§ For purposes of ascertaining Increment Value Duty on agricultural land that has come into the category of building land, no increased agricultural value, due to the 1220 efforts or expenditure of the cultivator, shall be taken into account when levying increment value.
§ Mr. EYRES MONSELLI beg to move, "That the Clause be read a second time."
The Clause is proposed in the interest of market gardeners, who, I think, will not receive fair or just treatment under Clause 7 of the principal Act passed in 1910. I do not pretend to be an expert in land valuation, but I think I may be allowed to speak for market gardeners, because in Worcestershire I represent by far the largest centre of market gardeners in the country. We have in the Vale of Evesham nearly 30,000 acres of land devoted to market gardening. I have been anxious since the Budget was introduced to put in a plea for market gardeners, but I have been afraid that they would be treated by hon. Members opposite as people whose hard case was brought forward in the same way as the case of widows and orphans is sometimes referred to. I can assure hon. Gentlemen that that is not so. When the subject of market gardening is raised in this House it is generally dismissed by an airy allusion to cabbage patches. The Chancellor of the Exchequer is one of the offenders, and I am very sorry the right hon. Gentleman is not in the House, because I think he would sympathise with my Clause. It puts in words what he has often said he is in favour of, but what the Bill entirely fails to give effect to. I think the Committee will understand that the important industry of market gardening cannot be dismissed with references to cabbage patches. It is the highest state of cultivation. The money put into it, and the energy put forth by those engaged in it result in the highest development of the land, and it pays more money than any other branch of agricultural industry. Under Clause 7 of the 1910 Act, I think it is a fact that market gardeners may be taxed on value which they themselves have created. On 20th April last year the Leader of the Opposition put the case in a nutshell, and it was not contradicted then. I will restate the case very briefly. Land used for market gardening is valued as regards site value at £50, as at the end of April, 1909. It is worked up in value by the market gardener to a purely agricultural value of £80. That increase is due to his work on the land, and it is also very much due to the manure he has put into the land. There is a point where that land enters the category of building land, and it may 1221 be sold for £100. He is charged Increment value, and that is assessed, not on the final agricultural value, but on the original site value of £50. It is assessed in respect of £30, which is due entirely to his own efforts on the land. That was not contradicted last year, and I do not think it can be contradicted at the present moment. I think the Committee will agree that it is very unfair that a man should be taxed in this way on his own improvements and expenditure.
§ Mr. EYRES-MONSELLThe "Westminster Gazette," I think, said that this vas a fair case, but that it was a very exceptional one. Market gardening is not exceptional. It is very common. This rise in purely agricultural value is the natural outcome of intensive cultivation, of the work put into the land, and particularly of the manuring of the land. The purely agricultural value of the land is raised to a very large extent by those means, and I could show many examples of it in my own Constituency. Last April the Chancellor of the Exchequer tried to steer clear of this case of manuring. He said he would rather take the example of draining the land. Naturally he would, because the amount of money spent in draining agricultural land is allowed for in assessing increment value. I say that the value put into the land in manure should be included. Clause 25, paragraph (b) provides for the deduction to be allowed for improvements on the land for the purpose of business, trade, or industry other than agriculture. All the Amendments previously put down to Clause 7 have been objected to by the right hon. Gentleman opposite, on the plea that we are trying to drive a coach and four through the Act. I can assure the right hon. Gentleman that I am not trying to do anything of that sort at all. I am trying to remove an undoubted hardship which presses on a very deserving class. I appeal to the Committee to accept this Clause on the ground that it will remove an obvious injustice upon a large and deserving class of the agricultural community, namely, the market gardeners—men who give the best example of the "back to the land" movement which hon. Gentlemen opposite very often talk about, and to which by supporting this Clause they will give practical effect.
§ Mr. BOOTHI hope the Government will not make any concession in the way 1222 desired by the hon. Member (Mr. Eyres-Monsell). It is one thing to talk about sympathy with market gardeners or any other class of people, and it is quite another thing to ask that they should be specially exempted from taxation. There are many deserving people in the country, I have no doubt, who are market gardeners, but there are also many little shop keepers who do not live under the salubrious conditions of the protégés of the hon. Member, and who are making their living without special exemptions from taxation. The Revenue Bill seeks to get revenue for the country, and if exemptions are to be given, and a less amount raised, it means that hon. Members opposite should not be so anxious to press on the Government increased expenditure in the various services. If we could give to all men in the country exemption from Income Tax, or other taxes they would have a little more money to devote to their business, and we would naturally benefit very deserving classes. To that kind of argument there is no end, and, without wishing to differ from the hon. Member in his zeal towards market gardeners, and while wishing that they should succeed, I cannot see that he has made out the slightest case why they should be exempted from taxation. In the part of the country I come from I am a rural guardian and a rural district councillor. I know something of the incidence of rates and taxes on the agricultural class, but I assure hon. Members that there is a little bit of healthy self-reliance in the North of England. [Cheers.] I am very glad that the Noble Lord the Member for the Thirsk Division (Viscount Helmsley) gives me that ringing cheer. We are not always coming from that part of the country cap in hand to the Exchequer, and we are not always coming for concessions and special consideration. If we are at all in difficulties there we prefer to stand with our backs to the wall.
I have listened very patiently to hon. Members from the agricultural parts of England, and I have never yet heard from them a note of confidence, a note of determination, or a note of self-reliance, like that to which we are accustomed in the North of England. There was only one part of the hon. Member's speech with which I thoroughly agreed. He laid down that a man who by his own industry improved the land through manure, and by diligent attention to the cultivation of the soil should get the benefit of his industry. He pointed out that occasionally when all 1223 that had been done a man suffers some injustice under the Budget Acts because he paid a little more in taxation. The part that a man of that kind pays in taxation is a mere flea-bite to what he pays in increased rent, but the hon. Member will not go to his constituency and appeal to ground landlords who let land to market gardeners in the same strain as he appeals to the Government in this House. I have noticed a most curious difference in the way in which hon. Members speak when they are dealing with private interests and when they are dealing with public money. When it is the case of the private landlords you must respect vested interests, but when it is the case of taxation, and when the money is to be got to build "Dreadnoughts" to keep the Germans away, then hon. Members want to pay as little as possible. Then they are up in arms against the State and they bring all their energy to bear against taxation. That is surprising to us, because that energy is never shown when they are dealing with rack-renting landlords. I sympathise with the hon. Member opposite in the difficulty he has when he goes back to the landlords in his constituency in Worcestershire. I am glad that he tries to protect the market gardener against undue extortion and exaction.
§ Mr. EYRES-MONSELLBy the Government.
§ Mr. BOOTHThat is exactly my point. The hon. Member is on the qui vive there. When the Chancellor of the Exchequer is proposing taxation the hon. Member is in his place, but when there is some chance for something being done for the small holder who is being evicted or pressed for his rent, the hon. Member adorns the bench on which he sits with that silence of which the Leader of the Opposition spoke yesterday. Any point in the argument of the hon. Member's speech which applies simply and solely to the taxation of the market gardener ought to apply with regard to the rent he pays. The market gardeners who have to pay a little increased taxation to the State ought to be glad to pay it. Whenever the Budget imposes taxes upon them for money which is to be spent in the manner I have hinted at, they ought not to complain. It ought to be a joy to them. The more wealthy and successful a man is in business, the more willing he should be to pay. I do not know as much of market gardening as of the cotton industry, but the more prosperous 1224 a man is the more ready he ought to be to perform his duties as a citizen.
8.0 P.M.
But there are times when a man puts his own industry and care into the soil and he finds an absentee landlord paying one of his occasional visits to the place and noticing the vast improvement and insisting upon an increase of rent, and those are cases to which the hon. Member, I have no doubt, will in future give his very humane and most admirable sympathy.
§ Mr. AUSTEN CHAMBERLAINIn the speech which the hon. Member (Mr. Booth) has contributed to our discussion there were two observations with which I agree. He said that he knew no more about cotton than he did about market gardening. I can well believe that, because he could not know less.
