§ Mr. ROYDSThe points I desire to raise are these: On 20th June we considered in Committee of Supply the Vote for the Valuation Department. In the discussion on that occasion I made two charges against the method of valuation employed by the Valuation Department. The first charge was that the site value of agricul- 2252 tural land as ascertained by the Government valuers was not the true site value of the land, but included a very large part of the owners' improvements. I instanced that there were included in that site value a very large part of the value attributable to farmhouses and buildings, and the whole of such improvements as drains, dykes, gates, stone walls, embankments, works of reclamation, and so forth. The whole of these are included in the so-called site value of agricultural land as ascertained under the provisions of the People's Budget. The result is that the site value of agricultural land is grossly inflated and does not represent the value of the site at all, but mainly represents the value of improvements effected by the owners of the land and their predecessors. The second point I made was that, Increment Value Duty has been claimed not only where there has been an increase in the value of the site, but in respect of buildings, builders' profits, occasional profits, and, indeed, where there had been a loss and no actual rise in the value of the site. I assert without any fear of contradiction that that method of valuation was being pursued, and is being pursued, by the Valuation Department.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)On a point of Order. I have waited until the hon. Member stated his two points. I want to know whether the case he was making out was a case of administration or one which involves an alteration in the Act of Parliament. I gathered to-day at question time that it was a matter which involved legislation, and I am confirmed in that by the statement the hon. Member has just made. In regard to the first point, it undoubtedly would involve an alteration in the Finance Act for a valuation such as he suggested. The hon. Member moved an Amendment on the Finance Act to effect the purpose which he now suggests he wants to achieve. The same 2253 observation applies to number two. Both of the points were raised by way of Amendment to the Finance Act. I submit that the questions involve legislation, and that they cannot be discussed. If it is a pure question of administration within the limits of the Act of Parliament I have nothing to say, but on the two points raised by the hon. Member legislation would be necessary.
§ Mr. SPEAKERI am afraid I am not sufficiently familiar with the Finance Act to say whether the points raised are matters of administration or matters which require an alteration of the law. If they involve an Amendment of the law, they cannot be discussed on the Motion for the Adjournment, but if they simply refer to the method in which the Act is now being administered by those whose duty it is to administer it, then the hon. Gentleman is entitled to criticise that administration.
§ Mr. ROYDSIf I may say so, I agree entirely with your ruling. My objection was to the methods of administration. I admit frankly, having regard to the methods of administration, it is absolutely impossible to say whether it is a question of law or not, because the Valuation Department, as advised by the Treasury, seem to me to take the law into their own hands. But my objections are purely on points of administration. It is absolutely impossible for me or the Chancellor of the Exchequer or anyone to say what the construction of the Finance Act is. I am objecting purely on grounds of administration. Whether it is in accordance with the law or not is a matter for the Law Courts.
§ Mr. SPEAKERHas the right hon. Gentleman a copy of the Act under which he says this is being done?
§ Mr. LLOYD GEORGEI have got a copy of the Act and I do not think that the hon. Member will deny what I have said. This is the point: That improvements which are effected purely for agricultural purposes are not deducted, and that they ought to be deducted. That is a matter for argument, but at any rate under the Act of Parliament the valuer is expressly prohibited from deducting improvements effected for agricultural purposes, because as we contend that would increase the increment afterwards, but 2254 still that is a matter for argument. The Act says:—
"The assessable site value of land means the total value after deducting (a) the same amount as is to be deducted for the purpose of arriving at full site value for gross value, and (b) any part of the total value which is proved to the Commissioners to be directly attributable to works executed, or expenditure of a capital nature (including any expenses of advertisement) incurred bonâ fide by or on behalf of or solely in the interests of any person interested in the land for the purpose of improving the value of the land as building land, or for the purpose of any business, trade or industry other than agriculture."
The hon. Gentleman's complaint has been that the improvements effected for agricultural purposes have not been deducted. He may be right or wrong, but that is the express direction of the Act of Parliament and the Commissioners simply act upon that. The hon. Gentleman says that they have broken the law. There is a remedy, and cases have been taken to the Law Courts upon this question. There is a direct remedy in the Law Courts on that express point.
