NEW CLAUSE.—(Repeal of Sections One to Nineteen and Twenty-five to Forty-two of Finance (1909

§ Sir F. BANBURY
I beg to move, "That the Clause be read a second time."
In the original form in which it appeared on the Paper my proposal included the Mineral Rights Duty. I do not intend to repeal that Duty, which does, I believe, produce some revenue to the country, but I do wish to repeal those parts of Part I of the Finance (1909–10) Act, 1910, which not only do not provide any revenue, but provide a loss. I have figures here to show that my statement on that point is absolutely accurate. The Chancellor of the Exchequer—I am sorry he is not here at the moment—earlier in the afternoon criticised the statement made by one hon. Member below the Gangway who talked of £1,000,000 as if it were not a very large amount. That hon. Member said that waste was not economy, and the Chancellor of the Exchequer said that all savings were nearly as good as revenue. That being the case, I wish to assist the Chancellor of the Exchequer by providing him with the means of saving what, in his own phraseology, is nearly as good as revenue. I have had a little balance sheet prepared for me which shows the effect of the Land Value Duties. I do not see my hon. and gallant Friend the Member for Newcastle-under-Lyme (Commander Wedgwood), who generally takes a considerable interest in all questions connected with duties on land. I am sorry he is not here because it might have assisted him in his particular fad if he knew what the financial result of these things is. The period commences in 1010 and concludes on the 31st March, 1916. The cost of the valuation from the 31st March, 1913, to the 1st April, 1914, was £1,393,000. Those figures are taken from the Official Report, and I can give the reference, which I have here. The cost in 1381 Ireland during the same period was £39,497. The cost for 1914–15, taken from the Official Report of July 14th, 1915, was £745,000, and the actual cost for 1915–16, taken from the Official Report on October 19th, was £466,000. Therefore, the total cost from the commencement in 1910 until March 31st, 1916, was £3,389,397.
I will now take the receipts on the other side. The total payments into the Exchequer, after deducting the Mineral Rights Duty, in the period I have named, was £746,096. So that there was a loss of £2,643,301 in that period. Now, when we are spending this large sum of money, and have been discussing during a considerable part of this afternoon the question of the Excess Profits Duty and the infliction of taxation upon industry, I ought almost to be raised to the Peerage for having shown the Joint Financial Secretary to the Treasury a means by which he can obtain revenue without inflicting any taxation upon any industry or imposing any burden upon any person. In addition to that, I shall set free a considerable number of officials who will be able to devote their energies to fighting the Germans or aiding in other Departments, and so letting loose young men who can bear their share of the burden at the front. About two years ago I brought forward a somewhat similar Motion, but it was limited to the period of the War. I proposed that during the War this valuation should cease, and I was met with a certain amount of opposition on the ground that it was breaking the truce. I hold that it was not breaking the truce, because it was confined to the period of the War; but we have now broken the truce so many times that it has disappeared altogether, and I hope no one will say when supporting, we will say, women's suffrage, which in my opinion has nothing whatever to do with the War, and which is certainly a most contentious subject, that this is breaking the truce.
There is an argument which may be advanced against me which perhaps ought to be met. I do not think there is very much in it. The supporters of the Land Valuation Department have always claimed that it ought to be credited with certain benefits derived from its activities. That is to say that, owing to the creation of this Department, we have been able to increase the percentage upon estates which have been liable either to Death Duties or the various duties to which estates on the 1382 death of the owner are liable. I will give a summary of the result. I have already shown that there is a debit, after paying expenses and after crediting receipts, from 1910 to 1916, of £2,643,301, as the result of the Land Valuation Duties. The increase of the Estate and Succession Duties, due to the activities of the Valuation Department in checking executors' and trustees' valuations, I put at £826,686. I think that as a reasonable statement. I also add the ad valorem stamp of 1 per cent, on deeds of voluntary gift of land and leaseholds. I do not think this can be credited to the Land Valuation Department, because it is to be presumed that the Inland Revenue is sufficiently active and energetic and has sufficient brains to look after its own Department without bringing in The officials of the Valuation Department who, after all, probably are no better than they are. I add £276,579 for that. That leaves an admitted loss of £1,540,036 up to 31st March, 1916. I really think the loss I gave before is the genuine one, but I am anxious to advance every argument which can be advanced by the supporters of these duties, and even admitting all that, the result is up to 31st March, 1916, a loss of £1,500,000. There remains the result for the year ending 31st March, 1917. The result there has been that the Department has cost £315,000 and the receipts have been £85,000, a loss of £230,000.
When the Government was formed we were told it was going to depart from the old principle of choosing members of this House or of another place, and was going to take in capable men of business who were great economists and thoroughly understood the management of affairs. I appeal to some of these gentlemen, and ask them whether in their private life and in their own business they would, in a time of stress like this, when they were not doing very well, continue a branch of the business which in 1917 cost £315,000 and only produced £85,000, and which, in the six previous years, had resulted in a loss of £1,500,000. Of course, the answer would be no. Why should the English taxpayer be subjected to treatment which the shareholders would not be subjected to by these able and energetic gentlemen who now sit upon that Bench? The last figures I will give are the estimated figures for the year ending 31st March next. The costs of this Department are estimated at £370,000 and the receipts 1383 from the Land Value Duties at £45,000, giving a loss of £335,000. There is not the slightest doubt that if there were not some old political prejudices in favour of these duties they would have been done away with long ago. I want to ask the Committee whether it does not think the time has arrived when we might leave sentiment behind, and, in view of the fact that we are a united House, that the ties of party have all vanished, that there is no opposition and no Government, and that we are all united in the sole desire of winning the War, put an end to what is nothing short of a scandal and endeavour to save to the Chancellor of the Exchequer a very considerable sum of money.

