HC Deb 11 May 1911 vol 25 cc1453-66

Original Question again proposed.

Mr. HAYES FISHER

I am glad that I shall not have to come even within measurable distance of making any grave charges of dishonesty or anything of that kind against any Government Department. But I wish to complain most strongly of the attitude of the Chancellor of the Exchequer towards the whole question of the relative amount of taxation which ought to be paid by the Imperial Exchequer to local authorities. The Chancellor of the Exchequer was unfortunately absent from the House in February and March. We all regret that he was ill, and we all rejoice to see him back in the vigour of health which he has displayed to-day. A part of the time that he was absent was occupied most benevolently, as he showed us the other day when he adumbrated that great scheme which I hope he will carry, with the assistance of all parties, to a, completely successful issue. But part of the time was not occupied so benevolently. I cannot help thinking that there was a little malevolence on his part in regard to this question of the readjustment of taxation between the Imperial Exchequer and local authorities. The Committee will remember that in February last I moved an Amendment to the Address complaining of the conduct of the Government in not mentioning this matter in the King's Speech. On that occasion we strongly reproached the Chancellor of the Exchequer for having broken the solemn pledge which he gave to the House last year, that if he were to stand at that box this year as Chancellor of the Exchequer he would deal thoroughly with this much-delayed question. We quoted his own speech and the speech of Lord Crewe, who, in the House of Lords, gave most categorical assurances that this year the question would be practically dealt with, and declared that local authorities might be assured that they would obtain some substantial relief whenever any Chancellor of the Exchequer stood at that box to tell us how he would disburse the money which he was collecting from the nation by way of taxation. The right hon. Gentleman will stand at that box for that purpose on Tuesday next, and I still hope that he may have something to say that will be, if not altogether, at any rate partially satisfactory to local authorities, and that he will be able this year to find money to redress the grievances from which local authorities have so long suffered.

As a result of the Amendment to the Address, we obtained some satisfaction from the Secretary to the Treasury. I suggested to the Government that they might at once appoint a small Committee of financial experts to go into the question, with a view to bringing up to date the proposals of the Majority and the Minority Reports of the Royal Commission of 1901, and to making some estimate of the new charges which have been put on local authorities by various Acts of various Governments—and by no Government so much as by the present—thereby arriving at some conclusion as to what redress might be given to local authorities out of Imperial funds. At the end of the Debate our hopes were raised by a promise from the Secretary to the Treasury that a Committee should be immediately set up to deal practically with the question—not to delay it, but to deal with it in a speedy manner, and to obtain information on which the Government might quickly act in giving at least some interim redress for these grievances. I was the more pleased when a little later on the Secretary to the Treasury informed me that the Government were willing not only to set up the Committee, but, from the London point of view, to accept some representative of London interests upon that Committee. He informed me, in his letter, that I must treat the matter as confidential until he had seen me. After he had seen me he informed me—and at least one other Member of this House—who the gentleman was that the Government proposed to have on the Committee, and he instructed me to make inquiries as to whether that particular official could be spared to serve. Then came a most extraordinary development on the part, of His Majesty's Government. Acting on my instructions, I proceeded to review the whole of the business likely to come before the London County Council during the next few months. I interviewed the gentleman named—the comptroller of the county council, Mr. Haward. I asked him whether he would be willing to serve,' and whether he thought there was anything in the way of the business of the county council that could possibly prevent his giving the time for such an inquiry if he were asked to serve. I certainly was left under the full impression that the county council were to be honoured by His Majesty's Government by being allowed to choose a representative.

Mr. LLOYD GEORGE

Choose?

