Commons to support the Government which imposed them.
§ Mr. POLLOCKThe Debate has ranged over a very wide area during this afternoon and evening. A great many speeches have been made by hon. Members opposite, who seem to think that they are arguing the question as to whether or not the Budget should have been the basis under which these taxes were first imposed. The House is really discussing the Amendment under which it is regretted that "no proposals are included indicating any amendment of the law governing the valuation and assessment to duty of land and houses, the present administration of which is causing loss and hardship to Your Majesty's subjects without a corresponding gain to the revenue." Some hon. Members on the other side seem to suggest that they, and they alone, are the persons who are anxious to see better housing of the working classes, both in the town and country. They are very much mistaken. On all sides of the House hon. Members are desirous of seeing a far better system of the housing of the working classes. The question that divides us is one of method. Two or three illustrations have been given—one by the hon. Gentleman the Member for Haggerston (Mr. Chancellor), and one by the hon. Member who has just sat down, the Member for Stockton (Mr. J. Samuel)—of the very high sums which were paid for particular pieces of land. The Member for 982 Haggerston told us that 200 years ago there was a piece of land, now included in the outskirts of London, whose value was £210. This land, he said, had recently been purchased for £24,000. I think the hon. Gentleman is making a great mistake if he supposes that that value will necessarily be altered—it may be taxed—under the system of land values which have been imposed. It may suffer taxation, and a portion of that value may go as revenue to the State. But qua value that value is maintained, and will be maintained, because some person has owned that property, and has held it as an investment, or has held it because it was good enough security for the £24,000 invested in it. But to suggest that there has been any unfair dealing with the property because so large a sum has now to be paid as against its original value is to mistake both the arguments and the methods which are complained of in this address. The hon. Gentleman the Member for Stockton gave us an illustration of the very high prices which had been paid for the purchase of sites for schools. I think it is pretty obvious that if £1,472 per acre was paid, that the land must be situated either in an urban area, or on the outskirts of an urban area. It may be called agricultural land, and may have been used as agricultural land up to the time that the school was put upon it. But it must have had something of building value in it when £1,472 per acre was paid for it. Because no one, no local body having the authority to buy that land, would ever have paid so high a sum for it unless they had been advised according to the method of ascertaining value that that was a proper sum at which to purchase the land for the purpose required.
But the matter which we complain of to-night is that inequalities and difficulties have been introduced by the method of taxation in the valuation and assessment for the duty on land. Hon. Members opposite are agreed with hon. Members on these benches as to the desirability of enabling land to be obtained for the purpose of better housing of all classes. Are you going to effectively attain that if you place difficulties in the way of ascertaining what the values of the land are, and what are the taxes which are to fall upon that land? If you take the cost of building on land the price of the land is a small matter compared with the amount of capital required to place buildings upon that land; and if you particularly desire to split up the land, and to develop it by building a 983 number of houses upon it, you ought to make it quite easy and simple for the land to be dealt with in the market, and easy and simple for persons to obtain advances upon land. What we complain of at the present time is that by this particular form of taxation you have rendered it more difficult for persons who invest money, and lend money upon land, because they are so uncertain as to the incidence of the taxes and burdens which have to be borne. Ask any builder throughout the country in any urban area or country district as to whether or not the Budget system of taxation of land has facilitated or expedited the building trade throughout the country? Any builder will tell you that it has had the contrary effect, and has prevented them from building and obtaining loans where they could have obtained loans before; and prevented them from engaging in enterprises which they previously had facilities for doing. Why? The reason is perfectly obvious. There are so many taxes, so many difficulties, in understand-the Act; so many difficulties in the manner of distributing and collecting them, that, naturally, persons who have any land hold their hands. They are not ready to encourage any enterprise where it is of such an uncertain nature as it has been rendered by this method of assessment and collection of duties on land. If the matter is considered from that point of view it will be seen that so far from having assisted in breaking up estates and causing a large increase in building, this whole method of taxation has had a contrary effect. The hon. Member for Stockton said that in an audience of reasonably intelligent persons he found it perfectly possible to explain what these taxes were. I congratulate him upon being a very fortunate person, because if he has really been able to explain to any audience that he has addressed what are the eleven different values which are cited in the Act, and to explain exactly what their incidence is, he must be a master of exposition; he must have had audiences far in intelligence above the ordinary run of those whom most hon. Members have the honour to address. It is because that in the Finance Act so many new and artificial values have been introduced that difficulties have been introduced into the minds of the most accomplished valuers in the country. The difficulty of construing the Act, the difficulty of deciding how the clauses are to be read together, and, above all, the difficulty 984 of ascertaining the value of that which has neither a building upon it, or fruit trees, growing timber, fruit bushes, or anything in, under, or on the surface, probably has taxed some of the subtlest minds in this country. For a very long time in this country there has been a system of valuation, and skilled valuers have been able to ascertain what the values of land are. Upon those valuations so ascertained large quanties of land have been bought and sold. Uncertainty has been introduced into the science of valuation, and cut into its excellence. Now we have got a chaotic system under which no man understands how to value, because the whole basis of valuation is not the true value which obtains between man and man in the market, but the hypothetical value, and according to new ideas of value which have not previously obtained as between business men. It is for that reason that valuation has been rendered very difficult in the hands of men who are experienced valuers, and it is for that reason that people have been un willing to advance loans on land for building purposes, and the development of land has received a check and not an impetus from this legislation. We have heard stories which are constantly used on platforms of hardship in some particular case arising from some landlord here or some landlord there. He is usually given a title and a coronet, and I believe he is sometimes referred to in less ornamental terms. But he is always referred to as the landlord who has done some injury, and who in some way had inflicted hardship. I took the opportunity of discussing valuation of agricultural land in the purely agricultural county of Lincolnshire, and I had the opportunity of talking with farmers who had tried to buy their land. A farmer only recently told me, when I congratulated him upon the purchase of his farm, that there was not much money in it. Indeed, said he, "I am worse off than I was before, because I no longer have the landlord behind me." It is only fair to landlords in this country to point out that there are many persons indeed who regret that they are no longer resident upon estates upon which a good landlord has for a long time done good among his tenants.