§ Colonel GREIG
I am not a financier, and I therefore venture, with considerable awe, to say a word as to what has fallen from the right hon. Baronet. I sit as a humble layman at the feet of the great financial pundit. I have made calculations in haste from his own figures, and obviously I may be wrong. He has told us that the establishment of this institution for levying these Land Value Duties has cost the country something like £3,389,000. On his own figures the capital cost has been decreasing every year since the establishment, because the last figure which fell from him was that this year the expenditure will be £335,000. In the first period it was considerably more, and it has gone on decreasing, and will tend to decrease, something like the instance of the rubber company. We then find that there has been a revenue to the State of £746,000 during the years 1910 to 1916. He excluded from that, and I do not know what the figure is, all the income that has come from the Mineral Rights Duties, which would make it a good deal more. It looks to me as if the £3,389,000, which you may fairly treat as capital expenditure, has yielded to the State £746,000. Working that out on a percentage it is 22 per cent., and divided by five years it is £4 8s. a year. That is not a bad investment for the State, and a good deal more will be coining in an Estate Duties which have not been brought into the figures as given. It seems to me that if the State is wise it will retain the Land Value Duties and refuse to consent to the appeal of the right hon. Baronet. It is very much the same as the principle on which the rubber companies are treated. It was an in- 1384 dustry which required a good deal of preliminary expenditure to make it pay. The capital cost is going down and the annual return is increasing.

§ Sir F. BANBURY
No. I do not admit the hon. and gallant Gentleman's contention, but he has given the figures correctly until he made his last remark. That is absolutely incorrect. It is quite true that the expenditure has gone down slightly, but it is also true that the receipts have gone down very much, and the hon. and gallant Gentleman said they had increased. Take the last two years. For the year ended 31st March, 1917, the Department cost £315,000, as against receipts £85,000. For the period 1917–18 the estimated cost is £335,000, while the receipts are only £45,000. So that the expenditure has actually increased, while the receipts have decreased; therefore the hon. and gallant Gentleman's last statement is quite incorrect.

