LOCAL TAXATION.

HC Deb 11 March 1913 vol 50 cc81-155

Mr. HAYES FISHER

I beg to move, as an Amendment to the Address, to add, at the end thereof:—

3.0 P.M.

"But humbly represent to Your Majesty that this House regrets that, notwithstanding the growing pressure of local rates in urban and rural districts, particularly in respect of education, and the heavy financial obligations which local authorities are invited to assume, including the treatment of uninsured persons suffering from tuberculosis, Your Majesty's Gracious Speech contains no announcement of measures to give effect to the recommendations of the Royal Commission on Local Taxation in favour of a large increase in the subventions from national funds in aid of local expenditure upon national services, or to fulfil the expectations of relief to local taxation held out in connection with the Budget of 1909."

This is the third year in succession in which I have endeavoured to obtain the opinion of the House that hon. Members regret that there is no announcement on the part of His Majesty's Government of any measure for diminishing the ever increasing burdens cast upon the ratepayers, especially in connection with services which have been pronounced by the Royal Commission to be preponderatingly national and connected with such matters as education, police, and main roads. This is an old story, but it is still a very painful one for the ratepayers, and it is one which grows more painful every year. The underlying question is really what is the fairest way of raising the money to meet the demands of the National Debt, services of the Army and Navy expenditure, all of which is properly met by Income Tax, Super-tax, Death Duties, and Customs and Excise services, which we all acknowledge to be absolutely necessary in the interests of the nation. I believe there is a general acknowledgment that our whole fiscal system, from a rating point of view, is antiquated and chaotic. In 1892 the Chancellor of the Exchequer expressed the opinion that— to throw the cost of every improvement in education, of every improvement in the dwellings of the working classes, and every improvement made and every action taken by the local authority—to throw the cost of all these things on one kind of property and that alone, was intrinsically inequitable, and ought to be remedied. I am convinced that the whole foundations of our system are wrong. Those foundations were laid 300 years ago and they cannot bear the superstructure which is now placed upon them. More than anything else we want a complete overhauling and a rearrangement of the whole of our fiscal system, both Imperial and local. We want a system more adapted to the twentieth century, and not to the 16th, 17th, 18th, or the 19th century. We want to view all these things with a modern eye. That is what I am constantly asking Governments to do, and some day I hope I shall be successful. The Chancellor of the Exchequer used to share that opinion himself, and he has said over and over again that immediate relief ought to be given to the ratepayer. The right hon. Gentleman has made a very interesting pronouncement on that question, for in his famous Budget speech of 1909 he used these words:— … in giving the much-promised relief to the local ratepayer—he is entitled to consideration in respect of the increased expenditure imposed upon him both by the late Government and the present Government, more especially in educational matters. He has also been very hard pressed owing to the increased costliness of maintaining the roads, attributable to the development in mechanical traction. I am not sure that it is altogether a fiscal question It has almost become a great social question, for the municipalities are at the end of their resources, and their work is almost at a standstill in many of these areas because they cannot afford to spend what is absolutely necessary on their development. The local ratepayer has been promised consideration by successive Governments, and he is surely entitled to get it. I think I can safely say more; the financial proposals which I shall lay before the House will enable me to make good that promise. That was a very strong declaration on the part of the Chancellor of the Exchequer, and shortly after that he received, on the 8th July, 1909; a deputation of the Association of Municipal Corporations, representing 295 different boroughs and borough councils. This deputation included many lord mayors, mayors, and Members of Parliament, and they desired, first of all, an assurance from the Chancellor of the Exchequer that the Budget would not, at any rate, restrict or diminish the resources already at the command of the local authorities. They were anticipating that the Licence Duties, more especially the extra Licence Duties which were going to be imposed by the Chancellor of the Exchequer for the benefit of the National Exchequer, would largely diminish the resources of the local exchequers, and in reply the right hon. Gentleman said:— I do not think there will be any real danger of any considerable diminution in the rateable value of licensed premises. … There may be in some districts, possibly in London, a slight diminution of the rateable value, but that would not arise this year at any rate. I am not sure whether the right hon. Gentleman is aware of the effect his legislation has had on the rateable value of licensed premises in London, and much the same thing has happened in other large towns in England. In London the Budget proposals have been mainly responsible for the first decrease which London has ever seen in the quinquennial assessable value of London, which is a very important matter for London. It means that the area from which we draw cur local taxation has been impoverished, by the action of the Chancellor of the Exchequer, to such an extent that in London we lose something like a penny rate owing to the increased Licence Duties put upon licensed property in London. I have here a Return which shows that the Chancellor of the Exchequer himself has benefited during those three years to the extent of £1,500,000, and he has drawn that amount from London in that time by increased Licence Duties for the National Exchequer. What has been the effect on the local exchequer? It has suffered during those years to the extent of a threepenny rate, and that is a very serious loss.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

Is that per annum?

Mr. HAYES FISHER

No; I said that for that time it was very nearly a penny rate. That may not seem much to the Chancellor of the Exchequer, but to the ratepayers it means a great deal of money. Therefore the forecast of the Chancellor of the Exchequer was entirely wrong. The right hon. Gentleman said, "Never mind. You may suffer some loss, but I want the local authorities to recollect what there is on the other side of the present Budget." This is what he said was on the other side, and what he said the local authorities were going to gain:— There would be first of all seine £600,000 going towards the roads. It is perfectly true that £600,000 is not a Grant in aid of the rates, but it does go towards the improvement of the roads, which is a burden upon the rates. How has that prophecy turned out? The Road Board has received altogether over £2,000,000, and, up to 31st March last, it had disbursed only £500,000 in the two years. This deputation were informed the ratepayers were going to be relieved to the extent of £600,000 in one year; that is, £1,200,000 in two years. As far as I can make out, the Road Board disbursed up to 31st December last, £900,000. That is very short of the £1,200,000 which the ratepayers were told they would receive in relief of their rates. I am not going to argue this Amendment from the London point of view. Every now and then I must give illustrations from London because those are the figures I am able to obtain with accuracy, whereas the figures for other parts of the country are much more difficult to get. Let, us look at the matter as it affects London. We naturally expected from the speech of the Chancellor of the Exchequer to this deputation that we in London would get a very fair share of this £600,000 a year. What has happened? London, we know, has contributed during that time at least £400,000 by way of Carriage Duties and by way of Petrol Tax to the funds of the Road Board. What has London received back from the Road Board? Under £4,000 in two years. That is a very important thing, because one of the problems which it is most difficult for all highway authorities to solve is the question of the maintenance and upkeep of the roads owing to motor traction. There is one source of revenue—the Petrol Duty—which has been taken away from us and handed over to the Road Board, and which apparently never comes back to us. Again, the Chancellor of the Exchequer, for the enrichment of the National Exchequer, has stereotyped our share of the Carriage Duties at the produce of the year 1907–8. What is the result? There was a growing duty. There was an improving value for all local authorities; there was a tax of which we might have legitimately thought we should feel the benefit and from which we should be able to derive a new source of revenue to be applied to all our numerous wants. The Chancellor of the Exchequer saw a growing wealth, and he seized it for himself. He said, "You shall only have so much. I will stereotype your share of it at so much. I see it is growing. I am going to take that."

That is one instance only of the methods pursued by the present Chancellor of the Exchequer. He not only by his legislation enriches the National Exchequer, but he diminishes and impoverishes the areas over which local exchequers raise their revenues. When he sees a growing source of revenue which might legitimately be retained by the local authorities, he seizes it himself for the enrichment of the National Exchequer, and then with singular and extraordinary irony he points out to the municipalities that they ought to broaden the basis of their taxation, and that they ought to be looking out for new sources of revenue. When we have got our eye on a new source of revenue which is legitimately earmarked for local purposes so has the Chancellor of the Exchequer. He is able to put his hand in it; we are not able to put our hand in it. I am quite sure the Chancellor of the Exchequer is human and will sympathise with those who stand in my shoes, and who see their revenue taken away from them for the enrichment of other exchequers, while the person who takes it ironically points out to the other party the duty of broadening the basis of taxation. I hope the Chancellor of the Exchequer will give a little more light and leading to local authorities as to what new sources of revenue there are open to them, and where he thinks we can broaden our basis of taxation. Will he indicate to us some new source of revenue which when he sees it growing he will not take to himself, and will he say to those of us who have, of are likely to have, the administration of local finance, "There you can go and take that; there will be a fine source of income for you there; I am going to let that source of income entirely alone"? I hope we may, at all events, have some guidance from the Chancellor of the Exchequer, who, after all, is the greatest authority in England on all financial problems. That is one thing he said to this deputation: "There is £600,000 a year I am going to give you." That is not all. There is £250,000 a year coming to you, half the proceeds of my new Land Taxes, so that altogether there will be £850,000 of revenue raised by this Budget which this year will go to the local authorities. By next year the yield of the Land Taxes will, I estimate, have at least doubled, so that next year the £250,000 will have grown to £500,000. That far more than compensates for any possible reduction in the revenue of the local authorities which may result from the depreciation of the rateable value of the licensed houses and the decreased consumption of whisky. In fact, he said, the Imperial dog is most generously sparing some of its bone to the local authorities. I have never seen any meat on the Chancellor's bone. [Laughter] Well, "on the Imperial dog's bone"; I will put it that way. On the contrary, the Imperial dog has really taken away from the local dog many of its choice and meaty bones. We see no good in this exchange, and the generosity appears to be entirely on the side of the local dog, and not on the side of the Imperial dog. That is what the Chancellor of the Exchequer said. It was exceedingly comfortable and comforting to this very powerful deputation that they should be told, "While you may lose a little bit on one side, you will gain enormously from my Budget on the other side." What did the Chancellor of the Exchequer do about half the value of these Land Taxes? We all know the history of that. In the dead of the night he came down here and seized the whole of them. He said: "I am going to take this at all events for three years." That was the first result of the land values taxation, of which so much has been made at election times by the Chancellor of the Exchequer's party. It was the first result for the ratepayers. They had always been led to suppose that these land values had been created by the expenditure of their rates, but that theory was demolished in a quarter of an hour one night by the Chancellor of the Exchequer, and the whole of that new source of revenue was diverted and appropriated by the Chancellor of the Exchequer, The Chancellor of the Exchequer having been wrong in all these forecasts I think he really ought to have a very generous feeling towards the ratepayers. I want to know from him whether those speeches of his, in reply to passionate speeches on behalf of the ratepayers, and pathetic speeches in some instances, represent at the present time the policy of the Chancellor of the Exchequer and the policy of His Majesty's Government? I cannot find much trace of that policy in the speeches that have been delivered by Cabinet Ministers in the election which has just taken place in London. I have read the speeches of every one of the Cabinet Ministers in the course of that election, and there is nothing there to lead to the hope that they have the remotest sympathy with the hardships of the ratepayers. They have been rushing about night after night in support of the party which is, at all events, anxious to spend money and abusing the only party which is distinctly anxious to economise. They may have been well within their rights in doing so, but I confess I should have admired the President of the Local Government Board a little more if he had maintained that more judicial and important attitude, which I think a man in his position as President of the Local Government Board ought to have maintained in the recent controversy. After all, he is the court of appeal in some most important matters, such as housing, surcharging, and sanctioning of loans. He is the court of appeal from the London County Council and other county councils, and it is a most unfortunate thing when the court of appeal descends into the arena and makes most inflammatory and abusive speeches against one party which, after all, at the present time, is the dominant party in that great county council. It ill fits him to do this, and then to pose as a great judicial an impartial authority, who tries to do justice to all parties in affairs in connection with local government. I hope the Prime Minister's attention will be called to this. I think it is a very bad precedent to see the President of the Local Government Board calling all those opposed to him monopolists, or contractors, or Publicans and sinners. Many even worse things than these he said. The Publicans and sinners were to my mind better characters on the whole than the Pharisees, and I think they were more commended and commendable.

All these Cabinet Ministers rushing about night after night, with one accord, whilst they expressed no sympathy with the ratepayers, so far as any relief could be expected in an increased subvention from the Imperial Exchequer, told the ratepayers, "Wait and see; there is going to be some splendid new taxation put upon land, and out of that you will be able to enrich yourselves." I do want to know, when Cabinet Ministers go about London making these speeches—why do not we find a single trace of any measure of the kind in the King's Speech, any measure which would even attempt to carry out any of these promises which they made so liberally and rashly on the eve of the elections? We cannot but be persuaded that these matters are brought forward by them only to serve an electioneering purpose by Cabinet Ministers. They have no intention whatever of bringing in any legislation of the kind. They have this Session in which they might do it. Even the Chancellor of the Exchequer himself I recollect last year rather indicated—I have his exact words here; I do not know whether he intended it only for London—that we were able by a reform in the rating system to make it possible for municipalities within their own areas to equalise the burden of rates. Then he said, "There would not be the same case, and there would not be the same demand upon the Imperial Exchequer." There again, like any measure for the taxation of land values, a measure for the equalisation of rates requires legislation. These are not matters in which municipalities can interfere in any practical way. They are matters for the Government. And again I see no trace in the King's Speech of any attempt on the part of the Government to bring about a further equalisation of rates in London. It was once mentioned by the present Government in a King's Speech many years ago, but it has never appeared since. In the London County Council, the whole of the council is in favour of a considerably further equalisation of rates, and are quite prepared to support such a measure. I am personally in favour of a considerably further equalisation of rates. I have said that constantly; I never said anything else. The poor rate is about 70 per cent. and that might be further equalised. But it is not a matter for the county council. It is a matter for the Government, and I say, "Do not point the finger of scorn at the municipalities because they do not find new sources of revenue when it is impossible for them to find new sources of revenue unless His Majesty's Government, or some Government, by legislation puts them into a position to get these sources of taxation." I say it is a lamentable thing when Cabinet Ministers go and make these speeches, one after the other, to lead people to suppose that relief can be given and will be given almost immediately to the ratepayers by means of legislation which will enable the municipalities to put some new taxes upon land values, or in another direction to equalise the rates between the richer and poorer parts. This promise has appeared for a great number of years—I think twenty years—in almost every speech of every Progressive or Radical candidate for the London County Council.

If the Government have a policy, if they are prepared with a policy, why do they not bring forward that policy and put it into a Bill? We are not able to argue the matter as things stand. We never know what we have to argue upon. Certain opinions are held by hon. Gentleman opposite in favour of the single tax, but the Chancellor of the Exchequer has repudiated the single tax Therefore it is no good our breaking a lance against the single tax, because the Government apparently are going to put themselves into a position of opposing the single tax. I do not know whether or not they are in favour of a single rate. We do not know how far they are prepared to go with the taxation of land values. There has been no opportunity of considering anything, except the speeches that are made, the many flimsy and immaterial speeches, by Members on that side of the House, and even by Cabinet Ministers, and made at a time of election when they are desirous of capturing votes. I do not think that is a very exalted position for Cabinet Ministers to take on one of the most difficult of all questions. It is not a question I intend to argue to-day; I am prepared to argue it at some other time. When Cabinet Ministers, one after the other, speak on questions of this kind, we ought, at least, to know that they are within measurable distance of being able to put on the Table of this House a Bill which will contain some practical solution which the House can discuss.

I say in my Amendment that the local authorities are constantly being invited to assume other financial obligations. In order to give some little freshness to an old Amendment, I have included the treatment of uninsured persons suffering from tuberculosis. The local authorities are being invited year after year to undertake new financial obligations. Those invitations are rather in the nature of Court invitations—invitations which the local authorities are not expected to refuse. There are all kinds of invitations. These invitations we all understand. They are not absolutely obligatory, but you expect them to be accepted, and there may be some kind of penalty for those who do not accept them. The local authorities were compelled to undertake medical inspection, and invited to undertake medical treatment. That resulted in a very large addition to the expenditure of money by the local education authorities. I have here both the estimate and the expenditure of the local education authorities. I admit that last year the Chancellor of the Exchequer did put upon the Estimates a sum of £60,000 for England and Wales, to go towards this expenditure on the part of local education authorities. The London County Council had estimated that it would receive £20,000 for the year 1913–14, but even so the total expenditure will be £67,500. That is an increase in expenditure of £46,500 put upon the ratepayers. For my part, I not only approve of this form of service and expenditure, but, if I may say so, I am grateful to the Government for imposing this new service on the education authorities. I believe it is money which will be well spent, and I have constantly said that inspection without treatment is nothing worth. I hope we shall go more thoroughly into this question. I am anxious to do so, but the Chancellor of the Exchequer must remember the tremendous growing burden of the education rate in many places. If education authorities go slowly in this class of expenditure it is not because they feel that the particular item for which the money is being charged is undesirable, but because they feel the total weight of this expenditure. Every year now the ratepayers are being called upon to pay more of this expenditure, and the National Exchequer is called upon to pay less. I have some interesting figures here. For the year 1909–10 the total expenditure on education in England and Wales was, in round figures, £23,000,000. The percentage borne by the rates was 50.7, and the percentage borne by the Grants was 49.2. For 1910–11 the total expenditure was £24,000,000. The proportion borne by the rates, instead of being 50.7, was 51.4; and the proportion borne by the Grants, instead of being 49.2, was 48.6. That is from England and Wales generally. London, as we all know, has to pay a very much larger proportion of the total expenditure by means of the rates. In London, out of every £100 spent on education, £70 is provided by the ratepayers, and only £30 by the National Exchequer. Again, we have been invited to adopt another form of expenditure. That invitation we have accepted. It is to reduce the numbers in our classes. That is an invitation which, I think, has been generally extended to every education authority. London has accepted it. It is going to cost London £5,000,000 in capital expenditure. In fifteen years it will cost London another 4½d. rate, unless some Grant is given towards this form of expenditure. Every time these invitations from Departments and from the Government are accepted, it means that the ratepayer is increasing the burdens he already feels to such an onerous extent.