Mr. HAYES FISHER

Yes. I left under the impression that the county council were to be allowed to choose a representative, that we were to be allowed to put forward the name of the man who in our opinion would best represent the interests of the ratepayers of London. What is the whole of the dispute in this connection? It is a dispute between the local authorities and the Imperial Exchequer as to how the expenditure of the country should be apportioned between the Imperial Exchequer and the local authorities. That is the dispute. That is the main contention that was running all through the inquiry of the Royal Commission which reported in 1901. That Royal Commission, as everybody knows, both in the Majority and in the Minority Reports, came to the conclusion, and published their conclusions, that if equity were done as between the taxpayer and the ratepayer that the ratepayer ought to contribute very much less and the taxpayer ought to contribute very much more towards the total expenditure of this country. We have constantly pleaded here and elsewhere that London has a very special claim and a very special grievance of its own against the Imperial Exchequer. I believed, and all my colleagues believed, that the Chancellor of the Exchequer was anxious and willing that on the Committee which he was about to appoint to furnish him and the Government with information, that. London should have some representative whom it thoroughly trusted to put forward its case, and to see, so far as London was concerned, that this case had some chance of being put forward fairly, and having justice done to it, as in the case of the county and borough authorities, or any other authorities.

We were immensely surprised a few days afterwards when we were told that there was one person whom the Chancellor of the Exchequer would not have on that Committee, and that was the comptroller of the London County Council. To this day, for the life of me, I cannot understand why the Chancellor of the Exchequer will not have upon that Committee the one man whom the majority of the London County Council, and I believe I may say the minority, too, desired to have upon that Committee to represent London. Why will not, why would not, the Chancellor of the Exchequer have that gentleman? One would have thought that he would have had the man who is the greatest authority on this subject in the whole of London. Mr. Haward is a man of recognised authority in the United Kingdom on this subject, a man who has written much upon this subject, and a man who knows probably more about it than any other living man. This was the man that we thought we ought to have to represent London's interest.

Mr. LLOYD GEORGE

May I ask the hon. Gentleman what objection he had to Mr. Harper? Does he regard him as incompetent, or without knowledge on the subject?

Mr. HAYES FISHER

I will answer that question if the Chancellor of the Exchequer will answer my question when he gets up. Why would he not have the senior officer, Mr. Haward? Does he regard him as incompetent? Does he regard him as unfitted to sit upon this Committee? If he does, why does he? Let me tell the Chancellor of the Exchequer that he is doing something which I will undertake to say has no precedent whatever, and which no Government has ever done.

Mr. LLOYD GEORGE

I will promise to answer the hon. Gentleman's question when my turn comes. He is now speaking. Can he tell me what objection he had to Mr. Harper? After all, it is for me to choose; this is a Government Committee, and the hon. Gentleman refused to permit Mr. Harper to become a member of it. I want to ask him what objection he has to Mr. Harper?

Mr. HAYES FISHER

That is quite a fair bargain. The right hon. Gentleman says he will answer my question as to what objection he had to Mr. Haward, as to why he would not accept the service of the senior officer, the comptroller of the London County Council. He asks, "Why do I object to Mr. Harper?" I will tell him. I say it is a gross affront to the senior officer, the comptroller of the London County Council, to select a subordinate officer to sit upon that Committee, and to pass by Mr. Haward after his distinguished services to the public. Here we have on the county council a gentleman in the position of Mr Haward, our senior financial officer, who has occupied that position for many years and to whom we have just offered the extraordinary and exceptional salary of £2,500 a year in order to prevent him going elsewhere, because we have such enormous confidence in his ability, and in his special knowledge of this great question which has now been carried on so long between the Imperial Exchequer and the local authorities. That is one reason. I say that that is good enough almost in itself. Recollect I did not go to the Financial Secretary to the Treasury. He came to me. I did not suggest the name of Mr. Halyard. He suggested the name of Mr. Haward. Mr. Haward is no creation of ours. Mr. Haward is a creation of the Progressive party. He was appointed to his present position by the Progressive party. I do not know whether he belongs to any party. Certainly he does not belong to the party to which I belong. He has no connection, so far as I know, with any political body. For years past Mr. Haward has been attacking every Government in turn on this question. When sometimes I am told: "Oh, this is a party manœuvre on your part; you are a Conservative and the right hon. Gentleman is a Liberal or a Radical," I reply, "Nothing of the kind, I have simply inherited my views from Lord Welby and others who have served the opposite party on the London County Council."

