HC Deb 01 August 1913 vol 56 cc967-1001

(1) Where on any occasion for the collection of Increment Value Duty it is shown to the satisfaction of the Commissioners that land is being or has been developed by or for the purpose of the erection of new buildings; and

  1. (a) that suitable buildings of a value at the rate of at least five hundred pounds for every acre of land used for or in connection with the buildings or exceeding twice the full site value at the date of the occasion of the land so used have been erected on the land, and that the erection of those buildings was commenced within five years before the date of the occasion; or
  2. (b) that within five years before the date of the occasion sums at the rate of at least two hundred pounds per acre or exceeding the amount of the full site value of the land have been spent on making suitable roads or sewers on the land, or otherwise suitably preparing the land for development,
any Increment Value Duty which would but for this Section be collected by the Commissioners on that occasion in respect of the land used for or in connection with the buildings, or the land which has been prepared for development, as the case may be, shall be remitted, and for the purposes of the provisions of the principal Act as to the collection of duty shall be deemed to have been paid.

(2) Any person who has so erected buildings or spent money as aforesaid, may apply to the Commissioners for a certificate of exemption under this Section in respect of the buildings erected or money spent and the Commissioners, if they are satisfied that the applicant is entitled to such an exemption, shall grant him a certificate accordingly, showing on a plan prepared to their satisfaction by the applicant, the land exempted and the time for which it is exempted.

Mr. PETO

I beg to move, in Subsection (1), to omit the words "it is shown to the satisfaction of the Commissioners."

The Commissioner's duty under this Clause is quite different from what it was under the other Clauses. In paragraph (a) it has to be proved that suitable buildings have been erected. Then it goes on to say that they are buildings of at least £500 per acre and so forth, and if these words "shall to the satisfaction of the Commissioners" are left in it appears to me that the Committee will be, in fact, setting up a fresh building authority. I do not think the Commissioners are the proper people to decide whether buildings are suitable. They are built according to regulations which vary in different localities. As far as London is concerned they are amply safeguarded under the Building Acts and the by-laws of the London County Council, and they are either suitable or not suitable, according to whether they are in accordance with the laws and by-laws. As to the question of the actual value of the buildings, that introduces a very serious trouble for anyone trying to get the benefit of the provisions of this Clause. It means the production of documents, bills of costs, plans and builders' estimates and all those things, in order to prove to the satisfaction of the Commissioners what is the character of the buildings to be erected. It seems to me it is a question where the onus ought to lie upon the valuer and not upon the person who is claiming exemption. Everyone knows what a difficult business it is to claim a comparatively simple exemption from Income Tax, and if these complicated questions as to site value and as to these houses being worth at least £500 per acre, and still more of there being suitable in some mysterious manner to the satisfaction of the Commissioners, have to be proved before the Clause can be put into operation it will very seldom be found to offer any practicable relief to anyone.

Sir RUFUS ISAACS

The question itself must be decided, and you must have a tribunal from which to obtain a decision, and I do not really sec how we can accept another tribunal than the one which is suggested, and if you leave out those words the burden must be placed on somebody.

Mr. PRETYMAN

There is an appeal under the Clause in the original Act.

Sir RUFUS ISAACS

There will be an appeal in the ordinary way.

Mr. PRETYMAN

The words are different in this Clause from those of the Clause in the Act.

Sir RUFUS ISAACS

There may be perhaps a little difference in the language, but I confess that it had not occurred to me that there was any doubt. The only reason why I put in the safeguard was in reference to a point which it occurred to me might raise a doubt. I do not think that there is any doubt about it, but if there is, I will make it clear.

Mr. PRETYMAN

You will put it right?

Sir RUFUS ISAACS

Yes.

Sir ALFRED CRIPPS

The view has been expressed here, and it is also expressed in the Memorandum, that the Clause is intended to relieve the land from increment Value Duty while being developed. I think that is a reform which is most necessary in the terms of the original Act. But the value of it is to be entirely taken away by the insertion of these words, "to the satisfaction of the Commissioners," coupled, as they must be, with the subsequent matters in the Clause. Suppose it were a Clause for the relief of land from Increment Value Duty while it is being developed, that would be a very simple Clause to frame, and you need not bring the Commissioners in at all. You bring them in, and you give them powers in order to limit the general application of Clause 3. When we look to those limitations we see that they practically take away a very large part indeed of the benefit of the whole Clause. The complications introduce, in my view, unnecessary expense, whereas a Clause of this kind ought to be perfectly simple. Why should you not have a Clause of this kind, that while land is being developed it is barred from any Increment Value Duty? There is no reason why you should not, have such a Clause. Directly you introduce these limitations as regards expenses and as regards the number of hundreds of pounds spent, what is the result? You want to know if the land is to be relieved from Increment. Value Duty for a certain number of years, but the whole matter is left in uncertainty, and, the very time when you want security is at the commencement, when the owner is making up his mind as to whether he will develop it or not. If he wanted to borrow money he could not get it, because he could not say whether he was secured from the Increment Value Duty, which depends upon the character of the buildings and the number of hundreds of pounds that have been spent. I think the provision of so much expenditure per acre is essentially a wrong one. The best development is where you get the largest amount of surrounding land. What you want is a large open space left in connection with a building for the purposes of light and air. It is in that direction that all modem social improvement has gone as regards building requirements in connection with town development. This proposal is entirely reactionary. Why should a man not have this relief if, in proportion to the land he is going to develop, he spends a comparatively small sum on buildings, and snakes provision for open spaces. On both of these grounds I maintain that the words "to the satisfaction of fie Commissioners" ought not to be introduced at all. You ought to give this relief in the general form which alone is valuable for his purpose. The question of suitability is not one for the Commissioners at all. The main point is that you should not bring in the Commissioners here, but leave it as a business matter between the parties. Let every man know what is the privilege to which he is entitled, in order that he may know from the commencement what, his position will be, and how he ought to make up his mind in developing the estate. We want to restore security, and to do so in this case I think the increment should not be calculated in the way proposed by the Government.

Sir GEORGE YOUNGER

This appears to be a complicated matter. We have restrictions to deal with at present in connection with the Town Planning Act.

Mr. PRETYMAN

On a point of Order. I do not think we should press the Amendment as to the Commissioners. We are debating the second Amendment, and I think we might put ourselves in order if we would first of all dispose of the Amendment before the Committee, and not deal with the question of suitability which, though a material point, is different from the other.

Sir A. CRIPPS

From my point of view, I wish to get these words out of the Clause altogether. I do not want any discretion left to the Commissioners. If the land is in process of being developed, I do not see that the Commissioners should interfere at all.

The DEPUTY-CHAIRMAN (Mr. Lyell)

It is perfectly obvious that we cannot discuss the question of leaving out the Commissioners without referring to the other question. The hon. Member is bound to take that into account while discussing whether the words with reference to the Commissioners should be retained in the Clause. If the hon. Member desires to withdraw his Amendment, of course, the other Amendments will then be moved in turn. I am quite unable to separate the various subjects. I cannot rule that the hon. Member is out of order on this Amendment in making a certain amount of allusion to the question of suitability.

Sir G. YOUNGER

I do not wish to travel into a general discussion on this point. What I say is that we have quite enough of interfering authorities in this matter without having another introduced. In all these town planning schemes nowadays you have got an authority to deal in deciding how a particular estate is to be developed and the ground laid out. In this particular case you are giving the Commissioners the right to interfere even with a scheme of that kind. They might come in and say, "We do not think your scheme suitable. We do not think your buildings are of suitable value." Who are they that they should think about these matters? They have no business to interfere at all. If an estate is being developed, the work is being done in the way the present owner thinks proper. It may be that he wishes to have houses on the ground, or he might wish to have factories. Why should the Commissioners come in at all in the matter? I agree with my hon. Friend (Sir A. Cripps) that Increment Duty should not be charged in the way proposed. I certainly think the proposal that the Commissioners should be entitled to interfere ought to be obliterated altogether.