§ The CHAIRMANThe hon. Member must resume his seat unless he rises to a point of order.
§ Mr. AUSTEN CHAMBERLAINThe hon. Member did not give way to my hon. Friend (Mr. Eyres-Monsell). My hon. Friend several times asked the hon. Member to give way and the hon. Member refused.
§ Mr. WATTOn a point of Order Is it not the rule that a Member can rise to give a personal explanation?
§ The CHAIRMANIt is not the rule that the hon. Member who is in possession of the House must give way to him.
§ Mr. BOOTHI quite admit that if it were true that I refused to give way I would fully justify the view of the right hon. Gentleman (Mr. Chamberlain). I never heard a single word of the hon. Member. If I had I would have sat down on the moment. I did see him move, but I thought he was speaking to the hon. Member in front of him. If I had the slightest idea that he wished to give an explanation I would have given way.
§ Mr. AUSTEN CHAMBERLAINAfter that explanation I will give way to the hon. Member if he wishes to say something to me.
§ Mr. AUSTEN CHAMBERLAINI accept the hon. Gentleman's explanation. It was so clear to us here that my hon. 1225 Friend desired to make an explanation that it did not cross my mind that the hon. Member did not know it. I can only say that I am now willing to give way to the hon. Member if he wishes to give an explanation. In consequence of what he has said I will try to couch my observations now in a more conciliatory form than in the circumstances I felt inclined. I was saying that I really thought that the hon. Member knew very little of the character of market gardening or the market gardeners in the Vale of Evesham. He appeared to consider that they were a weak, whining set of people, not to be compared with the stalwart men he was accustomed to deal with in the north. If he will take the trouble to go down to Evesham and move among these men he will find that a more sturdy, independent, hard-working class of men he could not meet anywhere in the country. They have established a land system of their own down there which has in my recollection of the House led to an Amendment of the Law to protect them. They have very considerable protection, and I think if they require more protection against the landlords they will be more likely to get it in those cases where they are renting the land, and are not freeholders. But that is not the point here, and it has nothing to do with the Amendment which my hon. Friend has moved. I only rise not to repeat the argument, but to state in the briefest possible language I can what is the point, because I believe if the House realises what it is it will see that it is not only we on these benches, but it is the Members on all the benches who desire the Government to deal with cases of this kind.
My hon. Friend proposes exemption in certain cases from Increment Value Duties. The theory of Increment Value Duties is that a man has got a windfall in the shape of the increased value of his land which he has done nothing to earn, that the increased value is created by the growth of prosperity of the community, and has come to him without any exertion on his part. That is the theory, but in this particular case it is not the practice. You are taxing a man on the value which he has created. [HON. MEMBERS: "No."] You have land originally valued at £50, but the owner of the land makes improvements, especially by the use of manure and brings its value up to £80 for agricultural purposes. That is pure agricultural value. If he sells at that point, when the land is at 1226 £80, which is its full agricultural value, he pays no Increment Duty on the increase from £50 to £80, which is due to his own work. But if he waits until the land is worth £1 more for building purposes than it is for agricultural, and then sells, he will pay duty, not only on the added value which it is worth for building purposes, and which would be due to the growth of the community, but also on the £30 which has already been added to it as agricultural value by his own exertions. That is incompatible with what you claim as the basis of the Increment Duty. You tax a man, not on a windfall, but on that which is the result of the sweat of his brow. You are taking away from him, not a share of money which he is only too lucky to get because he has done nothing to earn it, but a share of something which he earns if anything in this world is earned. That is the whole point of this Amendment. Are you going to insist, as you do now, on charging a man Increment Duty on the value he has added to his land for agricultural purposes if that land happens to become more valuable still for building purposes. Charge on the difference between the value that he created and the value for building purposes, and not on the difference between the original agricultural value and its value for building purposes. That is all that the Amendment asks.
§ The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Masterman)Following the example of the right hon. Gentleman, I hope I may be able to give an answer in a conciliatory form in a Debate which his speech has rendered very reminiscent of the Debates we held two years ago. Up to now the Amendments which have been proposed have been mainly new Clauses dealing with new points arising since the Act came into force; and here, I think, the right hon. Gentleman will agree with me when I say that we are re-fighting a battle which was fought at great length night after night when he put his point of view eloquently and forcibly, and we did our best to put our point of view. Nothing material has arisen to contribute to the discussion since the time when the Budget Bill of 1909 passed the House of Commons, and I think though I do not in the least complain of it, that the statement of the right hon. Gentleman rather enlarged on the narrow line which I think was taken up, and, if I may say so, rightly taken up, by the hon. Gentleman the Member for Evesham (Mr. Eyres-Monsell). In connection with one of his remarks, I would like utterly to 1227 repudiate in the name of the Government and my right hon. Friend the Chancellor of the Exchequer any idea or desire to be neglectful of the interests of market gardeners when we were advocating the passing of the Budget in 1909, or that we considered that market gardeners were a negligible class who grew a few turnips and cabbages in the neighbourhood of towns. Quite a number of Amendments were introduced into the Bill when it was passing through Committee definitely remedying definite grievances which might be felt by the market garden community. There were none more important than the Amendment which gave exemption to small workers of the land, those who work the land in small pieces who are also owners of the land, who obtained complete exemption from the Increment Tax under fifty acres and an average value of less than £75 an acre.
§ Mr. EYRES-MONSELLAll our market garden land does not come within that.
§ Mr. MASTERMANI agree. That was an exemption given to market gardeners, and pressed for on their behalf, especially near small provincial towns, and it is a refutation of the statement that we denied the claims of those who represent market gardeners. We also gave exemption from Undeveloped Land Duty to the full amount of the agricultural value of the market garden, and we also gave complete exemption from Undeveloped Land Duty to holdings of less than £500 in value. All those are very material concessions to those who are developing market gardening in the neighbourhood of towns. But when the hon. Gentleman advocates, as he above all other Members of this House has the right to do, the interests of market gardeners, representing as he does the Vale of Evesham, and when he advocates certain exemptions from the Increment Tax, I do not see in his speech any full announcement of whether he is advocating exemption from the point of view of the landlord or the point of view of the tenant. The market gardener may be an owner of his land. In the great majority of cases he is not the owner. In the great majority of cases, in the neighbourhood of towns, he is a yearly tenant, and he is liable quite apart from the question of our Budget to be turned out on a year's or even six months' notice when the land is desired for building land.
§ Mr. EYRES-MONSELLHe gets compensation for his market garden.
§ Mr. MASTERMANNo. If he did get compensation there would be more body in the Amendment of the hon. Gentleman, for, as nobody knows better than Lord Helmsley, a market gardener does not get full compensation in the neighbourhood of towns. There was a considerable revolt on this side of the House, in which I confess I took part, then being in an unofficial capacity, in favour of the market gardener receiving full compensation under Schedule 2 of the Act which he only gets to a limited extent under Schedule 1. If the hon. Member had limited the Amendment to providing that the landlord should get something like the compensation which he gives to the tenant then it would be a more tenable Amendment than that which is brought before us, but I am informed by the Board of Agriculture, from which I obtained special information, that although we already know that there is a special need of compensation in such districts as the Vale of Evesham, with its Evesham cup custom, that is very remote from the practice of the great majority of this land in the neighbourhood of towns in this country, and, as a matter of fact, we should be giving, if we accepted this Amendment, to a very large extent exemption from Increment Duty to the landlords on all Improvements for which the tenant has paid, and to which the landlord contributed nothing. That alone seems to make it impossible to accept this Amendment. As to the general contention which was advanced by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain), I think, if I may say so, he did not sufficiently mark the fundamental distinction, which after many months, was made in the Budget, and accepted by a large majority of agricultural Members at that time—the distinction we made between land which had a building value and land which had not a building value, so long as it does not pass into the category of building land. I think he will be the first to acknowledge that no agricultural improvements can ever be effective for Increment Duty where the land increases in value because of those improvements. Where agricultural land or market gardens increase in value owing to a recovery of prices, where the advance in prices of the produce of the land increases its value, never will that agricultural land, so long as it is purely agricultural, be liable to a farthing of Increment Duty. I think it is worth while that this should be re-stated in the new House of Commons, as it. was 1229 re-stated time and again in the old House of Commons.
