§ Mr. ROYDS
This afternoon I asked the Chancellor of the Exchequer whether, in view of the Referee's decisions in two test cases regarding agricultural land—the Chells Farm and the Norton Malreward cases—and the Deptford case, respecting urban land, he would be willing to advise the Valuation Department to postpone the issue of further provisional valuations until the basis of valuation was settled, and to devote their energies to wiping off the arrears in the Estate Duty Department and in respect of the 350,000 occasional valuations which have yet to be made. The Chancellor of the Exchequer replied in the negative. What is the position? Let us take the case of agricultural land first. The Referees in these cases were Mr. Drew and Mr. Daniel Watney, two of the most eminent valuers and surveyors in the country. Those gentlemen decided that in their opinion in these cases the method of valuation of agricultural land, as pursued by the Valuation Department, was wrong in its entirety. The effect of the decisions was that all the valuations of agricultural land made up to the present time were founded upon a wrong basis. I believe that the agricultural land of this country comprises at least seven-eighths of the total land of the United Kingdom—I suppose some 60,000,000 or 70,000,000 acres of land. The Chancellor of the Exchequer stated last week or the week before that 1394 about 4,500,000 provisional valuations had been served.
§ The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)
That included urban land.
§ Mr. ROYDS
I take it that about one third of the provisional valuations of the land of the country have been, served, but I do not think anything like one-third of the agricultural land of the country has yet been valued. The figures do not refer to acres, but to the number of provisional valuations. A large number of the provisional valuations have not yet been made final. What is the effect of decisions of the referees in the agricultural cases? They' alter the whole of the figures, not only of the total value, but of the two. site values, the full site value and the assessable site value. They materially alter the total value. They fix the total value upon a different basis altogether from that fixed by the Government valuers, and they have brought down the two site values by 50 per cent. The reason they brought down these site values was because they found the Government valuers had been including in site value a very large proportion of the owners and tenants' improvements. In the case of the Norton Malreward valuation they brought down the site value to less than half what it had been originally fixed by the provisional valuation.
§ Mr. ROYDS
I quite admit that the valuations were not brought down to the figures of the owner, but the answer to that is perfectly obvious, because the valuers, in making their valuation, said specifically that they had included in the site value, notwithstanding the large deductions which they had made, a large proportion of improvements which were obviously owners' improvements, and had those improvements not been included, the site value, in my opinion, would have been brought down to an insignificant figure, very much the figure at which the owner-placed it. That is the position in both cases. I asked the Chancellor of the Exchequer this afternoon, as these two decisions had been given to the effect that the whole basis of agricultural valuation was wrong, if he would defer the serving of any further provisional valuations of agricultural land until the basis of 1395 valuation had been fixed, because I cannot see what is the use of any valuation in regard to which the basis on which it is to be made is not fixed and the views expressed by the Referee and those adopted by the Government valuers are as wide apart as the poles. Is there any urgency for this valuation of agricultural land being pressed forward Primâ facie none of this agricultural land is the subject of any of the three taxes imposed on land under the Finance Act of 1909–10. But supposing it could be made liable to any of those three taxes, what is the position? Increment Value Duty which, I think, is the only tax under which agricultural land could possibly come, is only estimated to yield £20,000 this year, not only from agricultural, but from urban land. There cannot be very much urgency in that regard. I dismiss Reversion Duty because it is not affected by the valuation at all. No valuation is needed for the purpose of Reversion Duty. The total estimate of the yield from all three duties for the year, taking the year by itself, is £205,000, of which Reversion Duty represents £100,000, so that the only sum left in respect to which this valuation applies is the paltry sum of £105,000.
I am sure the right hon. Gentleman has come to the conclusion that it does not pay to tax crossing sweepers with Increment Duty or nursing homes or poor spinsters or even builders' profits. That tax I consider has gone or ought to have gone. It yields nothing, and the right hon. Gentleman knows it. Nor do the Undeveloped Land Duties. He has found in regard to them that it does not pay to tax undeveloped land. Instead of houses springing up, building development is arrested in consequence-of this tax. That is the position. I have stated these facts to show that even if these taxes did apply to agricultural land—which the right hon. Gentleman says they do not—they are so paltry and so insignificant that they cannot enter into consideration in the question which we have before us. To what further use can this valuation be possibly put? The right hon. Gentleman suggested it might be exceedingly useful for the purpose of local rating and taxation, but he added that it would be grossly unfair and improper for the valuation of agricultural land under the methods adopted by the Valuation Department to be used for the purpose of rating and taxation. He stated that perfectly clearly, and I under- 1396 stood him to say that it was his intention in the Revenue Bill, which we have not yet seen but which we have been promised for a considerable time, to introduce Clauses which would revise the method of valuation of agricultural land so that the owners' improvements should be left out and that that land should be valued on the same basis as urban land is now valued. The position is this: Agricultural valuation is not needed for the purposes of the taxes imposed by the Finance Act, and they cannot be used, according to the view of the right hon. Gentleman himself, for the purposes of any future taxation unless and until the whole methods of the valuation of agricultural land are altered and the owners' improvements are excluded. That is the state of affairs at the present time. My suggestion to the right hon. Gentleman is that under those circumstances he should defer any further valuation of agricultural land unless and until the basis of valuation is settled by Parliament. I would like to ask the right hon. Gentleman whether it is his intention to introduce in the Revenue Bill provisions to the effect that all owners' and tenants' improvements of agricultural land shall be excluded from those site values? My question this afternoon also extended to urban land, because under the Deptford decision, which was a decision also of the Referee, certain deductions were directed to be made and allowed by him. That decision has been totally disregarded just as in the case of agricultural land, and valuations have been made as if the decision of the Referee had never been given. I would ask the right hon. Gentleman this perfectly plain question: I would ask him to state whether it is or is not the fact that there is any urgency in regard to these agricultural, or, indeed, urban valuations, whether the sum of money which he estimates to receive from his taxes, gives him any anxiety whatever—the total is £105,000—and then whether, if he desires, as I hope he really does, to have a true valuation of the land, he is not willing to defer the service of any further provisional valuations until a basis has been fixed by this House of Commons, which will enable the valuers to arrive at the true and not a false value.
