HC Deb 02 July 1923 vol 166 cc86-91

The enactments relating to inhabited house duty shall have effect as if for the references therein to annual values of, exceeding, or not exceeding, as the case may be, the several amounts specified in the first column of the following table there were substituted references to annual values of, exceeding, or not exceeding, as the case may be, the several amounts, respectively, specified in the second column of the said table.

Existing Annual Values. Substituted Annual Values.
1. Twenty pounds. 1. Thirty pounds.
2. Forty pounds 2. Sixty pounds.
3. Sixty pounds. 3. Ninety pounds.
—[Sir W. Joynson.-Hicks.]

Brought up, and read the First time.


I beg to move," That the Clause be read a Second time."

This Clause contains a new scale of annual values for the purposes of Inhabited House Duty. I hope that the hon. Member for Harrow (Mr. Mosley)—I will not say I hope he is drying up in the way of correspondence, as has been the case with the hon. and gallant Member for Finchley (Colonel Newman)—but that we shall have no criticism from him in regard to this. This Clause is introduced to carry out an almost universal desire. The hon. Member for Colne Valley (Mr. Snowden), the hon. Member for Barrow-in-Furness (Mr. D. G. Somerville), and the hon. and gallant Member for Finchley, all put down Amendments relating to the Inhabited House Duty. I am very glad to say that the Chancellor of the Exchequer realised that the re-assessment would cause difficulties in this matter, and he met us very fairly. The proposal now is that houses below £39 in value shall be exempt. Houses between £30 and £60 will be charged 3d. in the £, and those between £60 and £90 will be charged 6d. Houses above £90 will be charged 9d. in the £. I should like to say, if I may—not in reply to the hon. Member for Harrow, I cannot do that on this Clause—in confirmation of what was said by the hon. and gallant Member for Finchley, that though, before these concessions were announced, I had an enormous mass of correspondence, occasionally of a somewhat violent character against the Government and myself, I have had none since that time, with the exception of one rather abusive telegram—I forget who it was from, and I am not quite sure whether or not it was anonymous. With that exception, I can confirm what has been said by the hon. and gallant Member for Finchley, that the concessions seem to have given great satisfaction.


I do not wish to seem ungrateful to the Financial Secretary for the very big concessions he has made; and I do not feel justified in the circumstances in asking him to make any further concessions, especially considering the difficult financial position of the country at the present time. It is only fair, however, that I should point out, especially for consideration next year, that this concession, though it is a very great one for the rest of the country, is not such a large one for the Metropolitan area. In the Metropolitan area it has always been recognised that the assessments are very much higher, and practically no houses will be exempt in that area. On the new estates outside the Metropolitan area, which have been developed with the assistance of the Ministry of Health, there are 2,816 houses and flats, 2,250 of which are assessed at over £30 a year. Because these houses now become liable to Inhabited House Duty it has been found necessary to raise the rents from 1d. to 5d. per week, and it has caused very serious discontent, and a grievance—


The hon. Member will understand that those houses would have been liable to pay Inhabited House Duty prior to this.


Yes, but the point is that under the lower assessments previously they were exempt. There is the increase in the cost of building and also on the assessments, and, therefore, houses that before the War would have been completely exempt now come within the limit. At any rate, that is what I am informed; I have a report from the Local Government Committee of the County Council to that effect. I have only been asked to put this at a very short notice, however, and I do not feel justified in pressing the point further, now. It is right that it should be pointed out to the House and to the Chancellor of the Exchequer that, owing to the increased assessments, London does not get full advantage of these concessions. I understand there has been recognition of the position that London is entitled to exemption for houses assessed at a higher figure than the rest of the country. Of course, the costs in London are very much higher, and, therefore, the values in London are much higher than the rest of the country. I quite appreciate that in the present financial position of the country, and after the great concessions which the Chancellor has made, it is not fair to press this point.