§ Mr. AUSTEN CHAMBERLAINYes; so long as the land has not a building value. But a great deal of land has a building value which cannot be utilised immediately for building, and which it is only possible to use for agriculture. The question is whether you ought to tax that agricultural land as building land?
§ Mr. MASTERMANNearly nine-tenths of the land of the country has no other value than that of agricultural land, and it will pay no Increment Duty, however much the market gardener or the agriculturist increases the value of his land. The right hon. Gentleman knows the definition to which finally the Chancellor of the Exchequer came, which was accepted by the House of Commons and embodied in the Budget, and which now the right hon. Gentleman proposes we should go behind, namely, the definition for which a precedent was found in the Death Duties, whereby a line was drawn between land which had a purely agricultural value and land which had also a building value. The drawing of any such line, of course, necessarily means hardship on the border line. That you have to recognise. It meant hardships under the Death Duties, where there was a limitation on the one hand for 25 years' purchase, and on the other of a larger sum.
§ Mr. PRETYMANSurely the position of the Death Duties is that land, whether it has a building value or whether it has not, under the Act of 1894, pays primarily on its income on the principle of twenty-five years' purchase of the income. If the land has a building value in addition to the agricultural value, the sum charged is in respect of that building value only. That is exactly what this Amendment asks us to do in regard to agricultural land.
§ Mr. MASTERMANI do not want to emphasise that point. It is really irrelevant to go through the whole of the Debate of 1909. I am trying to trace out to the hon. Gentleman that a line is drawn between building land and agricultural land which to a certain extent is an artificial line on the borders of which line there may be cases of hardship. The right hon. Gentleman (Mr. Austen Chamberlain) took a case where the increase for building land was a pound more. The hon. and gallant Gentleman (Mr. Pretyman) knows that it is the practice of the Inland Revenue, in respect of those estates, not only to draw 1230 the line, but to colour red the land which comes within the twenty-five years limit, and blue for land outside that limit. If you make a distinction of that sort, you must have a certain amount of hardship in every case which is near the line. But, as a matter of fact land which is in the neighbourhood of towns, and comes under the category of building land, does not increase in value by £1 above its agricultural value, but by £50, £200, and £500.
§ Mr. AUSTEN CHAMBERLAINThe question is not what it goes to, but whether you are taxing value that a man has created, whether it is £81, or £100. The point is the gap between the original agricultural value, the created value which you are going to tax the man upon, and the building value. That is my point.
§ Mr. MASTERMANI was coming to that point, and perhaps I was too greatly labouring the method by which we created the division. Let me take the clearest example I can. Supposing that agricultural land had a value of £50, supposing that by the work and labour of the tenant the agricultural value is increased to £100, and supposing it is sold at £200 for the purpose of immediately building upon it cottages, then our position is that it is not an additional value, but an alternative value, and that is where the real controversy arises in connection with the Budget of 1909. The building value is destructive of the agricultural value. The land cannot both be used for the growing of asparagus and also for the building of cottages. The fact that the land being used for building destroys the agricultural value is an element in the price for which it is sold. If land could both be used for building and for growing asparagus and garden produce, it would sell for a good deal more from the fact that the agricultural value is to be destroyed if it is to be used for building. If the building value under those circumstances does destroy the agricultural value, why should we allow the increased agricultural value that has been made and destroyed to be exempted from Increment Tax?
§ Mr. AUSTEN CHAMBERLAINIt is not.
§ Mr. PRETYMANIt is at the time of death the duty is charged.
§ Mr. MASTERMANI was taking another point altogether—I was taking the sale of land for immediate building purposes. The occupation of that land 1231 for building purposes is of no more value to the builder, who buys it because it has been subjected to intensive cultivation, than if it were ordinary meadow land.
§ Mr. EYRES-MONSELLWhen this land comes into the category of building land, if money has been expended upon it for drains, that expenditure is exempted. But why not exempt expenditure on manure which has improved the value of the land? You are taxing a man on his own improvements and his own expenditure.
§ Mr. MASTERMANIf the work which has been done on the land has increased its value as building land, then, by Clause 25, Subsection (4), the full value is given for those improvements, and rightly given, because that is an increase of the value of the land that is due to the work of those who are selling it as building land; but if money spent on drainage or fruit trees or whatever is not increasing the value of it as building land, then that value has been destroyed when the land is sold for building, and, in consequence, that destruction is taken into account in the price, and therefore ought not to be exempted. I do not think there really can be any doubt about that simple proposition. I do not think that that point is really disputed.
§ Mr. AUSTEN CHAMBERLAINindicated dissent.
§ Mr. MASTERMANI thought the dispute referred to another and a more difficult point. The only difficulty I can see is in the case when you are dealing with land which is not immediately sold for building land, but which has a building value. There you are in a more difficult position. The building value of the land is given arbitrarily by some valuer, and you discount at present the future prices which will be received for it for building in five or ten or fifteen years. All that you are doing there by the system established by the Budget is that you are making that building land pay Increment Duty which would be paid ultimately when it is actually built upon. You are taking that duty in instalments, and the only question is whether you are to take it at the end, when the last seller would pay it, or whether you are justified in taking it in instalments. We think you are justified in taking it in instalments, because of the system established by the Budget of franking the land when it is sold up to the whole value on which Increment Duty 1232 has been paid. In that case, a buyer buying that land fully franked will be prepared to give more for it.
§ Viscount HELMSLEYDoes not the hon. Gentleman see that by his last sentence he is proving that the only result is to put up the price of the land?
§ Mr. MASTERMANPerhaps the Noble Lord will expound that at more length when he speaks later in the Debate, as I have no doubt he will. The sole result is that we take the Increment Duty on a series of occasions, instead of on the last occasion. But the more transactions of this kind that take place the less Increment Duty will the State receive because 10 per cent. of the original site value, or new value, is taken off, so that if the land goes through a series of transactions before it is finally cleared of asparagus beds those who own the land pay less increment than if increment was paid by the last person.
§ Mr. PRETYMANWhat about the exemption given to the Friendly Societies?
§ Mr. MASTERMANI am dealing with the Increment Tax, especially as it affects market gardeners. I have no knowledge of how Friendly Societies are mixed up with market gardeners nor knowledge of the exemption given to Friendly Societies. I am giving the actual facts in connection with any case of land in which that 10 per cent. off the original site or new value is allowed on every transaction. Therefore, if the land, instead of being sold immediately for building, passes through a series of transactions while it is gradually increasing in building value, the amount paid on that land will be less than if it is all done in one transaction. I need not remind the House of the very large concession which we also made in connection with this Increment Duty, that is to give the full value up to the present agricultural value of the land. That was a concession which broke through the principles on which the Act was founded. It would have been perfectly legitimate on our part when the land was turned into land for the building of cottages to go back not to the present value of the land, but to the prairie value of the land. The principle of the Act is to take the building increment, and the building increment must inevitably ultimately destroy the agricultural interest. If they were compatible uses of the land, then the position of the hon. Gentleman who moved this Amendment would be unassail- 1233 able but as they are mutually destructive uses of the land, and as we are only taking instalments of the building increment, I think it is clear we cannot accept the Amendment.
