REVENUE BILL.

HC Deb 07 March 1911 vol 22 cc1036-159

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."

Sir ALFRED CRIPPS

I desire to call attention to what I consider the central vice of this Revenue Bill, and that is its great injustice to ratepayers. It totally disregards what I think are the legitimate claims and rights of the great local spending authorities. The part which deals with this matter is Part 5—Provision as to payments for local authorities. There is grim irony in these introductory words, because when we come to the enacting portions we find in two most material particulars that not only is there no provision as to payments for the local authority, but the enactments do in terms take from the local authorities what they possessed and ought to possess at the present time. Section 10 repeals Provision 91 of the principal Act under which the proceeds of the duties of land values were divided equally as between the local and national Exchequer. A proposal of that kind appears to me to undermine the whole justification for any duty on land values. More than that it appears to me to be a breach of faith in respect of the principle of undertakings given as to the allocation of the proceeds of these duties, partly to the local authorities and partly to the national Exchequer, In Section 11 is stereotyped for a period of time the maximum amount that the local authorities should receive from the Local Taxation Account. I want to know how that can be justified? I can understand that in taking the standard of 1909 you can fix the minimum amount, because as the right hon. Gentleman the Secretary for the Treasury informed us the other day there were special circumstances which had to be considered. But how can, he justify that part of his proposal, namely, that, having regard to the far larger sum which ought over a certain number of years to be paid to the local spending authorities than the amount raised in 1909, they are to be deprived of that advantage which is their due, and which they are entitled to under present conditions? As to the provisions contained in Section 10, I do not think that anyone in discussing these duties on Land Values at any rate prior to their introduction into the Budget of the right hon. Gentleman opposite ever suggested that if they were raised they ought to be allocated to national, as distinct from local, purposes. There were a large number of Committees and Commissions, and a large number of proposals, extending over a period of twenty to thirty years, and although one would not like to state an exhaustive negative, yet so far as my inquiries have gone, prior to the introduction of the Budget, I cannot find any proposals from any source, or from any expert authority, who thought that duties of this kind, if raised at all, ought not to be raised and applied for the purposes of local taxation, and for purposes of local expenditure.

Starting from that point, let me say a word or two as regards the distinction between the application of funds for local and for national purposes. I do not want to go into details or into the history of the past. It is sufficient for my purpose to refer to the Report of the Royal Commission on Local Taxation, and to the principles laid down in that Report. Nothing, in one sense, has been more astonishing in the history of this matter than to find that the Minority Report of the Royal Commission has been quoted in favour of the proposals contained in this Revenue Bill; whereas those proposals, when properly considered, constitute the most scathing condemnation that you could possibly find of applying these proceeds of the Duties on Land Values to any other than the local purposes for which they are properly allocated. May I say a word or two upon the principle involved, because if we are to have financial purity; if we are to have financial justice; particularly as regards the distribution between local and national charges, it is im- possible to arrive at a fair basis without we appreciate the distinction and difference which necessarily arises when we consider the question of local as distinct from the question of national expenditure and national burdens. In the first place, as is pointed out most clearly in the Minority Report, if duties on land value are to be imposed at all, they ought only to be imposed on the scale of benefits actually received by the expenditure made in the particular locality. There is, of course, necessarily a difference between a burden placed on a locality by the National Exchequer and the payment made in return for expenditure locally incurred in respect of which there must be some special benefit as regards that particular property for which payment is demanded. If anyone really wants to appreciate the underlying principle of the Report of the Royal Commission on Local Taxation they will find it laid down in specific terms, that the proceeds of duties of this kind ought not to be applied, and cannot properly be applied, to purposes of national expenditure at all; that they ought to be limited in principle to expenditure incurred for local purposes, and in respect of which special benefit has been received as regards the land so to be charged.

4.0 P.M.

When we come, on the other hand, to matters of national expenditure everyone in this House will agree that you ought to apply a different principle to that. You do not there apply the principle of payment for benefits received. You are dealing with what we call national and onerous duties with such matters, for instance, as the Army and Navy, matters in respect to which all citizens ought to be asked to contribute in proportion to their ability to bear contribution. And what was pointed out in the Report of the Royal Commission was this, that if you take the test of ability to bear, then the duties of land values sought to be imposed under the principles of this Act cannot be justified, and cannot be justified for this reason. A landowner may be a rich man or a poor man. It is no test of the ability to bear, or of wealth, in the individual that he happened to own either a large or small piece of land, as the case may be. As a matter of fact, a large number of landowners in this country are comparatively poor. On the other hand, you may have a large number of citizens who either do not own any land at all in this country or only some small portion in the nature of a toy or a luxury, and is it right when dealing with national and onerous burdens that the comparatively rich man able to bear the burdens of the State may escape, whereas the comparatively poor man, upon whom the burden falls more heavily, has to bear more than his proportion and just share.

I do not believe in principle there is any difference as regards the basis between national and local taxation, but I call the attention of the House to the matter at the present moment. When we come to the application, what is being done under the present Bill? What is being done in the present Bill is in violation of the principle I am attempting to lay down. What is being done in the present Bill is a standing obstruction to any future Government seeking to undertake a readjustment in the relationship between local and national burdens which they say they desire to do. I am not addressing the House to-day merely upon theoretical questions. I dare say many Members of the House have received what I have received from the Society of Municipal Corporations, who urge everyone interested in this subject to press the Government to withdraw the proposal contained in Section 10, under which every local authority, whatever its conditions may be, will be deprived in the future of any possible advantage from the proceeds of the duties upon land values. And I ask the House to recollect this. When the Finance Act of 1909 was originally introduced it contained no provision for giving a share of the proceeds of the duties of land values in favour of the various local authorities. What was the result? Protests from every side, and although I am sorry the Chancellor of the Exchequer is not present to-day, I see the right hon. Gentleman the Secretary to the Treasury is present, and I shall have to draw his attention to what was said by the Chancellor of the Exchequer on the occasion of the discussions on the Budget. I hope the Chancellor of the Exchequer will not think I am taking any unfair advantage of his absence, which no one can regret more than I do, because whatever one's political feelings may be we all welcome the Chancellor's presence in this House, particularly on occasions of this kind. The Chancellor of the Exchequer said this, and perhaps the Secretary to the Treasury may be able to tell me what answer the right hon. Gentleman would now have to make:— I have always thought that the local authorities have an undoubted charge upon these Land Taxes, and the Government are disposed favourably to consider the Amendment which I think stands in the name of the hon. Member for Bolton, for dividing these taxes equally between the local authority and the Exchequer. Does the right hon. Gentleman think still "that the local authorities have an undoubted charge upon these Land Taxes," and if he does think so, how can he justify the proposals contained in this Bill which takes away from the local authorities the disposition of half the amount so raised in accordance with the principle laid down by the Chancellor of the Exchequer in answer to the question addressed to him by the hon. Member for Bolton? But the matter does not rest there. I am not now dealing with what might have been said by the Chancellor of the Exchequer in the heat of debate, or upon the public platform. If it was a matter of that kind I should not have called attention to the statement this afternoon. A deputation, headed by the President of the Association of Municipal Corporations, waited upon the Chancellor of the Exchequer upon the 8th July, 1909. And I shall read quite shortly, but still without leaving out any part which is material what the Chancellor of the Exchequer said. He said this:— We hope in the course of the next year to make some progress with the readjustment of the relationships with local finance. That is our definite policy and that is our intention, and we hope to survive in order to carry it through. And he goes on to say this:— What we have done this year is merely a practical pledge of our desire to carry it out. Now, what was this he had done as a practical pledge of his desire to carry it out? It was the retention of the basis of the duties of land values—half to the local authorities and half to the National Exchequer. It was that very concession to which he referred as evidence of his desire to carry through a scheme dealing with the whole readjustment of the relation ships between local and national taxation. Let me read a little further on:— This year we decided to divide this Land Tax—". He decided then to divide the Land Tax, but he is now depriving the local authorities and the ratepayers of that division which he pledged himself to on that occasion:— The yield of which must necessarily be a growing one. And listen to what follows:— Well now, we have definitely allocated half that amount towards local expenditure. What has become of the definite allocation? What has become of a promise of that kind on the part of the Chancellor of the Exchequer when passing his Budget or 1909–10. I ask how are you going to reconcile the provisions of Section 10 of the Revenue Bill with the promise made on the occasion to which I have referred by the Chancellor of the Exchequer. He said:— We have definitely allocated half that amount towards local expenditure. "Definitely allocated" does not mean allocated for a particular year or for a particular Bill. The promise made by the Chancellor of the Exchequer was for the definite allocation of half these funds for the purposes of local taxation, although my opinion is that that allocation was too small; because, on principle, not a portion of the profits of these duties is due to the local authorities, but, on principle, every farthing so derived ought to be placed for benefits received, and ought to go towards liquidating the heavy local expenditure to which the local authorities are at the present time exposed. I understand, also, from the quotation I have read from the speech of the Chancellor of the Exchequer that he was looking forward to the readjustment of the relationship between local and national finance. I believe it is agreed upon both sides that there is no matter of greater importance than the proper readjustment of these financial relations. We feel on both sides of the House that until a proper readjustment is made you cannot escape the wanton waste in expenditure and in increased cost—except by a proper definition they will remain mixed up together, which results in waste both to the resources of the Exchequer and to the local authorities.

Let me say one or two words as regards the justification, as I understand, which was put forward by the right hon. Gentleman opposite (the Secretary to the Treasury) for the alteration under which it is now proposed that the whole proceeds of the Land Duty shall be applied to the purposes of National Expenditure only. Because it is quite clear that some justification must be put forward, and it is quite clear, apart from such justification, the Chancellor of the Exchequer has put his hand into the ratepayers' pocket and withdrawn from it money properly allocated to local expenditure in order to apply it to the purposes of the National Exchequer. What is often forgotten is this: That if you take a charge which ought to go to the local authorities and use it for national purposes you are exonerating a large number of people who ought to bear their proportionate burden as regards matters of national expenditure and national control. It is a well-known fact that 1d. on our rates produces about one-third of what 1d. in the Income Tax produces. The result is that you have not an allocation properly made, and apply local funds to local purposes and national funds to national purposes, a large number of contributors who ought on every principle to pay their share upon matters of national concern escape the burden and contribution altogether. How can it be right to apply for national purposes a fund which is derived from a comparatively small area and small sources. I am not for the moment arguing against the imposition of Land Values—this is not the occasion to do so—what I ant protesting against is this. How can you possibly justify raising money for national concerns and leaving out of the contribution some of the wealthiest individuals in the country, who ought to bear their fare share in proportion. That is where the bitterness comes in so far as the ratepayer is concerned. If you get local charges for local purposes, and if the local ratepayer is making payment for benefits received, I do not think he has any reason to complain, although it may be that his burden has become rather heavy in the last two years. But that is an entirely different matter when dealing with national concerns and national expenditure. There he has every reason to complain, not so much because of the expenditure placed upon him but because other persons who ought to contribute and who on every principle are bound to contribute escape the charge which they ought to bear as regards these matters of national concern.

Let me say another word upon this point, Before the right hon. Gentleman proposed that the funds derived from the Land Duties should be exclusively used for national purposes, there had been a large-number of schemes introduced by local authorities in order that the funds so derived might be applied to local purposes, There was what was known as the Betterment Bill. That was based upon the principle that where any special land derived' a particular advantage from local expenditure it was considered to be fair that a special rate should be put upon the owners. I do not think anyone would controvert a principle of that kind. In the same way there were a large number of private Bills introduced into this House by the larger-municipalities, all of them seeking in one way or another to obtain this source of revenue, mainly the proceeds of the duties on Land Values, in order to assist them in their local outlay and expenditure. Why should the Treasury now come in and take from them a fund which has admittedly always been applicable, in the first instance, to local matters and local expenditure? Why should the Treasury now come in and take, not only a portion, but propose, as in this Bill, that not one penny of that contribution should be left to the local authorities for local purposes at all? What is the excuse put forward? Perhaps I had better not use the word "excuse," but I will ask what justification is put forward for this proposal. The first justification was this: The right hon. Gentleman says it is fair for the National Exchequer to take the whole of the proceeds of the duties on Land Values, because, on the other hand, the National Exchequer is going to bear the whole burden of old age pensions. That was the main justification put forward by the right hon. Gentleman opposite. What is the answer to that? I think it is two-fold. In the first place, I deny altogether that any charge in connection with old age pensions ought, under any circumstances, to have been placed upon the local authorities at all. Surely old age pensions are a national charge, and ought to be a national burden. I do not think on any ground that is sustainable as regards a fair distinction between local and national finances, that it is possible to argue that any part of the old age pension expenditure ought to have been placed upon local authorities or local funds.

The right hon. Gentleman suggested that a charge of this kind, or a portion of this charge, might have been placed upon the local funds, because, to a certain extent, the expenditure for Poor Law relief was diminished correspondingly. I join issue there altogether with the right hon. Gentleman. The Royal Commission on local taxation said that Poor Law relief itself was a national service, and I agree with the Royal Commission on that point. We have passed the time when Poor Law relief can be merely a local matter in a particular parish or a particular union or county. Inter-communication between all parts of the kingdom is very different now from what it was when the Poor Law was first constituted in the days of Queen Elizabeth. I suggest that what was laid down both in the Minority and the Majority Report of the Royal Commission is perfectly justified, namely, that the time has come when Poor Law relief in this country should be regarded as a national service in the sense that the contribution towards it should be made, not from a particular class of property, but from all the wealth throughout the United Kingdom. If that contention is right, and if under any circumstances old age pensions ought not to have been placed upon the funds of the local authorities, then there is no concession whatever made by the right hon. Gentleman as compensation for taking away the whole of the proceeds of the duty on Land Values from the local authority, who would have devoted them for the benefit of the ratepayers. You cannot; justify taking the proceeds or half the proceeds of the duties on Land Values out of the pockets of the ratepayers because you do not charge them with an expenditure to which, in principle, they ought never to be liable. Even if I agreed with the right hon. Gentleman—which I do not—let me put this consideration to him. Nothing has raised more complexity in this readjustment of local and national charges than the unfortunate propensity from time to time to attempt to balance these two injustices one as against another. That is really the origin of these wasteful Grants-in-Aid, and a great deal of the local burdens which are now improperly placed upon local authorities. I would suggest to the right hon. Gentleman that there are very long odds against two injustices of that kind countervailing one another and arriving at financial purity in a matter of this kind. I am not aware of any other justification put forward by the right hon. Gentleman except this matter of old age pensions. He did suggest there were other matters for which it was desirable that the funds of the National Exchequer should be used. That may or may not be so, and it is not for me to argue that point, but I do say, whatever the interests of the National Exchequer may be, that is no argument whatever for taking out of the pockets of the ratepayers funds to which they are legitimately and properly entitled. If in this House we do not maintain firmly a right principle on a point of this kind, we may postpone any scientific readjustment of the relationship between local and national expenditure, and between local resources and the National Exchequer to the period of the Greek Kalends.

Let me say one or two words in conclusion as to the nature of these charges which are now going to be devoted wholly to the National Exchequer. I want to emphasise an extremely important point. On all grounds of principle the proceeds of these charges ought to be applied locally and not for national purposes. There are three sources from which the proceeds of these duties will be derived. The first of these sources is the Increment Duty, and I want to say a word or two upon that point. It appears to me to be justifiable that if an Increment Duty can be directly attributed to local expenditure, it ought to make some special payment towards the cost of that local expenditure. Apart from that, I think there is no principle what-ever on which you can make any charge for Increment Duty at all. All classes of property in this country, whether land or otherwise, are liable to fluctuation, to periods of depression as well as to periods of prosperity. That is common to all classes of property in this country, and if you are dealing with national expenditure, and with national resources, there is no more reason why you should select land than any other class of property, because land, equally with any other class of property, is subject to the fluctuation of ordinary depression according to the condition of the market. Let me say a word or two as regards the Undeveloped Land Tax. It certainly is curious in the discussions which have taken place on this proposal that land should be held to be developed in all cases except when it is used for the purpose of the great industry of agriculture. I take this position: I say there is no more important industry for which land ought to be and should be developed than the great industry of agriculture in this country. And more than that. Is it not a short-sighted policy to substitute for agriculture or market garden areas what I may call the desert of small houses which so closely surround our large and populous community? If you want small holdings and small holders to encourage a large amount of labour on the land of this country, you can encourage it best in the neighbourhood of our large towns, where there is a demand for holdings of that kind, and a demand for the (produce of market gardens and small accommodation plots.

But apart from that, let me show how this proposition affects the position of the local authority. If the right hon. Gentleman will follow me, I will try to put my illustration in a concrete form. It is easy to use general language, but I wish to put my proposition in a concrete form in order to show clearly how it works out. Take accommodation land in the neighbourhood of a large town and assume that it is let for £2 per acre. I do not think that is an unfair value. Let me assume that for building purposes, if there was a demand for this land, it would be worth £500 an acre. I take that figure because that is the price commonly taken for building land in the neighbourhood of a large town. What is the position? At present that land is rated at £2, and the local authority gets the benefit of a rate on £2 per acre. If this Bill is passed the undeveloped duty on that land will be approximately £1 per acre, that is the difference between its agricultural value and £500. If the differference was £480 the exact sum would be £1. What would be the result as regards the rating authority? Instead of raising the rate upon a property of £2 annual value, it would have to raise it upon a property of only £1 annual value; so that not only do you deprive the local authority of a source of income to which they are justly entitled, but by putting an unfair burden-upon that class of property you reduce the value from which income is derived at, the present time. It is notorious that this has been done in the case of licensed property. I see the Solicitor-General present, and I will put to him, not a conundrum, but a legal principle, to which I think he will most certainly assent. If you are ascertaining the rateable value of property you have to deduct all legal and onerous charges, rates, taxes, and matters of that kind which affect the amount of income which is supposed to come from the tenant to the landlord. Is the Solicitor-General not perfectly certain that if this Undeveloped Duty is imposed it will pro tanto diminish the amount on which at the present time the local authorities are entitled to raise the rates with the result that not only do you deprive the local authorities of a source of income, but you diminish the income on which they are entitled to rely at the present moment. That, in my opinion, is the effect of putting the proceeds of these duties upon land value upon a wrong principle. Supposing you put them as a payment for benefit received? In that case the local authority would have got the advantage, and the whole advantage. Suppose, instead of putting them upon a principle of that kind, you tried to select a particular property and put that special burden upon it. In that case you depreciate the value of the property, and the annual rateable value to the local authority becomes less to a corresponding extent.

Mr. SNOWDEN

I am sorry to interrupt the hon. and learned Member, but we on this side of the House do not quite follow the argument he is using. Would the hon. and learned Member mind explaining a little more clearly how he arrives at the depreciation in the assessment?

Sir ALFRED CRIPPS

I am much obliged to the hon. Member. These are rather complex questions, and being very familiar with them, one is apt to pass over links in the argument. I will try and make my point clear to the hon. Gentleman, and perhaps he will tell me if he does not follow any portion of my argument. I am sure he will do so in the most courteous possible manner. At the present time, when rating a property in a particular locality, you rate it on its annual value after deducting all outgoings in the nature of taxes and charges of that kind. That is what you do. I am supposing a case where you have a property which, after making all those deductions before this Bill has been passed you get a net result of £2 per acre per year. The result of this Bill would be to reduce that £2 to £1 or thereabouts in the case of the illustration I gave, and it would do it in this way: The difference between the agricultural value and the developed value, or its value for building purposes would be somewhere about £480. If it was actually £480 the charge for undeveloped duties on that land would be exactly £1 per acre per year. When you have that charge upon the land, you have to deduct that £1 from the £2 before you arrive at the new rateable value. The result is that you halve in that case the rateable value which, before this Bill was passed, the local authority would be entitled to have. Of course, it will be open to the hon. Gentlemen to question the law as I have sought to explain it, but I think they will agree with me in this, whether I am right or wrong—and I am sure I am right—that they ought to have no difficulty in understanding the point which I seek to make. If hon. Gentlemen will follow me, I think they will see that what I am saying goes to the whole basis of what I call the wrong principle in seeking to apply the proceeds of these duties on land values to the purposes of the National Exchequer. You get a wrong principle for this reason. In rating you consider the local circumstances, local benefits, and local conditions, but, as regards the National Exchequer you consider none of those things. As has been pointed out in the Report of the Royal Commission on Local Taxation, you do not consider the conditions of the property or the owner of the property, but you place your national charge in proportion to the ability of the taxpayer to bear the particular burden, and the more you equalise or make proportionate the charge to the ability to bear it the juster is any system which may be adopted as regards the National Exchequer and national expenses.

There is one other point to which I want to refer, particularly as the Lord Advocate (Mr. Ure) is present. The Lord Advocate has been a very strong supporter of the duties on land values being raised for national purposes. I want to give an illustration which, I think, shows how wrong it is. Amongst these duties on land values is a duty on reversions—that is to say, a duty which comes into force when a lease terminates. Let us see how unjust it is to apply funds of this kind to national purposes. In Scotland, as the hon. Gentleman very well knows, there will be no Reversion Duties at all. He comes from a country in which practically not one farthing will be raised on Reversion Duties at all. I do not want, however, to call attention to his canniness upon a point of that kind. It is also true of the North of England. Throughout the north of England you let land, not on leases, but chief rents. Therefore, so far as the north of England and Scotland are concerned, you will get no contribution to the National Exchequer under the head of Reversion Duties and all the sums to be derived from Reversion Duties will come from the southern part of England, and substantially from the great metropolis itself. Is it not obviously unjust that the proceeds of a Reversion Duty which cannot be imposed in Scotland owing to their feu system, or in the north of England owing to their chief rent system, should be taken from London and applied to places where the duty is not in existence and where no charge at all can or will be made. Immediately you depart from the true principle of dedicating the proceeds to local purposes you get gross injustice as between area and area in all parts of the country. I am not speaking particularly on behalf of London and the metropolis, but, if you are to have Reversion Duties at all—and I myself think they ought not to be raised—the main proceeds of those duties ought to be applied in London and to the benefit of the metropolis itself. It does not matter, except as regards the contract between parties, whether you have a feu duty system, or the chief rent system, or the leasehold system as we have it in the southern parts of England and particularly in the metropolis; but why should Scotland and the north of England escape a charge of this kind altogether, and why should the proceeds of a charge of this kind, levied in London, instead of being applied to London purposes, be applied outside, where no corresponding contribution is made of any sort or kind?

I am sorry to have detained the House so long, but these reasons on the readjustment of local and national finances are extremely complicated and difficult. I do not believe there is any other subject which is so important and which so calls for an attempt at solution on a scientific basis at the present time. So long as the present conditions continue we shall have nothing but complaint on one side and waste on the other. What is the right hon. Gentleman doing in the present Bill? He is going in the face of every Committee—I charge him with this—and of every Commission which has ever reported in order to deprive the local authorities of a fund to which on the law of principle they are entitled. Let me remind him of this. He is raising the worst obstacle he could to any final and proper readjustment of this difficult question. I beg of him to reconsider the sections in the Revenue Bills which deal with the provisions as to payments for local authorities. I beg of him to deal fairly and not unfairly with local authorities in this matter. After all, ratepayers are not immediately represented in this House, but it would be to the honour of this House if we always took great care that the interests of the ratepayers were properly protected. It is in their interests and in the interests of the local authorities that I oppose the Second Reading of this Bill, and hope at any rate its provisions will never find a place upon the Statute Book.

Mr. RYLAND ADKINS

There was a good deal in the latter part of the speech of the hon and learned Gentleman to tempt many Members of this House into a somewhat fascinating course of debate. Some of his contentions were often heard in the discussion of a very famous Budget Naturally, any of us who rise on this side of the House would wish to reassert our differences with the hon. and learned Gentleman, and to say that, however confident he may be that he is right in his arguments, we are unable regretfully to share that confidence. But I do not desire this afternoon to be drawn into those paths of controversy, attractive though they are. I desire from a point of view very different from that of the hon. and learned Gentleman to support some of the contentions which he has put before the House. He speaks, of course, as one strongly opposed to this recent land taxation. I desire to speak as a strong supporter of this land taxation, and, speaking from the point of view of a strong supporter of it, I desire to respectfully urge upon the Government that there is a great deal to be said in the direction in which the hon. and learned Gentleman spoke in the early part of his speech. Before I come to that, however, I desire to refer to two other matters. This Bill, the Second Reading of which is now before the House, will, no doubt, be passed into law, and it is a disappointment to Members in all parts of the House that anything like a really scientific reconstruction of the relations between local and Imperial expenditure should not have been undertaken. Some of us share in that regret and feeling as sincerely as hon. Members opposite, but we realise that the constitutional controversy in which Parliament is now engaged has taken, and will take, so large a proportion of the time of Parliament that it may well be impossible for so large and complicated a subject to be dealt with adequately in this Session. It is surely all the more desirable now to put on record by speakers from all parts of the House what are the fair and minimum demands of local authorities and what are the claims of ratepayers and of local administrators, which, whatever be the fortunes of this Session or of any Government, must before long come up for permanent adjustment and for permanent settlement. There is in this Bill a very important help to local authorities in changing the Grant—which is known as the Whisky Money—to a permanent Grant, and local administrators, I am sure, are glad that the amount of that Grant should be substantially greater than the very depleted return of last year. It must not, however, be taken that the amount of that fixed Grant really meets the requirements or the just claims of local authorities in this particular.

The Whisky Money, of course, was originally given by this House with the intention that it should be spent on higher education. That intention was not transferred into any mandatory enactment, and in various parts of England the ratepayer, on his less enlightened side, contrived to get a part of that money for very different purposes than education; but since 1902 it has been made compulsory upon the various local authorities to apply it to education. The claims of education have grown, and the necessity for getting further grants from the Exchequer in respect of education are greater every year. Therefore, when that fund, which for a number of years showed signs of expansion, is put aside and a fixed grant is given instead, it may be well to say frankly that the amount given—although we are all grateful that it is more than we got last year—is still not sufficient, and when the Committee, promised by my right hon. Friend, meets, I hope they will bear in mind the fact that the claims of local authorities in respect of education, and particularly in respect of that higher education which is so necessary, are not fully met and cannot be put aside as having been dealt with finally and completely by the arrangement now made. Another £50,000 or £100,000 added to what is given would, I think, have put the Government in a stronger position. They would have been able to say that the fixed amount given was just over the average or mean Returns of the Whisky Money during the whole period of its allocation. I pass from that to the very considerable incidental relief to the ratepayers arising from the putting of old age pensions on the taxes. I desire to associate myself, although not quite so vehemently, with what has fallen from the hon. and learned Gentleman who last spoke. Many on this side hold as strongly as he does that old age pensions must be a national charge. But while the discharge of that duty is incidentally of considerable benefit to the ratepayers, it need not be taken into account on any matter of principle when we are discussing the relations between local and Imperial taxation. I only desire to add this on the main subject under discussion. The hon. and learned Gentleman spoke of the relations between the proceeds of the Land Taxes and local taxation. I do not go as far as he does, for, to judge by some of his phrases, he appeared to suggest that each particular locality should have returned for its own benefit the precise sum which the locality raises in land taxation. That is at once impracticable and unfair, and the argument of my right hon. Friend the Chancellor of the Exchequer, in which he quoted the interdependence of Lancashire and Cheshire as an illustration, entirely disposed of that suggestion. Although the argument against the precise allotment of these particular proceeds in particular localities may be a conclusive argument, it does not have the same weight when it is used to justify the Government in taking the whole proceeds for national purposes generally. I should have thought that the statement made by the Chancellor of the Exchequer and the Financial Secretary to the Treasury, to the effect that the provisions in Clause 10 of this Bill, upon which the hon. and learned Gentleman animadverted, are intended to apply only to this year would suffice, but it must at any rate be the object of hon. Members in whatever part of the House they sit to keep the Government to that statement and secure that the arrangement shall only be for this year, although there may be good grounds for ear-marking these specific proceeds of this particular tax for this year. There is a connection between land taxation and the needs of local government which any and every Government will have to reckon with. The forces which have assisted the Government, and I think most rightly assisted it, in successfully carrying the Budget which imposed these taxes, and the forces which in all parts of the country support them in the maintenance of this taxation, are very largely forces coming from the spirit of municipal life and development and coming from enlarged ideas as to what the duties of local government should be. It would, I think, be a great discouragement to all that is best in local government both in counties and towns, if the whole proceeds of this taxation were permanently taken away from objects of local administration. I therefore desire, from the point of view of a supporter of the Government and from the point of view of a supporter of one and all of these Land Taxes which are now the law of the land, to urge upon the Government the extreme importance of carrying into effect the suggestions made by the Chancellor of the Exchequer and the Financial Secretary that when these things are permanently settled there shall be a distinct and definite relation between land taxation and local government and local administration. I hope that before the Debates on this Bill are concluded we may have a yet stronger expression of opinion from the Government in that direction. I am quite certain that the taxation will be more popular, that its value will be better realised, and that more public support will be given to it in many ways if it is understood that, without giving back to a particular town what that town raises or to a particular parish what that parish raises, you will still give back to the assistance of local government some part of the public money raised in this way. I am sure that when the relations between local and Imperial Taxation are put on a more thoroughly scientific footing there will still be scope for large subventions from the Imperial Exchequer to local administration, and if there is one method by which that subvention should be given it should be by securing the assignment of this Land Tax, the growing productivity of which will, I hope, always be borne in mind, for the benefit of enterprises which, though obviously local, benefit the community in a most important way.