§ Mr. ROYDSThe Chancellor of the Exchequer has dealt solely with Section 25, Sub-section (4). But there is another Sub-section, Sub-section (2) of Section 25 which defines the full site value of land as
"The sum the land might be expected to realise if divested of buildings and of any other structures including fixed or attached machinery on, in or under the surface which are appurtenant to or used in connection with any such buildings, and of all growing timber, fruit trees, fruit bushes, and other things growing thereon."
I have always understood that that includes anything in the nature of agricultural equipment for agricultural purposes as well as houses and buildings. The right hon. Gentleman has dealt with Sub-section (4) which deals with claims for deductions after the land has been so divested, but I think that the Act means that all these things should be deducted from the value of the site.
§ Mr. SPEAKERThat is a matter surely for the Law Courts. You cannot expect me to decide that.
§ Mr. ROYDSI do not ask you to decide it, but I ask that you should not give a decision against me by precluding me from catering on the matter.
§ Mr. SPEAKERI am asked to decide whether what is now being done is being done under the Act or being done outside the Act. The hon. Gentleman says that the Act is being violated by reason of certain things being done by the valuers. If I decide that that is so, that the Act is now being violated by the valuers, then, of course, I will allow the hon. Gentleman to proceed, but he does ask me to come to that decision. Now it appears to me that the matter is one of contention between the construction of two Sections of the Act—the hon. Gentleman takes one view and the Chancellor of the Exchequer takes another. It must really be a matter for a Law Court to decide.
§ Sir G. YOUNGERThis question arose on an Amendment proposed by myself, and in answer to my Amendment and in asking me to withdraw it, the Chancellor of the Exchequer distinctly said it was provided for in Sub-section (4), with a good deal more than I asked for. This may be a question of law, but it certainly is also a question whether the Act is being administered in the way the Chancellor of the Exchequer explained.
§ Mr. LLOYD GEORGESurely the hon. Gentleman does not suggest that under this Section agricultural improvements should be deducted?
§ Mr. SPEAKERThe point seems to me to be whether the valuers are properly construing the Act. That seems to be the point. I cannot decide that.
§ Mr. ROYDSThe Amendment moved by the hon. Member for Ayr Burghs (Sir G. Younger) was that there should be deducted from the site value all improvements of whatever nature under, on or in the soil. The Chancellor of the Exchequer asked my hon. Friend to withdraw the Amendment so that he might introduce a more comprehensive Amendment covering mere even than was included in my hon. Friend's Amendment. It seems to me therefore that it is purely a question of administration, and without any question whatever the new Amendment was passed as embodying what the meaning and intention of the House was. I do allege that the Act is not being administered in accordance with its provisions.
§ Mr. SPEAKERThe fact that the hon. Member moved an Amendment to the last Finance Bill shows that he was not satisfied with the state of the Bill as it then was, and that he wished to make the law other than as it was proposed. The fact that the Amendment was not accepted I think rather goes against the hon. Member than otherwise. The fact that the Chancellor of the Exchequer may have promised to deal with the matter in another way, and that in the view of hon. Members he has not carried out that, undertaking in a way satisfactory to them, is another matter altogether. I still do not see how I can possibly be asked to decide whether the law is or is not being properly carried out.
§ Mr. AUSTEN CHAMBERLAINI recognise the extreme difficulty of the case. The point, as I conceive it, is that if the question is decided in a Court of Law none of those concerned can say what the decision of the Court of Law will be, but when the Act was under discussion we received certain assurances from the Chancellor of the Exchequer that the Amendments were unnecessary, and that the Bill as drafted provided what we wished to secure. Our present contention is that the declarations by which the Government induced the House to pass the Bill are not now being accepted and worked upon by the Revenue authorities. Is it possible for my hon. Friend to raise that question?
§ Mr. SPEAKERIt is now too late. It seems to me that the proper time to raise that point would have been cither when the Amendments proposed by the Chancellor of the Exchequer were before the Committee, or on the Report stage or Third Beading stage, and hon. Members ought then to have said: "What you are now inserting in the Bill does not carry out what was said." It seems to me too late now to argue that question. There is the law! The law is such as passed the House on the Third Reading. It is not administered in the way in which the hon. Member for the Sleaford Division thinks it ought to be administered. The Chancellor of the Exchequer, on the other hand, says it is now administered according to law. It seems to me that the proper course is first of all to bring it into the Law Courts and see what is really intended by the Act, and if that is not satisfactory suggest an Amendment of the Act.