Mr. C. BATHURST

It. is clearly impossible to decide that the Commissioners are the proper authority to deal with the matter unless we know what is going to constitute suitability with respect of buildings. We already get in the country districts serious overlapping in all sanitary matters, and we will have still further overlapping by the bringing in of these Commissioners to decide a question in which, as a rule, they will be in no way concerned. I do not in the least know what the word suitability means, and I propose presently to put a question to the Attorney-General on the subject. But assuming that suitability brings up the same considerations as now come before district councils, it will lead to overlapping if these matters have to be brought before the Commissioners. As a local administrator, I warmly support the Amendment.

Mr. JAMES HOPE

Why is it that in each of the first three Clauses of the Bill a different expression is used? In Clause 1 you have "is proved to the Commissioners," in Clause 2 you have the words "it appears to the Commissioners," and in Clause 3 you have the words "it is shown to the satisfaction of the Commissioners." If there is no difference in substance, it would surely be better to have the same language throughout, because it is that sort of thing that may lead to great complications. With regard to appeals, is it absolutely certain that an appeal will not be taken through having these different forms of words? On referring to Section 33 of the principal Act, I find that it lays down certain grounds upon which an appeal is possible. Are these questions covered by the words "it appears to the Commissioners," and "it is shown to the satisfaction of the Commissioners"? If it is clear, it is satisfactory enough that an appeal is to be allowed, but surely these differences of expression leave some doubt as to whether there will be the right of appeal.

Sir TUDOR WALTERS

I wish to have a point made clear about Clause 3. Is the Committee to understand that under this Clause the Commissioners are to have any say in the matter of the laying out of land? Are they to have any discretion to say, "You are not laying out the land properly. It is not in accordance with the Town Planning Act." If that is so, they certainly ought not to have these powers. If the powers in the Clause simply mean that the Commissioners are t) be satisfied that this is a bonâ fide expenditure of money for the development of the estate, that is quite another matter. It would not be right that any individual should have the benefit of this exemption from Increment Duty by a sham laying out, or by building some house or houses that just came within the limit prescribed here without seriously intending to develop the remainder as a building estate. I hope that the Attorney-Generat will take care that this Clause only means that the Commissioners, if satisfied by figures submitted to them that this sum of money has been expended and that it is a genuine building estate and that genuine building development is taking place, will not then be able to disallow the claim made by reason of any abstract theories they may happen to hold as to how a building estate should be laid out, but that the Commissioners should have power to deal with any ingenious attempt to evade the conditions prescribed, so that persons in order to escape payment must fulfil the requirement of the Act.

Sir RUFUS ISAACS

I entirely agree with what my hon. Friend the Member for Sheffield (Sir Tudor Walters) has said. Taking the Clause as it stands, I should have thought that it was not open to the other construction which has been suggested. Certainly there is no intention of leaving to the Commissioners the deterinination of the plans of the development of an estate, and there are no words in the Clause which suggest that. All the Commissioners have to satisfy themselves upon, and all they have to determine under Clause 3, is whether land is being developed for the purpose of erecting new buildings, but not how it is being developed or laid out.

Mr. PRETYMAN

Suitability.

Sir RUFUS ISAACS

That is an entirely different point from that which the hon. Member has discussed. There are conditions laid down in (a) and (b) undoubtedly, but I say at once that there is nothing in any of those conditions or in any of the words in (a) or (b) which would give the Commissioners the right to interpret how land should be laid out. Certainly it is not the intention. I have not any doubt whatever. If the hon. and learned Member for South Bucks tells me on consideration that he is really in doubt about it, I can only say that I cannot see any room for doubt of any sort. When we come to discuss the suitability of buildings, that is a different point. I am quite prepared to discuss it now. I quite bow to your ruling that it was not out of order to discuss it, but it makes this difficulty, that we are discussing this question and at the same time the difficulties which will be created by the conditions of (a) and (b). I quite understand that it may be necessary to take the whole matter as one, and that that may be the more convenient way of dealing with it, but we cannot discuss it twice, particularly having regard to what has taken place. Certainly the word "suitability" does not give them any right to do anything of the kind suggested. All that is intended by the introduction of the word is to guard against the very class of case to which my hon. Friend referred of a pretended development, and not a real development, entirely for the purpose of getting the benefit of the exemption. Everybody knows very well in these matters that if you were simply to say that the land is being developed, and that no Increment Value Duty should be collected, that would be open to many methods of evasion. The object of putting in these words about suitability of buildings is to provide against that. There is no intention whatever of interfering with buildings. All that is intended is to prevent the erection of temporary buildings merely for the purpose of saying that the land is being developed and should be exempt. That is the whole point. That is the question the Commissioners will have to declare upon. The tribunal that is to determine is the matter which we have to confine ourselves to at present. As I have already intimated, this would be subject to appeal. If there was any doubt about it on consideration—I do not think there is—I will take care that there is a provision that the right of appeal shall apply in this as in other cases.

Mr. JAMES HOPE

Is there any difference in the verbiage employed in the two Clauses?

Sir RUFUS ISAACS

I see no difference between saying "proved to the Commissioners" or "shown to the Commissioners' satisfaction."

Mr. PRETYMAN

Will the right hon. Gentleman agree to having the same words, "where it appears to the Commissioners," as in the previous Clause? Courts of Law would have to find some reason for those differences. Why should we create artificial difficulties? We have put in these words, "where on any occasion of collection of Increment Value Duty it appears to the Commissioners," and the other part should follow exactly the same lines.

Sir RUFUS ISAACS

I have no objection to having the same words as given in the earlier Clause, "where it is proved to the Commissioners." I quite a useful addition, and do that.

Mr. CAVE

I am not quite satisfied that we are putting in the right words in substitution. With regard to what the hon. Member has said, notwithstanding the hon. and learned Attorney-General, I think that the effect of the Clause, even with the new words, would be to give the Commissioners the right to interfere and express an opinion upon the suitability of buildings. The suggestion is that this would give them power to interfere or refuse relief where there is no bond fide building. At present I think this Clause does much more than that. It is left to them to say, if they think right, "Though you are spending so much on the buildings here, we do not think that the buildings are suitable." That surely is a matter, as the hon. Gentleman has said, upon which the owner or the builder is the best judge, and nobody else ought to have a right to interfere in that question in which they are really not concerned. We are discussing whether the Commissioners have to be satisfied or whether somebody else, the referee, has to be satisfied. As this Clause stands, the Commissioners have to have proved to them first, that building is going on; second, that buildings are being erected of a certain value; and third, that those buildings are suitable, and I think that the suggestion would not meet the objection of the hon. Gentleman opposite. I feel great doubt whether, as the words stand, there would be any effective appeal, because where it is said, "shown to the satisfaction of the Commissioners," no Court of Appeal would say it was shown to their satisfaction if they said it was not. I rather think that the same criticism might apply to the words which the Attorney-General proposed, "proved to the Commissioners," because they can always say it is not proved to their satisfaction. I should much prefer the second form of words.

The DEPUTY-CHAIRMAN

I think we are getting to a Debate on alternative words, and that it would be more in order for the hon. Member to withdraw the Amendment which is at present before us.

Mr. PRETYMAN

Is not this Amendment, a necessary precedent to inserting the words proposed? We desire to take these words out, and if that is done it will then be competent for us to decide what words are put in their place.

The DEPUTY - CHAIRMAN

The Amendment originally moved was to take the words out altogether and to put nothing in at all. If that is withdrawn, then I think an Amendment might be moved on the question of alternative words.

Sir A. CRI PPS

On the point of Order, if the Amendment were withdrawn the present words would stand, and, therefore, no alternative words would be introduced. In answer to what the learned Attorney-General said on the general point as to which he appealed to me, if I would repeat my view, on consideration I would like to say this: The object aimed at, as the hon. Member for Brightside (Sir T. Tudor Walters) stated, is to ensure genuine development, which I agree is a proper thing, but to ensure that words ought to be introduced at an earlier stage, such as "is being, or has been bond-fide developed." When you come to the question of buildings you introduce the word "suitable," and it appears to me to be impossible that that word would not have a much wider signification. Therefore, I suggest to the Attorney-General that, in order to carry out what he has sketched, the best way is to introduce the words "genuine development" and afterwards put in words such as these, "buildings of a certain value in connection with genuine development." That is what the hon. Member for Brightside said we were really desirous to obtain. I think the word "suitable" must go out, as that would give the Commissioners a power which no one wants to give to them.