§ Mr. HICKS BEACHI hope the hon. Member has convinced those on his own side, but I think he has given no answer at all to the arguments put forward by the Member for Evesham (Mr. Eyres-Monsell) and my right hon. Friend Mr. Austen Chamberlain. In the first place the right hon. Gentleman tried to make out that if he did grant the concession the only result would be to give something to the landlord which had really been earned by the tenant. I think he was under some misapprehension on that point, because, so far as I know, in all cases of market gardening, the market gardener receives full compensation on leaving the land for improvements he has made as a market gardener, except in the case where the tenant has been carrying out market gardening operations without obtaining the consent of his landlord. That is a very great difference. We objected to a tenant receiving full compensation when carrying out certain kinds of agricultural pursuits to which his landlord objected, and for which he had not received sanction. We agreed that if a man carries out certain operations which tend to the improvement of the soil and the holding, having got permission to carry them out, then that man is justified in receiving compensation for them. He does receive full compensation under the Market Gardeners Act. The hon. Gentleman tried to shield himself by saying that after all this will not affect many market gardeners, and that nearly all of them come under the fifty-acre Clause, and that if they do not they are tenants of their holdings. I think the hon. Gentleman must be aware that there is a very large number of market gardeners in this country who do own and cultivate themselves holdings over fifty acres. Therefore, my hon. Friend the Member for Evesham was speaking for a very considerable number of people whom everybody admits are a very hard working and deserving portion of the community.
We submit that those persons are very unjustly taxed under this Increment Duty as compared with other classes. It is all very well for the hon. Gentleman to talk about small shop-keepers, cotton-millers, and people of that kind, but they have got nothing in the world to do with this Increment 1234 Duty at all. The point has been ably put forward that a man is under this Act taxed on his own improvements, whereas the whole principle of the Increment Duty is that a man should be taxed on what the Chancellor of the Exchequer described as "windfalls." The hon. Gentleman has not answered this point, that if land has a value of £50 per acre, and if the tenant of that land by his own intensive cultivation improves its value up to £80 for purely agricultural purposes, that that man for the prospective building value is not taxed on the difference between £80 and the prospective building value, but on the difference between the prospective building value and the £50 valuation. The hon. Gentleman tried to answer that by saying that when building value appears it destroys the agricultural value, and that, therefore, no account must be taken of the enhanced agricultural value which is due to the cultivator's own handiwork. I would ask the hon. Gentleman what is the position in the case of Death Duties. Do the Government admit that building value destroys the agricultural value entirely, or do they take the value which happens to be most convenient to them for the purposes of the Treasury? I think the hon. Gentleman will agree that if a death had occurred before that land had been valued as building land, it would have been valued by the estate branch of the Inland Revenue at its full agricultural value of £80, and the State would take good care that it was valued at death for the particular purposes of Estate Duty. It seems to me very hard that as soon as they get the Increment Value Duty they should drop that value altogether, and say that they must now go back to the old original site value, of which they would have taken no notice at all for Estate Duty alone. Hon. Members opposite have stoutly denied on every platform throughout the country that they are taxing agricultural land for Increment Value Duty, but I think it has been unmistakably proved to-night that under the Budget of 1909 they do tax purely agricultural land, even when used for purely agricultural purposes. In doing that they are inflicting a great hardship and injustice on a most deserving body of men. If hon. Members opposite really want to encourage people to go back to the land, they are attempting to do it in a very remarkable way when they go into the Lobby in support of the Government who still adhere to this very unfair method of taxing a man on his improvements.
§ Mr. W. F. ROCHI gathered from the speech of the Under-Secretary for the Home Department that his objection to this new Clause was based on the view that in the case of increased agricultural value the landlord got the whole benefit of the work and expenditure of the tenant. If that were literally so there would be force in the argument. I would point out, however, that these agricultural improvements, such as draining and manuring, are frequently paid for by the landlord as well as by the tenant. The cost is frequently shared, so that in many cases the increased agricultural value, so far from being solely the creation of the tenant, is due to capital expenditure towards which the landlord has contributed. Moreover, in nearly every case under the Agricultural Holdings Act, particularly for heavy manuring and drainage, the tenant has a substantial claim for compensation, which the landlord is compelled to pay. So that, even with the Clause as it stands, it is far from true to say that the landlord gets the whole benefit of the work and expenditure of the tenant.
The Under-Secretary said in his speech that if we were satisfied that any of this value went to the tenant he would favourably consider the matter. Supposing, after the Clause has been read a second time, an Amendment were suggested to add after "Increment value" these words: "Provided that such value consist of money actually paid to any tenant for compensation for improvements." That would be a direct incentive to a landlord, if he wanted, not to pay Increment Value Duty upon money which he had expended, to treat his tenant generously. Not only would the landlord gain to some extent, but the tenant would be a great gainer as well. In the case where the landlord had actually paid money direct to the tenant it would not be a measure of justice to charge the landlord Increment Value Duty on purely agricultural grounds, and the hon. Gentleman himself has admitted that his great objection to this new Clause was based on the fact that the added agricultural value was given by the work of the tenant and not of the landlord. In this case the landlord would be gaining no advantage at all except in so far as he had actually paid the money to the tenant. In the interests of agriculturalists who take great interest in the working of this particular Clause, I hope the hon. Member will give some consideration to this aspect of the case.
§ Viscount HELMSLEYI think the Amendment suggested by the hon. Member opposite would have a great deal of force in the case of a sale for building, but I do not think it would operate well in the case of death or on any other occasion where Increment Value Duty is leviable, except that of a sale for building. It seems to me that the Under-Secretary's argument is not sound in reference to alternative values for agriculture and building. Take three sets of figures—£50, £60, and £80. Say that a piece of land has to start with for agricultural purposes the value of £50. It is improved by the cultivator so that the value goes up to £60. Similarly its building value goes up £60. There is an increment on the building value which the hon. Member says is an alternative value; but, as a matter of fact, there is no increment to the cultivator.
§ Mr. MASTERMANWill the Noble Lord agree that when the land is sold for houses to be built upon it there is a destruction of the agricultural value, and consequently of any increment in the agricultural value?
§ Viscount HELMSLEYThat is not quite the point. As far as that £10 increased value is concerned, although there is an increment in the building value, there is no actual increment to the owner of the land, because he has put money into it up to that amount. Therefore it does not matter if the building value destroys the other, because presumably he will not sell that land for less than the £60, which is the agricultural value. He will make sure when he does sell the land that the extra cultivation which he has put into it is recouped in the price that he gets for it as building land. If that is clear in reference to the increment from £50 to £60, it equally follows when the increment is from £50 to 80. All we suggest is that that part of the increased value for which he gets no actual return other than that which he has himself earned should be exempted from this taxation, and that instead of paying Increment Value Duty on the whole increase from £50 to £80 he should pay only on the difference between £60 and £80. There would be no increment if the agricultural value and the building value increased pari passu all through. The Government have admitted that, and there is no increment under the Bill in that case. Therefore, following on their own admission, we claim that there should be this extra exemption of the agricultural value which is due to the cultivator himself. 1237 I do not think myself that the principle of the thing is at all affected. It may apply a little, but, at any rate, if it is right in one case it is right in the other. I quite sympathise with hon. Members who desire to make these things more applicable to the owners than the tenants. I want to see the tenants exempt. But when you are dealing with this tax you are not dealing with the tenants, except indirectly. You are dealing with the owners of land. I do think it is a pertinent point to put to hon. Members opposite that they cannot go on putting taxes on land and expecting always that they are going to be paid by the person on whom they fall in the first instance.
They agree with that doctrine very much when other forms of taxation are under discussion. I must say I was rather interested in what the hon. Gentleman the Under-Secretary for the Home Department said, if I understood him aright. He said that if land was franked by the payment of Increment Duty the buyer would be prepared to give more for it. I wonder if he has considered what he means by that? Does he not mean that the seller would be able to get more for the land because of the Increment Duty being paid? Does it not mean, therefore, that the seller will be able to transfer to the buyer part of the Increment Duty? Does it not strike the hon. Gentleman that that will more particularly take place in those very places where there are more would-be buyers of land than sellers? Therefore I have always maintained that in those places where land is difficult to get, by it being "held up," the only result of your taxation will be to put a further power into the hands of the owner to exact a larger price than hitherto. Of course, in places where there are more people wishing to sell land than people willing to buy it, then the seller naturally will have to pay the duty, and he will get a less price in consequence of the duty. I really think the argument of the Under-Secretary points to the fact, as we on this side have often said in this House, that in those very cases where you want to facilitate the sale of land—which is the object of these taxes—those very cases where the land is difficult to get—you will be doing the exact opposite to what you desire.