§ Colonel GREIG
May I remind the right hon. Baronet that much of the Undeveloped Land Tax has not been collected yet?

§ Mr. BALDWIN
I hope my right hon. Friend will withdraw this Clause. He has started an excellent hare. If he wanted to give an example of how this Clause will help in the prosecution of the War I think he has had it by the way in which his challenge was taken up by the hon. and gallant Gentleman, whom I always thought one of the gentlest spirits who sat behind me. I do not think there could be any more effective method of putting a stick into a beehive and raking out every bee in the House than introducing in the middle of the War a discussion of land values. It would dissipate the party sitting opposite me as quickly as if a bomb dropped through the House. Of course, there is the reason which my right hon. Friend alluded to, that it would be breaking the party truce. He knows quite well that it is no answer to say that introducing women's suffrage, whether that is a wise or a foolish thing, is breaking the party truce, because the lines of cleavage on that question are not party lines. We can adopt women's suffrage and we can attend to our business in the House of Commons, but if we began to discuss a matter of this kind during the War everything which was not only moribund but dormant in our party spirit would spring once more into life and take possession of us like seven devils.

§ Sir F. BANBURY
I congratulate my hon. Friend on having made a very excellent speech. He has not alluded to the question before the House in one single sentence. He has not given a single argument either for or against, but he has succeeded in amusing the Committee which is, after all, not a bad thing, without committing himself or his Government to any single principle or any single opinion. Therefore, under these circumstances, I beg to offer my sincere congratulations to the Government for having obtained such a very valuable assistant who will be able to get up, as I believe Mr. Disraeli once requested a Member of this Government to get up, '' and speak at great length but do not say anything." I would like for a moment to answer the criticisms of the hon. and gallant Gentleman (Colonel Greig). He will, I know, interrupt me if I misrepresent him. As I understood him, he said "the cost for the six years has been £3,000,300 and something, and the net receipts have been £700,000. I choose to assume that the cost is capital, and that therefore the result is a return of under £300,000 on an income of £700,000." Did anybody ever hear of a more extraordinary argument advanced by anyone who had any knowledge of finance? Supposing, for the sake of argument, the hon. and gallant Gentleman had a balance at his bank of £5,000. He went and drew it all out, and he said, "that is capital expenditure," and he puts back in the bank £3,000. The net result is he is £2,000 worse off, but according to the hon. and gallant Gentleman he is £3,000 richer, because he has got this £3,000 which he had returned into the bank after taking out the £5,000. If he will excuse me for saying so, I do not think he himself intended that that argument should be taken really seriously, but he thought that somebody must get up and meet my arguments, which were unanswerable, and therefore he said the first thing that came into his head in order that it might be said, "after all, this land valuation scheme has still got one friend left." I do not know that I quite agree with what my hon. Friend said about contentious business. I will not go into it now, but I venture to say there has been a great deal more contentious business introduced during the last year or two than ever before, and the contentious business that has been introduced has not touched the 1386 vital spots. There are two vital spots. One is the provision of men and the other is the provision of money. This touches one of the vital spots. I am glad the Chancellor of the Exchequer has returned to the House. I hope he will not be annoyed if I say he made a most excellent suggestion earlier in the afternoon. It was to the effect that economy was very nearly as good as revenue. Now, I have been showing him in his absence a method of economy that is nearly as good as revenue. I certainly expected he would have supported me. Perhaps the reason he went out of the House was that he should not be able to hear my argument and be converted by it. But speaking quite seriously, I really think this a most important matter, and I cannot withdraw. If there was any sign of sympathy in the House I would divide. I do not know whether there is or is not, but I certainly cannot withdraw. Therefore, it must be divided on or negatived.

NEW CLAUSE.—(Repeal of Sections One to Nineteen and Twenty-five to Forty-two of Finance (1909–10) Act, 1910.