Sir F. BANBURY

It seems to me that the Amendment which has been proposed is to leave out the words "it is shown to the satisfaction of the Commissioners," and the Question you, Sir, have to put is, "That those words stand part." If the Amendment is negatived, then I venture to say that it would not be in order to put in other words in their place, and what ought to be done is for my hon. Friend to withdraw his Amendment, and afterwards it would be open to him to move to omit the words "it is shown to the satisfaction of," and put in different words, otherwise it would be impossible to achieve my hon. Friend's desire.

The CHAIRMAN

The hon. Baronet is quite right, and when I asked the hon. Member was he prepared to withdraw, why I did so was that on the withdrawal the whole question would be open for consideration.

Amendment, by leave, withdrawn.

Mr. PETO

I beg to move, in Subsection (1), to leave out the words "is shown to the satisfaction of," and to insert instead thereof the words "it appears to."

Sir RUFUS ISAACS

The position which I made clear earlier in the Debate, and also my right hon. Friend the Chancellor of the Exchequer, when we discussed this at the beginning of the proceedings, would apply in this case. This Amendment does not do what we are anxious to do, and which we made clear earlier, and it is this: It is desired that the burden should be thrown on the persons claiming to establish to the Commissioners a certain state of facts. In order to do so it is not sufficient to say "it appears to." That leaves the matter in doubt as to whether the Commissioners have got to ascertain for themselves or not. Obviously in a case of this kind, where you arc giving an exemption, that would not be right. I will take the words "where it is proved to the Commissioners" as they appear already in the principal Act. There is an appeal from that and it removes all possible doubt.

Sir A. CRIPPS

I think we may take those words.

Mr. PETO

The next Amendment on the Paper in my name proposes to omit the words "when suitable." That would mean that their discretion would be limited to land that is or has been developed or used for the erection of new buildings, therefore I submit it will be perfectly easy to prove to the Commissioners that land is being developed.

Mr. C. BATHURST

I should like to know whether the discretion of the Cornmissioners is to be limited to genuine development for the purposes of the erection of buildings or the suitability of the buildings under paragraph (a), or the suitability of the roads under paragraph (b).

Sir RUFUS ISAACS

It must apply to all. They have to be satisfied with the conditions laid down. When we come to discuss the word "suitable," I think I shall be able to meet the criticisms that have been made. I admit quite frankly I had some doubt about the use of the word "suitable." It is a little vague, and it might be extended beyond what we legitimately intend, but I must have the word "proved."

Amendment, by leave, withdrawn.

Mr. PETO

I beg to move in Sub-section (1), to leave out the words "shown to the satisfaction of," and to insert instead thereof the words "proved to."

Amendment agreed to.

Sir A. CRIPPS

I beg to move, after the word "been" ["or has been developed"], to insert the words "bond fide." I think the Attorney-General agrees that we ought to have some such words in the Clause.

Sir RUFUS ISAACS

I think it is quite clear what we intend. I have no objection to the insertion of these words in order to get rid of the word "suitable." But there must be no misunderstanding. It is left to the Commissioners to decide whether the land has been bond fide developed and whether the condition has been carried out.

Question, "That those words be there inserted," put, and agreed to.

Further Amendment made: Leave out the word "suitable"[" (a) that suitable buildings of a value"].—[Mr. Peto.]

Mr. C. BATHURST

I beg to move, to leave out the word "five" ["five hundred pounds"], and insert the word "three."

It seems to me that the Government and their advisers have been too much obsessed with the urban question and have overlooked altogether the rural or semi-rural question, and the extent to which that question will be affected by this Clause. If £500 is the limit it will clearly operate unjustly against many of those who are developing building outside villages or small provincial towns. The provision seems to contemplate a very costly scheme where the land adjoining a proposed road is to be crowded with buildings and has a very high commercial value. That is not the case in the country districts. This matter is painfully familiar to me, because large developments have been made or attempted to be made in my district by laying out roads with a view to cottages being erected, which cottages, in fact, have not been erected. Take the very ordinary case of a cottage costing £300 with an acre of land held with it, or, alternatively, two semi-detached cottages costing £150 each with half an acre of land. That is the sort of development which we more rural people are being urged to encourage in every possible way. We are being urged to erect cheap cottages which is a very difficult thing to do at the present time, and to provide them, not merely with a garden, but with from half an acre to an acre of allotment land. Many of us are trying to do it, but this Clause will operate against our efforts. My Amendment seeks to make the margin for this purpose £300 instead of £500. That would cover the case which is more common in the country districts. No doubt the right hon. Gentleman will tell me that I should be saved by the words "exceeding twice the full site value." But twice the full site value in a purely rural district means little more than twice the present commercial value, because the full site value of such land, unless it has a few trees scattered over it, is practically the same. Take, by way of illustration, land of the present value of £150. It is quite conceivable that you may find such land immediately outside a village, and you are desirous of developing that land for building purposes. If that is so, under the circumstances which I have mentioned, it is impossible for the person undertaking such development to get any value whatever out of this Clause. In fact, he would, as a result, be charged with Increment Value Duty upon the necessary cost of the development of the land for this purpose.

Sir RUFUS ISAACS

As the hon. Gentleman is aware, this is a concession which has been made, and I do not think it should be pressed further, having regard to the exemptions already made under Sections 7 and 8 of the principal Act in reference to both agricultural land and small cottages. I do not think that the hon. Gentleman gives full effect to the words "or exceeding twice the full site value." He seemed to read that provision as if it would be twice the full site value of the acre. It clearly does not mean that. I think it really meets the hon. Gentleman's point. First of all, the condition is that in the development of the land there have been erected buildings of the value of not less than £500 for every acre, or buildings exceeding twice the full site value.

Mr. C. BATHURST

Of what?

Sir RUFUS ISAACS

Of the land with the building. The words are, "or exceeding twice the full site value at the date of the occasion of the land so used," and that the erection of the buildings was commenced within five years before the date of the occasion. There is not a word about twelve years!

Mr. PRETYMAN

If the Attorney-General is correct in his interpretation it makes a very great difference indeed, but I do not think the Clause as it stands will bear that interpretation.

Sir RUFUS ISAACS

That is not the point between us. As I heard the hon. and gallant Gentleman put it, it struck me he was arguing it as though the cost was twice the full site value per acre.

Mr. PRETYMAN

No, no, of the land.

Sir RUFUS ISAACS

The land in connection with the buildings, certainly. It means the building upon this piece of land and the land which is connected with the building. It does not necessarily mean an acre. It speaks of the area being developed. It means that if you want to determine the land for a particular purpose, say, a quarter of an acre, and you arrive at the full site value of a quarter of an acre, then all that you have to see is that a building exists of twice the full site value of that quarter of an acre. That is what it means. There is no limit as to the building being £500 per acre. You are trying to draw hard and fast lines. What this House is trying to do is to try to get people to occupy the land, with a house, in the rural districts for agricultural purposes.

Mr. PRETYMAN

What this Clause does is that it deals with the composite subject on the occasion exactly as every Clause which limits benefits—in these cases where in the composite subject the value of the buildings bears some large ratio to the value of the land. That is exactly what we all want to do. What we want is to get as much and not as little as possible spent on the building. It is not a question here of an acre, nor is it a question, as the Attorney-General, I think, seems to imagine it is, merely of the site of the house upon which the land stands.

Sir RUFUS ISAACS

I was drawing the distinction between them.

Mr. PRETYMAN

It is the whole unit on the occasion. The proposition before us is, Are we to say, whenever any unit passes on occasion, that the unit, being a composite unit, containing a house or building, shall be deemed the benefit of this Clause unless the value of the house is double the full site value? The Attorney-General and the Government think that, in proposing that, they are going to increase the cost of the building. Not at all. What they are going to do is to limit the amount of land going with that building. The Government are so anxious to prevent anybody getting round them that they really do not see the effect of this Clause as ordinarily interpreted by common-sense people in the market place. You have got in the word "bonâfide." That in it elf makes a very big alteration in the Clause. Why do you want all these hedging restrictions? The Attorney-General, in an earlier point on a previous Amendment, said that we might be quite sure that we were quite safe on the point then under discussion. Let me remind the Attorney-General that he knows perfectly well that it has happened over and over again in connection with this very obscure and complicated Act that the assurances of interpretation given from the Government Bench have been utterly falsified when they came before the Courts. It has been so.