§ Mr. MASTERMANmade an observation which was inaudible to the Official Reporter.
§ Viscount HELMSLEYNo, I do not think that will make so very much differ- 1238 ence. A great deal of this land, subject to the Increment Duty, will not be subject to the Undeveloped Land Duty, and certainly in regard to the sort of land that I am contemplating; I think the effect would be such as I have stated. I would be out of order in developing that further, because we are dealing with agricultural exemption. I hope I have made it clear that, as a matter of fact, the Government, if they do not accept some such Amendment as this, are taxing agricultural values in land, although they do not mean to. At any rate, it is not in any way accurate to say, as they have said so often both here and in the country, that agricultural land is entirely exempt from taxation.
§ Mr. GRETTONThe whole difficulty which the Government is in on the question of this Amendment and in other cases arises from the fancy values attached to land. They do not deal with real but with fancy value. Take the case where you have agricultural land undeveloped, worth £60 as agricultural land, and worth £60 as building land. What do the Government propose to do? This land is coming into the market, and the question arises whether it shall be sold either as building or agricultural land. The Government say, if sold as building land, they will send their valuer down and reduce that land to some fancy value, which they call site value, and tax the difference between the £60 and what they declare to be the site value. If, on the other hand, they find it is to remain agricultural, as at present, it will be subject to no tax at all. The position of the Government on this question appears to me to be an absolutely untenable one. The owner of the land, say, always intends to improve the land to some considerable extent for agricultural purposes. That land is sold to a builder, and the seller of the land is to be taxed on the improvement which has been made, either by himself or by the tenant. It is equally certain that under various Agricultural Acts he may have to compensate his tenant for disturbance. He is to be taxed upon the money which he actually pays for disturbance to his tenant in order to clear the land for building purposes—which is apparently the purpose of this tax. In the way the Government propose to administer their Act, they are actually going to discourage the bringing of land under cultivation into the market for building purposes, because the owner of that land will obviously be able to sell it to much better advantage as agricultural than he will be able to sell 1239 it as building land. As the Noble Lord has just said, I do not believe the Government want to tax agricultural land, but it is their incurable way at looking at these taxes, and the fancy values which they have created as a figment of their brain that have involved them in all these difficulties. If they will only deal with the real values as they exist in the market for real purposes, they will be able to see their way through these difficulties and the whole mass and mist will disappear, and they will be able to administer their own Act with justice.
§ Mr. LANE-FOXI wish to echo what the last speaker has said that the Government do not wish to tax agricultural land. They have said it in the House and on the platform so often that they are perfectly convinced that it is true. The argument of the right hon. Gentleman who has just gone out of the House (Mr. Masterman) was a very ingenious one when he said that the building values destroyed——
§ Mr. HOBHOUSEThe right hon. Gentleman has left the House because he is not feeling well.
§ Mr. LANE-FOXThe right hon. Gentleman misunderstands me. I do not in the least wish to complain of the absence of the hon. Member. I am only saying he gave us a very clear and a very ingenious argument which I am sure we all enjoyed. His argument was that the building value +would eventually destroy the agricultural value, and need not be considered. But here we are dealing with the case of a value which may change hands either by sale or transfer many times before the actual building value accrues, and in that case the Government are putting a tax upon a man's improvements and upon the money he has spent. I do not think in that case they can deny that a certain proportion of agricultural value is being taxed. The Noble Lord (Viscount Helmsley) said very convincingly the mere fact that the Government admit that where the values are equal the agricultural value does away with and nullifies the building value, is an element that ought to be considered, and even when the building value rises higher, it ought to be exempt from taxation. This case is very much more convincingly dealt with in the matter of undeveloped land in which no one will deny there is a very large element of doubt as to whether agricultural land is not taxed. When it is considered that this duty has to be paid by many people before the building value 1240 develops and the full benefit of it is derived, it will be found that many persons may have to pay upon their improvements in a way not anticipated or desired by hon. Gentlemen opposite. I think the Government have not fully considered the real meaning and effect of this matter.
§ 9.0 P.M.
§ Mr. PRETYMANThe speech made by the Under-Secretary for the Home Office shows how difficult it is to find a logical argument for an illogical tax. His main argument was that agricultural value was destroyed by building value. My hon. Friend behind me has pointed out that that is pure theory, and although it may be possible to argue on theory in this House you cannot expect practical people outside to consider that the agricultural value is eaten up by the building value when the land is still used for agricultural purposes and is still growing agricultural crops and will continue to do so for another half-century. Here you have a tax levied upon land which is used to-day for agricultural purposes when that land has acquired a potential building value, and that tax is to be levied either on the death of the owner of the land when it still remains agricultural, and when there is no question or probability that it is going to be built upon. It is also to be levied when the land is sold, not as the Under-Secretary is good enough to assume, for building purposes, but whenever it is sold for merely agricultural purposes. Take a piece of land used for purely agricultural purposes which has a potential building value. That land is sold for purely agricultural purposes, and passes from hand to hand and because it is held to have a potential building value it is to be taxed. The Government carry their imagination to very distant points, but I cannot suppose that they really believe that the agricultural owner of that land, the agricultural seller or buyer, the first of whom has used it and the second of whom intends to use it, for purely agricultural purposes, can swallow the absurd theoretical argument that such land has a building value which has destroyed the agricultural value. Do the Government deny that they are levying this tax upon the sale of land used for purely agricultural purposes and to be again used for purely agricultural purposes. It is a fact that, in these circumstances, the tax is levied, yet they have the face to tell the House and the country that in such circumstances the building value has destroyed, not that it 1241 will destroy, but has destroyed, the agricultural value, and that is their justification of the tax. That may be good enough for the House of Commons, or, rather, the Government may think it good enough for the House of Commons, but it is not good enough for practical farmers and agriculturists in the country.
It does not seem to be thought necessary by the Government to make out a case. All they think it necessary to do is to say somethnig which will justify their supporters in following them them into the Lobby, be the argument good or bad, but people ouside this House who look for some justification for taxation will not believe it, and cannot believe it. I challenge any practical man who knows anything about agricultural land to deny that this is not a tax upon agricultural land. The other argument was that this was a tax upon the landlord and not upon the tenant. That is equally thin, because that would apply to taxes levied upon all agricultural values. If that argument has any value at all it simply means you may place any taxation upon the owner of agricultural land and defend it by saying it does not affect the tenant, but only the landlord. If that argument is good, why confine your taxation to this particular form of agricultural land? Why not levy it upon all agricultural land? We do not know exactly what area this tax is going to cover, but we had a very significant speech from the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood), who told us that in his opinion—and he is one of the great instigators of this tax—land nearing roads within five miles of a town or half a mile of a railway station, would be liable to this tax. That was his statement to the House yesterday, and obviously that covers half the agricultural land of the country.
§ Sir RUFUS ISAACSNo.
§ Mr. PRETYMANI do not want to speak at random, but I will say that it covers a very large proportion of the agricultural land of the country. It is equally clear that whatever may be the prospects of future building developments, it can only be an infinitesimal proportion which can possibly be covered with buildings during the next half century. Therefore the whole of the remainder not covered may change ownership, and it will be liable to this imposition. This involves not only expense in the payment of duty in those cases where the duty is leviable, but it involves going through the whole 1242 machinery of levying the tax and of the transfer of the land which is potentially liable whether the tax is payable or not. That will cover an immense area of agricultural land. I doubt whether there will be any transfer of land under this costly machinery, and the transactions of the sale of the land or the grant of probate on the passing of the land at death, where the transaction will not have to go through the mill of the Increment Value Duty. There is another point upon which I interrupted the hon. Member. The Under-Secretary to the Home Office used an argument for which we are extremely grateful. He pointed out that when Increment Duty is paid periodically by instalments the aggregate duty paid is less than when paid in one lump at the time when the land is finally sold for building purposes. The hon. Member made his case good, and that we accept. What I call attention to is that the Government have claimed great credit throughout the country for having given an exemption to Friendly Societies by enacting that Increment Value Duty shall not be collected on any periodical occasion, but it shall be paid in one lump. We are now glad to have it from the hon. Member that agriculture is benefited by paying periodically instead of by paying in one lump. I think that was the argument.