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Again, we have illustrations from new countries on questions raised which deal with land in London and so on, but after all, you have got to consider that what we are discussing to-night is whether or not in the existing principle of the taxation of 985 land values, we have got a reasonable method of collecting these taxes, and whether this method, and this only, is the method which should be adopted if you are going to exact your full pound of flesh out of the land. We have had several illustrations of difficulties that have occurred under this Act. A particular one brought to my notice which occurred under Section 1, Sub-section (a), in connection with the lease of premises which was lenewed at £100 a year. It was afterwards set by the lessee, to whom once more the lease was granted, at £100, to another subtenant at £120, and, thereupon, the original lessor was approached, and it was claimed that he was liable to pay duty. He answered that the premises were let as they always were at £100 a year. The official answer was: "The sub-tenant has secured £120 and you might have secured £120 if you had been fortunate enough, and the value now is £120 and not £100, and, although you have no share in the increase, and although you are not receiving the higher rent, you are liable to Increment Value Duty by reason of the fact that somebody else has received the increase." That is a case which illustrates, and very clearly illustrates the principle of the Valuation and Assessment Duty upon land and calls upon Members of this House to inquire whether we have or have not arrived at what is the best method of exacting this tax, and, whether or not, we might, by making some amendment in the present system, secure greater justice and more revenue and greater certainty and facilitate the desire of persons on both sides of the House, that there should be greater development of the building land of the country, and better housing for all persons who have an interest in living upon land.
§ Mr. AUSTEN CHAMBERLAINThe Debate has ranged over a very wide field, and has gone far beyond the contents of the Amendment which was Moved by my Noble Friend this afternoon. I do not propose to follow hon. Members into that wider field. I wish to bring the Debate back, as far as I can succeed in doing so, to the specific question or such specific questions as were raised by my Noble Friend and by my hon. Friends on this side. Perhaps I may say a word about a speech which was delivered by an hon. Gentleman below the Gangway opposite. There was one speech from the hon. Member for West Aberdeenshire (Mr. J. M. Henderson), 986 in which he warned his friends that the course they were pursuing to-day would split the Liberal party and consign it to defeat. I have no reason for objecting to any course which they choose to pursue, but I would venture to address an appeal to these hon. Gentlemen, that before they discuss this question again, either in the House, or in the country, they should try to clear their minds upon one or two points in which they seem to me to be involved in very considerable confusion. I listened to several speeches from the opposite side of the House in which complaint was made that the holder of undeveloped land, of great capital value, contributes a wholly inadequate sum to the local rates, but that the moment he sold or let a piece of his land to another—and of course the case put was that he sold or let to someone poorer than himself—that that person was rated at the true value, whereas the landlord who held his land up was rated upon a fictitious or agricultural value which was not the true value of the land. I say for myself—and I think I can speak for all my friends as well—that the existing rating system is not satisfactory, that all is not fair as between ratepayer and ratepayers. But that is a question wholly distinct from these land taxes. What benefit do you do to the ratepayer by taxing the land? The ratepayer does not get relief.
§ Mr. WEDGWOODYou use the money for the relief of rates.
§ Mr. AUSTEN CHAMBERLAINBut that is not the Budget.
§ Mr. WEDGWOODYou are not dealing with the Government, you are dealing with the United Committee.
§ Mr. AUSTEN CHAMBERLAINThat is not the Budget. That was the proposal of the Sheffield Resolution, which received such condemnation at the hands of gentlemen who spoke from those Benches opposite. I think the hon. Gentleman who interrupts me has not spoken.
§ Mr. WEDGWOODI have not got the chance.
§ Mr. AUSTEN CHAMBERLAINPerhaps he would permit me to address myself to those who have.
§ Mr. WEDGWOODThey have expressed my views to perfection.
§ Mr. AUSTEN CHAMBERLAINI say the rating question is totally distinct from the question of the Budget taxes. The fact 987 that there is a case for revision of rating and the fact that there is injustice between one ratepayer and another now is no reason why the tax-gatherers should take that which on their showing belongs not to the tax-gatherer but to the ratepayer. That is my first observation as to the confusion which appears to exist in the minds of hon. Gentlemen below the Gangway. My second observation is that I really wish they would make up their minds whether the owner of the land is entitled to charge the market value of the land when he has an opportunity of doing so. When leases expire and the owner resumes possession of his property, I want to know whether hon. Members think he is entitled to charge the market value of the land, or whether it is a heinous offence for him to do so, because he robs a man who puts buildings on that land, who has made improvements, and enjoyed those improvements for the terms of the lease. As I listened to the speeches of hon. Gentlemen opposite, and read the speeches of advocates holding similar views in the country, I constantly see it put, as I have heard it put in this House this afternoon, that a landlord who, at the expiration of a lease, raises the rent of the sitting tenant is robbing the sitting tenant. [An HON. MEMBER: "Hear, hear."] If that is an injustice as between the landlord and his tenant then give it to the tenant, but that is not what you do. You say to the landlord, "You are robbing, let us share the spoil. The tenant is being deprived of what is his property, give me part of it." That contention is further illustrated by the cheers which issue from the same quarter whenever it is pointed out that the Administration of Woods and Forests, which is a Government Department, raise the rents of its tenants, takes from them fines, and in fact levies what has been called "blackmail" whenever it has the chance. When this is done by a Government Department it is loudly cheered, but if the argument of the hon. Member opposite is true, that that property belongs to the tenant, it is just as much robbery if it goes into the pocket of the State, as if it goes into the pocket of the landlord. If it is not the property of the tenant, but is the property of the landlord, then it stands on the footing of all other properties, and should contribute its quota like any other property. Instead of this you put it into a special class by itself labelled "moral obliquity," "robbery," and "blackmail," 988 and you endeavour to tax it out of existence on the ground that it is not the moral possession of its nominal owner. That is all I want to say upon those wider issues. I make an appeal to hon. Gentlemen opposite to clear up the confusion which pervades their arguments, and settle before we have another debate which horse they are going to ride.
I think everyone will acknowledge that my Noble Friend, in his closely reasoned speech, delivered without heat or bitterness, stated his case with great clearness and did not raise those large questions which have been referred to. For the purpose of this Debate we no longer challenge the original policies of these land taxes. We did that at some considerable lnegth upon a former occasion, and the time may come when we may do it again, but for the purposes of this Debate we have to accept the fact that those taxes are on the Statute Book, lawfully levied, and have got to be collected. My Noble Friend, basing himself on that assumption, asked the House and the Government to consider the practical effect of these taxes, their administration, and to examine into certain cases in which, granted you are to have the taxes, it is contended that the way they are being administered in the case of particular provisions of the Budget is causing injustice and unnecessary suffering and inconvenience. That is the real point before us to-night. Granted that those taxes are on the Statute Book and that the form in which they appear is the final one, are the methods being followed necessary for the collection of the taxes? or can they be amended so as to save injustice and inconvenience? The Attorney-General, who spoke earlier in the Debate, was very anxious to extract from my Noble Friend, or from anyone who would be good enough to tread on the tail of his coat, a statement that the valuers have instructions to be unfair, or were knowingly acting unfairly. That, however, is not the statement which my Noble Friend, or which any of us, desires to make. If we make a statement about the valuers in general it is one which I think the hon. and learned Gentleman will scarcely dispute. The Attorney-General is well aware how greatly valuations made in good faith, vary in different cases between civil litigants, and how more strikingly they vary when the Government is one of the parties in cases for the compulsory acquisition of property. Does the hon. and learned Gentleman say that in such 989 cases the valuers on one side or the other, or the expert witnesses are knowingly or deliberately perjuring themselves? No, Sir, he would not make any charge of that sort, levelled broadcast against professional men. I think he would say, and permit me to say, that in such cases where the truth is very hard to get out, where after all it is largely a matter of opinions and not of strict fact, the agents have to be biassed by the interests of their employers. If an agent is valuing for the seller he will be likely to put a higher value upon the property than another man who is valuing for the buyer. That is not a charge of dishonesty against anyone. I think hon. Members from Ireland will confirm me when I say that I believe that the term "tenants' valuer" or "landlords' valuer" is well known in Ireland. One set of men have a bias in favour of the higher price, and another set are biased in favour of the lower price. All that we say is that it appears to us that in this case also valuers will have a bias which favours the interests of their employers, which in this case is the Government or the tax - collecting authority.