Mr. WILLIAM O'BRIEN

I hope hon. Members will excuse me for making a short excursion from the topics they have dealt with. But I desire to offer some criticisms on the Treasury's dealings with Ireland, and I am sincerely sorry that the Chancellor of the Exchequer is not able to be with us as yet in his old fighting form, as whatever differences we may have with him, will not interfere with our personal admiration for him. I do not know who ought to have the credit or discredit of the strategy by which this Budget was split up on the eve of the General Election so as not to preclude the possibility of the abolition of the Whisky Duty in Ireland. I am afraid that it is certainly not Ireland that is to be congratulated on the success of that strategy. No doubt the Government won their General Election, but I am afraid that Ireland has lost her chance of the repeal of the extra Spirit Duties, at all events unless, which God forfend, another General Election is to supervene before very long. Under other circumstances my Friends and myself would have done our best to engraft upon this Bill a clause for the repeal of this extra Spirit Duty, but I am afraid that the pendency of Home Rule, or rather the possibility of Home Rule, cripples us very considerably in fighting the Budget legislation of the Treasury so far as it affects Ireland. Those of us who all along voted against the Budget of 1909 are placed m this difficult position. On the one hand we are asked to sacrifice everything for the chance of forcing the Parliament Bill through before the Coronation and for the chance of getting the Home Rule Bill through before the present Parliament expires, and consequently we are compelled to be rather sparing in our criticisms of the Government, while, on the other hand, some of us at all events have a firm conviction that the Budgetary conditions created under the Budget of 1909 constitute a new and very formidable obstacle to Home Rule from the point of view of both England and Ireland. The Chief Secretary the other day told us that the Cabinet are instituting at this moment certain critical actuarial inquiries into the finances of Ireland, and until we know the upshot of that investigation I am afraid we shall be greatly hampered in discussing this or any other Bill. I do hope, although I do not see any Member of the Government present who may be able to help us in this matter, that by the time the Chancellor of the Exchequer produces his second Budget for this year, he will be able to tell us in some definite way what really is to be the financial standpoint of Ireland for the future in its dealings with the Imperial Treasury. For the moment I can only suggest that we are entitled at least to know from somebody on the Treasury Bench whether or not the Chancellor of the Exchequer means to make this heavy impost upon an Irish industry a permanent one. and whether he still considers that it would be a national crime to relieve us of a tax which has caused the discharge from employment of an immense number of workmen in Dublin, Derry, Limerick, Cork, Middleton, Bandon, and elsewhere, which has cut down very seriously the very narrow profit on the growth of Irish barley by encouraging the use of foreign barley, which confessedly diminished the output of this Irish industry last year by something like £1,250,000, and all this in addition to increased direct taxation under this Budget upon Ireland which the Treasury itself has estimated at an additional £600,000 a year, and in addition to a loss of at least £1,000,000 a year which the Irish farmers sustained owing to the repudiation by England of her bargain in 1903 for the continuance of land purchase in Ireland.

I pass to say a few words of gratification at the abandonment of the proposal to quarter the charge for pauper old age pensions on the ratepayers. I am inclined to think that the ratepayers of England are indebted for that relief to the somewhat vigorous and spontaneous agitation which this proposal raised in Ireland. Assuredly there was a very determined attempt in Ireland to persevere with the proposal until popular feeling began to show itself in a somewhat angry way. The Irish Local Government Board, as the Chief Secretary is aware, issued a circular in which they intimated that they were in communication with the Treasury, and had ascertained that it was determined that these contributions from the ratepayers should be persisted in. The Local Government Board gave a very peremptory order indeed to Irish Boards of Guardians to make provision for these contributions in their current estimates. Even since the House sat—since the January Election—I have tried very often to get either from the Chief Secretary or from the Secretary to the Treasury some assurance that this order will not be enforced, and the board of guardians will not be compelled to make this provision, especially as the contribution was not yet authorised by law. I am afraid it is only too certain that if the Irish Boards of Guardians had yielded to the pressure of the Local Government Board, and had made provision for these contributions in their estimates, the Treasury would not have been superior to the temptation to lay hold of the money in that way, and to take out of one pocket of the ratepayers the relief which they affected to put into another pocket.

5.0 P.M.

Fortunately, the Irish Boards of Guardians—it is a way they have, and sometimes a rather good way—refused point blank to carry out the order of the Local Government Board, and intimated in a very determined way that they would stand no nonsense upon the subject either from the Treasury or their own representatives, and the result, I am glad to say, has been that everybody has been induced peacefully to toe the line. We in Ireland, therefore, have to congratulate ourselves most heartily upon the result of this entirely unofficial and spontaneous agitation in Ireland, and although, no doubt, England will have to pay for the exemption by the withdrawal of the Increment Tax, that is a matter which, perhaps, for the moment does not directly affect Ireland.

As to the deficit on the local taxation account, apparently the proposals of this Bill do technically make good that deficit. But we cannot allow that the contributions which are made by the Imperial Treasury for Irish local purposes, and especially for the purpose of education and lunatic asylums, are more than about half of what they equitably ought to be. For instance, the Capitation Grant of 4s. to the district asylums, although it may have been quite fair when it was fixed, because, I believe, that at that time the 4s. represented something like half the support per head—that 4s. now represents scarcely very little more than one-third of the average cost per head in the asylums. In the same way, there is the most flagrant disproportion, which we must always protest against, between the Imperial Grants that are made for Education to Scotland and to Ireland and to England. To some extent you have falsified the result of your own excellent late Universities Bill by an utter absence of anything approaching co-ordination as between primary and secondary and superior or higher education, and especially by the starvation—the absolute atrophy—to which you have reduced intermediate education. The Chief Secretary will agree that there is no greater resource in Ireland than the amount of intellectual youth which is still undeveloped among our own people, and I do not envy the Education Minister in Ireland who would have to reconstruct the educational system there with the present crippled and inadequate material. In regard to the Land Taxes, I should not, of course, like to reopen the whole discussion upon them, because of the extent to which your new peasant proprietors in Ireland have been affected by the double Stamp Duties and the Succession Duties, which are now a penalty upon every transfer of land in Ireland; and I would add also are the cause of very grave apprehensions which are beginning to spring up in the minds of Irish farmers as to the future of what are called the Increment Taxes and the Land Taxes of Ireland.

For the moment, no doubt, by the methods I have hinted at, Form IV. has been dropped in Ireland, or almost entirely dropped there, just as Form LL. has been dropped, owing, and there is no use in disguising it, to the pressure of General Election necessities. But, knowing what we do know, how very extreme doctrines indeed as to the nationalisation of land recommend themselves to the Chancellor of the Exchequer, to the Lord Advocate, and as we got a very startling reminder in this House the other night, to the Home Secretary as well, it is not surprising if in Ireland there is very considerable apprehension as to future dangerous developments in reference to the nationalisation of land and all the troubles that it may bring in its train. I am sorry to say that even already those double Stamp Duties and Succession Duties have in many instances obliterated almost the whole effect of the reduction which has been made in the annual payment of the peasant proprietors, and in that way has opened the door to very considerable trouble in Ireland. I do not wish now that the Chief Secretary has told us that we are on the eve of a readjustment of the whole financial relations between the countries—I do not think it would be advisable for me to press this matter any further at this moment. For the same reason I will not dwell tonight upon the utterly water-logged condition of over-taxation in Ireland, except to say this, that we cannot allow this particular or any particular to pass without making it quite clear that we regard the whole Treasury theory of dealings with Ireland as an oppressive and intolerable grievance, and one which will be a very thorny, and possibly the most thorny, difficulty when you try to come to work out some plan upon which the Irish legislature can be made financially workable. At all events, I trust that this Cabinet Committee, whoever they may be, and I wish the Chief Secretary would tell us a little more about them—I do hope that they understand clearly that we protest, and cannot protest too strongly or too indignantly against the theory that was set up in a recent White Paper issued by the Treasury, according to which Ireland is made to appear as if she were your debtor to the extent of £2,300,000 a year for the luxury of being governed from Downing Street. Whenever this question is probed to the bottom I hope the English Cabinet is not going to attempt to deal with such a problem as that without calling in some expert Irish financiers. If they do, I promise that those expert financiers—I am not one of them, but we are glad to say that we have Irish financiers capable of holding their own with the English Treasury—if they do I think there will be no difficulty whatever in proving that the Cabinet and the English people are under a grotesque delusion as to the position of affairs.

There is a sum of at least £3,000,000 a year, the difference between the old age pensions and the cost of the Dublin Police and the Dublin Castle establishment and so on which you charge against Ireland—burdens which, beyond all doubt, are Imperial in their origin and their design, for which credit should be given. If, moreover, Ireland was to get credit for the Customs and Excise Duties that are paid in Ireland upon articles which are exported to England and payments on foreign investments, and so forth—if all these setoffs were taken into account, I think it would be very easy to show that even at the present moment, when you suppose us to be £2,300,000 a year in your debt, there is a surplus of at least half a million in favour of our Treasury in this regard. All that, I presume, will now have to be overhauled from top to bottom by this extraordinary Cabinet Committee if the Government are to produce any Home Rule Bill or any proposal for an Irish Legislature that will not be congenitively attacked by insolvency. In the meantime, as far as I can see, Ireland and her representatives are left in this rather cruel predicament—that we are called upon to go on enduring without protest—without official protest—for I am sorry to say that speeches of mine are not official protests under present circumstances—we are to go on enduring for an indefinite number of years what we regard as the loss of a couple of millions a year in hard cash, and, on the other hand, we are supposed to be very sparing in our complaints, and even of a word of criticism upon the subject, while we have absolutely nothing solid in return, except the promissory note—I doubt not a perfectly genuine one—in regard to Home Rule, and of a Home Rule which up to date still remains exceedingly shadowy. The Chief Secretary may be good enough to intervene in this Debate, and if he does I hope he will give us some indication of what is the nature of this cryptic Cabinet inquiry that is going on at the present moment into the whole financial future of Ireland, for there really ought to be no hugger-mugger about it. I hope he will tell us also whether the representatives of Ireland and the people of Ireland are to be taken into confidence and to be consulted, and are to get a hearing upon this vital question if we are to avoid the possibility of the Home Rule Bill receiving the same fate which overtook the Irish Councils Bill. I trust also that he will give us some hint, some indication, how soon this inquiry may be expected to fructify in regard to some practical proposals which will—if the Chief Secretary will excuse me for saying so—have to be a little more acceptable than what he the other night practically described as a tight fit. A tight fit is an entirely uncomfortable permanent arrangement as between countries, and, at any rate, until we have heard further upon this subject we are bound to maintain our protest against the whole Treasury system of dealing financially with Ireland. We cannot accept this or any other Budget without making it quite clear that we regard the whole Treasury way of dealing with Irish finance as utterly wrong-headed and oppressive. We have to endure it, but we endure it under duress and in the hope that when the Cabinet Committee present their conclusions to the public we shall be presented with a very different kind of Budget indeed for the Irish legislature if there should be any possibility of a Bill to establish an Irish legislature being carried into law.

Mr. RICE

I cannot help thinking that the Government realise that considerable hardships have arisen under these taxes. First of all there is a big valuation being carried on throughout the United Kingdom of all the land in the country. We are told the Government is bearing the cost of the valuation. That is true so far as the Government valuation goes, but every owner of land, whether large or small, will have to make for himself another valuation in order that he may check the figures of the Government. What is the chief reason for this valuation being made? Obviously to decide what the site value is. Site value is a purely hypothetical question and an extremely difficult one to get at. There are numbers of different valuations to be gone through before it can be arrived at. Obviously, then it requires an expert to deal with that matter, and, therefore, everyone will be put to considerable trouble and expense in arriving at a decision. Form IV. has been distributed throughout England and Wales and Scotland and to a certain extent throughout Ireland. I ask whether really the expense of issuing Form IV. and the trouble which has been given to individuals has been worth anything. Many people have done what the Chancellor of the Exchequer advised them to do, namely, to put down, in answer to the questions, "I do not know." Obviously, valuations founded on answers of that kind are quite useless. We are told continually that agricultural land is exempt. Agricultural land is not exempt from these taxes. Take even the case of purely agricultural land, which at this moment may have no higher value than for purely agricultural purposes. A few years hence it may get a value higher than for purely agricultural purposes. In the meantime the owner may have spent considerable sums on it and enhanced its value for purely agricultural purposes, but when the day arrives on which Undeveloped Land Duty is to be charged, no allowance whatever will be made for that enhanced expenditure. Allotments without a doubt are taxed under this plan—a most cruel hardship I call it, especially when you remember that under certain circumstances five acres of garden are allowed to a dwelling-house in town free from Undeveloped Land Duty. Obviously that is right. No one wants every garden in every town covered with bricks and mortar. But if five acres of land can be allowed with a dwelling-house in a town which belongs to the better class of people, surely it would be as well to exempt the garden of the working man in his allotment. I hope sincerely we may hear from the Government that some of these hardships are going to be removed.

It seems to me that the Chancellor has in effect told the builder and the landowner that he is going into their trade as a sleeping partner. He says to them, "If you make any profit you have to give me 20 per cent. of the increment. If you make a loss you have to stand it yourself." It is a case of heads I win and tails you lose. I hope we shall have it explained to us carefully and in detail how site value is going to be found "on the occasion." Is there going to be a complete new valuation on the leasing and the selling of land in order to get at the site value, or will any enhanced value that the lessor or the seller gets be all treated as site value? It is a very important point, and we really ought to have an answer to it. Say a man has had his house and his site valued at £1,000, and a few years hence he sells it for £1,500, after making the statutory deductions he is allowed, I want to know if the whole difference between £1,000 and the £1,500 is going to be treated as site value. May I also express the hope that the Government will see their way to relieve arrears of payment under Mineral Rights Duty. The Inland Revenue authorities are demanding payments on the arrears of Mineral Rights Duty which accrued before "the last working year"—October, 1908 to September, 1909. That is a distinct hardship because owners who have pressed their lessees, and have been paid, escape paying on the arrears, but if the landlord pressed the lessee, owing perhaps to diffiproves himself a good one and has not culties in opening the colliery or the mine, and has allowed the arrears to accumulate, then, because the arrears were paid within "that last working year," Somerset House is demanding payment of them. There is a great sense of insecurity among owners of land, and it is not surprising when we hear the Lord Advocate telling us that he wants to put all the taxation and all rating on the bare value of land. That was described by the Lord Chancellor in another place as not only absurd, but unjust. The Lord Advocate went further, and has told us that these taxes are not to remain where they are. Is it surprising then that there is a good deal of insecurity among all landowners, whether great or small?

Mr. W. PEARCE

I want to call attention to the position of London under the provisions of Part 5 of this Revenue Bill. When the Secretary to the Treasury was speaking the other day he presented a small Budget in which the local authorities were concerned. He told us that he was going to make an addition to the Whisky Duty which would amount to £270,000 on an average, and he was going to take the burden of pauper old age pensions, which makes £1,500,000, the two benefits together coming to £1,770,000. In return for that he intended to take away half of the Land Taxes, which he estimated at £500,000, and he had left a net benefit to the local authorities in the United Kingdom of £1,270,000. I have tried to examine this position from the point of view of London, and, although it is not altogether usual, perhaps, to take it from the position of one's own locality, my excuse to the House is that after all the population of London is nearly 5,000,000, or one-tenth of the United Kingdom. When we find Gentlemen from Ireland and Wales both anxious to see how these proposals affect their own countries, I think it is time that someone examined this matter from the point of view of the county of London. On the best information I can get, if population is accepted as the basis, the county of London, which ought to benefit to the tune of about £127,000, will not derive anything approaching this sum from these three proposals. So far as the standardising of the Whisky Duty is concerned London comes out quite properly. But the sum for pauper old age pensions for London is less than for the rest of the country for a good many reasons. One is that there has not been the same amount of outdoor pauperism in London as in many other parts of the country. Another reason is that the cost of living in London has been so much greater than in the rest of the country that there is not the same attraction for people to leave the workhouse at the age of seventy as there is in other parts, and therefore in this respect the benefit to London is not likely to come up to anything like the average. I have seen figures which have been published in a good many papers and which appear in a county council paper to-day which estimate that the saving on standardising the Whisky Duty in London will amount to £47,500, and that the saving with regard to pauper old age pensions will be £105,000, making a total benefit of £152,500. In addition to this, London is asked to give up its share of the land values, which is estimated to amount to £100,000, so that if my calculation is right London's benefit under the three proposals will amount to £52,500 instead of £127,000.

I should not have been so anxious to call attention to this to-day if this had been the only time on which London subjects had been dealt with in the proposals of the Government. Since I have been a Member of the House—it has not been done from intention—the basis of all these financial proposals affecting local authorities has been unfortunately chosen in a way that has been greatly to the detriment of London. I should like to remind the House of the effect of the Excise Duties in the Budget. London paid under the old duty about £200,000. As the new duties are estimated on half the assessment value a very big plum has fallen to the Government, and they must be receiving £500,000 or £600,000 more from London to-day than before the new duties were instituted. This had an unfortunate effect on the finances of the local authorities in London. There has been a drop in assessments of £370,000 and a loss in rating of £157,000. This is not very long ago, and the finances of the London County Council and the borough councils have been very lately affected thereby, and I think in making any new proposals the Government ought to be just as careful with regard to the county of London as they would have to be with regard to Ireland They should have examined how these proposals, taken as a set, affected the municipal finances of London, and I hope it is not too late even now, if my case can be proved that London again is getting very much less than the average to which it is entitled, that the basis may be reconsidered; and if these proposals are to be put in operation, at any rate, that the Government will consent to put a time limit upon them, and not put them in perpetuity. We are promised a reconsideration of the whole of this question with regard to Imperial and local taxation, and I am very anxious that no further principle should be adopted which would make it very difficult to get it changed when this rearrangement happens. I have, therefore, thought it my duty, though on this side of the House, to ask the serious attention of the Government to these proposals, which, I think, will be found to have a very unfortunate financial effect on the whole of the County of London. I do not want to make it a matter of electioneering. Though London has not the same number of Members that Ireland has, at any rate we are sixty Members in London; and I am glad to think that on this occasion this is not going to be treated as a matter of party politics. After all, it is not party politics at all, and when we once begin to examine into the question, London Members on both sides of the House, acting together, ought to be able to take full care, and this is the only way in which it can be done, because if Members for London on both sides are not as careful in looking after London's interests as Members from other parts of the Kingdom we shall always suffer. It is only by joint action that we can bring the Government to the necessity of seeing that this kind of proposal, at any rate, shall not be to the financial detriment of the County of London.

Mr. GEORGE YOUNGER

I will only say with reference to the hon. Member's speech that it was long ago pointed out, in Debates on the Budget, that London would suffer very seriously in respect of the new licences, and there can be no doubt whatever that the facts which the hon. Member has stated show that they have been extremely oppressive in regard to London. I do not think anything can be added to the very able speech by my hon. and learned Friend the Member for the Southern Division of Buckinghamshire (Sir Alfred Cripps) on the question of the new proposal of the Government to take the whole of the proceeds of the land duties for the Exchequer. The Chancellor of the Exchequer, in making that proposal, has returned to his first proposition in the Budget of 1909, and from which he was forced to depart. I am pretty certain that he will be forced back from the present temporary annexation of that money by an even more forcible opinion than he had to reckon against in 1909. The local authorities all over the country have regarded the taxation, whether they agree with it or not, as distinctly in a large measure owing to themselves. There may be something to be said for the nation sharing in part, but undoubtedly the great argument has been that the local authorities should share in the revenue from these taxes. There has been no one more insistent on that than the Lord Advocate himself. He has gone about the country telling everyone of the rivers of gold which these taxes were going to produce. I think that was one of his expressions.

The LORD ADVOCATE (Mr. Ure)

Never under any circumstances. I have warned hon. Members frequently against supposing that there were rivers of gold.

Mr. YOUNGER

I entirely withdraw the observation so far as the right hon. Gentleman is concerned, but others have said it. I think the hon. Member for New-castle-under-Lyme (Mr. Wedgwood) has held out hopes and conveyed that impression. I do not believe this annexation of the money will ever be made permanent. I thank the local authorities will be able to get back their proper shore of the taxes. I do not think the right hon. Gentleman opposite gave any credit for the improvement in the position of affairs with regard to the Whisky Money. He took the figures for the very worst year as evidence of the large sum required to be provided to make good the deficiency, but in one of his recent speeches he said that whisky was improving steadily, and under these circumstances I venture to say that the debtor and creditor account requires amendment, because the drain on the Exchequer will not really be so serious as he endeavoured to make out when he was submitting his statement.

I wish to ask the Financial Secretary to the Treasury for some information as to Clause 4 of this Revenue Bill and as to the manner in which the Revenue is going to be affected by the results arising from the Wrigglesworth judgment. I am not at all certain that Clause 4 meets all cases, and, above all, I am not quite sure what is the real meaning of Sub-Section (c). On the 20th February the Financial Secretary, speaking in this House, said that under (c) the annual value was to be determined by the Commissioners of Customs and Excise, who would pay due regard to the new Licence Duty. He said that would be deducted before the actual valuation was made. I suppose he meant that they would take the new Licence Duty into consideration in making the valuation. But where there is a Schedule A valuation dependent on the rent paid by the occupier under his lease, what becomes of Schedule C? I suppose Schedule C does not apply wherever Schedule A applies. What is to become of Scotland then? In Scotland the tenant of licensed property is very rarely the owner. He rents the premises from the proprietor, who has no connection whatever with the trade, and the supply of liquor is not tied in any way. The proprietor is simply an ordinary owner of property. The rent under the lease is obliged to be taken as the annual valuation of the premises, except in those particular cases dealt with by the Valuation Acts, where the Inland Revenue authorities do not regard the rent under the lease as a sufficient rental under Schedule A for the licensed premises, and therefore put an additional value of their own on the premises. Surely similarly in the case which has arisen owing to the new duties Schedule C ought to be applied. Surely, in this particular case, the actual rent should be reduced wherever it can be shown that the lease has been made before the Budget of 1909. The new Licence Duty, being so very onerous, is, of course, reducing the valuation of that house if it were to come on the market. I think that is an extremely important point, and I do not believe that a clause of this kind meets the case in Scotland or the case of the free house in England. Eighty per cent. of the free houses in England are just exactly in the same position. On that point I should like to ask whether, under Schedule C, there will be an appeal. I do not think there is, but perhaps the right hon. Gentleman will tell us. The situation in Scotland with regard to the position of the tenant is a peculiar one in all respects. I have got a statement from Dundee which is typical. Out of 209 fully licensed houses, only thirty-five are owned by the licence holders. In all the other eases, the occupier is the tenant of an independent person. Out of 193 licensed grocers, only seventy-two of the houses are owned by the occupiers. At the last Court the assessor agreed that 50 per cent. of the new duty should be deducted from the previous Schedule A Valuation. In those cases where the occupier is the owner of the property Schedule A, which applies now, would apply to the new licence, but in the case of a man who is merely tenant it is not so. The tax falls upon the two classes of people, and the figures which I am; going to read to the House show how exceedingly inequitable it is. I shall take a £100 house, of which the owner is occupier.

Allowing for the deduction which the Court of Session said ought to be made, the new burden on the owner would be £7 4s. 5d. a year, and on the tenant £17 2s. 10d. a year. On a £200 house, the new burden on the owner would be £23 9s. 6d., and on the tenant £55 14s. 4d. On a £300 house the new burden upon the owner would be £39 15s., and on the tenant £94 5s. 8d. On a £400 house the new burden on the owner would be £55, and on the tenant £131. These are not single cases which are few in number, but they are cases, as the House will see, of a very great majority of the people there. Surely these are cases which ought to be dealt with. I perfectly agree that you cannot impose a tax which will be quite equitable in all cases. Very often the minority must suffer, but here the majority are to suffer, and surely it is not too much to say that the Chancellor of the Exchequer should make some special arrangement to meet cases wherever the Government think the Licence Duty ought to be reduced.

Another point is this. You will stereotype the difficulty for another year. The Scotch licences are due to be paid on 8th May, and there can be no new valuation or roll made up until October, so that the assessment must be on the old unreduced basis. Therefore the duties will have to be paid on the basis that existed in 1909 and 1910, and the same difficulty will arise as the refunding of the sum overcharged in the current year. We know that the Chancellor of the Exchequer has no intention of returning the sum overcharged for the year 1909–10. He proposes to return the sum overcharged for 1910–11. He has estimated that that will cost the Revenue £400,000. If it is to cost the Revenue that amount then those responsible for the calculation should allow the refund to be made general. Is it to be made general? I see nothing in the Bill as it stands which entitles the Inland Revenue authorities to refund to anyone who has not got a reduction of rent, and got the fact embodied in the Valuation Roll. There are endless cases where appeals were made against assessment on account of the heavy duty, and the local authorities, not understanding the law, refused any reduction at all, although since that time the whole of the three valuation judges in the Court of Session unanimously agreed that 50 per cent. of the new Licence Duty must be deducted, and, as a matter of fact, that was deducted in certain cases. But what about the other cases? In many cases the valuations were not so treated. Therefore if you leave the Bill as it stands now, you are going to refund to the man who has been successful in getting his assessment reduced, the over-payment made, but you are not going to take off anything in other eases. This is surely the case in which the right hon. Gentleman must take some means to provide an equitable arrangement. The hon. Member for Lincoln, speaking the other day, took notice of something I said about the taxation of the liquor trade. He suggested something which he regarded as more definite and more easily arrived at than an estimate of the licence value on which the Budget proposes in future to charge the Licence Duty. He used the argument that the publicans in one case would pass on the duty, while in the other they would not be so likely to do so. I am bound to say I cannot follow the argument of the hon. Member at all. It does not appear to me to matter on what basis you charge the publican—whether on the basis of the annual licence value or on the basis of the article itself. So long as £100 has to come out of his pocket, it does not very much matter what is the basis. Anyone who is inclined, if he can pass off in the one case will do so in the other. The remarks I make on that question are an expression of my own personal opinion. I have not the slightest idea whether those concerned in that matter agree with me. Perhaps it may be that the hon. Member is right, and that the annual licence value, if it can possibly be arrived at, is probably the best basis to tax upon. But after all, licence value can only be arrived at by returns giving the actual facts connected with the man's trade, and if you cannot possibly arrive at some definition of licence value that every one will accept, which is improbable, I do not see that it makes any difference what you call it if you tax on what is actually received.

In the course of his speech on the resolutions, the Financial Secretary to the Treasury produced an anonymous article from "The Times," so far as I can see, with a view of endeavouring to prove that the Government taxation of the license trade has really not done it any serious harm, and that as a matter of fact, the tremendous reduction in the value of brewers' shares and securities arose from some totally different cause, and was not in any way whatever the result of the Government policy. Everyone knows that the descent from the highest point of value which those shares had reached had nothing to do with the Government proposal. Everyone knows that the tremendous fall in brewery stock occurred before the Budget was heard of in 1909. But I tried to interrupt the right hon. Gentleman to suggest that the only way to settle this question was to ascertain what the prices were before the Budget and what the prices were after it. I think he will find that in almost every case they are very much lower now than they were before the Budget, although there has been a certain return from the lowest point, which I think was reached possibly about October or November, 1909. If the right hon. Gentleman thinks that a trade which was so depressed can stand an enormous burden of this kind without being depressed in any way, all I have got to say is that he is wasting his time sitting on the Treasury Bench. If the right hon. Gentleman can manage breweries and distilleries, or anything else in the trade, so as to enable them to meet the burden placed on them by the present Government and return to the shareholders anything like the profits they had before he is wasting his time accepting the salary he gets as Financial Secretary to the Treasury, because there are rivers of gold awaiting him if he can manage to do what I have said. I could give instances if I liked of breweries in England to prove what I say. But I take four of the principal breweries in Scotland, which, as the House knows, are not nearly so seriously affected as breweries in England, and in no single case, if you take the value on the first day of 1909 of the preference shares—because the ordinary shares are not in the market at all—is the value to-day anything like what it was then; and this although these breweries are not nearly so much affected and although none of them ever paid less than 10 per cent. on their ordinary stock. That proves to the right hon. Gentleman that he is not quite accurate in the argument which he used, and I think it is a little unfair to suggest that these burdens have not been very serious to the trade. I come now to the question of the £400,000 which the Chancellor of the Exchequer says will be lost to the Exchequer owing to the concession he is making in respect of the Wriggles-worth decision. I am somewhat bewildered about the position on that. The Chancellor of the Exchequer from the very outset of the Budget in 1909 declared in this House that after having readjusted the off-licence holders he expected to get £1,600,000 a year from the off and retail licences in the country, which was what he thought would be a reasonable and fair contribution from them towards the extra demands which he required to put on the taxpayers. And the Postmaster-General certainly once, if not often, said that the Government had no intention of exacting any more, and if it were found that they did they would be ready to readjust the position. The right hon. Gentleman is now carrying out that pledge by readjusting the duty as in this Bill and accepting the new reduced assessment for the purpose of the future basis of taxation until a new licence value is arrived at.