I come to the third invitation. The Chancellor of the Exchequer, in his anxiety, with which I have a great deal of sympathy, to hasten the day when we may greatly diminish the amount of tuberculosis in this country, has, through the Local Government Board, made rather more than a suggestion. He has caused an invitation to be sent to all local authorities to find half the amount of money required. The Government is to find half and the county councils are to find half the money that is to be expended on the general treatment of consumption or tuberculosis. It is not confined to insured persons nor to the dependants of insured persons, but is to be a general treatment of all consumptive cases. I do not wish at all to prejudice the decision of the local authorities as to whether or not they will fall in with the arrangement and accept the invitation, but I want to tell the Chancellor of the Exchequer that that invitation must be considered with other invitations, that it would be quite impossible for anyone who has any regard for local exchequers, for the effect of new services on the rates, and for the effect of new services and rates on the ratepayers, especially the poorer ratepayers, to consider an invitation of that kind as if it were art isolated invitation. It must be considered with due regard to all the other obligations which are being increasingly imposed upon the ratepayers. I am not going to suggest for one moment that if it stood by itself it would be an unfair proposition. I am not going to say that the country would not gain by that expenditure. All I am going to say is that this and other matters affecting national health are really national services far more than they are local services; they have much more intimate reference to the country as a whole than to any particular locality. There is an amount of national wealth in this country which is not tapped adequately, and which does not make sufficient or adequate contribution to national expenditure of that kind. The Royal Commission in 1901 found that the total personalty that was liable to Imperial subventions was three times the value of the realty upon which rates were levied in this country. If that was true in 1901 it is much more true to-day because there has been a fall in values in realty. There has been a great accretion of personal wealth in this country, and that personal wealth does not contribute, in the way that realty does, its fair share towards national services, and towards these forms of national expenditure of which I for one will not complain, but which I wish to see, if anything, brought to that full fruition which is desired by the Chancellor of the Exchequer. All this is a fair and legitimate complaint on the part of the ratepayer, and it is a complaint which is growing as the years go by, because of the enormous number of increased obligations which are put upon the ratepayers from time to time by different Government Acts and Departmental actions.

I think I know what the answer of the Chancellor of the Exchequer is going to be. He is going to say, "In obedience to your request, made from this side of the House and voiced by me, I have set up a Departmental Committee which is inquiring into all these matters, and until it has reported, we, the Government, are perfectly impotent to bring about any promised relief to the ratepayer or to do anything whatever to diminish the burdens which are imposed upon him and which the Government acknowledge are extremely onerous." That Departmental Committee was appointed two years ago next April. The terms of reference were given and the names were given on 3rd April, 1911. The former Secretary to the Treasury, now Chancellor of the Duchy of Lancaster, stated in answer to my criticism, that— We must proceed expeditiously, and the Government will appoint a small Committee to go as soon as possible into the points that stand over in order that the pledges given by the Chancellor of the Exchequer, by the Prime Minister, and by the leader of the Government in the other House, may he kept and redeemed in good faith as they were made. I ask the Chancellor of the Exchequer whether, looking to all the speeches which he made inside and outside the House and looking to his own solemn declarations at that box and looking to other promises made by other Ministers, he thinks that this matter is being dealt with with expedition, and whether he thinks that the country and the ratepayer are being treated with the good faith which the Chancellor of the Duchy of Lancaster said they were entitled to. When is the Committee going to report? We have asked again and again for an interim report. No, not even an interim report. Volumes of evidence have been delivered, but no expression of opinion. Over 10,000 questions have been asked and answered. No, the Committee cannot form any opinion. Always and ever when we ask anything, the Committee is still sitting. How long is that going to be the answer? Will it carry us over the next General Election? Will the Committee still be sitting? Will 100,000 questions by that time have been asked and answered? Why does it not report? It was rumoured that the Committee was about to report many months ago. There were also rumours that for some reason or other it resumed its researches, and it went pursuing many paths of economic doctrine, and many quaint theories, and that it is still purusing them. Who has any control over them? Has the right hon. Gentleman? Has he ever communicated with them? Has he ever told them at all what sort of inquiry they should continue to pursue, or are they entirely immune from any possible acts on the part of His Majesty's Government? They may do what they like. Can they remain sitting till after the General Election? Are they bound at any time to give us any report? Are we ever to have the result of their deliberations, or are we always to be told, "It is no good bringing this matter forward. You are only wasting time. The Committee is still sitting"?

I think it is about time, when all these Cabinet Ministers go rushing about making these declarations of policy, that the Government, with all the information at their command, were able to make up their minds what kind of taxation of site values it is that they think they can practically recommend to the House There is a mass of information on the subject. You do not want any more. It is contained in volumes of evidence taken by one of the ablest Commissions that ever sat, the Royal Commission of 1901. If you read the two Blue Books issued by the present Departmental Committee, will you want to know anything more about what is possible in connection with the taxation of site values? So all these questions have been examined over and over again by the Royal Commission and by the Departmental Committee. Last year the Chancellor of the Exchequer suggested that we should look about for new taxes. Every suggestion I ever heard for new taxation has been examined either by the Royal Commission or by the Departmental Committee or by both. I do not believe there is anything new into which they can inquire. I believe if you want to study the subject there is ample information. All that you want really is a Cabinet decision as to what can be done. The ratepayers are entitled to have those pledges redeemed. They have been solemnly and sacredly made, and in some way or another ought to be met. The debt is long overdue, and it ought to be paid. Language has lost its meaning if pledges of that kind are to be made and are not to be carried out, and it is the final degradation of the House of Commons if Ministers are able to make these pledges so solemnly at that box and let year after year go by without intending or endeavouring to give any effect to them.

Question proposed, "That those words be there added."

Sir LUKE WHITE

The House is indebted to the right hon. Gentleman for bringing this question forward. We have had many Debates with regard to it, but I think the urgency of the question has become such that the Government must deal with it on an early occasion. Whether we look at it from the point of view of a county council, a county borough, a municipal authority, or an urban or rural district, we are all agreed, and the Government have admitted the fact, that many services which are borne by the local ratepayers are of a national character, and some relief should be given from the National Exchequer. I do hope that before this Debate closes the Chancellor of the Exchequer will give the House some assurance as to dealing with this very important and pressing question. It is a question which cannot be delayed. During the thirteen years I have been in this House I have voted on every occasion for Motions dealing with the important matter of local taxation, and I believe to-day if we went to a vote on this question untrammelled by party ties there would be a unanimous opinion that the time had arrived when it should be dealt with. It is a serious question. It is not only serious in the urban districts, but also in the rural districts. The right hon. Gentleman who moved the Amendment has given various illustrations with regard to the position of local taxation as affecting the ratepayers in London, but I venture to say that, although these illustrations were drawn from his experience of the London County Council, yet at the same time similar illustrations could be given as to what is taking place in every borough and county throughout the land. The ratepayers during the past twenty years have, at any rate, had burdens placed upon them by Parliament which ought never to have been placed upon them. They are for services which are national in their character, and those services should be borne on the broader back of the taxpayers rather than by the ratepayers of this country. It has been acknowledged by the Prime Minister himself that the cost of education, police, poor relief, main roads, and various other services are national in their character, and that assistance to a very large extent should be given from the National Exchequer in respect of those services. We stand to-day as we stood some fifteen or twenty years ago. Parliament after Parliament has given pledges and passed Resolutions with regard to dealing with the important question of local taxation, but still nothing has been done.

I, as representing an agricultural constituency, acknowledge that some sixteen or seventeen years ago, when the Agricultural Rates Act was passed, something was done with regard to the pressing burdens which were placed upon agricultural land in this country. It gave some assistance at that particular time. Parliament gave a subvention from the National Exchequer of one-half of the rates as they then existed with regard to agricultural land, but Parliament pledged itself that that Act should only remain in existence for five years, and that the House of Commons would deal with the question in the meantime. Parliament has never dealt with it. What has been the experience of agriculturists throughout the country? I may say—and I say it advisedly—that at the present time, although agricultural land is only rated one-half, under the Agricultural Rates Act, it is paying more to-day for local taxation than it paid previous to the Grant of that Exchequer contribution. It is high time that this question was dealt with. Reference has been made to the fact that the Departmental Committee is still sitting. That. Committee, to my mind, ought to have reported within a very short time as to one of the principal inquiries which it was set up to advise the House upon, and that was, What difference exists to-day as to the Exchequer contributions towards the local ratepayers as compared with the contributions which took place on the Report of the Royal Commission on Local Taxation? That information could have been given by a Department of the Government, and we might have had the information before us in order that the question might have been dealt with. I, for my part, think that throughout the country there is a growing feeling that the time has arrived when this important question should be dealt with, and this House should endeavour to get the Government to deal with it on the earliest possible occasion. A very great deal of injustice takes place throughout the country in respect of services which are of a national character when the cost of these services is placed upon local rates. The cost of these services is continually increasing the burdens upon the local ratepayers, and I trust the Chancellor of the Exchequer to-day will give some indication that the question is ripe for consideration and will be dealt with in an effective manner, in order to relieve the local ratepayers of the heavy cost which is at present thrown upon them in respect of these services.

4.0 P.M.

Mr. WILLIAM PEARCE

It is impossible not to feel very much sympathy with the remarks made by the right hon. Gentleman opposite (Mr. Hayes Fisher). I am sorry that some parts of his speech put a party complexion on this question, because I feel myself if the London Members could speak with one voice we could exact vastly different terms from the Government from those which we enjoy to-day. My quarrel is not with a particular Government. I would point out that we have been trying for a long series of years to get this subject dealt with. I find that of the total burden of taxation on London, only 15 per cent. comes from Imperial Grants, and that country boroughs get 24 per cent. and counties 31 per cent. It is clear, therefore, that the case of London requires consideration. The cost of education places London in a worse position still. In London, as the right hon. Gentleman has said, the London County Council only receive £30 out of £100, while in the rest of the country nearly 50 per cent. is borne by Imperial Grants. To my mind the Grants for education prove the case for London better than any other portion of the services for which Imperial aid is given. With regard to education, I have a grievance against the Mover of the Amendment. He was once a member of a Government. I believe he was Financial Secretary to the Treasury in 1902. Presumably at that time he had some influence in connection with the Grants which were given for education. A Grant called the "A Grant" was given for education. Under no Grant given from the Imerial Exchequer has London suffered more than under that Grant. The terms of it were unfair. That Grant was voted by the Unionist Government when the right hon. Gentleman was Financial Secretary to the Treasury, and it was based largely on the assessment. The effect of this particular Grant alone has been that while the country districts receive 9s. 4d. and the boroughs 9s. 6d., London only receives 7s. 4½d. It does seem to me that there is a preposterous difference between the Grant made to London and those made to other places. The Grant was given in aid of education in the whole country. It is evident that the cost of education must be greater in London than elsewhere. The teachers' salaries have to be higher, the erection of schools cost more, and education all round is very much more expensive in London than anywhere else. When the last Grant was established and the basis was so arranged that London must suffer to the extent of 2s. per child, London Members must have been asleep to allow any Treasury, however artful, to impose those terms upon them. There are over 600,000 children in London, and on this head alone London suffers to the extent of £65,000 a year. The case here is so irresistible that I hope the Government will at least undertake that when new arrangements are instituted the case of London shall be met in this respect. This result arises largely from annual value or assessment being taken into account. London suffers in this way also under the Licence Duties for beer and spirits in the Budget of 1910. Those duties being based on annual value, London paid a very much higher share than the rest of the country, and the effect has been to reduce the rateable value of London by a very heavy sum, certainly not less than £100,000. Here, again, London has a very clear and strong claim upon the consideration of the Government in any rearrangement.

The right hon. Gentleman opposite spoke about the Petrol Tax. I had occasion to go to Stepney this morning, and there I saw large tracts of road being repaired by the borough council. Without a doubt those repairs were rendered necessary by the large amount of motor traffic down Commercial Road. But the whole of the Petrol Tax is taken by the Government; none of it goes to the local authorities who have to bear the burden of repairing the roads. The trams which run down the same road, through the upkeep of the roads and their contribution to the rates, pay to the extent of £120 each to the local authority, whereas the motor traffic, which is quite as heavy as the trams in this part of London, is taxed through the petrol that it uses, and none of that tax goes to the local authority. I am an old member of the London County Council. When I was a member there was an account between the Exchequer and the London County Council. It was arranged on very benevolent terms, and showed a large balance which was the perquisite of the London County Council. I was a member of the council for nine years, and in no year was that balance less than £200,000, while in one year it was as much as £440,000. That balance went to the benefit of the rates of London. Since 1907 the sum has been rapidly diminishing. From 1907 to 1910 the balance in favour of the London County Council was about £20,000 a year; but for the last three years there has been a deficit. Here again, consideration is due to London from the Imperial Exchequer. I have ventured to make these remarks because ever since I have been a Member of this House I have been struck by the very unfortunate terms which London has always obtained in the financial arrangements made by whatever Government is in power. I think it is partly London's own fault. We have been shown how to do it and have had an example in the methods of the Irish Members. Whenever there is any question of an Imperial Grant the Irish Members speak with one voice. If London Members acted together we should represent nearly sixty votes, and we could obtain from any Government very different terms from those which exist to-day.

The object of my remarks is to impress upon the Government that when this rearrangement of local Grants is made London has a special case and requires a special Grant as compared with any other part of the country. I can assure the Chancellor of the Exchequer that this grievance is felt very strongly in London, and that some rearrangement has long been looked for. I was very pleased at one remark made by the right hon. Gentleman opposite. He said that he was prepared to support some further equalisation of rates. I speak as the representative of a very poor district, inhabited almost entirely by the industrial and poorer classes, where it is felt to be a great hardship that the poor rates of the district should fall on that particular place. It is a very heavy charge. In Poplar the charge is 4s. in the £; in Stepney it is well over 1s. in the £; but in many other districts it is only 3d. or 4d. in the £. We in the East End of London claim that at least we are entitled to an equalisation of the poor rate. It cannot be argued that a poor district should undertake the burden of the poor rate instead of requiring assistance from the other parts of London. This was half promised in the King's Speech of 1907, but we have heard nothing about it since. I know the difficulties of the case, but I submit that the Government might very beneficially turn their attention in this direction.

Sir WILLIAM BYLES

My hon. Friend told the House that this question was one which especially affected London. I have risen to assure the House that it by no means affects London only, but that the large boroughs, as well as the agricultural districts, are feeling the pinch very much indeed. I do not claim to have the intimate, detailed knowledge possessed by the right hon. Gentleman opposite who so ably introduced the subject, or by other speakers in the Debate, and I would not have intervened but for the fact that the local authority in the borough which I have the honour to represent are in a constant state of irritation and resentment in reference to this matter. I get many communications begging me to urge upon the Government the necessity for the immediate treatment of the grievance in question. I have many times endeavoured by means of question and answer to elicit from the Government some information as to the expected Report of the Departmental Committee, but in vain. The Committee goes on, as has been said, asking questions, getting answers, and receiving volumes of evidence, but we are no forwarder. I do not know whether the nation is really forwarder, but the present Parliament does not seem to get one inch nearer a solution of the question. It is admitted on all hands, I believe, that there are placed upon municipalities and local authorities a good many burdens which ought to be national charges, and of these education is one of the chief. There is no doubt, to my mind, that local education authorities would develop their systems much more, attempt experiments, and improve the whole scope of their work if they could afford to do so; but they have placed upon them by the Imperial Parliament burdens which really compel them to cramp and confine their operations far more than they ought to do. The poor districts in the country really suffer the most from this inequality. The right hon. Gentleman opposite said quite truly, and I am glad he recognised it, that there is in the country plenty of wealth from which to draw the resources to relieve the burdens of the local ratepayers. I agree. It is not for me to point out in this Debate where those sources are. No one knows better than the Chancellor of the Exchequer himself. Some of us are looking eagerly for an attempt to be made to draw revenue from those fortunate holders of land, which, in my judgment, ought to belong to the nation, and in that way to finance the operations of education and other matters which local authorities have to take up. The right hon. Gentleman said that it was all a question as to the best way of raising the resources required. No one wants to spend less, but we want to spend it on other things, and—at least, I do—to get it from other sources. It is not necessary to point out how national funds are being squandered in other directions. I hope an opportunity will come very soon for a discussion of that description. We are spending enormous sums of money upon other services, while we cramp and confine the expenditure upon education and other necessary works in the boroughs and districts—work which might be enormously developed if assistance could be obtained from the Government. I would press the Chancellor of the Exchequer to tell us plainly what are his expectations as to the Departmental Committee, how soon we may hope for a Report, and what are the prospects of settling this question, which is becoming quite a hoary one, by adjusting the Imperial and local charges with greater fairness to the local ratepayer, and without undue burden, as I believe, on the general taxpayer.