§ Mr. AUSTEN CHAMBERLAINI see the great difficulty of presenting the matter, but I do not think it was possible, if I may submit so, for us effectively to raise this while the Bill was under discussion, because we were not met by the Government at that time with the declaration that those things ought not to be done, but we were met by the declaration that they would be done under the Bill as drafted, and not that the Amendments were wrong, but that they were unnecessary. My hon. Friend wishes to raise the case that the administration of the law does not comply with the announcement of the intentions of the Government which induced the House of Commons to pass the law. We could not press the Government further at the time when the law was under discussion because they said the law was that which we desired it to be. We now find that as administered it is not. I do not know whether it is possible for us to raise the question under those circumstances, but I think you will see that our remedy was not when the Bill was under discussion.
§ Mr. SPEAKERI have followed the right hon. Gentleman, but there is the law. Good or ill there it is. There arises the question, is that law being put into operation by the valuers? If it can be shown before the Law Courts that the law is not being properly administered, then, of course, the hon. Member for Sleaford will have a proper and legitimate reason for discussing the question. But I think first of all he must show that the law is not being carried out in the sense in which it received the assent of Parliament.
§ Mr. LLOYD GEORGEI cannot accept the declaration of the right hon. Gentleman as to what passed at the time. I do not want to go beyond that now, but I am bound to enter a caveat.
§ Mr. AUSTEN CHAMBERLAINThat is the question I want discussed.
§ Mr. LLOYD GEORGEI cannot be expected to recollect everything that took place in a six-months debate, but all these points were raised on the Finance Act this year, when the hon. Gentleman took the natural course of moving a couple of Amendments to that Act. I remember one of them raised this very specific point which has never been challenged in the Law Courts, and I venture to say no one would dream of challenging it in the Law Courts. The hon. Member adopted the 2258 one way of doing so by moving Amendments.
§ Mr. PRETYMANMay I say that the point took place not on an Amendment to the Budget, but on the discussion on the administration of the Act, which was on June 20th, when this matter was being discussed. It was on the administration of the Department, and was not raised on an Amendment.
§ Mr. LLOYD GEORGEIt was raised on an Amendment.
§ Sir F. BANBURYMay I ask you, Sir, whether it would be in order to draw attention to the working of the Act, with the object of asking the Chancellor of the Exchequer whether he would consider any Amendments.
§ Mr. SPEAKERNo, that is the difficulty in the way of the hon. Member. You cannot on the Motion of Adjournment discuss the Amendment of an Act of Parliament.
§ Mr. ROYDSPerhaps I shall be in order if I draw your attention to the fact that in the discussion on the administration of the Act on 20th June, the Chancellor of the Exchequer expressly stated that all the cases I have mentioned should be referred to a Committee of experts. His words were:—
They can refer nil cases such as those mentioned by the hon. Member, and other cases which have been mentioned from time to time by the hon. Member for Chelmsford. I propose that a Committee shall be appointed at once in order to get its report upon these very important matters.Although five months have elapsed no Committee has been appointed. Land valuation has proceeded since that date, and, according to my contention, a false value has been placed on the sites of agricultural land. I maintain that the value is wrong on the construction of the Act itself. I argued it on this ground on June 20th, and the Chancellor of the Exchequer promised to appoint a Committee to inquire into the express point, but no Committee has been appointed. I have pelted him with questions since, but have been able to get no redress. It is a public scandal that this valuation should be allowed to proceed on these lines. It is a useless valuation; it is a false valuation.
§ Mr. SPEAKERThe hon Member is now trying to get round my ruling. He is entitled to criticise the Chancellor of the Exchequer for not appointing the Committee; that would be in order.