The hon. and learned Gentleman said that the only interest of the Government was to get one fair valuation, that if it was too low the Government would gain on one occasion whilst it lost on another, and that, equally, if it was too high, what it gained at one time it would lose at another. Matters would be equalised, and the Government had no interest in the matter. That surely is not true. The interest of the Government, of course, is to get as much revenue as they can. I am not charging them with improperly trying to get revenue in any way which is not due, but that is their abstract interest. Their interest is to get as much revenue as they can, and for the purpose of the Increment Duty their interest is to place the original site value as low as possible. It is the site value upon which the Increment Duty will be calculated—the difference between the value when the sale or transaction takes place and the original site value. Therefore, the lower the original site value, the greater is the Government's chance of getting revenue. "Ah," says the learned Attorney-General, "but if we place the value too low, we should punish ourselves, because that value would be used against us for Death Duties, and would be conclusive against our claim for the higher Death Duties to which we are entitled. But the Death Duties are not 990 levied on site value, and have nothing at all to do with site value.
The argument of my Noble Friend is-perfectly true. The interest of the Government, as a pure tax-gathering body, is to. get a low site value fixed originally, and to get the highest value they fairly can at any subsequent time. I think it must inevitably be the case with any zealous set of public servants that they would attempt to do the best they can for the Government.—not for a Government, but for Government as such—for the Government which employs them, and who want to get the largest revenue they can, with, of course, regard for justice, and that they would be biassed in favour of the views, which yielded the largest amount of revenue. In this case the Government have set these valuers one of the most difficult tasks they could set any one—a task which requires the skill and experience of the most experienced and most skilful people in the profession of valuing. Have they employed and appointed the most skilled and most experienced people? I do not know, but so far as I can judge, the salaries which they have offered are not such as to tempt the men who have the largest experience to enter on this work on behalf of the Government. I asked the Chancellor of the Exchequer in July last, and I venture to repeat the question to night—
whether he would cause a complete list of officials appointed since January, 1909, in connection with surveying and valuations for purposes of Inland Revenue, to be printed in an early issue of the 'London Gazette'—I should prefer it laid as a Parliamentary paper—setting forth in each case the district for which the official is appointed to act; the nature of the previous experience which qualified him for the appointment, and the salary and emoluments attached to it."—[OFFICIAL REPORT, 28th July, 1910, col 2504.]The Chancellor of the Exchequer said he would bear that suggestion in mind—and I have no doubt he has done so—but until the valuation staff were complete he would be inclined to think it was undesirable. I presume the staff is now complete, and I wish to ask the Lord Advocate-whether the Government will now give me and the House that information in order that we may judge of the qualifications of the gentlemen whom the Government have secured for this most intricate and difficult task?I want to come to another matter—and one of great importance—and that is the interpretation to be put on what we may call the "twenty years' Clause." We argued in this House again and again, 991 when the Budget was under discussion, that it would be a great hardship for a man who had paid a certain sum for land, if that land fell in value, and then recovered, a portion or even the whole of the original value, when, in fact, he had only received the same sum as he had paid, or less than he had paid. We felt it would be a great hardship if the purchaser was taxed on the increment, when, in fact, he had received only the same sum as he had paid, or less than he had paid. We thought we had received from the Government in the twenty years' Clause some satisfaction of our claim. They declined to go back more than twenty years, but said that they would give the purchasers the advantage of substituting the figures of the purchase they had made if the purchase had been made within twenty years. This is a question with which the Chancellor of the Exchequer dealt in receiving a deputation. At that deputation the point was raised—Supposing a man bought a property for £2,000, and there is a slump in the value of property in the neighbourhood, bringing the value down to £1,000—and I understand the hon. Member for West Perth knows of a dozen cases in his own Constituency to which these figures would apply—but supposing the property was bought for £2,000, in a slump the value went down to £1,000, and then there was a recovery to £1,500, we understood that in that case the increment of £500 would not be chargeable, and that in fact it would be treated as a case in which there was no increment. But that is not the interpretation of the Inland Revenue. They are demanding increment under exactly these conditions; they are demanding increment where the amount paid for the property is more than the amount realised, because in the interval there has been a slump in value from which there has been a recovery. When this question was alluded to earlier in the day, the Under-Secretary for the Home Department interjected across the floor of the House the remark that it might be in the Chancellor of the Exchequer's speech to the deputation, but it was not in the Bill. I venture to say that was not an answer that the Chancellor of the Exchequer, had he been here, would have stated to the House.
§ Mr. MASTERMANI only said that the Bill as it stood did not carry it out.
§ Mr. AUSTEN CHAMBERLAINIs not that what I said? That it was not in the 992 Bill, though it was proved to him that it was in the Chancellor of the Exchequer's speech.
§ Mr. MASTERMANI said nothing about the Chancellor of the Exchequer's speech.
§ Mr. AUSTEN CHAMBERLAINHere are the shorthand notes, but the Under-Secretary having been made acquainted with what the Chancellor of the Exchequer said, says it is not in the Bill. Probably it is not. Are the Government going to make good the words of the Chancellor of the Exchequer? You said, again and again, your object was to tax unearned increment, and you are going to tax a man on his loss. That is what you are going to do now. The tax may be right or wrong, but are you going to tax a man, not on his profit, but on his loss. That is a question to which I hope we shall get an answer. I got a little confused as to what the Attorney-General said on this point. When case after case was cited on this point, the Attorney-General said, "That only shows that often higher valuations are placed upon property at one time than five or ten years after." But that was exactly what we said when the Budget was under discussion. That is the case which we assured him the Chancellor of the Exchequer claimed to have met, but which, as the Under-Secretary truly says, he has not met. Are you going to meet it? I remember the Prime Minister giving a justification for this tax. It was very simple; he would put it into a sentence. He said that over the great part of the country the growth of the value of land was steady and continuous. On another occasion he used even stronger language, but I have not got it at this moment; but we have pointed out that it is not steady and continuous, it fluctuates up and down, and here you are not dealing with the increment which is due to the work of the community, but taking away a part of the value which the man had actually paid in hard cash.