Mr. MUNRO-FERGUSON

I wish to ask particularly for information as to the Report of the Departmental Committee. After all, if that Committee continues indefinitely to consider this question, it will sit as long as the Royal Commission presided over by Lord Balfour of Burleigh. That Commission, at any rate, broke the back of the question. I admit that new problems have arisen since; but, from the point of view of the local administrator, that Commission broke the back of the question, and it is in the capacity of the local administrator that I am more particularly interested. It has become very difficult to conduct local administration under the existing incidence of the burden, and it is getting more and more difficult. We always hear the complaint of London. No doubt there are poor districts in London which severely feel the rates, But some steps have been taken to equalise the rates: I do not know how much further progress might be made in that direction. London as a whole does pretty well out of the Government. If the Government put burdens on London, it also spends a good deal of money in London. In one way or another I do not think London has much to complain of in the matter of expenditure if you balance it with receipts. I will give two examples of what we call landward parishes. In a prosperous agricultural district there is a landward parish—I was chairman of the parish council at one time. There were no land values in the parish; there was no source of income whatever except the land rental. The burdens were not heavy there, but they are rapidly increasing, and you have to contemplate the position of communities where there is nothing but agricultural rentals from which to derive revenue; there is nothing in the way of prairie values, but simply rating upon the fixtures to enable the agricultural rentals to be earned. I could give the example of a Highland parish—and I, for one, deplore the fact—where 60 per cent. of the rates is levied upon sporting land. That is a very unnatural and unhealthy condition of things, and the fact is that without the 60 per cent. of revenue from sporting lands the rates would be over twenty shillings in the pound. I should hope that a large proportion of the sporting landlords will disappear, and the land developed in other ways, so that alternative sources of revenue may be obtained; otherwise there would be nothing left for many years except the existing revenue.

But it is not only a land question, for in many boroughs besides those of London the rates have now become too heavy to enable the necessary expenditure to be met. The fact is that it is tins House which is imposing liabilities on the ratepayers. It should be remembered that a substantial proportion of local expenditure is insisted upon by Parliament and by Departments, and not by the representatives of the local ratepayers at all; and that is why these burdens are constituting so very serious a difficulty from the ratepayers' point of view. I have always held the view, like one of my teachers, Adam Smith, that land is a proper subject for bearing a fair proportion of taxation, but, on the other hand, I do not think that all taxation should be put upon the land, and that liquid fortunes should be made to contribute. I remember that last year the Chancellor of the Exchequer commented on the death of two persons, one a noble Duke, and another, a Mr. Smith, commonly known as "Chicago Smith," who lived in a bedroom at the Reform Club. Mr. Smith left £5,000,000, and I imagine his contributions to local taxation were exceedingly small. I remember the Chancellor of the Exchequer comparing him with the nobleman who had transferred his estate, and saying that if he had not lived like a lord, he had died like a gentleman, paying Death Duties on £5,000,000. I should like to have seen some proportion of the duties on that £5,000,000 going to the educational rate, and to some extent Poor Law relief and police rates. The Chancellor of the Exchequer, who has always spoken on this subject with great moderation, the other day used words to the effect, one cannot produce land reform entirely by piling taxation on land, which already has to bear such a large proportion of taxation: and I submit that in any readjustment of taxation great liquid fortunes as well as great landed possessions should contribute towards local taxation. Though the whole subject is of a most intricate character, I do not think it ought to be much further delayed, but that the time has arrived for a settlement of the matter. There are various adjustments of local taxation which have to be carried through by a process of evolution, and from every point of view, therefore, I hope that the Departmental Committee will not sit indefinitely. Between Lord Balfour of Burleigh's Committee and the Departmental Committee we shall have material on which to come to a final judgment, which cannot be taken too soon, in the interests of the local administration of the country.

Mr. PERCY HARRIS

Although I am a London Member, I do not want to argue the case from the point of view of London alone, because I think we discredit the general case by dwelling too much upon what may be considered to be the special claim of London. At the same time, I cannot accept the view of the hon. Gentleman who has just spoken that London has no case, and I cannot see any reason why the poor London ratepayer should be called upon to pay an excessive share of expenditure on national services than the poor ratepayer in any other district. We must look upon this matter from the general point of view of the ratepayer. I really thought that the Chancellor of the Exchequer intended to deal with this question, after his clear declarations upon it, but I cannot help reluctantly coming to the conclusion that, after all, the policy of the Radical party remains what it has been for many years, namely, one to exploit the grievances of the ratepayers for party purposes, whilst postponing all practical measures of relief. The hon. Member for Limehouse (Mr. Pearce) remarked what a pity it was that London Members did not unite upon this question. But how difficult he and his friends make that. I could give examples of how this question has been exploited for party purposes in the London County Council elections. There was put into my hands a pictorial address to the ratepayer, representing a man drowning in a river, and it was suggested that the only possible people willing to help him were the Progressive Radical party. The difficulty about arguing this case really is that the whole of it is admitted, If you ask whether the ratepayer is entitled to relief, the Chancellor of the Exchequer tells you very plainly that the local ratepayer has been promised consideration by successive Governments, and is surely entitled to it. If you ask whether the case is urgent, then again I cannot find any stronger language than that used by the Chancellor of the Exchequer when he said:— It has almost become a great social question; for the municipalities are at the end of their resources, and their work is almost at a standstill in many of these areas, because they cannot afford to spend what is absolutely necessary on their development. If you ask whether the Government can find the money for this purpose, I would point out that the Chancellor of the Exchequer said in 1909, that he hoped by the proposals he was introducing, that he would be able to find money to relieve the local ratepayer. Is there need of further inquiry? There again the Chancellor of the Exchequer has told us in very plain words that there is no need of further inquiry. He said:— We have had Committees and Commissions galore, all taking evidence, all reporting, all making suggestions, and nothing is ever done. I therefore thought it was no use going through the farce of appointing more Commissions to take evidence and get conclusions which are not acted upon, but I thought the time had come for the Government to act upon its own responsibility. I think one is entitled to ask why the Government could not act on their own responsibility and deal with this matter. The only reason that might be suggested against their acting is that the Government are not in a position to proceed at once, as the Departmental Committee is still sitting, or slumbering, or whatever it is they are doing. I think the deliberations of that Committee might be expedited. After all, is not the Departmental Committee a fraud on the ratepayers? This Committee has assumed quite a different character from that which was indicated when it was appointed. We were told it was to be a small Committee; it has proved to be a Committee of thirteen, which I think a large Committee. We were told it would be a Committee of experts, but it is a Committee which has to go and seek information elsewhere. We were told it was not to go through the farce of taking evidence; they have gone through the farce of taking evidence. We were told that it would be able to make a Report expeditiously; that was the very word used—and that there was no reason or excuse for delay. If the Departmental Committee had kept to their reference they really could have reported long ago. What, after all, is their reference? Their reference, first of all, was:— To inquire into the changes which have taken place in the relations between Imperial and local taxation since the report of the Royal Commission on local taxation in 1901. Everybody knows that what has taken place has been to the disadvantage of the ratepayer. Surely it should not take many months to ascertain what are the changes which have taken place between Imperial and local taxation. Surely that could be done in a few months or a few weeks. [HON. MEMBERS: "No, no."] The reference goes on:— To examine the several proposals made in the reports of that Commission, and to make recommendations on the subject for the consideration of His Majesty's Government, with a view to the introduction of legislation at an early date. If they had kept to that reference they could surely have reported without delay, but instead of doing so they have inquired into matters which were not reported upon by the Royal Commission at all, which were not recommended by the Royal Commission, and which were in direct conflict with the recommendations of that Commission. They have gone out of their way to inquire into what the Royal Commission described as "crude and violent theories." I quite agree you do not dispose of those theories merely by calling them "crude and violent," but surely those theories have been expounded by very competent people, and need no further inquiry. Indeed, if the Government want information upon those theories, they can find very competent people in the House to advise them. No further inquiry is wanted. Either one accepts those theories or one does not; either the Government holds that land value is public value, and may be taken away from the owners, and used for the relief of the rates or they do not. Either they and those associated with them hold that theory or they do not. I understand that they do not, and I think it would be better if we had a definite statement in respect of that subject. If they do not hold that theory, then they must give relief to the ratepayers on lines recommended by the Royal Commission, either by the extension or development of the system of assigned revenues, or, what most people prefer, a direct Grant from the Exchequer. There is really no need for further inquiry upon that point, nor is there any need to make further inquiry as to the recommendations of the Minority of the Royal Commission. The Minority of the Royal Commission undoubtedly suggested that if further Grants were made though the Exchequer a make-weight should be established in the shape of a direct contribution from owners. I have never been able to follow the theory of the make-weight and I cannot pretend that I am a great admirer of the Land Taxes, but if the Government adopt the theory of the make-weight then their course is perfectly clear. They should carry out the promise which they made to allocate half the proceeds of the Land Taxes to the municipalities. If ever there was a promise which assumed the nature of a Parliamentary bargain surely it was that promise. We had a very definite statement from the Chancellor of the Exchequer that the municipalities had a special interest in those Land Taxes, and he proposed to allocate half the proceeds to the municipalities. The Prime Minister emphasised that point. Speaking on 24th June, 1909, he said:— When you adjust the strictly local portion on any basis you like to choose, you will be more and more disposed to agree that the Government have come to a wise decision in dividing the fund between the local and the central authorities. Surely one is entitled to ask why has the go-by been given to that wise decision, and why the proceeds of the Land Taxes are not to be divided between the Imperial Exchequer and the municipalities. It seems to me no further inquiry is needed, and that all that is required is that the Government should act on its own responsibility. I venture to support this Amendment, because it seems to me there is absolutely no case against it, and no reason for delay. The Government have made a definite promise, and we ask them at once to give effect to it.

Mr. DUNDAS WHITE

I am sure the House is very pleased that this question of rating has been raised, and I myself only wish that the right hon. Gentleman who moved it had gone a little further than he did. His remedy seems to be to suggest that we should organise the disordered conditions of affairs rather than deal with the causes of the disorder. I think if he had gone a little further into the question of rating he would have seen that it is not only a question of the amount of the rates, but that it is a question of principle on which the rates are levied. We have heard a great deal from right hon. Gentlemen opposite about the encouragement of agriculture. I can fancy no system which discourages agriculture more than the present system of rating. Take the simplest case, and suppose a man were to take a piece of unused headland and were to break it into cultivation and to erect farm buildings, hay sheds, and various other things of that character, what do we find? We would find this system operating, that the more he improved the land the more he would be rated and the more he would have to pay, and, in fact, he would be steadily rated on his improvements. Subventions, such as the subvention under the Agricultural Rates Act, do not deal with the root of that evil at all. We ought to have a rating system on a totally different principle, and to exempt improvements from rating as far as we possibly can and to rate on the market value of the land alone.

We have heard complaints that British capital is driven abroad. We want to see British capital put into British industries, and not only in the agricultural industry but in the manufacturing and secondary industries, but there, again, our rating system operates in precisely the same way. Suppose, for instance, some one wants to extend his factory and to develop his workshop, or to set up a new industry, as soon as he has his building up and his machinery installed as a going concern, the money he has put into it is at once penalised by the rating system, which rates him not only on his buildings but on his machinery as well. In Scotland, I am glad to say, we have got loose machinery exempted from rating, but that is not so in England. In both countries the present rating system penalises manufacturing industries to an extent which everyone interested must recognise. Take one other point and I have done with this particular aspect of the question. If we take the case of housing we have the same difficulties, Apart from the difficulty of getting the land, as soon as the house is built and is a going concern so soon is that house rated, and the better the building the higher the rating, and the better the accommodation for the people the more it is penalised by this system against which I protest. I see some mention in the Amendment of the treatment of uninsured persons suffering from tuberculosis. Bad housing is one of the causes of tuberculosis, and it is a far better thing to remove the causes than that we should merely seek to remedy the defects.

What do we find, suppose a municipality or private individual wants to obtain land for the building of houses or anything of that sort? The rating valuation may be very low and merely nominal, but when a man who is going to develop it tries to get it he finds that although the valuation for rating is very low that the valuation for purchase may be very high. It is the experience, not only of individuals but of municipalities, not only in one part of the country but in almost every part of the country, that the high price that has to be paid for land frequently makes building an impossible commercial proposition. There are two things necessary, the first is that we should do all we can to unrate buildings and improvements of every kind, and, secondly, that we should rate land on its market value, whether it is used or not. When we do that we will bring a great deal of unused land into the market, and the more unused land we make available the more will be reduced the rates generally to their natural level. These things lie at the very root of improvement in our rating system. Various critics say, "Ah, well, but the land values may not be sufficient for these purposes." I wanted to know what the land values are. As far back as 1907 and 1908 the present Government passed through all its stages a Bill to ascertain the value of land in Scotland. I venture to hope that that Bill may be taken up again, and that at least we shall have the data, and the last people who should object to a measure of that sort are the people who base any argument on what they suppose the value is to-day. We want really to ascertain what those values are: Even if it could not be perfectly done, and if we could not afford to exempt improvements altogether from rating, I would still say let us do that as far as we possibly can. I believe when we have the data we shall find it can be done.

The Mover of this Amendment said he wanted to know new sources of national wealth to tap. He spoke of broadening the basis of taxation, and we speak of that and of broadening the basis of rating, but I venture to suggest broadening the basis of contribution. There are a good many just now who do not contribute their fair share, and I may take the case of owners of grounds rents in London and various other places, and owners of feu duties in Scotland. I know it may be said that because of the rating they are able to get less than they would otherwise get. To some extent that may be true, but fifty or sixty years ago when the rates were very small they still bore their quantum of ground rent, and very much so in London, and yet they did not contribute any further share to rating at all. In fact, they are not rated. I venture to think people in that position might well be called upon to join in a contribution to these local needs. I am very sorry that the Mover of this Amendment has laid such stress on the point of subvention. There are a good many people on this side who are tired of subventions and doles, and who do not believe that that is the way to meet these difficulties. We want to get a sound principle and system of rating, and we want also to get a sound system of Imperial taxation. I, for one, have never favoured doles and subventions, and I do not suppose I ever shall, because, in the first place, it complicates the relation between local and Imperial finance, and, in the second place, you at once land yourself in difficulties if you abandon the simple principle. When we have straightened our standard of rating and settled various other questions we should reallocate both the raising of finance as between local and Imperial authorities. That is the line, I venture to think, on which we could go. We have had far too many doles and subventions, and I venture to hope there may be an end to those. This whole question is of very great importance. Hon. Members have spoken for London, and my right hon. Friend (Mr. Munro-Ferguson) has spoken for Scotland. May I put in an additional word as regards Scotland? It is a well-known fact that during the last couple of years the population of Scotland instead of increasing has been diminishing. It is a well-known fact that this year emigration is beginning again at a rate which threatens to exceed the emigration in years past. We would not stand in the way of any of our people doing the best they can anywhere, but it is very important, if we want to realise the possibilities of our own country and if we want to give British labour and British capital a fair chance here, that we should do what we can to remedy those evils to which I have referred, and to enable our people to make the best use of their own country in all its industrial and housing aspects.

Mr. OUTHWAITE

This Amendment draws attention to a grievance which I think is generally acknowledged amongst all sections in this House, and that is the grievance which results from casting certain services which may be considered to be national in essence on to the counties. The Amendment refers to the Report of the Royal Commission on Local Taxation. That Commission reported in favour of certain services being regarded as national and being financed very much more than at present from national funds. I desire to find out to what extent those services are now met by way of the rate and what this Commission Report therefore involves and the recommendations of which find support from right hon. Gentlemen opposite. For police and police stations in England and Wales last year a sum of £3,120,000 was raised by way of rates, and for the support of lunatic asylums a sum of £980,000. For education there was a sum of £14,260,000, and for highway and bridges £12,000,000, and for Poor Law relief and the support of pauper lunatics, £11,760,000. Those are services which the Commission reported ought to be transferred to the National Exchequer, and which are now financed from the rates to that extent. That virtually means that a revenue of about £40,000,000 now made by way of rates should be transferred to the National Exchequer.