§ Mr. MASTERMANI do not know what Friendly Societies have to do with the argument.
§ Mr. PRETYMANI say that the exact opposite is claimed by the Government in Clause 37, because they say they are benefitting the friendly societies by giving the very doubtful privilege that they are to pay in the lump instead of paying their duty by instalments. That so-called exemption is really one that increases the duty to friendly societies, and it does not exempt them at all. I wish to emphasise and make it perfectly clear that under the Principal Act if this Amendment is not accepted agricultural land which is now being used in the ordinary sense as agricultural land for agricultural purposes, and will for many years be so used—which is being bought and sold solely for agricultural purposes—is being taxed. How in face of that fact hon. Members opposite can go to their constituents and say they are not taxing agricultural land passes my comprehension. I hope and trust this Debate will clear that issue, and whether it be right or wrong, or defended on logical or illogical general grounds of taxa- 1243 tion, to say it is not taxing agricultural land is clearly false and cannot be substantiated to any practical assembly.
§ Mr. JOHN WARDI have listened to the whole of this Debate, and heard the proposition put forward and the cases stated much in this direction: The supposition is that you take a piece of land which I assume to be near a town, because I think it is urban sites we are dealing with, and I will assume that the present value of this piece of land is £50. The supposition is that entirely by virtue of the work of the tenant who is described by the hon. Gentleman opposite for the purposes of this argument as a market gardener, this piece of land is improved to £60 for purely agricultural purposes. Then we go on by some magical process and in a few years time it is discovered that this piece of land has a building value of £80. The assumption is that you should not deal or tax or levy the Increment Duty upon the land from £50 to £60, because that is purely the agricultural value, and because of that it is urged that we are taxing agricultural land.
I think the case ought to be stated slightly differently, and if the hon. and gallant Gentleman will allow me, I will put what I consider and what I think the man in the street would consider the proper way of looking at this business. The agricultural value may be £50. Is it not right to assume that if it ever is likely to become land with a building value, it will be near a town, and that parallel with its advance in agricultural value, its building value will also go forward, and at the time when it is really worth £60 for agricultural purposes it would be equally worth £60 for building purposes? Is it not right, also, to assume that the mere fact that it has a greater value for agricultural or market garden purposes is also due to the fact that there is an increase of population in the locality, that better market facilities are being given, that there is a better means of selling the produce and a greater demand for it, and it must not always be taken that although the agricultural value has gone from £50 to £60 that it is absolutely and entirely due to the work of the cultivator. May it not be assumed that there are social factors at work which make the land, ten years later, worth £10 more per acre as agricultural land, but which are not purely agricultural reasons? May we not assume, therefore, that though the building value is now equal with the value of the land for agricultural purposes, 1244 yet the owner, knowing the population is increasing, that the demand for land is increasing enormously, and that there must be an end to its purely agricultural value, is keeping it for agricultural purposes so that he may get rid of it later on at the full building value? The hon. and gallant Gentleman built up a picture in order to try and prove that the Government and those who support them are really taxing agricultural land, but may we not equally, logically, and fairly argue that we are not taxing agricultural values at all, but the increment due to the social efforts of the people in the locality.
§ Mr. EYRES-MONSELLWill the hon. Gentleman read the Clause we are discussing?
§ Mr. JOHN WARDThere is not the slightest doubt that when I am out of Order the Chairman will call me to order. I am only answering the hon. Member for the Barkston Division (Mr. Lane-Fox), who used the figures £50, £60, and then £80 for building purposes, and the remark that it was out of order and was not in the Clause should have been made when the hon. Member was giving those figures.
§ Mr. LANE-FOXMy hon. Friend did not suggest that the hon. Member was out of Order. He suggested that he was talking about something not in the Amendment.
§ Mr. JOHN WARDI am assuming that the increase may be due to causes other than the work of the cultivator himself. It is a moral certainty that if the land is purely agricultural and there is no encroachment by the population on the site there never will be any building value attached to it and no Increment Value Duty will be payable. If the land is in the middle of a waste where there is no possibility of the pressure of population, it can never have a building value. The hon. Member for the Barkston Division suggested that we could not, in face of his statement, still adhere to the contention that there was no tax on agricultural land. I venture to suggest my illustration shows that we are justified in saying that when land is used for purely agricultural purposes we do not impose any tax upon it. It is only when it has a building value, which means that there is a pressure of population upon it, and that there is an increment due to that pressure of population, that we say it should be taxed. We are therefore perfectly justified in maintaining that the Budget Land Taxes do not press upon agriculture.
§ Mr. ROYDSThe hon. Member who has just sat down said he did not desire to tax land unless it had a building value, and he was quite sure nothing was taxed unless it was building land. I should like the hon. Member to point to any Clause of the Budget which refers to building land. There is no mention of building land in the Finance Act. All the Act says with regard to land and the taxation of it is that if it has any value for any purposes other than agriculture then it shall be taxed. It need not necessarily have a building value at all. The hon. Member is referring to cases of land near towns, but last night the hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) said the persons they wished to single out for taxation were the owners of land in and around country villages. My hon. Friend the Member for Chelmsford (Mr. Pretyman), referring to some of the remarks of the hon. Member for Newcastle-under-Lyme, said that half the land of the country would be taxed. Exception was taken to his statement, but I think, when I draw the attention of the learned Attorney-General to the fact that the actual statement of the hon. Member for Newcastle-under-Lyme was that the object was to tax all land in and around every village in England he will see that the statement of my hon. Friend was correct, and that no one can deny that agricultural land throughout the length and breadth of the country is taxed under this Budget.
The new Clause moved by my hon. Friend is too modest. He only proposes to exclude from the Increment Value Duty any portion of the value of agricultural land which is attributable to improvements. I think the Clause should go a great deal further, and should exclude from any charge for Increment Value Duty the whole of the value of the agricultural interest in the land. I would remind the Committee what the position under the Act is with regard to the imposition of the Increment Duty. Under the provisions of Section 2 Increment Value Duty is chargeable on the difference between the original site value and the new site value of the land. The agricultural value of the land is not considered at all. The original site value of an ordinary farm differs very largely from its agricultural value. I think the best way for me to make the matter clear is to give a simple illustration.
Take a farm of 100 acres worth £30 per acre, or a total value of £3,000. The original site value was £2,000, and the value of 1246 the buildings and improvements £1,000. The farm is subsequently sold for, say, a sugar beet factory for £3,500. The claim for Increment Value Duty arises. The claim is not on the difference between the agricultural value of £3,000 and the amount obtained for the farm for use as a sugar beet factory, but it is on the difference between the original site value of £2,000 and £3,500. Thus the owner of agricultural land is not only charged on his improvements, which my hon. Friend wishes to exempt by this proposal, but he is charged upon agricultural property of the value of £1,000 which he actually possessed at the time of the passing of this Act. That is the point I wish to make clear to this House. I have heard some discussion on this matter, but I do not think that this point has ever been made sufficiently clear. I remember a year ago, on one of my first attendances in this House, there was a discussion on Clause 7 of the Finance Act, and the Chancellor of the Exchequer was urged very strongly to exempt from Increment Duty agricultural improvements which had been made since the passing of the Act. The House did not seem to realise that under this Act the owner of land is not only charged on his improvements created since the passing of the Act, but he is actually charged on the agricultural value of the land and on the buildings and agricultural improvements which existed at the time of the passing of the Act. For that reason I think the new Clause moved by my hon. Friend is much too modest. I have put down another later on, but, as I am afraid we shall have no chance of reaching it, I must accept the lesser advantage, and will, therefore, support the Clause.