The POSTMASTER-GENERAL (Mr. Herbert Samuel)

I do not think the hon. Member is putting it quite correctly. I was referring to the new basis of assessment on licensed value, and I said that the Government was accused of proposing this new basis of assessment in order to get out of the trade ultimately a much larger sum. I said that that was not so, and that if it was found that the new basis yielded a much heavier revenue than the old basis of assessment then the rate of Licence Duty would be correspondingly lowered.

Mr. YOUNGER

I have no doubt that the right hon. Gentleman is perfectly right. I think that that is so. But that makes no difference in my argument. That was not the burden of the Chancellor of the Exchequer's statement. He believed, and the right hon. Gentleman's owm recollection is, that a sum of £1,600,000 was conceived to be the fair contribution of the trade, and the Chancellor having found that his estimate was very much under the mark, is now doing his best to restore the position on that point. I am making no complaint whatever on that, but on referring to the Chancellor's remarks in the Debate on 24th February, I find he said:— I should like to say one word in regard to the public-house valuation, referred to by my hon. Friend the Member for Lincoln. He very properly has said that we charged upon a higher valuation a year ago, and have now decided to charge upon a different principle. That is purely a financial matter. That year we wanted certain revenues, and we were strictly entitled to charge it, but in this year we are content with less, and so we have altered the system, which we are at perfect liberty to do. That is a financial matter, and the Treasury is entitled to choose either method without being open to any reflection that it is doing anything unfair."—[OFFICIAL REPORT, 24th February 1911, cols. 2264 and 2265.] I do not think that that is at all a correct statement of the situation. It is contradicted by the official statement which the Chancellor of the Exchequer issued after he had met a deputation which saw him about the Wrigglesworth Judgment. This is an extract from the official communication:— The Chancellor of the Excheqner stated that he was satisfied that this decision would operate in certain cases with greater severity than was intended when the Finance Act of 1910 was framed, and announced that he would include in the financial provisions which Parliament still has to pass before the close of the financial year an amendment adjusting this difficulty. Obviously the right hon. Gentleman was bound to do as he has done when he found he was taking so much more out of the trade than he intended to take, and he must not fly away with the belief that he is making concessions. He is making no concessions. He is only restoring the position which he himself put up from the start. He is now offering to these people an instalment of justice, not even a full instalment, because he only proposes to pay back the over payment for one year, entirely ignoring the overpayments for the first year—1909–1910. I am bound to say, considering that he expects a very large surplus this year, it does not seem either fair or generous not to include both years in this Bill. We will discuss that later on in Committee, but I think there is a very strong case for including both years. It might be difficult, troublesome, and inconvenient, but all the same it is a reasonable thing, and I certainly think it should be done. I cannot allow the impression to go abroad that this is anything more than a reasonable instalment of justice to those from whom a great deal more has been extracted than the right hon. Gentleman intended.

6.0 P.M.

Mr. LOUGH

I think that my right hon. Friend the Financial Secretary to the Treasury has hardly received a fair measure of justice with regard to this little Bill from these critics on the opposite side of the House. Even the hon. Member (Mr. Younger), who is always so good-tempered and usually so fair, failed to acknowledge or make sufficient acknowledgment of the great benefits which this Bill confers both on the licensed trade and on the local authorities. If I may respectfully say so, I think that criticism would come with a great deal more effect from the far side of the House if, when such gifts are given by the Chancellor of the Exchequer, some reasonable acknowledgment was made of them. There are three great benefits conferred by the Bill. First, this is a measure of fair play to some extent to the licensed holders, and is a very costly gift to them. The second benefit is the stereotyping of the grants to local authorities instead of leaving them to fluctuate according to the amount of the Whisky Money. The third benefit is relieving the local authorities for the moment, at any rate, for many fear that part of the cost of old age pensions will fall upon them. These are three valuable proposals, and I think ought to be acknowledged by every fair critic of the Bill, whatever he may have to say about it. Having made that observation very handsomely I hope to my right hon. Friend I want to ask him if he will give me an answer to a few questions with regard to this Bill when he stands up to reply because there are some vague points about the Bill. Is it a Bill simply confined to this year, a Bill necessary to regulate the finance of this year ending 31st March, 1911? Is it a Bill of that kind only? If it is it seems to me a very proper measure with which we can find very little fault. Evidently my hon. Friend the Member for the Middleton Division of Lancashire (Mr. Adkins), who spoke a few moments ago, thinks that it is such a Bill which is only confined to the present year. But I am afraid that the provisions which have been so much criticised in this Bill, which take away from the local authorities any share of the Land Tax, prove that the Bill is not confined to the present year, and I fear will not be confined to next year, or perhaps the year after. I would be very glad if my right hon. Friend, when he comes to reply, will tell us what is the limit of time with regard to this matter? It appears to me that it cannot be this year, because the claim which the Government is making was defended by my right hon. Friend by saying that the whole cost of the extension of the old age pensions which was being borne by the Government would benefit the local authorities to the extent of £1,250,000. No such benefit could arise this year. The extension has only been for three months, and it has only cost say perhaps half a million or £600,000. Therefore, with the additional cost which will be thrown upon the Treasury, there was no necessity to make this large claim with regard to the Land Tax. I would be glad to have that matter made clear. I believe my right hon. Friend the Chancellor of the Exchequer—we are sorry not to see him present to-day—received a deputation on the subject, and gave them the assurance that he is not going to go back upon what he promised in regard to the share of the Land Taxes; and I hope that the full half fixed in the Bill will be ultimately and permanently given to the local authorities. We discussed that matter at great length in this House on the Budget of 1909–10. We have had an election since, and I can quote many speeches of the Chancellor of the Exchequer and other Members of the Government proclaiming the large grant to be given to the local authorities; yet here, within a few weeks of the election, they are apparently at the present moment taking the grant clean away. But I do hope that my right hon. Friend will make it quite clear that this is only a temporary provision. I will go a step further, and say that if I could I would make it apply only to the year ending the 31st March, 1911. That would be best of all. I put a supplementary question to my right hon. Friend the other day with regard to the Land Taxes and asked him whether he was able to give a reply to it. My question was simply this, How much has been received from each of the four Land Taxes and how much has been received in London from them. My right hon. Friend replied in his usual courteous way that he could give no information, and that he could add nothing to what had already been stated. He did not give the information I wanted. I do think that we are not trespassing too far if we ask the Government to give all the information they have at this moment with regard to the Land Taxes. They are making large proposals with regard to them. I am particularly curious about one, which I suppose is included in the Land Taxes—I mean the duty on Mining Royalties, which I believe, is the most productive of all the Land Taxes.

I would like to know how much of the revenue, which seems to me exceedingly small for the year is received from mining royalties and how much is left to the other three taxes—the Reversion Duty, the Increment Duty, and the Undeveloped Land Tax. I think, before proceeding to give up this money, we ought to get all the information possible; we ought to know how much these taxes produce. I am curious about London. I was brought up in the genial faith that when we got land taxation the local authorities, particularly in London, would reap a golden harvest. I can recall a speech, made in the year 1900, and in which the Chancellor of the Exchequer established his fame, which was devoted to this point—the absolute claim of the local authorities to a readjustment, and to a complete system of taxation being-put upon the land, the proceeds of the taxes to be given to the local authorities That was the system on which we Liberals were nourished. [HON. MEMBERS: "Hear, hear."] I have had a longer experience than some of my young Friends on this side of the House, and I am speaking of what I knew before receiving the advantage of the education which they give us. Speaking of these taxes, I have heard with the greatest pleasure from hon. Gentlemen opposite that they are all willing that land values should be rated in a locality for the benefit of the locality. That is remarkable progress. I remember the time when the Tory party would not have made that admission readily. We have had a great deal of trouble in wringing it out of them. In 1905 we passed a Bill by a majority of eighty, even in a Conservative Parliament, based on this principle. I believe that we ought to repeal the Agricultural Rates Act, one of the worst measures ever passed by this House. It is a perfectly unfair Act, and it will leave a stigma which rests on the Parliament that passed it. What does that Act do? It compels our Chancellor of the Exchequer to be writing cheques all day long for men who have to pay their rates. He writes cheques for £2,000,000 a year to enable men to pay their rates on land at the present moment.

Surely there need be no conflict between us on the point that the first step that ought to be taken by the Government is to put a fair share of the burdens on the owners of land, before expressing any ambitious hopes about the rivers of gold to be obtained from taxation of land. I mention that as one of the chief points we used to hear about, namely, that an adjustment of local taxation must take place. I do not think you can withdraw the Act of 1896 at the present time, but I do say it is an unjust Act, and benefits the owners of land. If it were repealed we could have a system of local taxation which could be applied to the benefit of the local authorities. These are the matters of the old faith in regard to the taxation of land—first, to repeal the Agricultural Rates Act, and make those who come under it pay their fair share of the rates of the country; secondly, the taxation or rating of land in towns apart from its building value; and, thirdly, to give the benefit of the Land Taxes to the localities. I think the duty on mining royalties, about which I am very curious, would raise a noble revenue, and the Chancellor of the Exchequer would be freed from a great many of the worries with which he is now trying to deal under the Bill before us. The Increment Tax, the Reversion Duty, and the Tax on Undeveloped Land, are none of them very productive, nor are they working smoothly. By Clause 1 of the Bill there is a provision to prevent the Increment Tax from being passed on; but everybody who has to pay a tax will naturally pass it on if he can. Then the Reversion Tax is not to apply to Scotland at all. I object to any tax applying to this country not being laid on Scotland, which is the richest part of the United Kingdom. [An HON. MEMBER: "There are no reversions."] However it is to be done, I should try to catch the Scotch somehow. I admit it is a most difficult thing to do with regard to matters of taxation. Then there are special provisions about the Reversion Duty, and I think all those proposals are acknowledgments of the difficulties of the Treasury with regard to these taxes. We ought to hear what the amount of them is; we ought to have a more candid and complete statement of the amount they are producing, and of the trouble and expense they are causing, before we deal with them even to the extent to which we are dealing with them under this little Bill.

The reason I say that is because I feel that we are sacrificing great things under our old claim, namely, the repeal of the Agricultural Rates Act, and a fair system of taxation of land, including urban areas, for the benefit of local authorities. Instead of getting those things, we are getting these taxes, which I do not think are turning out very productive. I admit, perhaps, that this is not the occasion on which to discuss at any length the subject, but I should be very glad if the right hon. Gentleman could at least tell us what the half of these taxes amounts to, and what the whole amounts to. I should like to hear what they are producing, especially in London, if possible. The hon. Member for Limehouse (Mr. William Pearce), who is one of the most successful speakers on this side of the House, and who always brings forward some useful point in a perfectly clear manner, has referred to this subject. I render him full support in regard to what he said about the treatment of London under this Bill. London seems to me to be always diddled by these Treasury proposals. It is true that the licence-holders in London are getting something, but—if I was not a little afraid of some of my hon. Friends beside me—I should say that they are not getting too-much. I think that they were rather hard hit in 1909–10, and that they ought to get something back. But how are they getting it? They are getting it at the cost of the ratepayers. They get £2, and the London ratepayer has to subscribe £3. That is just the sort of thing the Treasury does, and I appeal to my right hon. Friend to see whether he cannot see his way to inaugurating a new era at the Treasury and establish his fame on a lasting basis. All over the country the ratepayers will be hit very hard under this proposal by which the licensed holders are benefited. I hope that my right hon. Friend will excuse my putting these questions to him, and especially that in regard to the duration of the period for which we are to abandon half the Land Taxes. I agree with almost everything which was said by the hon. and learned Gentleman who opened the Debate in such an able speech. He is one of the witnesses that hon. Members opposite are willing that the Land Taxes should go to the local authorities. Let the right hon. Gentleman take them at their word, and he will find those behind him willing to support his efforts, and I think it is possible that he would get a great deal more revenue out of those taxes than he will obtain out of the taxes dealt with under this Bill.

Mr. EDWARD WOOD

The right hon. Gentleman opposite (Mr. Lough) hardly understands the position of those who sit on this side of the House as to the Land Taxes. My own position is, and I think it is that of my hon. Friends, that we do not deem the Land Taxes to be a sound system of taxation, but we do say that, if there must be this taxation, the proceeds ought properly to go to the local authorities who contribute their value rather than to those who have no claim whatever. One word as to the position of local authorities under a proposal of this Bill. I think, with regard to the whisky money, that it is a matter for regret that this Bill, in the first place, should stereotype the form, and, in the second place, should stereotype the basis of the one particular year, 1909. It is a matter of regret that they should stereotype that form because I cannot help thinking that it is not a sound principle if you want any fair basis of readjustment between local and Imperial burdens. It would be better if, instead of a stationary basis, you could provide a proportionate basis, and ask the State to contribute a definite proportion on the expenditure of each year. I venture to say that that is exactly the mistake that was made when the Agricultural Rates Act was originally passed. As hon. Members who have anything to do with the working of that Act know, there is great hardship to-day, and far greater hardship than was contemplated when the Act was passed, by the very fact that it was passed and remained on a stationary basis. The result is that when the local expenditure, has increased the relief has not been able to increase with it. Therefore, I would ask the right hon. Gentleman if he could see his way as to the possibility, instead of having a stationary basis, to devise some means by which relief could be given in some well-regulated proportion according to the burdens the State and the local authority respectively have to bear.

I have great sympathy with the words of the hon. Member who said that in this matter we ought to stand together. By his words he drew my sympathy for London, and I want to draw the sympathy of hon. Members opposite to one part of the country, namely, the West Riding of Yorkshire. The West Riding of Yorkshire, if this Bill goes through in the form in which it is proposed, would be very hard hit, because, if the year 1909 be the basis taken, they will get, I think, about £1,000 less than if a five-yearly or a six-yearly average on the previous years were taken. If you are to have a stationary basis, I would suggest you should have a five-yearly average or a six-yearly average, in order that, as far as possible, you should be able to put the local authorities on the level in which they have been in recent years. I do not know whether the right hon. Gentleman studies these things carefully, but if he does he will be aware that at the present time in the West Riding of Yorkshire there is a very great difficulty on the subject of secondary education. The West Riding at present is making application for leave to raise their rates for the purpose of secondary education to fourpence. That has been opposed by very nearly all the district councils concerned. If the Government, therefore, could see their way to give rather more relief to that, county councils and others in the same position, they would be doing a thing which, over and above their own benefit, would be preventing technical and secondary education from really what it is to-day stinking in the nostrils of the people who have to pay the rates in that part of the country. I do not think this is at all a controversial matter. I would be glad, therefore, if the right hon. Gentleman could meet the wishes of the local authorities on this question. The burden is undoubted, and the relief would be of great value to the local authorities.

There is another point that has not been touched on in this Debate, and that is as to the statutory deductions that are allowed under Section 69 of the Finance Act of last year under Schedule A. As the House will remember, the existing allowances before that Act was passed were one-eighth and one-sixth. To these allowances there was added an additional allowance under certain conditions, making the whole thing up to a quarter, or 25 per cent. of the upkeep and maintenance that the landlord could show he had spent on the land, including farm and buildings, and also on properties under £8 valuation. The point is that at the present time it is necessary, in order to get the rebate, to show separately the maintenance and the cost generally in each case. You want to show what has been spent on land and farm buildings, and you have to show separately the money spent upon property. In a great many small estates I know of it is an extremely difficult matter to separate between the two. It would be a very great assistance if the right hon. Gentleman could see his way to make it possible for the whole sum to be shown in a lump in order that the rebate may be qualified for. I hope the right hon. Gentleman understands my point.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)

Not quite. It is a little difficult to understand as it is a difficult subject.

Mr. E. WOOD

What I mean is that at present, in order to obtain the 25 per cent. rebate, the applicant is compelled to show the details of the whole amount spent under the two heads, first as to farm and building, and secondly as to properties under £8 in value. In many cases where books are not kept it is practically impossible to divide the expenditure between the two heads. It would, therefore, be an immense boon if the applicant could return to the Surveyor of Taxes the whole amount spent instead of showing the items separately. In asking that we are not asking for any more than is already given under Schedule A. I may observe we still think that the basis of Schedule A is the wrong one, and that land ought to be transferred to Schedule D, while, at the same time, we are extremely grateful for the reduction that is given.

Mr. HOBHOUSE

I think this probably will be a convenient moment at which I may answer some of the speeches and some of the criticisms which have been passed on the proposals which are included in this Bill. The hon. Member who has just spoken directed my attention to the question of the relief given under the Finance Act, 1909–10, in respect of amounts spent in the maintenance of property. He particularly called my attention to the difficulty which he, and as I know, as a matter of fact, other people interested in the subject have found in disentangling in small properties the amount spent in the maintenance of land and farm-buildings from that spent on the maintenance of cottages under a rent of £8. Speaking from recollection the necessity of the distinction between the two is this. I think first of all in the matter of houses the deductions are one-sixth under the original Act of 1894, and in the matter of land the deductions are one-eighth. You would have to get a flat rate which did not exist before in order to accept accounts which made no distinction in the amounts spent on the upkeep of one and the other.

Mr. PRETYMAN

This is rather an important point.

Mr. HOBHOUSE

I quite agree.

Mr. PRETYMAN

The allowances of one-sixth and one-eighth under the Schedule involves no accounts, and, therefore, the owner of a small estate who keeps no accounts as to where his carpenter or mason has been working simply returns his sixth and eighth. In regard to the further allowance under Section 69 he has to present an account showing exactly what he has spent. Nobody has objected to that but what I understand my hon. Friend has suggested is that that might be easily converted without any difficulty into a flat rate. There is no necessity in regard to that additional sum that there should be some distinction as between it and the one-sixth and the one-eighth.

Mr. HOBHOUSE

I do not think so for a reason I will give. The allowance under the Act of 1894 is an allowance which can be claimed automatically. In the case of the 25 per cent. allowance on expenditure, expenditure has to be shown as against the allowance. That is really what makes the difference. Therefore, in order to get the condition of things which the hon. Gentleman suggests, you would have to abandon the distinction between the one-sixth and one-eighth and accept a flat rate. I certainly could not promise on behalf of my right hon. Friend the Chancellor of the Exchequer the concession which the hon. Gentleman asks, at all events in this Bill, but if there is any administrative ease that can be given in this matter, and I think the Chancellor of Exchequer has already gone a considerable way in the representation on these points, I certainly shall be very happy to consider and see what can be done to meet the difficulty. I turn to the speech made at the commencement of the Debate by the hon. and learned Member for Wycombe (Sir Alfred Cripps), a speech of great interest, and which I think was listened to with attention by the whole House. He spoke rather strongly of what he termed the great injustice to ratepayers who had been imposed under Clause 10 of the Bill we are now discussing. He went on to say that Section (91) of the Finance Act undermined the whole principle on which the taxation of land values was based. He went on further to say that our proposal stereotyped permanently the amount payable to the local authority. That was a point also raised by my hon Friend the Member for Middleton (Mr. Ryland Adkins), and he used a phrase in which he said the Chancellor of the Exchequer and myself had given an undertaking that the operations of the Bill should be confined to during the current year. I want to make it perfectly clear to the House, and to repeat the principle which the Chancellor of the Exchequer laid down when he was speaking on the Debates on the financial relations, that while we cannot say that this Bill is confined to the operations of the current year, or even of next year, that the alteration in the relations between the local authorities and the Treasury which we propose by this clause, I want to make it perfectly clear that that is not a permanent settlement.

That is only a repetition of an undertaking given by my right hon. Friend on a previous occasion. There have been all sorts of attempts by different Chancellors of the Exchequer in successive Administrations to deal with the matter by means of a fluctuating or a stationary basis; but it has always been found that a fluctuating basis which was satisfactory in any given year, became, after a sufficient lapse of time, unsatisfactory; and the next financial authority attempted to make the position satisfactory by adopting exactly the opposite method. It is not for me to lay down any definite principle where such high financial authorities have failed. All I would do is to point to the exceeding difficulty of arriving at any settlement which can be called permanent. Every settlement of this kind must be revised from time to time as new conditions grow up, as new charges are imposed, and as new burdens have to be met.

I would like to deal, as briefly as I can, with the question whether the repeal for temporary passing purposes of a section like that which conferred a half share of the proceeds of the Land Value Taxes on local authorities really undermines the principle upon which the taxation of land values is based. Those taxes are surely based upon the principle that where large national assets are created in most cases, and always increased, by the exertions of the community, to which the owner for the time being has either contributed a very small sum or not contributed at all, it is desirable to look upon those assets, which in the past have not been taxed, as a great source of national revenue, and that it is desirable that they should contribute to the needs of the community which has done so much to create them. The repeal of this section for a temporary passing purpose does nothing to undermine that principle. The position taken up by the Government is that that principle will continue, although for passing purposes the repeal of the section is enacted by this Bill. The hon. and learned Member went on to say that every municipal corporation would be deprived of future advantages, and that every farthing should go to the local authorities. My right hon. Friend, when he first of all announced to the House that he was prepared to take over the extra cost of what may be called the pauper pensioners, laid it down most clearly that it was necessary that the Exchequer should be assisted in this operation by contributions from the local authorities who had been relieved of great charges. That was laid down most clearly on more than one occasion. I do not think that anyone will allege for one moment that that has not been the consistent attitude of the Chancellor of the Exchequer on this matter.

I would ask the House to allow me to-repeat in some greater detail the statement which I gave when I spoke upon the Financial Resolutions, with regard to the respective positions of the local authorities and of the Exchequer in this matter. The Exchequer is going to take over the cost of a large number of pensioners who were formerly paupers, at a total estimated cost of £1,500,000. I have been pressed on several occasions to give de-bails as to how these figures were arrived at. It may interest the House if I give them now. Taking round figures, the indoor paupers over seventy years of age in England and Wales are 5,029, whose cost, measured by the amount of relief given to the rates, may be put at 5s. per week each. The outdoor paupers over seventy years of age in England and Wales are 116,308, and we put their average cost of 3s. 7d. per week. In Scotland the numbers are—referring always to paupers over seventy years of age—476 indoor at 5s. a week, and 9,142 outdoor at 3s. 2d. a week. In Ireland the numbers are 2,024 in door at 4s. 6d. and 15,900 outdoor at 2s. 6d. That makes a total, in round figures, of 149,000 paupers, costing £1,350,000. I have laid stress upon the cost of the indoor paupers of 5s. a week, because they really cost individual unions a larger sum than that on the average. I have taken 5s. as representing that part of the cost of which the rates will be relieved by our taking them upon the pension list. There will be some cost remaining in respect of union charges, for the upkeep and maintenance of workhouses, and salaries of officials; but the actual relief given to the rates of the various unions is at the rate per week which I have indicated to the House. In the total amount, £1,350,000, there is no account taken of those persons who have come upon the pension lists after 6th January of this year, of those persons who are receiving pensions, but who were not in receipt of poor law relief, and therefore disqualified for receiving pensons during December, 1910. If you take the number of these persons and add their cost, it gives a total amount of £1,500,000, of which the rates are relieved. You have to add to that sum at least another £500,000 for what I have ventured to call potential paupers. You thus arrive at a total relief to the rates by the operation of the Old Age Pensions Act of something like £2,000,000 a year.

Mr. AUSTEN CHAMBERLAIN

I have never been able to follow what the right hon. Gentleman means by potential paupers. He anticipates, as I understand, that the charge for paupers would go on steadily increasing for paupers over seventy but for the Old Age Pensions Act, but the Old Age Pensions Act checks that. I understand that these are the potential paupers. I am not sure whether I am right or not.

Mr. HOBHOUSE

I think so, if I understand the right hon. Gentleman aright. A great number of persons would, undoubtedly, become paupers if there were no Old Age Pensions Act; that is quite clear. A great number suffer great privations in order to keep themselves off the rates previous to the Pensions Act coming into operation. Those are two classes of persons whom I call potential paupers. Their cost would have fallen on the rates had they not received pensions.

Mr. AUSTEN CHAMBERLAIN

My difficulty is this. Why would there be more paupers in the future than there were in the past? No doubt there were always old people approaching the age of seventy who were potential paupers, but as new paupers came on old paupers died oft. I do not understand why the total number of paupers should increase above what the average level has been. I should have thought it would have been rather the other way.

Mr. HOBHOUSE

I have taken in my calculation the persons who are actually on the rates, representing £1,500,000. I take, in addition, those persons who would have come on the rates.

Mr. AUSTEN CHAMBERLAIN

But you allow nothing for those who would have died.

Mr. HOBHOUSE

Unfortunately, they have not died yet—unfortunately from the financial point of view; therefore, we have to include their cost.

Mr. AUSTEN CHAMBERLAIN

Surely at any given moment the number would be approximately the same. New men are always coming on and old men are always going off, but at any given moment the number will be approximately the same.

Mr. HOBHOUSE

That is so; but for the purposes of financial calculation, you must take some fixed date, see what you would have paid and what you would have received on that date, and base your calculation accordingly. Upon 1st January there were so many persons, and upon the same date there would have been so many other persons if the Act had not been in operation, and you are entitled for the purposes of calculation to see what amount of relief is given on 1st January to the rates by reason of your proposals. I think that is not an unsatisfactory, as I believe it to be a perfectly sound and proper, calculation. That brings me to the case of London. Some of my hon. Friends rather hold the view that, in the words of my right hon. Friend the Member for West Islington, London is going to be "diddled" by the Treasury proposals. Let me assure him that that is not the case at all. A statement has been put out by the Finance Committee of the London County Council—the second statement within the last few weeks—which I think is very misleading. It says:— The position for 1911–12 may be stated is follows; making good the shortage on beer and spirit surtaxes £270,000. I have already pointed out that that sum is £328,000. Treasury Estimate of relief to Poor Rates £1,500,000. They say nothing about the calculation which I have just been discussing with the right hon. Gentleman as to the relief given in respect of potential paupers. They estimate, therefore, the relief to the local authorities, not at £2,328,000 as it ought to be but at £1,770,000. They then proceed to deduct from it the cost of one moiety of Land Taxes, £500,000, and thus they arrive at an estimated net gain to local authorities of £1,270,000. I venture to point out to the Committee that the relief we are giving to local authorities is much larger than that. Taking into account the whisky money, it ought to be estimated at a sum approximating £2,250,000. I do not, however, for the purposes of argument, put it any higher than the £2,000,000 to which I referred just now. Then they give the approximate result of the proposal as affecting the London ratepayer in 1911–1912 as follows, making good the shortage on beer and spirits surtax, say £47,000. They have made an error in calculating this sum of £47,000, because payment for the year in respect of whisky money, and payment in the year are two different things. What they should have calculated in respect of making good the shortage on education and the Customs and Excise Licenses is a sum not of £47,000 but of £57,000. The saving in Poor Law Expenditure, in the same way, which they have calculated at £107,000, is £117,000. In consequence, you get a relief to the London rates not of £152,000, but of £174,000. Then you have to deduct from that the share of the moiety of the duties of the land value in our proposals. They have fixed that at a sum of £100,000—I know not by what calculation! The total sum which we have put the land values as being worth to the Revenue is £490,000 the first year and £600,000 in the second year. I do not, therefore, know upon what basis the London County Council calculate their share of the Land Value Duties, which will be one half of whatever the land values may yield. I do not know how they have arrived at the sum of £100,000. Accepting their figures for the purpose of this argument, if you deduct from £174,000 this £100,000—a figure which I do not for a moment admit to be correct—there is left a net profit to the London rates in respect of the transaction we propose of £74,000 a year. That, as I have pointed out, is not a permanent settlement with London, but one for the time the arrangement lasts. We do not anticipate that it will last a long time. While it lasts London rates will be better by the amount of £74,000 a year.

