CIVIL SERVICES AND REVENUE DEPARTMENTS ESTIMATES, 1913

§ Sir G. YOUNGER
I do not think that the Chancellor of the Exchequer in his speech this afternoon was quite fair to my hon. and gallant Friend (Mr. Pretyman) who opened the Debate on the main Vote this afternoon. The right hon. Gentleman had a great deal to say about the Land Union, an institution for which it is very obvious he has no very great affection, but I think that the right hon. Gentleman ought to hear the other side. It is all very well for him to speak about the Land Union and about my hon. and gallant Friend, and to resent, as no doubt he does, the work that they have been doing in the past two or three years in watching with a very careful eye, not only the right Iron. Gentleman's own action with regard to the Budget, but also the action of his administrators, of the Inland Revenue, and indeed of the Law Courts and everybody else with regard to these valuations and 2324 the collection of these taxes. Let the right hon. Gentleman ask those who have been advised by the Land Union in this matter, and whose interests have been cared for by them in a very difficult situation, and he will perhaps realise that there are two sides to the question, and that, however much he may feel aggrieved by certain remarks of my hon. and gallant Friend or by certain things he has done, there are others who appreciate very much the work he and the Land Union have done and the care they have taken. It is no use for the right hon. Gentleman to come down here and make the sort of speech he made this afternoon under the impression that he has really answered my hon. Friend. The right hon. Gentleman is an adept at producing and dragging a red herring across any path. There is no one more able to do that, and no one more interesting in the doing of it than the right hon. Gentleman, but it does not really influence people as the right hon. Gentleman thinks. We see through it quite well. When the right hon. Gentleman cannot answer a direct challenge, he generally answers something else. He sets up a man of straw and knocks him down with great effect; but after all it was not a man of straw that was set up here. There are an enormous number of objections being raised. I have ever so many objections to valuations in which I am concerned, and I think I know a little more about these matters than those who make the valuations. There are a number of points which may be the subject of appeal on my part, and there are thousands in the same position. The Gentlemen who have to deal with these matters are very nice. I have no fault to find with those with whom I have come into contact. They meet me perfectly reasonably.
With regard to a recent. decision in the House of Lords, the Chancellor of the Exchequer, in answer to a question I put to him, said he did not see why the Government should pay the costs of that case. I have a report of that case as dealt with by the Referee and by the Valuation Court. The Valuation Court consisted of three very capable judges, men of great experience. But they made an absurd mistake in thinking—and it was a very natural mistake—that the word" value" in the Budget means "value" as understood in a dictionary. The "value" of the Budget has no analogy at all to "value" in common life. The Budget "value" is a mere abstraction: 2325 it is nothing that exists in Heaven or on, earth; it is something created by the right hon. Gentleman, and the minus value which must arise in certain cases is the natural result of the system of taxation defined by the Budget. Those of us who dealt with it from week to week and month to month realised that fact long ago. The judges, thinking the word "value" meant "value" as ordinarily understood took the view which was overruled by the House of Lords—as I think quite rightly. Lord Johnston—one of our most experienced judges, said the Court was bound to consider whether it was the real intention of the Statute that a minus site value should be possible, and he added that he had come to the conclusion there was no foundation for the contention of the Government that the question must not be considered in accordance with ordinary business methods. But there are no ordinary business methods in connection with this matter. It is a question of finding and fixing an increment value and that has nothing to do with ordinary business methods. The Lord Chancellor went on to say that the issue could not be determined by the wording of one Section, but that the provisions must be taken as a whole; it was a tax intended to raise revenue by the assessment of increased value in land. That is of course where the judges went wrong. Where the Referee says it is impossible to have a minus value, and Where you have a Court composed of three competent judges saying the same thing, and the House of Lords over-ruling that decision in a test case governing thousands of other cases it surely is only reasonable, if the Act is so ambiguous as it turned out to be in this matter, that the Treasury should pay the costs of the action instituted to determine how valuations are to be made.
I should like to ask the right hon. Gentleman what is going to happen with regard to the valuations made before this judgment was given, and what is going to happen with regard to overpayments which have been exacted from many people who have paid Increment Duty. Obviously you cannot give a 10 per cent, deduction off a minus quantity. The dictum of one of the judges was that 10 per cent. was to be taken off the full site value. It was not so done; therefore in every case where a deduction of 10 per cent has not been taken off the full site value, the subject has been overcharged. The right hon. Gentle- 2326 man has been asked what he is going to do about that, but no one has ever yet heard an answer from him. He again referred, and always does refer when these matters arise, to the fact that we did not jump at his offer to appoint a committee of experts to consider whether the administration of this Act is satisfactory or according to the terms of the Statute. We have told the right hon. Gentleman over and over again that that is not our difficulty or our point against him. I am quite certain that the Act is being administered in the best possible way by those responsible for it, but they are administering a very complicated Act.