Everybody who has ever examined this case has come to the conclusion that London has a special grievance and a special claim against the Exchequer. I now go back to the right hon. Gentleman's question: Why we would not allow Mr. Harper to serve on the committee. We wrote a letter to the right hon. Gentleman when he suggested the name of Mr. Harper instead of that of Mr. Haward. We informed him that London would expect its senior officer to be the person to represent London's interests on that Committee, particularly as he was a man of almost world-wide reputation on this question. We did not—and do not—disparage Mr. Harper's great abilities when we suggested in our letter that Mr. Haward ought to give evidence before the Committee if that Committee was to take evidence. Let me tell the right hon. Gentleman another reason. He belongs to the dominant party in this House. I happen to lead the dominant party in another House. After all, if anybody's policy should be represented it should be that of the dominant party. We had the utmost confidence that Mr. Haward would represent the views of the dominant party. And the views of the dominant party, let the House recollect, are shared in the main at the present time by the minority of the London County Council. What views does the right hon. Gentleman want represented on behalf of that body? Is it the views of Mr. Harper? I admit Mr. Harper's great ability. But Mr. Harper is known to have very special and very pronounced and extreme views on the question of Land Values Taxation. That is the real reason, I suspect, why the right hon. Gentleman wants Mr. Harper and not Mr. Haward. He wants reflected a. current that will run right throughout his Report. I cannot help thinking the right hon. Gentleman does desire to get out of that Committee some report in favour of those notions which I think he largely himself imbibed from Mr. Harper when he used to consult Mr. Harper on the land values proposals contained in his Budget.

Mr. LLOYD GEORGE

Hear, hear.

Mr. HAYES FISHER

The right hon. Gentleman admits that; he admits he was in the habit of consulting Mr. Harper on the land values taxation. Surely, after all, what the London ratepayer wants is somebody who will put forward the London ratepayers' case fearlessly and independently against the Government; somebody who will not in any way be in the power of the Government, and not somebody whose views are well known to the Government on land values taxation, and who is likely to write a report very much on the lines on which the right hon. Gentleman desires the report to be written. That is a very good reason why we did not desire Mr. Harper. That reason has been very much strengthened by the conduct of the right hon. Gentleman during the last few weeks in the case of Mr. Harper. When he was unable to obtain the services of Mr. Harper, and when he refused the services of Mr. Haward, something occurred. Mr. Harper resigned his position as statistical officer of the London County Council in order to serve upon this Committee. He threw up a position worth £1,100 a year, and a pension right of £600 a year. The right hon. Gentleman was asked whether the Government had offered Mr. Harper any appointment in the future, or intended to give him any appointment in place of that which he had resigned in order to oblige His Majesty's Government by serving upon the Committee. We on this side received the answer that the right hon. Gentleman would not preclude himself from making use of Mr. Harper's services in any capacity hereafter, paid or unpaid.

That is quite a sufficient reason why Mr. Harper cannot be held to represent independently the views of the London ratepayer against the Government. Mr. Harper, in all probability, is about to enter the service of the Government, and the result of that, of course, will be that, from our point of view, inasmuch as we ratepayers are opponents of the Government, he will be merely a Government wolf in the left-off clothing of a county council lamb. When his report comes to be given it will be the report of an official who either is to obtain a very important place with a very big salary from His Majesty's Government, or is looking to that Government to give him a place of at least greater importance and greater magnificence than that which he occupied under the London County Council. Under these circumstances we say that anyone who either has become a Government official or is about to become a Government official is not in that position of fair-mindedness towards the London ratepayers' case and of independence towards the Government that we have a right to expect from anybody put upon that Committee which is going to report, and on the basis of whose report the readjustment for years to come is going to take place between the Imperial Exchequer and the local authority.

I think I have adequately answered the question put to me as to why would not the London County Council allow Mr. Harper to represent their interests on this Committee, and why they did insist on having Mr. Haward, if they were to be represented at all by any official. I hope the right hon. Gentleman when he gets up will answer my question just as directly and with as little evasiveness as I have answered his. I think the right hon. Gentleman will agree that I have not evaded this question in any way.

Mr. LLOYD GEORGE

Hear, hear.