Sir RUFUS ISAACS

We are putting that right.

Mr. PRETYMAN

It is all very well to have it put right after thousands of pounds have been spent in litigation. That may be all very well from the point of view of some hon. and learned Gentlemen, but it is not the point of view of the ordinary person concerned in business with these matters. The right hon. Gentleman knows perfectly well that the business of the Department is not to construe what the intentions of the Government nor the House were, but to get the utmost duty they can out of the actual verbiage of this Clause. We are in a reasonable mood here to-day. We are settling things quite to our own satisfaction, but we know that every word that is put in here is liable to be the subject of litigation. You may be perfectly certain: may lay this down as an axiom, that any claim which can be based upon any word which we put into this Act will be claimed and pressed to the very utmost. We cannot assume anything else. We are not safe in assuming anything else. If you put in the word "bond fide" it is unnecessary to put in all these other hedging restrictions, and therefore I think the paragraphs (a) and (b) can come out altogether. Simply say that the land is being or has been bonâ fide developed. You cannot put in limitations. You are here dealing with the ratio of buildings to land in order to ensure that there shall be a large extent of buildings. I do suggest it would be very much simpler to have paragraphs (a) and (b) out altogether now we have got the word "bonâ fide" in.

3.0 P.M.

Mr. C. BATHURST

I think the interpretation of the right hon. Gentleman the Attorney-General has caused some confusion, at any rate in the minds of us on this side of the House. Surely when we come to consider this question we must make up our minds when we speak of twice the full site value what is the full site value to which we are referring! For my part, I suggested across the floor of the House just now that the right hon. Gentleman must mean the area being developed. The right hon. Gentleman declined to accept that interpretation. He spoke of the unit of development. Referring back to the third paragraph of this Clause, we find the words "where it is shown that the land is being or has been developed." Surely, if those words have any meaning at all, they must refer back to the expression "land," and whatever the expression "land that is being or has been developed" means, that surely is the expression which we must read in at the end of the expression "full site value"! The Chancellor of the Exchequer is one of those who has repeatedly urged us in the country districts to develop the land and provide cottages, and provide as large as possible an area of land with these cottages. Perhaps I may say, although it may appear a little egotistical, that I have been doing my utmost in my part of the country on the lines that he has suggested. I find myself, and others will find themselves in. this difficulty, that they will get no value out of this Clause at all as regards Increment Value Duty unless they limit the amount of land which they are providing for the cottages where they are making new roads for the purpose of those cottages. The whole point lies here, that I think the Government have been a little too much possessed with the urban standpoint and have not fully realised that there is a rural standpoint. My object is to reduce the £500 to £300, in order that you may extend the same benefit to all those who desire, we will say, to provide an acre of land for purposes of allotment, or otherwise, with a cottage costing £300; or, we will say, half an acre to each of two cottages costing £150.

Sir TUDOR WALTERS

I think there is a point in the rural question worthy of a little further consideration. I cannot imagine how this phrasing was used for paragraphs (a) and (b), or that there was the slightest desire to perpetuate conditions in the country district by making the cottage always worth twice as much as the land on which it stands. I do not think that is the object at all. I imagine this was the point of view: We want to make such arrangements under Clause 3 that anyone who really sets to work to develop land in town or country, and that the erection of those buildings was commenced five years before the occasion for the collection of Increment Value Duty, shall be free from increment Value Duty. We do not want a man with five or ten or twenty acres of land, as the case may be, simply to say he is going to use it for building purposes and by that means to escape the duty. We want him to spend money, because you cannot have houses without expenditure of money, and, secondly, we want to encourage the spending of the money. If he spends money it shows he is carrying on development. What is the best test to indicate the bona fides of his expenditure, and yet enable him to get the deduction he ought to get? If a man spends £500 an acre in building, that is a very low sum. It seems to appear on the face of it that in rural districts he would generally spend more than twice the amount in building than the land is worth. I think from the evidence adduced this afternoon that is assumption based upon practical experience, and therefore I think you must recognise that argument., and either reduce the sum as suggested from £500 to £300 or else you must have two categories, namely, a deduction of £500 in urban districts and £300 in rural districts. Either of these tests would meet the case, or you might, instead of saying twice the site value say expenditure on buildings equal to the full site value. I prefer to divide it into two classes, and say £500 per acre in urban districts and £300 for rural districts. If the Chancellor of the Exchequer would accept that we would get over the difficulty, but I should not like any words included in this Clause which seem to suggest we want to limit the amount of land to each house or cottage in town or country in connection with building operations.

Mr. LLOYD GEORGE

I think there is a good deal in the contention of the hon. Member opposite (Mr. C. Bathurst). It might conceivably affect the cost of a cottage in rural districts. I agree absolutely with him that it is of vital importance that you should encourage rather than discourage the amount of land attached to each cottage. We had the famous case of three acres and a cow, but not even the cost of the cow-house would make the buildings cover the exact figure. I do not think the words here would be a safeguard against acts of that kind. I am not at all sure that the suggestion made, that you should distinguish here between urban and rural cases, is not the best. The hon. Member wants us to use the words "bond fide development," but who is to judge that? Will the Commissioners' decision be final? If not, you would have litigation about every case. You would have questions in the Court in the first instance, questions in the Court of Appeal, questions before the Commissioners and the referees, and finally, the House of Lords, to decide the question of bona fides which is a very difficult one, unless you lay down some principle or rule which could be applied with simplicity to each individual case. If you have an arbitrary figure, there may be some cases of hardship, but you cannot avoid that. An arbitrary figure would avoid the greatest hardship of all, and that is, that you would have to litigate every case with enormous expenditure, and as was pointed out by somebody on Second Reading, the litigant has no chance against the Crown. I accept the soundness of the criticism of the hon. Gentleman opposite, and I will undertake to meet him. My present view is that the suggestion of my hon. Friend (Sir J. Tudor Walters) is the right one. If there is any other suggestion which can be put forward, I will be glad to receive it. I promise to meet the hon. Member, and if the hon. Member is satisfied with that, I will see the words are put down between this and the Report stage, or, if he has any other suggestion to make, if he sends it in I shall be happy to receive it.

Sir A. CRIPPS

In reference to what the Chancellor of the Exchequer said about the different categories of £500 for every acre of laud used for building in urban districts, and a somewhat small sum in rural districts, I think in rural districts it ought to be less than £300. That figure is too much. My hon. Friend the Member for Wiltshire gave his experience. My experience is that I never like to give less than an acre, but I think you ought to have as low a limit as £200. I would ask the Chancellor of the Exchequer or the Attorney-General, in these circumstances do they want the words, "or exceeding twice the full site value at the date of the occasion of the land so used have been erected on the land." These words never would be interpreted without all the difficulty the right hon. Gentleman anticipated. If he differentiates the figures for urban and rural, he can leave out these words altogether.

Mr. LLOYD GEORGE

I accept that.

Mr. C. BATH URST

In view of what has been said by the Chancellor of the Exchequer I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Mr. PETO

I beg to move, in paragraph (a), to leave out the words "and that the erection of those buildings was commenced within five years before the date of the occasion."

The CHAIRMAN

Has not that been very much the subject of this Debate.

Mr. PRETYMAN

May I point out that there was not a word said about the five years' limit. We have discussed and disposed of the other part of the trouble, but not the five years' limit.

The CHAIRMAN

I beg pardon; this is, of course, the concluding point to the Amendment of the hon. Member for Wiltshire.

Mr. PETO

It appears to me that the words which I propose to leave out are put in there with the sole view to the builder who is developing an estate or portion of an estate. The unfortunate landowner who uses his land for building purposes, particularly in the country, does not always complete the transaction and sell his property, and therefore the occasion applies within five years of the erection of the house. But the five year limit does not even meet the case of the builder. Very frequently he builds a number of houses with the firm determination and intention of selling them as fast as he completes them. But it very often happens that the market runs away from him, and he finds himself compelled to hold his buildings, and no occasion arises. He has to let them at the best rent he can, and very often at a low rent, perhaps for a period between six and ten years. Through some reason or other he may afterwards begin to effect sales on the same estate and sell at a considerably increased price some seven or eight years after the erection of the building, which would show something in the way of an increase in the site value which would be chargeable with Increment Duty. If the estate has been developed the land has been used for building purposes, and I do not see the reason for putting in this very arbitrary distinction.