§ Mr. SPEARI cordially support the proposed new Clause, because otherwise this provision will act as a deterrent to the expenditure of capital in developing agricultural land under the idea that possibly it may be required for building purposes. That, to my mind, would be disastrous from two points of view. It would mean a lessening of employment on the land for its improvement, and it would mean reducing the possible capital output of our native food supply. It seems to me, therefore, that this Clause is absolutely necessary, to prevent any deterrent of the development of this class of land, simply on the ground that, at some future time—perhaps half a century ahead—it may be required for building purposes. In reply to what was said by the hon. Member 1247 for Stoke-on-Trent (Mr. John Ward), I venture to suggest it will be quite as accurate to say that all agricultural land that has a site value above its agricultural value is subject under the Budget to the Increment Tax. Consequently I do not think it is fair to say that agricultural land is not taxed. Another reason why I think it most important that this Clause should be passed is that it will make the class of land around towns and villages, now used with great advantage for dairy and market gardening purposes, dearer, and it will consequently tend to a reduction of the milk supply for the adjacent towns and to a limitation of the capability of the land in producing vegetables for the people.
I hold it is most desirable that we should encourage dwellers in towns to have their allotments not only from a financial point of view, in the way of providing vegetables for their families, but also because it is most healthy that these men should have a little plot of land to cultivate. The infliction of this charge under the Budget will, however, make it less possible for them to obtain land for the purposes I have mentioned. I believe, unless this
§ Clause is passed, it will act as a deterrent to the expenditure of capital in the development of agricultural land, simply because there is a possibility of that land in the future being required for building purposes. By thus preventing development you will deprive the adjoining community of the amount of labour which the carrying out of improvements would entail, and you will also impoverish the district by a reduction of the food supply from that class of land. I cordially support the Clause. I believe it is a simple measure of justice. I support it in the interests of those who live in towns, who want the milk supply that comes from adjacent land—a supply which it will be more difficult to obtain under the infliction of this increased burden. I want also to see dwellers in towns having every facility offered them to have their allotments and, if need be, their small holdings adjoining to the town, which would be hindered if this increased burden were insisted upon.
§ Question put, "That the Clause be now read a second time."
§ The Committee divided: Ayes, 118; Noes, 246.
1249| Division No. 89.] | AYES. | [9.35 p.m. |
| Acland-Hood Rt. Hon. Sir Alex. F. | Goldman, C. S. | Perkins, Walter F. |
| Agar-Robartes, Hon. T. C. R. | Goulding, Edward Alfred | Peto, Basil Edward |
| Baird, J. L. | Grant, J. A. | Pollock, Ernest Murray |
| Balcarres, Lord | Gretton, John | Pretyman, Ernest George |
| Baldwin, Stanley | Guinness, Hon. W. E. | Primrose, Hon. Neil James |
| Banbury, Sir Frederick George | Hambro, Angus Valdemar | Pryce-Jones, Col. E. |
| Barlow, Montague (Salford, South) | Hamersley, A. St. George | Quilter, William Eley C. |
| Barnston, Harry | Harris, Henry Percy | Ratcliff, Major R. F. |
| Bathurst, Charles (Wilton) | Harrison-Broadley, H. B. | Rawlinson, J. F. P. |
| Beach, Hon. Michael Hugh Hicks | Helmsley, Viscount | Rawson, Colonel R. H. |
| Benn, Arthur Shirley (Plymouth) | Hillier, Dr. A. P. | Remnant, James Farquharson |
| Benn, Ion H (Greenwich) | Hills, J. W. | Rolleston, Sir John |
| Bennett-Goldney, Francis | Hill-Wood, Samuel | Rutherford, Watson (L'pool, W. Derby) |
| Bentinck, Lord H. Cavendish- | Hohler, G. Fitzroy | Salter, Arthur Clavell |
| Bigland, Alfred | Hope, Harry (Bute) | Sanders, Robert A. |
| Boscawen, Sackville T. Griffith- | Hope, James Fitzalan (Sheffield) | Sanderson, Lancelot |
| Boyle, W. L. (Norfolk, Mid) | Horner, A. L. | Smith, Harold (Warrington) |
| Boyton, J. | Houston, Robert Paterson | Spear, John Ward |
| Bull, Sir William James | Hunt, Rowland | Stanier, Beville |
| Campion, W. R. | Hunter, Sir C. R. (Bath) | Stanley, Hon. G. F. (Preston) |
| Carlile, E. Hildred | Ingleby, Holcombe | Stewart, Gershom |
| Cave, George | Jardine, E. (Somerset, E.) | Strauss, Arthur (Paddington, North) |
| Chaloner, Colonel R. G. W. | Joynson-Hicks, William | Swift, Rigby |
| Chamberlain, Rt. Hon. J. A. (Worc'r.) | Kebty-Fletcher, J. R. | Terrell, H. (Gloucester) |
| Clyde, J. Avon | Lane-Fox, G. R. | Walker, Col. William Hall |
| Cooper, Richard Ashmole | Larmor, Sir J. | Walrond, Hon. Lionel |
| Courthope, G. Loyd | Law, Andrew Bonar (Bootle, Lancs.) | Warde, Col. C. E. (Kent, Mid) |
| Craig, Norman (Kent, Thanet) | Lewisham, Viscount | Weigall, Capt. A. G. |
| Crichton-Stuart, Lord Ninian | Locker-Lampson, G. (Salisbury) | Wheler, Granville C. H. |
| Cripps, Sir C. A. | Lockwood, Rt. Hon. Lt.-Col. A. R. | White, Major G. D. (Lancs., Southport) |
| Dalrymple, Viscount | Lyttelton, Hon. J. C. (Droitwich) | Williams, Col. R. (Dorset, W.) |
| Dalziel, Davison (Brixton) | Mackinder, H. J. | Willoughby, Major Hon. Claud |
| Dickson, Rt. Hon. C. Scott- | Magnus, Sir Philip | Wolmer, Viscount |
| Dixon, C. H. | Mount, William Arthur | Worthinpton-Evans, L. |
| Douglas, Rt. Hon. A. Akers- | Neville, Reginald J. N. | Yerburgh, Robert |
| Fell, Arthur | Newman, John R. P. | Younger, George |
| Fetherstonhaugh, Godfrey | Newton, Harry Kottingham | |
| Fitzroy, Hon. E. A. | Nicholson, Wm. G. (Petersfield) | |
| Fletcher, John Samuel (Hampstead) | Orde-Powlett, Hon. W. G. A. | TELLERS FOR THE AYES.—Mr. Eyres-Monsell and Mr. Royds. |
| Forster, Henry William | Pease, Herbert Pike (Darlington) | |
| Gibson, Sir James P. | Peel, Captain R. F. (Woodbridge) | |
| NOES. | ||
| Abraham, William (Dublin Harbour) | Harcourt, Robert V. (Montrose) | O'Donnell, Thomas |