§ Mr. LLOYD GEORGE
The hon. Member has spoken temperately and genially, and I have no complaint to make at all, though these points have been put before. The only complaints I have are these two. The hon. Member raised the question of 1397 the valuation of agricultural land, yield of all these taxes, and the question of local rating in reference to agricultural land, and he left me about seven or eight minutes, in which to reply. I am afraid that in the very short time at my disposal, I cannot possibly do justice to the very important questions which he raised. The other complaint I make is that, while he raised all these questions he did not raise the question of which he gave me notice—that he would raise the issue of tenant right, and the effect of tenant right.
§ Mr. LLOYD GEORGE
It was raised in the question put to me, but not mentioned now; that is the complaint I make, that the hon. Member gives notice of it and then raises about half a dozen other issues.
§ Mr. LLOYD GEORGE
I think that the hon. Gentleman must have forgotten the question in respect to which he gave me notice, which was as to the decisions that were given in what were known as the test cases in reference to tenant right.
§ Mr. LLOYD GEORGE
Perhaps the lion. Gentleman will allow me to continue. He will also bear in mind that there were supplementary questions which were put in reference to exactly the same decisions and the whole point was whether the decisions which were given in respect to tenant right did not affect the whole of the agricultural valuation, and whether it was fair to accept those decisions. Those are questions which were put to me both by the hon. Gentleman and the hon. and gallant Member for Chelmsford, and I understood that that was the question to be raised.
§ Mr. PRETYMAN
I do not want to dispute it at all. The question was raised as to the decisions in reference to tenant right. That is not the sole point of view that was raised in the question this afternoon. That was a minor point.
§ Mr. LLOYD GEORGE
I have only got five minutes, and I will give the whole of it to the hon. Member if he prefers it. I understood that the whole question was with reference to the test cases as to tenant right. If the hon. Gentleman prefers altering the form of the question I have no objection. I should like to say this with regard to tenant right that it makes no difference to the valuation, and I should be prepared to prove that if the hon. Gentleman persists in the question of which he gave me notice. To come to the question which he raised this evening, he wanted to know whether we were prepared to hang up the whole of the agricultural valuation until we had made an amendment which would enable us to deduct the improvements in respect of drains and other tenants' and landlords' improvements upon the property. I do not think it is necessary to do that at all. I think it would not be fair to set up this as the basis of local rating until this amendment has been accomplished. I have said so on behalf of the Government, and not only on behalf of myself. I am not prepared to rate agricultural land upon the present basis until these deductions have been made. I can assure hon. Gentlemen that when we produce our Revenue Bill they will find that I have inserted provisions with a view of carrying that pledge into operation. I hope that when he sees it, probably on Monday or Tuesday next at the very latest, he will be satisfied with the provision or Clause I have inserted.
§ Mr. LLOYD GEORGE
I am very glad to hear that from the hon. Baronet. Upon that matter I consulted a landowner this afternoon, and he assured me he had made a careful valuation of the whole property, after making various deductions. I examined the valuation, and passed it over to the officials of the Inland Revenue to subject it to a more careful scrutiny. Here we have a test case not conducted by ourselves, but by a very able and intelligent landowner, who takes an interest in these matters. That valuation which he has been taking will be of the greatest importance and assistance to us in achieving the results which the hon. and gallant Gentleman has in his mind. At any rate, I 1399 can assure him that there is no intention on our part of utilising the present figures—I will not say the present basis—without making a deduction in respect of improvements effected by landlords and tenants on their property.
§ Mr. LLOYD GEORGE
I agree, but as a matter of fact we do not include that in our valuation at the present moment. That is a matter which is in issue; that is a matter upon which we are pleading. The Referees are not men who are competent to give a final decision on the point of law, and I think they would be the last persons in the world to claim that they were. We cannot accept the decision of the Referee upon a matter which is the interpretation of an Act of Parliament. I can assure the hon. and gallant Gentleman that they are the very last men in the world to contend 1400 that we ought to do so. In saying that we are not impugning the position and authority of Mr. Drew and Mr. Watney. I agree with what everybody has said about them. They are very able and very experienced men, and they are very honourable and very upright men. They take the greatest possible trouble to arrive at a fair decision, but we must receive the opinion of our Judges of the High Court upon the interpretation of an Act of Parliament. I can assure the hon. and gallant Gentleman that we shall take all those questions into account when we come to arrive at our final valuation of agricultural values. As he knows very well, our main idea is first of all to ascertain what the building value of the land was with a view to establishing our claim—
§ It being Half-past Eleven of the clock, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at Half after Eleven o'clock.