There is a general agreement as regards this matter of the transference of these burdens, now locally borne, to the National Exchequer, and the reason is very clear, because the result of calling upon localities to bear these burdens, such as poor relief and education, is this, that the heaviest burden is naturally cast upon the locality least able to bear it, while the lightest burden is cast upon the locality best able to bear it. Obviously where the poor live there will be the most children to be educated by the public authority, and the most poor to be relieved. Where the rich live there will be fewer children to be educated, and perhaps no poor to he relieved. Obviously that naturally results in the heaviest burden being cast on the locality least able to bear it, and the lightest burden being cast on the locality best able to bear it. Hon. Members who have spoken have referred to the difficulties in Scotland, in London, and elsewhere. I desire to point out how this system of casting these national burdens upon localities in the provincial town of England bears upon the borough which I have the honour to represent. In Hanley the rates are 11s. 3d. in the £. That extortionate levy is largely due to the burden of education, and the rates are rising in consequence of the increased demands for educational purposes. It is a borough almost entirely inhabited by working men. The rich men who have made money out of industry in the place take good care to go outside the borough boundary and live, under more pleasant conditions, in districts which are rated very much lower than is the borough of Hanley. Consequently this enormous burden is thrown upon the workers, who are not getting very high wages, and the result is, as I have found out from careful inquiry and calculation, that you find a man earning £1 a week living in a cottage, and that very miserable abode is assessed at £8 a year, which means that, with the rate of 11s. 3d. in the £, this man is paying from £4 to £4 10s. a year in rates. I reckon that that man is paying what would be equal to an Income Tax of 1s. 6d. to 2s. in the £. Now that is a very grievous burden indeed, and it results from this system of casting these national burdens upon the localities.

Such conditions of affairs exist throughout the length and breadth of the country, and the consequence is there is a very general agreement that the time has come when these national services should be financed wholly or very much more than they are at the present time by the National Exchequer. The controversy in regard to this agreement only arises when we come to the question as to how the revenue is to be found to provide for the thirty or forty millions of taxation which ought to be transferred from the local authorities to the National Exchequer. After all, that is a matter for the Chancellor of the Exchequer to deal with. We are at the moment simply putting forward what are the grievances of the localities and the municipalities in regard to this important matter. The right hon. Gentleman opposite (Mr. Hayes Fisher) complained of the delay which is taking place in the solution of this problem, and he referred to the delay in connection with the Report of the Departmental Committee. I think the reason of that delay is very obvious. Only one solution has been brought into the field. There is only one proposal which can at all be maintained by argument as to how the revenue shall be found when the transfer of these enormous burdens takes place from the local authorities to the National Exchequer. No argument has been brought forward that in any way can be substantiated except the proposal for an Imperial tax levied upon the land of the United Kingdom, Vague suggestions have been made for the finding of this money by way of an Income Tax. I do not, however, think that any definite proposal or any proposal which has any sound support whatsoever has been brought forward for the raising of thirty or forty millions of revenue by way of the increase of the Income Tax. Therefore the cause of the delay is the one which I have pointed out. Only one proposal, or, at any rate, only one sound proposal, has been brought forward, and that is for the raising of this money by way of a National Land Valua- tion Tax, and that National Land Valuation Tax we cannot get until the valuation of the land in the United Kingdom has been completed. Whilst I am largely in agreement with the wording of the Amendment, I regret that it does not go further and say that we should have had from the Chancellor of the Exchequer some statement as to the progress of that valuation, which is the only means by which he can fulfil the pledges he and his colleagues have made in regard to this matter.

My concern in regard to the delay in this valuation largely arises from a fact which I think we should face, and which the Chancellor of the Exchequer should face, and that is that his valuation when it is complete, if it is completed on the line on which it is going, will be absolutely useless for the imposition of a National Land Valuation Tax, because the proper valuation is not being made of agricultural land. As regards agricultural land, improvements and other expenses are being included in what virtually may be regarded as the site value. Until these improvements are excluded from the valuation, the Chancellor of the Exchequer will not be able to meet this difficulty on the lines on which a large section of the supporters of the Government are demanding that it shall be met. He cannot find in his own party any section which is urging that this difficulty should be met on any other lines except by these means, namely, the imposition of a National Land Valuation Tax. I would like to support what the hon. Member who has just sat down said. There is another reason why this method of dealing with the land problem has such large support in the country, and it is not only because it meets the difficulty of the adjustment between local and Imperial taxation, but it also deals with that other grievance for which a solution must be found—the grievance which arises from the taxation of industry. The Chancellor of the Exchequer has told us recently about the housing problem in the country and of the horrible conditions under which the agricultural labourer lives and his miserable rate of wage. It is absurd, to my mind, to talk about the difficulty under which the agricultural labourer lives and labours if, at the same time, you continue that method of taxation which results in this, that whenever a man erects a cottage for an agricultural labourer to live in round comes the assessor and proceeds to levy a heavy tax which the unfortunate agricultural labourer, earning 14s. a week, has to pay. I have been examining into the conditions affecting agricultural labourers, and I find that where an agricultural labourer is earning, say, 14s. a week, he pays a rate of as much as 10d., 11d., 1s., or 1s. 1d. a week.

I say to the Chancellor of the Exchequer that it is an excellent thing to bring forward these grievances and expose the wrong that exists, but it is about time we had more definite statements from him and some assurance that the problem will be met along the lines of taxation and rating reform. This question—and I speak with some feeling on this matter — is brought prominently forward into the politics of the day with the support of Cabinet Ministers on certain specific occasions. During the past year, whenever a contest took place in a democratic constituency in which a Labour candidate came forward as well as a Liberal candidate, then the Liberal candidate put this question of the taxation and rating of land values very conspicuously in his programme and asked for the support of the workers as being the best policy for them. That policy had then, so far as we know, the assent of the Government and of the Liberal party. Under these circumstances I would like to have some assurance that this is not a policy solely for three-cornered contests and that the memorial which was presented to the Government on this question is going to be embodied in the legislation of the near future.

Sir RYLAND ADKINS

The two last speeches to which the House has listened so attentively have been speeches of great interest. No one can complain that when an Amendment to the Address like this is before the House hon. Members who feel very strongly the value of remedies in which they believe should state very clearly what in their opinion are the great disadvantages and inequalities of the rating system, and impress upon the House the necessity for reform. I hope the two hon. Members will not think me disrespectful to them or that the House will think I am anxious to divert the Debate into other channels if I do not enter into a discussion of high political theories or indulge in the pleasure of looking into certain electioneering methods. I wish to confine myself to the point, which is an exceedingly grave one, as to the present conditions of local authorities in regard to the discharge of their onerous duties, and how imperative it is that some relief should be given to the ratepayers in those districts long before the time suggested by my hon. Friend (Mr. Outhwaite), when another and a better valuation will be completed and when thirty or forty millions of taxation will be taken from the shoulders of the local authorities and put upon the Imperial Exchequer.

5.0 P.M.

However desirable these things may be, they are not going to be done within the next year or within the next two years. We want something to be done at a much earlier date. It is really, I think, blameworthy on this Government, as on previous Governments, that more has not been done to meet the serious position which has arisen, and to relieve those local authorities up and down the country, in London, in the great towns, and in the country districts, who are trying to carry out the decisions of this House by administering the law. It is no exaggeration to say that the work of local administration, which is none too easy at any time, has been made far more difficult of late years. On the one hand, old duties have been placed upon local authorities for a long time, duties which, as regards the administrative counties, were defined in the County Councils Act of 1888, and even then promises made by the Government were not redeemed. Whenever there was a question as to whether a certain proportion of the cost of police, roads, or anything else was to be borne by the Imperial Exchequer, it invariably happened that in every bargain that was struck it was struck to the disadvantage of the locality and to the advantage of the Treasury. Since then, by all Governments in turn, more duties have been placed—I will not say wrongly—upon local authorities, duties not only of the old kind of maintaining in efficiency the police, the asylums, and the roads, but new duties of quite a different kind, such as those in regard to education and public health, which are constantly and necessarily growing, and which were intended to grow when they were put upon local authorities, and which, because they are of that growing character, raise in a more acute form than ever this question of the relation between local and Imperial expenditure. We have been promised from time to time definite forms of relief. We welcome the appointment of this Committee, and, however trenchant may be the criticism made by hon. Gentlemen opposite—whose political exigencies have to be thought of—I say that that Committee in itself is a good thing, and I believe hon. Members will agre[...] with me in that. I desire to join in pressing for some Report from that Committee. As a means of inquiring into a very important question of national and local finance it has been of the greatest value, but there is danger of it being turned into an engine for delay, and it is of the utmost importance that we should guard against that. May I briefly touch upon two points, both of which I quite agree will not be finally solved until you really do have a complete dealing with this complicated problem, and which certainly will not be solved even then unless you have great changes in the incidence of rating, and unless you have many matters to which my two hon. Friends have referred dealt with in a spirit of courage? In these two points a great deal could be done immediately if the Exchequer saw their way to give a Grant of some substance in respect of both of them. One is the question of higher education, especially in the English counties. The County Councils Association, who have their reports from every county in England and Wales, know how exceedingly difficult it is with the present feeling of the ratepayers, and with the present burden of the rates, to get enough money raised locally for those duties of higher education, which are not compulsory to the extent which the duties of elementary education are, and yet which everybody knows, if neglected, are a real injury to the growth of young English people in all parts of the country, and put our country to the gravest disadvantage with competing countries. Recently in the county in which I am allowed to do a little work for education, we have had two projects before the county council.

The one was to establish a farm school, together with other matters of agricultural education, and the other was the creation of an institute in connection with the boot and shoe trade, which is the principal trade next to agriculture in the county. In the first case a Grant from the Board of Agriculture of something like half the capital cost was offered by my right hon. Friend the President of the Board. What was the result? Although the projects involved an expenditure of some two or three thousand pounds by the county, it was got from committee after committee, and from the council itself, with comparatively little difficulty. With regard to the boot and shoe insti- [...] to which there was no corresponding Grant possible from the Board of Education, or, at any rate, none available, we have the greatest difficulty to get the sanction of the representatives of the ratepayers to the experiment. We have now to wait months, or even years, before we are able on financial grounds to do what would be of the greatest possible value if the quality of that great trade that I refer to is to be kept up in the future, with benefits, not only to the locality, but to English commerce generally, and the trades and persons wherever they choose to go. What we ask in connection with this Debate is that there should be set aside this year and in this year's Budget additional money available for education Grants, especially for higher and technical instruction. These raise no question of religious or political controversy, and the Grants are absolutely necessary if the duties of the local authorities are to be carried out with the necessary amount of local support and sympathy from the public, among whom the institutions are placed.

The other instance I venture to give is this: A question of the relationship between local and Imperial expenditure in regard to the roads. The traffic on the main roads of this country has been revolutionised in the last thirty years. Thirty years ago the traffic of those roads, which are really the great arterial roads of the country to-day, was almost entirely local. The vehicles of all kinds that went along them, even of those which tried their surfaces the most, and which involved the greatest wear and tear, were, nine-tenths of them, vehicles from the county area in which that section of the road was. The development of motor traffic has altered all that. In many parts of England now the bulk of the traffic along those roads, so far from being predominantly local in any sense, is now overwhelmingly general. You are getting from year to year an increasing amount of traffic, which formerly went by the railway, going now by the roads, which are maintained, under the old laws, at the expense of the ratepayers. We may see any day in any part of the country my right hon. Friend the Chancellor of the Exchequer, and my right hon. Friend the Attorney-General going through at a vivid speed, the greatest possible, with due regard to their conscientious devotion to the speed limit. In their wake come all kinds of fashionable and influential persons, who appreciate fully the trunk roads of this country for purposes of pleasure as well as of business. What do we say in regard to that? We say whether this Committee has reported or not, whether we are able or not to get any readjustment of the law of rating, there is a case here and now made out why the expenditure on this special type of roads, which I venture to call trunk roads, should not be as it is now more than half borne by the locality, but that three-quarters of the cost should be borne by the Exchequer and only one quarter by the locality, with most certainly the added check on efficiency of special inspection on the part of the Board of Agriculture or the Government Department most appropriate. That is a matter which can be attended to, if the Government think fit to Budget for it, in this Session of Parliament. It would be a very direct and none too adequate acknowledgment of the changed conditions of the road traffic in this country.

I desire to speak with respect and appreciation of the work that has been done by the Road Board in regard to many of the roads of the country. But the Grants made by the Road Board are almost, entirely made for the benefit of the persons who use the roads by this non-local traffic. What we also say is that the ratepayers on whom is placed an additional burden in consequence of the traffic which is not local should have the same claim with the users of the road for recognition and considerate treatment from the Treasury. I apologise for keeping the House so long on what are really details of these questions, but I do assure the Government that this is a matter in which local authorities of all kinds are of one mind. The friction caused by the pressure of the rates has hindered good administration in all parts of the country. Just as no Government can be efficient that has not got adequate support in this House, so no local administration can be efficient which has not got the real sympathy and support of the community in which its work is done. That sympathy and support is largely impaired, and to a great degree withdrawn, because of the present state of the rates, and the present unsatisfactory relations between local and Imperial expenditure in these matters. Therefore, not merely on the ground of finance, but on the ground that I am sure, the Government desire to take into consideration the conditions of good local administration as well as the conditions of good Parliamentary work, I make my appeal to the Government not to allow this Debate to close without giving a definite and prompt hope of some appreciable amelioration of what is a universal grievance.

Captain JESSEL

I am glad to find that all the speakers have been practically unanimous in pressing this Amendment upon the Government. I hope the Government will accede to it. It will please their own supporters, and will also satisfy hon. Members on this side. But I am afraid that in the form in which the Amendment is the Government will perhaps not be in a position to accept it. I do hope, however, that they will really pay respectful attention to the many very weighty arguments which have been advanced this afternoon. I agree with a great deal of the speech of the hon. Member who has just sat down, but I cannot altogether agree with him in his concluding remarks on the Road Board. Take the case of London. The Road Board has received over £400,000 from the ratepayers of London. Of that money only £4,000 have been spent upon London. Something like £80,000 have been spent upon Ireland. So that we have really got nothing to be thankful to the Government for in connection with the proceedings of the Road Board. I am glad to see the hon. Member for Limehouse in his place, because he has told us that the London Members were a very powerful body. We number sixty here; if we joined hands we could bring any Government to its knees! It is not our fault on this side that that has not been done long ago. It is the fault of hon. Members opposite. In 1896 they brought forward a Motion on the King's Speech for the further equalisation of the rates in London. Nothing has been done since that time. They have much more influence with the Government than we have. Why have they not pricked the Government into action or allowed the Government to treat London as has been done? The right hon. Gentleman the Member for Leith Burghs told us, in his important and interesting speech, that, after all, London grievances were not very large compared to other parts of the country. This is a general Motion, and I quite admit the way the rest of the country has been treated in respect to the allocation of Imperial taxation and local burdens, But our case in London is stronger than anywhere else.

Mr. C. BATHURST

No.

Captain JESSEL

My hon. Friend says "No." He will agree with me in this particular, that our case is an extremely strong one. In respect to educational services London ratepayers pay 70 per cent., as against the Government subvention of 30 per cent., whereas in the other great county boroughs I think the proportion is half-and-half—50 per cent. paid by the local authorities, with 50 per cent. from the Government. That is one of our great grievances in respect of London. The hon. Member for Perthshire and the hon. Member for Hanley drew attention to their remedy of the taxation of land as the method in which the money required by this Amendment could be raised. The hon. Member for Perthshire pointed out what a hardship it was that whereas the rates on vacant and idle land were very small, that when a man took the trouble to put a house on the land that industry was taxed at once, high rates being put on. But surely the hon. Member forgets that when a house is built on land there are certain duties in connection with it cast upon the local authorities, and these have to be paid for. In the first place, the district has to pay its proportion for the police. Again, it is presumed, in these days of stringent by-laws from the Local Government Board, that the house has to be well drained, sewers put in, and so on, that public lighting has to be provided. Last, but not least, it may be presumed that the occupants of that house will have children who will require to be educated. All these things have to be paid for, and for all these reasons it is quite apparent that the tax upon the house is not upon industry, but is to go towards services rendered to the occupants of the house. These things have to be paid for out of the rates. I think that ought to dispose of that part of the question.

Then the hon. Gentleman says he never was in favour of subventions from the Government to local authorities, but there again I think he totally misunderstands the nature of the case. What we are asking is a proper payment by the State for national services rendered; it is not a question of mere subvention or doles. The local authorities do certain national duties and we on this side of the House are of opinion that the Government of the day does not bear its proper share with the local authorities. Year by year the burdens are heavier upon the local authorities while the Government is doing less. While we are on the question of the taxation of site values, I am sorry the hon. Member opposite did not go a little further and try to get from the Government some explanation which I hope we shall get upon this question. I rather wondered why there was no reference in His Majesty's Gracious Speech to the taxation of site values. There has been an interesting election recently for the London County Council. The Postmaster-General, the President of the Local Government Board, and the Secretary for Scotland were running about all over London like so many rabbits preaching and advocating a tax upon site values, and they actually told the electors that if only the Progressive party were returned His Majesty's Government would bring in a measure to tax site or land values. I do not know whether it is as a result of that election that this great measure has not appeared. I am glad the Chancellor of the Exchequer is here, and I may say we shall be very glad to know why Ministers were allowed to range themselves beside the Progressives, preaching the taxation of site value, while there was no indication in His Majesty's Speech of any such measure. I say their action was a fraud and a delusion and a snare upon the ratepayers of London, and we are entitled to know how His Majesty's Government stand with regard to the matter. Judging by the speeches of hon. Gentlemen opposite we on this side of the House are not the only people who want to know something about the action of His Majesty's Government. We are not concerned about the domestic question on foot between Radicals and Liberals, but the hon. Gentleman opposite has raised a very important question, and if I were he I would press the Chancellor and the Government for an answer so that we may know where we are upon this matter.