Mr. HARRY LAWSON

How does the right hon. Gentleman calculate the saving in the Poor Law expenditure, because London has a much smaller proportion of outdoor relief than any other part of the country?

Mr. HOBHOUSE

I am calculating it upon the actual figures supplied by the Local Government Board. The figures are of persons who will come off the rates in the London workhouses and their cost. Therefore, if hon. Members opposite think that the Treasury are trying to drive an unduly hard, even an improper, bargain with the London ratepayer, they are under a misapprehension. On the contrary, we are granting to the London ratepayer a very substantial relief in respect of these rates, taken over the whole of the Metropolis. I think that the longer the proposals of the Government are looked at from the point of view of relief to the London ratepayer the greater will be the advantage which it will be seen the ratepayer enjoys, and the more reluctant he will be in the future to go back to the proposals which for some time seem to have attracted him.

Captain JESSEL

Has the right hon. Gentleman taken into consideration the decrease of the assessable value of London through the increased Licence Duty. That I understand is part of the case of the London County Council?

Mr. HOBHOUSE

As I understand, the total decrease in the valuation, owing to the changed assessable value of the houses is £370,000.

Captain JESSEL

Of which £157,000 is lost to the rates.

Mr. HOBHOUSE

Well, I think I am trying to argue this matter reasonably, and I do not think you ought to put the whole of that loss upon the operation of the Finance Act. I am not prepared to deny that some portion of it may be ascribed to that Act. But everybody knows that there was a very considerable drop in the value of public-houses, especially in some particular parts of London, quite apart from the operation of the Finance Act.

Mr. HARRY LAWSON

They did not lower the assessments. The assessments have only been lowered in consequence of the Finance Act.

Mr. HOBHOUSE

The assessments would have been lowered because the value of licensed houses and the monopoly value attached to these houses had fallen by reason of the decreased consumption of spirits and beer. Therefore, taking into account the decreased valuation of licensed premises, there is a substantial and distinct benefit—I hope my hon. Friend behind me will agree with me when he looks into the figures—conferred upon the London ratepayer in connection with this clause.

Mr. W. PEARCE

My point is this. If the figure taken is £2,000,000, London, on a basis of population, is entitled to £200,000. On his own showing, all London is going to get is £74,000; therefore, I was contending that it was a hard bargain for London.

Mr. HOBHOUSE

I do not quite understand where my hon. Friend gets his calculation as to London being entitled to one-tenth.

Mr. W. PEARCE

On the basis of population.

Mr. HOBHOUSE

I recollect no occasion upon which my right hon. Friend has ever for one moment allowed that he was prepared to distribute whatever he had to give from the Exchequer in respect of the proceeds of the land values on the basis of population. Nor I think are there any facts in existence which would show that if the half value, the half proceeds of the Land Value Duties went to the local authorities that the result would be to give the local authorities their share in that grant upon the population basis. It is purely an arbitrary calculation, for which, I venture to say, it will be very difficult to find any substantiation either in fact or figures. May I deal with another point insisted upon again and again by speakers from this bench? That nowhere can any hon. Gentlemen find any justification for the belief that the Land Value Duties, if they had been distributed in accordance with Section (91) of the original Act, would have gone back to the place from which they had been collected. They were always to be charged upon the supposition that their distribution would be over the country generally. There is one final question I would like to put to the House. It is an argument advanced by the hon. Gentleman the Member for Wycombe, and by the hon. Gentleman the Member for Middleton, that there is a necessity for getting a larger grant for education. An hon. Gentleman opposite said that old age pensions are and must be a national service. There is only one way to meet the demands of the local authority upon the Exchequer. The Exchequer can only be filled by taxation. Are hon. Members of this House prepared to go down to their constituents and explain that the only way you can fill up any lacunœ which may exist in the local exchequer is by increasing taxation. If hon. Gentlemen are so-prepared they are perfectly justified in demanding, or at all events in explaining, the necessity for larger grants from the Imperial Exchequer for local services which bear a national character. But it is only upon condition of increased taxation, whether proposed by one party or another, that you can make good the excess expenditure upon services such as education, the care of the aged sick, which are, by the Local Taxation Report, admittedly national services. This question-after all has to be faced in a practical, concrete form when demands are made as they have been made to-day from all quarters of the House for an increased grant from the Exchequer to local authorities. Only upon the basis that eventually extra taxation, no matter by which side, will have to be imposed in order to make good these grants—only if that question is faced do these demands seem to be justifiable.

Mr. PRETYMAN

This Debate has largely turned upon the manner to be adopted for the allocation of the money raised by the Land Taxes to local authorities. This is a very important point, and it has been very adequately discussed. I would only emphasise my own strong agreement with every word which fell from my hon. Friend behind me, and which I think I have previously expressed: that, on principle the whole of the money raised from any form of land taxation ought to be devoted to the local authority in the proportion of benefit received. Remove from the local authority any benefit from these taxes and the whole justification for them is abandoned. I do not wish to labour that point, but I would like to refer to what the right hon. Gentleman said in relation to potential paupers. The figures he gave us were that 149,000 paupers were now costing £1,350,000, and he added to that figure £500,000 saving from potential paupers. Taking in the same proportion the cost for potential paupers as he took for those actually removed from the rates, the sum would amount to £50,000.

7.0 P.M.

These are very large figures. He has claimed for 20,000 paupers who would have been on the rates at January but for this Act, in addition to the 149,000 directly removed by the Act. I do not, of course, question the figures, but I think that seems a very large claim upon the face of it. Then, with regard to assessment in London, I am sure it has been generally accepted that this drop in the assessment of licensed houses is mainly, if not entirely, due to the Finance Act. It does so happen that this year the quinquennial valuation took place, and you do not get the same clean-cut issue as you would do but for that, and it is possible to suggest that some portion of the drop would take place this year in the quinquennial valuation. The right hon. Gentleman has made the most of it. But I do not think the point is worth very much. I do not want to go over old ground, but there are one or two points not touched on on which I desire to put a few questions. I think we have some right to complain that we had no statement in regard to the Land Taxes. We understood, and we hoped, that in the Second Heading Debate we were going to get some indication of the progress which the Government had made with their valuations, and some indication of the amount of revenue that these taxes have already produced.

Mr. HOBHOUSE

I am sorry I did not make some reference to that. It is inconvenient, I agree, that some figures could not be given. But I do not think, having regard to the general, and indeed, immemorial practice of this House that any anticipation should be made of the revenue of the year in anticipation of the Annual Statement made by the Chancellor of the Exchequer when he comes to the Budget for the complete year. But this, I think, I may say that the proceeds of this tax will not be in excess, as I am informed, of our anticipation, and therefore we are not making a profit out of this proposal, which will be to the disadvantage of the local authorities.

Mr. PRETYMAN

I understand what the right hon. Gentleman says, but I think we are all agreed that the Government has spent moat of its time in departing from the immemorial practices of this House, in this Parliament when it is to their advantage. We had a definite understanding from the Prime Minister and the Chancellor of the Exchequer that we should know the particular revenue from this tax last year. We are not asking for an anticipation of facts, but for facts due to us last year and postponed until now.

Mr. HOBHOUSE

I do not quite see how, if this discussion had taken place last August, I should have been able to furnish the figures now asked for. I should have been in no better position to furnish them then than now.

Mr. PRETYMAN

I think that is a childish interruption. What I am asking for now is what I asked for then—the last of available figures. We had no figures in August, and it we had we should have had some indication of the progress made. [HON. MEMBERS: "No, no."] Yes, what I am asking for are figures in the wider sense, some statement as to how many valuations have been made and as to the general progress which this form of taxation is making in the country generally.

Mr. HOBHOUSE

I beg the hon. Gentleman's pardon. I thought he was asking for figures of revenue and nothing else. If I understood he was asking for something else and not detailed information I should have tried to supply him. I confess I thought, and the whole Committee thought, he was asking for definite figures of revenue.

Mr. PRETYMAN

I should like the figures of revenue, but I want a great deal more. We have asked innumerable times for information. May I give one specific instance? I ask the Attorney-General, and I certainly ask the Chancellor of the Exchequer, and particularly on the last occasion that this matter was debated, not to attempt to answer them because he was not too well, but we expected and demand a reply now to the point as to how the site value is calculated upon the occasion. I have asked that question over and over again, and I am told that the entire business community responsible for transactions of this kind are in a complete fog upon the rules and many other points. We have been told, over and over again, that those who are subject to those very intricate, complicated, and novel forms of taxes would be able to receive from the Department and the officers responsible to the Department the fullest assistance and information to enable them to understand the application of these taxes of their property. May I inform the right hon. Gentleman of a fact of which I am sure he is thoroughly well aware, that for the last two or three months the determined policy of the Department and its officers has been to refuse information, and to refuse to commit themselves to any principle of any sort or description as to how these taxes are to be levied. I have letters upon letters from people upon the subject. I have received this morning a letter from a firm of solicitors who produce chapter and verse, and who wrote letters to the Attorney-General, but received no answer whatever, asking for information in certain circumstances, and exactly the kind of information that we were told would be given. They got no information, and I do not wonder at it, because I do not believe the Revenue authorities know themselves in what circumstances or exactly upon what principle this tax should be applied.

I have got a case here from Newcastle to which I referred the other day which shows that persons liable to this tax, so far from getting assistance cannot even get the statutory form. Here is the case of a builder who erects houses. Amongst them he erects a shop. He sells the shop at a profit. No provisional valuation is served upon him, no Form VII. is served upon him. The Department valuers commit themselves to nothing. They make a personal approach to him, and say, "Your profit on this transaction is £250. Pay us £50 Increment Value Duty." He says, "I will do nothing of the kind." And by personal interview of this description in which the Department commits themselves to no principle, and do not send a statutory form, they gradually whittle down their demand from £50 to £18. No principle is given nothing is put on paper, but the demand which was £50 is now £18—and that is taxation. We have an exactly similar case with regard to Mineral Eights Duty. Most complicated matters arise, and the experience there is the same as it is with regard to the Land Taxes. When a strong man has competent business advisers to take up this question on his behalf, and make their case to the Treasury the valuation officers make no commitment on matters of principle, and the man, because he is a strong man, finds the claim against him withdrawn. There is no guidance for any one. I do not want to labour the point, but I tell hon. Gentlemen opposite that the whole business community are being placed to the greatest inconvenience, and there is delay and constant expense.

I do not know whether the hon. Gentleman the Member for the Brightside Division of Sheffield (Mr. Tudor Walters) is in his place. He is an expert, and I challenge him to get up in his place as an expert and a supporter of the Government and deny the statements which I am making. I challenge him to deny that in regard to valuation generally there is complete confusion in the administration of this Finance Act and that nobody knows whether they are liable to this tax or not. I challenge him and the Government to deny that there has been no official indication given as to how site value is to be calculated on the occasion. No one knows where they stand or how the taxes are based. The whole campaign for the imposition of these taxes and the whole defence for the tax up to this moment has never been based as it ought to have been based as a matter of revenue, upon the method of revenue, or of fairness between this individual or another. We know they are based upon an ad captandum argument to the public as to the great advantage they will receive from the expenditure of the money when obtained. This tax is only advocated as a revenue-producing instrument, and its only defence is upon the division of the spoil. I think it is time, after all these months are passed, that we had from some responsible speaker on the Front Bench, an explanation as to how these valuations are going to be made, and how the taxes are going to be levied in order that those subjected to them may really know what they are liable to. The whole responsibility rests with the Government. They have upset the land market and caused endless confusion, and the trouble is increasing every day. It is their duty to the country to help those who are being injured out of the mess into which they have got them. It is time we had a plain statement of the position of the Government in this matter, and I think we have a right to demand such a statement. I wish to draw attention to the remarkable provision contained in Clause 3. We had a statement from the Chancellor of the Exchequer the other day, claiming that the referees who had been appointed were men of exceptional knowledge in dealing with these matters, and I had the pleasure of entirely agreeing with the right hon. Gentleman on that point. Now we see a clause introduced by the Government which seems to indicate that they are afraid of the decisions which may be given by these referees. I hope my expression of confidence in these referees did not fright-en the Government.

Sir RUFUS ISAACS

The clause referred to by the hon. and gallant Member has only been inserted in order to clear up what was most doubtful, that is the point as to whether the Commissioners had the same right of appeal as other persons aggrieved. It was thought that there ought to be no doubt upon this point, and that we had better have a declaration in the Bill. Clause 3 is only inserted in order to remove all doubt from that point.

Mr. PRETYMAN

I do not see why they should have an appeal against their own referees. Who appoints the referees?

Sir RUFUS ISAACS

The Lord Chief Justice. There was at one time a question of the Government nominating them. Objection was raised to that, and as a result, in the Finance Bill a provision was substituted that they should be nominated by an absolutely independent authority.

Mr. PRETYMAN

Of course, I accept the Attorney-General's explanation. I wish now to refer to a matter in regard to which I think it is very unfortunate that the Chancellor of the Exchequer is not here, because he alone can deal with real authority with this matter. Last Friday we had a short Debate, and I then raised a case from Wales. It was the case of the Mountain Ash Building Society, and I read a letter from the Secretary of the society, in which it was stated that 100 working men built 130 houses at a cost of £270 each, these houses having been assessed at £200. That assessment has since been raised to £213. The Chancellor of the Exchequer, when I made that statement, interrupted me and said:— I should like to explain I accept at once from the hon. Member what he states, but I have made some inquiries, and the case which he has given for Mountain Ash requires explanation. If the hon. Gentleman tells me that each of these houses cost £270 to build, of course I accept his statement; but what I am told is it does not cost the builder anything like that sum to build them. In many of these the houses are sold at very extravagant prices, as arrangements have to be made to allow the workmen who buy them to pay back at so much a month or so much a year. That makes the transaction Precarious for the vendor, and he charges his price, but £200 does represent the real value, I am told. Coming from the Chancellor of the Exchequer one would have a right to expect that that statement was founded upon some careful inquiry, because if his words meant anything they meant that he had inquired and that £270 did not represent the value on the ground stated in his interruption. After that I received, unsolicited, from the secretary of the club at Mountain Ash, the following letter:— Referring to the Chancellor of the Exchequer's interruption of your speech last night he is absolutely wrong in the statement he makes. The trustees and committee of management of this club invited tenders for the building of these houses by advertising in the usual way in the local papers, and accepted the lowest tender, which was £258 per house to which must be added the cost of leases, architects' fees for preparing the plans and cost of mortgage. It works out as follows:—

Contract price	…	£258	0	0
Architects' fees	…	7	10	0
Costs of lease per house	…	1	0	0
Costs of mortgage per house	…	1	10	0
Extras	…	2	0	0
	…	£270	0	0

The builder is paid £80 per cent. as the work proceeds, and makes no arrangement whatever with the individual member for payment of money or anything else and runs no risk whatever."

This shows that the interruption of the Chancellor of the Exchequer was absolutely wrong and that my own statement was absolutely correct. Here you have the fact that 100 workmen built 130 houses which actually cost £270. They are valued at £213, and if they sell any of them again at what they cost to build there will be Increment Duty charged upon them, not because they have increased in value, but because they have been undervalued and subsequently sold at their proper value. I have received a further letter from this gentleman, and this is what he says:— A deputation waited upon Mr. Edgar Jones, M.P., yesterday, with reference to the matter, when he informed them that the site values of these houses fixed by the land valuers had nothing whatever to do with the lessees or with the owners for the time being of the dwelling houses, and that these site values had been fixed really as against the freeholder. So that if on any future occasion the freehold is sold at a higher price than the site value fixed by the valuers the freeholder would have to pay Increment Duty. Mr. Edgar Jones also stated that the holder of leasehold premises had nothing whatever to do with the Increment Duty, even if the house was sold at an increased price fifty times. As the hon. Member for Mountain Ash has made that statement to these men, I hope the right hon. Gentleman will feel that he is in duty bound to deny this statement in order that these men may know what the real facts of the case are. That is the kind of thing we have to face. It would not be proper for me to accuse, and I do not accuse, the hon. Member for Merthyr Tydvil (Mr. Edgar Jones) of making and knowingly making a statement which was inaccurate.

Mr. C. E. PRICE

I think it is scarcely fair to refer to a matter of this kind unless the Chancellor of the Exchequer is here to reply. It is scarcely fair to make such accusations against the hon. Member for Merthyr Tydvil when he is not here to answer them.

Mr. PRETYMAN

I am bound to reply to the Chancellor of the Exchequer's statement, and it is unfortunate he is not here. This, however, is a matter of public importance. When the hon. Member opposite interrupted me I was in the act of stating that I made no attack upon the personal veracity of the hon. Member for Merthyr Tydvil. I do not want to make an attack upon him, and if I had intended to do so I should have sent him notice beforehand.

Mr. C. E. PRICE

As the hon. and gallant Gentleman has referred to my hon. Friend the Member for Merthyr Tydvil, may I ask him if he sent any intimation to my hon. Friend that he intended to raise this matter to-night?

Mr. PRETYMAN

No, I did not. If it is considered necessary to send a notice to every hon. Member referred to in the Debate it would be extremely inconvenient. The practice of this House, when any personal imputation is made against any hon. Member is that notice should be sent to him. When the hon. Member interrupted me I was stating that I had no intention whatever of imputing any wilful inaccuracy to the hon. Member for Merthyr Tydvil. My sole object is a public one that the proof may be known.

Sir HARRY VERNEY

What is the date of the letter?

Mr. PRETYMAN

The date of the letter is the 25th February, 1911, and the statement was made on the day before—that is, the 24th February.

Sir RUFUS ISAACS

The hon. and gallant Gentleman is asking me to challenge a statement which he says has been made by my hon. Friend the Member for Merthyr Tydvil, who is not present. I do not know whether the hon. Member made that statement or not, or whether the letter that has been read contains accurately what the hon. Member said. How can I contradict it?

Mr. PRETYMAN

May I be permitted to dissent entirely from that statement? My sole object is to let people know the truth. [An HON. MEMBER: "Is it the truth?"] Here is a signed statement from the secretary of the club, and I maintain that I am making no accusation against the hon. Member opposite. The hon. Member for Merthyr Tydvil received a deputation from the members of this club, and the secretary of the club sent me a report of what they were told. I will withdraw the request I have made to the Attorney-General to contradict what is in the letter. For the present I will leave the hon. Member out of it. All I would say is that an hon. Member has made this statement, and all I want is that the Attorney-eneral when he replies should make it clear that lessees are liable to taxes. I am perfectly justified in saying that the secretary of this club informs me that the club has been officially informed by their Member that they are not liable, and I have a right to ask the Attorney-General to make it perfectly clear that if property held under a long lease by a lessee increases in value that lessee will be liable to Increment Value Duty. That is my point. We never can get a plain statement on these matters, and unless dome special point is made and unless we pin the matter down, as I have done in this case, it is absolutely impossible to get the truth to the people of this country. The whole matter is obscure, and the statements made on the platform, possibly in excellent faith, arise out of the theory on which these taxes are imposed and administered by Somerset House. There are endless points which may be made here. It is only confusing the issue to try and raise too many points at once, and it is impossible to carry them all in my head. I do not know whether the Attorney-General is capable of carrying in his head the real effect of these taxes on land, but I am not. In any particular instance the area covered and the ramifications and complications are so innumerable that it is almost impossible for anyone—it is quite impossible for me and most other people—to form a conclusion as to how any particular case is really affected. I will conclude, as I began, by appealing to the Attorney-General when he speaks later to do what he can to try and clear up some of the points in order that we may know where we stand. There will be the Budget introduced later on, when we shall have further opportunities of debating this question. Will he do what he can now to let us clearly understand how the site value is going to be calculated on an occasion, and whether there is going to be another valuation? We do not know that. Is there going to be another valuation? Is there, or is there not, to be a claim that the whole of the increment cannot be due to the buildings, and some must be due to the site. That is the kind of question I have asked over and over again, and I hope the learned Attorney-General or the Solicitor-General will answer it, and also deal with the other points I have raised.

Mr. MACLEAN

The hon. Member who has just resumed his seat has made a speech with which, both in matter and tone, we are thoroughly well accustomed. These gloomy anticipations and wailing utterances have been heard many times, but, fortunately, the facts are entirely in opposition to the anticipation and belief of the hon. Member. He wound up his speech with the extraordinary statement that these Land Taxes have upset the land market. Well, if they have upset the land market, they have upset it to some very good purpose, because if we are to judge by the impartial criticisms of "The Times," the land market has experienced a very strong recovery, and during the past few months has been most satisfactory, the outlook being most encouraging in every department. I rise more especially to draw the attention of the House to Clause 1, and to express my own personal gratification that it is in the Bill. The friends of the hon. and gallant Member have found out that these taxes are fruitful, and landlords throughout the country have been engaged in the congenial occupation of endeavouring to pass the whole of the Increment Tax on to those who purchase their property.

Mr. PRETYMAN

Not the landlords generally, but only a Member of the Cabinet, Lord Beauchamp.

Mr. MACLEAN

I am going to speak from my own personal knowledge, and I say that is not so. I have seen literally scores of documents containing a contract in legal form drawn up by solicitors, in which it is expressly stipulated that the Increment Duty shall be paid by the purchaser and not by the vendor. I would give a special instance of what happened in the burgh of Innerleithen in my own Constituency. The local authority there had a small portion of land, about half-an-acre, on the Traquair Estate granted to them at the full market value, but with the expressed stipulation inserted in the contract that the community which had made the value of the estate what it was should bear the Increment Duty, which, I think, has been quite generally admitted by hon. Gentlemen opposite should be borne by the landlord, at any rate in that special kind of case. I therefore heartily welcomed this endeavour on the part of the Chancellor of the Exchequer to meet a most unfair attempt as I would describe it, to evade the intentions of the Legislature that those who receive this increment should pay the duty on it. I only hope that when the Bill goes into Committee they will adopt the precedents found in the Income Tax Act and not only make these contracts void, but where they are carried through, specially inflict a penalty upon those who violate the clear intentions of Parliament. There is another point with regard to Stamp Duties on leaseholds to which I wish to draw attention. A practice has sprung up certainly in Scotland since the passing of the Budget, of doing away with any written agreement for the taking of small houses so as to avoid the pressure of the Stamp Duty. That is not a very good position in which to put either the tenant or the landlord, and it is not fair that the protection of a written agreement should be left out for the purpose of evading the Stamp Duty. Inconveniences and hardships occasionally occur, and I would suggest that considerable relief might be afforded in the case of houses below a certain amount, say £15 or £18 a year.

Captain CLIVE

I should like to bring the Debate back to Section 10, which certainly seems to me the most important and revolutionary in the Bill. I would ask the House to consider for a moment or two what justification, if any, can be found for that section. The justification claimed is the relief that is given to the ratepayer by the removal of the pauper disqualification on January 1st last. Three years ago, when the Old Age Pensions Bill was before the House, the question of whether paupers should receive pensions was considered, and it was felt on this side of the House that if it was right to give pensions to paupers they should be given at once. The opinion was strongly expressed that it was not right or in accordance with precedent to pledge whatever Government might be in power, three years later to find the money to give these pensions. The views of the present Government, however, pre- vailed, and the clause was put in promising pensions to paupers in three years time. During those three years the Government was able to consider how the money was to be found, and as late as the autumn of last year their intention was declared to be to try and get some of it back from the ratepayers. As soon as that opinion was given the opinion of the country was also expressed in very clear terms that it would be absolutely unjust to endeavour to recover that money from the ratepayers. There were many belated reforms due to them, and now there was a chance of some relief coming to them it would be a great injustice if they were deprived of that relief by Act of Parliament. The Government probably had two considerations in view: first, it would be a very bad electioneering Bill upon which to go to the country to put back the burden on the ratepayers of the country, and, secondly, that it was undesirable because it would inflict a pauper taint upon those who received these pensions if any money came out of the rates and not out of the Imperial Exchequer. The Government, therefore, had to look round for some other means of recouping themselves, and they have resorted to Section 10 of this Bill. I would like to remind the House how it was that in the Budget of 1909 half the proceeds of these Land Taxes were allocated to the local authorities. It was owing to the very widely expressed opinion among Members of this House that the whole of those taxes ought to go to the local authorities. The Government put in this promise undoubtedly in order to satisfy Members on their own side of the House as well as on this side, and to enable their Budget to go through more easily. The right hon. Gentleman, speaking in Committee on the Budget in 1909, said:— I distinctly stated in my Budget speech that it was the intention of the Government to allocate a portion of the money which they hope to raise by the new taxes to the relief of local taxation in some way or other. I grave a definite and specific promise. If the right hon. Gentleman gave this definite and specific promise in order to get his Budget through, is it right for him to come down to the House now with this Bill cancelling that promise in a most drastic manner. I contend it is on a par with another breach of faith of which the Government have been found guilty. They pledged themselves in the most formal way in both Houses to do something this year if they were in power for the relief of the local ratepayer. In spite of that pledge, all they have done is to postpone the matter for at least another year. It is rather interesting to notice the absence of the Irish Members from this Debate practically during the whole of the afternoon, because the hon. and learned Member for Waterford (Mr. John Redmond) in Committee on the Budget, said:— We stated from the commencement that our support of this clause was conditional on two matters. The first was that the yield of these taxes should go to the local authorities. Not half, but the whole should go to the local authorities. The right hon. Gentleman has not gone the full length we desire, but no doubt we will have other opportunities of pressing our views. They have another opportunity now, but no doubt this is another of the pills they have made up their minds to swallow in the hope some day of getting the sop of Home Rule. It would be interesting to know how many pills the Irish electors will swallow with still only the hope of Home Rule held out before them. It seems to me a very distinct breach of faith. It is not a very straightforward attempt to recoup the Exchequer in a sum which is fairly due to the ratepayers and which the Government do not care to attempt to recover by the method of bringing a Bill into Parliament. It is another ease where one cannot but regret that, in addition to the Chancellor of the Exchequer, there is not some Minister who is especially responsible for the interests of the ratepayers. Probably the most suitable Minister would be the President of the Local Government Board. Over and over again where the interests of the ratepayers are concerned, there is no one but a private Member to advocate them; there is no Member of the Government directly concerned to watch and guard them. Ministers have to go to the Exchequer. They have to obtain money from the Treasury, and knowing the difficulties of securing money for the benefits associated with their schemes, they find it easier to impose the burden on the ratepayer's head. This shows how unprotected the interests of the ratepayers are in this matter. The Financial Secretary referred in his speech to the basis on which grants are given in relief of the rates, and expressed the opinion that successive Chancellors of the Exchequer had varied their policy, because sometimes they thought it right to vary the grant with the amount of the tax, and at other times they took the opposite view that there should be a fixed basis for the grant. I venture to suggest that neither of these bases is quite correct. Surely the more suitable would be a proportionate one. You should have the grant constituting a definite percentage of the amount spent. For instance, in the case of higher education, it might be 50 per cent. on the amount expended in the country on that object.

Mr. GEORGE THORNE

I am anxious to clear up one point which has been referred to several times in the course of this Debate. If I understand the hon. Member who last spoke rightly he suggests practically that the Government are guilty of a breach of faith in regard to the removal of the half of the Land Tax. But I take it that the attitude of the Government is that stated by the Financial Secretary a short time ago, and I therefore do not think there is any justification for the hon. Member's charge. I understood when this matter came before us on the Resolution—and this has now been confirmed by the right hon. Gentleman himself—that this is a purely temporary matter. It is on that point I am asking for some further assurances, to make it perfectly clear, not only to this House, but to the country, that that is the position the Government take. As the Bill stands I do not consider it satisfactory. What the Government intends is, I believe, perfectly satisfactory, but the way in which it is presented to the House in this Bill, under Clause 10, is not satisfactory, and we want something more definite and precise in this behalf. As a temporary arrangement I do not, on behalf of those whom I represent, object to the plan of the Government. I understand that practically the ratepayers are going to benefit rather than the reverse by the advantages they will receive in reference to the payment of these old age pensions.