Then there is another most important question which we have asked the Government time after time to review, and which arises on divestment. The Act clearly says that the expense of divesting the land of all that it has on it in order to make it assessable shall be allowed to the possessor, but we have had a letter quoted by my Noble Friend from a correspondent who has been informed by a valuation agent that he has instructions—I do not know from whom, but I think it would be right that the Government should find out 993 —that he has instructions not to allow the value if the value of what is removed is greater than the cost of removal. Accordingly, if a market gardener has to divest his land of his fruit, and he can sell his fruit for more than the cost of picking it, the value of his fruit is to be set against the cost of removing it from the land. Is not that absolutely iniquitous? Is not that contrary to the principle of every code of justice that you can conceive, and is it not directly contrary to the words of the Statute? One other point I will bring to the notice of the House. The question of the deterrent effect on the enfranchisement of leaseholds has already been dealt with. I understand that the Government, though they would yield nothing to us on the discussion of the Budget, although on two occasions we raised Amendments, are now so convinced of the hardship that they will make some proposal when the rest of the Budget of this year comes before the House. But what about agricultural land? We have heard of the letter which the Civil Lord issued to his constituents in which he said that all agricultural land was free. I will give the House a case within my personal knowledge. I do not mind saying that I am my own case. I own a little land in the neighbourhood of Birmingham. Some five or six years ago I let a portion of it to a district council for allotments. The other day I had a deputation of the tenants who came to know whether I would renew the lease. I said I really could make no statement on the subject then. I had not the remotest idea of what valuation the Government would place on the land, or what would be my position, but I observed that I was in the position condemned by the majority of this House, and against which the Finance Act was specifically directed, of holding land with a building value and employing it for agricultural purposes. If I built on the land to-morrow I should be free of tax. If I let it to them for allotments I should be taxed, perhaps a small sum, but I should be taxed as a wrongdoer, for abusing my rights as a landlord and misapplying the land. I said the land was bought with other land a good many years ago, beyond the twenty years' limit, for £200 an acre. It was let to the district council for £3 an acre. I had to explain that to them because they said: "But surely it is agricultural land, and agricultural land is not taxed." I said: "You think it agricultural land, and I think it agricultural land, but the Government 994 knows better. It has a value for building purposes in excess of its value for agriculture, and assuming that there has been no increment since it was bought twenty-five or thirty years ago, it is worth £200 as building land. It is let at £3 an acre—I suppose I must take its agricultural value at £100—and I am subject to all the pains and penalties of the Undeveloped Land Tax."
How does it affect the tenant? The propositions which they made to me was that if they paid me £6 rent instead of £3, that would make the agricultural value £200, the same as the building value, and I could escape' all the taxes. I said, "That is quite so, but I do not want to raise the rent to the allotment holders. I do not like to suggest such a thing." They said I need not suggest it. They suggested it to me. You are taxing agricultural land. It is true of that land and of a great deal in the same neighbourhood that it has a building value in excess of its agricultural value, but it is absolutely true that the whole of the agricultural land in that neighbourhood of which it is true cannot be built over now or within any reasonable number of years, and the only use to which you can put a great deal of it will be agriculture, and it will be taxed while agriculture is the only use it is put to. Therefore, I say you are taxing agricultural land, and, what is more, you are taxing agriculture, and by the necessities of the case this falls especially on the urban districts. You are taxing small holders, allotment holders, and market gardeners on their industry, forcing landlords to raise the rents against them, because they get, as I have shown you, by raising the rents on the tenants, not only a higher immediate profit of rent, but exemption from taxation. Be your taxes in general right or wrong, again I ask do you say that that is a necessary incident of them, and do you mean to rely, as the hon. Member for the Central Division of Edinburgh (Mr. Price) gave us the comforting assurance, that you must have cases of injustice and that you need not try to remedy them?
§ The LORD ADVOCATE (Mr. Ure)The topic under discussion to-night is an interesting one. I share my right hon. Friend's view that the discussion which is now drawing to a close has ranged over an extremely wide field, and I shall endeavour to follow his example in returning, if possible, to the narrower range within which the Noble Lord's Amendment 995 to the Address applies. The significance and the interesting character of the Amendment is, as usual, not in what it does, but in what it does not say. It laments that the Gracious Speech from the Throne does not contain any proposal for the amendment of the Land Taxes of the Budget because, as they are now administered they lead to loss and hardship to His Majesty's lieges without any gain to the Exchequer, but it does not regret or lament that there is no proposal in the Speech to repeal the Land Taxes. Why? Is this due to lack of courage, is it due to prudence, or is it a change of mind on the part of hon. Gentlemen opposite. I used to be denounced as a "wrong up" and a pirate, and the Land Taxes were characterised as robbery, confiscation, Socialism, the end of family, the end of sovereignty, the end of Empire, and the end of all things, and now, when hon. and right hon. Gentlemen have the opportunity of suggesting to this House that these taxes should be repealed, they turn their backs deliberately on that opportunity. Again I ask why? I think no one who heard the discussion yesterday can have any doubt on that question, Hon. Gentlemen opposite changed their mind not because of the uninstructed verdict of an ignorant electorate—I would not suggest that for a moment. Hon. Gentlemen last night were loud in their protestations of belief in the conclusions of the minority of the Royal Commission, who reported that separate valuations should be made of land and buildings. There is no talk now of separating land from buildings. Yesterday that was the burden of their claim. Now we hear nothing of the conclusion of the minority of the Royal Commission that it was not only possible to disentangle land, but that it "was desirable and just to do so. They thought a rate ought to be imposed on land severed from the buildings, and they thought that the rate should be devoted to urban improvements. These hon. and right hon. Gentlemen say the difference between confiscation and robbery on the one hand, and just and wise taxation on the other, is measured by the difference of the application of the taxation you receive. Is the principle all wrong when the money goes to the State, and is the principle right when you give the money to the local authority? Right hon. and hon. Gentlemen are on the straight road now to learning 996 the true doctrine. What becomes of the arguments such as we have listened to to-night about depression in the building trade following from the Land Taxes in the Budget? What has the Amendment got to do with depression in the building trade? Repeal the tax if you want to cure depression in the building trade and really believe that the Land Tax is the cause of the depression. I would remind the hon. and right hon. Gentlemen opposite that this is not the first time, unfortunately, that we have had depression in the building trade. There has been depression in the building trade in past years when no one so much as ever heard of the Land Taxes in the Budget, and I am afraid that we shall have depression from time to time in the future. We know quite well the cause of depression in the building trade. People in Edinburgh, people in Glasgow, and other places give the explanation quite clearly. It is due to over-building. I am not going to inflict a second reading speech on the Budget of 1909. Right hon. and hon. Gentlemen have had, I am afraid, to endure that infliction from me more than once, and I promise them I shall not repeat it. My view in the matter is expressed in one sentence. I say that when value realised or realisable is the creation of the community it should make a contribution at least. That seems to me the principle applying to these taxes. The Amendment of the Noble Lord says nothing about repeal, but only regrets that there is no proposal for an Amendment of the Land Taxes, because in their present form they have led to maladministration, which has resulted in loss and hardship to His Majesty's subjects; and therefore, of course, the Amendment is necessarily confined to the question: What Amendment do you propose or ought to be made upon the Land Taxes imposed in order to correct that maladministration? The Noble Lord in his speech disclaimed altogether the idea of making complaint of the bad administration of these taxes. He clearly explained at the outset that his Amendment was directed to showing that such maladministration as he complained of was due not to any fault or favour on the part of the valuers appointed by the Government or the official staff, but was due to the fact that they were working in strict obedience to the land clauses.