| Acland, Francis Dyke | Hardic, J. Keir | Ogden, Fred |
| Adamson, William | Harvey, A. G. C. (Rochdale) | O'Kelly, Edward P. (Wicklow, w.) |
| Addison, Dr. C. | Harvey, T. E. (Leeds, W.) | O'Malley, William |
| Adkins, W. Ryland D. | Harvey, W. E. (Derbyshire, N.E.) | O'Neill, Dr. Charles (Armagh, S.) |
| Agnew, Sir George William | Harwood, George | O'Shaughnessy, P. J. |
| Allen, Arthur Acland (Dumbartonshire) | Haslam, James (Derbyshire) | O'Shee, James John |
| Allen, Charles P. (Stroud) | Haslam, Lewis (Monmouth) | O'Sullivan, Timothy |
| Anderson, A | Havelock-Allan, Sir Henry | Parker, James (Halifax) |
| Armitage, R. | Haworth, Arthur A. | Pearce, Robert (Staffs, Leek) |
| Ashton, Thomas Gair | Hayden, John Patrick | Pearce, William (Limehouse) |
| Baker, Joseph A, (Finsbury, E.) | Hayward, Evan | Philipps, Col. Ivor (Southampton) |
| Balfour, Sir Robert (Lanark) | Henderson, Arthur (Durham) | Pointer, Joseph |
| Barnes, G. N. | Herbert, Col. Sir Ivor | Power, Patrick Joseph |
| Barran, Rowland Hirst (Leeds, N.) | Higham, John Sharp | Price, C. E. (Edinburgh, Central) |
| Barry, Redmond John (Tyrone, N.) | Hinds, John | Priestley, Sir Arthur (Grantham) |
| Barton, W. | Hobhouse, Rt. Hon. Charles E. H. | Priestley, Sir W. E. B. (Bradford, E.) |
| Benn, W. W. (T. Hamlets, St. Geo.) | Holt, Richard Durning | Pringle, William M. R. |
| Bentham, G. J. | Home, C. Silvester (Ipswich) | Radford, G. H. |
| Bethell, Sir J. H. | Howard, Hon. Geoffrey | Raffan, Peter Wilson |
| Black, Arthur W. | Hudson, Walter | Rainy, A. Rolland |
| Boland, John Plus | Hughes, S. L. | Rea, Rt. Hon. Russell (South Shields) |
| Booth, Frederick Handel | Hunter, W. (Govan) | Rea, Walter Russell (Scarborough) |
| Bowerman, C. W. | Isaacs, Sir Rufus Daniel | Reddy, Michael |
| Boyle, D. (Mayo, N.) | Jardine, Sir J. (Roxburgh) | Redmond, John E. (Waterford) |
| Brigg, Sir John | Johnson, W. | Redmond, William (Clare) |
| Brocklehurst, W. B. | Jones, Edgar (Merthyr Tydvil) | Roberts, Charles H. (Lincoln) |
| Bryce, J. Annan | Jones, H. Haydn (Merioneth) | Roberts, G. H. (Norwich) |
| Burns, Rt. Hon. John | Jones, Leif Stratten (Notts, Rushcliffe) | Robertson, Sir G. Scott (Bradford) |
| Burt, Rt. Hon. Thomas | Jones, William (Carnarvonshire) | Robinson, Sydney |
| Buxton, Noel (Norfolk, N.) | Joyce, Michael | Roche, Augustine (Louth) |
| Byles, William Pollard | Keating, M. | Roche, John (Galway, E.) |
| Cawley, Sir Frederick (Prestwich) | Kellaway, Frederick George | Runciman, Rt. Hon. Walter |
| Chapple, Dr. W. A. | King, J. (Somerset, N.) | St. Maur, Harold |
| Clancy, John Joseph | Lambert, Richard (Wilts, Cricklade) | Samuel, Rt. Hon. H. L. (Cleveland) |
| Clynes, John R. | Lansbury, George | Samuel, J. (Stockton) |
| Collins, G. P. (Greenock) | Lawson, Sir W. (Cumb'rld., Cockerm'th) | Samuel, S. M. (Whitechapel) |
| Compton-Rickett, Rt. Hon. Sir J. | Levy, Sir Maurice | Scanlan, Thomas |
| Condon, Thomas Joseph | Lewis, John Herbert | Schwann, Rt. Hon. Sir C. E. |
| Craig, Herbert J. (Tynemouth) | Logan, John William | Seely, Col. Rt. Hon. J. E. B. |
| Crawshay-Williams, Eliot | Lough, Rt. Hon. Thomas | Sheehy, David |
| Crooks, William | Low, Sir F. (Norwich) | Simon, Sir John Allsebrook |
| Crumley, Patrick | Lundon, T. | Smith, Albert (Lancs., Clitheroe) |
| Dalziel, Sir James H. (Kirkcaldy) | Lyell, Charles Henry | Smyth, Thomas F. (Leitrim, S.) |
| Davies, E. William (Eifion) | Lynch, A. A. | Snowden, P. |
| Davies, Timothy (Lincs., Louth) | Macdonald, J. R. (Leicester) | Stanley, Albert (Staffs, N.W.) |
| Davies, Sir W. Howell (Bristol, S.) | Macdonald, J. M. (Falkirk Burghs) | Summers, James Woolley |
| Dawes, J. A. | MacGhee, Richard | Sutherland, J. E. |
| Delany, William | Maclean, Donald | Sutton, John E. |
| Denman, Hon. R. D. | MacNeill, John Gordon Swift | Taylor, John W. (Durham) |
| Dewar, Sir J. A. | MacVeagh, Jeremiah | Taylor, Theodore C. (Radcliffe) |
| Dickinson, W. H. | M'Callum, John M. | Tennant, Harold John |
| Dillon, John | M'Laren, F. W. S. (Lincs., Spalding) | Thomas, J. H. (Derby) |
| Donelan, Captain A. | M'Laren, Walter S. B. (Ches., Crewe) | Thome, G. R. (Wolverhampton) |
| Duncan, C. (Barrow-in-Furness) | M'Micking, Major Gilbert | Trevelyan, Charles Philips |
| Duncan, J. Hastings (York, Otley) | Manfield, Harry | Ure, Rt. Hon. Alexander |
| Edwards, Enoch (Hanley) | Markham, Arthur Basil | Verney, Sir Henry |
| Elibank, Rt. Hon. Master of | Marshall, Arthur Harold | Wadsworth, J. |
| Elverston, H. | Mason, David M. (Coventry) | Ward, John (Stoke-upon-Trent) |
| Esmonde, Sir Thomas (Wexford, N.) | Masterman, C. F. G. | Wardle, George J. |
| Essex, Richard Walter | Meagher, Michael | Wason, Rt. Hon. E. (Clackmannan) |
| Falconer, J. | Meehan, Francis E. (Leitrim, N.) | Watt, Henry A. |
| Farrell, James Patrick | Meehan, Patrick A. (Queen's Co.) | Webb, H. |
| Fenwick, Charles | Menzies, Sir Walter | Wedgwood, Josiah C. |
| Ferens, T. R. | Millar, James Duncan | White, Sir George (Norfolk) |
| Ffrench, Peter | Molteno, Percy Alport | White, Sir Luke (York, E. R.) |
| Field, William | Mond, Sir Alfred Moritz | White, Patrick (Meath, North) |
| Fitzgibbon, John | Money, L. G. Chiozza | Whitehouse, John Howard |
| Flavin, Michael Joseph | Montagu, Hon. E. S. | Whittaker, Rt. Hon. Sir Thomas P. |
| France, G. A. | Mooney, J. J. | Whyte, A. F. (Perth) |
| Furness, Stephen W. | Morgan, George Hay | Wiles, Thomas |
| Gelder, Sir W. A. | Morrell, Philip | Wilkie, Alexander |
| Gill, A. H. | Morton, Alpheus Cleophas | Williams, Llewellyn (Carmarthen) |
| Goddard, Sir Daniel Ford | Muldoon, John | Williams, P. (Middlesbrough) |
| Goldstone, Frank | Munro, R. | Williamson, Sir A. |
| Greenwood, Hamar (Sunderland) | Neilson, Francis | Wilson, Hon. G. G. (Hull, W.) |
| Greig, Colonel J. W. | Nolan, Joseph | Wilson, John (Durham, Mid) |
| Guest, Major Hon. C. H. C. (Pembroke) | Norman, Sir Henry | Wilson, J W. (Worcestershire, N.) |
| Gulland, John William | Norton, Capt. Cecil W. | Winfrey, Richard |
| Gwynn, Stephen Lucius (Galway) | O'Brien, Patrick (Kilkenny) | Wood, T. M'Kinnon (Glasgow) |
| Hackett, J. | O'Connor, John (Kildare, N.) | |
| Hall, Frederick (Normanton) | O'Connor, T. P. (Liverpool) | TELLERS FOR THE NOES.—Mr. Illingworth and Mr. Dudley Ward. |
| Hancock, J. G | O'Doherty, Philip |