The more rules you make as to the size of the buildings and other things, the more cases of hardship you will create and the more friction you will put in the way of ordinary business transactions. A man will always be considering, "Shall I be able to get this thing off my hands in five years or not?" He may find that he has just missed the five years, and under those circumstances he will have an Increment Duty to pay on the top of what he has calculated. We have always understood that the object of these Land Taxes is to tax the increased value of the site not due to any part of the enterprise of the owner. In this matter, if we keep to the land we shall interfere to the smallest possible extent with the ordinary transactions of business. When we get beyond that and begin making rules as to the way an estate is to be developed the result will be just the same as in other cases: when restrictions are placed on trade, and you will hamper the industry. This proposal is certain to create very great hardship. I wish to emphasise the fact that the successful builder who has developed his estate, and who is selling his houses and plots of land on which they stand like hot cakes, is provided for in this Clause, and because he is successful he will escape the Increment Duty. On the other hand, where the builder's enterprise is not so successful and where the houses may be left on the man's hands, if these words remain in the Clause the unsuccessful builder will have to pay Increment Duty, while the man who, in the view of the Chancellor of the Exchequer in framing these Land Taxes, might he supposed to be able to afford it is going to escape the tax, whereas the other builder will be hit very hardly.

Mr. C. BATHURST

I agree that this does not apply to the development of land in rural districts. It is quite a common case to make a road outside a small village or town and then bring building materials upon a piece of land to build, for example, a couple of cottages, and afterwards to. find it wholly impossible, owing to temporary unemployment in the district, to obtain further occupants for more cottages at that time. The result is that three, four, and even five years may elapse before the completion of the other cottages takes place. That being so, this does not meet the case of the enterprising developer of land in the rural districts. This proposal in the Clause will actually operate against the Exchequer. When he speaks of things within five years there are many cases I could point out where buildings have been commenced, if you mean by "commenced" the turning of a sod, and five years may elapse or more before they have been completed. Surely, the test ought to be the completion of the buildings without any consideration of other circumstances. If the right hon. Gentleman will leave out the words "commenced within five years" and will substitute the word "completed" he would then get a larger revenue and he would do justice in town and country areas alike. I am sure the right hon. Gentleman will see that the word "commenced" is wrong and the words "within five years" will operate serious injustice.

Mr. LLOYD GEORGE

I cannot help thinking that this discussion has proceeded on an entire misconception of the object of this Clause. The arguments which have been used in favour of the Amendment seem to be in favour of dropping this Clause altogether. Does the hon. Member want that? The hon. Gentleman thinks it would be better to lay down clearly that we arc not going to tax profits but purely the increased value due to communal considerations. Clause 1 has added all sorts of things which you can deduct before you arrive at the site value. Clause 2 has practically done the same thing, and if you read Clauses 1 and 2 together you will find that you cannot tax anything in the nature of profits at the present moment. I want that to be clearly understood, and, if that is not the case, then Clauses 1 and 2 ought to be strengthened.

Clause 3, however, provides that within five years where a builder is developing an estate he is not to be liable to a duty of any sort or kind, although there may have been an increase in the communal value. That is a totally different proposition to the one put forward in this Amendment, which means that if there happens to be a great growth in the value of land owing to the fact that the development of a town has been rushing in that direction, and which is not due to anything which by any conceivable distortion can be regarded as builders' profits, such as the fact that coal or anything else has been discovered there, even then for the five years, if the builder is developing the land you are not allowed to charge a penny of duty. Such a development may not be due to his exertions at all, and I think the hon. Member who took part in the discussion might give credit to the Government for what the Clause really means. The hon. Member opposite (Mr. C. Bathurst) says that you cannot say when the building has been commenced. It is still more difficult to ascertain when the building has been completed. Sometimes it is due to the builder, and very often it s due to the person on whose behalf the budding is being set up. He is always making alterations and additions. The original plan is not carried out all at once and in another year something is added. Therefore, you cannot arrive at the point at which the building has been completed; it is much easier to say when the building has been commenced.

Mr. C. BATHURST

The local sanitary authorities have at present to decide when a building has been completed in order to pass it.

Mr. LLOYD GEORGE

Yes, for certain purposes, but it is a different thing when you have to say for the purposes of taxation when it has been completed. I would infinitely rather assent to an Amendment that would extend the period than have anything of that kind. It has been suggested that we should substitute seven for five, and I think that would cover the case.

Mr. PRETYMAN

I quite accept the suggestion of the right hon. Gentleman as to paragraph (a), the builder. I think that the seven years is better, because, if you take completion, the man might leave the chimney-pot, and the building would not be completed. Seven years, I think, would be satisfactory, so far as paragraph (a) is concerned, but the situation is a little different in paragraph (b). It may be more than seven years in the case of a man who proceeds to develop a piece of ground by making a road across it. It is a very different thing from building a house. It may be ten or fifteen years before anything is got for it at all. The Com- mittee must bear in mind that the whole point of this Clause is not so much to give actual relief. The actual relief, as the right hon. Gentleman has pointed out very properly, is given in Clauses 1 and 2. The object of this, therefore, is not to give relief, but security to enable a builder or a land developer to feel confident that for a certain period he will not have any liability at all. I do not believe that this Clause will give much relief, because the relief is already given in a previous Clause, but it will enable a builder or a land developer when he goes to borrow to say, "There is no uncertainty about this; I have got an absolute exemption." The longer the period you give, the greater the security. I think that so far as builders are concerned seven years ought to be enough, but I would ask the right hon. Gentleman to consider whether he cannot give a rather longer period than seven years in paragraph (b).

Mr. LLOYD GEORGE

I think that I am meeting paragraph (b)very fairly, though I promise to consider the point, between now and Report. I do not feel, at present, that a case has been made out, because, as the hon. Gentleman has very fairly pointed out, this is a case of complete exemption. He wants security, and I think that security for seven years is, on the whole, quite as much as a man would expect under the conditions. I agree that very often it means that a man has got very exaggerated ideas as to the building value of particular plots, and he goes and lays down roads and sewers years before he ought to do so, but I think when we say to him, "We will give you seven years complete exemption," that we are meeting his case very fairly.

Sir A. MARKHAM

The Chancellor of the Exchequer is gradually shredding the whole basis of the Increment Value Duty. He has agreed to this period of seven years, but I can take him into districts where land which four or five years ago was only worth £40 or £50 an acre is now being developed and simply because a colliery has been opened in the middle of the land is selling at £1,000 an acre without a single effort on the part of the owner. I will take my own case. I am developing several collieries and the value of the adjoining land has arisen from £40 or £50 to £1,000 an acre without a single penny of expenditure on the part of the owners, and yet they are not going to pay a single farthing Increment Value Duty for seven years!

Mr. LLOYD GEORGE

I would remind my hon. Friend that, in the first place, they have got to spend £500 per acre under paragraph (a), and then they must spend £200 per acre in development under paragraph (b). If they do that, they do something to solve the housing problem in that district. They are really spending £200 per acre in order to put it on the market and make it fit for housing, and I think we ought to meet their case.

Sir A. MARKHAM

That is true with regard to paragraph (b), but, if a man has only put up one house on an acre, he has complied with the first condition, and therefore the whole basis of the Increment Value Duty seems to me to have gone by the acceptance of this Amendment.

Mr. ROYDS

There is nothing new in this Clause. It is only extending the privilege which is given with regard to Undeveloped Land Duty to Increment Value Duty. When an owner has spent £100 on roads he is exempt from Undeveloped Land Duty, not for five or seven years, but for twenty years. I do not know why, if he spends £200 per acre, instead of £100, on roads under this Section, he should not be exempt from Increment Value Duty in the same way. In the original Act as printed it was only ten years, but it was thought necessary to extend it and twenty years was put in. If the Chancellor of the Exchequer is going to consider how many years he is going to give, I hope that he will give the same as he has already given in the case of Undeveloped Land Duty and extend it to twenty years.