§ Viscount HELMSLEYI do not think that that is a quite accurate representation of what I said. I said that some of 997 the grounds of complaint were due to the Act itself and some to the administration of it.
§ Mr. UREI noted carefully what the Noble Lord said, and I found it squared actually with his Amendment. Looking at the Amendment, we see it has no relation whatever to maladministration. He regrets there is no proposal for an amendment of the Land Tax, and, as to maladministration the Amendment does not complain. Therefore the reply to all the arguments from the other side is: What Amendment do you propose to the Land Tax, or what Amendment do you suggest we should propose to this Land Tax to correct the maladministration of which you complain? I will endeavour to follow the right hon. Gentleman (Mr. Austen Chamberlain) in the various points to which he directed the attention of the House. First and foremost the gravamen of his complaint was that there had been habitual under-valuation. Hon. and right hon. Gentlemen opposite have, like the Noble Lord, disclaimed the idea that there was any instruction given to the valuers to under-value. They have disclaimed all attack upon the Government for a deliberate intent to under-value, but they say there has been habitual under-valuation. On what evidence do they make that complaint? Thousands and hundreds of thousands of valuations have been made, and not a single complaint has been heard. There have been, let me say in passing, complaints of over-valuation, but out of the thousands hon. and right hon. Gentlemen opposite have been only able to give us half a dozen who honestly and sincerely believe that their land has been undervalued, but have not thought fit to go to the Referee to get that under-valuation corrected. Is the House really going to believe in the truth and soundness of a charge of under - valuation upon these few letters written by gentlemen who have a higher opinion of the value of their property than the Government valuer. It is not unknown that the owner of property takes a more exaggerated views of its value than other people do. That is exceedingly probable, if he is a willing seller. Reference has been made to mortgages. Has the House to-day heard for the first time that money has been borrowed on insufficient security? Has the House to-day heard for the first time that the mortgagee has lent money on insufficient security? I can well understand the mortgagor and the mortgagee 998 being very much taken aback if the security was not of the value at the time the valuation was made. That is not an uncommon experience. What changes do hon. and right hon. Gentlemen propose upon the land clauses of the Budget for the purpose of correcting them? What means do you suggest under the land clauses in order that the mortgagor and the mortgagee may rest satisfied that the security is sufficient? Is it really said that we are to introduce a proposal amending the land clauses of the Budget to this effect, "The mortgagor's word shall be taken for it as final?" The hon. Member who seconded the Amendment asked on what basis were we making our valuation. I am surprised at the question. I am quite certain that the hon. and learned Gentleman knew very well what the basis was. The basis was the price that the property might be expected to fetch in the open market if exposed for sale by a willing seller.
§ Viscount HELMSLEYIncluding the site value.
§ Mr. UREProduce your site value in the various ways set out by the Act of Parliament. The Noble Lord's complaint was as to the total value.
§ Viscount HELMSLEYMy general complaint was not so much against the total value as against the allocation of the values in the total value as regards site value and the remaining values.
§ Mr. UREWhat amendment does the Noble Lord propose should be made in order to get the values up? The Noble Lord regrets we have not proposed an amendment of the law. I say from beginning to end of the Land Clauses of the Act the only bases and the natural basis is the price which might be expected to be secured in the open market by a willing seller. That is the test given from beginning to the end of those clauses. And it is the test universal in valuation. At all events, we have no evidence at all before us to show that there has been any under-valuation. If the hon. Gentleman really thinks there have been cases of hardship and loss inflicted in consequence of under-valuation the remedy is exceedingly simple, and that is—go to the Referee. The Noble Lord knows perfectly well the Budget provided a competent appeal, which was accepted by this House. He does not demand amendment of any of the clauses relating 999 to appeal. There are thousands of those cases in which the owner of the property has acquiesced in the valuation. The matter has been adjusted with perfect smoothness, and the absence of friction, except in certain cases which no doubt will arise both of over and undervaluation, where owners of property quite naturally and quite honestly differ in opinion from the Government valuer with regard to the value of their property. The second charge which the right hon. Gentleman made was a complaint about the amount of reductions allowed in arriving at site value. It would be quite improper for me to express an opinion upon the meaning of that Clause. We are dealing not with a Bill but with an Act which the House has already passed. If any difference of opinion arises on a matter of that kind the referees determine the question; therefore it would be quite improper for any man now, when the Act is passed——
§ Mr. AUSTEN CHAMBERLAINCan the Lord Advocate assure us that the Government will stop the instructions which are stated by a valuer to have been issued to him to deal with this matter in a particular way.
§ Mr. AUSTEN CHAMBERLAINIt would be improper, the Lord Advocate says, for a law officer to give any opinion to the House; then is it not improper for somebody who is not a law officer to give instructions to the valuers?
§ Mr. URETo give an opinion with regard to the meaning of an Act of Parliament which the House has decided upon, the person to decide the Act of Parliament is the referee. It would be very proper to ask an opinion from the Law Officer if the Bill were before the House. This, really, is a very small detail. I pass to the much more serious question as to the twenty years' limit. As I read the Act, it is perfectly clear. The right hon. Gentleman says that the Chancellor of the Exchequer put a certain meaning on the Act of Parliament. I have not had an opportunity of communicating with the Chancellor of the Exchequer, but I am told that when he used the expression to which attention has been called he was really thinking of a site which had been purchased some time within twenty years, sold 1000 subsequently at a lower value, and then had risen, but not to the amount of the price at which it changed hands originally. I am sure the right hon. Gentleman will not press me to put an interpretation on a phrase used by the Chancellor of the Exchequer. I have not the slightest doubt that if the Chancellor of the Exchequer gave any undertaking that undertaking will be fulfilled. It being a pure question of the interpretation of the phrase, I prefer that the Chancellor of the Exchequer himself should have an opportunity of explaining it.