Mr. HAYES FISHER

I have told the right hon. Gentleman quite frankly why we did not want Mr. Harper to be our representative. I hope he will tell the Committee why he took the very extraordinary course—a course absolutely without precedent—of passing over this senior official, the greatest financial official probably that any municipal body has ever had, and putting upon his Committee another official occupying, as I say—although a man of great ability, I do not in the least deny that—a position of a very subordinate character to that of Mr. Haward.

Mr. LLOYD GEORGE

No.

8.0 P.M.

Mr. HAYES FISHER

The right hon. Gentleman says "No." He is not occupying a position of a very subordinate character? Well, here is one man, the comptroller of the greatest county council in the world, of the largest local authority in the world, having something like £15,000,000 to look after every year, enjoying a salary of £2,500; and here is another officer enjoying a salary of £1,100 a year—one of our chief officers, it is true, but a man altogether in a very inferior position to that occupied by Mr. Haward. I am really surprised that the right hon. Gentleman with his great acumen should even contest that case at all. I should like to know this. Here is a Committee which I understand now is to consist of thirteen members. What we desired when we moved that Amendment, and what I suggested, was that a Committee should be formed—a small committee of financial experts, to bring up to date the conclusion and figures embodied in the Report of the Royal Commission of 1901. What has the right hon. Gentleman given us. The right hon. Gentleman has given us a Committee, half of which is composed of officials and the other half representing different in- terests. There are two ways of forming committees, one is to have a really judicial committee, none of whose members should in any way be partisans. I think it would be far better to use that form than the other, which is a Committee of partisans possibly representing conflicting interests, and to fight it out, with a chairman to see fair play. That appears to be the method the right hon. Gentleman has adopted. When the right hon. Gentleman adopted that method he might at least have seen to it that London was represented not by an official of the Government, or one who is to become an official of the Government, but by one who would be able to hold his own in this body, and that London should have its champion in the arena in which these thirteen gentlemen are to contend.

I should like to ask is that Committee going to take evidence or not. If the Committee is merely bound to bring the facts and figures of the Royal Commission up to date, I do not see why they should take evidence, at all events, not more than documentary evidence. But if that Committee is going to develop a new theory on local taxation; if it is going seriously to discuss the well-known theory on taxation held by Mr. Harper, that you could do away with the present rating system altogether if only you would raise your revenue from taxes upon the capital value of land, then I say that a matter of that grave kind and character affecting not only urban interests but rural interests, ought not to be the subject of inquiry by a single Committee not open to the public, but ought to be the subject of an inquiry by a Committee formed in the way committees are usually formed, taking evidence openly, or ought to be the subject of some such Royal Commission as that of 1901. This, to my mind, is a very important matter. I should like to know a little more specifically first, whether that Committee is to take evidence, and, next, whether this Committee is to go deeply into this important question of land value taxation, and is to bring up more recommendations on which the Government may frame legislation of that character hereafter. If that is going to be the case, we may abandon any hope of this question being settled next year. If the Committee is to develop new theories on the taxation of land values, and that upon that this House is to be called upon to legislate hereafter, then I say there is no chance whatever of this House dealing with this very important question next year, or of a substantial Grant being given to local authorities out of the Imperial Exchequer.

Let me remind the right hon. Gentleman that this case has become extremely aggravated, not only by legislation up to the present time, but by the administration of His Majesty's present Government, and particularly in the region of education. Two claims of expenditure are being forced upon the local authorities at the present time, by the Department over which the right hon. Gentleman the President of the Board of Education presides. There is one proposal at present which the County Council of London is discussing with His Majesty's Government, which, if it is adopted, will at once lead to a capital expenditure of £2,000,000 on the rates of London, and an annual maintenance expenditure of £500,000 a year, amounting to something like a 2½d. rate. That is one little proposal put forward by the Board of Education at the present time. I am not going to occupy the time of the Committee with a long disquisition on this question of local and Imperial taxation. I had my opportunity in February last. But I want to inform the right hon. Gentleman that for many years past these acute and burning questions have constituted a great grievance on the part of the local authorities and the ratepayers, and are becoming aggravated every day almost by the attitude of various Departments of the Government towards local expenditure, and that the time has come when he ought to give an absolute assurance to this House that he will give to the local authorities some Grant, if not this year, then next year, in order that partially, at all events, some of these grievances may be redressed. In conclusion I must move, in order that the discussion may be carried on, a reduction of the salary of the right hon. Gentleman by £100.