Those whom I represent will undoubtedly get more money from these proposals of the Government than they would under the original arrangement as regards one-half of the Land Taxes. I repeat, therefore, I can see no justification for the charge of a breach of faith. But I want to have it made perfectly clear that this is a purely temporary arrangement, and that, later on, the promise of the Government in regard to the half-share of the Land Tax will come into force. I ask the Attorney-General, when he speaks, to give us an assurance to that effect. If that be not done the course of events will be this. In Section (91) of the principal Act there is a provision for the payment of half the proceeds of the duties on land values for the benefit of local bodies. Under Clause 10 of this Bill that section is entirely repealed, and ceases to have effect. If later on we are to get back again this half of the Land Tax there is no provision directly providing for that, but there is a suggestion of oscillation, which I do not think is the intention of the Government. I desire to ask whether we cannot have a promise that during the Committee Stage Clause 10 shall be so modified as to definitely express what I understand to be the object and intention of the Government. As it stands it looks like a complete reversal of policy.

We have the statement of the right hon. Gentleman that it is not a change of policy, and I want an assurance that that shall be made clear in the Bill itself. Of course, the assurances given here are given in perfect good faith, and will be carried out, but the localities we represent have not the privilege of being here to listen to the precise statements of Ministers: they have to be content with the secondhand assurances we give them, and therefore I should like, before the Bill is passed into law, it shall be so worded as to make it clear to them that, though Clause 10 absolutely repeals the provision in regard to half the Land Tax going to local authorities—a fact which will lead the public to think the Government is going back on its promise—that is not really the case, and I ask the Attorney-General to give an assurance, desired by many hon. Members on this side, who have had representations from local authorities in all parts of the country, that Clause 10 shall be modified in the direction indicated by the Financial Secretary to the Treasury. We want it made manifest that it is not intended to be a permanent repeal, but only a temporary arrangement, and that when we deal with the whole question the promise of the Government will be given full effect to. I recognise the Government has given a clear indication of their determination to carry this through. It was hoped last year by the Chancellor of the Exchequer that he would be able to deal with the subject this year, but for reasons which entirely satisfy us on this side it is impossible for him to fulfil that promise. In Older that there shall be no undue delay, however, he has promised to appoint an expert Committee to go into the whole question so that at the earliest possible moment practical proposals may be made to the House to carry out an arrangement as regards the definite relationship between Imperial and local taxation. I believe it will give great satisfaction right through the country if, instead of being asked to rely on assurances made, no doubt, in absolute good faith by the right hon. Gentleman, that this is only a temporary arrangement, a promise is given that the Clause will be altered so as to make it perfectly clear that the refusal of the Grant to the local authorities is only a temporary arrangement. I hope the Attorney-General will give us that assurance.

Mr. POLLOCK

I desire to call attention to a portion of this Revenue Bill which has not been referred to hitherto in this Debate—I mean Part 3, containing the clauses referring to Income Tax. Clause 7 deals with the point as to the assession and recovery of Super-tax, and as the Financial Secretary is still present I desire to call his attention to a very curious fact in regard to this Super-tax. According to the forms issued this Super-tax is collected upon a basis of four years' average instead of a three years average, and it is high time, I think, that this question of the three years' average should be reconsidered. The Super-tax at present is collected under Section 66, Sub-section (2) of the Finance Act, 1909–1910, and under that section for the purpose of a Super-tax the total income from all sources for the previous year is taken as the basis of the tax. By reason of the Super-tax being collected on the total income for the previous year, notices have now to go out that the basis for the year returned should be the statutory income of the previous year. But the statutory income of the previous year means the three years before that year.

Mr. HOBHOUSE

Only under Schedule D.

Mr. POLLOCK

Yes, but if the right hon. Gentleman will look at the term of Sub-section 2, Section 66, of the Finance Act, 1909–10, he will see that the basis of the return for the Super-tax is not the statutory income of the year, for the purposes of which the return is being made, but the statutory income of the previous year, which is based on the three years' average before that year. The result is that for the purpose of the Super-tax you have a four years' basis. I desire to ask the right hon. Gentleman has not the time come for considering whether there should not be some facility given to allow Income Tax to be based on the actual income received during the year. A Commission discussed this matter and reported in 1906, giving the present system by no means a complete blessing. In fact, they were prepared to suggest that some alteration should be made. At the present time this three years' system works somewhat unfairly. It may work more regularly for the purposes of the Treasury, but it works unfairly in this case, that, while the Income Tax is collected on the basis of the income actually received during the year, by reason of the three years' average, it often happens that Income Tax has to be paid on a sum which has no sufficient relation to the income actually received during the year. That works hardship in a great many cases, and particularly in the case of professional incomes, in the case, say, of a doctor removing from one locality to another, or in the case of a member of the legal profession where there are many ups and downs; in fact, in the case of all professional incomes there are various circumstances which make the calculation of the income on a three years' basis give by no means a true relation to the actual income which it is the intention of the Exchequer to tax. We are not dealing with a light tax. We have the authority of the Prime Minister himself for saying that an Income Tax of 1s. in the £ is a tax which must ultimately be a burden on the trade of the country and even upon the wages of working men.

8.0 P.M.

We have now got to the point, therefore, at which the Income Tax has risen so high that it has become an actual burden upon the trade of the country, and also affects the wages of the working man. I desire therefore to call attention to the method by which the Super-tax is collected, and also incidentally to raise a point with regard to the fact that facilities are not given for another basis to be adopted for the purpose of calculating Income Tax other than the three years' system. I turn to another point on which I hope the learned Attorney-General will give us some assistance when he comes to speak, and that is what possible meaning can be attached to Sub-section (3) of Clause 8. It is a most remarkable provision, and I have no doubt that the Attorney-General will apply his brilliant intellect to it, and to what it can possibly mean, for it is quite beyond my comprehension. There have been particularly in the Income Tax Act of 1890, various clauses whereby, I presume, they endeavour to keep alive the powers which have been granted in the previous year until the collection of Income Tax has taken place. But this Sub-section provides that:— Any charge or deduction of Income Tax made during any Income Tax year previously to the passing of the Act imposing the tax shall be deemed to be a legal charge or deduction, so far as it does not exceed the charge or deduction which might have been made if the Act imposing the tax had been in force. That is to say it assumes there is no Act in force, and I think it must also be meant to apply to the case of a Bill or a Resolution imposing the tax.

Mr. HOBHOUSE

It only deals with the possibility of the reduction of any tax. Supposing the tax has been imposed at 1s. 2d.—an interim tax of 1s. 2d.—and it is subsequently reduced to 1s. 1d.?

Mr. POLLOCK

I am obliged to the right hon. Gentleman for answering at once, but I can only say that it seems to me inoperative for the purpose. What it says is, supposing the Act imposing the tax had been in force, and that is an hypothesis of there being no such Act at all, and the earlier portion of the Sub-section seems to me to be an absolute contradiction in terms of the last portion. I hope that those who are responsible will consider it more carefully, so that it may be made more clear, and its effect rendered more easy to understand. I turn to the last matter to which I desire to call attention at the present time, and that is to an omission from this Revenue Bill. The Financial Secretary was good enough to say on 8th July last that he would consider the very important question of the method of collecting Income Tax in cases where there were wasting assets, and he laid down on that occasion two propositions which, if I may respectfully say so, seem to be sound. He drew a distinction between a capital invested in the purchase of temporary sources of profit and capital invested in the purchase of temporary interest in a permanent source of profit. I know the question I am dealing with is a very delicate one, but it has a very serious effect upon the country. There is no doubt of that. I have only recently had brought to my attention a case in which it has been determined not to have an English company for the purpose of working a foreign concession because if an English company were brought out it would be liable to Income Tax, and it was therefore thought better to have the whole thing abroad. The consequence was the Revenue lost a large possibility of collecting Income Tax from a company which would have been an English company if the system of collecting Income Tax was based on more equitable lines than it is at present.

Another question of hardship which I wish to call attention to is the method by which the present Income Tax is imposed. In the balance-sheet of a company which I hold in my hands the Income Tax was imposed upon a sum of £15,000. That £15,000 comprised the sum placed to reserve, and Income Tax was actually paid on an insurance reserve and of course on the balance of profit and loss. The balance of profit and loss being £3,900 and no more, the Income Tax is at present calculated and has to be paid on a total of over £15,000, the actual profit alone available for distribution being only £3,900. In that particular case, as in many others, the actual Income Tax received by the Treasury was a sum of 4s. 6d. in the £ instead of 1s. 2d. That is not an extraordinary case, and there are a great number of cases like it where the actual wasting assets are taxed and assessed as well as the real profits from which income is received and dividends paid. In those cases surely a good ground has been made out for asking for some modification of the basis on which Income Tax is imposed, and I desire to call attention to the words of the right hon. Gentleman in July last, and to ask him whether the time has not now come when this matter should be reconsidered. Perhaps I may ask something even more than that, because I am sure that he would agree with me that the present system of the Income Tax Acts is most unsatisfactory. There are something like 150 Acts, and we have to go back to rules made in 1842, before the tax was a permanent one, and when it was entirely temporary, and for the purpose of ascertaining what the Income Tax is you have to consider a number of Schedules, a number of cases set out in reference to those Schedules, and a number of rules founded upon those cases, that are all outside the sections of the Act. The policy dictating the Acts has varied from time to time, and the result is that you get a system which can hardly be called order but perhaps would be better called chaos. Under these circumstances, I ask the right hon. Gentleman to say whether or not he cannot make good if not in the present Bill in the future financial arrangements some of the omissions from the present Act and try to impose the Income Tax more equitably. I also him ask particularly to deal with the question of wasting assets which he himself laid down so lately as last July were treated under a system in reference to which he had an open mind, and I deduce something like a sympathetic mind in the direction of reform.

Mr. JOHN WARD

I have listened to many speeches by the hon. Gentleman the Member for Chelmsford without being interested in the slightest degree, especially upon the subject of the Land Tax. He and I take absolutely opposite views with reference to this tax and its policy—I am afraid that most of the speeches have been delivered against the policy—and he has attempted to show some weakness with reference to the method by which the tax is collected. But to-night he struck one note which, I think is worth a good deal of his previous criticism with reference to this tax. Perhaps I was struck by his criticism and by his arguments, and also by the facts which he quoted, because I have some practical knowledge of the subject which he was dealing with. He drew attention to some correspondence that he had received from a building society I expect, somewhere in South Wales, where a contract had been let after proper competition, tenders having been advertised for, and the actual cost of the building ran to a certain sum, and then when the valuation was fixed under the Finance Act for this tax the valuation was fixed for a sum which was under the sum which was the cost of the building. That is a very serious position of things if it is general throughout the country—a very serious position indeed—because everybody knows hat the advances which builders and contractors and those who are speculating in a business of this kind are affected. Everybody knows that if the Government proceed to depreciate the actual value of the property, especially so far as the building is concerned, there is going to be great difficulty on the part of the speculative builder in getting a mortgage and an advance on the property, and the building industry is going to be very seriously damaged if such a thing is general. For that reason I am bound to say, while being a thick and thin supporter of the policy of this tax, I think for the first time the hon. Gentleman's criticism has hit a weak point in the armour of the Government in regard to this Finance Act if his statements are correct.

I am particularly interested in the statement made in reference to this case, because I have practical knowledge of a similar one, and therefore I should like to know whether there are other cases to which the attention of the revenue officers of the right hon. Gentlemen who will apply the Act has already been directed. I know a similar case myself at Clapham where, as a matter of fact, the builder has been in the business all his life, and knows what the cost of a building will be to a very small fraction indeed in regard to the style of building upon which he is engaged. I think some sort of advance forms were sent to him before the building was actually constructed, and he had to fill up and give an estimate of what the cost would be. He gave an estimate of what the building would cost, and as a matter of fact it came out very much at the price he thought. It is villa property, and the building came out at within £25 of his estimate, which is very good for that class of property. As a matter of fact I have seen his books both as to the cost of the material and the wages of the men employed on this building, and the valuation officer of the locality has fixed the value of the building at a low figure. I do not know whether the land is included as well, nor do I know whether this valuation is one against which a man can appeal, so that the matter can be rectified before it is final. I do not know whether the value gets out to the people who are advancing the money, but I know that a certain number of men have stood off from this building, because of the low valuation which was fixed upon the building, and this prevented the builder getting the necessary advances to go on. Hence all I have heard against the policy of these taxes is not nearly so important as that practical point which the hon. Gentleman put his finger upon with reference to the building society in South Wales. I ask the right hon. Gentleman, when he replies, not to take too much notice of the persistent opposition of the hon. Gentlemen opposite against the whole policy of the Bill, but to deal with the point which we consider a much more important one, the weak element in the method of imposing the taxes, which may be injurious to the building industry if it is general. My personal attention has only been drawn to this one case, and it may have been appealed against, and it may have been rectified now, but, at any rate, I should like to be assured that such a thing as that cannot occur again, for, if it does, instead of assisting in the development of the building trade, it is going positively to injure it.

Mr. HOARE

I am sure we on this side are very much interested in the point which the hon. Member has raised, and if I do not follow that line of argument it is not because I do not agree with him, but because I feel sure the right hon. Gentleman will answer him. I am perfectly confident also that the hon. Gentleman's grievance is by no means unique. There are many others like him. I will confine my few remarks to a part of the question with which I have had very practical contact during the last five years, the question of the Grants to Higher Education. During those years I have had a somewhat large share in drawing up the estimates for higher education in the County of London, and from that point of view I listened with very great interest to the remarks made by the right hon. Gentleman. I own I was somewhat disappointed with those remarks. I will not follow him into the detailed consideration that he gave to the Report of the Finance Committee of the London County Council, which is, I believe, on their agenda to-day, but it is a noticeable fact that whilst the right hon. Gentleman thinks the County of London is going to gain £74,000 under the Finance Act the Finance Committee of the County Council think they are going to lose £104,000. I do not think the right hon. Gentleman made quite enough of the great fall that has taken place in the assessable value of rateable property in London. Even if the whole of that fall is not the result of the legislation of the Chancellor of the Exchequer at any rate I am sure I am within the mark when I say that a great part of the depreciation, £157,000 a year, is due to that cause. Even if you only take it at half it will immediately cancel that gain which the right hon. Gentleman declared the County of London was going to get out of these financial proposals. Then there was another point in the right hon. Gentleman's speech which struck me. He said several times that this was only a temporary arrangement, and that it must not be taken in any way to prejudice the final settlement of the relations between the local authorities and the Imperial Exchequer. If this is only a temporary arrangement I most sincerely hope that when this Bill goes into Committee the Government will accept an Amendment which will define the fact that it is not a permanent settlement, but only a temporary arrangement. That can easily be done in Clause 11, Subsection 5, by deleting the words "in every subsequent financial year." I feel sure that if that Amendment is pressed, after what the right hon. Gentleman has said he can find no reason to disagree with it.

We in London who have had close connection with higher education, have been put into a considerable difficulty by the vacillating policy which has been adopted by Chancellors of Exchequers, not only during the last two years, but during a longer period than that. In 1890, when the Customs and Excise Act started the arrangement which has since become known as the Whisky Duty, I believe it was regarded as a temporary and not a permanent arrangement. It has, however, gone on for twenty years. I hope the temporary arrangement to which the right hon. Gentleman has alluded will have a much shorter life than that. But since then local education authorities have been put into a difficulty by not knowing exactly what this particular branch of revenue was going to bring in, and therefore they find it extremely difficult to draw up their estimates accurately and closely. That was acknowledged by the Prime Minister in 1907, when he was introducing the Finance Bill of that year. He acknowledged, what I think most of us acknowledge at the present, time, that the system of assigned revenue is by no means an ideal system. It was stated in the speech with which he introduced the Finance Bill in 1907. I propose that in future after the dose of the present financial year local authorities should no longer have any concern with probate duty, local taxation, licences, or beer and spirits, but that they should receive from the Consolidated Fund a sum equivalent to the proceeds of these respective sources of revenue that at present go o the local taxation account and at the present rates of charge. So that as long ago as 1907 the Chancellor of the Exchequer of the day, the present Prime Minister, acknowledged that he was bound to keep up the assigned revenue devoted to the purpose of higher education at the rate of the year 1907. That is a very important admission, for at that time the Land Taxes had not been introduced, so that there was no possibility of a confusion between two distinct propositions. The Chancellor of the Exchequer of the day said that the grant for higher education in 1907 must not fail below the level of that year, so that it is quite beside the point when the Chancellor of the Exchequer in the succeeding year said that, because this revenue had fallen off owing to legislation and to change of taste, the grant should be given them from the Land Taxes. The two propositions are quite distinct. The Chancellor of the Exchequer was pledged to keep up the assigned revenue to the point of 1907, I year before the Land Taxes were introduced at all. Since that time we have been put into additional difficulty by the fact that the proposal with reference to the Land Taxes has also been reversed. We were under the impression that to make up the deficiency on the assigned revenue to higher education we were going to receive part of the proceeds of the Land Taxes. That has been reversed during the last two months, and in future we are to receive a lump sum on a fixed basis. I cannot pretend to say what a moiety of the Land Taxes would have brought in, but the important point is that if we had received a half share of the proceeds of these taxes we should have received what probably would have been an expanding revenue. As it is now, we are offered a fixed grant on the basis of a particular year. During the discussion several hon. Members have drawn attention to the dangers of stereotyping the grant at a given year, and I most sincerely concur with what they have said. The particular year taken is the financial year 1908–9. If that year is taken as the permanent standard, progressive education authorities will be put into very great difficulty in future, for I think it will be acknowledged on both sides of the House that if there is any branch of educational expenditure which is likely to grow in future it is that for higher education. We are only just beginning to enter upon expenditure for higher education. During the last generation elementary education had the most prominent place, but the tendency at the present time is to concentrate attention on various branches of higher education.

It is sufficient, in order to give point to what I say, to refer to the case of higher education in London. I do not wish to press the case of London more than that of any other education authority. I believe what is true of London is true of a great many other progressive education authorities in the country. Taking 1908 as the basis, I would ask the House to consider what London has done in regard to one or two particular items. Take the item of trade schools and technical institutes. Everyone who has had any connection whatever with education administration will agree that in future there will be a large expansion of and expenditure on trade schools and technical institutes of various kinds. In 1908 we in London were spending £68,000 on trade schools and technical institutes. The Estimates for the year 1911–12 are no less than £96,285. In the case of secondary schools, in 1908 we were spending £60,000. In the year on which we are entering we expect to spend £88,000. Then there is the case of university education in London, and if there is anything certain in future it is that there will be a large expansion of expenditure on various branches of university education. There is a Royal Commission now sitting, and it is perfectly certain that the recommendations of that Commission will lead to a large expenditure on university education in London. If you take 1908 as the basis of these grants, you will have fixed grants at a given amount, and at the same time you will have an expenditure on higher education expanding very largely in all those various branches. It comes to this, that in 1908 in London our maintenance expenditure on higher education was £412,000, while in 1910–11 our expenditure on higher education will be £571,456; in other words since 1908 the growth of maintenance expenditure alone is about £160,000.

In conclusion, I may say a word with reference to the basis on which these grants should be made. I agree with an hon. Friend behind me who said that it would be much fairer to take a given period of years as the basis on which the grants should be given. I would suggest that three years would be a fair basis. Other hon. Gentlemen went further, and said that these Exchequer grants for education should be proportionate to the amount an education authority is spending on higher education. Expressing my own personal opinion, formed from a somewhat close contact with the administration of higher education in London, I think that basis would be a dangerous one. I think if the Exchequer undertook on any such test or standard to give a certain proportion of the expenditure of the local education authority, it might lead that authority into paths of extravagance. I think it would be far wiser and far more practical if the Exchequer, in conjuction with the Board of Education, took various other tests and standards rather than the gross expenditure of any education authority. I think they should take into account the quantity of the higher education that is being given in any local education authority's area. I think they should also take into consideration the quality of that education. I think further they should take into account the question of the ability of a particular education authority to find funds. It is well known that the resources of various education authorities differ to a very remarkable extent, and it would be quite fair if the Exchequer and the Board of Education in conjunction were to consider the capacity of any authority to find money for higher education. At the present moment the grants for higher education are given regardless either of the quality, the quantity, or the ability of the education authority to pay. As the Prime Minister said to a deputation two years ago, the grants rain on the just and the unjust alike. I would impress upon the right hon. Gentleman opposite that when he comes to make a permanent rearrangement of these particular grants he should take into account the points I have mentioned.

Mr. AINSWORTH

I desire once more to impress on my right hon. Friend the great importance, in fact I might say the necessity, of taking this opportunity of dealing with the question of licensed premises in Scotland, and the scale and amount on which the duty should be calculated. I am looking forward hopefully to the result of the deputation from the licensed holders of Scotland which he has promised to receive, and which will represent, I understand, 11,000 licence holders in Scotland. I believe the House is aware that the system of licences in Scotland is entirely different from that in England. The tied House system does not exist in Scotland. There it is much simpler to deal with the occupier of a licensed house than it is here. What the deputation would impress on my right hon. Friend is that in dealing with the licensed question in Scotland he should make the amount payable per licence proportionate to the amount of liquor consumed. That is a matter very easily ascertained, because when spirits are sent from a distillery to a licensed house to be consumed they must be accompanied by a permit. If the same principle is adopted with every other kind of liquor there would be no difficulty whatever in arriving at the amount sent into the licensed premises for trade in the course of the year; and all we ask for is that the licence should be calculated practically on the amount of business done. Think for a moment how much fairer it is to calculate it in this way than to calculate it on the value of the house. Take the case of large houses. Large sums are spent on building a house. If no liquor was consumed in that house, of course there would be no need for a licence, and therefore it follows that the Licence Duty should start with the amount consumed and be proportionate to the amount consumed. How absurd it is that you should charge a first-class house on the quality of the house, whereas if the same amount of liquor is sold in an inferior house the amount of Licence Duty is very much less. Therefore you are making the Licence Duty payable, not upon the article which is the object of the licence but upon the quality of the house that a landlord chooses to put up in the interest of the public. I sincerely hope that my right bon. Friend will take this matter into serious consideration. I may say that the deputation previously met the Inland Revenue officials, and for myself I think that the arguments are entertained by the Inland Revenue authorities. I can assure you that every Scotch Member will confirm what I say, as indeed it was said earlier by the hon. Member for Ayr Burghs (Mr. Younger) that this is the best and simplest, and, indeed, the only way of settling the licensing question in Scotland, and of saving all sorts of injustice now and of trouble in the future. I may also tell you that the deputation say that they are prepared to find all the money the Chancellor of the Exchequer asks them to find, only they say that they should be called on to pay it in the manner that is most just and suitable for themselves, and the least injurious. I hope that the matter will be taken into serious consideration by the Government. I do not ask them to reply now, but I want them to wait until they see the deputation of Scotch gentlemen, and I trust that after that no further argument will be required to induce them to agree to this change.

Mr. HARRY HOPE

I want in a very few words to support the appeal that has been made by the hon. Member for Argyllshire (Mr. Ainsworth) in asking that these License Duties on hotels in Scotland should be charged on the liquor consumed on those hotels. We know that those hotels in the holiday resorts where the season is short are going to be very seriously hurt by these license duties. I am perfectly sure there is no desire on the part of hon. Members on either side of the House that anything should be done to destroy the hotel-keeping business in these places. We know that these hotels have many difficulties to contend with. There is a very short season, and in Scotland if there is a bad summer the season is extremely short, hough I believe our weather is not as bad as it is often painted by our friends in the south. But I do know that in the west of Scotland these holiday resorts cater for a very large number of holiday-makers, and it is contrary to the interests of the public in that part of Scotland that the hotel keeping business there should be seriously hampered. All we ask is that the money should be collected in a different manner. We ask that instead of these hotel licences being as they are proposed the money should be collected according to the turn-over of liquor on the premises. When we appeal to the Chancellor not to let us off any money but merely to allocate the collection of this money in a different manner, surely he will not turn a deaf ear to our appeal. When this appeal is made and supported by hon. Members on both sides of the House, and when the deputation comes up from Scotland this week, I am sure that the Chancellor, whatever his views may have been in the past, will recognise that the hotel-keeping business in these holiday resorts in Scotland should not be hampered if it can be helped. Therefore I join with much pleasure in the appeal which the hon. Member for Argyllshire has made, and I hope that in a few days when the Chancellor has considered this matter fully he will give a concession which the Scottish people desire.

Mr. BYLES

I am not surprised that the Government is pressed on all sides for greater relief for the local authorities, because Parliament is continually imposing upon municipalities duties and burdens which they are obliged to discharge and towards which Parliament gives them very little assistance. On behalf of the borough which I have the honour to represent I want to say that the Town Council of Salford are very much disappointed indeed at Clause 10 in the Bill which we are considering, the clause which takes away from them the moiety of the produce of the Land Taxes. They consider that these taxes belong to them. Indeed, almost every authority on this subject has conceded that the land values, or at any rate a portion of them, should go to the locality where they are created. They reply that they will grow, and therefore they think that what is being taken away from them to-day will grow into a larger amount in future. They think that where the municipality has shown enter- prise, where it has made parks, tramways, and so forth, and where the population has raised large and flourishing towns, and in that way enriched the landlords, the taxes upon the land really ought to belong to the locality. Although I am quite aware that something is given in return in regard to the hitherto disqualified pauper pensioners, yet we feel, considering that the Land Taxes are to grow in future, that more really is being taken from the municipalities than is given to them. Further than that, the right hon. Gentleman the Chancellor of the Exchequer is really taking back in this clause that which he had unconditionally given, and he is giving in exchange for it only something that the municipalities have a right to, because pauperism, we all hope, may decrease in the future, while Land Taxes, we all hope—at least I do—will increase. My right hon. Friend no doubt has done something to reassure those who represent these municipalities, because he has told us that the deprivation which they are now asked to accept will not be a permanent one, although he cannot promise that these taxes shall be restored next year. This will not prevent me, of course, from voting for the Second Reading of the Revenue Bill. That would be an absurd position to take up. I hope, however, that the matter may be further discussed in Committee by those who feel they have a grievance.

The right hon. Gentleman reminded the House that if any grants were made to the municipalities they must come out of the Exchequer, and that the Exchequer can only be filled by fresh taxation. That is perfectly true, of course; but I maintain two things—first of all, that taxes can be levied much more fairly, with much fairer incidence, than rates can be levied under the present measure. I will not argue that now; I leave that to the common sense of anybody who has looked into the question. Secondly, that the country, as a whole, can bear more taxes far better than the ratepayer can bear more rates. The municipalities cannot stand increased rates, and they must have relief.

Mr. GRETTON

I am not surprised at the criticisms we have heard from different quarters in this Debate, for it is just the kind of experience we expected after the discussion of two years ago. The Budget was discussed very fully and at some length, and, in the speeches which were made, it was criticised with full expert knowledge. If hon. Members opposite had taken the trouble to come into the House during those Debates, instead of staying elsewhere and coming back when the bells rang to blindly vote for a measure which they now so much criticise from different points of view, perhaps there might not have been so much to criticise now. It is now seen that the Budget requires amendment and alteration in important particulars. I propose particularly to deal with the point of view of the Licence Taxes as they affect the English licence holders, and I am more encouraged to do so since we have had m this Debate little more than the Scotch case put forward. The hon. Member for Argyll (Mr. Ainsworth) spoke of the way in which those duties could be levied. He came to the conclusion that the Government is entirely wrong, root and branch, as to the way in which the Licence Duties should be levied, and he went on to advocate what is practically the club system—to abandon the taxation of licences and to put the taxation on the article. The Government say that the tax is to be put upon the licence holder in respect of his monopoly. The proposal on the other side of the House by Members representing Scotland, and by one or two Scottish Members on this side, is now apparently that this principle should be abandoned root and branch, and that the taxation should be put upon the article as sold on those licensed premises. I do not think that is a system which would commend itself to the Inland Revenue, because a more wasteful and inconvenient method of collecting the tax could hardly be conceived. The proper way, if you want to tax your article, is to tax it at its source, to collect the tax when it is in the bulk, when it can be levied easily and with little expense to the Revenue. If the Government taxed the article as now suggested they would have to periodically examine the books of the licence holder and tax him on the beer, wines and spirits bought and sold.