§ Mr. ROYDSI am quite willing to confine my remarks to that. It is quite true that since June 20th communications have taken place between my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain) and the Chancellor of the Exchequer as to the terms of reference to this Committee, but the Chancellor of the Exchequer refused to make the scope of the inquiry wide enough to embrace the two points of charge to which I have referred, and the result is that nothing has been done. I ask the Chancellor of the Exchequer these simple questions. Is he or is he not prepared at once to act up to the promise which he gave me on June 20th to appoint a Committee of experts to inquire into the working of the valuation under the People's Budget? [HON. Members: "Hear, hear."] It was always called the People's Budget; the people have not forgotten it; and it is high time we inquired how it is getting on. Is he prepared to make the inquiry wide enough to embrace the two points of charge which I made? Is he also prepared to allow the House to discuss the terms of reference and the constitution of the Committee? Will he agree to suspend the valuation of site value of agricultural land until that Committee has reported? The Chancellor of the Exchequer has hinted rather broadly that he intends to have a second scheme of land reform shortly. I suggest that it will be in the interests of this House, the country and indeed of the right hon. Gentleman himself that, before he embarks on a second scheme, we first inquire how the first scheme is getting on.
§ Mr. LLOYD GEORGEThe hon. Gentleman has asked me questions as to whether the Government is prepared to stand to the pledge which I gave, in a discussion in this House, to appoint a Committee of experts to inquire into the administration of the valuation under the Act of 1909. I have always been prepared to adhere to that pledge. I am prepared now to adhere to that pledge. The pledge I gave was that I was prepared to submit to a Committee of experts the question of the administration of the valuation under the Act of 1909. I have offered to do that over and over again—to submit the terms of reference. My right hon. and learned Friend the Attorney-General read out those terms, I believe, and he has submitted them to the right hon. Gentleman the Member for East Worcestershire. So 2260 long as it is on the question of administration—
§ Mr. LLOYD GEORGEIf it is to be a question of the best methods of valuation, which involves legislation, that is obviously not a question to be settled by surveyors. That is a question which involves policy. I ask again what I have asked repeatedly, which of the two positions do the Opposition take up? Do they want to inquire into the question as to whether the valuers are carrying out the law as it stands, into administration? I am quite willing to assent for a Committee of experts to be set up to consider that one question—a narrow question I agree—as to whether or not the Act of Parliament is being carried out. If they want to go beyond that and consider the question as to whether this Act of Parliament prescribes the true or right value—surely that is not a question for valuers: that is a very important question of principle where you need a different Committee. I do not care which of the two the Opposition want. I am willing to refer the first to a Committee of experts, and the right hon. Gentleman (Mr. Austen Chamberlain) knows roughly the kind of experts I mean. He agrees I am perfectly certain, that the general lines on which we would proceed are those that will guarantee the impartiality of the inquiry. If they want the second—it would be a different Committee. I should like to know their view. There is a great deal to be said for considering the question of valuation, which might be useful—[HON. Members: "Hear, hear"]—Yes, for other purposes—for controversial purposes. Is that what the right hon. Gentleman wants? I should like the Opposition to decide for themselves what it is they are really asking for. If they ask for the second, I have told them that I am quite willing to take that into consideration, but it would be a different inquiry.
§ Mr. AUSTEN CHAMBERLAINI have two minutes. If I express myself imperfectly it is because of the pressure of time. The right hon. Gentleman offered us an inquiry. Negotiations took place between hon. Members on the opposite side and myself as representing my hon. Friends on this side as to the nature of that inquiry. It is perfectly true, as the right hon. Gentleman has said, that what he offered us was an inquiry by experts as to whether 2261 the administration of the Act was in accordance with the terms of the Act. But the terms of reference were not wide enough to decide that question. That was the point on which our negotiations broke down. The Government insisted that the only valuation that should be inquired into should be the original valuation as at April 30th, 1909. We asked that they should inquire not only into that but into such valuations as had taken place since—where the tax had been paid. If the right hon. Gentleman will give us an inquiry into the valuations under Part I. of the Act, that is of both the valuations, we will accept it. If he refuses to give us an inquiry into both—
§ Mr. LLOYD GEORGEIf that does not involve legislation.
§ Mr. AUSTEN CHAMBERLAINIf it does not involve legislation. I will be quite 2262 frank with the right hon. Gentleman. I think that such an inquiry might lead the public to think that the Act is not wisely drafted. But what we want to know is whether the two valuations are true valuations and not whether one or the other is true. That is the point on which we differ. The point on which the negotiations broke down—I think the Attorney-General will agree—was that the Government offered us an inquiry into the first valuation only, and that we said we did not care for that unless we were allowed an inquiry into both valuations—
§ And, it being half-an-hour after the conclusion of Government Business, Mr. SPEAKER adjourned the House, without Question put.
§ Adjourned at Twenty minutes before Twelve o'clock.