Passing from that I should like to say a word about the incidence of taxation, and first I should like to say one or two words about London. In London, if something were done to equalise the Poor Law, some step would be taken in that direction. At the present moment 70 per cent of the taxation of London is equalised by Grants from the central authority, and I do not think we would object much if the Poor Law was equalised, but it has become a large question as regards the country where the burden is getting to be too great altogether upon the rates. Session after Session Ministers of the day come down to the House and lay new burdens upon the ratepayers, and do not make any corresponding advance. For higher education and elementary education new provisions and regulations are constantly made by the Board of Education. More drastic remedies are called for, such as fewer pupils in classes, necessitating more expensive provisions in the schools. These sort of things are constantly being done, and year after year we are told the matter is urgent and requires the attention of His Majesty's Government. What do they do? They palm us off with a Departmental Committee, which as far as I can see, is taking its time to report, not because it has not got evidence already, but because it is giving the Government every opportunity of delay to make up its mind. I ask the Government in all seriousness—I do not suppose for a moment they can cover the whole of the ground—but at all events to make some step in advance. Perhaps the Chancellor of the Exchequer will say he has given us something last Session for medical treatment. He has given a very small amount, and I ask the Government in all sincerity this Session, if they cannot make a step in advance, and if they cannot, complete the whole thing, at least do something to relieve the growing burden upon the ratepayers.

Mr. CHIOZZA MONEY

I did not intend to intervene in this discussion, because I should rather hear from the Chancellor of the Exchequer what his views are with reference to this problem, the urgency of which has been urged upon us from both sides of the House. There is an unanswerable case for the ratepayers. If the case is urgent for transferring certain burdens from the ratepayer to the taxpayer, it is surely because of this fact that the incidence of Imperial taxation, imperfect as our system of taxation may yet be, is much fairer than the incidence of local taxation. When, therefore, we transfer a burden from the ratepayer to the taxpayer we do really perform a good and wise act of government. I very earnestly hope, therefore, that we shall hear something from the Chancellor of the Exchequer with regard to the pleas of urgency made. I have been led to intervene for a few moments in this discussion by what has been said by several of my Friends, the hon. Member for Hanley and others, with regard to the taxation or rating of land values. I understand what is called the single tax is unpopular, and that is not surprising; but it does surprise me that hon. Members who repudiate the idea of the single tax should rise and advocate the rating of site value as a remedy for the grievances of the rate- payers, because if one is convinced that the whole of the local rates should be placed upon land values surely there is even a stronger case for the imposition of Imperial taxes in the same manner! Of course, as we know, many local burdens could hardly be called taxation at all. They are payment rendered for direct service. If, therefore, there is a case for charging these solely and entirely upon land value, how much stronger is the case of giving an Imperial burden exactly the same incidence! It seems to me that the Government, if they are going to consider this question of rates as a whole, must have regard both to the origin of the rates and to the purposes of the rates.

What is the origin of the rates? To go back to the origin, we find they were intended to be an Income Tax. It was not until somewhere in the forties that by an Act included every year in the Expiring Laws Continuance Act the inhabitants and occupiers of districts are exempt from contributions as individuals to taxation for local purposes. There is a curious parallel in this matter to which I very strongly direct the attention of the House and the Government. In the reign of William and Mary an Income Tax was imposed for Imperial purposes. It was supposed to be levied upon all forms of property, or rather upon individuals owning all sorts of property, and also upon personal incomes. What happened? At that time the assessment on personal property was very difficult, and therefore it came about that what was intended to be an Income Tax became in effect solely a tax upon realty. There we have a perfect parallel with the case of the rates. What came to be called the Land Tax was reimposed in various forms from period to period until at last Pitt cleared up the matter by making the remains of these so-called Land Taxes, which was intended to be an Income Tax, a fixed charge. Pitt reimposed the Income Tax of our time upon a better assessment, including, as was the intention in the time of William and Mary, not only realty, but personalty. Here we have an historical parallel and an historical example to which I direct the attention of my right hon. Friends. The local rate, intended to be a local Income Tax, failed to become what it was intended to be.

At the present time we have our rates assessed solely upon individuals in relation to one particular form of property. What is the result? This country, of course, has passed through the Industrial Revolution. It has passed from the conditions of an agricultural country to that of an industrial country; it has become a wealthy country in the process, and yet this wealthy country raises its local taxation just as if the Industrial Revolution had never been accomplished. What has been done for Imperial Income Tax has not been done for local Income Tax, yet hon. Friends of mine, in speeches whose earnestness and sincerity cannot be denied, plead not to go forward to the real reform, but to go backward and to levy our rates even more upon one form of property. What is suggested is not reform, but something in the nature of a retrograde movement. As a matter of fact, that kind of income would not stand the test. My hon. Friend the Member for Hanley spoke of the popularity of it in the country. If you go up and down the country telling people there are £300,000,000 or £400,000,000 which can be got front a sort of Tom Tiddler's land, from which you can distribute largess, you will no doubt find a great number of people to believe you, and it will be very popular, but if it is ever put to the test of experience it will be found that the alleged hundreds of millions are figurative.

It is particularly unfortunate that this historic parallel has not received as much attention as I think it deserves. The Commission of 1901 dismissed the subject in a few paragraphs as impossible. In Germany and other countries this principle has been carried out as a practical measure, and yet we find a Commission in our own country dismissing the matter as quite impracticable. I should be the last to suggest that we should abolish local rating as we know it to-day, and change it into a sole Income Tax system, because if we did that, we should do an injustice to many individuals. What we ought to do is to establish something on the lines of what Pitt did, and impose a local Income Tax in relation to all new burdens. By doing that we should make the incidence of taxation a truer one, and we should help to lay the burdens upon those best able to bear them. I would ask my hon. Friends who are doing so much to preach the doctrine that the rating of land values means not only the raising of large amounts of new income, but who are also commending it as a policy which would have very great social effects. [An HON. MEMBER: "Of course it What social effects would it have? Let us con- sider what we are doing. My hon. Friend spoke earnestly on the housing question, and references have been made to tuberculosis, but what will the rating of land values do? I heard a speech made in London in which the speaker talked of the 12,000 acres of open spaces, and he told his audience that the rating of land values would fill them up which is precisely what we should not do.

Anyone who has considered this subject will see that if you rate or tax any particular commodity you restrict the use of that commodity, and that is as true of land as of any other commodity. Even the Minority Report, which reported very gingerly in favour of the taxation of land values declared that you would have to be very careful about gardens and open spaces, and you would probably find it necessary to exempt them. That is only one of the things we have to consider. Surely my hon. Friends must consider the problems of leaseholds, leases, and sub-leases, and other difficulties which have been solved by the advocates of this policy in a dozen different ways, none of them agreeing with the other. There is the difficulty of mortgages, and this problem is all the greater in view of the fact that a large number of houses and business premises in this country are built with borrowed money. What is the suggestion of my hon. Friends in this respect? Let them make up their minds whether they are going to rate mortgagees or not. I submit these remarks to the House in the earnest hope that they may do something to induce the Government to tell us what is the state of their mind on this important subject. It is a question which cannot brook delay. It has brooked delay a long time now, and the time is approaching when we must clear up the muddle, and I hope the Government will not dismiss as impracticable, without very serious consideration the question of imposing a local Income Tax.

Sir ALFRED CRIPPS

I am afraid that I approach this subject in rather a pessimistic spirit, because it is nearly twenty years since I was a member of the Royal Commission which was appointed to find a solution of this very difficult problem as between local rates and Imperial taxation. I am bound to say as regards both sides of the House, so far as the Front Bench is concerned, nothing has been done from that date to this to carry out on any sound principle the very important matter suggested by the Royal Commission, and if we have done anything we have gone in a backward direction. The hon. Member who has just sat down exposed the fallacy contained in the suggested single tax or tax upon site values, and his exposing of that fallacy is exceedingly valuable. The hon. Member has traced the history of this question from the time of Pitt and as regards modern rating it is fair to take Pitt as the starting point for our modern life and conditions. On the industrial side the hon. Member pointed out, what everyone must admit who has had practical experience and does not talk really from a theoretical standpoint, that if you are going to put all the burdens of your rates and taxes on occupied land and other land, you must affect the social difficulties which exist at the present moment. What could be worse than to deprive our towns and such places as London of their open spaces? There is no social advantage which is of greater importance for the benefit of poor Londoners than the open spaces.

What has been suggested would put an unfair burden on undeveloped land. I do not mean land dedicated to public purposes and open spaces, but land which is capable of being built over and which has not been built upon. I would ask the Chancellor of the Exchequer whether it is not the result of his experience that the effect of putting this exceptionally additional burden upon undeveloped land has not been to retard the housing problem, and diminish considerably the ratio of building that was going on for the benefit of the housing of the working classes in our large towns? I think all the statistics point in that direction. I am sure the right hon. Gentleman will agree that if you look at the statistics, and if you consider the number of houses for the working classes which have been constructed since the 1909 Budget was introduced, it will be found that the ratio of increase has been considerably diminished as compared with preceding years, and that is a very serious matter. It is always very popular to advocate the putting of a tax upon somebody else and not upon yourself, and you can always get a cheer for that, but I think the hon. Member opposite is quite right in giving the go-by to mere theoretical statements of that kind, and in seeking to inquire what the result of a proposal of this kind is likely to be. If the Chancellor of the Exchequer considers what I am saying is worth replying to, perhaps he will answer the allegation I am making, that at any rate since the undeveloped Land Tax has been made legal it has had the effect of intensifying all the difficulties of the housing problem in our large towns; it has put an additional and exceptional burden upon the building trade, and has therefore discouraged a branch of industry which under no conditions has been exceptionally remunerative.

Of course, it is part of the business of the builders to select a suitable site, and a great deal of the business ability of the builder consists in selecting an appropriate site. Supposing the builder does not do this, and selects a site which does not develop. In that case the builder is enormously taxed because he has bought property not suitable for the purposes to which he desires to dedicate it, and that is the hardest form of taxation you can imagine. That is a liability which no one will undertake if he can possibly avoid it. Take the other position. Suppose a builder buys a piece of land with great business skill, and the value of that land immediately rises because it has been well selected as regards the site of the houses, which are immediately taken up. Then he is met by the Increment Duty, and therefore what would be his legitimate profit in the case of success is taxed off, whereas in the case of failure he is subjected to a special and exceptional tax of an enormously heavy and detrimental character. Under these circumstances one does not wonder that we get this result.

The hon. Member who has just sat down rightly calls attention, as every business man would, to the difficulty in the case of mortgages. It is not so much a question of dealing with mortgages, because now you cannot get mortgages. You may go to the bankers who were finding the money in the old days for the builders, but they will not advance the money. This has never been a very profitable matter for the bankers, because the building trade was always speculative. Now the builder cannot get advances, either by mortgage or otherwise, from the bankers to enable him to carry on one of the most beneficial businesses for society, that of providing proper housing for the working classes in our large towns. From whatever point of view you approach this section, you arrive at this result: First of all, that the form of the tax is in itself reactionary against the spirit of Pitt, as the hon. Member opposite put it, and when you come to inquire into its operation and effect, putting aside these mere theoretical expressions, you find you are throttling in a most detrimental way a development in that nature of building for the working classes which ought to be encouraged, and which everyone who desires to see social improvements would wish to encourage in every possible way. Let me deal with another matter which was also mentioned by the hon. Member who spoke last. He said, "Is not the ratepayer the same as the taxpayer?" That is not really true when we come to the question of the incidence of local taxation.

Mr. CHIOZZA MONEY

I added that.

Sir A. CRIPPS

Yes, but let me emphasise a little bit what I mean, because it is from this point of view, I think, it is so important to introduce the right principle, and I hope the Chancellor of the Exchequer will consider it. It may roughly be taken that a penny on the rates only gives a third of what you would get from a penny on the Income Tax. We draw from that the most important deduction that when you put a charge on the rates, and not on the National Exchequer, you exempt two-thirds of the people in this country who are obtaining their income either from industrial sources or to a very great extent from investments abroad. When you come to national problems, apart from mere local problems, although they may be locally administered, it has always appeared to me a most monstrous thing, for which there is neither excuse nor argument, that two-thirds of the property of this country should be exempted from that taxation to which, if it is for a national service, it ought properly to be subject. We have sometimes considered this too much from the point of view of the ratepayer. I think the ratepayer is very hardly treated, but I want to consider it also from the other Point of view, particularly having regard to what has been expressed from time to time by some Members on the opposite side of the House. How, for instance, in such a matter as education can they, when putting a large amount of that charge upon the rates, justify exempting from taxation in respect of a matter of that kind two-thirds of the realised property or income from abroad, as is the case at the present time? I have never heard any excuse for that proposition. Of course, I feel very strongly what I may call the ratepayers' burden, but I feel much more strongly the injustice and inequity of not making people contribute in proportion to their means towards these great national services.

I do not believe you will ever get any satisfactory solution of this question merely by tinkering with it. You must grapple with it at the foundation. You must make up your mind clearly what ought to be a local charge which, generally, is that which is beneficial in the locality, and what ought to be what we on the Royal Commission called a national and onerous charge. You must as regards the national and onerous charge make all sources of income in this country contribute in proportion to their ability. I know there is a different principle when we come to rating, but when you are dealing with a national charge, and dealing with it as an onerous charge, a charge which has to be borne by the country for national purposes and objects, then I say the real test of the imposition of taxation under those conditions is the ability of the person to bear the burden that you put upon him. Immediately you bring that test to bear, you cannot justify, and I am sure the Chancellor of the Exchequer will not attempt to justify, putting these heavy national charges upon a particular form of property from which the ratepayer contributes, although it is perfectly clear that form of property does not get any special benefit whatever as regards these particular burdens and these particular charges. It is quite true, and people are apt to forget, that what we call "personal property"—I think that is the largest term—is only exempted from local taxation in this country owing to an Act which has been incorporated in the Expiring Laws Continuance Act each year. Up to about 1840 this great distinction which now exists in only having certain property subject to rates, and having income subject to national charges did not exist. The hon. Member is quite fair about that.

May I say why that was, and give two illustrations. We know in matters of money Scotch people are a careful people and quite right too. A Scotch judge went for his holiday to a country district in Scotland. When he was there they rated him on his income as a judge. He said, "This is rather a monstrous thing. I have come down here for my holiday, and you rate me on my income as a judge." That Scotch judge made his voice so largely heard that it was one of the incidents which led to the passing of this Act in order that the incidence should be on real property only. I do not know whether the Lord Advocate who on questions of land taxation pronounces what I should call the most outrageous propositions has the same cautious views as this Scotch judge or as Scotch people generally. May I also say one word as regards the history of the change in England. It was not in old days exactly real property, but what was called "visible property," which was taxed, and a case was brought as regards a farmer and a manufacturer, and it was held by Lord Denman—I have not looked it up, but I think I am right—that you must rate the profits both of one and the other in order to get equity of rating. A tremendous fuss was raised by the industrial interests in this country, and a Bill was passed to relieve them for one year from the effect of that decision, but, unfortunately, I think because no one has really attempted to grasp this principle, that Bill, which was intended to be quite temporary, has gone on from year to year with the disastrous result that, instead of going in the industrial direction, as the hon. Member has pointed out, and as other economists thought was right, you had a reactionary policy as regards the ratepayer, and you went back to the old principle of the Land Tax. Unfortunately, from that day to this the remedy has never been applied, and the injustice then constituted has been aggravated and increased to the detriment particularly of the rural districts.

Let me say one other word upon this distinction between local and national services. We, in this House, quite properly determine what is to be the level of our national education. Is it not for the State to determine how they desire the children of the people to be brought up, and if we in the House of Commons lay down quite irrespective of local needs, a general level of national education to be observed in all portions of the country, ought we not to pay the bill from the National Exchequer? If education is one of the great means of social progress, how can you justify allowing two-thirds of the industrial property coming from investments abroad, or from ordinary industrial profits in this country, to escape from bearing that portion of this national service which they ought to bear in proportion to their wealth and ability. That is exactly the principle laid down by the hon. Member opposite, and I hope, when the vote comes, he will carry out his views by voting for the Amendment. May I give one other illustration? It is again an illustration from the Royal Commission. I do not know whether the Chancellor of the Exchequer has read a really interesting history of rural roads, published by Mrs. Sydney Webb, which bears out the view we took on the Royal Commission. It is quite true that in the old days a road was, practically, purely a local matter. There was, in fact, hardly a road at all. That is not true now. Our main roads are not county matters; they are national matters, and, being national matters, you ought to put the burden on the National Exchequer. Let me say how exceptionally hard it is as regards a rural district such as that in which I live in the neighbourhood of London. All the small tradespeople one would wish to encourage in the smaller towns and villages near London are being competed with to-day by vans sent down from the central shops, such as Whiteley's, in London, These people use the roads for industrial purposes more than the local people, and they do not pay a penny directly for their upkeep. Nobody desires to destroy every little local tradesman in the country, and they must be fairly treated. You must deal with this question whether a charge is for national and onerous purposes or whether it is merely for local purposes which give a benefit in a particular district on principle.