Sir F. BANBURY

I do not see the force of the argument of the hon. Baronet (Sir A. Markham) opposite. He did not put the coal in the earth. All he had to do was to take it out and he did not take it out for the purposes of the Land Tax. He did it in order to make, and he has made, a considerable sum of money. Yet lie does not pay any Increment Value Duty so far as I know. That being so, the hon. Baronet 'wants to have it all his own way. He seems to think that besides making profit out of the coal he should have the rest of the interest in the land which he has bought.

Sir A. MARKHAM

The answer to that is very simple—

The CHAIRMAN

This is a by-product. Does the lion. Member for Devizes press his Amendment?

Mr. PETO

No; I will move a subsequent Amendment.

Amendment, by leave, withdrawn.

Mr. PETO

I beg to move, in paragraph (a), to leave out the word "five" ["commenced within five years"], and to insert instead thereof the word "seven." Personally, I am not satisfied with the proposal to insert "seven" years as the limit. I hoped the Chancellor of the Exchequer would undertake to reconsider his decision on that point.

Mr. LLOYD GEORGE

I cannot do that.

Mr. PETO

Very well; on the understanding we are not satisfied with "seven," I will move that "seven" be inserted, in order that the Chancellor of the Exchequer may have an opportunity at a subsequent period of inserting an even longer period of years.

Amendment put, and agreed to.

Mr. C. BATHURST

I beg to move, in paragraph (b), to leave out the words "two hundred pounds."

I feel very strongly upon this quesiton. This limit of £200 is clearly inapplicable to the case of roads in rural districts of the kind I have described, and I therefore desire to leave out the words "two hundred pounds," in order to insert "fifty pounds." What is contemplated here evidently does not apply to short stretches of country road with a considerable depth of land behind the houses to be built on either side. You may have eighty or a hundred yards of land behind the cottages. That is not an uncommon case. What is going to happen there? The cost of forming the road, draining, kerbing, and channelling will not be more than about £50 or £70 per acre at the outside. Where you have something like half an acre to an acre supplied with each cottage, or even a considerably smaller area than one acre behind each cottage, you will find that the cost of making a road comes out at considerably less than £100. I cannot see why you should put discouragement upon those who are laying out roads for this class of house in country districts, but you will be putting such discouragement, if you insist on this limit for road construction of £200. Such a limit clearly would only apply to cases of congested districts where there are houses close together on either side of the road with very small gardens attached. There the roads may be made in tip-top engineering fashion—in the most approved style at considerable cost. But that is not how roads are made in the country. They are not less useful because they are not intended for motor cars such as that in which the hon. Baronet opposite enjoys his pleasure, but they are intended for ordinary plain country folk, and I would make a strong appeal to the Committee to insert this limit of £50 with regard to rural districts.

Mr. PRETYMAN

May I suggest it would be wiser to treat this matter as the proposal in paragraph (a) was treated. There is a practical reason for doing so; there is nothing in the Clause which determines the area of land in these particular cases. It should be remembered that this covers all occasions of Increment Value Duty, of Increment Duty on death as well as on "occasion." When you are dealing with building, you are dealing with a unit which is pretty obvious, but when you are dealing with development, you have something very different.

Mr. LLOYD GEORGE

I think that would be the best way of dealing with it. The hon. Gentleman is pressing me rather too hardly. We have met him very fairly this afternoon on one or two matters of vital importance. But I am prepared to adopt the course suggested by the hon. and gallant Member opposite and to agree to the omission of these words.

Mr. PRETYMAN

Will you take the limit of £50?

Mr. LLOYD GEORGE

No; I cannot do that. It would be quite impossible. The hon. Gentleman appears to forget that this is a Clause which gives complete exemption for a certain period of time. Why should there be complete exemption from this duty if the land goes up in value through something which is not done by the proprietor? We are giving him seven years in order to allow him full time to develop, and it is pressing rather too hard to say that because he is spending £50 per acre on roads he should have complete exemption for a whole period of seven years. I think that is asking too much.

Sir TUDOR WALTERS

I never listened to a more extraordinary doctrine about road-making than that advanced by the hon. Member for the Wilton Division. Does he seriously suggest we shall give exemption to people who make what they call roads, and what they are pleased to term sewerage, at £50 per acre I There can be no arrangement for disposing of the sewerage, and I do not think they ought to claim exemption under such 'circumstances. I can quite understand that such roads would not be suitable for motors, even that driven by the hon. Baronet.

Mr. C. BATHURST

I never made any reference to sewerage.

Sir TUDOR WALTERS

I think £200 in towns and £100 in country districts would be a generous limit, and even that is putting the figure too low. You cannot develop land, you cannot make decent roads and provide sewers, for £50 per acre.

Sir A. CRIPPS

I should like to give a practical instance. I can point to several cases where, in country districts, property has been properly laid out with regard to roads and sewers at a cost not exceeding £50 per acre. A fact of that kind is worth any amount of theory. In many cases there is no general sewerage system, as in urban districts. You have only to deal with the sewage of a particular cottage, and that, of course, does not involve so great an outlay. I want to ask the Chancellor of the Exchequer whether he cannot see his way to do in paragraph (b) what he did in paragraph (a). Realising there is a difficulty in regard to the amount of expenditure between urban and rural districts—and he knows perfectly well there is a great distinction —can he not see his way clear to make a concession on this point? I do not think £50 is too low. Make it 2100, if you like, but there ought to be a distinction. Two hundred pounds per acre is a sum altogether beyond any amount I have ever known to be expended in a rural country district upon matters of this kind. It would make cottage building so expensive that you could not carry it out at all. At the present time we want to reduce, so far as we reasonably can, the cost of building cottages in country districts. That is one of the problems of the day. I do not want to refer to one's own experience, but I have built a good many cottages and know what they cost. I know that as regards roads or sewers £50 per acre would be quite a large sum. Let us have here a distinction between the two as regards the development for the purposes of roads and sewers as we have in paragraph (a) as regards buildings, in order that rural districts may be treated on substantially the same footing as urban districts.

Mr. CAVE

I am rather struck by the fact that the Chancellor of the Exchequer has accepted the suggestion made against the landowner, but has made no suggestion in his favour. If you strike out the words "exceeding the full site value of the land," that takes away from the landowner an alternative from which he may benefit. My hon. and gallant Friend suggested that by way of set-off to a concession on the other side that the amount to be expended on the roads should be reduced. After what has been said, if those words are left out, there ought to be a reduction from £200 to £100.

Mr. LLOYD GEORGE

Perhaps I did not quite understand the suggestion made by the hon. and gallant Member. I thought he assented to the suggestion that the words should be left out because they were left out in the corresponding paragraph above. I think there is something to be said for making a distinction between a rural and an urban area, because, in the first place, you do not have to lay out land in a rural area in such an elaborate fashion. Labour is cheap, and it does not cost so much. I am inclined to make a distinction between urban and rural land to the extent of £200 for the urban land and £100 for the rural land. I think that will meet the case.

Mr. SNOWDEN

I understood the Chancellor of the Exchequer to say just now that he is prepared to accept the suggestion that he should make a distinction between urban and rural areas. I should like to hear something a little more definite about that, and to know how he proposes to make the distinction between an urban and a rural area. May I illustrate what I mean by referring to the case in which the hon. Baronet (Sir A. Markham) sunk a pit. The district in which that pit was sunk was at one time a rural district under the administration of a rural authority. By the opening of that pit and the development of an urban population increment value has been created. The constant transformation of a rural area into a town area is the transformation by which you get the increase in land values which it is the purpose of the Chancellor of the Exchequer to tax. If, therefore, this discrimination is going to be made an enormous percentage of the increment which otherwise would be taxed will be lost. Increment value arising from the transformation of agricultural land into building land is almost always sudden. If you take this Clause as it will read and take the illustration of the pit that was sunk—it was known for some little time before the hon. Baronet began his operations that this pit was going to be sunk—all that the landowners in that district, which was a rural area, would have had to do in order to escape altogether paying Increment Duty upon the value which was almost immediately going to be created, would have been to expend £100 per acre. The hon. Baronet pointed out that as the result of sinking the shaft the land increased in value from £50 to £1,000 an acre. The landlord need only have spent, contemporarily with the sinking of the pit shaft, £100 per acre on roads or sewers to escape payment of the duty on the whole increment of £900. I submit these considerations to the Chancellor of the Exchequer and would point out that by this concession and those made in the course of the afternoon he is taking away all prospect of ever getting any good result from the Increment Value Duty.