There are fully licensed houses, there are beer houses with on and off-licences, and there are other complicated licences which hon. Gentlemen opposite may learn something about if they turn to the Schedule of the Act of 1909–1910. There are something like 120,000 licences in the United Kingdom, and the proposal is that the Government should make a half-yearly examination of the books of the licence holders in order to collect the Licence Duties. But I do not propose to go into that any further—it is only a symptom of the way in which these duties are pressing upon those who have to pay them. The Government profess in this Revenue Bill to make some concession to the licence holders. I maintain that it is no concession at all; it is a mere act of bare justice, won for them by the judgment of a court of law. The Government make a small return out of an outrageously burdensome duty that ought not to have been levied. The amount actually remitted is very small, but perhaps it is worth something to ease the burden of these Licence Duties. As to Clause 4 of this Bill a statement has been made which can only be excused by the ignorance of those who made it. There is little confusion in this matter, because during the present financial year the House has been asked to pass three Budget Bills. They have passed the Finance Act of 1909–10, the Finance Act of 1910 (which was passed shortly before the Dissolution of Parliament), and now they have this Revenue Bill, which is really another Finance Act under a new name. This is the third Finance Bill that we are asked to pass in one financial year. Section 44 of the Finance Act laid it down that the annual value of any premises should, subject to certain conditions, be one half the gross Poor Law assessment, and that in the determination of the value the duty on the licence was not to be allowed to be deducted. On every occasion on which the matter was discussed in this House we contended that was taxing a man on the value of the tax he paid. That argument was never effectively met. The then Solicitor-General did his best to meet it, but the only argument he put forward was that it had been the practice which had prevailed hitherto. The Government clearly took the view that those words were to be effective, and that the amount of the tax was to be added to the licence value; and that the total value was to be levied on the annual value of the licence with the tax added. In October, 1910, the Government issued instructions to the Board of Customs and Excise to that effect. Meanwhile an appeal was lodged, and the well-known case of Wrigglesworth r. The King came before Mr. Justice Channell in the King's Bench Division on 16th December of last year.

[The hon. Member quoted from the judgment.]

9.0 P.M.

There in that judgment is a direct contradiction of the whole argument put for- ward by the Government. It was said at the time that there was no alteration of the law yet the first time a case is brought forward into a court of law the decision of the learned judge is that there has been an alteration in the law. In this House the Government shut their ears to every argument, and tried their utmost, until they were brought into a court of law, to perpetrate an injustice. The result is that the position of the Government is untenable, and they have brought in Clause 4 of this Bill to put back the system of calculating duties to the same basis as they had been. I thought it was worth while to go into the history of this matter in order that it may be well understood that this is really a concession, brought about by the judgment of a judge of the King's Bench Division. There is another principle attached to the Act which weighs most hardly and unjustly on a very large number of licence-holders, and that is the scale of minimum duties. Probably there are not many hon. Members who realise what that scale is. It begins with a value of £5, according to density of population, while houses of exactly the same value, if they happen to be in a district which has 100,000 inhabitants have to pay £35. Thus in the thickly populated district the house pays £35, and a house of the same kind and doing the same trade a quarter of a mile away pays £5. Those minimum duties are professedly intended to crush out of the licensed trade a certain number of the smaller houses. They have not yet succeeded in doing so. This scale is one of the greatest blots on this so-called reform of licensing taxation, and sooner or later it is a matter to which the Government will have to give serious consideration. Having made my protest against the general sum and amount of these duties, I desire to suggest one or two points on which the Government should accept reasonable Amendments in this Bill. The first is as to the payment of the duty in instalments. The Government during the Budget discussion did make a concession that Licence Duties of the amount of £60 could be paid in two instalments. They make a further concession that that practice may apply to licences of over £20 annual value. Those have worked very well in practice, and I believe the Government desire to continue the practice. As the wording of the Act as it now stands is not quite clear as to whether that concession is to be continued, I think something should be done to make it clear that they do not wish to withdraw it.

As regards seasonal hotels in Scotland, I quite agree with what has been said by Scotch Members. They have a very real grievance, but it is a grievance which is not confined to Scotland, nor to the seasonal hotels in Great Britain. There is a very large class of hotel, with much larger hotel accommodation than is justified by the constant and regular trade, and they are absolutely on the same footing as seasonal hotels. The motor traffic has opened up a great many of the old coaching inns, which, during the spring, summer and autumn seasons do a very good business as hotels, but during the winter season, when the motor traffic is very much diminished, they are very heavily burdened by the taxes they have to pay. Such country inns, which are really hotels, or it may be have a bar, ought to be treated on the same footing as the seasonal hotels in Scotland. We English Members have not such great facilities for getting the ear of the Government as the Scotch Members have, but when this case comes to be debated, as it doubtless will be at a later stage, the case of the English country inn which does a business as an hotel during some part of the year, and only as an inn at other times, will have to be taken into consideration, because it is on all fours with the Scotch case.

With regard to the question of annual value, we were told by the Chancellor of the Exchequer when he was defending his Budget, that the present Licence Duties which were being paid on the Poor Rate Assessment, were only a temporary arrangement. He acknowledged the very great injustice of the arrangement, and agreed that as a permanency it could not be defended. But he said we were to have a new annual value, and that all these things would then be adjusted. We, on this side, asked how long it would be. We were perhaps rather sanguine, and suggested it might take three years, but two of those three years have gone, and we have not seen one of those annual values. We were promised forthwith a new annual value in the cases of houses with a Poor Law Assessment of over £500 which chose to accept the option given by the Budget of claiming to be taxed on the new annual value and not on the Poor Law Assessment. Are any such values in existence? It is time we saw them, and the country should know when this new annual value-is to be ready.

There has been a great deal of misconception and what I may call "sloppy" Debate on this question of annual value. Many hon. Members seem to have the idea that annual value and compensation value can in some way be made the same thing. Obviously that cannot be so. Annual value is what a thing is worth yearly, but compensation value is the total amount you pay a man when you deprive him of his business. Annual value is the price which a man who takes a licensed house would be willing to pay for the opportunity of doing business in that house to make a living for himself with perhaps a margin of profit. If you are going to clear him out, you must not only compensate him for the value of his opportunity to earn a living, but also for depriving him of the living he has actually earned. So that on the top of annual value, the compensation value includes something to be given to the man which you cannot assess and tax him upon. If you tax him on the compensation value, you are not only taxing him on his income by Income Tax, but you are taxing him on it twice in Licence Duty—an obviously absurd thing to do.

Annual value is the value of the privilege which is granted to do a certain business. No man would take a licence unless be saw some reasonable opportunity of making a living, and, if he does very well, perhaps a little profit in addition. I hope there will be no further confusion between annual value and compensation value. Anunal value ought not to include bricks and mortar. It is simply the opportunity to do business in a certain position, wherever it may be, in the buildings provided in that position. I do not think the matter is clear, even in the minds of the Government themselves. I have seen fantastic proposals put forward. The only way in which you can assess the annual value of a house is by the opportunity which it affords of doing trade, on the old sound principle of taking the amount which somebody will give for the opportunity of doing business in that position. You ought not to tax bricks and mortar as well as licence, but you are taxing them now, and that is the complaint which the hotels are making. You are taxing the capital which a man has laid out in bricks and mortar, a great deal of which is of no use for the business. "This question is a very complicated one, and it requires clear thinking to arrive at the proper basis upon which to deal with the matter. The hon. Member for Lincoln (Mr. C. Roberts), in the course of a speech upon the Resolutions on February 27th last, said:— We temperance reformers have a clear promise from the Prime Minister, that when the Parliament Bill has become law and the constitutional question has been settled, the Licensing Bill, or at least a Bill as strong, shall be placed upon the Statute book as one of the first fruits of the victory over the Lords. Did the hon. Member for Lincoln speak with authority when he made that statement, or was he only speaking in his abounding hope?

Mr. CHARLES ROBERTS

I do not think I said anything of the kind. I think the hon. Member is quoting a speech which was not made by me at all.

Mr. GRETTON

The hon. Member is quite right. I withdraw entirely. The speech was made by the hon. Member for the Rushcliffe Division (Mr. Leif Jones). Was that statement made with authority? If it was, if a bargain of this kind has been made by Ministers, a more outrageous and more unjust bargain has never been made in the history of Parliamentary Government. The Licensing Bill was defeated by the House of Lords, but the Government did not choose to make any appeal to the country. One of the arguments used by Members opposite when the Licensing Bill was rejected by the House of Lords was that they would still get their way, because they would be able to get rid of a large number of licences and "get their own back" by "swinging taxes" on the licensed trade. The Budget of 1909 was avowedly introduced to increase to an overwhelming and crushing extent the taxation upon the licensed trade to counterbalance the loss of the Licensing Bill. Spokesmen on behalf of the Government prophesied it so constantly that there is no doubt that it was the intention of the Government. I have followed this matter carefully, and it was never denied that this was the case. They said that they had lost the Licensing Bill, and that they must have something big from the licensing trade. If the Government are going to introduce this overwhelming taxation—and it is now admitted that the taxation is more than it ought to be—the Government are collecting more than they want from the licensing trade—if on the top of that they are going to bring in a Licensing Bill, all I can say is that they will break down the whole licensing system of this country. It will not be worth while to make beer and other liquors, and we shall be brought to the position that it will be less onerous to buy all we can either from German or American brewers. Another point: I very much regret that, after all that has been said, after the enormously overwhelming case which has been brought forward, there has been no concession to the agricultural interest in this country to enable agriculturalists to start the valuable sugar beet industry. Concessions in the matter of the growth of tobacco have been made to Ireland and Scotland. There is no Excise Tax upon sugar. It was not in the Budget, but the Government indicated that a full Excise Duty will be charged when sugar is produced. Agriculturists throughout the country have urged the country again and again to help the beet industry, which is one of the most valuable, and which not only helps agriculture, but the building, machine, and other trades. The Excise might be done away with, or at any rate lowered for a period of years. On behalf of a large body of agriculturalists I want to record my sincere regret that some step of that kind has not been taken in the Bill now under the consideration of the House.

Mr. SIDNEY ROBINSON

I want to direct the attention of the Government to what I consider to be an omission in the Budget of 1909, and also in this Revenue Bill. It refers to the tenant being called upon in certain cases to pay the Reversion Duty, which it was intended the landlord, or the lessor, should pay. Clause 1 of the Bill is necessary to protect the lessee against being charged Increment Duty. So far, so good. But why not also include the Reversion Duty, and protect the tenant, the lessee, in the same way? I hold in my hand a letter from a Constituent with regard to this matter. He gives me an extract from a clause which, it is suggested, should be inserted by the landlord in certain leases, being one of the considerations of the renewal of the lease, and which reads somewhat as follows:— That in the event of the owner being called upon to pay Reversion Duty on this property the lessee shall give an undertaking that he will repay the amount. I think that is an absolute contravention of the spirit of this Clause. I would ask the Government to take this into consideration, and either to add an amending Subsection themselves, or to support me in doing so when this Bill comes before the Committee. That is all I want to say on this matter, which is of very great importance, not only to many in my own Constituency, but to many in different parts of the country.

Mr. WILLIAM HORNE

I would claim the indulgence of the House in speaking for the first time. I heard the other night a challenge from the Government Bench as to the integrity of the valuers of Somerset House. I myself have been a member of the Surveyors' Institution for over thirty years, and I should like to say how confident I am that the men who have been engaged have tried to do their best in the position in which they have been placed. I also, till within the last few months, had the honour of occupying a position of advising the Treasury in several very important negotiations. I can therefore speak personally as to what pressure, at any rate, has been put upon myself in these matters. I can only say that the Treasury did me the honour to imagine that as I should do the best for a client, so I should for the Government, and in no way was any suggestion made that I should act in any way but what I thought best. Speaking as one who for some years had the honour of acting for a Government Department, I am bound to say that one feels that the interest of the Department is one's own interest; one wants to do the very best one can for it. One had unconsciously the feeling that all the rest of the world is against your Department, and it is your duty to do the best you can for it. Perhaps one has a little prejudice on behalf of the Department, and therefore one is not entirely to be taken as quite a safe guide and as being without prejudice in the matter. Speaking as a surveyor, it is not a fact that we are able to give absolutely exact values and figures of properties. We can only give what we believe to be the figures; we can only give opinions. And the more we get of practice the more we get to know about the business, the more we realise our ignorance, and how much there is to learn before we become perfect. The gentlemen the Government have taken on are young men, men who know the theory of valuations, but still cannot know very much from practical experience. I have heard and know of values that have been made of which instances were put forward from this side of the House which were remarkable for their lowness. For instance, there was one gentleman I know who bought a house and land some few years ago, and gave some £1,800 for it. He improved the House, and a short time ago he wished to make a present of it to his son. He had it valued for that purpose, and returned the value himself at £1,800, the sum which he gave for it. But the valuer, on behalf of the Government, reduced it down to £1,200, the amount for which it was mortgaged. I give another case. There was a property upon which the site value for a good frontage was put at £9 a foot. This was objected to by the owners. The valuer met them very fairly, and said: "You are not satisfied; then what do you think the value should be—£15 a foot?" They thought that a fair value. "Very well," said the valuer, "let us put it at £15 a foot." The fact is that it is impossible for valuers to fix exact values in such cases.

There are four different classes of property in this country. Agricultural land can be valued pretty fairly. In the case of new buildings, such as terraces of houses, you can get the site values very fairly, but when you come to the value of building land, or future building land, it is nothing more than intelligent speculation as to the discount you can allow on future value. Nobody can tell how long it is before these values will be created, and nobody knows how many different things may arise in the course of a few years which may destroy them. The fourth class of property, of which again it is impossible for anybody to say exactly what the site values are, are houses in towns which have been built for some years. I am quite certain that it is impossible to give accurately the site values of old-established properties in any town or city. For that reason taxation under this Bill will, I feel sure, be inequitable, because some persons will have to pay more heavily than others upon values which are not exact.

Let me give shortly one example. I had to act for the Government in regard to a particular site, and I had to try and find out what the value of the site was. It was never built upon. I went to two architects. I asked them to imagine they were acting for a client who wanted to make the best use of the site; to treat it as if they were going to plan offices, private houses, or flats, and to get out plans upon every one of these different systems. They did so. I took the plans to a house agent and said, "Tell me what are the best rents you could get for these houses if built." They gave me a list. The architects told me how much the buildings would cost, and I added the interest to the cost of the building, and I deducted that from the rents I should obtain, and the remainder I imagined would be the full ground rent that land would represent. I multiplied that by a proper number of years' purchase, and it became the proper value of the land. My value came out at £10,000, and the surveyors were good enough to say that I was correct. On the other side, surveyors equally eminent went into the witness-box and declared that the land was not only worth £10,000, but was worth £25,000. The result was a verdict was given for, I think, about £16,000. We were not boys engaged in this calculation, and we were honestly trying to get hold of the right value. I at least was trying to get hold of the right value, and the others were doing the same thing, though they disagreed with me. That proves that it is impossible to give exact values where you have to separate the site from the buildings thereon.

In my opinion the Chancellor of the Exchequer is under the impression that it does not matter what figures you put down for a property. I do not think he minds whether you put high figures or low figures. I believe his idea is that all property will value itself in the course of time, and that you will get the proper values by sales and letting effects from time to time and thus you will make a proper rent roll of the kingdom. In that I think he is mistaken. Because values which apparently belong to one property may in reality belong to another property. A house is sold and you think a very large price is given and that you got the value of the house. But that house may have commanding windows over another property. The owner of the second property wishes to pull down his houses to build fresh ones. It is necessary for him to get hold of the first house, and therefore he has to pay a large price for the first one so as to get rid of these commanding lights. Every time properties are divided and every time they are joined together under one ownership you get difference of value. And therefore I am certain that taxation of site values will be unequal, and I believe it will be unfair, and I do not think it is the best way of collecting the taxation which is required. If, money is required by the Chancellor of the Exchequer I feel sure he would have done much better if the taxation had been charged upon rental values and not upon imaginary site values. We can follow rental values to some extent and if we charged upon income we are safe, and at any rate it is. But when we come away from rental values which the property is bringing in at the moment and suggest that the tax should be put upon imaginary figures which may be obtained some time in the future, then I think we are adopting a basis of taxation which is not fair between one man and another, and not calculated to bring in the best terms for the Government.

Mr. McCURDY

I rise to support the Second Reading of this Bill, because, in my judgment, the Finance Act of 1910 does in some particulars require amendment, both in the interests of the country at large as well as in the interests of the present Government. I think we all realise that the Finance Act of 1910 has passed out of the contentious stage. The Land Taxes were not the subject of any serious criticism upon Opposition platforms during the last election, and although the hon. Member for the Ripon Division (Mr. E. F. Wood) said to-night that his party did not consider the Land Taxes a proper method of taxation, that was not an expression of opinion which they thought politic to put forward at the last General Election. We stand in this position. The battle of the Budget of 1909–10 has been fought and won by the present Government. The Land Taxes have come to stay, and I should like hon. Members on this side of the House to consider what our party has gained by this matter and what undisputed territory is now in our possession. In the first place we have secured a valuation of the whole of the land of the United Kingdom, and we have secured it in the form of a Doomsday Book. In the second place—and to this I attach still more importance—we have secured as regards all the undeveloped land in the kingdom a periodical valuation to be made every five years. There are three classes of land taxed under this Act—agricultural land, undeveloped land, and land developed by building upon it. For the purpose of taxation, and for the purposes which the Chancellor of the Exchequer has in view in this Bill, there is no question that the second class—the undeveloped land, which in ordinary parlance is either building land or shortly to become building land—is by far the most important land in the kingdom for the purposes of taxation. There is usually no increment going on in cases of land fully built upon, except in the case of land situated in central positions in large communities. We have also secured a recognition on the part of the country at large, and even I think on the part of the Opposition, of the justice both of our Undeveloped Land Duty and of the principle of the Increment Value Duty contained in this Act.

It was no doubt gratifying to a good many hon. Members on this side of the House to find in the course of the Debate that the hon. and gallant Member for Chelmsford (Mr. Pretyman) bad become a convert to the justice of the principle underlying the Increment Value Duty. We have secured those advantages, and there is no proposal before this House, or likely to be brought before this House, to destroy any of those advantages either by amendment or repeal. On this side of the House we hoped that we had secured something more than that—namely, a firm and solid basis of taxation as the necessities of the nation require it for meeting the social needs of the community. I want to press so far as a private Member may do so upon the Government the enormous importance—if these novel forms of taxation are to serve as a basis for future taxation as was the intention of their authors—of removing from the present Act defects which will lead to cases of hardship which might render the basis useless for that purpose. I think the Attorney-General will bear me witness when I say that in trying to give effect to the will of the representatives of the people in this House in recent years we have experienced not only the constitutional difficulty with which we are dealing in the present Parliament, but we have continually had to face the judicial difficulty, that is the difficulty when our Acts of Parliament get into the Law Courts, of interpretation by the judges, who find themselves, with the best intentions, often incapable of construing the Acts of Parliament so as to give effect to the intentions of this House when those Acts were passed into law. This has been the case with many important measures sent from this House during the last few years. Unfortunate as that may be in the case of ordinary legislation it is still more unfortunate that such a result should follow in the case of an Act which imposes taxation upon the subject. It would be unfortunate for the Government if cases of hardship should arise in construing the Act as it leaves Parliament, imposing burdens which the Government had no intention of imposing.

Especial responsibility rests upon us because we do not brook Amendments by another place, and therefore the responsibility to see that every opportunity is given for careful and considered Amendment and revision of the Finance Act in this House is one upon which I need not dwell. I submit for the consideration of the Government various points in regard to the Finance Act of 1910, in which I think amendment is very desirable. In the first place the basis of the Act is a simple one. It is that as between the site value—a term now familiar to every hon. Member of the House—upon one occasion and the site value of the land, as ascertained on the occasion on which increment value has to be assessed, there is a difference of value found, and upon that difference of value a tax is to be levied. The first point, in my humble judgment, which seriously requires correction is this: the draftsman of the Act has by Section 25 set up an elaborate, a satisfactory, and a proper method of ascertaining the site value of land by valuation. The natural method of ascertaining whether an increment has taken place in respect of site value so ascertained would obviously have been a valuation on the occasion on which increment value was suspected. You would then find whether there was any difference or not. For purposes the wisdom of which I cannot follow the draftsman has adopted another course, and while providing that the original site value is to be ascertained by a proper system of valuation he then provides that on any subsequent occasion it is to be ascertained in one of four wholly different ways according to the occasion on which the Increment Value Duty is to be ascertained. I submit to the Government that although the methods of the Acts in regard to ascertaining site value on the occasion on which it is to be collected may be convenient for the purposes of the Government there ought to be an overriding clause enabling the subject whom it is proposed to tax in respect of increment to have his land re-valued. His land was originally valued as on the 30th April, 1909, and he should be allowed on a subsequent occasion, it may be tomorrow or twenty years hence, when a claim is made to have the land revalued for the purpose of ascertaining the site value on the same basis. I do not know if an Amendment would be in order on this Bill, but I would submit to the Government that in their own interests there should be a like option for the Commissioners to have a proper valuation made. The basis of the supposed site value adopted by the Government—the consideration appearing in the transfer—is a method which, in a number of cases, obviously lends itself to facile means of evading the duty. It is, therefore, in the interest of the Government, as well as of the person paying the tax, that this arbitrary and irrational method of ascertaining the site value on the second occasion should be superseded by a proper valuation. The method of arriving at the Increment Value Duty is in another respect unsatisfactory. Whereas the valuation made on 30th April, 1909, may be a valuation of 1,000 acres, the second valuation, if it is the sale of a plot of land, will be one of land very much smaller in quantity. I am quite sure the hon. Member who preceded me, and who interested the House by his technical knowledge on the subject, will agree with me that the price per acre would in those cases be a very different amount. I therefore submit it is obvious that on that point some provision ought to be made. There ought to be a provision that on the second occasion the valuation shall be made on the footing that the land is being offered on the same conditions as those on which the original valuation was made.

I pass from points of detail to some main points, to which I hope the Government will give their consideration. The first is the question of how this Act is going to affect building estates. The Chancellor of the Exchequer, on 6th October, 1910, received a deputation from the Building Trades, and Mr. Smethurst put to him the case of a builder purchasing land at £300 per acre, laying it out, and by his scheme of development increasing the value to £600 per acre, apparently apart from any expenditure on roads made. The answer of the Chancellor of the Exchequer to Mr. Smethurst was:— That is value created through your own skill. Mr. Smethurst said:— Is not all that £300 difference Increment Value within the meaning of the Act. The Chancellor of the Exchequer said:— Not a penny of it. Mr. Smethurst said:— That is very satisfactory. I do not think it appears on the face of the Act. I may respectfully agree with Mr. Smethurst. I think the declaration of the Chancellor of the Exchequer is satisfactory, but I do not find it upon the surface of the Act. No doubt, the legal advisers of the Government will take care to see that due effect is given to the pledge of the Chancellor of the Exchequer in that respect. I want to ask the Government to carefully consider this point. All building estates come within the definition of undeveloped land. By this Act you provide a quinquennial valuation of the site value of undeveloped land. That valuation will involve finding the gross value, the total value, the full site value, the accessible site value, and the increment value. Once every five years that will be ascertained by the process of valuation. Is it necessary to hamper business operations by having hundreds of valuations, or ascertainments of duty in the course of twelve months, when every five years the matter automatically comes under your quinquennial valuation? I suggest it ought to be possible to make provision that the quinquennial valuation shall be the basis of Increment Value Duty in the case of building estates until the next quinquennial valuation. If that period be too long for the purposes of the Government, there might be an intermeditae valuation.

There is another case which I would ask the Government to consider. It is a case impressed upon me by the builders in my own Constituency, and I am merely representing their views in the matter in putting it before the Government. A builder purchases land for the purposes of his trade, which is that of developing land and building houses upon it, at the full value of the land and finds that land upon his hands. I submit, on behalf of people who axe in that position, that there is no logical ground for imposing upon them the Undeveloped Land Duty. On the one hand, they are not holding up the land, they are doing their best to dispose of it, and, on the other hand, they purchased the land at the full value without any notice that it would be liable to any duty of this kind. I therefore venture to suggest that at any rate for a moderate term of years from the passing of the Act, builders who have purchased land at the full value for the purposes of their trade, should, if they satisfy the Commissioners that they have bonâ fide been endeavouring to develop the land, be exempt from Undeveloped Land Duty. It is a small and a temporary exemption, because future builders will purchase their land with a full knowledge of the obligation imposed by the Act.

Another matter of very considerable importance is the question: how the valuation for Increment Value Duties will affect the owners of small house property. Here again I venture to draw the attention of the Members of the Government, who in the absence of the Chancellor of the Exchequer, may be responsible for framing Amendments to this Act, to the very clear language used by the Chancellor of the Exchequer when meeting a deputation of the Building Societies on the morning of 6th October, 1910. The Chancellor of the Exchequer is reported in "The Times" to have said:— There are two classes of working men investors in house property. The first class is the largest class, that class of workmen who has either built or bought a house. There has been an impression that those workmen would be crushed by the new taxes. Now, as a matter of fact, those workmen would not have to pay a penny under the Finance Act, whether for Undeveloped Land Duty, Increment Duty, or Mineral Bights Duty. I hope those who are responsible for framing Amendments will carefully consider what is necessary to give effect to that very plain declaration on the part of the Chancellor of the Exchequer. I want to point out to the Government how in my humble judgment the draftsman of the Act has caused a great amount of difficulty and trouble in this matter of small houses. The basis of the Act—I will not weary the House with quotations upon the subject from the speeches of the Prime Minister, the Chancellor of the Exchequer, and many others—the underlying principle of the Act is that the community is entitled to take a portion of that wealth which has been added to the land by the exertions and the expenditure o£ the community, and not by the expenditure or exertions of the owner. Surely it is part of that principle that the owners should have benefited by the exertions of the community before the community are entitled to take back a part of that benefit. Let me put this simple proposition. Take an ordinary street of small houses such as you will find in every town of the United Kingdom. The land was worth £50 when the cottage was built. The cottage cost £250, giving a total value of £300. The value of that cottage is dependent on one factor alone, and that is what is the rent obtainable for it. There may come a time when the land upon which that cottage is built is becoming ripe for purposes other than that of cottage property—ripe for development as shop property, or business premises. See what follows. Until the site value of that land for business premises exceeds the site value of the land for cottage purposes, plus the value of the cottage building on it, it will not pay anybody to pull down the cottage for the purpose of building business premises. There is an increment value, but it is an increment value which in the nature of things it is impossible to realise.

See how that applies in 99 cases out of 100, so far as concerns these small house holders to whom the Chancellor of the Exchequer referred to. See how it applies in the case of the working man who has bought his house and land for £250, the value of the land being £50. To put it quite shortly as a result of the original valuation and the method of assessing the site value upon re-sale it is found, under the process of the Act, there is supposed to be an increment of £50. How can the owner realise that increment? He can only realise it by pulling down and sacrificing the cottage, the value of which ex hypothesi was originally £200 and at the present time is £150. It has been said it can be realised by sale. I venture to say that is a mistake. As a matter of fact, may I for one moment, seeing that I am dealing with facts on the hypothesis that the increment value is ascertained by the method of the Act, ask the House to consider this problem in the cold light of fact. That class of property purchased by working men all over this country in small towns, and terrace houses in the immediate outskirts of other towns, is property which, so far as Midland towns are concerned, is on land which was purchased for building purposes ten or fifteen years ago, and was worth a great deal more than it is to-day, because in the meantime the community have been spending their money and labour on making roads in carrying out water and tramway services. Where to? To these houses? Is o; but beyond them, to the outer circle, in opening up for the purpose of land development large areas of land which were not available ten or fifteen years ago, when these houses were built.

10.0 P.M.

Take my own Constituency—Northampton—and take another town with which I am exceedingly familiar, Leicester. In those towns the value of building land upon which small house property of this description is placed has been continuously falling for years past. And if another valuation is to be made as to whether there has been an increment value, the result of that valuation must be to show that no increment has accrued. But under the artificial method of taking the supposed site value for the purpose of getting what is deemed to be increment value you have arrived at a sum which for the purposes of this Act is to be called increment value for the purpose of duty. There is one small point in the valuation clause to which I think the serious attention of the Law Officers of the Crown might be directed. I will put it to them in a concrete form. Under Section 25 Sub-section (4) of the Finance Act of 1910—the section which provides for the deductions to be made from the total value of land for the purpose of arriving at the assessable site value, the important clause is 4 (b). This Clause the Government rely on, and I am afraid mistakenly, as excluding from the operations of this Act increment value, which is proved to the Commissioners to be directly attributable to works executed or expenditure of a capital nature (including any expenses of advertisement) incurred bonâ fide by or on behalf of or solely in the interests of any person interested in the land for the purpose of improving the value of the land as building land, or for the purpose of any business, trade, or industry other than agriculture. I will not discuss the technical language of that section. I will merely ask the Government to consider a concrete case and decide whether, in their judgment, the language of the Section covers it. Take the case of four owners of four adjoining estates who join together and give a guarantee to a railway company of £20,000 to put a station on the land. The hon. Member who preceded me will probably agree that that is a factor which would increase the site value of the land. For my part I cannot find that any part of that increment value would be exempt from the Increment Value Duty under the section as drawn.