My hon. Friend the Member for South-West Bethnal Green (Mr. Harris) seems to be under the impression that only in London have assessments gone up. On the contrary, surely, he will remember that it is really because assessments have gone up outside London that these concessions have been made. It was from a sense of justice that the concessions which were given to those outside London were also made to London. I do not think my hon. Friend can go so far as to suggest that both outside and inside London—


I do not want to interrupt the hon. Gentleman, but I would point out that a portion of the working-class cottages and houses in the rest of the country are under £30, but that in London there are practically none under £30. Therefore, in London, there are no houses exempt from Inhabited House Duty.


I hardly think the hon. Member will suggest that there should be a differentiation in the rate of allowance between London and outside. If that be his argument, I do not think this is the proper opportunity of going into any differentiation in the scale of taxation.

5.0 P.M.


I cannot understand the hon. Gentleman the Member for South-West Bethnal Green (Mr. Harris). I have been astonished at the very wide concessions that the Chancellor of the Exchequer has been able to give in these matters. I think they are excellent, and I am surprised that anyone should grumble at them. I think that anyone who has anything to do with property is only too delighted to accept them and say nothing.


I think the right hon. Gentleman and his hon. Friends on the other side have not quite appreciated the case my hon. Friend the Member for South-West Bethnal Green (Mr. Harris) is putting forward. He is putting forward only a general case and not in reference to this particular concession. A house of £20 in London and a house of £20 outside London are entirely different things. A house of £20 outside London is a much better house than one of £20 in London. If you take the exemptions in pre-War days, you will find that of the houses of £20 over 80 per cent. of these houses outside the metropolitan area were exempted, while only 23 per cent. were exempted in London. That shows that standard of £20 in London and the provinces was unjust in regard to London. What my hon. Friend was suggesting was that when a new scale is being adopted, as it is being adopted by this Clause, some account should be taken of this difference, and while £30 may be an admirable limit for the rest of the country, it is not so for London. I think from the figures I have quoted I have made good that contention. Obviously, when you are levying a tax of this kind, which is based on the value of a house a man inhabits, you should endeavour to tax men relatively in the same way who are in the same position all over the country. The rent standard of £20, as it was formerly, and £30, as it will be if this Clause be passed, is not fair between all sections. My hon. Friend has been at some disadvantage in presenting the case. Had he had time he would have desired to propose an Amendment to give effect to this. The difference between London and the rest of the country has been recognised in other legislation. In the increase of Rent and Mortgage Interest Restriction Act, a different standard was taken for London and for the rest of the country. The figures are within the recollection of the House. For the purpose of restriction of rent it was recognised that the limits which were applicable to the rest of the country were not fairly applicable to London. If that is true in respect to restriction of rent, surely it is equally true in respect of the taxation of inhabited houses. While my hon. Friend is not pressing this point, I think it is extremely important that the Financial Secretary should bear it in mind, and I hope that between now and another Finance Bill he will have this matter before him and endeavour to see that justice is done as between taxpayers in London and taxpayers in other parts of the country.


I congratulate the last speaker on that nimbleness of mind which enables him to take up any case at any moment. He thinks there is no distinction between London and suburban houses.


May I point out that that would apply to the whole of the Metropolitan area.


When I speak of the suburbs, I mean outside the county of London. You must remember that people have to pay substantial sums to get backwards and forwards from their homes to their places of business. A man who has to take a ticket from say, Hendon or Golders Green to get to and from his work has really to add that to his rent. Therefore, higher rentals in London are justified by reason of the absence of that liability to get backwards and forwards. You have to have a higher value in London because of the increased value of the houses, and unless you distinguish between the country districts and London you would be doing a great injustice to those persons who wanted to have the protection of rent restriction. You would have a level valuation throughout the whole country. Many men who ought to have had the benefits of these Acts in London would have been excluded. Therefore, you must remember that the man in London is on the spot and can walk backwards and forwards and probably does himself a great deal of good by walking backwards and forwards. For these reasons, I think there is no reason for a distinction between the different areas and I hope my hon. Friend will not make any concession.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time, and added to the Bill.