6.0 P.M.

There is only one other matter to which I wish to allude, and it is one of great interest. I want to say a word with regard to land taxation in connection with rates. I think that has been misunderstood. I admit I was on the side of a Majority Report of the Royal Commission on local taxation at the time, but I have come round since on further consideration to think that the Minority Report was right on this question. Their report, of course, was wholly inconsistent with taking these land improving values and matters of that kind for national as distinct from local purposes. The whole basis of the Minority Report, and it is the proper basis on principle, was that if you are to have these exceptional charges on land they must be not for national purposes, but for local purposes. The Chancellor of the Exchequer himself acknowledged that in the first instance. His idea was that it should be half and a half. The idea of getting it all into his own pockets was, however, too much for him. I think he was quite wrong. I say that with all courtesy to him. If he had taken exactly the contrary view, and, having got what he wanted for his National Exchequer in some other way, he had said, "I made a mistake, and I will give all the money I get from my Land Taxes for local purposes, and local purposes only," then, so far, he would have done the right thing; but he did exactly the wrong thing, and, not only did he do the wrong thing, but by doing the wrong thing he made the ultimate solution much harder, because he has taken away, and deliberately taken away, what ought to be one of the sources from which particular localities could get without further burdening the ratepayers with some assistance as regards the heavy charges they are under at present. Let me point out what I mean by that so that I may not be misunderstood. Take the question of what is called site value. I have in my mind exactly what is said in the Minority Report of the Royal Commission. Suppose you have a site value which has grown, through either industrial or other local development, which has grown owing to the growth of the locality where that particular land is situated, where there has been development, and new streets have been formed, becaue of the advanced policy of the local authority in that particular district. The meaning of the Report upon that is this, and I do not propose to contest it. Suppose under those circumstances, owing to the operation of local development, or very likely from the expenditure of local rates, the site value is enhanced, apart from any question of the buildings upon it — that is an entirely different matter—I agree with what was said by the Minority Report that it is right that the taxes or the rate on the enhanced site value should be in proportion to the benefit the owner has received from the local expenditure which has taken place in that particular locality. That is a perfectly sound and right principle. I am not now mixing this up with the question of what is really industrial development like the Lumsden case. That is quite outside of this point. We had before us on the old Royal Commission the views of Mr. Harper, of Lord Moulton, and of Mr. Costello, who has since passed away, and the Minority Report accepted the view which I have stated, I think that view is absolutely sound. If you get a site value enhanced by expenditure in that particular locality and by the conditions of that particular locality, so far as the extent of that enhancement goes, I see no harm in having a special site rate for local purposes. Mind you, when I say that, I say it is absolutely inconsistent with the principle of the 1909 Budget. You could not do anything more unjust than to do the thing twice over, once for national and once for local purposes. Indeed you could not do it; you would destroy the property from which you are seeking to get the benefit. I do urge the Chancellor of the Exchequer in the strongest way to pay attention to what has been said as regards this matter, and I urge him more in this direction than in any other direction. Do not deal with this as a mere matter of another £500,000, or something of that sort, given from the Exchequer to the rates. That merely leads to extravagance, in my opinion; and as soon as you have done that you would have to get another £500,000, or some other sum, immediately made up. Deal with it on the principle of determining what are local and what are national charges. I want to express my own view, that if you once do that I would put every penny as regards truly local charges upon the ratepayers. Having once separated it, I would say, "You ought to pay this, and it is a proper charge." On the other hand, as regards national charges, every penny ought to be paid out of the National Exchequer. We ought to have that distinction clearly enforced, and until we do we will never get a fair economical and true solution of this question between the local rates and the National Exchequer.

Mr. LLOYD GEORGE

Although on this side of the House we do not at all find ourselves in agreement with the hon. and learned Gentleman's views regarding local taxation, we always recognise what a great authority he is upon the subject. No man has greater experience and knowledge of the problem than he has, and therefore a contribution from him to a discussion on local taxation is a valuable one to anyone who has got to consider the methods of dealing with the subject in the immediate future. For that very reason I gladly welcome the principle which he has laid down with regard to the taxation of site values. And it made me regret more and more his absence from the House at the time when the Budget of 1909 was under discussion, because I do think that such a contribution from him at that time might have been, not merely of great assistance to us, but of still greater assistance to his party. I regret that I cannot follow him in his discussion of the effect of the Land Taxes upon the building trade. I understand there is a Motion to be discussed later on which will probably raise that very issue. My right hon. Friend the Secretary to the Treasury is taking charge of that discussion, and I shall therefore say just this one word upon the subject. So far as the statistics of employment in the building trade are concerned, they are considerably improved since the Budget of 1909 became the law of the land. That is the only index we have got at the present moment of its effect. I have no doubt at all that there is a certain measure of truth in what the hon. and learned Gentleman says that for the moment mortgagees may have been frightened. If they were frightened, they were frightened because the valuation which was made under that Act disclosed in many cases that the properties were very considerably over-mortgaged. I have not the faintest doubt that the permanent effect of that is going to be very healthy and very sound, because anyone who has had experience in building operations and in the conduct of business on behalf of the building trade knows that there is no more fruitful source of disaster, both to the building trade and to the neighbourhood, than to find that money has often been raised out of proportion to the real value of the properties. When we have a valuation conducted on official principles, which has no reference to the interests of any individual, and which simply tries to ascertain what the real value is, it may in some instances have the effect of alarming mortgagees, and therefore temporarily causing inconvenience. But in the long run I am certain that it will be better for sound, real business. That is the effect, and it is coming to be the effect now. That temporary effect is passing away, and there is an improvement in the building trade which has been, and is now being, developed on a sounder basis. I am sure both the building trade and the community will profit in the long run by even that temporary inconvenience which has been caused in such cases.

There is one observation of the hon. and learned Gentleman with regard to these taxes which I find myself in agreement with, although he directed it in the nature of criticism against what I have done—that is his view that the proceeds of these taxes should be utilised for local purposes. I do not challenge that proposition in the slightest degree. I think there should be consent about that, but whether the money should be raised locally or not is another matter. There is a great difference to my mind between raising it locally and raising it as we do now. It is a matter of machinery, but I agree that it should be distributed for local purposes. I am still of opinion that it is better that the machinery should be Imperial, but I agree that the distribution should be of a more local character. By "local" I do not necessarily mean that, in dealing with the money, it should be paid to the area of the immediate town or village where the increment arises, because the increment is very often attributable to the business or trade or commerce of an adjoining city, and therefore, when the increment arises in a comfortable well-to-do suburb, I think it is very unfair that the whole of the proceeds of that tax should be devoted to the relief of the burden of taxes in that suburb where the increase in the value is due to the fact that people are working in an adjoining district. I safeguard myself, when I say I agree with the hon. and learned Gentleman, by making that qualification. I do not understand him to disagree generally with what I say.

Sir A. CRIPPS

I should agree with it, and I think that is a reason for further extension.

Mr. LLOYD GEORGE

The hon. and learned Member went on to say that first of all I agreed to the Amendment providing that the proceeds of the taxes should be divided between Imperial and local purposes, and that I afterwards recovered possession of the half that I gave. May I point out that that was a purely temporary transaction. It was limited by date.

Mr. C. BATHURST

Next year.

Mr. LLOYD GEORGE

That is right—the hon. Gentleman is generally accurate in these things. Next year. It was purely temporary, and it was during the period of what I may call the ripening, the fructifying period of the taxes, the period before the full harvest could arrive, and I do not think that the local authorities can complain of the bargain. It was perfectly clear that, until the valuation was completed, the taxes would not reach any dimensions which would make it worth while for the local authorities to enter into a quarrel with the Imperial Government about them if they got a substantial equivalent, and they got it. I may remind the hon. and learned Member that it was not taken away without something in return, and, as generally happens in a case of that kind, the Imperial Government got the worst of it. We gave far more away than we took from the local authorities. I observe the hon and learned Gentleman smiles, but it was so I assure him. I remember perfectly well how I was bombarded by hon. Members from both sides of the House. I made the best bargain I could for the Treasury, and it was a very bad one for us. The local authorities walked away with the honours of the contest. I do not disagree at all with the principle laid down by the hon. and learned Gentleman that in the main these taxes ought to be utilised for local purposes, and in any settlement which is made, if it is made by the present Government or its successors, that is the line which will be taken, I feel confident.

There is another observation which he made and in which I will not say I am happy to find myself in agreement. But I do find myself in agreement with him in saying that this is a very old problem and that its very antiquity has begun to discourage those who take an interest in it. He reminded us that twenty years ago he was a member of a Royal Commission appointed to deal with this problem, and he also made an observation which shows how wise we are in taking our time over this problem. He said that in the Royal Commission he took a certain line after reflecting for two or three years, but after considering the matter for another twenty years he has now changed his opinion. The hon. and learned Gentleman advanced an argument which I should not have dared on my own initiative to submit to the House of Commons, which shows that we should not rush in these matters. It is a very old problem. During the time I have been in the House of Commons I have seen no end of Motions by hon. Gentlemen taking an interest in the matter, generally, I agree, when Liberal Governments are in power. I was looking through the Parliamentary Reports this morning, after I got notice of this Motion, and I found there was a Motion of the same character moved in 1883 by Mr. Pell, who was also a great champion of the rights of local authorities and of the agricultural interest. He made a Motion in 1883– That no further delay should be allowed in granting adequate relief to the ratepayers in counties and boroughs in respect of national services required of local authorities. He made, I will not say the same speech as the hon. and learned Gentleman, but it was exactly on the same lines. He began his speech by quoting another Motion of the same character— That a measure dealing with the whole question of local taxation … is most urgently required, which had been passed in this House in 1872. That is forty-one years ago. Both of them were, of course, during the time the Liberal Government was in power. Mr. Gladstone dealt with that Motion, and I think also Mr. Goschen. Mr. Gladstone on that occasion laid down a principle which I commend to my hon. Friend the Member for East Northamptonshire (Mr. Chiozza Money). I do not think he will find himself quite in accord with Mr. Gladstone on that occasion. He regarded the principles laid down by my hon. Friend as a taxation of labour as against a taxation of property. However, I am not going into that at the present moment, for it is much too dangerous a topic to discuss under present conditions. My difficulty was his difficulty, and it is the difficulty which every Chancellor of the Exchequer has experienced who has had to deal with this matter. I do not think there has been a Chancellor of the Exchequer for the last forty or fifty years who has not had to deal with it. The Motion was moved in almost identical terms. It is the difficulty of the Minister who recognises a grievance, who recognises the urgency of the problem, and who is also very much alive to the difficulties of dealing with it. I cannot deny any of the general statement which has been made by hon. Gentlemen on both sides of the House, that this is a very important problem. I cannot deny that it is a very pressing problem. All I can say is it is not the only pressing problem, and that Governments have got to choose in that respect. For instance, the right hon. Gentleman the Leader of the Opposition last night, in the course of his first speech of the Session, pressed other urgent problems for solution this Session. There was the reform of the House of Lords; there was the settlement of industrial disputes; there was housing and redistribution, and there was a fifth—[An HON. MEMBER: "Aeroplanes"]—a national service or the problem of national defence in some form or other. I do not say the right hon. Gentleman advocated conscription. At any rate, they were each of them problems which he urged upon us, and he rather complained that the Government had not indicated their intention of dealing with them in the course of the present Session. Therefore when you come to deal with this question it is really a choice between urgent problems; and I realise the urgency of several of the problems mentioned by the right hon. Gentleman.

On the occasion to which I have referred Mr. Gladstone made an observation which is quite relevant to the present discussion, and which is always forgotten. There is always a demand for a relief of the burden of the ratepayers. Mr. Gladstone said:— This is a Motion for increasing taxes. That side is always forgotten. You cannot relieve the burden of the ratepayer in this country; you cannot make a substantial contribution in any shape or form except by increasing the taxes upon somebody. You may say that there is a certain class of ratepayer in this country who is contributing a larger share to the burden of local taxation than he ought. That means that there is somebody contributing less. I do not deny that that is the case, but I do want everybody to remember that it is a very easy thing to go to the Exchequer and press the Exchequer to grant relief of the burdens on one man. I wonder whether the Exchequer would get the same support in increasing the burden of the other man. That is the experience of every Chancellor of the Exchequer. The moment he grants relief to any section of the community that is quite right; but when he has to replenish the National Treasury in order to make up that amount, well, I dare not repeat in a respectable Assembly the language which is used about it. That is really the difficulty. You cannot do it. After all ratepayers and taxpayers are individual citizens of this country, and it is an adjustment or readjustment of the burdens between two sections of the citizens. [HON. MEMBERS: "Hear, hear."] That commands general agreement, and it is, of course, a perfectly obvious observation. But when we come to the method of doing this the hon. and learned Gentleman made a suggestion with which I will deal later on. His suggestion is that you should divide the services into two definite, clean-cut cate- gories, and say, "Here is a local service; there is a national service." That is his suggestion so far as I could follow it. I wish to point out what I regard as the dangers of that. It is a danger to administration, and a very serious danger—I think a very serious menace. As the hon. and learned Gentleman knows, under the Roman Empire this problem of the adjustment of local and Imperial taxation constantly arose. The municipalities were constantly complaining that the burdens were too heavy for them. They were constantly appealing to the Imperial Exchequer for cash. They got it, but they got it eventually in many cases on the distinct condition that they surrendered the control to the centre. I think that is a very great menace; it would be a danger to embark on a policy of that kind, and I hope we shall consider once, twice, and even oftener before doing so.

The prevailing tone of the Debate has been one of recommending generally subventions from the Imperial Exchequer. I cannot conceive a more futile and mischievous method of dealing with the problem. It hardens the difficulties and swells the difficulties. It does not remedy any evil. The moment you begin to do it you simply find that the local authorities spend more. I do not think they spend it more efficiently, and in a few years, after you have gone on for a year or two, or even before you have gone on for a year, back they come again and say, "This is inadequate; you must give us more." That was the experience of Mr. Goschen. He thought he had settled the problem, and he made a real effort to settle the problem, but in about a couple of years the local authorities came back again and asked for more money. That has been the experience of every Chancellor of the Exchequer who has given Grants. It was the experience of Lord St. Aldwyn. When he started to give Grants he found that the Grants only relieved one section of the community, and the other section—the ratepayers—said, "Where do we come in?" In the course of a very few years the very class relieved by his Grants came and said, "This has already been swallowed up in the increase of rates and we ask for more." I urge, whatever the solution is, that no attempt should be made to solve the problem on that basis. It is the least businesslike method, and it is the most extravagant method of solving the problem. In 1888 Mr. Goschen made a real effort to put the question of local and Imperial taxation upon a better business footing. What happened? He started the assigned revenues, but his principle of distribution is already antiquated. I think that is absolutely agreed. The principle of distribution is on the basis of the then existing conditions in each locality. The Parliamentary Grants were distributed to the counties, county boroughs, and towns, but there has been a complete change in the character of the population in many districts. It is so complicated that two gentlemen—I am not sure whether they were members of the Royal Commission of which the hon. and learned Gentleman was a member—said the thing could not stand a day were it not for the fact that it was so obscure and complicated that nobody understood it. There is a good deal to be said for that.

What happens in regard to these subventions? The one difficulty of dealing with the problem now is that you create vested interests; not vested interests in individuals, but in localities. There is one locality which is very well treated, and there is another which is very shabbily treated, but if you begin to readjust the sums of money which are distributed between these localities, you will find that you have created a vested interest in locality "A," which is well treated, and you cannot very well reduce the amount of the Grant given to it because you increase the rates by doing so. Supposing you increase the subvention without having a complete change in the whole principle upon which You are dealing with the problem, you simply create fresh vested interests, which will make it More difficult in future to deal with the problem. Therefore I do hope that before we take that step we shall, at any rate, consider some very drastic change in the relations of local and Imperial finance, and of the method of raising the revenue for local purposes.

The hon. and learned Gentleman made another observation, and here, again, I find myself in agreement with him. He said, "Whatever the Government do, I hope they will not tinker with the problem; I hope they will deal with it thoroughly." The hon. and learned Gentleman is absolutely right there. But what does that mean? Will the House consider for a moment what dealing with the relations of local and Imperial finance means. My hon. Friend one of the Members for London said that London is very harshly treated, and is not getting her fair share of the Grants. Then comes an hon. Friend of mine from Scotland, who says that London is treated uncommonly well as compared with Scotland. Then comes another Member from another district who says that both are treated infinitely better than Salford. The suggestion was that each of these districts should somehow or other get more cash. The Londoner wanted cash, and the Scotchman naturally wanted more cash, and my hon. Friend wanted more money for Salford. It is not really as simple as all that.

