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In estimating the increment or reversion value under Part I. of the Finance (1909–10) Act, 1910, the additional value given to any site by the erection of a house or houses under this Act shall not be taken into account.— [M r. Hopkins.]
§ Brought, up, and read the first time.
§ Mr. HOPKINSI beg to move," That the Clause be read a second time."
The object of this new Clause is to exempt the buildings to be put up under tins Bill from the Increment or Reversion Duty under the Finance Act of 1910. If this Clause becomes part of the Bill there will be no other Clause that would do so much to stimulate building. It is well known to anyone who has taken any interest in building, particularly in the building of cottage property in England, that the unfortunate result of Part I. of the Finance Act of 1910 was most seriously to diminish—by at least 50 per cent.—the provision of small houses. The effects of that Act were more serious than the War on building, and if we honestly want these houses built we ought to lay aside our prejudices and predelictions about the Finance Act of 1910 and remove that handicap in the way of building. I should like also to see the exemption applied to buildings which are to be put up by the local authorities, but they are not so important, as local authorities do not rely to the same 1570 extent on private banking facilities. The great trouble was that after the passing of the Finance Act of 1910 the builder was faced with the uncertainty of not being able to get funds from his banker to carry on building operations. It is quite possible that it would have been better to have dealt with this subject on a broader basis instead of in this Bill, but it will be better to do it in this way and help building on under this Bill than not to do it at all.
§ Sir T. WALTERSI am quite sure that this is not an Amendment that could wisely be accepted. Whatever be the meris or demerits of the Finance Act of 1909–10, this is a question which ought to be dealt with in a comprehensive way and not in a Bill of this kind. If these land taxes, on which I express no opinion, had the effect of discouraging building, it seems to me it would weaken the case for their repeal if they were to be dealt with in an isolated way of this sort. There is no reason also why they should be perpetuated in other cases and exempted in this case. I think, therefore, the proper time to deal with them would be when we get the Report of the Committee now considering the whole question, when no doubt new legislation, if it is recommended by the Committee, will be undertaken. I hope, therefore, my hon. Friend will not press this Clause to a Division.
§ Mr. LYNNI am sorry the hon. Gentleman has taken the line he has adopted, because there is no doubt whatever that but for the land taxes in the so-called People's Budget of 1909–10 we would not have had our present building troubles. Let me give as an instance the case of my own city. At the time of the passing of the 1909–10 Finance Act we had 7,000 vacant houses. On 31st March of the present year we had only 164. I believe our case is typical. In Manchester and other large cities it is declared that the principal reason for the cessation of building was that Budget, which shows the folly of people trying to upset the law of supply and demand. I hope the Government will change their mind on this subject, because, after all, municipal authorities and Government Departments can never provide houses. If houses are to be provided they must be provided by private enterprise.
Mr. T. WILSONMany people in this country are under the impression that the shortage of houses was caused by the War. [HON. MEMBERS: "No 1!"] Owing to the 1571 War houses could not be erected because workmen could not be spared to build houses. Now we learn that it was not the War but the land taxes imposed by the Budget of 1909–10 which has caused the scarcity. I think the Committee will sum up the situation a great deal better than that.
§ Mr. INSKIPI am sorry that the hon. Member (Sir Tudor Walters) takes the view he does. I thought that every member of the Committee would be agreed that we have to do something to get houses. The only argument the Minister of Health used in answer to the many Amendments moved from the opposite benches was that we want houses. That is the case for this Amendment. The right hon. Gentleman's proposal would leave out many unjust cases, which would not be dealt with even if the Amendment were accepted. It hardly meets the case. But we are not discussing finance. It is a great emergency, and we want to get the houses built. If you tell a man that you are going to put a tax upon the value of the land if he puts a house upon it, he will be less likely to build than if he is to have no tax upon it. The very small loss to the Revenue should be given up in the interests of this great cause of the housing of the people.
Lieut.-Colonel PINKHAMI would like to show what is the cause of the shortage of houses. I remember when there were eight or nine builders in one London district. Within twelve months after the passing of the Increment. Value Duties, there was not a builder left on a certain estate, and there was no house-building in progress. That estate had been laid out on very good lines, seventeen houses to the acre. But the result was that the building did not go on, and of the eight builders two went into the Bankruptcy Court, and the rest, I believe, are now back again working at the bench.
§ Mr. ADAMSONThe shortage of houses, we are told, has been responsible for the making of the Coalition Government, but we now see that one section of the Coalition is trying to upset legislation which was passed by the other section. Before the Coalition took place this legislation was passed, and now we have men in the Coalition trying to upset that. [An HON. MEMBER: "We are entitled to do that!"] The hon. Member skipped very lightly over the difficulties raised by the Amend- 1572 ment, and I observe that the Minister of Health is keeping a discreet silence upon it. I hope, however, he is going to remain firm.
§ Mr. PRETYMANI cannot help saying one word. I will not discuss the merits of the question. Everyone knows my opinion about it. If we want the houses built the sooner we abolish these duties the better. A partial relaxation would not be so effective as a complete abolition. I should like to hear a statement from the Government that in the next Budget these duties would be removed. That would facilitate housing very much. I do not think these duties have got now very many friends. The right hon. Gentleman opposite seems to have a hesitating and sneaking regard for them which is shared by some other Gentlemen. But I do not think that really in their hearts they believe that the retention of these duties in their present form is any good to anybody. The Committee which has been considering the matter is not sitting now. I should rather regret that by the Housing Bill we should in this way give a particular privilege to the building of houses over any other work of the kind, but it would be better that these houses should be built and that they should not have to bear this burden of the Increment Value Duty. I think a considerable portion of the subsidy might as well be withdrawn, because it would be liable to assessment for the Increment Value Duty. A statement from the Treasury Bench that these duties would disappear would be the best way of dealing with the matter.
The CHAIRMANI was afraid that this Debate would lead to a discussion which would be outside the scope of the Bill. The hon. Member must not pursue it on the present line.
Major BARNESI should like to join in an attempt to settle this vexed question of the effect of these duties on the housing problem, and I would like to ask for a Return showing what number of houses has been erected for a considerable time year by year. That is a sporting offer, and I hope someone will take it up. Even if such a Return is in existence I think it will be found that there were considerable periods of fluctuation. I would also like to get a Return showing the number of empty houses in all those periods. We ought to get all these particulars classified.
The CHAIRMANThe hon. and gallant Gentleman cannot pursue this point, which has been ruled out of order.
Major BARNESI do not wish to pursue the point, but I think it is rather hard that I should be cut off in making a reply. I would like to join in pressing this Amendment upon the right hon. Gentleman, and expressing my wish that he would insert it. It would give a great deal of innocent pleasure to hon. Members opposite, and would not impose a serious limitation upon the operation of the Finance Act. It is an example of the talk which we hear from some who believe they know a good deal about the Finance Act, whereas there is very little known about it. In estimating the increment value any additional value given to a house under this Act cannot be taken into account. In regard to reversion value, no consideration at all is given to the State. The right hon. Gentleman would be perfectly safe in accepting that Amendment.
§ Mr. MOLESThe right hon. Gentleman the Leader of the Labour party (Mr. Adamson) was intensely amused by one section of the—
§ Mr. MOLESMay I ask your ruling, Sir, on a point of Order? Do you rule that it is permissible for the Leaders of the Labour party to make representations, irrelevant to the Debate, and to preclude the other party from replying?