Question proposed: "That item A be reduced by £100."

Mr. MOUNT

I should like to support what fell from my hon. Friend who has just sat down as regards the unsatisfactory nature of the Committee which is being set up in regard to the question of local taxation. I approach the matter from a different point of view from that of my hon. Friend, but I entirely endorse what he said in regard to what he calls the great mistake of the Chancellor of the Exchequer, and the Government, in having adopted the principle of appointing their Committee of a number of gentlemen who represent certain definite interests. I have always felt that Committees such as this ought to be composed of financial experts and men with open minds not pledged in any way to any particular experiments and not in any way supposed to hold watching briefs for particular in terests. That is not the attitude adopted, or the action taken, by His Majesty's Government in regard to this Committee. They have adopted the principle of appointing their Committee from representatives of various interests which they believe to be affected, and if they adopted that principle they ought to take the very greatest care that the interests particularly affected should have proper representation upon the Committee. My hon. Friend who has just spoken has shown that with regard to London the ratepayers are not likely to be satisfied with the representative appointed by the Chancellor of the Exchequer.

There is another interest, which is, I think, quite as deeply concerned, in fact I think more deeply concerned, with regard to this question of local taxation, even than London. We know the grievance London suffers under. I refer to the rural industries and the agricultural interests. I am not going now—it would be out of order to attempt to do so—in any way whatever to deal with the question of local taxation. But I should like to remind the Committee of this, that what this Committee has to inquire into are the changes which took place since the Royal Commission reported in 1901. And I think anyone who takes any interest in this matter, or has watched this question of local taxation since that time, must recognise that the great additional burdens that have been put upon local ratepayers have been mainly under the heads either of Education or Highways. On both of these questions I think it would not be difficult to show that the real advantages that have accrued in the matters of Education and Highways have been to the benefit of the urban rather than the rural ratepayers. I am not going to go into these questions at the present time, but I should like further to point out that not only are the objects for which these burdens are imposed more for the benefit of the urban than the rural ratepayer, but that the rural ratepayer is less fitted now to bear the burden which falls upon him.

I should like to remind the Committee that in the last Report of the Local Taxa- tion Account it was shown while there had been a decrease in the rateable value of agricultural land of 2.2 per cent., there had been an increase of 32.5 per cent, in other hereditaments. It must be obvious to anyone that if your rateable value has fallen you are less able to bear the burden placed upon you than if your rateable value has increased. I think anyone who has any knowledge of rural districts knows that not only has the rateable value gone down, but that the rates have gone up. I should like to give an instance of the value of land—

The DEPUTY-CHAIRMAN (Mr. Whitley)

The hon. Member himself stated it was not in order to discuss a matter that obviously required legislation. The only point here is the effect of the appointment of this Committee.

Mr. MOUNT

I was only trying to show the special grievance under which agricultural ratepayers have to suffer, and that they ought to have further representation upon the Committee. If you rule I am not entitled to go further as to the question of the burden placed upon agricultural lands I will not pursue the matter.

Mr. WALTER LONG

On a point of Order. May I submit this is not a question that will require legislation? The Chancellor of the Exchequer has it in his power by administration and by the application of Budget sums for the relief of local taxation, to deal with the whole question which my hon. Friend is raising.

Mr. LLOYD GEORGE

On the point of Order. May I submit that the point raised by the right hon. Gentleman would certainly involve legislation. The Budget statement cannot deal with it in any way. I know of no other way than by legislation in some shape or form. The point raised by the hon. Member (Mr. Mount) as to whether we are to have more agriculturists upon the Committee does, I think, come in.

The DEPUTY-CHAIRMAN

The constitution of the Committee is quite in order, but in respect to the point raised by the right hon. Gentleman (Mr. Long), I must remind him this question has been discussed on the Budget on many occasions in my recollection, but never in Committee of Supply, and I think it would not be in order to discuss it in Committee of Supply.

Mr. MOUNT

I was only going to point out the increased burden upon agriculture.

And, it being a quarter past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further Proceeding was postponed without Question put.