It was said that there were a great number of simple people in this country who were quite unable to understand the meaning of Form IV., and the meaning of the valuation proposals, that these people were a little apt to be misled, and that they accepted the valuation without taking an appeal to the proper tribunal, because they did not understand it. What change do hon. Gentlemen opposite really suggest should be made in the Act for the purpose of enabling simple-minded people to understand it? Frankly, we have had no complaints from people who did not understand. There was a great hullabaloo made about Form IV., but really when people sat down calmly and quietly to settle it the difficulties disappeared. The Chancellor of the Exchequer was asked to revise the form to suit the views of those gentlemen who found fault with it, but there was not a single suggestion made for alteration. The result is that out of 10,000,000 forms sent out upwards of 5,000,000 have been returned. [An HON. MEMBER: "How many filled in correctly?"] The overwhelming majority are filled in quite correctly. The right hon. Gentleman opposite has not suggested, at all events, any Amendments to be made in Form IV. to make it clearer and more intelligible. I rejoice to think that from my countrymen, at all events, there has come an overwhelming proportion of Form IV.'s correctly filled up. I submit that no case whatsoever has been made out to justify amendment of the land clauses for the purpose of effecting better administration.
§ Viscount HELMSLEYrose in his place and claimed to Move "That the Question be now put."
§ Question, "That the Question be now put," put, and agreed to.
§ Question put, "That those words be there added."
1001§ Mr. WEDGWOOD (who spoke seated, and wearing his hat)On a point of Order. I wish to know whether the Question of the Closure was carried by this House. I distinctly heard the "Noes," and they seemed to me a good deal louder than the "Ayes."
§ Mr. SPEAKERThe only "No" which I heard came from the hon. Member himself.
§ Mr. WEDGWOODOn a point of Order. I desire to know whether a private Member in this House is to be protected, and whether divisions are to be taken fairly, or at the will of the two Front Benches.
§ Mr. SPEAKEROn that point of Order the hon. Gentleman will remember that he yesterday made a very impressive speech
§ of considerable length. He cannot expect to speak every day.
§ Mr. WEDGWOODI was directly attacked personally by the hon. Gentleman the Member for Chelmsford (Mr. Pretyman) in a gross and offensive manner. I have had no chance to reply.
§ Mr. SPEAKERThat is not so. If that had been so, I should have called the hon. Gentleman to order.
§ Mr. WEDGWOODHe said we have received £5,000 from Mr. Joseph Fels.
§ Mr. SPEAKERThat matter was disposed of at the time, and the hon. Gentleman was perfectly satisfied with the explanation.
§ The House divided: Ayes, 189; Noes, 263.
1005| Division No. 7.] | AYES. | [11.0 p.m. |
| Anson, Sir William Reynell | Dickson, Rt. Hon. C. Scott | Locker-Lampson, O. (Ramsey) |
| Anstruther-Gray, Major William | Doughty, Sir George | Lockwood, Rt. Hon. Lt.-Col. A. R. |
| Archer-Shee, Major M. | Douglas, Rt. Hon. A. Akers. | Long, Rt. Hon. Walter |
| Arkwright, John Stanhope | Eyres-Monsell, B. M. | Lonsdale, John Brownlee |
| Astor, Waldorf | Faber, Capt. W. V. (Hants, W.) | Lyttelton, Rt. Hon. A. (Hanover Sq.) |
| Bagot, Lieut.-Colonel J. | Falle, Bertram Godfray | Lyttelton, Hon. J. C. (Droitwich) |
| Baker, Sir R. L. (Dorset, N.) | Fell, Arthur | Mackinder, Haiford J. |
| Balcarres, Lord | Fitzroy, Hon. E. A. | Macmaster, Donald |
| Baldwin, Stanley | Fleming, Valentine | M'Calmont, Colonel James |
| Banbury, Sir Frederick George | Forster, Henry William | Magnus, Sir Philip |
| Banner, John S. Harmood- | Foster, Philip Staveley | Malcolm, Ian |
| Baring, Capt. Hon. G. V. | Gardner, Ernest | Mason, James F. (Windsor) |
| Barlow, Montague (Salford, South) | Gastrell, Major W. H. | Meysey-Thompson, E. C. |
| Barnston, H. | Gilmour, Captain J. | Mildmay, Francis Bingham |
| Bathurst, Hon. A B. (Glouc., E.) | Goldman, C. S. | Mills, Hon. Charles Thomas |
| Bathurst, Charles (Wilton) | Goldney, Francis Bennett- | Morrison, Captain J. A. |
| Beckett, Hon. W. Gervase | Goldsmith, Frank | Morrison-Bell, Major A. C. (Honiton) |
| Benn, Ion Hamilton (Greenwich) | Gordon, J | Mount, William Arthur |
| Bentinck, Lord H. Cavendish- | Gretton, John | Neville, Reginald J. N. |
| Bigland, Alfred | Guinness, Hon. W. E. | Newdegate, F A. |
| Bird, A. | Haddock, George Bahr | Newman, John R. P. |
| Boscawen, Sackville T. Griffith- | Hall, D. B. (Isle of Wight) | Newton, Harry Kottingham |
| Boyton, James | Hall, Fred (Dulwich) | Nicholson, Wm. G. (Petersfield) |
| Brassey, H. Leonard Campbell | Hall, Marshall (E. Toxteth) | Norton-Griffiths, J. (Wednesbury) |
| Bridgeman, W. Clive | Hambro, Angus Valdemar | Orde-Powiett, Hon. W. G. A. |
| Bull, Sir William James | Hamilton, Lord C. J. (Kensington, S.) | Ormsby-Gore, Hon. William |
| Burdett-Coutts, W. | Hardy, Laurence (Kent, Ashford) | Paget, Almeric Hugh |
| Burn, Colonel C. R. | Harris, Henry Percy | Parker, Sir Gilbert (Gravesend) |
| Butcher, J. G | Harrison-Broadley, H. B. | Pease, Herbert Pike (Darlington) |
| Campion, W. R. | Helmsley, Viscount | Peel, Capt. R. F. (Woodbridge) |