What are the questions which have to be settled before you really can deal with this great and complex problem? If there are going to be increased Grants is there going to be increased control? That is a most vital question. In my own judgment I think there ought to be more control. I think there ought to be more central control upon the finance of local authorities. There are many ways of doing it. For instance, are Grants going to be paid in proportion to population? That is one problem. Are you going to say, "We will give you so much money in proportion to either your population or your rateable value upon some automatic principle which will depend upon statistics," or are you going to say, "If your education system is efficient, if you are looking after the housing problem in your district thoroughly, if the problems of public health are attended to, then your Grants will be upon a different scale from what they would be upon if you neglected your duties?" Is that to be one of the elements? I think it has got to be considered. What is the basis of the distribution of the funds? Everyone agrees that at the present moment the basis of distribution is a thoroughly wrong one. The basis of distribution of Grants now is very often in inverse ratio to the need. Take education. The gigantic Grants distributed for education are not in proportion to the burdens of a locality. They are not in proportion to the capacity of a locality to bear the burden. There has been some attempt, in a crude way, to meet that difficulty by creating something which is called a necessitous area Grant, but that is really tinkering after all with a very great problem. It does meet the pressing needs of a few exceptional areas where the rateable value is low and the expenses are high. But you ought to be distributing these Grants upon some definite and clear principle which ought to apply to the whole of the United Kingdom and the nature of the neighbourhood, the poverty of the neighbourhood, the question of whether it is necessary that you should render greater aid than to another district which is better situated—all these elements ought to be taken into account in the distribution of your Grant. Then the hon. and learned Gentleman puts in another enormous question which I have referred to you already: Are you going to separate the services into local and Imperial? Are you going to say education is an Imperial charge? I do not know what you call a local charge. The Poor Law is called a local charge.

Sir A. CRIPPS

I should take the distinction which was drawn in the Royal Commission itself. There the Poor Law was said to be a national charge.

Mr. LLOYD GEORGE

I am obliged to the hon. and learned Gentleman for giving us an idea of what he meant by local and Imperial charges. The Poor Law, education, police, and roads, would be national charges. Just see what that means. Take education to begin with. If it is a question of building schools, is the whole burden to be charged upon Imperial taxes? At present you have this check at any rate on extravagant buildings, that the locality knows that it has to bear a share of it. [Interruption.] That is sometimes the case. I cannot say it is the case in London. The complaint I have heard is just the other way, but I do not know. But just conceive what will happen afterwards. The demand in the district will be for more building and for larger buildings. There is no check from the point of view of economy. Every Member of Parliament would be pressed by his constituents to urge the Education Minister to spend more money upon buildings, and there is no local control and there is no local check, and, therefore, whatever the cost of education is now, in a very short time it will be doubled without getting twice the result you are getting at present. That is a matter which has got to be considered very carefully. The same thing applies to roads and to the Poor Law, and before the House of Commons commits itself to the principle that all these great services are to be administered and paid for imperially, I hope they will reflect upon the effect which that vital change of policy will have upon the national expenditure.

Here is another question which we shall have to consider. The right hon. Gentle- man (Mr. Hayes Fisher) rather jibed at something I said about broadening the basis of taxation. I think you will have to consider that when you come to deal with the question of local and Imperial taxation. At the present moment, as has been pointed out over and over again, there is only one means by which a local authority can raise funds, and that is by putting on a 1d. or a 2d. rate. I think a local authority ought to have its choice of two or three subject-matters of taxation. What those subject-matters should be I do not propose to indicate at present. I have in my own mind an idea as to what you might very well allow local authorities to impose taxation upon. Mr. Goschen was at one time in favour of a local Income Tax. I think he dropped it, and any man who looks into that question twice will come to exactly the same conclusion as he did. A local Income Tax would simply destroy the Imperial Income Tax as a means of raising money, and would not produce anything like the results which have been anticipated by those who have advocated it. I remember going into it very carefully. I find that in Germany in many respects it has not been a very great success. A man who has a very large income enters into a bargain with the local authority, and says, "If you are going to assess me at my full income I am going to live just across that river. If you assess me at so much, I will stay here." Then there is a bargain between him and the local authority as to what his income is going to be. That is bound to be the case if you are going to have a local Income Tax, and, on the whole, I think it is infinitely better that you should raise Income Tax imperially and distribute the proceeds among the local authorities.

Here is another question which has already been raised in the course of the Debate. To what extent are you going to relieve improvements from rates? I do not think you can dismiss that altogether and treat it as purely a question of a single tax. It is a totally different question. An improving landlord now contributes more towards the rates than a man who neglects his duties as a landlord. A landlord who builds good farm buildings is instantly, I do not like to use the word penalised, but I do not know a better word, by paying more to the rates. The local assessor comes along and says, "You have spent £1,000 on improving the farm." At 5 per cent. that is £50. He will add that to the gross estimated rental, and then there is a reduction, so he has to pay heavier rates because he has done his duty by his tenant and by the community. That is a bad principle. That has got to be considered very carefully There ought not to be a system which, pro tanto at any rate, directly discourages improvements upon property. I have heard many manufacturers say the same. The moment you have a manufacturer who has got modern ideas and wants to improve his machinery and bring his premises up to date, down comes the local assessor and increases his assessment. To that extent it is discouragement of improvement, whether in agriculture or in any other industry. That is a question which has to be considered very carefully, and I am perfectly certain it is worth the while of the House of Commons to consider whether there is not some system which at any rate does not directly discourage a man from spending his capital upon improving his property.

There is another point which I think is very vital. Before you can settle the question of local and Imperial taxes you must have definite and clear ideas on these points. There is the question of areas. The right hon. Gentleman never said a word about areas, but he must know what a vital question it is. To what extent are you going to confine the expenditure and the raising of your revenues to the present areas? The Education Act of 1902 dealt with that problem to a certain extent because it widened the areas, and widened them to a very considerable extent. It took the county area, where under the old School Board system you had a very much more limited area. To that extent it undoubtedly did meet this problem. But education is not the only question, and I am not sure that the Act of 1902 has completely settled the question of areas even in education. Then there is the police. I believe the Home Office are of opinion that in many districts the police area is much too small, and therefore expensive. The same thing applies to the Poor Law. I am not sure whether it was the Majority or the Minority Report that recommended that the areas should be very much larger than they are at present. The question of areas is a vital question because here you have two contiguous areas. A working class population lives there and a suburban population lives here. It is practically the same community. They are dependent upon the same industry entirely, and yet they are separate areas for the purpose of taxation. Then the working class areas have to pay a much heavier rate because the education rate is heavier and the rateable value is lower in proportion to the population, and those who live in the contiguous area, dependent upon the same industry, are let off with paying one-half or one-third of the rate. That is a problem which demands the most urgent consideration.

The right hon. Gentleman complained that this Committee has not reported. I would infinitely rather not receive a report from a Committee which has not considered the whole problem. It would be of very little use to any Government, and if the right hon. Gentlemen were sitting here dealing with this problem, unless he meant merely to put down £2,000,000 on the Estimates, to be distributed in a haphazard fashion amongst the local authorities, there is not one of these points which I have mentioned which would not have to be considered very carefully. He says that the Cabinet should consider this. I still say that for the Cabinet the right course is to take the opinion of men who are undoubted experts on the whole of these questions. The Committee have already had, I think, over eighty sittings, and they have considered most of those questions. They are now, I think, considering the question of areas—a very vital and important question—and I hope that they will give full consideration to it, for I am sure that no Government will deal with the question of local taxation without having full light on that most important problem. I know that the right hon. Gentleman takes up a certain position with respect to the solution of the problem. I think he quoted a passage in which I gave expression to my opinion on that subject, I think we could have dealt with it a couple of years ago if circumstances had been favourable, but I wish to point out that we were thrown into very great confusion at that time, and the Government came to the conclusion, apart from that, that it was necessary to appoint a Committee to recommend the best method of solving the difficulties of the local taxation question. But we have done something. The right hon. Gentleman was not quite fair to the Government when he referred to that side of the question. The scheme of old age pensions has certainly been a great relief to the local rates. On 31st March, 1906, the outdoor paupers in this country over seventy years of age were 168,000. There were only 9,530 outdoor paupers over seventy years of age on 1st January, 1912. That is an enormous reduction. That in itself is a great help to the local authorities. I do not wish to say what the amount of the charge would have been upon the local authorities annually if the old age pensions scheme had not been in existence, but to that extent the burden has been taken off their shoulders and put on the shoulders of the Imperial Exchequer.

The right hon. Gentleman said something about roads, and I should like to say a word on that subject in relation to local taxes. The right hon. Gentleman said that London has only had £4,000 or £5,000 from the Road Board. A very good answer to that has been given by the hon. and learned Member for the Southern Division of Buckingham (Sir A. Cripps). Although these motors are registered in London, they tear up country roads, and it is not merely the pleasure motor, but the business motor that does so. To an increasing extent you will find everywhere that they are tearing up the roads, and I think there is something to be said for the adjoining counties as to the question of road maintenance. Let me put another point to the right hon. Gentleman. It is a question of policy for the Road Board, and there has been some discussion regarding it. The money was to be spent not merely for maintaining roads. It was also to be used for fitting them for motor traffic, and where necessary making new roads. The right hon. Gentleman knows that the Road Board are considering the question of a fresh outlet from London which the Metropolis is very much in need of. They have accumulated very considerable sums of money which they hope to use for that purpose. I should regard it as bad policy to say to the Road Board, "You must spend the whole of this money for improving roads, Do not accumulate a penny." I think it is worth their while considering whether—not here in London—it is not desirable that new roads should be made in some areas in the United Kingdom where there is a real demand for them at the present moment. I had a letter from the Secretary for Scotland pointing out that there are districts in the Highlands where roads of that kind might be made. The Commissioners are a judicial body, and it is for them to recommend to the Government the making of such roads, and I hope no pressure will be brought to bear to scatter these funds merely on maintenance of roads.

The funds may be useful from another point of view. The Road Board are to take into consideration the state of employment, and when periods of unemployment come, as they will come in every country, instead of giving a Grant of £300,000 or £400,000 to be spent on schemes which there has been no time to think of, it is very much better that schemes should be thought out years in advance, so that the money will be properly spent if the time should unfortunately come when it is necessary to spend money in this way on account of the badness of trade. It is perfectly clear that we could not this year deal with the matter of local taxation. Nothing but another Autumn Session could possibly enable us in the matter of time to deal with it.

Mr. HAYES FISHER

Why cannot the right hon. Gentleman give us an interim Grant?

Mr. LLOYD GEORGE

Really, I think that would be a most unwise proceeding. What would it mean? It would undoubtedly mean taxation if you are going to give Grants. The right hon. Gentleman said that when I introduced the Budget in 1909 I stated that I hoped there would be cash available for the purpose of relieving the burden of local taxation. To a considerable extent that hope has been realised, for the burden of paupers has been taken over under that Budget. I am speaking from memory, and I think the amount is about £2,000,000. I must also say that if I have not had the margin I hoped to have for the purpose of further reducing local taxation, it is because there has been an unexpected demand in respect of armaments owing to the condition of affairs in Europe. The pressure on the Government has been such as could not be resisted, and therefore money which would otherwise have been used for the purpose of reducing local taxation has been devoted to armaments, and that is an expenditure which we did not anticipate in 1909. Whenever the problem comes up to be dealt with, I hope it will be dealt with comprehensively. I hope it will be dealt with in such a way that Chancellors of the Exchequer will not have to get up year after year to resist demands for mere Grants-in-Aid, which simply increase and encourage local extravagance. I hope it will be dealt with in such a way as will involve a solution which will improve the efficiency of local services, and make it possible for the Imperial Exchequer, where the duties of national services are undertaken, to render those services more effective and more economical than they are at the present moment.

Mr. FORSTER

The Chancellor of the Exchequer has made an extremely interesting speech, but I am afraid what he has said will carry cold comfort to the minds of the ratepayers, who are so largely interested in this question The right hon. Gentleman commented on the various difficulties which must beset every one who attempts to solve the problem of the proper relation between local and Imperial taxation. Let me remind the House that those difficulties have already been examined by a Royal Commission which sat for many years. They are not new difficulties to those who have studied this problem. They have been engaging the attention of a large number of persons for a considerable number of years, so that they are not new difficulties which we have to face for the first time. The Chancellor of the Exchequer congratulated my hon. and learned Friend on his change of opinion since he signed the Majority Report of the Royal Commission. I hope he is not going to wait until every member of the Royal Commission has changed his opinion, because, if he does, I am afraid we shall have to wait until the crack of doom before this question is dealt with. He referred to the difficulties which any Chancellor of the Exchequer is bound to find himself in when approaching this question. I think that every fair-minded man must agree with the genuine character of the grievance disclosed this afternoon. The right hon. Gentleman said it was very difficult for any Chancellor of the Exchequer who realises the difficulty and gravity of the problem to find the money. We all sympathise with the difficulty which the right hon. Gentleman finds himself in, but I think that what he and the House of Commons ought to remember is that it is largely in consequence of the various Acts of Parliament passed by Parliament under the aegis of the present Government that the burden of rates has increased so heavily during the past few years. Broadly, the action of the Government in the House of Commons has added to the gravity with which the right hon. Gentleman finds himself confronted. I think he cannot leave that out of account, and I wish to refer to it very briefly.

7.0 P.M.

The right hon. Gentleman reminded us of a maxim with which I think we are all familiar, namely, that you cannot take the burden off one man in these matters with out putting it on somebody else. I think you might do something to spread the area from which you draw your contributions. The right hon. Gentleman says you cannot substitute a local Income Tax for our present system of rating. I think it is true that everyone who has inquired closely into the question of local Income Tax is forced to admit that however unattractive it may be at first sight, there is no reason why we should not make some innovations of our system with a view, at any rate, of bringing into contribution a larger portion of property which now escapes altogether. It was only in the concluding portion of his speech that the right hon. Gentleman really touched the Amendment which has been moved by my right hon. Friend. He came to the question of subventions, and he ruled it out of consideration altogether in a single sentence. He regards subventions as bad, and, as I understand him, will have nothing to do with them. I think it is worth while to consider how we are going to get what we want. We are going on passing measures of social reform, and more and more we hesitate ourselves to find the costs. Undue burdens are placed upon local authorities. We leave them to pay for the administration of Acts passed by the House of Commons. That is not a good way of carrying out social reform. It is bad because we have no close estimate as to the cost of the reform when we are passing the Act, and it is bad from the point of view of the reform itself, because either the money is made available with difficulty by the local authorities or else it is not forthcoming at all. In either case the reform which we are passing or desire to see carried out fails to come to fruition.

That is a bad way of doing business, and however attractive it may be to the Government of the day or even to the tender conscience of the House itself, it is bad business. I do not believe that we should adopt that system of carrying out any of our measures of social reform if we were in closer contact than we are with the ratepayers who have to find the money. I think there is a quickly growing and very prevalent feeling of dissatisfaction with the heavy burdens which the ratepayers have to hear for what are in reality national services. It was only last week, I think, that this feeling found expression in the elections to the London County Council. I have several friends who moved about among the ratepayers in that contest, and as far as they were able to judge the one thing which really moved the minds of the ratepayers and influenced their votes was the desire for economy. That was the really deciding factor in the result of the elections. There was a great deal to lead to another decision on the part of the ratepayers. There was the natural desire for a change after one party had been in office for six years, and there were the telegraphic efforts of the leading organs of the Press identified with the party opposite, which I hope brought a full and adequate return to the revenue of the Department over which the Postmaster-General presides. Then there was the intervention of various Members of the Cabinet, including the President of the Local Government Board (Mr. Burns). I can only say that it was a singular and very noteworthy development of his remarkable activity, and I hope that it is not going to be regarded as any part of the proper functions of the President of the Local Government Board that he should intervene in contested municipal elections. However, if he is satisfied with the result of the county council elections I will not say anything further to discourage his peace of mind. I only referred to that because I believed that we were coming to a time when the ratepayers will refuse to bear further burdens.

Already in the counties they are insisting upon returning Members who are pledged to economise rather than carry out in their fullest development the various measures of social amelioration which the House of Commons insists upon thrusting upon them. I am confirmed in this view by what has happened in connection with the provision of sanitorium benefit for uninsured persons. The House of Commons will remember that the local authorities are empowered to confer this benefit because it is borne half by the State and half by the local authority itself. As far as my recollection serves me there is no county council in the country that is providing this benefit at the present time. I am very sorry for it. I regard it as a most admirable object. Why is it that the county councils will not take it up? It is, I believe, solely on account of the cost. It is very desirable that this question should be tackled at the earliest possible moment. The consumptives of to-day are just as worthy of treatment as the consumptives of to-morrow. National health is just as important to-day as it will be next year. This is not a party question, because the Radical county councils are just as backward as the Tory county councils. But when we ask why is it that the county councils are doing nothing it is, I believe, solely because they know that the ratepayers will not face the cost. We have now got to a time when the ratepayers look with a jealous eye at any proposal which they think will throw a burden upon them, and it is because they believe that this question of the eradication of consumption is really a national matter which ought to be undertaken as a national matter that they are reluctant to undertake it. I remember that my right hon. Friend the Member for East Worcestershire (Mr. Austen Chamberlain), when discussing this question of sanatorium benefit in Committee of the Insurance Act, expressed grave doubts as to whether it ought to find a place in the Insurance Act at all. He took the view, though he did not insist upon it, that the crusade against consumption was really a national matter which ought to be undertaken by the nation as a whole, and not merely as part of the Insurance Act. I am bound to say that I think that what is going on now in the country shows that the great majority of people, at any rate, have ranged themselves behind the view which my right hon. Friend has expressed.