I conclude my remarks by saying this, the reason why I press these alterations upon the Government is partly because of an experience I had immediately before the last General Election. Somewhat rashly I agreed to address a meeting of the freeholders of Northampton upon the effect of the Land Taxes. Hon. Members may be reminded of the experience of Bishop Colenso when sent to convert the Zulus, but I can assure them and the Government that when at the conclusion of my remarks a number of small householders, who had purchased houses for £150 or £200, and whose houses were being valued under the Finance Bill, came and asked me what their positions would be under the Act, I did not feel comfortable in the matter. I told them this: the object of this Act, as explained by every Member of the Government, is not to put a tax upon transactions of this kind—transactions in which there is no increment of any kind in fact due to the exertions either of the community or anyone else. The object of the Government, I said, is to put a tax upon that growth in the value of land which we see in urban districts arising from general action and not from any effort on the part of individuals. I said we have the promise of members of the Government that if in the working of a novel and admittedly complex Act eases of hardship should be found to arise the Government will be prepared to amend the Act. I told that meeting with every confidence that if such cases could be shown the Government would be prepared to fairly meet them, and it is with the same confidence that I have ventured to make the remarks that I have done to-night.

Mr. CLANCY

The hon. Member who addressed the House before the last speaker began his speech by saying that he had been employed under various Governments for many years, and I suppose hopes to be again so employed in valuing property. As a person who has never been employed by the Government, and never expects to be employed by one, either in this country or in Ireland, perhaps I may be allowed to say a word or two on the Second Reading of this Bill. With the speech of the hon. Gentleman who preceded me I do not intend to deal, because I regard such a speech as cognate to the Finance Bill of the year before last. It seems to me to have been without reason and at this stage unworthy of consideration. I have no sympathy whatever with the owners of land whose property has been increased in value by any means except their own expenditure not being compelled to contribute their share to the public expenditure. So far as Ireland is concerned I am sure I am not afraid either of the valuation or taxation of agricultural land. Agricultural land cannot be taxed. The great bulk of the future proprietors in Ireland can never be taxed, whether they own urban land or not, because their property would never, in the majority of cases, be more than fifty acres in extent, and it is certain never to be worth £75 per acre. Therefore, whether they have urban land or not, they never can be taxed, and I for one, as representing an agricultural community, or at least a constituency which is largely agricultural, do not feel the slightest anxiety about the taxation or valuation of Land Values. I do not intend to occupy more than a few minutes of time, because I think the sooner we get into Committee on this Bill the better. We have certain objections to make to this Bill, but I think we would prefer to make them in the shape of Amendments to the Bill in Committee.

Meanwhile perhaps I may be permitted to make one or two remarks upon what I think are defects in the Bill. In the first place it seems to me that the Government have not given sufficient consideration to the question of the Licensing Duty as regards Ireland. They have made a concession as regards England, and I think that that was a concession that was loudly called for, and may be very well justified. I think the very least they can give to Ireland is to extend that concession to that country wherever it can be shown that the effects of the Licence Duties in England are the same as in that country. That is a point which I hope we may have an opportunity of dealing with in Committee on this Bill. I heard to-night a speech on these benches in which it appeared to me there is some misapprehension in the mind of the speaker as to the effect of the Finance Bill of last year. I heard a statement that the Stamp Duties of Ireland had been doubled, but that is not so. The Stamp Duties in Ireland are not doubled in the case of any property under £500 in value. That is plain on the face of the Act, and it is probable that in the majority of transactions in Ireland in regard to land and houses, it will be found that they come within £500 value. I do not know whether it was intended that the same statement was true as regards the Succession Duties or the Estate Duties, but at any rate if it was stated that the Succession Duties had been doubled all I can say is that that is not so, for as a matter of fact those Duties have been decreased in the case of a considerable number of small properties in Ireland, and have not been increased in others. My anticipation is, though I may be wrong, that so far as the Estate Duties which will be collected in Ireland in this current financial year are concerned, they will show a decrease instead of an increase over the amount of last year. Another mistake which I think was made was in assuming that Clause 11, Sub-section (2) provides a remedy for what we have always maintained was a great financial grievance. The right hon. Member spoke of that Sub-section as satisfactory—at least, I think that was the word he used, and as making up the deficit in the Local Taxation Account. I imagine he was thinking that the Sub-section of Clause 11 deals with what are called the payments into the Local Taxation Account in respect of the proceeds of the Excise Licence Duties. It has nothing whatever to do with payments into the Local Taxation Account for Ireland of the proceeds of the local taxation licences. It deals with a totally different matter. It deals with what is commonly known as the Whisky Money, and that Whisky Money is not applicable at all to the Grants-in-Aid of anything in Ireland except to intermediate education and the Department of Agriculture and Technical Instruction, and in regard to that matter I think Ireland has a very great grievance indeed. When this grant was first made the total proceeds of the Whisky Money amounted to £71,000 per annum. It has been gradually going down until it reached last year the sum of £40,000. This is crippling the hands of the Intermediate Education Board, and is destroying the efficiency of the intermediate education system. Now, what the Government propose to do is to sterotype the amount received the year before last, which, I think, will be about £50,000, as the payment which will be given in future in aid of intermediate education and as the equivalent for this Whisky Money. I think that is very unfair. It means that you started with a contribution which was admitted to be just of £71,000. You then take a year at which the contributions fell by £27,000 and you take that year as the standard year and thereby decrease our contribution by nearly £20,000 per annum. That is unjust, because, while you have made no other grant to Ireland in aid of intermediate education, you have been making, at any rate for the last ten or fifteen years, grant after grant in aid of intermediate education in England and Scotland. I should like the Government to show how it is that they justify such action. I cannot imagine what the answer can be. With reference to another matter, the question of the reduced grants payable in aid of local services in Ireland out of what is called Local Taxation (Ireland) Account, all I have to say is that the party with which I act regard with profound dissatisfaction the fact that no provision whatever is made in this Bill—it may perhaps be made afterwards—for meeting the deficit on that grant. Here, again, you start with making a contribution of 4s. per week in aid of the maintenance of lunatics in Irish asylums. That was no concession to Ireland in particular. You made a similiar contribution in aid of similar services in Scotland and in England, where, as far as I know, no complaint has arisen in consequence of the failure to continue the grant. In Ireland, on the contrary, the contribution in consequence of increased expenditure has fallen from 4s. a head, which, in my opinion, was not sufficient, to something near half. That is a matter upon which local bodies in Ireland look with great seriousness. I cannot understand why the Government now do not at all events make a special contribution in respect of this matter in consequence of a recent action in the Courts of Ireland. The Secretary to the Treasury will understand what I am saying if no other person does. In 1901 the Government of the day, of which the right hon. Gentleman was not a Member, deprived the local bodies of Ireland of £37,000 for the year. They refused to pay the grant in respect of three months of that year on a pretence which they afterwards abandoned as absurd, but in the very following year the same Government did the very same thing, and it has taken eight years to convince the Government that in the second operation they were as badly advised and acted as wrongfully as in the first instance. They know that in respect of the first three months of 1899 nearly £40,000 was refused, and they said, "Yes, we owe it, and a Court of Law has declared that we owe it, but we will pay it out of the Local Taxation (Ireland) Account." That is to say, they propose to feed the dog with a bit of its own tail. I think the Government are bound in decency to propose an additional vote of £40,000 to make up the deficit which they admit they owe on account of the first quarter of the year 1899. I do hope that the right hon. Gentleman who represents the Treasury will give favourable consideration to the arguments I have advanced.

Mr. WALTER LONG

The hon. Member (Mr. Clancy) began by criticising the speech of the hon. Member for Northampton (Mr. McCurdy), and saying that he did not think it was worthy of notice. Then he declared himself a general supporter of the Government policy in this matter. I am bound to say that if the Government cannot get any better support than they have got from the hon. Gentleman, they are not likely to find much in this Debate to give them comfort. It is true that he poured contempt on the suggestion that Ireland will suffer under the Land Taxes, but as we know the condition of Ireland is entirely different from the rest of the United Kingdom, we do not wonder that he is not so apprehensive as some other Irishmen are, and as we are in other parts of the United Kingdom as to the effect of the taxes on land. I pass to the speech of the hon. Member for Northampton. Nobody who heard that speech can question the fact that the hon. Gentleman displayed a very accurate and technical knowledge of the subject he was discussing. He showed that there are innumerable cases in which this Act must inflict injustice on various branches of industry.

I am not going myself to add to the list of cases that have been brought before you as illustrations of this particular injustice. All I want to do is to point out what is our position and the position of those on behalf of whom complaint has been made tonight. It has been alleged more than once in the course of the Debates in this House, and especially in the country, that the owners of land and a certain class of property which is being specially taxed under this Budget are seeking to evade their responsibilities and to avoid the burdens which ought justly to fall upon them. There is not a shadow of foundation for that charge. On one question alone, the taxes that may fall on land, the contention is not that your system of taxation, the way in which you get at your taxation, that is to say whether it is so much in the £, or how it should be levied, is in itself wrong or inflicts an unfair burden on the owners of that class of property, but the contention is and it has been maintained in this Debate and more than maintained in Debates which preceded it, that this Budget with its new form of taxation was never fully and carefully considered by those who are responsible for it. I have no right to inquire into the secrets of the Government. I have no power to compel information even if I asked for it. But during a great many years that I have been a Member of a Government or of an Opposition nothing has struck me more than the marvellous knowledge of the Treasury of every question with which they are called on to deal; and I, like everybody else who has been brought into connection with the Treasury, realise how remarkably able have been the men who have manned the Treasury year in and year out, and I have marvelled when I have had read the complaints sent to me, letters and memoranda, about the working of this Act, about the extraordinary way with which it was proposed to extract this taxation, that it was possible for a great Department like the Treasury to sanction legislation of the kind.

I confess I should like, if possible, to get the information, to know what trouble was taken when this Act was being drafted, to ascertain what the effect of it would be. You propose to increase taxation under the heads of Income Tax and Super-tax, and propose to levy special taxes on land of a particular character.

Abundant cases have been given to-night to show how badly the Act is working in regard to the new taxes on land. But we have contended and contend now that no attempt whatever has been made by the Government when they are proposing an additional form of taxation on incomes drawn from land to remedy with any degree the injustice which has existed for some time among the different classes of income. At the present moment, in the extra taxation which you levy upon income drawn from land and income drawn from other sources your method imposes the gravest possible injustice upon the income drawn from land. Take two incomes of the same amount, one drawn from land and the other from investments. The owner of the latter income gets practically the full amount for his own enjoyment, whereas the owner of the income from land receives probably not more than 50 per cent., and sometimes even less. I am talking now of not before the deduction has been made, but after the deduction has been made which the law allows. Carry it a step further. Until this Government came into office, I say without hesitation that every Government, to whatever party it belonged, has recognised the fact that realty, and especially agricultural realty, suffers from a grievous injustice under the head of local taxation. What has this Government done? For the first time, in dealing with realty, especially agricultural realty, they have refused to recognise this disability. They have gone further than that: they have not merely increased the taxation, but they have actually drawn upon a new source of revenue, and they have done this in a way which makes the remedy of this grievance far more difficult in the future. The hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) holds a strong view. I remember hearing him say in this House that nobody who owns land has any right to complain of the incidence of taxation upon it, because he bought it subject to these charges.

Mr. WEDGWOOD

I beg the right hon. Gentleman's pardon, I said nothing of the sort. What I said was that all those burdens which are hereditary burdens, have been taken into account when the land has been bought. It has been bought subject to certain charges. These charges are not taxes but rent reserved to the State, and are absolutely incidental to the ownership of the land.

Mr. LONG

I think the hon. Gentleman went further than that on the occasion to which I refer. He made the statement that people who owned land had no right to speak of these burdens. The hon. Gentleman, who is a very eloquent and powerful advocate of his own cause, knows as well as anybody in this House the fact that you have every year the Expiring Laws Continuance Bill, which includes a Bill to relieve personalty, which ought to bear its share just as much as land, and when he sees these charges are connected with a particular class of property, he is ignoring what is the true historical case, and there still remains, and there must remain until it has been dealt with, a very great grievance on the part of the owners of realty, especially agricultural realty, in regard to the question of local taxation.

How has it been dealt with this year? What is the proposal of His Majesty's Government, as I understand it, with regard to the question of education alone? This is one subject on which all bides of the House are agreed as to the necessity of sufficient money being found. How about the Grant-in-Aid of education and the Exchequer contribution? "What is it the Government are doing? This grant was first commenced in 1890, and we find that in the year 1899–1900 the amount granted had risen to over a million. The average for the ten years ending 31st March, 1899–1900 was £884,539. That is the contribution which the Exchequer gave to the local rates. What is the Government proposing to-day?

Mr. HOBHOUSE

Is the right hon. Gentleman speaking of England and Wales alone?

Mr. LONG

That is the amount which was granted; and the amount for the last year, 1908–09, was £807,000.

Mr. HOBHOUSE

The right hon. Gentleman is speaking of England and Wales alone.

Mr. LONG

Yes.

Mr. HOBHOUSE

I think the figures are right.

Mr. LONG

I really do not see the point of the right hon. Gentleman's interruption, because the same injustice arises if you compare the figures with the whole of the kingdom, or if you take, as the hon. Gentleman who preceded me did, a similar point in regard to Ireland. The injustice is the same, but only varies in degree according to the amount. The point I am trying to make is one which is not affected in the least degree by taking the figures for the whole country or for England and Wales. What is it that the Government are doing under this Bill? They are applauded by those who are saying that they are making a great revolution in our fiscal system and remedying injustices. Where are those injustices? It is claimed by hon. Gentlemen opposite that the case of the land is only the case of the large landlord. This affects every ratepayer who is an owner or occupier of real estate in this country, and especially agricultural estate. To come back to the figures I was quoting, the maximum amount was over a million pounds, and the average for ten years was £884,000. The Government are now doing a thing which has never been done before. I do not believe they have got a precedent in the whole of our local taxation arrangements since the first great revolution or reform was made in 1890. In 1890, in 1892 subsequently, and in the passing of the Act of 1894, and, so far as I know, on every occasion upon which the Government of the day had sought to deal with the question of local taxation, they have never before taken one single year's expenditure. [Mr. HOBHOUSE: was understood to express dissent.] I know what the right hon. Gentleman has in his mind—not the grant made by the Exchequer in aid of local taxation, but the distribution of the grant after it had been made by the Exchequer, as between the different local authorities. That is a totally different question. Since the grant in 1878 the practice uniformly followed is that the State has always taken the average of the expenditure in arriving at the amount the State ought to pay when it has adopted the principle that some particular expenditure ought to be regarded as national rather than local. They have not based their expenditure on the lowest year they could find in all the years that have passed, but have taken a period of years and the average of that period.

What are the Government doing to-day. They have not only imposed this fresh tax on realty—and these very considerable ad- ditional burdens upon agricultural realty, but they have gone further. They have abstracted from the sources of revenue available for the relief of local taxation, that particular source from which they are getting their Land Taxes, Undeveloped Land Duty, etc., but when they come to make their contribution, instead of that which the local authorities now get, they take the lowest year they can find of all those available since 1894. Having done that, they say to the local authorities, "We not only add to the Imperial taxation which already falls on property available to you to get the rates from; we not only make an entire change by taking a source of revenue that would be open to you, but we actually decrease the amount which out of the Imperial Exchequer is to go to you in aid of local rates." I venture to say that, apart from those individual statements that have been made in this Debate and in the previous Debate, that this in itself is a sufficient condemnation of the financial policy of the Government. I do not know what the experience of other hon. Members has been, but I have received from all parts of the country, from Gentlemen of different political opinions, the same statement about the operation of this Act. For my part, I profoundly regret the absence of the Chancellor of the Exchequer. We all regret that he should be absent. We doubly regret that his absence should be caused by ill-health. But apart from the cause, I regret it especially, because it is only the Chancellor of the Exchequer who can deal with the criticism and attacks which have been made to-night. I doubt if any Act of Parliament was ever so much the work of one individual Minister in its passage through Parliament as this Finance Act was. We all remember the courageous and powerful speeches with which from time to time the Chancellor of the Exchequer supported the Bill in its long and eventful course in this House. It is really almost impossible for anybody in his absence to deal with the criticisms which have been made.

What do those criticisms amount to? Hon Members opposite cannot continue the charge that they delighted in making at the beginning, that those who were to be taxed were trying to shirk their responsibilities, and were grumbling because they were called upon to make a fresh payment. They cannot continue that charge, because what have been the criticisms, and where have they come from? The hon. Member for the Chelmsford Division said that there was here an expert on these questions who really knew whether or not these complaints were well founded, who really knew whether or not these sections were workable, who really understood whether or not the grievances alleged had a real foundation, and he challenged him to get up in the House and take part in the Debate. It may be that the hon. Member for the Brightside Division of Sheffield (Mr Tudor Walters) will speak later on. At all events, he has not taken part in the Debate so far.

Mr. TUDOR WALTERS

I was not present when the challenge was made. I am perfectly willing to answer any questions put to me if I have an opportunity to speak.

Mr. LONG

I am delighted to hear it. My hon. Friend made this challenge. He said that there was here one hon. Gentleman especially—there may be others—who realises what the effect of these criticisms is. Perhaps I am wrong in using the word "challenge.' It was not used in any offensive sense at all. My hon. Friend suggested that this great and acknowledged expert should tell the House whether, in his opinion, these alleged grievances existed or not. I should be very interested to hear whether the hon. Gentleman will tell us that, speaking from his great experience as an expert on this question, all the statements made by us are without foundation. The speech of the hon. Member for Northampton was a destructive criticism of the Act from beginning to end. He has made a series of statements showing that the Act cannot work unless it is materially altered. We should like to hear these statements answered. If they are not to be answered by those who are experts on the question, we should like to know whether the Government propose to deal with them, or at all events to give them consideration.

I will refer incidentally to only one branch of the subject. Take the effect which the Act has had on building land. Will the Government deny that this has been one result—I am only going to put it generally—that where an estate has been bought as a whole, at what may be called the wholesale price, where a very small portion of it—possibly the site of one house—comes into the market, there you come upon the owner for Increment Duty; there you are charging him with Increment Duty upon one small fraction—it may be of only one-tenth or one-eighth of an acre—while he is compelled to hold the whole of that estate practically at a loss? If that is true—and I am assured on the best expert authority that it is not an exaggerated case—then can it be denied for a moment that one result of your Act has been to place an obstruction in the way of the development of building land? Can it be denied that these taxes fall upon the smaller owners of real estate, whether in the town or the country? What is the cry that hon. Members opposite have indulged in more often than any other during the last few years—though I have not heard it so much lately? Attacks used to be made from the opposite side of the House upon owners of land. We were told that the one desire of the people was to get back to the land. They were to be facilitated in so doing by measures which were to show very little mercy to the existing owners of land. I wonder if hon. Gentlemen opposite are quite so confident now that their policy is right? I notice that the Minister for Agriculture, Lord Carrington, has lately been saying a great deal upon this subject. The Noble Lord has taken quite a fresh line. He really must be a source of continual anxiety to his colleagues. He speaks about these questions with a freshness and want of accurate information which must cause them unfailing anxiety. He talks about "movements in land." He talks about the landlords getting fancy prices for their land. [An HON. MEMBER: "Oh."] An hon. Member interrupted me.

Mr. RICHARD LAMBERT

I was merely interested in knowing what price hon. Members get for land when there is water on it.

Mr. LONG

I think the hon. Gentleman is a new Member. In that case I will not say what I should have said. He shouted out something about "water," and then asked what price I got—

Mr. RICHARD LAMBERT

No.

Mr. LONG

I do not think, under the circumstances, that the incident is worth prolonging. I am perfectly prepared, if the House is interested in the incident, to tell hon. Members of the matter in full detail. Those who have been longer Members than the hon. Gentleman will know that whatever failings I have, I am not afraid to face criticism. Everyone present knows who has looked closely into this question that it is very foolish to talk about booms in land. For this reason: that anyone who will take the trouble to examine the prices of land for the last thirty-five years will find that there has been no "boom"—if by that is meant that land has acquired a special value in excess of that which it previously held. What they will find—and I am thankful for it, because it is a good thing—is that there has been an increased demand for land. [An HON. MEMBER: "Hear, hear."] Yes, certainly; surely nobody thinks, however badly they think of the landlords, that they would be so foolish as to sell their property if there was no increased demand! There has been an increase in the demand, but anyone who looks into the facts and figures will find, if he compares prices to-day with those of thirty years ago, that there is a remarkable difference and decrease in the price, and many men are selling land to-day which they bought at that period. It is foolish to talk of the boom in the price of land to-day. Now comes the point suggested by the Minister for Agriculture that something should be done for the tenant farmers. I am not going to discuss that point. I do not think it would be in order upon the Budget, but I only mention it for this reason: that it is impossible for the Government to justify the form of their taxation, and to say the land is strong enough to bear this increased taxation if they want to bring people back to the land and to increase small ownership. This policy of placing extra taxation upon land and increasing the charges which fall upon the local ratepayers and decreasing the contribution from the Imperial Exchequer which is part of the Government's finance policy will destroy the possibility of smaller ownership of land becoming a reality, and will make it impossible for the labourer, the artisan, and the people you profess to have in view to contemplate anything of the kind as tending towards increased prosperity. I submit the Finance Act is unjust in the first place because it imposes this increased taxation upon owners and occupiers of land, in a way never properly thought out, and because, in the second place, in place of recognising the fact, recognised by all previous Parliaments, that there exists a fundamental injustice as to rates between the different classes of property, the Government have apparently forgotten that fact altogether, and have added to the injustice instead of lessening it. These, in my judgment, are some of the weak points in their system. My hon. Friend who spoke earlier said it was our intention to oppose this Finance Bill at this stage, and I am bound to say I think we could do nothing else if we are to do justice to the cause of the local authorities. I am certain of this, that the Government will find, in their anxiety to get fresh revenue—I think an anxiety which has been quickened by their desire to attack those who have always been hostile to them—that they have prepared for themselves fresh and serious difficulties. To meet those difficulties there is no real attempt made in your financial proposals, and therefore we shall resist them not only because we think they are unjust, but because we think if you had given a reasonable amount of consideration to the schemes which we adumbrated you could have got your increased revenue without injustice, and in a way which would not have exposed you to the damaging criticisms you have received, not only from this side of the House but from your own supporters, who have made it clear that you have not taken the trouble to fully think out the schemes you have asked Parliament to adopt.

Sir RUFUS ISAACS

Like my right hon. Friend who has just spoken and other hon. Members, I regret the absence of my right hon. Friend the Chancellor of the Exchequer from this Debate. I regret it all the more because there is no one in this House who can do such full justice to the subjects which have been discussed in this Bill. I regret his absence also because some of the criticisms have been directed to observations made by my right hon. Friend, and are therefore to a certain extent personal. Moreover, I regret it the most, because I think, had he been present, it would have been a great and joyful evening to him to have realised, when we got to the Second Reading of the Revenue Bill, dealing for the first time with the Land Taxes after the passing of the great Budget of 1909–10, how he has received support and praise for his taxes—

Lord HUGH CECIL

No.

Sir RUFUS ISAACS

Perhaps the Noble Lord will allow me to proceed without interruption. If I may say so, I am afraid the Noble Lord cannot have been present during the whole of the Debate, but whether he agrees with me or not I think he will see that I have some ground for my statement. I will make the observation again, that the Chancellor of the Exchequer would have heard first of all how the Increment Duty has improved in the estimation of hon. Members opposite, [HON. MEMBERS: "No."] I heard a speech from the hon. and learned Member for South Bucks during the course of this Debate in which the burden of his statement was—I think I can paraphrase him fairly—that he found fault with our Increment Tax because it was a tax upon land and not upon other kinds of property, not upon stocks and shares and any other form of valuable property. I know that has been said before, and that the right hon. Gentleman opposite shares that view, but almost in the same breath we are told that the view is that in principle this Increment Tax should go to the local authorities. What I should like to know is whether that is to be an Increment Tax only on land or levied also upon all other kinds of property. [An Hon. Member: "He did not say that."] I think I am stating quite correctly what he said.

11.0 P.M.

Let me proceed to another statement made on the benches opposite. It was stated quite recently that there was a persistent undervaluation. An attack was made by the Noble Lord (Viscount Helmsley), who I remember made a very admirable speech. He attacked the valuers, or rather the valuation, and he was challenged to state whether or not he was accusing the valuers of purposely undervaluing the property or whether he was attacking the Government. His view was that he was attacking the Government. It was pointed out to him that he could only attack the Government if he said the Government were instructing the valuers to undervalue the property. This evening, the hon. Member for Guildford (Mr. William Home), who speaks with authority on a subject of this character, and who is a well-known expert with regard to the valuation of land, has given most eloquent testimony to the impartiality of the valuers who act in these matters, and he was able to atate, and did state, that he entirely dissociated himself from any such attack upon the valuers. There was no ground whatever for it. Moreover, he went on to say, from his great experience, and no doubt everybody will agree, that valuers do very often differ in the statements they make. Of course, they do. At the same time, I would ask him and very many others who are experts with him, whether it does not frequently happen that a person is instructed to value a property without being chosen either on the one side or the other, but to value it impartially for some one person or for the public benefit. I know and I am sure he does—we all know—numberless cases in which persons are appointed for the reason that they have expert knowledge and will, it is thought, quite impartially and fairly determine what is the value of the particular property. I do not quite know why it should be suggested the valuers are undervaluing, except in the sense, which may be perfectly true, that there may be cases in which valuers have made mistakes. Of course, there may be cases in which they have undervalued property just as there may be cases in which they have made mistakes by overvaluing property. In both cases you may get errors, but of course there are means of dealing with them.

I am dealing now with what specially fell from the hon. and gallant Member for Chelmsford (Mr. Pretyman) in the criticisms which he directed to these valuations. In point of fact, it is said that these values are persistently made at an undervalue. I have pointed out on a former occasion, and it has also been referred to in subsequent Debates, how very few have been the Objections received or appeals made to the Referee from the valuations. No doubt the answer will be made, "Oh, yes, but there are a number of persons who would appeal but who cannot." Let me point out what may happen so as to show what opportunities of redress there are of which advantage may be taken before there is an appeal to the Referee. There is a provisional valuation. That is the first step. Any person could object to that informally either by letter or postcard, or he could see the district valuer. There is no difficulty whatever. He can make an informal objection without the expense of having to employ lawyers or surveyors. He can go to the District Surveyor and say, "You have placed too high a value on the property." After that if he is not satisfied—if the District Surveyor adheres to his valuation there is still this course open to him: he can apply to the Commissioners, and the Commissioners, who are only anxious to get through this work without any difficulty and to be as reasonable as possible, will hear what he has to say. All that has to happen before he is pushed to the extreme of having to appeal to the Referee. It is difficult to see under these circumstances what grounds there can be for complaining of this undervaluation when there are all these opportunities open for redress. I will say further that the Commissioners of Inland Revenue would be only too glad if there are real cases, as has been stated in this House, of undervaluation if these are brought to their notice. They will deal with them and give them every possible consideration. I do not think that anybody can well ask for or expect more. I do think the door has been opened very wide, seeing that it enables any one who has a real complaint to have it dealt with. That is all I have to say with regard to undervaluation.

Another point with which I want to deal was raised by the hon. and learned Member for South Bucks. It was really a rather extraordinary point. I do not know whether there were many Members present at the time. The hon. and learned Member took an illustration to make his meaning quite clear, and that having apparently satisfied him he proceeded to argue upon it. He said, supposing he had agricultural land which was let at £2 per acre, but on which there was an excess or improved value of £480. The result would be that although the value was only £2 per acre there would be a halfpenny tax—Undeveloped Land Duty on the capital value, which would produce £1, and from that he deduced the extraordinary proposition that that would reduce the rateable value of the agricultural property from £2 to £1 per acre. He added that what we were doing was in effect to reduce the assessable value of property all over the country. That was the statement of the hon. and learned Member. It is a most remarkable case, but it really does not bear examination for one moment. Let us see what it really means. It means first that supposing your Undeveloped Land Duty had been 1d. instead of ½d. on the £480, the amount of duty to be paid per annum would be £2, and as the agricultural property was worth £2 per acre the result would be that there would be no assessable value at all, because, according to him you have to deduct the value of the tax which you pay from the rateable value of your property. That was the proposition put forward—it reduced the assessable value by one half all over the country. But we will assume that instead of the property being worth £480 it was worth £960 excess value over the £2 agricultural value. There is valuable building land near a town. Its agricultural value is only £2, but as building land it is worth £960 and the Land Duty has to be paid on £2 per acre. Result, deduct your £2 from your assessed value and therefore there is no assessable value on that land at all. That is the hon. Gentleman's proposition, and it rests upon his extraordinary supposition that the more the landlord has to pay the lower the price at which he will let his property.