| Carille, E. Hildred | Henderson, Major H. (Berks., Abingdon) | Peel, Hon. W. R. W. (Taunton) |
| Cassel, Felix | Hickman, Col. T. E. | Perkins, Walter F. |
| Castlereagh, Viscount | Hill, Sir Clement L. (Shrewsbury) | Pole-Carew, Sir R. |
| Cater, John | Hills, John Waller | Pollock, Ernest Murray |
| Cautley, Henry Strother | Hohler, G. F. | Pretyman, E. G. |
| Cave, George | Hope, Harry (Bute) | Quilter, William Eley C. |
| Cecil, Lord Hugh (Oxford University) | Hope, James Fitzalan (Sheffield) | Rawlinson, John Frederick Peel |
| Chaloner, Colonel R. G. W. | Horne, W. E. (Surrey, Guildford) | Rawson, Col. R. H. |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Horner, A. L. | Rice, Hon. Walter F. |
| Chambers, J. | Houston, Robert (Paterson) | Roberts, S. (Sheffield, Ecclesall) |
| Chaplin, Rt. Hon. Henry | Hume-Williams, W. E. | Ronaldshay, Earl of |
| Clay, Captain H. H. Spender | Hunt, Rowland | Royds, Edmund |
| Clive, Percy Archer | Hunter, Sir C. R. (Bath) | Rutherford, Watson (L'pool, W. Derby) |
| Clyde, J. Avon | Jardine, E. (Somerset, E.) | Salter, Arthur Clavell |
| Cooper, Richard Ashmole | Jessel, Captain H. M. | Samuel, Sir Harry (Norwood) |
| Courthope, George Loyd | Kebty-Fletcher, J. R. | Sanders, Robert A. |
| Craig, Captain James (Down, E.) | Kerry, Earl of | Sanderson, Lancelot |
| Craig, Norman (Kent, Thanet) | Kinloch-Cooke, Sir Clement | Sandys, G. J. (Somerset, Wells) |
| Craik, Sir Henry | Kirkwood, J. H. M. | Scott, Leslie (Liverpool, Exchange) |
| Crichton-Stuart, Lord Ninian | Lane-Fox, G. R. | Scott, Sir S. (Marylebone, W.) |
| Croft, H. P. | Lewisham, Viscount | Smith, Harold (Warrington) |
| Dalrymple, Viscount | Locker-Lampson, G. (Salisbury) | Spear, John Ward |
| Stanler, Beville | Thomson, W. Mitchell- (Down, North) | Wolmer, Viscount |
| Stanley, Hon. G. F. (Preston) | Thynne, Lord Alexander | Wood, Hon. E. F. L. (Ripon) |
| Starkey, John R. | Tobin, Alfred Aspinall | Wood, John (Stalybridge) |
| Stavelcy-Hill, Henry | Touche, George Alexander | Worthington-Evans, L. |
| Steel-Maitland, A D. | Tullibardine, Marquess of | Wortley, Rt. Hon. C. B. Stuart- |
| Stewart, Gershom | Walker, Col. William Hall | Wyndham, Rt. Hon. George |
| Strauss, Arthur (Paddington, North) | Warde, Col. C E. (Kent, Mid.) | Yate, Col. C. E. |
| Sykes, Alan John | Wheler, Granville C. H. | Yerburgh, Robert |
| Talbot, Lord E. | Williams, Col. R. (Dorset, W.) | Younger, George |
| Terrell, G. (Wilts, N. W.) | Willoughby, Major Hon. Claude | |
| Terrell, H. (Gloucester) | Wilson, A. Stanley (York, E. R.) | TELLERS FOR THE AYES.—Sir A. |
| Thompson, Robert (Belfast, North) | Winterton, Earl | Acland-Hood and Viscount Valentia. |
| NOES. | ||
| Abraham, William (Dublin Harbour) | Farrell, James Patrick | M'Micking, Major Gilbert |
| Acland, Francis Dyke | Fenwick, Charles | Manfield, Harry |
| Adamson, William | Ferens, T. R | Marks, G. Croydon |
| Addison, Dr. C. | Ffrench, Peter | Martin, J. |
| Agnew, Sir George William | Fitzgibbon, John | Mason, David M. (Coventry) |
| Ainsworth, John Stirling | France, G. A. | Masterman, C. F. G. |
| Alden, Percy | Furness, Stephen | Mathias, Richard |
| Allen, Arthur A. (Dumbartonshire) | Gelder, Sir W. A. | Meagher, Michael |
| Allen, Charles P. (Stroud) | Gibson, Sir James P. | Meehan, Francis E. (Leitrim, N.) |
| Anderson, A. M. | Gill, A. H. | Menzies, Sir Walter |
| Armitage, Robert | Glanville, H. J. | Molloy, M |
| Ashton, Thomas Gair | Goddard, Sir Daniel Ford | Moiteno, Percy Alport |
| Asquith, Rt. Hon. Herbert Henry | Goldstone, Frank | Money, L. G. Chiozza |
| Baker, Joseph A. (Finsbury, E.) | Greenwood, Granville G. (Peterborough) | Montagu, Hon. E. S |
| Balfour, Sir Robert (Lanark) | Greig, Col. J. W. | Mooney, J. J. |
| Barlow, Sir John Emmott (Somerset) | Griffith, Ellis J. | Morgan, George Hay |
| Barran, Sir J. N. (Hawick) | Gulland, John W. | Morrell, Philip |
| Barran, Rowland Hirst (Leeds, N.) | Gwynn, Stephen Lucius (Galway) | Morton, Alpheus Cleophas |
| Barry, Redmond John (Tyrone, N.) | Hackett, J. | Munro, R. |
| Barton, William | Haldane, Rt. Hon. Richard B. | Murray, Capt. Hon. A. C. |
| Beale, W. P. | Hall, Frederick (Normanton) | Neilson, Francis |
| Beauchamp, Edward | Harcourt, Robert V. (Montrose) | Nolan, Joseph |
| Benn, W. W. (Tower Hamlets, St. Geo.) | Hardie, J. Keir (Merthyr Tydvil) | Norman, Sir Henry |
| Black, Arthur W. | Harmsworth, R. L. | Norton, Captain Cecil W. |
| Booth, Frederick Handel | Harvey, A. G. C. (Rochdale) | O'Brien, Patrick (Kilkenny) |
| Bowerman, C. W. | Harvey, T. E. (Leeds, W.) | O'Connor, T. P. (Liverpool) |
| Brady, P. J. | Harvey, W. E. (Derbyshire, N. E.) | O'Doherty, Philip |
| Brocklehurst, W. B. | Haslam, James (Derbyshire) | O'Dowd, John |
| Brunner, J. F. L. | Havelock-Allan, Sir Henry | Ogden, Fred |
| Bryce, J. Annan | Haworth, Arthur A. | O'Grady, James |
| Burke, E. Haviland- | Hayward, Evan | O'Kelly, Edward P. (Wicklow, W.) |
| Burns, Rt. Hon. John | Henderson, Arthur (Durham) | O'Malley, William |
| Byles, William Pollard | Henderson, J. McD. (Aberdeen, W.) | O'Neill, Charles (Armagh, S.) |
| Carr-Gomm, H. W. | Henry, Sir Charles S. | O'Shaughnessy, P. J. |
| Cawley, Sir Frederick (Prestwich) | Higham, John Sharp | O'Sullivan, Timothy |
| Chancellor, H. G. | Hinds, John | Palmer, Godfrey Mark |
| Chapple, Dr. William Allen | Hobhouse, Rt. Hon. Charles E. H. | Parker, James (Halifax) |