If you look at the increased burdens that were thrown upon them in connection with education and the upkeep of roads and other matters of local administration, which are really national in character, you cannot wonder at the outcry which is being raised at present. I do not want to elaborate these matters, because they have been dealt with very fully by my hon. Friends and hon. Gentlemen opposite, and have been alluded to by the Chancellor of the Exchequer; but there is one matter which arises in reference to roads which one cannot leave out of account altogether, and that is the freedom from contribution on the part of those who have done the most damage. Perhaps the House will allow me to give my own personal experience. My home is in one of the Southern counties, and my house is exceedingly close to the main road out of London in that direction. Day and night my house shakes and quakes on account of the heavy and rapid traffic which pours by in a never-ending stream. I allude to that because it is a thing which one knows about from one's own observation, but my experience is just the same as that of all the people who live along that road, the people who have to pay for the upkeep of the roads to which these motor 'buses and heavy steam lorries drawing enormous weights at rapid rates do enormous damage, and to the maintenance of which they make no contribution. That is one of the problems which we shall have to face, but I think it is only fair to those who live in the locality that, at any rate, something should be done to help them out of the difficulty in which they are at present. There has been general agreement expressed in the House this afternoon that something ought to be done, and done now, to meet the difficulty to which Member after Member has alluded.

My right hon. Friend, in his Amendment, asked for increased subvention from the Exchequer. The hon. Member, I think for one of the Glasgow Divisions, said that there was no use in tinkering with the question in that way, that these subventions would be no use, that what you have to do is to reform our rating system root and branch, and that ameliorative measures are no earthly good unless you go in for a wholesale revision of our system. My right hon. Friend himself, in the beginning of his speech, said that that was what he desired to see. If I remember his phrase aright, he said he wanted to look on the rating system with a modern eye. We want to bring it up to date. We cannot continue to wait. What we want to do now is to give the people who are loud in their outcry as to the heavy burdens which they now bear some relief, and give it soon. The right hon. Gentleman the Chancellor of the Exchequer said that in all these matters it is a question of how much you give and where control is centred. You obviously cannot have local control if the fund is coming from the Exchequer. I quite agree that you cannot divorce control from contributions, but while you have local contributions the amount of control ought to bear some relation to the amount of contributions. The control should be real and not merely nominal. Take the case of the Education Act. The amount of contribution is real enough, as it is over 50 per cent. of the total cost of education. The local control is largely a myth. The main lines on which education has to be administered are laid down in a code to which the local

authorities have to conform, and which they cannot alter, so that they find themselves tied hand and foot in the administration of education.

You have no true relation between control and contribution in the case of education. I believe it is essential, if you are going to call upon the ratepayers to bear these burdens, that you must give to them a larger element of control, real control, instead of merely nominal control. If you do that, I think you are bound to come to their assistance in helping them to shoulder their heavy burdens. I am not in the least surprised that the local authorities and the ratepayers are becoming restive. From time to time their minds may have been lulled to rest by promises of the Government with reference to the provision of funds to enable them to meet their financial obligations. Promises fall from the lips of the Chancellor of the Exchequer gently as the dew from Heaven, but I am sorry to say that those promises seem to be forgotten as easily as they are made. My right hon. Friend has quoted undertakings given by him, and by the present Chancellor of the Duchy of Lancaster, and by the Leader of the party opposite in the House of Lords, that the matter should be dealt with forthwith.

It has not been dealt with forthwith; it is not being dealt with now, and the House of Commons has clearly expressed this afternoon a genuine wish that it should be dealt with at the earliest possible moment, and without further loss of time. The Chancellor of the Exchequer says it is absolutely essential that the Committee should go on inquiring into the subject, and that the matter should not be hurried in any way whatever. The Committee was appointed largely on the request of my right hon. Friend the Member for Fulham, and it was desired, when that Committee was appointed, that it should solve the difficulty, and not shelve it. We have had a Committee which has been a convenient cloak for the delay which has taken place in the settlement of this matter, and we say that the time has now come when further delay cannot be endured.

Question put, "That those words be there added."

The House divided: Ayes, 123; Noes, 224.

Division No. 1.]	AYES.	[7.19 p.m.
Baird, John Lawrence	Banner, John S, Harmood-	Bathurst, Hon. A. B. (Glouc., E.)
Baldwin, Stanley	Barlow, Montague (Salford, South)	Benn, Arthur Shirley (Plymouth)
Banbury, Sir Frederick George	Barrie, H. T.	Benn, Ion Hamilton (Greenwich)
Bennett-Goldney, Francis	Gastrell, Major W. Houghton	Newton, Harry Kottingham
Bigland, Alfred	Gibbs, George Abraham	Nicholson, William G. (Petersfield)
Bird, Alfred	Gilmour, Captain John	Nield, Herbert
Bridgeman, W. Clive	Glazebrook, Captain Philip K.	O'Neill, Hon. A. E. B. (Antrim, Mid)
Bull, Sir William James	Goldman, C. S.	Pease, Herbert Pike (Darlington)
Burn, Colonel C. R.	Gordon, Hon. John Edward (Brighton)	Perkins, Walter F.
Butcher, John George	Goulding, Edward Alfred	Peto, Basil Edward
Campbell, Capt. Duncan F. (Ayr, N.)	Guinness, Hon. W. E. (Bury S. Edmunds)	Pretyman, Ernest George
Campion, W. R.	Gwynne, R. S. (Sussex, Eastbourne)	Rawlinson, John Frederick Peel
Carlile, Sir Edward Hildred	Hall, D. B. (Isle of Wight)	Rawson, Col. Richard H.
Cassel, Felix	Hall, Marshall (E. Toxteth)	Roberts, S. (Sheffield, Ecclesall)
Cautley, Henry Strother	Harris, Henry Percy	Rolleston, Sir John
Cave, George	Harrison-Broadley, H. B.	Royds, Edmund
Cecil Lord Hugh (Oxford Univ.)	Henderson, Major H. (Berkshire)	Rutherford, Watson (L'pool, W. Derby)
Cecil, Lord R. (Herts, Hitchin)	Hewins, William Albert Samuel	Salter, Arthur Clavell
Chaplin, Rt. Hon. Henry	Hibbert, Sir Henry F.	Samuel, Sir Harry (Norwood)
Clay, Captain H. H. Spender	Hohler, Gerald Fitzroy	Sanders, Robert Arthur
Clive, Captain Percy Archer	Hope, James Fitzalan (Sheffield)	Sanderson, Lancelot
Coates, Major Sir Edward Feetham	Hope, Major J. A. (Midlothian)	Sandys, G. J.
Collings, Rt. Hon. J. (Birmingham)	Horne, E. (Surrey, Guildford)	Smith, Harold (Warrington)
Craig, Charles Curtis (Antrim, S.)	Houston, Robert Paterson	Stanier, Beville
Craig, Captain James (Down, E.)	Hume-Williams, W. E.	Stewart, Gershom
Craik, Sir Henry	Hunt, Rowland	Swift, Rigby
Cripps, Sir Charles Alfred	Hunter, Sir Charles Rodk.	Talbot, Lord E.
Dalziel, Davison (Brixton)	Ingleby, Holcombe	Terrell, G. (Wilts, N. W.)
Denniss, E. R. B.	Jardine, Ernest (Somerset, E.)	Terrell, Henry (Gloucester)
Du Cros, Arthur Philip	Jessel, Captain H. M.	Thomson, W. Mitchell- (Down, North)
Duke, Henry Edward	Jowett, F. W.	Touche, George Alexander
Eyres-Monsell, Bolton M.	Joynson-Hicks, William	Tryon, Captain George Clement
Faber, George Denison (Clapham)	Kerry, Earl of	White, Sir Luke (Yorks, E. R.)
Falle, Bertram Godfrey	Kimber, Sir Henry	Wills, Sir Gilbert
Fell, Arthur	Law, Rt. Hon. A. Bonar (Bootle)	Winterton, Earl
Finlay, Rt. Hon. Sir Robert	Lawson, Hon. H. (T. H'mts., Mile End)	Worthington-Evans, L.
Fitzroy, Hon. Edward A.	Locker-Lampson, G. (Salisbury)	Wortley, Rt. Hon. C. B. Stuart-
Flannery, Sir J. Fortescue	Lockwood, Rt. Hon. Lt.-Col. A. R.	Yate, Colonel C. E.
Fleming, Valentine	Lyttleton, Hon. J. C. (Droitwich)	Younger, Sir George
Fletcher, John Samuel (Hampstead)	Mackinder, Halford J.
Forster, Henry William	Magnus, Sir Philip	TELLERS FOR THE AYES.—Mr.
Gardner, Ernest	Mildmay, Francis Bingham	Hayes Fisher and Mr. C. Bathurst.
NOES.
Abraham, William (Dublin, Harbour)	Davies, Timothy (Lincs., Louth)	Henderson, J. M. (Aberdeen, W.)
Acland, Francis Dyke	Davies, Sir W. Howell (Bristol, S.)	Henry, Sir Charles
Addison, Dr. C.	Davies, M. Vaughan- (Cardigan)	Herbert, General Sir Ivor (Mon., S,)
Ainsworth, John Stirling	Dawes, J. A.	Higham, John Sharp
Allen, Arthur Acland (Dumbartonshire)	Delany, William	Hinds, John
Allen, Rt. Hon. Charles P. (Stroud)	Denman, Hon. Richard Douglas	Hobhouse, Rt. Hon. Charles E. H.
Armitage, Robert	Dewar, Sir J. A.	Hodge, John
Arnold, Sydney	Dickinson, W. H.	Hogge, James Myles
Asquith, Rt. Hon. Herbert Henry	Dillon, John	Holmes, Daniel Turner
Baker, H. T. (Accrington)	Donelan, Captain A.	Holt, Richard Dunning
Balfour, Sir Robert (Lanark)	Doris, William	Horne, Charles Silvester (Ipswich)
Barlow, Sir John Emmott (Somerset)	Duffy, William J.	Howard, Hon. Geoffrey
Beck, Arthur Cecil	Duncan, C. (Barrow-in-Furness)	Hudson, Walter
Benn, W. W. (T. H'mts., St, George)	Duncan, J. Hastings (Yorks, Otley)	Hughes, S. L.
Bethell, Sir J. H.	Edwards, Sir Francis (Radnor)	Isaacs, Rt. Hon. Sir Rufus
Black, Arthur W.	Edwards, John Hugh (Glamorgan, Mid)	Jardine, Sir J. (Roxburgh)
Boland, John Pius	Esmonde, Dr. John (Tipperary, N.)	John, Edward Thomas
Booth, Frederick Handel	Esmonde, Sir Thomas (Wexford, N.)	Johnson, W.
Brady, Patrick Joseph	Esslemont, George Birnie	Jones, Rt. Hon. Sir D. Brynmor (Sw'nsea)
Bryce, J. Annan	Farrell, James Patrick	Jones, J. Towyn (Carmarthen, East)
Buckmaster, Stanley O.	Fenwick, Rt. Hon. Charles	Jones, William (Carnarvonshire)
Burke, E. Haviland-	Ffrench, Peter	Jones, W. S. Glyn- (Stepney)
Burns, Rt. Hon. John	Flavin, Michael Joseph	Joyce, Michael
Burt, Rt. Hon. Thomas	Gelder, Sir W. A.	Keating, Matthew
Byles, Sir William Pollard	George, Rt. Hon. D. Lloyd	Kellaway, Frederick George
Cawley, Harold T. (Lancs., Heywood)	Gill, A. H.	Kennedy, Vincent Paul
Chancellor, H. G.	Ginnell, Laurence	King, J.
Chapple, Dr. William Allen	Gladstone, W. G. C.	Lambert, Richard (Wilts, Cricklade)
Churchill, Rt. Hon. Winston S.	Glanville, H. J.	Law, Hugh A. (Donegal, W.)
Clancy, John Joseph	Goddard, Sir Daniel Ford	Levy, Sir Maurice
Clough, William	Goldstone, Frank	Lewis, John Herbert
Collins, Stephen (Lambeth)	Greig, Colonel J. W.	Lough, Rt. Hon. Thomas
Compton-Rickett, Rt. Hon. Sir J.	Griffith, Ellis Jones	London, Thomas
Condon, Thomas Joseph	Hackett, John	Lyell, Charles Henry
Cornwall, Sir Edwin A.	Hall, Frederick (Normanton)	Lynch, A. A.
Cotton, William Francis	Hancock, J. G.	Macdonald, J. M. (Falkirk Burghs)
Cowan, W. H.	Harcourt, Robert V. (Montrose)	MacNeill, J. G. Swift (Donegal, South)
Crawshay-Williams, Eliot	Harmsworth, R. L. (Caithness-shire)	Macpherson, James Ian
Crumley, Patrick	Harvey, T. E. (Leeds, West)	MacVeagh, Jeremiah
Dalziel, Rt. Hon. Sir J. H. (Kirkcaldy)	Harvey, W. E. (Derbyshire, N. E.)	M'Callum, Sir John M.
Davies, David (Montgomery Co,)	Hayward, Evan	McKenna, Rt. Hon. Reginald
Davies, Ellis William (Eifion)	Hazleton, Richard	M'Micking, Major Gilbert

Markham, Sir Arthur Basil	O'Shee, James John	Scott, A. MacCallum (Glas., Bridgeton)
Marshall, Arthur Harold	O'Sullivan, Timothy	Sheehy, David
Masterman, Rt. Hon. C. F. G.	Outhwaite, R. L.	Sherwell, Arthur James
Meagher, Michael	Palmer, Godfrey Mark	Simon, Rt. Hon. Sir John Allsebrook
Meehan, Francis E. (Leitrim, N.)	Parker, James (Halifax)	Smith, Albert (Lancs., Clitheroe)
Middlebrook, William	Parry, Thomas H.	Smith, H. B. Lees (Northampton)
Millar, James Duncan	Pearce, Robert (Staffs, Leek)	Smyth, Thomas F. (Leitrim)
Molloy, Michael	Pease, Rt. Hon. Joseph A, (Rotherham)	Spicer, Rt. Hon. Sir Albert
Molteno, Percy Alport	Philipps, Col. Ivor (Southampton)	Strauss, Edward A. (Southwark, West)
Money, L. G. Chiozza	Phillips, John (Longford, S.)	Sutton, John E.
Mooney, John J.	Pirie, Duncan V.	Taylor, Thomas (Bolton)
Morgan, George Hay	Pointer, Joseph	Tennant, Harold John
Morrell, Philip	Price, C. E. (Edinburgh, Central)	Thomas, James Henry
Morison, Hector	Radford, G. H.	Toulmin, Sir George
Muldoon, John	Rea, Rt. Hon. Russell (South Shields)	Trevelyan, Charles Phillips
Munro, R.	Reddy, M.	Verney, Sir Harry
Munro-Ferguson, Rt. Hon. R. C.	Redmond, John E. (Waterford)	Ward, W. Dudley (Southampton)
Murphy, Martin J.	Redmond, William (Clare, E.)	Wason, Rt. Hon. E. (Clackmannan)
Murray, Captain Hon. A. C.	Redmond, William Archer (Tyrone, E.)	Wason, John Cathcart (Orkney)
Needham, Christopher T.	Rendall, Athelstan	Webb, H.
Nolan, Joseph	Richardson, Albion (Peckham)	Wedgwood, Josiah C.
Norman, Sir Henry	Roberts, Charles H. (Lincoln)	White, J. Dundas (Glas., Tradeston)
Norton, Captain Cecil W.	Roberts, G. H. (Norwich)	White, Patrick (Meath, North)
Nuttall, Harry	Robertson, Sir G. Scott (Bradford)	Whitehouse, John Howard
O'Brien, Patrick (Kilkenny)	Robertson, J. M. (Tyneside)	Whyte, A. F. (Perth)
O'Connor, John (Kildare, N.)	Robinson, Sidney	Wilkie, Alexander
O'Connor, T. P. (Liverpool)	Roch, Walter F. (Pembroke)	Williams, J. (Glamorgan)
O'Doherty, Philip	Roche, Augustine (Louth)	Williams, Penry (Middlesbrough)
O'Dowd, John	Roe, Sir Thomas	Wilson, W. T. (Westhoughton)
O'Grady, James	Rose, Sor Charles Day	Wood, Rt. Hon. T. McKinnon (Glas.)
O'Kelly, Edward P. (Wicklow, W.)	Rowlands, James
O'Malley, William	Russell, Rt. Hon. Thomas W.	TELLERS FOR THE NOES.—Mr.
O'Neill, Dr. Charles (Armagh, S.)	Samuel, Rt. Hon. H. L. (Cleveland)	Illingworth and Mr. Gulland.
O'Shaughnessy, P. J.	Scanlan, Thomas

Main Question again proposed.