Viscount HELMSLEY

Does the hon. and learned Gentleman therefore suggest that the rents of this agricultural property should be raised?

Sir RUFUS ISAACS

If the Noble Lord will follow the argument, I will deal with him later. After all, we can only proceed one by one, and I will deal with him later on. I do not intend to have this argument interrupted by a question which is really not relevant, and I am going to pursue and exhaust this case. I want to show into what a delusion the hon. and learned Member must have been misled with regard to this, because under Section 19 of the Finance Act, 1909–10, the Undeveloped Land Tax is borne by the landlord and not by the tenant at all, and on arriving at your assessable value you have to take into account what is rent—what is the value which would be obtained per annum—the annual value of that property, deducting all tenants' rates and taxes. This is not a tenant's tax, and therefore could not be deducted from the assessed value of £2. It is a tax which the landlord has to pay, and therefore, so far from there being any justification for this contention which has been put forward, when you come to examine it, not only is it not the fact, but it cannot possibly be, because of the sub-section to which I have referred, and the landlord is the person who has to pay the tax, and it cannot be imposed upon the tenant—there is no possibility of putting it upon the tenant—and that is stated in Section 19 of the Act of 1909–10. I come to the point raised by the hon. and gallant Member for Chelmsford (Mr. Pretyman) with reference to site value. He asked, how are you going to calculate your site value on an occasion—how is it to be done? It is always a very unpalatable task, but if the hon. and gallant Gentleman will follow me through the Act I will show him. It is very simple if you follow two or three sections from the Act of Parliament, although it may be somewhat extraordinary, because at any rate we are told that we had not given full and complete consideration to the matter, and one of the reasons we had not given full and complete consideration was that we had not dealt with a point of this character. I find it is dealt with quite plainly in the Act, and that you only have to refer to its provisions in order to see what it is that is done. There is a provision as to the way in which the site value is to be arrived at, and in regard to deductions which have to be made for valuation, but it appears that the hon. and gallant Member does not want me to deal with it in this way. I have no particular desire to discuss sections of an Act of Parliament across the floor of the House at all, and the only reason why I am doing it is that the hon. and gallant Member was very insistent upon this, and very anxious that it should be answered, and particularly desired me to reply to it, which I propose to do. If you refer to the valuation section which deals with this particular question, it states that— The full site value of land means the amount which remains after deducting from the gross value of the land the difference, it any, between that value and the value which the fee simple of the land, if sold at the time in the open market by a willing seller might be ex-expected to realise if the land were divested of any buildings. If you want to get the value of the land you have to find out what is the value which the land would realise if sold at the time in the open market by a willing seller—there is nothing very wonderful about that—which they might be expected to realise if the land were divested of any buildings. You have, therefore, a means provided under the Act, and the consequence is that, supposing there is an occasion you have to ascertain the value, you have a means provided for doing it, and you have a means of ascertaining what is the value of the buildings. It is only in respect of the site value that you have to pay the Assessment Tax, and you must first of all, as is shown by the Act, deduct the value of the buildings.

Mr. PRETYMAN

We are told it is nothing to do with the value of the buildings. It is that part of the value which is due to the buildings.

Sir RUFUS ISAACS

If the hon. Gentleman will look at the section—

Mr. LONG

This is the form which you issue yourselves. We do not issue it.

Sir RUFUS ISAACS

I was asked a question specifically under the Statute, and was challenged by the hon. and gallant Gentleman to give an answer. I give him the answer, and refer him, chapter and verse, to the section, explaining what it is that has to be done, and pointing out—whether it is a good means or a bad one is no the question—the means provided under the Statute in answer to the question which is put to me as to what is actually being done at the present time, and the way in which the Act is being administered. All I can say is that I am speaking from instructions as to what actually happens from information as to the mode which is adopted, and what I have said is in accordance with the section of the Act of Parliament which I have quoted, and that Act of Parliament bears out what I have stated.

Mr. LONG

The form I have given the hon. and learned Gentleman is the form issued by the Government, which everyone owning land and that class of property has to fill up. The interpretation by the Government officials of the Statute he has read is not that the buildings, etc., have to be valued, but that you have to take the property covered by buildings, trees, etc., divest it of all this covering, and then arrive at the site value.

Sir RUFUS ISAACS

What the right hon. Gentleman has said to me is only the same thing as the Statute says. I had not the form before me, and of course it was not easy to answer, but the right hon. Gentleman had handed this document to me expecting that I should deal with it. When I come to examine it I find it is exactly in accordance with the section. Of course, you have to divest your land of the buildings upon it. You cannot arrive at the site value with out doing that, and in point of fact there is no real difficulty about the letter which the hon. and gallant Gentleman (Mr. Pretyman) read to the House. That is in regard to the matter of dealing with the houses to which he called attention—the £270 houses. With reference to this it is stated that there is property valued at £213. That is the valuation put upon it. It is said that the site value is £18. If your valuation of the property at £213 is right and if the site value is £18 there will be no difficulty in arriving at what the rest of the property is valued at.

Mr. PRETYMAN

May I point out to the learned Attorney-General that that is original site value, and what I have asked and what I want to know is not how the original site value is calculated—we have arrived at how that is being done—but how the site value on the occasion is to be valued according to Section 2. Is there to be another valuation on the occasion or is there not?

Sir RUFUS ISAACS

I wish to draw the hon. and gallant Gentleman's attention to Section 2 of the Act, which deals with the particular point. It is to be "subject in each case to the like deductions as are made, under the general provisions of the part of this Act as to valuation." That is the valuation. Therefore, having got so far we have got to turn to the section dealing with the valuation in order to arrive at how it is to be calculated.

Mr. PRETYMAN

The values are to be different.

Sir RUFUS ISAACS

I am replying to the point put to me. The hon. and gallant Member may not agree with me, but at any rate it is the view I am expressing in answer to his question. If you look at Section 25, Sub-section (2), it will show you that there is a deduction for buildings and a revaluation of the site value.

Mr. PRETYMAN

Is that to be a revaluation?

Sir RUFUS ISAACS

There is to be a revaluation of the site. What you do is, you have got to ascertain what the value of the buildings is, and from that there is no difficulty in getting at the site value. When you have deducted the value of the buildings you have arrived at the site value.

Mr. PRETYMAN

So far as it goes I thank the learned Attorney-General for his explanation, but he must bear in mind that on these two occasions—the original occasion and the occasion when the duty is leviable—all the valuations will have changed. Has there then to be another valuation in order to ascertain those different valuations? The words in Section 2 are "like deductions." Those words are extremely vague, and what we cannot ascertain in practice is—is there to be a revaluation or valuations—another valuation on the second occasion when the site value is calculated?

Sir RUFUS ISAACS

There is a sum of money which is passing, say, on the sale, the consideration for the transaction. To arrive at your site value you have got to deduct the value of the buildings. You have got to arrive at that value, and of course you may have to value those buildings for that purpose, and deduct that from the consideration money which has passed, and in that way you arrive at the site value. Therefore when you come to examine the letter which contains a reference to a statement made by the hon. Member for Merthyr Tydvil, who is not present, it is quite impossible for me to deal with an answer which he is supposed to have given to a question of which I know nothing and nobody in the House knows anything. Whether he said what he is alleged to have said in the letter of course I cannot say.

I have dealt with the question which was raised with regard to site value. A question was raised, I think, by the hon. and learned Member with reference to Increment Duty. In respect of that it is quite plain if your house comes within the exemption clause, if it is one of the houses for example with a rental of not more than £16 then it does come within the exemption clause in a district like this. Consequently if you are dealing with a house worth £200 and let at £16 it is quite clear that there is no increment to pay at all, always provided that it is occupied for twelve months. Further, even in any circumstances there is the question of ten per cent. which has to be taken into account. Of course the transferror will have to pay if it does not come within the exemption and that is the answer which I give to the question that has been put to me, and I hope I have made it quite plain. Something has been said by the right hon. Gentleman about the criticism which was administered to the Budget of 1909–10 by my hon. and learned Friend the Member for Northampton (Mr. M'Curdy). A very interesting speech was made by him which threw a good deal of light on the working of this Act. I do not think there is anyone who would not say that there must be difficulties and that points must arise which will have to be dealt with and discussed and made the subject of amendment. My hon. and learned Friend, as he was entitled to do, pointed out certain matters and made certain criticisms which he thinks could quite properly be applied to the Act, and we quite recognise that they should, and of course, will, receive careful consideration. But why should that justify the right hon. Gentleman in his statement to us now, that this shows that these taxes have not been properly or carefully considered?

All I wish to say is that the Budget surely was discussed fully enough and perfectly enough in this House. It was discussed not only here but in the country. Now that we are dealing with it here, it may be quite possible—I do not dispute it—that there are points which will have to be met, just as occurs with every other scheme of taxation of this kind. It occurred in the same way with Sir William Harcourt's Death Duties, introduced in 1904. There were amendments to make. Inequalities and hardships were pointed out which were made the subject of various Statutes in the years that followed. One must always have to deal with these cases of hardship under a new scheme of taxation.

I do not propose to go in detail into what has been said with reference to licensing matters, because it strikes me that they can be more properly dealt with in Committee. I quite appreciate what was said by the hon. Member for the Ayr Burghs (Mr. Younger) in regard to Scotland. I think it requires very careful consideration, and the matter will be dealt with at a later stage. In reference to the Wriggles-worth case, some observations have been made by an hon. Member opposite, and I cannot help thinking that they were ungracious in the circumstances, because the Chancellor of the Exchequer has dealt with the matter very fairly. In regard to the criticism of this particular clause in the new Bill, the details can be discussed in Committee. But, broadly and substantially, I do not think it will be disputed that the Chancellor of the Exchequer has dealt fairly with the point that arises in consequence of this decision. On the question of the local taxation settlement, a speech was made by the hon. Member for Wolverhampton, and he suggested that the Government should introduce in their Bill a provision to show that the settlement was to be temporary, and not permanent. I cannot see why that should be done, because, after all, the statement made to the House by my right hon. Friend this evening was that this is a temporary settlement and not a permanent one, and that it is not intended that it should be permanent. All that is intended is that it should be a temporary settlement, and it is not necessary to introduce anything into the Bill in order be deal with that.

In my view, and I think in the view of the majority of the House, the Chancellor of the Exchequer is highly to be congratulated upon the present state of affairs, and also upon this—that, in spite of the difficulties there are in administering a new scheme of taxation of this kind, in spite of all the difficulties we have heard about in connection with Form IV., yet nevertheless, everything is proceeding satisfactorily. There have been, as we know, almost complete returns to Form IV., and they were mostly full of the information which is required, and as I think I stated before according to the view of the Commissioners the statements which are made in them appear to be quite honestly given and of considerable value. Therefore, that being so we find no reason to be dissatisfied with the present state of affairs in reference to the land taxes. After this discussion I hope that the House will now be ready to pass to the Second Reading of this Revenue Bill, which in spite of its very few clauses has been very fully discussed.

Mr. JOHN WALSH

I would crave the indulgence of the House while I say a few words on this important subject. I am very sorry to say that this affects one of the few industries in Ireland and also the farming community in Ireland. As every hon. Gentleman knows, Irish whisky had gained a name over the world and the only branch of that industry left in Ireland is injured very much by this very Bill. We have a little distillery in Bandon where 300 hands were employed, and they were only worked three months last year. Barley growers were not able to sell their barley, and they could get no grains for their cattle. I am perfectly satisfied that it is a great hardship for the country to pay this tax on whisky. The liquor trade is only living from hand to mouth. As to this tax of three and ninepence on whisky, from what I see here to-night I hold out very little hope of the tax being taken off. I heard some hon. Gentlemen on the opposite side say that there was no in-crease in Land Duty and Stamp Duty.

I can quote a case in point, and I hold that one fact is worth a thousand assertions. A widow living in my part of the country disposed of her land to her three children in natural love and affection. She went up to Dublin and word came down from the authorities there that they must inquire into it. A pound was the old Stamp Duty in that case. Notice came that she must get a Valuer, and so a valuer and an auctioneer had to be got. They calculated the hens and the ducks and the geese, and down came word that the tax was £15 upon that particular farm. They would not pay it, and got a solicitor to send on a brief to junior counsel in Dublin, and word came down from counsel that the figures were absolutely correct, and that they should pay. A further letter was received, saying that if they did not pay within ten weeks there would be £10 more to pay. I know a small farmer in my own district, with only three cows and 15 acres, who sold a little bit of land the other day, and the tax was 10s. In the case of ten per cent. of the farmers in County Cork, if they sold their holdings to-morrow, the value of the land, stock, and chattels would not exceed £500. I should not like this tax to be continued without entering my protest. There is also a principle involved. We were already overtaxed to the extent of two and three-quarter millions sterling, and there was no reason why this additional taxation should have been imposed. The British Debt in 1801 was £45,000,000 and the Irish Debt only £28,000,000. From that date to January, 1817, the annual charge was only £1,200,000, but in 1817 it was increased by £4,000,000. I simply enter my protest against further taxation. I intend to vote against the Bill, and I hope other Irishmen will do the same.

Question put, "That the Bill be now read a second time."

The House divided: Ayes, 253; Noes, 182.

Division No. 38.]	AYES.	[11.45 p.m.
Abraham, William (Dublin Harbour)	Barton, W.	Brocklehurst, W. B.
Acland, Francis Dyke	Beale, W. P.	Brunner, J. F. L.
Addison, Dr. C.	Beauchamp, Edward	Bryce, J. Annan
Agnew, Sir George William	Beck, Arthur Cecil	Burke, E. Haviland-
Alden, Percy	Benn, W. W. (Tower Hamlets, St. Geo.)	Burns, Rt. Hon. John
Allen, Arthur Acland (Dumbartonshire)	Bentham, G. J.	Burt, Rt. Hon. Thomas
Armitage, R.	Birrell, Rt. Hon. Augustine	Byles, William Pollard
Asquith, Rt. Hon. Herbert Henry	Black, Arthur W.	Carr-Gomm, H. W.
Atherley-Jones, Llewellyn A.	Boland, John Pius	Cawley, Harold T. (Heywood)
Baker, H. T. (Accrington)	Booth, Frederick Handel	Chancellor, H. G.
Balfour, Sir Robert (Lanark)	Bowerman, C. W.	Clancy, John Joseph
Barran, Sir John N. (Hawick)	Brace, William	Clough, William
Barran, Rowland Hirst (Leeds, N.)	Brady, P. J.	Clynes, J. R.
Barry, Redmond John (Tyrone, N.)	Brigg, Sir John	Collins, G. P. (Greenock)
Collins, Stephen (Lambeth)	Jones, W. S. Glyn- (T. H'mts, Stepney)	Price, C. E. (Edinburgh, Central)
Corbett, A. Cameron	Jowett, F. W.	Price, Sir Robert J. (Norfolk, E.)
Cornwall, Sir Edwin A.	Joyce, Michael	Radford, G. H.
Cowan, W. H.	Keating, M.	Raffan, Peter Wilson
Crawshay-Williams, Eliot	Kellaway, Frederick George	Rainy, A. Rolland
Crumley, Patrick	Kilbride, Denis	Reddy, M.
Dalziel, Sir James H. (Kirkcaldy)	King, J. (Somerset, N.)	Redmond, John E. (Waterford)
Davies, E. William (Eifion)	Lambert, George (Devon, S. Molton)	Redmond, William (Clare)
Davies, Timothy (Lincs., Louth)	Lambert, Richard (Wilts, Cricklade)	Redmond, William Archer (Tyrone, E.)
Davies, Sir W. Howell (Bristol, S.)	Lansbury, George	Rendall, Athelstan
Dawes, J. A.	Law, Hugh A.	Richards, Thomas
Delany, William	Lawson, Sir W. (Cumb'rid, Cockerm'th)	Richardson, Thomas (Whitehaven)
Denman, Hon. Richard Douglas	Leach, Charles	Roberts, Charles H. (Lincoln)
Devlin, Joseph	Levy, Sir Maurice	Roberts, G. H. (Norwich)
Dickinson, W. H. (St. Pancras, N.)	Lewis, John Herbert	Robertson, Sir G. Scott (Bradford)
Dillon, John	Logan, John William	Robertson, J. M. (Tyneside)
Donelan, Captain A. J. C.	Lundon, T.	Robinson, Sydney
Doris, W.	Lyell, Charles Henry	Roch, Walter F. (Pembroke)
Duffy, William J.	Lynch, A. A.	Roche, John (Galway, E.)
Duncan, C. (Barrow-In-Furness)	Macdonald, J. R. (Leicester)	Rose, Sir Charles Day
Edwards, Enoch (Hanley)	Maclean, Donald	Rowlands, James
Edwards, John High (Glamorgan, Mid)	Macnamara, Dr Thomas J.	Samuel, Rt. Hon. H. L. (Cleveland)
Esmonde, Dr. John (Tipperary, N.)	MacNeill, John Gordon Swift	Samuel, J. (Stockton)
Esmonde, Sir Thomas (Wexford, N.)	M'Callum, John M.	Samuel, S. M. (Whitechapel)
Essex, Richard Walter	M'Curdy, C. A.	Scanlan, Thomas
Esslemont, George Birnle	McKenna, Rt. Hon. Reginald	Seely, Col., Rt. Hon. J. E. B.
Falconer, J.	H'Laren, H D. (Leices.)	Sheehy, David
Farrell, James Patrick	M'Laren, Walter S. B. (Ches., Crewe)	Shortt, E.
Fenwick, Charles	M'Micking, Major Gilbert	Simon, Sir John Allsebrook
Ffrench, Peter	Markham, Arthur Basil	Smith, Albert (Lancs., Clitheroe)
Field, William	Marks, G. Croydon	Smyth, Thomas F. (Leitrim, S.)
Fiennes, Hon. Eustace Edward	Marshall, Arthur Harold	Snowden, P.
Fitzgibbon, John	Martin, J.	Soares, Ernest Joseph
Flavin, Michael Joseph	Masterman, C. F. G.	Stanley, Albert (Staffs. N. W.)
Gelder, Sir W. A.	Mathias, Richard	Strachey, Sir Edward
Gill, A. H.	Meagher, Michael	Summers, J. W.
Glanville, H. J.	Weehan, Francis E. (Leitrim, N.)	Taylor, John W. (Durham)
Goldstone, Frank	Molloy, M.	Tennant, Harold John
Greenwood, Granville G. (Peterborough)	Mond, Sir Alfred Moritz	Thorne, G. R. (Wolverhampton)
Grey, Rt. Hon. Sir Edward	Money, L. G. Chiozza	Thorne, William (West Ham)
Guest, Hon. Major C. H. C. (Pembroke)	Mooney, J. J.	Toulmin, George
Guest, Hon. Frederick E. (Dorset, E.)	Morgan, George Hay	Trevelyan, Charles Philips
Gulland, John William	Morrell, Philip	Ure, Rt. Hon. Alexander
Gwynn, Stephen Lucius (Galway)	Munro, R.	Verney, Sir Harry
Hackett, J.	Murray, Captain Hon. A. C.	Wadsworth, J.
Haldane, Rt. Hon. Richard B.	Needham, Christopher T.	Walters, John Tudor
Harcourt, Robert V. (Montrose)	Neilson, Francis	Walton, Sir Joseph
Hardie, J. Keir (Merthyr Tydvil)	Nolan, Joseph	Ward, John (Stoke-upon-Trent)
Harmsworth, R. L.	Norton, Capt. Cecil W.	Ward, W. Dudley (Southampton)
Harvey, A. G. C. (Rochdale)	O'Brien, Patrick (Kilkenny)	Waring, Walter
Harvey, T. E. (Leeds, W.)	O'Connor, John (Kildare, N.)	Warner, Sir Thomas Courtenay
Harvey, W. E. (Derbyshire, N. E.)	O'Connor, T. P. (Liverpool)	Webb, H.
Harwood, George	O'Doherty, Philip	Wedgwood, Josiah C.
Haslam, James (Derbyshire)	O'Dowd, John	White, Sir Luke (York, E. R.)
Havelock-Allan, Sir Henry	Ogden, Fred	White, Patrick (Meath, North)
Haworth, Arthur A.	O'Grady, James	Whittaker, Rt. Hon. Sir Thomas P.
Hayden, John Patrick	O'Kelly, Edward P. (Wicklow, W.)	Wiles, Thomas
Hayward, Evan	O'Malley, William	Williams, J. (Glamorgan)
Hazleton, Richard (Galway, N.)	O'Neill, Dr. Charles (Armagh, S.)	Williams, P. (Middlesbrough)
Henderson, Arthur (Durham)	O'Shaughnessy, P. J.	Williamson, Sir A.
Henderson, J. M. (Aberdeen, W.)	O'Sullivan, Timothy	Wilson, Hon. G. G. (Hull, W.)
Hinds, John	Palmer, Godfrey Mark	Wilson, John (Durham, Mid)
Hobhouse, Rt. Hon. Charles E. H.	Parker, James (Halifax)	Wilson, J. W. (Worcestershire, N.)
Holt, Richard Durning	Pearce, Robert (Staffs., Leek)	Wilson, W. T. (Westhoughton)
Howard, Hon. Geoffrey	Pease, Rt. Hon. Joseph A. (Rotherham)	Winfrey, Richard
Hudson, Walter	Philipps, Col. Ivor (Southampton)	Wood, T. M'Kinnon (Glasgow)
Hughes, S. L.	Phillips, John (Longford, S.)	Young, W. (Perthshire, E.)
Isaacs, Sir Rufus Daniel	Pickersgill, Edward Hare
Jardine, Sir J. (Roxburgh)	Pirie, Duncan V.
John, Edward Thomas	Pollard, Sir George H.	TELLERS FOR THE AYES.—Master of Elibank and Mr. Illingworth.
Johnson, W.	Ponsonby, Arthur A. W. H.
Jones, H. Haydn (Merioneth)	Power, Patrick Joseph
NOES
Aitken, William Max	Baldwin, Stanley	Beckett, Hon. W. Gervase
Anson, Sir William Reynell	Balfour, Rt. Hon. A. J. (City Lond.)	Benn, Arthur Shirley (Plymouth)
Archer-Shee, Major M.	Banbury, Sir Frederick George	Benn, Ion H. (Greenwich)
Arkwright, John Stanhope	Banner, John S. Harmood-	Bennett-Goldney, Francis
Astor, Waldorf	Baring, Capt. Hon. G. V.	Bentinck, Lord H. Cavendish-
Bagot, Lieut.-Colonel J.	Barlow, Montague (Salford, South)	Bigland, Alfred
Baird, J. L.	Barnston, H.	Bird, A.
Baker, Sir R. L. (Dorset, N.)	Bathurst, Hon. A. B. (Glouc., E.)	Boscawen, Sackville T. Griffith-
Balcarres, Lord	Beach, Hon. Michael Hugh Hicks	Boyton, J.

Brassey, H. Leonard Campbell	Henderson, Major H. (Berks, Abingdon)	Quilter, William Eley C.
Bridgeman, William Clive	Hickman, Col. T. E.	Ratcliff, Major R. F.
Bull, Sir William James	Hill, Sir Clement L.	Rawlinson, John Frederick Peel
Burdett-Coutts, W.	Hillier, Dr. A. P.	Rice, Hon. W. F.
Butcher, J. G.	Hills, John Waller	Roberts, S. (Sheffield, Ecclesall)
Campion, W. R.	Hoare, S. J. G.	Rolleston, Sir John
Carlile, E. Hildred	Hohler, G. F.	Ronaldshay, Earl of
Carson, Rt. Hon. Sir Edward H.	Hope, Harry (Bute)	Rothschild, Lionel de
Cassell, Felix	Hope, James Fitzalan (Sheffield)	Royds, Edmund
Castlereagh, Viscount	Horne, W. E. (Surrey, Guildford)	Rutherford, John (Lancs., Darwen)
Cator, John	Houston, Robert Paterson	Rutherford, Watson (L'pool, W. Derby)
Cave, George	Hunter, Sir C. R. (Bath)	Sanders, Robert A.
Cecil, Lord Hugh (Oxford University)	Ingleby, Holcombe	Sanderson, Lancelot
Chaloner, Col. R. G. W.	Jardine, E. (Somerset, E.)	Sassoon, Sir Edward Albert
Chamberlain, Rt. Hon. J. A. (Worc'r.)	Jessel, Captain H. M.	Scott, Leslie (Liverpool, Exchange)
Clay, Captain H. H. Spender	Kebty-Fletcher, J. R.	Scott, Sir S. (Marylebone, W.)
Clive, Percy Archer	Kerr-Smiley, Peter Kerr	Sheehan, Daniel Daniel
Clyde, J. Avon	Kerry, Earl of	Smith, Harold (Warrington)
Compton, Lord A. (Brentford)	Kinloch-Cooke, Sir Clement	Stanier, Beville
Cooper, Richard Ashmo'e	Kirkwood, J. H. M.	Stanley, Hon. G. F. (Preston)
Courthope, G. Loyd	Knight, Capt. E. A.	Starkey, John R.
Craig, Captain James (Down, E.)	Larmor, Sir J.	Staveley-Hill, Henry
Craig, Norman (Kent, Thanet)	Lawson, Hon. H. (T. H'mts, Mile End)	Stewart, Gershom
Craik, Sir Henry	Lewisham, Viscount	Sykes, Alan John
Crichton-Stuart, Lord Ninian	Lloyd, G. A.	Talbot, Lord E.
Cripps, Sir C. A.	Long, Rt. Hon. Walter	Terrell, G. (Wilts, N. W.)
Croft, H. P.	Lonsdale, John Brownlee	Terrell, H. (Gloucester)
Dairymple, Viscount	Lowe, Sir F. W. (Birm., Edgbaston)	Thomson, W. Mitchell (Down. North)
Dixon, C. H.	Lyttelton, Rt Hon. A. (Hanover Sq.)	Thynne, Lord A.
Doughty, Sir George	Mackinder, H. J.	Touche, George Alexander
Douglas, Rt. Hon. A. Akers-	Magnus, Sir Philip	Tuillibardine, Marquess of
Eyres-Monsell, Bolton M	Malcolm, Ian	Walker, Col. William Hall
Falle, B. G.	Meysey-Thompson, E. C.	Walsh, J. (Cork, South)
Fell, Arthur	Mills, Hon. Charles Thomas	Warde, Col. C. E. (Kent, Mid)
Fleming, Valentine	Morrison-Bell, Major A. C. (Honiton)	Weigall, Capt. A. G.
Fletcher, John Samuel (Hampstead)	Mount, William Arthur	Wheler, Granville C. H.
Foster, Philip Staveley	Neville, Reginald J. N.	White, Major G. D. (Lancs., Southport)
Gibbs, G. A.	Newman, John R. P.	Williams, Col. R. (Dorset, W.)
Gilhooly, James	Nicholson, Wm. G. (Petersfield)	Willoughby, Major Hon. Claude
Gilmour, Captain J.	Nield, Herbert	Wilson, A. Stanley (York, E. R.)
Goldman, C. S.	Norton-Griffiths, J. (Wednesbury)	Winterton, Earl
Goldsmith, Frank	Orde-Powiett, Hon. W. G. A.	Wolmer, Viscount
Gordon, John	Ormsby-Gore, Hon. William	Wood, Hon. E. F. L. (Ripon)
Grant, J. A.	Paget, Almeric Hugh	Wood, John (Stalybridge)
Greene, W. R.	Parkes, Ebenezer	Worthington-Evans, L.
Gretton, John	Pease, Herbert Pike (Darlington)	Wortley, Rt. Hon. C. B. Stuart-
Guinness, Hon. W. E.	Peel, Capt. R. F. (Woodbridge)	Yate, Colonel C. E.
Haddock, George Bahr	Perkins, Walter F.	Yerburgh, Robert
Hall, Fred (Dulwich)	Peto, Basil Edward	Younger, George
Hall, Marshall (L'pool, E. Toxteth)	Pole-Carew, Sir R.
Hamilton, Lord C. J. (Kensington, S.)	Pollock, Ernest Murray	TELLERS FOR THE NOES.—Viscount Valentia and Mr. H. W. Forster.
Harris, Henry Percy	Pretyman, E. G.
Helmsley, Viscount	Pryce-Jones, Col. E. (Montgom'y B'ghs)

Question, "That the Bill be committed to a Committee of the Whole House," put I and agreed to.

Bill committed to a Committee of the Whole House for Thursday next (9th March).