| Clancy, John Joseph | Holt, Richard Durning | Pearce, William (Limehouse) |
| Clough, William | Horne, C. Silvester (Ipswich) | Pearson, Weetman H. M. |
| Collins, G. P. (Greenock) | Hudson, Walter | Pease, Rt. Hon. Joseph A. (Rotherham) |
| Compton-Rickett, Rt. Hon. Sir J. | Hughes, S. L. | Phillips, John (Longford, S.) |
| Condon, Thomas Joseph | Hunter, W. (Govan) | Pickersgill, Edward Hare |
| Corbett, A. Cameron | Isaacs, Sir Rufus Daniel | Pirie, Duncan V. |
| Cornwall, Sir Edwin A. | Jardine, Sir J. (Roxburgh) | Pointer, Joseph |
| Cotton, William Francis | Johnson, W. | Pollard, Sir George H. |
| Cowan, W. H. | Jones, H. Haydn (Merioneth) | Ponsonby, Arthur A. W. H. |
| Craig, Herbert J. (Tynemouth) | Jones, W. S. Glyn- (T'w'r H'mts, Stepney) | Power, Patrick Joseph |
| Crawshay-Williams, Eliot | Jowett, F. W. | Price, C. E. (Edinburgh, Central) |
| Crooks, William | Joyce, Michael | Priestley, Sir Arthur (Grantham) |
| Crumley, Patrick | Keating, M. | Radford, George Heynes |
| Dalziel, Sir James H. (Kirkcaldy) | Kelly, Edward | Raffan, Peter Wilson |
| Davies, E. William (Eifion) | Kemp, Sir G. | Rainy, A. Rolland |
| Davies, Sir W. Howell (Bristol, S.) | Kennedy, Vincent Paul | Raphael, Sir Herbert H. |
| Dawes, J. A. | Kilbride, Denis | Rea, Rt. Hon. Russell (South Shields) |
| Delany, William | Lambert, George (Devon, S. Molton) | Rea, Walter Russell (Scarborough) |
| Denman, Hon. R. D. | Lambert, Richard (Wilts, Cricklade) | Reddy, M. |
| Devlin, Joseph | Lansbury, George | Redmond, John E. (Waterford) |
| Dillon, John | Law, Hugh A. | Redmond, William Archer (Tyrone, E.) |
| Doris, W. | Lawson, Sir W. (Cumb'rld., Cockerm'th) | Rendall, Athelstan |
| Duffy, William J. | Levy, Sir Maurice | Richardson, Albion (Peckham) |
| Duncan, C. (Barrow-in-Furness) | Lough, Rt. Hon. Thomas | Richardson, Thomas (Whitehaven) |
| Edwards, Enoch (Hanley) | Low, Sir F. A. (Norwich) | Roberts, George H. (Norwich) |
| Edwards, Sir Frank (Radnor) | Lundon, T. | Roberts, Sir J. H. (Denbighs) |
| Edwards, John Hugh (Glamorgan, Mid.) | Lyell, Charles Henry | Robertson, Sir G. Scott (Bradford) |
| Elverston, H. | Lynch, A. A. | Robertson, J. M. (Tyneside) |
| Esmonde, Dr. John (Tipperary, N.) | Macdonald, J. Ramsay (Leicester) | Roch, Walter F. (Pembroke) |
| Esmonde, Sir Thomas (Wexford, N.) | MacGhee, Richard | Roche, John (Galway, E.) |
| Essex, Richard Walter | MacVeagh, Jeremiah | Roe, Sir Thomas |
| Esslemont, George Birnie | M'Callum, John M. | Rose, Sir Charles Day |
| Falconer, J. | McKenna, Rt. Hon. Reginald | Rowlands, James |
| Rowntree, Arnold | Taylor, John W. (Durham) | Wedgwood, Josiah C. |
| Runciman, Rt. Hon. Walter | Taylor, Theodore C. (Radcliffe) | White, Sir George (Norfolk) |
| St. Maur, Harold | Tennant, Harold John | White, Sir Luke (York, E.R.) |
| Samuel, Rt. Hon. H. L. (Cleveland) | Thomas, J. H. (Derby) | White, Patrick (Meath, North) |
| Samuel, J. (Stockton-on-Tees) | Thorne, G. R. (Wolverhampton) | Whittaker, Rt. Hon. Sir T. P. |
| Samuel, S. M. (Whitechapel) | Toulmin, George | Wiles, Thomas |
| Scanlan, Thomas | Trevelyan, Charles Philips | Wilkie, Alexander |
| Seely, Col. Right Hon. J. E. B. | Ure, Rt. Hon. Alexander | Williams, J. (Glamorgan) |
| Sheehy, David | Verney, Sir Harry | Williamson, Sir A. |
| Shortt, Edward | Wadsworth, J. | Wilson, Hon. G. G. (Hull, W.) |
| Simon, Sir John Allsebrook | Walsh, Stephen (Lancs., Ince) | Wilson, Henry J. (York, W.R.) |
| Smith, Albert (Lanes., Clitheroe) | Walton, Sir Joseph | Wilson, T. F. (Lanark, N.E.) |
| Smyth, Thomas F. (Leitrim, S.) | Ward, John (Stoke-upon-Trent) | Wilson, W. T. (Westhoughton) |
| Soares, Ernest J. | Ward, W. Dudley (Southampton) | Wood, T. M'Kinnon (Glasgow) |
| Strachey, Sir Edward | Wardle, George J. | Young, W. (Perthshire, E.) |
| Strauss, Edward A. (Southwark, West) | Warner, Sir Thomas Courtenay | |
| Summers, James Woolley | Wason, Rt. Hon. E. (Clackmannan) | TELLERS FOR THE NOES.—Master of Elibank and Mr. Illingworth. |
| Sutherland, J. E. | Wason, John Cathcart (Orkney) | |
| Sutton, John E. | Watt, Henry A. |
§ Main Question again Proposed. Debate arising,
§ And, it being after Eleven of the clock, and objection being taken to further Proceeding, the Debate stood adjourned.
§ Debate to be resumed to-morrow (Wednesday.)
§ Ordered, That the Lords Message [this day] communicating a Resolution relating to the Local Government Acts, 1888 and 1894, and the Local Government (Scotland) Acts, 1889 and 1894, be now-considered:—
§ [The Resolution was as followeth:—"That it is desirable that a Joint Committee of both Houses of Parliament be appointed to inquire into the application of the provisions contained in the Local Government Acts, 1888 and 1894, and the Local Government (Scotland) Acts, 1889 and 1894, relating to financial adjustments consequent on the alteration of the boundaries of a local government area or on an alteration in the constitution or status of the governing body of a local government area, and to report to the House if they are of opinion that any amendments in such provisions are desirable."]
§ Lords Message considered accordingly:—
§ Resolved, "That this House doth concur with the Lords in the said Resolution."—[Mr. Burns.]
§ Message to the Lords to acquaint them therewith.
§ Adjourned at Thirteen minutes after Eleven o'clock.