Mr. LLOYD GEORGE

I agree that would be the case if that were the interpretation of rural areas which we were to adopt. I take it that the rural areas are to be bond fide rural areas in the sense proposed by the hon. Member opposite.

Sir A. MARKHAM

This was an agricultural area.

Mr. LLOYD GEORGE

Will the hon. Baronet kindly allow me to proceed? I do not consider that to be an agricultural area at all. It was certainly a peaceful agricultural district before my hon. Friend began his operations. Then it became what the hon. Member for Blackburn (Mr. Snowden) called "transformed," and ceased to be of the character which the hon. Member for Wilton (Mr. C. Bathurst) gave to rural land. It became an industrial district. I do not think it will be sufficient to say that the land shall be under a parish or rural council. That is not enough. I think it will be somewhat difficult to get a definition. I understand that the object of the hon. Member for the Wilton Division is that where it is a bond fide agricultural district, and there is an attempt to solve the housig problem, so that agricultural labourers and artisans engage in agricultural pursuits and ancillary pursuits, you, should differentiate in its favour. I am sure the hon. and learned Gentleman the Member for South Bucks (Sir A. Cripps) will realise that it must be confined to bond fide agricultural districts. It will be-difficult to find words, but I think we can, do it. It must be subject to the satisfaction of the Commissioners and with an appeal. That we will consider. I do not want to bind the Committee at the present moment.

Sir A. CRIPPS

I think the right hon. Gentleman will find a distinction drawn between urban and rural areas in the Railway Acts and in decisions of the Courts.

Mr. LLOYD GEORGE

I do not like to, bind myself to any form of words, so long as it is made perfectly clear what the intention is, and that it is not intended to, protect the owner of land in a district which has been transformed from an agricultural to an industrial district, or where the district has taken a wholly different character, owing to the sinking of the pit or the setting up of works, which have often been the occasion of a great population coming in. That is a very important point. I agree with my hon. Friend for Blackburn, and it is therefore very important that the words should be carefully considered. There is one matter, and it is that the words "or exceeding the amount of the full site value of the land," should come out.

Mr. CAVE

No; it could be dealt with on Report.

Mr. LLOYD GEORGE

I am afraid I must get those words out while we are in Committee. I want to safeguard myself against any possible infringement of the 'rules of the House.

Mr. CAVE

In the case of the last paragraph when leaving similar words out we got a quid pro quo. In this case I am rather inclined to think, after what the right hon. Gentleman has just said, that he is disposed to whittle down the concession. Let the Chancellor of the Exchequer put down the words for Report, and at the same time move to leave out those words.

Mr. PRETYMAN

The Chancellor of the Exchequer could not expect us on Report to agree to an Amendment which would increase the charge. Under the provision of paragraph (a) we have got a definite concession that will put us in a better position, and I must remind the Chancellor of the Exchequer that it is quite obvious that the object of this provision as to full site value was to deal with rural districts. What we want is something for rural land. The Chancellor of the Exchequer has undertaken to agree to a lower value for rural land, and I think it will be better to leave the provision as it is. Is the right hon. Gentleman giving us an undertaking?

Mr. LLOYD GEORGE

I have said so, subject to a definition. We are agreed in substance as to the meaning of the rural land.

Mr. PRETYMAN

I misunderstood the right hon. Gentleman. I beg pardon.

The CHAIRMAN

It seems to me that this Clause is to give certain relief which does not now exist, and therefore the question of increasing or diminishing does not arise.

4.0 P.M.

Sir A. MARKHAM

I should like to impress upon the Chancellor of the Exchequer what constitutes an urban rural district. I can give him a case which will prove my contention at once. The hon. Baronet the Member for the City of London referred to me, and suggested that I wanted to make a profit out of the land. I want nothing of the kind. I want land for the purpose of housing, and I do not care whether it is profitable or not, although I have built several thousands of houses. I recently bought land in a certain district from a Member of the other House, and in that case the value of the land was worth £18 an acre as agricultural land, and a great deal of it had been sold previously at £13 an acre. The moment there was an expenditure upon the land, and a railway siding was brought near to it in connection with the proposed site of a colliery, its value rose from £20 an acre to a minimum of £100 an acre. By the concession which the Chancellor of the Exchequer is making he will lose the whole of the profit of the tax which he himself referred to, time and again, during the discussion on the Budget, as increment value that was to be put into the pockets of the people in new districts where developments took place. By giving way on this Amendment, the Chancellor of the Exchequer loses a chief source of revenue. Where the people of a district are satisfied that there is to be an expenditure of half a million of money to develop a certain colliery, the whole value of the land increases without any effort on the part of the owner of that land. I always thought that where a man received a windfall without any effort of his own, and is due to the increase of population, it was to be the subject of taxation. On this Amendment and the concession made the right hon. Gentleman loses the basis on which the tax is founded.

Mr. C. BATHURST

The question which has been raised by the hon. Baronet opposite is not really material to the Amendment before the House. I understand that pasture land is intended to be covered, and certainly it is not intended to cover the class of land with which the hon. Baronet is most familiar. I desire to thank the Chancellor of the Exchequer for his attempt to meet us half way. I am going to be so ungrateful as to say that the limit does not quite meet the case that I have in mind. Still, half a loaf is better than no bread.

Sir A. MARKHAM

About three-quarters or a bit more.

Mr. C. BATHURST

We are not getting anything more than the crust. I understand that the right hon. Gentleman is prepared himself to bring up on Report the substitution of £100 for £200, and therefore I desire to withdraw the Amendment. I sincerely hope that it will not cut out the other alternative, which will be of very great value to the owners of rural property.

Mr. JOHN WARD

I only wish to say with reference to the concession made by the Chancellor of the Exchequer that it is not as though he got any advantage from concessions of this sort. He is merely depriving himself of sources of revenue from the Land Taxes as imposed by the Budget of 1909, and supplying the hon. Member for Chelmsford with another ground for sayingthat these Land Taxes are absolutely unreliable as revenue-producing proposals. All that the right hon. Gentleman is doing is to supply the hon. and gallant Gentleman opposite-with the opportunity of producing another pamphlet to show how impossible it is to get any money out of the Land Taxes.

Amendment, by leave, withdrawn.

Other Amendments made.

The Committee divided: Ayes, 233; Noes, 46.