§ Mr. LLOYD GEORGE
It is all very well for the hon. Baronet to say so. He has never said anything to the contrary, so far as I know. That was not the view of those who were attacking the administration of the Act. On the contrary, they used very strong words about the administration. They went as far as to say that if this was an ordinary business these men would have been sent to prison. It was an attack upon the administration, and a charge that they undervalued under instructions.

§ Sir G. YOUNGER
I hardly think that is the exact position. No doubt these charges were made off and on.

§ Mr. LLOYD GEORGE
Hear, hear!

§ Sir G. YOUNGER
There is no doubt that this Act, as the right hon. Gentleman himself will agree, is an extremely difficult one to administer. It is most complicated. There is no Act like it in any kingdom under the sun, and there was never an Act so little understood by its authors or by those who fought it during the many months we fought it. We are beginning to understand it a little better now. Our point is this: the administration may be right or wrong. There may be flaws here and there. An expert Committee may find them out. They may he serious or trifling. What we want, and what we have always asked for is that the right hon. Gentleman will let us have a Committee to see whether or not the values you are taking are true values. That is what the right hon. Gentleman has always refused to give us.

§ Mr. LLOYD GEORGE
dissented.

§ Sir G. YOUNGER
Will he give it to us now?

§ Mr. LLOYD GEORGE
The hon. Baronet says I have refused to give them that. On the contrary, I stated distinctly that I was prepared to give one or the other Committee, but I wanted to know which it was they wanted; whether it was a Committee to consider whether the Act as it stands is being properly administered, or a committee to consider whether the principles ought to be altered. If they wanted the former, I am prepared to have a Committee of experts, but if the latter, I will not have a Committee of experts, but a different committee. I do not care which it is, and I stand by my offer now.

§ Sir G. YOUNGER
This is the first time I have understood that to be the case. I have taken a part in the negotiations behind the scenes, not with the right hon. Gentleman, and have had submitted to me once or twice the reference which the right hon. Gentleman proposed to give, and I always advised my hon. Friends never to accept anything from him at all, unless the Committee he appoints is to have the right to say whether these values are true values or whether they are not. Negotiations have always broken down on that point. If, however, he says he will give us an alternative Committee, either a Committee to consider whether the Act is being administered according to its provisions or whether the values being found under the Act are true values, something that the word "value" means, I have no doubt that the right hon. Gentleman (Mr. Austen Chamberlain) will reconsider his position and will let the right hon. Gentleman know whether or not he accepts the alternative. But it is the first time I have ever understood him to make that offer. But everyone knows these values are not true values. A minus value is an impossibility. There must be a positive value. A minus value merely arises from the fact that there is a heavy burden on a particular piece of land which reduces the datum point to a point below its value. That is why the hon. Member (Mr. Pringle) challenged the statement of my hon. Friend (Mr. Pretyman) on the new theory of the Land Taxers on the opposite side, and hon. Members have given up all idea of trying to place rating upon assessable site value and desire now to put it on full site value.

Mr. DUNDAS WHITE
I do not think the hon. Baronet could mention any hon. 2328 Member on this side who ever suggested rating the assessable site value.

§ Sir G. YOUNGER
Assessable site value is a new term according to the Chancellor of the Exchequer. What the hon. Member and others have always said, is that they wanted to rate the bare land value irrespective of all improvements upon it. The bare land value is your assessable value, and in many cases in Scotland it is less than nothing.

Mr. DUNDAS WHITE
Assessable site value is a technical word under the Finance Act. If the hon. Baronet implies something else, I would suggest his using another term.

§ Sir G. YOUNGER
Of course it is a. technical word. Everything under the Finance Act is a technical word, and there is no valuation in it at all. They are a concoction of the right hon. Gentleman. They are an invention of the evil one. The hon. Member (Mr. Pringle) did not know that the hon. Member (Mr. Wedgwood) introduced a measure the other day, the introduction of which my hon. Friend voted for, and that measure proposed, not to place rating upon bare land value, but upon full site value, because these Gentlemen thought they knew all about it before they found out that bare land value offered nothing to rate upon. That disposes, at all events, of the challenge that I was not correct in saying that was a new development on the other side. I suppose it is no good my making an appeal to the right hon. Gentleman to reconsider his position in regard to the minus value scheme. I do not know why he is so determined to refuse any sort of kind, generous treatment to the unfortunate person whose case is going to govern thousands of others in Scotland. I still have a sort of faint hope that the right hon. Gentleman, on thinking it over, will think it is one of those cases of peculiar circumstances which deserves special treatment, and which ought to receive at his hands fairly generous consideration. After all, it has settled for him a most important principle, one which was obviously going to give very great difficulty in Scotland, and create a good deal of trouble to the Treasury and to the land valuation officials, and, if for no other reason than that it has got them and him out of a very great difficulty, he ought to see his way to pay the very small amount of money which this involves.

CIVIL SERVICES AND REVENUE DEPARTMENTS ESTIMATES, 1913–14.