Division No. 249.] AYES. [4.5 p.m.
Abraham, William (Dublin, Harbour) Gardner, Ernest Munro, Robert
Acland, Francis Dyke George, Rt. Hon. D. Lloyd Murray, Captain Hon. Arthur
Addison, Dr. C. Gilmour, Captain J. Newman, John R. P.
Adkins, Sir W. Ryland D. Gladstone, W. G. C. Nolan, Joseph
Agnew, Sir George William Gordon, John (Londonderry, South) Nugent, Sir Walter Richard
Allen, A. A. (Dumbartonshire) Gordon, Hon. John Edward (Brighton) O'Brien, Patrick (Kilkenny)
Allen, Rt. Hon. Charles Peter (Stroud) Grant, James Augustus O'Connor, John (Kildare, N.)
Atherley-Jones, Llewellyn A. Greenwood, Granville G. (Peterborough) O'Connor, T. P. (Liverpool)
Baird, J. L. Greig, Colonel James William O'Doherty, Philip
Baker, H. T. (Accrington) Griffith, Ellis Jones O'Donnell, Thomas
Baker, Joseph Allen (Finsbury, E.) Guest, Major Hon. C. H. C. (Pembroke) O'Dowd, John
Balfour, Sir Robert (Lanark) Guest, Hon. Frederick E. (Dorset, E.) O'Malley, William
Banbury, Sir Frederick George Gwynne, Stephen Lucius (Galway) O'Neill, Dr. Charles (Armagh, S.)
Baring, Sir Godfrey (Barnstaple) Hackett, John O'Neill, Hon. A. E. B. (Antrim)
Barlow, Montague (Salford, South) Hall, Frederick (Dulwich) O'Shaughnessy, P. J.
Barnston, H. Hamilton, C. G. C. (Ches., Altrincham) O'Shee, James John
Bathurst, C. (Wilts, Wilton) Harcourt, Robert V. (Montrose) O'Sullivan, Timothy
Beach, Hon. Michael Hugh Hicks Harmsworth, Cecil (Luton, Beds) Outhwaite, R. L.
Beale, Sir William Phipson Harmsworth, R. L. (Caithness-shire) Palmer, Godfrey Mark
Beauchamp, Sir Edward Harvey, T. E. (Leeds, West) Pease, Herbert Pike (Darlington)
Beckett, Hon. Gervase Hayden, John Patrick Pease, Rt. Hon. J. A. (Rotherham)
Bean, W. W. (T. H'mts, St. George) Hayward, Evan Peto, Basil Edward
Bentinck, Lord H. Cavendish- Hazleton, Richard Phillips, John (Longford, S.)
Bethell, Sir J. H. Henderson, Major H. (Berks, Abingdon) Pollock, E. M.
Boland, John P[...]us Henry, Sir Charles Pretyman, Ernest George
Boyle, Daniel (Mayo, North) Higham, John Sharp Priestley, Sir W. E. B. (Bradford, E.)
Boyton, James Hill-Wood, Samuel Primrose, Hon. Neil James
Brady, Patrick Joseph Holmes, Daniel Turner Reddy, Michael
Bridgeman, William Clive Holt, Richard Durning Redmond, John E. (Waterford)
Bull, Sir William James Hope, James Fitzalan (Sheffield) Redmond, William (Clare, E.)
Burke, E. Haviland- Hope, Major J. A. (Midlothian) Redmond, William Archer (Tyrone, E.)
Burn, Colonel C. R. Horne, C. Silvester (Ipswich) Roberts, Charles H. (Lincoln)
Carr-Gomm, H. W. Horner, Andrew Long Roberts, Sir J. H. (Denbighs)
Cassel, Felix Howard, Hon. Geoffrey Robertson, Sir G. Scott (Bradford)
Cave, George Hughes, Spencer Leigh Robertson, John M. (Tyneside)
Cawley, Sir Frederick (Prestwich) Isaacs, Rt. Hon. Sir Rufus Robinson, Sidney
Cecil, Evelyn (Aston Manor) Jones, Rt. Hon. Sir D. Brynmor (Swansea) Roch, Walter F.
Cecil, Lord Hugh (Oxford University) Jones, J. Towyn (Carmarthen, East) Roche, Augustine (Louth)
Clancy, John Joseph Jones, William (Carnarvonshire) Roe, Sir Thomas
Clive, Captain Percy Archer Jones, W. S. Glyn- (T. H'mts, Stepney) Ronaldshay, Earl of
Clough, William Joyce, Michael Rowlands, James
Condon, Thomas Joseph Keating, Matthew Royds, Edmund
Cornwall, Sir Edwin A. Kelly, Edward Samuel, Sir Harry (Norwood)
Cotton, William Francis Kennedy, Vincent Paul Samuel, Rt. Hon. H. L. (Cleveland)
Cowan, W. H. Karr-Smlley, Peter Kerr Samuel, Samuel (Wandsworth)
Craik, Sir Henry Kerry, Earl of Sanders, Robert Arthur
Cripps, Sir Charles Alfred Kilbride, Denis Scanlan, Thomas
Crumley, Patrick King, Joseph Scott, Sir S. (Marylebone, W.)
Cullinan, John Lardner, James C. R. Sheehy, David
Dalrymple, Viscount Law, Hugh A. (Donegal, West) Shortt, Edward
Dalziel, Davison (Brixton) Lawson, Sir W. (Cumb'rld, Cockerm'th) Simon, Rt. Hon. Sir John Allsebrook
Davies, David (Montgomery Co.) Lloyd, George Butler (Shrewsbury) Smyth, Thomas F.
Dawes, James Arthur Low, Sir Frederick (Norwich) Stanley, Major G. F. (Preston)
Delany, William Lundon, Thomas Steel-Maitland, A. D.
Denman, Hon. Richard Douglas Lynch, Arthur Alfred Talbot, Lord Edmund
Denison-Pender, J. C. McGhee, Richard Tennant, Harold John
Denniss, E. R. B. Macnamara, Rt. Hon. Dr. T. J. Terrell, George (Wilts, N.W.)
Devlin, Joseph MacNeill, J. G. Swift (Donegal, South) Thomson, W. Mitchell (Down, N.)
Dickinson, W. H. Macpherson, James Ian Thynne, Lord Alexander
Dickson, Rt. Hon. C. Scott MacVeagh, Jeremiah Tullibardine, Marquess of
Dillon, John M'Curdy, Charles Albert Ure, Rt. Hon. Alexander
Donelan, Captain A. McKenna, Rt. Hon. Reginald Walters, Sir John Tudor
Doris, William M'Laren, Hon. H. D. (Leics.) Warner, Sir Thomas Courtenay
Duffy, William J. M'Laren, Hon. F. W. S. (Lincs., Spalding) Webb, H.
Edwards, Clement (Glamorgan, E.) Manfield, Harry White, Major G. D. (Lancs., Southport)
Edwards, John Hugh (Glamorgan, Mid) Mason, David M. (Coventry) White, J. Dundas (Gies., Tradeston)
Esmonde, Dr. John (Tipperary, N.) Mason, James F. (Windsor) White, Patrick (Meath, North)
Esmonde, Sir Thomas (Wexford, N.) Masterman, Rt. Hon. C. F. G. Whittaker, Rt. Hon. Sir Thomas P.
Eyres-Monsell, Bolton M. Meagher, Michael Whyte, Alexander F.
Fetherstonhaugh, Godfrey Meehan, Francis E. (Leitrim, N.) Wilson, Hon. G. G. (Hull, W.)
Ftrench, Peter Meehan, Patrick J. (Queen's Co., Leix) Wood, John (Stalybridge)
Field, William Molloy, Michael Wood, Rt. Hon. T. McKinnon (Glas.)
Fiennes, Hon. Eustace Edward Molteno, Percy Alpert Young, William (Perth, East)
Fisher, Rt. Hon. W. Hayes Money, L. G. Chiozza Younger, Sir George
Fitzgibbon, John Mooney, John J. Yoxail, Sir James Henry
Fitzroy, Hon. Edward A. Morgan, George Hay
Flavin, Michael Joseph Morison, Hector TELLERS FOR THE AYES.—Mr. Illingworth and Mr. Gulland.
Fletcher, John Samuel Morton, Alpheus Cleophas
Forster, Henry William Muldoon, John
NOES.
Adamson, William Hogge, James Myles Roberts, G. H. (Norwich)
Barnes, G. N. Kellaway, Frederick George Samuel, J. (Stockton)
Booth, Frederick Handel Lambert, Richard (Wilts, Cricklade) Scott, A. MacCallum (Glas., Bridgeton)
Bowerman, C. W. Leach, Charles Smith, Albert (Lancs., Clitheroe)
Bryce, J. Annan Macdonald, J. Ramsay (Leicester) Snowden, Philip
Buxton, Noel (Norfolk, N.) Marshall, Arthur Harold Sutherland, John E.
Byles, Sir William Pollard Martin, Joseph Sutton, John E.
Chancellor, Henry George Morrell, Philip Taylor, Thomas (Bolton)
Chapple, Dr. William Allen Parker, James (Halifax) Thomas J. H. (Derby)
Craig, Herbert J. (Tynemouth) Pearce, Robert (Staffs, Leek) Thorne, William (West Ham)
Duncan, C. (Barrow-In-Furness) Pointer, Joseph Wadsworth, J.
Gill, Alfred Henry Price, C. E. (Edinburgh, Central) Wardie, George J.
Glanville, Harold James Pringle, William M. R. Wilson, W. T. (Westhoughton)
Goldstone, Frank Radford, George Heynes
Hardie, J. Keir Rattan, Peter Wilson TELLERS FOR THE NOES.—Sir A. Markham and Mr. J. Ward.
Hinds, John Richardson, Thomas (Whitehaven)
Hodge, John

Question put, and agreed to.